1. Plaintiffs have filed this suit for permanent and perpetual injunction, rendition of accounts, damages and compensation for the infringement of trade mark, passing off and copyright.
2. Plaintiffs have also moved an application under ,Order XXXIX rules 1 and 2, C.P.C. being C.M.A No. 8973 of 2004 against the defendants, seeking ad interim orders against infringing, passing off.
3. Attempt to infringe and of pass off their products/services and also selling and offering for sale advertising their product/services under imitated trade mark ADT and its logo, design. label, getup, artistic work and design and copyright similar or deceptively similar or any close variation thereof to that of the plaintiff. Other part of the application relates to relief against prosecuting criminal complaints.
4. On hearing the plaintiffs. ad interim orders were passed on 1-6-2004 whereby the defendants were restrained from using or claiming any right or interest in the mark ADT with logo design, label, colour scheme and getup as that of the plaintiffs mark ADT. Defendants were also restrained from using copy right of till next date.
5. Defendant No.1 along with written statement has also filed a counter claim for damages in the sum of Rs.5 million against the plaintiffs and so also C.M.A. No.5478 of 2004 under Order XXXIX, rule 4, C.P.C., seeking recall, rescind or vacation of ad interim order operating against them. Defendant's Nos.2 and 3 filed a joint written statement defendants Nos.4 and 5 have not yet placed any written statement on record.
6. Brief facts leading to the listed-applications, appears to be that the plaintiff No.1 a Swiss company appointed the plaintiff No.2 a wholly owned subsidiary of a foreign company, as an exclusive licensee for providing security services and equipment ADT as trade and service mark. In terms of licence agreement dated 15-5-2001 annexure-G (at page 113 of the file), plaintiff No. 2 in turn appointed one ABM investment, a proprietary concern of defendant No. 2, as their dealer under agreement dated 10-1-2002 (annexure-J page 213 of the file).
7. Case as setup by the plaintiffs seems to be that, the dealership agreement clause (3) did not confer any right or interest for the use of 'intellectual property' except for the benefit of the principals that is plaintiffs. It was further provided in the dealership agreement that, on termination thereof, all the promotional material equipment and devices shall be restored by the dealer to the principals. It seems that dealership of ABM investment was cancelled by the plaintiff No.2, through notice dated 22-8-2002 addressed to defendant No.2, (annexure-J-I at page 255 of the file).
8. Plaintiffs grievance is that on termination of dealership the defendant No.2, instead of restoring the promotional material be managed to get " ADT Pakistan (Pvt.) Ltd." the defendant No.1 incorporated by adopting the plaintiffs mark ADT as a part of its corporate name. Article and Memorandum of defendant No.1 was placed on record (at page 355 to 399 of the file), to show that defendant No.2 and his wife, the defendant No.3 are the founder Director/share-holder of the defendant No. 1 Company. It is the grievance of the plaintiffs that the defendant No.2 fraudulently misappropriated the trade and service mark, logo and house name of the plaintiff No.l. It Is stated that in furtherance of his malicious intent and motive. defendant No.2 obtained a copyright in respect of the mark and logo of the plaintiff, on the basis of fraudulent misrepresentation made by him and so also by the defendant No.5. In the forgoing drop injunction application C.M.A. No.8973 of 2004 was filed.
9. Defendants were served, written statement and counter-affidavit were filed by the defendants Nos.1,2 and 3, other defendants chose not to file any counter-affidavit. Defendant No.1 also filed an application under Order XXXIX, rule 4, C.P.C. being C.M.A. No.5478 of 2004 seeking recall of interim orders dated 1-6-2004. Defendant No.2. main player in the entire episode, did not deny the dealership agreement between the plaintiff and ABM Investment to which he was the sole signatory for the dealer. He however, asserted that ABM Investment was a partnership firm. No partnership deed or names of other partners were disclosed. Defendant No.2 did not deny the pendency of the plaintiffs application of the Trade Mark 'ADT' with Trade Mark Registry dated 7-10- 1997. He also neither denied that promotional material and devices have not been returned on the termination of the dealership, nor. denied that he formed the defendant No.1, Company, he claimed that there is no prohibition under law to form a Company by adopting any name.
