Mr Akhil Sibal, Sr. Adv. with Mr. Nishad Nadkarni, Mr. Ankur Sangal, Mr. Ankit v. CARLTON SHOES LTD & ANR

Judgment

1. These appeals arise out of a common judgment dated 17 July 2023, rendered by a learned Single Judge of this Court in CS (Comm) 730/20191 and CS (Comm) 52/20202. As the cause title themselves Signature Not Verified 1 Carlton Shoes Ltd. v VIP Industries Ltd Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter would indicate, these were cross suits, instituted against each other by Carlton Shoes Ltd.3 and VIP Industries Ltd4. The lis

2. Once the air is cleared, the controversy has percolated down to only one issue, which is whether goodwill, for the purposes of a passing off action, is of a mark, or of a mark in respect of particular goods or category of goods.

3. CS (Comm) 730/2019, instituted by CSL against VIP and CS (Comm) 52/2020, instituted by VIP against CSL, were both seeking permanent injunction, restraining the opposite party from using the mark CARLTON, as a word mark or a device mark.

4. During the course of the arguments, Mr. Akhil Sibal, learned Senior Counsel for VIP, submits that the restraint that his client seeks against CSL is only against use of the mark CARLTON for luggage, bags and similar goods. He has no objection to CSL using the mark CARLTON for any other item.

5. As against this, CSL presses its claim for injunction against VIP in respect of the use of the mark CARLTON for any goods in Class

18. 2 VIP Industries Ltd v Carlton Shoes Ltd. 3 “CSL” hereinafter 4 “VIP” hereinafter Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter

6. VIP and CSL filed, with their respective suits, applications under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 19085, seeking interim injunctions pending disposal of the suits. CSL filed IA 18443/2019 in CS (Comm) 730/2019 and VIP filed IA 1369/2020 in CS (Comm) 52/2020.

7. By the impugned judgment, the learned Single Judge has dismissed IA 1369/2020 filed by VIP and has allowed IA 18443/2019 filed by CSL in the following terms: “66. For all the aforesaid reasons, this Court comes to a prima facie conclusion that Carlton has made out a case for grant of injunction against VIP. Accordingly, CS(COMM) 730/2019 filed by Carlton is allowed to the extent of restraining VIP, its assigns, affiliates, relatives, successors-in- interest, licensees, franchisees, partners, representatives, servants, distributors, employees, agents and all other persons from marketing, selling or offering to sell bags and other allied goods falling in class 18 under its trademarks CARLTON (word mark) I.A. 18443/2019 similar and/or any other trade mark identical/ deceptively trademarks CARLTON/CARLTON to Carlton’s or any variants thereof singularly or in LONDON/ conjunction with any other word or monogram/logo or label or in any other manner, amounting to passing off. I.A. 1369/2020 in CS(COMM) 52/2020 filed by VIP against Carlton is dismissed.

67. It is however directed that Carlton shall maintain accounts of manufacture and sales of the impugned products under the marks CARLTON/CARLTON LONDON/ file the same on affidavit on half-yearly basis in this Court.” and shall Signature Not Verified 5 “CPC” hereinafter Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter

8. Aggrieved by the impugned judgment, VIP has, therefore, instituted the present appeals. FAO (OS) (Comm) 151/2023 challenges the impugned judgment insofar as it dismisses VIP’s IA and FAO (OS) (Comm) 152/2023 challenges the impugned judgment insofar as allows CSL’s IA. The Impugned Judgment in a nutshell

9. CSL and VIP both possess registrations of the mark CARLTON, in Class 18, for various goods. CSL’s registration in Class 18 is w.e.f. 6 May 1994, whereas VIP possesses two registrations of the CARLTON mark in Class 18, w.e.f. 26 July 1995 (through its predecessor-in-interest CARLTON International PLC6) and w.e.f. 21 April 2006, on its own account.

10. In their cross suits, seeking injunction against use of the mark CARLTON, CSL and VIP pleaded infringement as well as passing off.

11. The entire judgment of the learned Single Judge can be condensed into three precise findings. They are that (i) as VIP and CSL have both registrations of CARLTON mark in Class 18, neither can maintain an infringement action against the other, in view of Section 28(3)7 of the Trade Marks Act, 1999, 6 “CIPLC” hereinafter 7 (3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter (ii) insofar as passing off is concerned, VIP had not been able to prove the existence of trans-border reputation of the CARLTON mark in India prior to 2004, when VIP commenced use of the CARLTON mark in India, so that the issue of passing off had to be decided on the basis of the goodwill and reputation of the respective marks of VIP and CSL after their use commenced in India, and (iii) CSL, on the other hand, had proved the existence of goodwill of the CARLTON mark in India at least from 2003, which was prior to the commencement of use of the CARLTON mark by VIP in 2004.

