Mgm Healthcare Private Limited vs Varamm Healthcare Private Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 29.09.2023

CORAM :

THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU

O.S.A. (CAD) Nos.120 and 121 of 2023

MGM Healthcare Private Limited having its registered office at New No.72, Lalah Towers Nelson Manickam Road Aminjikarai, Chennai – 600 029 rep. by its Authorised Signatory Harish Manian .. Appellant in both appeals

Vs

Varamm Healthcare Private Limited having its registered office at No.69, 4th Main Road, T Block 3rd Avenue, Anna Nagar Chennai – 600 040. .. Respondent in both appeals

Prayer: Appeal under Order XXXVI Rule 1 of the Original Side Rules read with Section 13(1) of the Commercial Courts Act, 2015 against the judgment and decree dated 15.6.2023 passed by the learned Single Judge in O.A.Nos.12 and 13 of 2023 in C.S. (Comm.Div.) No.2 of 2023.

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For the Appellant : Mr.Vijay Narayan Senior Counsel for Mr.Abishek Jenasenan

For the Respondent : Mr.Vijayan Subramanian

JUDGMENT

(Delivered by the Hon'ble Chief Justice)

The present appellant/original planitiff has filed a suit bearing

C.S. (Comm. Div.) No.2 of 2023 alleging infringement of its

registered trademarks “VARAM” and by the respondent/

original defendant.

2. The appellant filed two interlocutory applications, bearing

O.A.Nos.12 and 13 of 2023. In O.A.No.12 of 2023, the appellant

sought interim injunction restraining the respondent, its directors and

all other persons claiming through or under the respondent, from

passing off and/or enabling others to pass off the appellant's

trademarks “VARAM” and as shown in the schedule to the

application by using the impugned “VARAMM Healthcare Private

Limited” and marks and/or any other mark

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identical and/or deceptively similar mark in any manner. O.A.No.13 of

2023 is filed for grant of interim injunction restraining the

respondents, its directors and/or persons claiming through or under

the respondent from infringing the registered trademarks “VARAM”

and as shown in the schedule to the application by using

the “VARAMM Healthcare Private Limited” and

marks and/or any other mark identical and/or deceptively similar

mark in any manner.

3. The learned Single Judge rejected both the applications.

Aggrieved thereby, the present appeals.

4.1. The case of the appellant is that it is a state-of-the-art

super-speciality hospital in the heart of Chennai. It has set up a one-

stop centre that will deliver quality care to women. The super-

speciality centre launched by the appellant was named as “VARAM”.

The centre was inaugurated on 18.10.2020. On 18.10.2020, the

appellant filed an application with the Trade Marks Registry for

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registration of the trademark “VARAM” and got it registered under

Class 44 relating to medical services, hospital services, medical clinical

services, etc.

4.2. The further case of the appellant is that the appellant is in

continuous and extensive use of the device and word mark

“VARAM” from the year 2020. The respondent started running a

clinic in the name and style of “VARAMM Healthcare Private Limited”

during October, 2022. The respondent company got incorporated

on 1.12.2021. A cease and desist notice dated 20.10.2022 was

issued. The respondent replied that it was the prior and honest

adopter of the mark “VARAMM”. The appellant, therefore, filed the

suit.

5.1. It is the case of the respondent that the word “VARAMM”

was derived from the names of the Director of the respondent and

his son - “VA” was derived from the name of “Varun”, i.e., the son

of the respondent's director, and “RAMM” was derived from the

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name of the Doctor and Director of the respondent's hospital, namely

Dr.Ramaprabha.

5.2. The further case of the respondent is that it has been

operating for the past four years under the name of “VARAMM”,

more specifically from 15.2.2019. The respondent claimed to be

prior user.

6.1. Mr.Vijay Narayan, learned Senior Counsel for the

appellant, strenuously contends that the owner of a registered

trademark is entitled to protection granted under the Trade Marks

Act, 1999 [for brevity, “the Act of 1999”] and there is absolutely no

need for the owner to show usage. On the other hand, the person

claiming prior usage has to establish his continuous usage.

6.2. It is submitted that Section 34 of the Act of 1999 has not

been properly construed by the learned Single Judge. The

respondent has to prove that the offending mark has been

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continuously used, whereas the court has rejected the prayer

seeking interim injunction only on the count that the respondent

has coined the mark earlier. The requirement for protection under

Section 34 of the Act of 1999 is not coinage, but continuous usage.

