2000 PLP 547 (CLC)

2. Suit for permanent injunction, to restrain the defendant from manufacturing, formulating, processing, selling, offering for sale or advertising under any trade marks of the respondent or its predecessor‑in- interest's goods, in respect of which the trade marks were registered or used, from infringing the trade mark of the respondent through the use of identical mark or trade mark with resemblance, and from passing of or attempting to pass all goods, manufactured, formulated or processed by the appellant or any person other than the respondent by use of any trade mark, lasel, design or insignia resembling with the one used by the respondent or from manufacturing, formulating processings or selling or dealing in the Elazabeth Arden, Ardena, Velva, Blue Grass, Mizmenion products of the respondent. A decree in the mandatory form of a permanent injunction to direct the appellant to deliver up the respondent, the formula and process provided by respondent, for the manufacture, formulation or processing of Elizabeth Arden, Ardena, Valva, Blue Grass, products of the respondent alongwith containers, labels cartons or material bearing or trade mark design or insignia of the respondent, was also claimed: Damages in the sum of Rs.10,000,000 were further claimed. Application under Order XXXIX Rule 1 and 2 of C.P.C. was filed alongwith the plaint, to seek injunctive relief, during the pendency of the suit, in the form in which the relief of permanent injunction was claimed.

3. Case set up in the plaint was that the respondent company was successor‑in‑interest to the house mark and trade marks "Elizabeth Arden, Ardena, Valva, Blue Grass, Milleniom and Elizabeth Arden Limited, a British Company of 76 Grosvence Street, London, now of 140 Wales Farm Road, London W

3. It was claimed that respondent and its predecessor‑in‑interest, directly and through its affiliates had been carrying on, for many years lucrative business comprising the manufacture and worldwide sale of products of its own formulations such as toilet preparations, cosmetics perfumery, preparations for the skin including creams and lotions, powders including face powder and talcum powder, preparations for the hair including oils and lotions, are being sold in distinctive cartons and containers in famous trade marks, brand names and labels and in particular the Elizabeth Arden, Ardena, Valva, Blue Grass, Invisible Veil and Red Door trade marks or brands. The products were being sold under the trade marks and allegedly well‑known in many countries including Pakistan. It was maintained that the respondent or its predecessors had secured and owned registration of various trade marks in many countries including Pakistan where the registration stands in the name of respondent or its predecessor. With a view to promote business, respondent decided to have its products' manufacturing locally under a licence permitting the use of its trade marks in the sale of its locally manufacturing products. The appellant received favourable consideration from respondent's predecessor to undertake local manufacture and sale of respondent's products under its trade mark or brand name and in this connection four agreements were signed, of which the earliest was dated 12‑6‑1968 it was a manufacturing agreement while the three subsequent agreements were allegedly signed on 1‑4 ‑1974, and 9‑5‑1974. It was added that trade mark licensing agreement, dated 9‑5‑1974 was between Eli Lilly and Company and the appellant. In terms of these licences, appellant was permitted to manufacture in Pakistan, the products of respondent's predecessor in accordance with secret formula and process developed by the respondent's predecessor and to sell such products in Pakistan under the trade mark of respondent or its predecessor. The contract arrangements were subject to certain conditions.

4. According to the respondent, the licence arrangement was terminated on 31‑12‑1980 by written notice and it was agreed that the appellant would be permitted a sell out period all around a year to enable the appellant to dispose of remaining inventory and finish goods, packing material or other raw material. It was alleged that the appellant was notified of the intentions to terminate licence arrangement and ultimately notice of termination was served, the receipt whereof was confirmed by the appellant. It was added that after the termination of the licence/agency and expiry of the sell out period, any subsequent use of respondent or its predecessor‑in -interest, with the trade mark by the respondent was contrary to the express provisions of contract and not permissible under Trade Mark Act 1940. It was maintained that the appellant was unauthorisedly using the trade mark which necessitated the filing of the suit.

5. The suit and also the application were contested by the appellant.

6. After considering the material on record and respective point of view of the two sides, the learned Additional District Judge, vide impugned order, dated 2‑7‑1999 allowed the application by observing that the respondent had a prima facie case, balance of convenience would lean in his favour and that irreparable loss would result, if the injunctive relief would not be allowed.

7. Learned counsel for the appellant submitted that he would not argue his case on the plea of limitation nor would make reference to other legal objections taken in the written statement but would only suggest a viable course. It was submitted that the appellant was not manufacturing, any longer, the goods, by making use of trade mark in question that permission should be granted to sell out the existent stocks and for this purpose, one year should be allowed. This offer was put to learned counsel for the respondent, he flately declined to allow further period for sell out. In these circumstances learned counsel for the appellant was asked to argue the case on merit.