12. Thus, the learned Single Judge has held that, in the absence of proof of trans-border reputation of the CARLTON mark, as used by VIP in India prior to 2004, priority of user in India of the CARLTON mark is of CSL. The learned Single Judge has also held that CSL has provided enough material to establish existence of sufficient goodwill in India as would justify an action for passing off.

13. Predicated on these findings, the learned Single Judge has proceeded to injunct VIP from using the CARLTON mark in respect of goods covered by Class 18 and has rejected VIP’s application for similar injunction against CARLTON.

14. One of the main planks of Mr. Akhil Sibal’s arguments, on behalf of VIP, is that goodwill has to be of the brand of the mark as Signature Not Verified marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor. Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter used in respect of particular goods. He submits that, even if CSL possess enviable goodwill for the CARLTON mark prior to 2004, it had never used the mark for bags. On the other hand, VIP has admittedly been using the CARLTON mark for bags in India since

2004. In respect of bags, therefore, Mr. Sibal’s submissions has been that it is VIP which possesses goodwill in the CARLTON mark rather than CSL.

15. The impugned judgment, he submits, has resulted in a peculiar consequence. It has permitted CSL, who has no goodwill whatsoever for the CARLTON mark for travel luggage, to use the mark for travel luggage and has injuncted VIP, which has over two decades of goodwill for the CARLTON mark in respect of travel luggage, from further using the mark for travel luggage whatsoever. Even the gross illegality of such a consequence, as he would submit, makes out a case for interference.

16. The issue before us is, therefore, limited and no detailed allusion to facts would be necessary. However, a brief factual overview, for statistical purposes, would be appropriate. Rival Stands before the learned Single Judge Case set up by CSL in CS (Comm) 730/2019

17. CSL contended, in its suit, that the mark “CARLTON” was adopted by one Baljit Virk in 1992 in the UK, and was based on the Signature Not Verified name of his son Carljit Virk. Baljit Virk incorporated the company Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter Carlton Shoes Ltd. in 1992 in UK. In 1993, Carlton Overseas Pvt. Ltd. was incorporated in India.

18. The trademark CARLTON was registered in India w.e.f. 6 May 1994 in Class 18 for “leather and imitations of leather and classes animal skins hides trunks and travelling bags umbrellas parasols and walking sticks whips harness and saddlery”

19. Admittedly, the mark CARLTON was in use in India since

1994. However, it is not in dispute that CSL did not use the CARLTON mark for bags of any sort, even though travelling bags were covered by the trademark registration held by it. The primary use of the mark CARLTON by CSL was for shoes, footwear and the like .

20. On 10 October 2019, CSL received a legal notice from VIP, which formed the ultimate provocation for filing CS (Comm) 730/2019. In the legal notice, VIP stated that it had come to learn that CSL was planning to use the CARLTON mark for bags and other such items. VIP claimed to have been using the mark CARLTON, for bags, suit cases and other such goods since 2006. As such, VIP claimed that, by planning to use the mark CARLTON for bags, CSL was seeking to piggyback on the goodwill and reputation earned by VIP in respect of the said mark. VIP also pointed out that it was the registered proprietor of the CARLTON mark in Class 18, through its predecessor CIPLC w.e.f. 26 July 1995 for “umbrellas and parasols, articles of luggage, briefcases and attache cases, suitcases, bags, bags for campers, bags for climbers, beach bags, game bags, handbags, Signature Not Verified rucksacks, school bags, school satchels, shopping bags, handbags, Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter haversacks, wallers, purses, pouches, sling bags for carrying infants, tool bags, travelling bags, trunks and vanity cases (unfitted), articles of leather and of imitation leather” and on its own account w.e.f. 21 April 2006 for “bags, suit cases, brief cases, carry-ons and travelling bags”. As such, VIP had amassed considerable goodwill of the CARLTON mark in respect of bags and similar goods, it is submitted, on which CSL could not lawfully seek to capitalise. As such, CSL was called upon to cease and desist from using the mark CARLTON in respect of goods covered in Class 18, particularly for bags of any sort.