Mere coinage is not equivalent to continuous usage. The burden to

establish continuous and prior usage of the mark lies heavily upon

the respondent. Moreover, occasional usage would not be a

substitute for continuous usage as contemplated under Section 34

of the Act of 1999.

6.3. It is also submitted that the appellant started usage of

the mark on 18.10.2020. The same is evidenced by the newspaper

report in The Hindu. Even if it is assumed that the appellant

obtained registration of the device mark “VARAM” with effect from

18.11.2020, the respondent has to show prior and continuous usage

even before 18.11.2020 to be entitled to protection under Section

34 of the Act.

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6.4. It is further submitted that mere producing of four

invoices is not sufficient to discharge the burden of continuous

usage. The respondent has only two transactions in August, 2020 –

one is a test payment of Re.1/- and no other details of the

transactions are produced. The email dated 18.8.2020 sent by

Google Maps does not prove continuous usage, as there is no way

to verify whether any customer has used Google Maps to visit the

respondent's premises. Even the acknowledgment dated 4.8.2020

issued by the Directorate of Medical and Rural Health Services is no

proof of offering the services to customers. The four medical

prescriptions produced by the respondent have to be rejected

outright. It is never the practice of any hospital to retain copies of

prescriptions issued to the patients. Moreover, these four sheets

prove sporadic usage at best and, that too, only on four dates in

2019.

6.5. It is submitted that the learned Single Judge ought to have

held that the respondent has miserably failed to prove the

continuous usage and is, therefore, not entitled to protection under

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Section 34 of the Act of 1999 and, inter alia, ought to have granted

injunction in favour of the present appellant.

7.1. Mr.Vijayan Subramanian, learned counsel for the

respondent, countering the arguments of the appellant, submits

that the respondent commenced the hospital in the name of

“VARAMM Healthcare” at No.69, T Block, 4th Main Road, Anna

Nagar, Chennai – 600 040. The respondent hospital specialized in

Obstetrics and Gynaecology Laparoscopy for women. The

respondent is operating for the last four years under the name

“VARAMM”, more specifically from 15.2.2019. The term “VA” was

derived from the name of Varun, i.e., the son of the director, and

the term “RAMM” was derived from the name of the doctor and

director of the respondent hospital Dr.Ramaprabha. It is submitted

that “VARAMM” in English means blessing/boon and the said word is

commonly used by the people under various circumstances.

7.2. It is further submitted that the respondent hospital, which

was earlier incorporated as MSME, has been incorporated as a

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corporate entity by registering the same under the Companies Act,

2013 in the year 2021. The respondent is operating the hospital in

the name of “VARAMM” since 15.2.2019. The appellant has only

opened its hospital subsequent to the respondent and is erroneously

claiming infringement against the respondent.

7.3. It is submitted that the appellant did not commence the

operation of running the super-speciality facility for women under

the name “VARAM” on 19.10.2020. The reliance placed on the

article in the newspaper The Hindu dated 19.10.2020 is misplaced.

The appellant commenced the operation of running the super-

speciality facility for women only during 6.3.2021 and the same is

established by the article published in Chennai Vision dated

6.3.2022 stating that “VARAM by MGM Healthcare, Chennai turns

One”. This article states that VARAM, a dedicated women's super-

speciality centre by MGM Healthcare in Chennai, celebrated its first

anniversary. Even the revenue generated shown by the appellant is

from April, 2021 and this clearly establishes that the appellant

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commenced operation under the name “VARAM” from March, 2021

only.

7.4. The respondent, to prove its prior usage, has placed on

record the registration of its “VARAMM Healthcare” as MSME vide

registration No.UDYAM-TN-02-0092155 and the date of

incorporation as well as date of commencement of business is

shown as 15.2.2019. The respondent has placed on record invoices

from vendors that they supplied products and from the service

providers which date from the year 2019. The name of the

respondent is shown as “VARAMM”. On 27.7.2020, a rental

agreement is entered into between A.Chandrakumar and

Dr.Ramaprabha for taking on rent the space for the hospital. An

MOU was entered into between Apollo Healthcare and Lifestyle

Limited with the respondent hospital VARAMM. The respondent also

sent an email for registration of UPI ID with Paytm on 3.8.2020.