8. Learned counsel submitted that the respondent had no prima facie case for the grant of injunctive relief, no case of passing out was made out, at best it was a case of breach of contract and not a case under the Trade Mark Act and that the Court was oblivious of the fact that no irreparable loss would be caused to the respondent, if injunctive relief would be denied. Learned counsel maintained that on the existing material, the respondent had failed to prove three ingredients for the grant of injunction. Lastly, it was argued that no finding on the revocation of agreement having so for been recorded, it was not a case for the giant of temporary injunction.

9. In reply, learned counsel vehemently argued that the licensing agreement had been revoked, which fact was confirmed by the appellant, the appellant was allowed sell out period which expired since long, there was no justification for seeking further sell out period, the appellant had been guilty of committing fraud and serious illegalities in using the trade mark of the respondent despite having no subsisting licence. Relying on Taktronix Incorporated v. M. Abdul Mannan PLD 1973 Kar. 14 and Cooper's Incorporated (Now named Jockey International Inc.) v. Pakistan General Stores and another 1981 SCMR 1039, learned counsel submitted that the respondent had a strong case for the grant of injunction and that the discretion was exercised on sound judicial principles.

10. From the pleadings and other material on record, it is evident that the case of respondent was that certain agreements were executed between the parties, by which, a licence was created and in terns thereof, the appellant was permitted to manufacture in" Pakistan, the products of the respondent's predecessor by making use of secret formula and using the trade mark of the respondent or its predecessor and that the agreement was ultimately terminated on 31‑12‑1980. It was also the case of respondent that the termination was confirmed by the appellant that in terms of the arrangement, a sell out period was allowed to the appellant who did avail the same and thereafter, the appellant had no right, either under the contract or in law to make use of the secret formula or the trade mark of the respondent and since the appellant was violating the rights of respondent, therefore, indulgence of the Court became necessary. In the course of hearing of this appeal, learned counsel for the appellant took the position that the appellant was not manufacturing the disputed goods, and that the appellant was only interested in gaining sell out to dispose of the existing stocks. From the letter, dated 12‑12‑1980, issued by the respondent, it is discernible that the respondent, 'after pointing out certain violations, notified their decision to tenninate the contract of agency. A notice was also served upon the appellant, in terms of para 3 of the agreement, for termination of the agreement from 31‑12‑1981. In its reply, the appellant acknowledged the receipt of two notices for termination of agreement, dated 1‑4‑1974 and maintained that the concession granted for disposal of the stock till December, 1981 was less than what the appellant had requested in its letter, dated 10‑3‑1980. A request was made to negotiate the possibility of extending the sell out period. It is, thus, obvious that so for as the termination of agency is concerned, there is sufficient material on the record which prima facie supports the plea of the respondent that the agency was terminated to the knowledge of the petitioner and sell out period was allowed till 31‑12‑1981. The request for extension of sell out period was not granted. In this situation, prima facie, there appears to be substance in 'the plea of the respondent that after the termination of the agreement and expiry of sell out period, the appellant could not possibly, either manufacture the products of respondent or could ~ make use of the trade mark. In these l circumstances, the respondent did have a prima facie case for the grant oft injunction. There being serious allegations of trade mark infringement, the l appellant having no subsisting right to make use of the trade mark and other A secret formula of the respondent, the basic agreement of agency having; already been terminated, the respondents were entitled to necessary! protection against illegal infringement of trade mark and, therefore, the learned Additional District Judge did not commit any error of law in restraining the appellant, from. manufacturing, formulating, processing selling or advertising, under the‑trade mark of the respondent or from l passing of or attempting to pass of goods manufactured, formulated or l processed, by the use of trade mark, label, insignia of the respondent. The' argument that the respondent did not make out any prima facie case or that other ingredients for the grant of injunction were non-existant, do not sound well.

12. Careful scrutiny of the facts noted supra, will reveal that serious questions of law and fact arise in the suit, the respondent prima facie proved existence of right to seek restraining order against the appellant, the appellant did not have prima facie any right to infringe the trade mark of the 8 respondent or make use of the insignia or label of the respondent, in view of the termination of agency rights and the refusal to grant injunction is bound to cause inconvenience and irreparable loss to the respondents. The argument that one year sell out period be allowed for disposing of the stocks is not worthy, of consideration for the reason that the termination took place in 1980 and the sell out period also expired 18 years before. It is not possible that despite the expiry of such a long time, the appellant was unable to dispose of stocks, which existed at the time of notice of termination of agency. The request for extension goes against the appellant as it indicates that the appellant had been manufacturing or formulating the products, after the termination of the agency, in violation of law and now intends to make out capital of its own wrong. Obviously, no one can be allowed to take benefit of its own wrong. The agency having been terminated with proper notice and sell out period having expired the appellant could not be expected to manufacture the products of the respondent, by illegally assuming subsistence of agency rights. In these circumstances, the request for extension in sell out period cannot be adhered to at this stage.

13. Appellant having failed to point out any legal infirmity in the impugned order and the discretion having been exercised on sound judicial principles, no ground is made out for interference in the impugned order.

14. Resultantly, the appeal is devoid of substance which is accordingly dismissed. H.B.T./L‑2/L Appeal dismissed.