21. CSL responded to VIP’s cease and desist notice on 16 October 2019 and 25 November 2019. In its responses, CSL pointed out that it was the registered proprietor of the CARLTON trademark in Class 18 w.e.f. 6 May 1994, which was much prior both to the registration of the CARLTON mark in Class 18 in favour of VIP or even of its predecessor and as well as of the date from which VIP claimed user of the CARLTON mark.

22. CSL promptly followed up the response to the cease and desist notice by CS (Comm) 730/2019, filed before this Court on 21 December 2019. In its suit, CSL contended that the use, by VIP, of the mark CARLTON, infringed the registered CARLTON trade mark of CSL and also amounted to an attempt by VIP to pass off its goods as the goods of CSL. As such, CSL sought a decree of permanent injunction, restraining VIP from using the CARTLTON mark in respect of any goods whatsoever.

23. Along with its suit, CSL also filed IA 18443/2019 under Order Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter XXXIX Rules 1 and 2 of the CPC, seeking interim injunction. Case set up by VIP in CS(Comm) 52/2020

24. VIP claimed proprietorial rights over the CARLTON mark by virtue of an Assignment Agreement dated 25 March 2004, whereby the marks along with goodwill vesting therein, were assigned by CIPLC in favour of VIP.

25. VIP pointed out, in its suit, that the origin of adoption of the mark CARLTON dated back to 1980 when Raxvale Ltd.8, a company incorporated the UK, had adopted the mark DIPLOMAT CARLTON, followed by adopted of the mark CARLTON in 1986. On 4 December 1989, the name of the company was changed from Raxvale Ltd. to Carlton International Plc. The mark CARLTON was registered in India in favour of CIPLC under Class 18 w.e.f. 26 July 1995 for “umbrellas and parasols, articles of luggage, briefcases and attache cases, suitcases, bags, bags for campers, bags for climbers, beach bags, game bags, handbags, rucksacks, school bags, school satchels, shopping bags, handbags, haversacks, wallets, purses, pouches, sling bags for carrying infants, tool bags, travelling bags, trunks and vanity cases (unfitted), articles of leather and of imitation leather”. VIP acquired intellectual property rights CARLTON mark from CIPLC vide Assignment Agreement dated 25 March 2004. Consequent thereupon, VIP also obtained registration of the mark CARLTON in class 18 for the “bags, suit cases, briefcases, carry-ons and travelling bags”, w.e.f. 21 April 2006. Signature Not Verified 8 “Raxvale” hereinafter Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter

26. VIP claimed user of the CARLTON mark, in respect of luggage, travelling bags, hand bags and the like since 2006.

27. The goodwill of the mark CARLTON, insofar as it pertained to luggage, therefore, dated back to 1980, when Raxvale commenced using the mark in the UK. In India, VIP itself had commenced using the mark CARLTON in respect of luggage, bags etc. since 24 May

2004. VIP had, therefore, to its credit, over 15 years of goodwill in the mark CARLTON in respect of luggage, bags and similar goods, by 2019, when it came to learnt that CSL was also intending to use the mark CARLTON for similar items. This, according to VIP, amounted to capitalizing on the goodwill earned by VIP in the mark CARLTON for luggage, bags etc. and also amounted to infringement of the registration of the mark CARLTON in favour of VIP/its predecessor- in-interest in Class 18, dating back to 26 July 1995. As such, alleging infringement as well as passing off, VIP, by its suit, sought a decree of permanent injunction, restraining CSL from using the CARLTON mark for any goods covered by Class 18. As already noted, before us, Mr. Sibal, learned Senior Counsel for VIP, has restricted the injunction that his client seeks against CARLTON to bags, hand bags, travel luggage and other similar goods, principally to travel luggage.

28. With its suit, VIP filed IA 1369/2020 under Order XXXIX Rules 1 and 2 of the CPC, seeking an interim injunction. Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter The impugned judgment

29. We may proceed, straightway, to the impugned judgment.

30. The findings of the learned Single Judge commence from para 28 of the impugned judgment. A. No case of infringement, as VIP and CSL are both proprietors of registrations of the mark CARLTON in Class 18

31. From paras 38 to 45, the learned Single Judge deals with the rival contentions of CSL and VIP, against each other, alleging infringement. The learned Single Judge holds, on the basis of Section 28(3) of the Trade Marks Act, that an action for infringement cannot lie at the instance of one registered mark holder against another, though each of them could maintain an infringement action against a third, unregistered trade mark holder.