The respondent also filed its application for registration dated

4.8.2020 before the Directorate of Medical and Rural Health

Services under the name of “VARAMM Womens Centre” and the

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same has been acknowledged by the Directorate of Medical and

Rural Health Services as well. The respondent also received email

dated 18.8.2020 sent by Google for successfully adding “VARAMM”

Women's Centre in the Google Map. The respondent has produced

an advertisement in the newspaper dated 23.8.2020 which features

the name of the respondent as “VARAMM”. A similar advertisement

is issued on 28.9.2020. All these documents are prior to

18.10.2020, i.e., the alleged date of commencement of the mark

“VARAM” by the appellant. The respondent has challenged the

validity of the appellant's trademark registration. The respondent

has applied for trademark in the name of “VARAMM HEALTHCARE”

before the Trade Mark Registry under Class 44 and the same is

pending registration.

7.5. Referring to the aforesaid documents, learned counsel for

the respondent submitted that the respondent has discharged the

burden under Section 34 of the Act of 1999. On the contrary,

Section 34 of the Act of 1999 recognises and protects the rights of

the prior user. Section 27(2) of the Act of 1999 would allow and

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give rights to the unregistered owner of the trademark to claim

passing off as common law remedy. This would show that the

primary motive of the legislature is to guard the unregistered prior

user of the trademark as well. In support of the aforesaid

submission, reliance is placed on the judgment of the Apex Court in

S.Syed Mohideen v. P.Sulochana Bai, (2016) 2 SCC 683.

8. We have considered the submissions canvassed by learned

counsel for the parties and have also perused the documents placed

on record, so also the impugned judgment delivered by the learned

Single Judge.

9. The judgment relied by learned Senior Counsel for the

appellant in the case of Lupin Ltd v. Johnson and Johnson, 2015 (1)

Mh.L.J. 501 is a case decided on a reference. The Division Bench of

the Bombay High Court held that where the registration of the trade

mark is ex facie illegal, fraudulent or shocks the conscience of the

court, the court is not powerless to refuse grant of an injunction,

but for establishing these grounds, a very high threshold of prima

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facie proof is required, and it is, therefore, open to the court to go

into the question of validity of registration of the plantiff's trade

mark to arrive at a prima facie finding. The Full Bench in the said

case further held that a very heavy burden lies on the defendant to

rebut the strong presumption in favour of the plaintiff. It was

further held that though it is considered as a practice of the Bombay

High Court of granting injunction in favour of the plaintiff having a

registered trade mark, the same cannot be treated as a total

embargo on the power of the court to refuse grant of interim

injunction.

10. Another judgment relied by learned Senior Counsel for the

appellant in the case of Kamat Hotels (India) Ltd v. Royal Orchid

Hotels Ltd and another, 2011 (4) Mh.L.J. 71, states that the use

should be a continuous use of trade mark so as to avail protection

under Section 34 of the Act of 1999 and that the mark in respect of

which protection is sought by the prior user must have been used

from a date prior to the use of the registered trade mark or the date

of registration of the registered trade mark, whichever is earlier.

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11. In the case of Amaravathi Enterprises v. Karaikudi

Chettinadu, (2008) 36 PTC 688, a Division Bench of this court

observed that the respondent could not prove the continuous usage

and also found that though the appellant had obtained registration

of the trade mark on 19.2.2004, it was the prior user, i.e., even

before the commencement of the partnership business of the

respondent.

12. In the case of S.Syed Mohideen (supra) relied upon by

learned counsel for the respondent, the Supreme Court has

observed that the prior user has superior right over the registered

owner of the trade mark. It is held that a registered proprietor of

trade mark has the exclusive right to use the trade mark and to

obtain relief in case of infringement of trade mark. However, such a

right is not absolute, but subject to rights of prior user for passing

off that are available to him under common law.

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13. The registration of a trademark, if valid, gives to the

registered proprietor of the trademark the exclusive right to use of

the trademark in relation to the goods and services, in respect of

which the trademark is registered and to obtain relief in respect of

the infringement of the trademark in the manner provided under

the Act of 1999.

14. However, the aforesaid principle is subject to Section 34

of the Act of 1999. Section 34 of the Act of 1999 provides that

nothing in the Act of 1999 shall entitle the proprietor or a registered

user of registered trade mark to interfere with or restrain the use by

any person of a trade mark identical with or nearly resembling it in

relation to goods or services in relation to which that person or a

predecessor in title of his has continuously used that trade mark

from a date prior — (a) to the use of the first-mentioned trade mark

in relation to those goods or services be the proprietor or a

predecessor in title of his; or (b) to the date of registration of the

first-mentioned trade mark in respect of those goods or services in

the name of the proprietor of a predecessor in title of his; whichever

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is the earlier. The prior user of the identical trademark is protected.