10. In para.18, of the plaint, it was specifically pleaded that, the defendant No.2 on the basis of false undertaking statement (at page 419) and affidavit of defendant No.5, Cyma Zuffiqar (page 415) applied and obtained the copyright of the mark ADT on 9-1-2002 (annexure M/1 to the plaint). Defendant No.5 had sworn a false affidavit that she had created artistic design under the title ADT of the file). Neither defendant No.2 nor defendant No.5 replied such assertions of the plaintiffs.
11. Defendant No.1 iii a detail written statement denied the allegation in the plaint. Neither the defendant No.1 nor the defendant No.2 denied that the defendant No.2 got defendant No. I Company incorporated under the name of style ADT Pakistan (Pvt.) Ltd. Defendants Nos.1 and 2 did not place any material on record in rebuttal to the Article and Memorandum of Association of defendant No.1, filed by the plaintiff, evidencing that the defendants Nos.2 and 3 were/are its founder Directors. Only photocopy of a purported resolution of defendant No.1 has been filed along with written statement showing the transfer of management of defendant No.1 Company from defendants Nos.2 and 3 in favour of defendant No.4 and one Akber Shahid. No Form-29 as required under the Companies Ordinance, 1984 was placed on record.
12. Contention of Mr. Qasit Nawaz that, the plaintiff had applied for the registration of the Trade Mark 'AM- as far back as on 10-6-1997 (Page 67), which was published in the Trade Mark Journal dated 1st October 2003 (page 69). Another application dated 26-6-2002 (page 83, 87) was made for other goods under the mark ADT. It is urged that the defendant No.2 was signatory to the agreement between the plaintiff No.2 and ABM Investment. Mr. Qasit, has further drawn my attention to Clauses 2.2. 2.4 and 3 of the agreement to assert that, the dealer was bound not to represent itself as ADT Licensee nor shall have any right, title or interest in the name, logo or the trade mark whether registered or not. Agreement also provided that the dealer shall not acquire any right as a result of performing the agreement, exclusivity and restrictive covenants, in terms of clause 3.7 were saved even after revocation of the agreement. Mr. Qasit, urged that, the defendant No.2 is the main person who has played the mischief. He further urged that, the copyright cannot be used as a substitute of the trade mark or even for service mark, in support, of his contention he has placed reliance on Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090; Dabur India Ltd. v. Hilal Confectionery (Pvt.) Ltd. PLD 2000 Karachi 139; Messrs Ferozesons Pvt. Ltd. v.
13. Dr. Col. Retd. K. U. Kureshi 2003 CLD 1052; Maaza International Company L.L.C. v. Popular Food Industries Ltd. 2004 CLD 171; Messrs Mehran Ghee Mill Pvt. (Ltd.) v. Messrs Chiltan Ghee Mill (Pvt.) Ltd.
14. 2001 SCMR 967; Pakistan Drug House (Pvt.) Limited v. Rio Chemical Company and another 2003 CLD 1531 and Tapal Tea (Private) Limited v. Shahi Tea Company 2002 CLD 1113.
15. Mr. Akhter All Mehmood learned counsel appearing for all the defendants contended that the defendant No.1 is the owner and proprietor of the mark and logo 'ADT and hold registration under the Copy Right Ordinance, 1962. It was therefore, urged that none other than the defendant No.1 is authorized to use the mark and label. 'According to him, plaintiffs neither are the registered trade mark holder nor possess any right in the mark under the Copyright Ordinance, 1962. He further urged that mere pendency of application for the registration of the Mark, with Trade Mark Registry does not confer any right on the plaintiff to claim any right therein. Learned counsel for the defendants contends that, instant suit has been filed as a counter-blast to a Criminal Complaint filed against the plaintiff No.2. pending adjudication before the competent Court of law. He further contends that defendant No.4 was providing security services since 1998 in Pakistan and after incorporation of defendant No. I under name and Style of ADT Pakistan (Pvt.) Ltd. On 24-12-2002 acquired exclusive right in said Company since 31-12-2002. It was urged that since the copyright stand registered in favour of defendant No.1 on 18-12-2003 none other is entitled to use the said mark and in fact, it is the plaintiffs who have infringed the mark of defendant No.1, causing financial loss and damages. Defendant No.1 has claimed damages in the sum of Rs.5 million as against the plaintiffs in the counter-claim.
