Mgm Healthcare Private Limited vs Varamm Healthcare Private Limited

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.

___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023

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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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.

___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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.

___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023

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.

___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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, ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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.

___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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 ___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023 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.

___________ https://www.mhc.tn.gov.in/judis O.S.A. (CAD) Nos.120 and 121 of 2023

THE HON'BLE CHIEF JUSTICE

AND

P.D.AUDIKESAVALU,J.

(sasi)

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

29.09.2023

___________ https://www.mhc.tn.gov.in/judis