EASTMAN KODAK COMPANY Vs. MESSRS MOTI INTERNATIONAL

JUDGEMENT

(1.) THE plaintiffs have filed the present suit against the defendant for infringement of their trade mark and also action in passing off. The case of the plaintiffs is that the 1st plaintiff No. 1 is an international company having several affiliates, associates and subsidiary companies. The 1st plaintiff has several registered trade marks in its name all over the world including India. The mark KODAK a coined word is a distinctive trade mark and one of the most well recognized trade mark in the world. The 1st plaintiff is registered proprietor of the said mark as also the trade mark known as KODAK K (device ). All these are registered under the Fourth Schedule to the Trade and Merchandise Marks Rules, 1959 framed under the Trade and Merchandise Marks Act, 1958. The registration of the said trade marks are valid and subsisting. The 2nd plaintiff is a subsidiary of the 1st plaintiff. At the time of filing of the suit 74% of the share holding was held by the UK subsidiary and as of date the 2nd plaintiff has share holding of 96%. It is then averred that the plaintiff No. 2 imports and markets the photographic films manufactured by Kodak Limited U. K. (a subsidiary of the 1st plaintiff in U. K. ). These imported films bear the legend not for re-sale outside India. The averment of plaintiff No. 1 is that the trade marks are applied the Kodak India Limited upon the said films as a licensee of the 1st plaintiff. It is the case of the plaintiffs that the defendant, a partnership firm appears to be in the film trading business and is also in the business of purchasing photographic film. The defendant, it is contended purchases film bearing the impugned trade marks with the legend Not for resale outside India and exports the said films to Hong Kong and/or China. The said export by defendant to Hong Kong and/or China is without the consent of the plaintiffs. It is alleged that the defendant exported Konica Films (in reality Kodak Profoto Films ). It is then set out that the notice on the packs, constitutes a positive prohibition upon dealing in the goods under the said trade marks, outside India that runs with the goods. The plaintiffs have not consented to the use of its trade marks in Hong Kong and/or China, and the plaintiffs have, by a clear notice made its absence of consent apparent to any purchaser of Kodak Professional Profoto films in India. The defendants act of exporting Kodak Professional Profot: films for re-sale outside India is actionable in India as the use of the said trade mark by the defendant amounts to use of the trade mark in India. The defendant is using the trade mark in the course of trade, in relation to the said goods in such a manner as to render the use of the marks likely to be taken as being used as a trade mark. Reference is made to Exhibit G which is letter dated 15th May, 2001 from Eastman Kodak Company, U. K. By the said letter the plaintiff No. 1 has confirmed the understanding under which Eastman Kodak Company through its British subsidiary Kodak Ltd. , sells to Kodak India certain films known as Kodak Professional Profoto film. It is then set out that it has come to their knowledge that the films are specifically for the purpose of sale and distribution in India and for no other purpose and for this reason the cartons are clearly marked Not for resale outside India. The attention of the plaintiff was drawn to certain persons exporting such film out of India to Hong Kong and that in doing so, the true identity of such films has been hidden or misrepresented as that of another manufacturer. It is also set out that quantities of such films have been found on the mainland of China in cartons with counterfeit Kodaks Chinese language boxes for Kodak Gold film. It is then set out that this activity is illegal and has caused the plaintiff No. 1 substantial damage and injured its reputation of its products in commerce. The plaintiff No. 2 was, therefore, requested to take all necessary steps to see that those films are sold only in India and that they are not improperly represented as Kodak Gold film through counterfeit packaging. It is then contended that subsequent to this the plaintiff No. 2 filed complaint with the Customs Authorities. Suffice it to say that pursuant to the complaints and subsequent order passed by this Court, Receiver came to be appointed by order dated 17th May, 2001. It has come on record that some cartons containing the plaintiffs mark were packed in cartons containing the words Konica (Superia 200 ). It may not be necessary to deal with this aspect of the matter considering the subsequent orders in respect of the goods seized by the Custom authorities and the reliefs which the plaintiffs are now seeking. The plaintiffs, it is pleaded, being the registered proprietor of the trade make have an absolute right to impose any restriction which they wish to on the said film. Reliance is placed on various judgments which will be adverted to in the course of discussion. In answer to the reply filed by the defendants it is set out that the defendant is misrepresenting the true identity of the film as that of another manufacturer to the consumers in Hong Kong and/or China and that the action of the defendant amounts to actionable wrong. It is denied that the defendant is merely exporting-the films to Hong Kong or that they are not aware of how the said films are further sold in Hong Kong and/or China and that the defendant is not concerned after their own sale and that the acts done in Hong Kong do not entitle the plaintiffs to file the suit in India.