16. Heard the arguments and perused the record.
17. It is not disputed that the defendant No.2, Asif H. Baig Muhammad, was a signatory to a dealership agreement 10-1-2002 annexure J (page 213) conferred by the plaintiff No.2. Relevant clauses of the agreement read as follows:-- "2.2.1 During the term of this Agreement, Authorized Dealer understands and specifically agrees:--
(i) that the Authorized Dealer shall act exclusively as a ADT Authorized Dealer solely for its benefit and the benefit of ADT:
(ii) that Authorized Dealer shall not offer services and/or products of any other alarm company or other entity 'engaged (in whole or in part) in the Electronic Event Detection Services Industry and shall not offer services and/or products which are similar in any manner whatsoever to that offered under this Agreement; and
(iii) that no entity, other than ADT will provide Electronic Event Detection Services with respect to Qualified Alarm Accounts. Failure to comply with constitutes breach of Agreement by Authorized Dealer and liable to immediate Termination without indemnities on the part of ADT.
18. 2.4 Authorized Dealer Status. Nothing contained in this Agreement shall be construed as creating a joint venture, partnership or employment, franchise relationship principal-agent relationship between the parties hereto, nor shall either party have the right, power or authority to create any obligations or duty, express or implied, on behalf of the other party hereto, unless specifically specified otherwise in this Agreement. ADT and Authorized dealer understand and agree that Authorized Dealer's status under this agreement is that of an independent contractor and that Authorized Dealer's status shall in no way be deemed to be that of an agent or employee of ADT.
19. Therefore. in dealing with third parties, Authorized Dealer shall at all times identify ADT as a provider of Electronic Event Detection Services and Authorized Dealer's capacity as an authorized, but independent, dealer of ADT. At no time shall Authorized Dealer or Owner hold itself out as ADT or represent. in any fashion or nature whatsoever, that Authorized dealer is ADT. No contracts, commitments, statements or representations by or on behalf of Authorized Dealer shall be binding upon ADT unless first approved by ADT.
20. 6.3 Employees of ADT. During the term of this Agreement, and for thirty-six (36) months after the termination of this Agreement, Authorized Dealer shall not approach, counsel or attempt to induce any person who is then in the employment of ADT to leave the employ of ADT.
21. 6.4 Non-competition. During the term of this Agreement, Authorized Dealer agrees that it and its Representatives shall not engage in any of the following activities: 6.4.1 act as a representative for any other provider of Electronic Event Detection Services; and/or 6.4.2 engage in any other business, duties or pursuits whatsoever, directly or indirectly, which compete or are of a similar nature with the activities provided in this Agreement, including, but not limited to, monitoring. maintenance and other related services.
22. 8.13 Licences and trade mark. Authorized Dealer owns or possesses all licences, trade marks, trade names. copyrights, and local licences or permits and other intangible property rights used in or necessary for the conduct of Authorized Dealer's business , as now operated and there exists no conflict with the licences copyrights, trade marks, trade names, copyrights, and local licences and permits of others. Authorized Dealer is not a party to any licence or royally agreement with respect to any patent, trade mark, trade name or copyright.
23. 18.17 Survival of Terms. All representations, warranties and covenants made by Authorized Dealer under this agreement shall survive termination of this Agreement (Underlined for adding emphasis), On perusal of 'above terms it is evident that, defend nt No.2 committed not to compete with the plaintiffs in sine or trade and business and restrictive covenants in the agreement as per clause 81.17 survived even after termination of the agreement. Admittedly the agreement was terminated on giving one month notice dated 2nd August, 2002 dealership terminated with effect from 15-11- 2002. From the record and admission made by defendant No.4, it appears that the immediately one month after termination of dealership, defendant No.2 Asif Baig Muhammad on 24-12-2004 got incorporated defendant No.1 Company, under the name and style of ADT Pakistan (Pvt.) Ltd.