32. The rival claims of passing off, as levelled by VIP and CSL against each other, therefore, according to the learned Single Judge, were alone required to be decided. B. No case of trans border reputation made out

33. The findings of the learned Single Judge, on this aspect, can also be divided into two parts. As the learned Single Judge observes, the plea of passing off, in a case such as this, has two faces. The aspect of passing off has to be examined both with respect to the Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter aspect of trans-border reputation of rival marks as well as goodwill and reputation of the marks within India.

34. It is open to a party, who has been using a trade mark outside India, either by itself or through its predecessor-in-interest, before commencing use of the mark in India, to contend that even the use of the mark outside India would contribute towards the goodwill that the mark has earned over a period of time, on account of the trans-border reputation of the mark in India. For this purpose, however, it would be necessary for such a party to establish spillover of the reputation of the mark, as used outside India, into the Indian territory. The principles that apply in this regard have been thus culled out by one of us (C. Hari Shankar, J.) sitting singly, in BPI Sports LLC v Saurabh Gulati9: “(i) The territoriality principle applies; not the universality doctrine. Existence of goodwill and reputation has, therefore, to be shown to exist in India. Universal or worldwide goodwill and reputation, sans any evidence of territorial goodwill and reputation, is not sufficient. (ii) Mere reputation is not enough. The claimant/plaintiff must show that it has significant goodwill. (iii) The actual existence of an office of the plaintiff in the country of the defendant is not necessary (iv) However, the claimant must have customers within the country of the defendant, as opposed to persons in the defendant’s country who are customers elsewhere. Thus, where the claimant’s business is carried on abroad, it is not enough for the claimant to show that there are people in the defendant’s country who happen to be its customers when they are abroad. (v) However, it would be enough if the claimant could show that there were people in the defendant’s country who, by booking Signature Not Verified 9 2023 SCC OnLine Del 2424 Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter with, or purchasing from an entity in the defendant’s country, obtained the right to receive the claimant’s service abroad. The person from whom such booking or purchase took place could be the claimant, or its branch office, or someone acting for or on behalf of the claimant. (vi) The claimant must be present through its mark in the territorial jurisdiction of the country of the defendant, though the existence of a real market was not necessary. (vii) Such presence could, for instance, be shown by extensive advertisements which had been circulated and seen, or read, in the country of the defendant. (viii) Once the existence of transborder reputation and goodwill was thus established, the claimant was not required, further, to prove the existence of actual confusion. The likelihood of the customer of average intelligence and imperfect recollection being confused, by the use of the impugned mark of the defendant, that the goods or services of the defendant were those of the claimant- plaintiff, was sufficient.”

35. Adopting the said principles, and following the judgment of the Supreme Court in Toyota Jidosha Kabushiki Kaisha v Prius Auto Industries Ltd10, the learned Single Judge holds that “the existence of goodwill and reputation has to be shown to exist in India and worldwide or global goodwill and reputation, sans any evidence of territorial goodwill and reputation, will be insufficient to succeed in a claim of passing off and thus yardstick to judge the claim of passing off will be “prior user” in India”.

36. Following the said observations, the learned Single Judge has thus concluded in paras 55 and 56 of the impugned judgment: “55. From a conjoint reading of the aforesaid judgments, the singular principle that emerges for deciding the claim of passing off will be to assess the existence of goodwill and reputation ‘in India’. As a corollary, worldwide or global goodwill and reputation Signature Not Verified 10 (2018) 2 SCC 1 Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter will not suffice albeit actual or physical existence of brick and mortar stores may not be necessary in the country. In other words, Plaintiff would have to establish its presence within the jurisdiction of Defendant’s country and through advertisements and promotion and not necessarily by real market but with a rider that that the spillage is so considerable as to confuse or deceive a customer of average intelligence and imperfect recollection into believing that the goods or services of the Defendant are those of the Plaintiff. this presence can be

56. Tested on the anvil of the observations of the Supreme Court in Toyota Jidosha Kabushiki Kaisha (supra) and the aforementioned judgments, in order to succeed in the claim for passing off, both VIP and Carlton in their respective rights would have to establish their existence through their marks in India and their goodwill and reputation abroad alone would not suffice, applying the territoriality principle.” C. CSL has goodwill, and priority of user, in India

37. As the learned Single Judge notes in the remaining paragraphs of the impugned judgment, the only issue that remained to be considered was the comparative goodwill of CSL and VIP in the CARLTON mark in India. Regarding this, the learned Single Judge has thus held in paras 56 to 65 of the impugned judgment: “56. Tested on the anvil of the observations of the Supreme Court in Toyota Jidosha Kabushiki Kaisha (supra) and the aforementioned judgments, in order to succeed in the claim for passing off, both VIP and Carlton in their respective rights would have to establish their existence through their marks in India and their goodwill and reputation abroad alone would not suffice, applying the territoriality principle.