The said provision has the words of caution that such prior user has

continuously used the trade mark from the date prior to the use of

the first-mentioned trade mark and the date of registration of the

first-mentioned trade mark in the name of the proprietor.

15. The contention of learned Senior Counsel for the appellant

is that the learned Single Judge ought to have considered the

continuous usage and should not have passed the order only on the

basis of the fact the respondent has coined the word “VARAMM”.

The learned Single Judge has observed that the respondent has

coined the word “VARAMM”. It is true that, by itself, would not be

sufficient to attract the protection granted under Section 34 of the

Act of 1999.

16. In the instant case, the learned Single Judge has observed

that the centre of the appellant has been inaugurated on

18.10.2021. This prima facie appears to be from the facts on

record, i.e., the article published in Chennai Vision dated 6.3.2022,

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to the effect that the appellant is running the super-speciality centre

in the name of “VARAM” from 6.3.2021. In the article published in

the Chennai Vision dated 6.3.2022, it is stated that the appellant, a

dedicated women's super-speciality centre by MGM Healthcare in

Chennai, is celebrating its first anniversary.

17. The rental agreement relied upon by the respondent dated

27.7.2020 is not referred to by the learned Single Judge on the

ground that it was unregistered. However, the other documents

were placed on record by the respondent to suggest that the

respondent is operating prior in time in the name of VARAMM

Healthcare Private Limited. That apart, a document is placed on

record to prove the registration of UPI ID with Paytm dated

3.8.2020 in the name of VARAMM Women's Centre. The email

dated 18.8.2020 sent by Google shows that the name of “VARAMM”

Women's Centre is successfully added in the Google Map. The

acknowledgment issued by the Directorate of Medical and Rural

Health Services dated 4.8.2020 suggests that it has received

application for registration of “VARAMM Womens Centre” from the

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respondent. The respondent also produced some medical

prescription sheets issued by the Centre to patients in 2019, so also

the registration as MSME in the year 2019. There are documents

placed by the respondent to suggest continuous prior usage of the

said trade name “VARAMM”.

18. At this stage of grant of temporary injunction during the

pendency of the suit, the court has to consider the prima facie case,

balance of convenience and irreparable loss. The documents are

placed on record by the respondent to suggest prior and continuous

usage. The learned Single Judge has also relied upon the same.

19. It is trite that this court in exercise of its appellate

jurisdiction would be loath to interfere with the discretionary order

of the learned Single Judge unless it is shown that the finding is

perverse or the learned Single Judge has considered the documents

which are not relevant and/or the conclusions are erroneous.

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20. This court while entertaining the appeal against the order

of the learned Single Judge at an interlocutory stage would not

allow the appeal only because a different view is possible. The

documents on record demonstrate prima facie the prior usage of the

said mark “VARAMM” by the respondent, so also the business being

run by the respondent. Some prescriptions are placed on record to

show that it is in continuous usage of the said mark prior to the

registration of the trade mark of the appellant. It is only after the

evidence is led a conclusive finding can be arrived at. The

reasoning adopted by the learned Single Judge is a plausible one.

21. In the light of that, we are not inclined to interfere with

the order of the learned Single Judge while exercising the appellate

jurisdiction.

22. It appears that the pleadings are complete before the

learned Single Judge. The parties may endeavour to get the suit

decided expeditiously. It is made clear that the observations made

at this stage are only prima facie in nature and the suit naturally

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would be decided on the basis of the evidence adduced by the

parties uninfluenced by the observations made at the interlocutory

stage by the learned Single Judge and this court in these appeals.

The appeals are disposed of accordingly. There will be no

order as to costs. Consequently, C.M.P.Nos.20173 and 20200 of

2023 are closed.

(S.V.G., CJ.) (P.D.A., J.) 29.09.2023 Index : Yes/No Neutral Citation : Yes/No sasi

To: The Sub Assistant Registrar Commercial Cases High Court, Madras.

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THE HON'BLE CHIEF JUSTICE AND P.D.AUDIKESAVALU,J.

(sasi)

O.S.A. (CAD) Nos.120 and 121 of 2023

29.09.2023

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