24. Adoption of ADT as part of corporate name of defendant No.1 Company, evidently is in breach of clause 2.4 and clause 6.4.2 of the agreement as reproduced above. Defendants Nos.2 and 3 by adopting name of defendant No.1 deceptively similar to that of the plaintiff No.1 in fact, they are holding out to be a subsidiary or connected or 'associated with ADT Services, AG, Switzerland, the plaintiff No.1 herein. It may be observed, that adoption of name and registration of Company under a name which is deceptive, is not permissible under section 37 of the Company Ordinance, 1984. In case where deceptive name has been adopted and it comes to the notice of the Company it may apply for the change in name or even the Registrar of Companies (now Securities and Exchange Commission of Pakistan) is competent to order for rectification of deceptive name. In appropriate cases, the Court may pass injunctive order against the defendants from adopting and or to carry on trade and business under the name and style deceptively identical'or similar to that of other company already carrying on business under a particular name. (See also Progressive Consultants (Pvt.) Ltd. v. Corporate Law Authority 2002 CLD 726) and section 2 (xviii) of the Trade Marks Ordinance, 2001.
25. In this case the defendants Nos.2 and 3 got incorporated the defendant No.1 company by adopting main feature "ADT" of plaintiff No. 1. It appears that the defendant No.1 has already been registered under name similar to that of plaintiff No. 1. Therefore, instead of passing any injunctive order forthwith. I deem appropriate to follow the course adopted by this Court in the case of Muhammad Baksh & Sons Ltd. v. Azhar Wali Muhammad 1986 MLD 1870. Wherien, the Court directed the Company to take steps to get the name rectified within one, month. In instant case, as well, the defendant No. 1 Company is directed to take,,steps and measure to seek rectification of its name within one month from the date of penning down of this order. In event to steps are taken within the time allowed, the Securities and--Exchange Commission of Pakistan In terms of section 38 of the Companies Ordinance, 1984, having jurisdiction in the matter may, direct the defendant No.1 company to, rectify its name to obviate deception and confusion on account of similarity of 'its name with that of the plaintiff No.1 and its trade mark.
26. From the record it is evident that, the defendant No.2 Asif Baig Muhammad and his wife Mrs. Meinu Baig Muhammad is the founder Director/share-holder of defendant No. 1. It is clear that, the defendant No.2 is a main person behind the scene. The registration of Copyright was obtained on the basis of undertaking given by the defendant No.2 containing assertion that defendant No.1 is owner of Copyright, and the affidavit of defendant No.5 Cyma Zulfiqar that, she has designed and created artistic work. On facts as unfolded in this case prima facie, it appears that the declaration by the defendant No.2 and the affidavit or defendant No.5 appears to be palpably false and incorrect.
27. Mr. Akhter All Mehmud, could not deny the fact that, the defendant No.2 was the signatory to the dealership agreement or that he applied for the registration of Copyright under his signature. Mr. Akhter, vainly contended that, defendant No.2 is partner in ABM Investment that, entered into dealership with the plaintiff No.2, therefore, defendant No.2 is not to be held liable for the act of partnership firm, arguments on the face of it, are fallacious. Defendant No.2, who is signatory to the dealership agreement has not placed any material on record to show that ABM Investment is a partnership. Even it is so, then also, it does not lie in the mouth of the defendant No.2 to pass on the buck on flimsy ground and avoid the consequences of the misdeed committed by him. Even defendant No.5 has not filed any counter affidavit to the listed application, apparently for the reason to avoid proceedings for purgery. Defendant No.2 has not denied the assertion of .the plaintiffs that after termination of dealership he has not restored/returned the promotional material, equipment etc. On the contrary, it appears that the defendant No.4 has entangled the management of plaintiffs in criminal prosecution. It also appears that the plaintiffs have already moved the Court of competent jurisdiction, for appropriate relief and it is up to the plaintiffs to take action for malicious prosecution if' they so chose.
28. Defendant No.4 has not placed any material on record to show that, he provided security services in Pakistan since 1998 under name of ADT. However. surprisingly enough, it was not the defendant No.4, but the defendants Nos.2 and 3 who got the defendant No.1 Company incorporated under a name deceptively similar to that of the plaintiff No.1 and its trade/service mark and logo 'ADT'.