57. VIP has placed on record promotional and advertisement material in support of its claim of transborder reputation of its predecessor-in-title Carlton International PLC. As an illustration, one of the said document is extracted hereunder, for ready reference:- Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter

58. It is palpably clear that these documents shed no light on whether the purported promotion material was extensively and widely published and/or circulated in India and customers here had seen and read them such that the goodwill and reputation of VIP’s predecessor percolated and spilled into India, since universal or worldwide goodwill and reputation, sans any evidence of territorial goodwill and reputation, is no longer the yardstick. As held by the Co-ordinate Bench, Plaintiff must have customers within the country of the Defendant, as opposed to persons in the Defendant’s country who are customers elsewhere. Thus, where Plaintiff’s business is carried on abroad, it is not enough to show that there are people in the Defendant’s country who happen to be its customers when they are abroad. None of the promotional material or articles placed on record by VIP even obliquely reflect VIP’s predecessor’s existence in the Indian market till 2004, when VIP acquired the trademarks and consequential rights and goodwill, by way of an Assignment Agreement. Some documents, purportedly advertisements/price lists, reflect their origin dating back to the 1980s and 1990s, but there is no supporting material to show their awareness amongst customers in India. It must be kept in mind that in that era, knowledge and awareness of brands was mostly through travel of people off shores or through electronic/print media as the online exposure was limited. No documents are found on record which would evidence sales in India by VIP’s predecessor, in the form of invoices, bills, delivery documents, photographs of stores displaying the products, etc. under the trademark CARLTON. VIP has laboured to piggyback on the advertisements and sales figures of its umbrella brand VIP in a misdirected effort to generate goodwill, however, that cannot aid VIP as the test here would be goodwill and reputation generated under the trademark CARLTON and not VIP.

59. Applying the aforesaid principles culled out by the Court in BPI Sports LLC (supra), VIP is required to show prima facie at this stage that it had customers/sales in India for its goods i.e. bags and other allied goods falling under class 18 under the trademark CARLTON, prior to Carlton, as opposed to customers outside the territorial boundaries of India. It is not enough to show that people in India were customers of Carlton International PLC, when they travelled abroad, going by the recent judicial precedents on this aspect. In a nutshell, VIP is required to prima facie demonstrate the Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter presence of its mark within Indian boundaries, which, in my opinion, it has failed to do, at this stage.

60. To substantiate its case, VIP has also placed reliance on certain articles, advertisements and sales invoices of goods under the mark CARLTON, post-acquisition of Carlton International PLC by VIP. However, all that can be said at this stage is that none of these documents evidence user of the mark CARLTON prior to the user by Carlton. The earliest sales invoice placed on record by VIP is dated 11.08.2006, followed by invoices dated 26.10.2006, 31.10.2006, 29.01.2007 and 30.01.2007 and thereafter from 05.11.2012 onwards. Significantly, invoices for the years 2006 and 2007 have no reference to CARLTON. To overcome this lacuna, pointed out by Carlton during the course of hearing, VIP filed additional documents vide Index dated 20.05.2022, containing a list of invoices allegedly reflecting sale of bags and learned Senior Counsel laboured hard to co-relate the sales, price lists and the promotional brochures. As an illustration, invoice dated 22.12.2006 annexed at Page No. 1 of the Index dated 20.05.2022, reflects the category of bag as ‘Airtec’ which finds mention in a price list annexed at Page 3 and promotional brochures are at Pages 4 to 6. However, despite this exercise and assuming the stand of VIP to be correct on its face value that bags were sold under the said invoices, no mileage can be drawn by VIP from these invoices, since the earliest invoice even in the additional set of documents dates back to 22.12.2006, which is well after the earliest sales of Carlton in India, which according to Carlton goes back to the year 1992/1993. In a nutshell, the documents filed by VIP i.e. promotional material, articles, sales/tax/import invoices etc. even cumulatively, do not constitute sufficient spillover into India of the transborder reputation, so as to defeat the claim of Carlton.