(2.) IN answer to the plaintiffs case the defendant has filed an affidavit in reply through Mr. Moti Bhatia, Partner. It is pleaded as follows. That the suit filed by the plaintiffs does not disclose any cause of action. It is false, frivolous and malafide and without any merits and no cause of action has arisen in favour of the plaintiffs. It is further averred that there is no infringement of the plaintiffs trade mark nor any passing off as alleged at all, even if the allegations in the plaint are taken to be correct, which are denied. It is then set out that the defendants purchase colour films from authorised dealers of the plaintiffs for the purpose of export to Hong Kong and other places. The films purchased in the ordinary and regular course of business are all manufactured by the plaintiffs/plaintiffs authorised licensees, to which the Trade Marks have been authorisedly applied by the manufacturers themselves. The purchases by the defendants are valid and lawful of the goods already bearing the relevant trade marks lawfully applied. The defendant, it is contended, do not apply trade marks to the goods at all. The defendants purchase goods already properly trade marked and lawfully sell them. It is, therefore, submitted that there is no infringement or passing off by the defendants. How they package the films for export is then set out. For protection of the goods from damage the defendants place them in larger boxes specially made for export for the defendants. After packing, the Rolls are lawfully exported and there is no violation of any law by the defendants. The order of the Court Receiver and subsequent act of taking possession and panchanma is then dealt with and explained. It is set out that a carton bearing No. 16/17 was opened and it was found that Kodak: professional profoto rolls were kept under the cover of Konica. The manner of packing is then set out and it is pointed out that the Panchanama does not record the correct facts. The carton bearing No. 16/17 contained 3 cartons of Kodak Profoto films each containing 300 such rolls. The export documents, do not mention Kodak films at all and they only state Kodak films. Dealing with the averment of the plaintiff that the importer in Hong Kong are packing the same in other boxes before resale it is contended that they are in no way connected with the same nor are the defendants responsible for the same. The defendants have not committed any infringement. It is then set out that the defendants do not export to China. It is also set out that the defendants act of export of Kodak Professional Profoto film for resale outside India is not export to China. It is also set out that the defendants act of export of Kodak Professional Profoto film for resale outside India is not actionable in India as alleged. The condition Not for resale outside India is only applicable to those goods made in U. K. which are to be sold exclusively in India and not to any other place outside India, but once the goods have reached India that condition is fulfilled and exhausted and it does not apply any further to any further sales. It is once again set out that the Kodak films which were found under the cover box of Konica films were so kept, due to the sizes of Kodak film rolls which came in packs of 300 each hence making a space of 100 rolls pack in a 1000 rolls box. There is no passing off or misrepresentation. It is then again set out that the defendants are not aware how the films are further sold in Hong Kong as they are not involved or concerned after their own sale. Dealing with the contention that the importer in Hong Kong is allegedly selling the profoto films in China in a different pack of superior film of the plaintiffs namely Kodak Gold, the defendants deny any knowledge of the allegations and hence put the plaintiffs to the strict proof. It is, therefore, pleaded that no case has been made out and consequently no relief be granted in favour of the plaintiff.

(3.) AT the hearing of the Motion on behalf of the plaintiffs it is contended that the defendants in exporting the films to Hong Kong and/or China bearing the legend Not for resale outside India have violated the conditions imposed by the legend. The aforesaid acts in exporting the impugned film to Hong Kong and/or China are done without the consent of the plaintiffs. It is then submitted that the notice on the packs, constitutes a positive prohibition upon dealing in the goods under the said trade marks outside India that runs with the goods. The plaintiffs, it is contended, have not consented to the use of its trade marks in Hong Kong and/or China and the plaintiffs have, by a clear notice made its absence of consent apparent to any purchaser of Kodak Professional Profoto film in India. The action of the defendants in exporting Kodak Professional Profoto film for resale outside India is actionable in India, as the use of the said trade marks by the defendant amounts to use of the trade mark in India. The defendant is using the trade marks in the course of trade, in relation to the said goods in such a manner as to render the use of the marks likely to be taken as being used as a trade mark. Reliance has been placed on the letter dated 15th May, 2001 Exhibit G to the plaint wherein it is recorded that the understanding which the plaintiff No. 1 has with its British subsidiary Kodak Limited to sell to plaintiff No. 2 the films known as Kodak Professional Profoto film. It is then contended that the plaintiffs as the registered proprietor of the trade marks have the absolute right to impose any restrictions which they wish to on the films. It is, therefore, submitted that the plaintiffs would be entitled to reliefs in terms of prayer clauses (a) and (b ). Reliance has been placed on the judgments in the case of The Incandescent Gas Light Company Ltd. v. Cantelo, XII RPC. 262 for the contention that an action for infringement can lie when there are restrictive conditions as to the user. Reliance is then placed on the judgment of Castrol Limited vs. Automotive Oil Supplies Limited, (1983) R. P. C. 315 to contend that even in case of use of identical marks in two countries by licencee of the same company, if there was an agreement that marks were not to be used outside the area of the agreement the defendant would not be protected, and injunction will be granted. Reliance is also placed thereon in the judgment of Colgate-Palmolive Limited and Another v. Markwell Finance Limited and Another, (1989) R. P. C. 497 for the proposition that when the registered Proprietor of a registered mark permits a subsidiary to use the mark and imposes a condition limiting the export of the goods bearing the mark, it would be open to the Court to grant injunction both on the ground of passing off and for infringement and considering, in that case, the cause of action was in U. K. , the provisions of Section 4 (3) (a) of the UK Trade Marks Act 1938 would be no defence. Section 4 (3) (a) it is submitted is similar to the provisions of Section 30 (1) (b) of the The Trade and Merchandise Marks Act, 1958.