61. Passing off is a tort premised on deceit and involves an element of confusion among and deception of a mythical customer who chances on the Defendant’s mark and it goes without saying that for this, Plaintiff’s reputation is an indispensable element. Absence or negligible presence of VIP’s goods in question under the trademark CARLTON in the Indian market space when Carlton started to occupy the space, defeats VIP’s claim of passing off against Carlton.

62. Carlton, on the other hand, is ‘first in the Indian market’ in respect of bags and allied goods falling under class 18 sold under the trademark CARLTON, territoriality principle having overtaken the universality doctrine. In the Indian market, prima facie Carlton has made out a case of prior user and enviable exposure of bags under the mark CARLTON, which is demonstrable from the following documents:- Signature Not Verified Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter (a) Invoices of sales from the year 2003 from various shops in different malls in Punjab, Haryana and Rajasthan as also list of 24 outlets across Delhi, Gurgaon, Noida, Chandigarh etc. where some sales invoices pertain to the years 2003 to 2005. (b) Certificate of Sales figures/revenues under the mark CARLTON in India for the years 1993-2018. (c) Articles extensively figuring on various high-profile magazines and newspapers widely published and circulated in India such as Cosmopolitan, Femina, Fashion Bloom, Apparel, Society, Outlook, The Tribune, The Pioneer, HT City, Business Standard, The Hindu etc. The earliest promotional material for bags dates back to March, 2004. Presence on e-commerce platforms available in (d) India like Myntra, Flipkart, Amazon, etc. (e) VAT registrations from the year 1993 onwards. (f) Master data of production under the CARLTON marks from the year 2003 onwards. (g) Consumer complaints from the year 2016 onwards showing actual confusion amongst consumers mistaking VIP’s products for Carlton’s products.

63. Passing off is a common law remedy based on the ethos and principles that goodwill in the business must be protected against misrepresentation by third parties in the course of trade and in several judgments, Courts have echoed that assertion of the right in passing off is premised on the ground that no one has a right to represent his goods or services as that of someone else and even if misrepresentation is not fraudulent or deliberate but innocent, Courts would come to the aid and grant injunction to protect the goodwill. The essential characteristics/elements of the action of passing off have been succinctly brought out by Lord Diplock in Erven Warnink BV v J. Townend & Sons (Hull) Ltd11 and it would be apposite to refer to them hereunder: “(1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another Signature Not Verified 11 [1979] 2 All ER 927 Digitally Signed By:AJIT KUMAR Signing Date:01.07.2025 13:29:56 FAO(OS)(COMM) 151/2023 and another connected matter trader (in the sense that this is a reasonably foreseeable consequence), and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or in a quiatimet action will probably do so”

64. VIP has prima facie failed to establish spillover of transborder reputation in India and/or prior user while Carlton is first in the Indian market and has shown formidable goodwill and reputation under the trademark CARLTON and its formative marks. VIP stepped into the market under the mark CARLTON well after Carlton and knowing the presence and existence of Carlton in bags in India, adopted phonetically identical and visually similar trademarks for similar goods, which needless to say would lead to likelihood of confusion with an unwary purchaser believing that the bags are sold by Carlton. In fact, in this case, Carlton has also placed on record material to show that VIP itself claims launch of its products under CARLTON in 2014 and complaints from customers from 2016 of actual confusion alleging inferior quality, which though is a matter of trial but does dent the case of VIP for passing off. No documents supporting passing off by Carlton have been filed by VIP, per contra. Therefore, Carlton has made out a prima facie case for grant of injunction and irreparable loss shall be caused if VIP is not trademark restrained from selling similar goods under CARLTON (word and device). Balance of convenience also lies in favour of Carlton.

65. VIP relied on judgments on the proposition of ‘first in the market principle/prior user’. In my view, judgments in S. Syed Mohideen12, Milmet Oftho Industries13 and Neon Laboratories Limited14 , aid the case of Carlton which has been successful in establishing prior user by way of sales and various other documents. VIP has also placed reliance on the judgments in Ansul Industries15 and Suzuki Motor16 for dishonest adoption, but these would also not help, as VIP has failed to make out a case of dishonest adoption by Carlton. The remaining judgments are on well settled proposition of law which can hardly be disputed but do not further the case of VIP in the facts of the present case.”