29. Plaintiffs have placed on record large number of invoices to show that, they are carrying on business in Pakistan under name of ADT. Application for registration of label dated 7-10-1997 (page 69) and dated 23-7-2002 (page 83 and 87) fortifies their claim.
30. Contention of Mr. Akther All Mahmud, that defendant No.1 holds registered copy right, is entitled to use the mark ADT to the exclusion of any other person. It may be observed that copyright subsist in original literary, dramatic, musical or artistic work it does not require formal registration. Title in copyright is not dependent on registration, the moment artistic work is created or expressed in any tangible medium of expression, unless otherwise so agreed by the author or creator in terms of contract if any, with third party. (See sections 11 and 13) of the Copyright Ordinance, 1962. Reference may also be made to Ferozesons (Pvt.) v. K.U. Kureshi 2003 CLD 1052 and Pakistan Drug House (Pvt.)
31. Ltd. v. Rio Chemical Co. 2003 CLD 1531. The moment it is shown that, the claim based on the registration is founded on fraudulent misrepresentation; such right could be successfully defeated and defended by the author of the work or his representative (see section 62 ibid). In instant case, there is no denial that the impugned artistic work in the name, style and colour scheme of 'ADT claimed to have been created by the defendant No.5 existed much before she had sworn affidavit to such effect and was being used by the plaintiff extensively. None other than the defendant No.2 was dealing as provider of service under trade or service mark "ADT" of the plaintiffs, under the dealership agreement.
32. Contention of Mr. Akhter Ali Mahmud that, the plaintiffs mark ADT is not yet registered, therefore. suit for infringement is not maintainable; hold no good, in view of the fact that section 46 of the Trade Marks Ordinance, 2001 also recognizes right of action against any person for passing off goods as the goods of another person or services as services provided by another person or the remedies in respect thereof. Likewise in case of copyright, right or Jurisdiction to restrain breach of trust or confidence cannot be defeated, where a person is shown to have obtained or claims copyright in breach of trust and confidence. Plaintiff No.1 a foreign based company and plaintiff No.2 a wholly owned subsidiary of foreign company have been able to demonstrate that they have adopted the mark "ADT" in Pakistan on 7-10-1997 (page 69). when they first applied for its registration. Irrespective of the fact that mark has not yet received registration, fact remains that plaintiffs have not only made out a case of "Passing off' under section 46(2) of the Trade Marks Ordinance, 2001 and so also case of breach of trust and confidence in terms of section 9 of the Copyright Ordinance, 1962. It may further be observed that, Copyright could not be used as a substitute or alternate for the trade or service mark. In the case of Pakistan Drug House (Pvt.) Ltd.
33. 2003 CLD 1513 at page 1554, while expressing anguish over the copy culture and growing tendency of piracy and misuse of Copyright as a substitute to trade mark, amendment in Copyright Ordinance, 1962 was suggested. It appears that 'legislation' is far too below on the priority list of the law makers, no steps in the directions suggested, has been taken as yet. Looking at the slow pace at which the legislator is at work, scrupulous traders like defendant No.2 feels pride in defiance rather than observance of law, and take advantage of loopholes to make personal gains at the cost of real owners besides discrediting Pakistan in global trade arena.
34. It appears that a person applying for Copyright has to file an 'application in terms of rule 4 of the Copyright Rules 1967, containing declaration as to ownership and use of the artistic work together with affidavit of the intended user and author of artistic work. In terms of sub-rule (3) of Rule 4, the person applying for registration of copyright, is also required to send a copy of the application to every other person interested in the. copyright of the work. In instant, case admittedly the defendant No.2 under the dealership agreement with the plaintiffs was "service provider" under the mark ADT, therefore, for all practical purposes the plaintiffs were interested persons entitled for intimation as to the hostile claim of the defendant No.2 of their service and trade mark. There is nothing on record to show that the defendant No.2 while applying for the registration of copyright had sent any copy of application either to the plaintiff No.1 or plaintiff No.2 with whom he had dealership agreement.
35. It may be observed that artistic work may at time be registered under Patents and Designs Act. 1911.
36. In order to avoid clash of interest, right and remedies under Copyright Ordinance, 1962 and Patents and Designs Act. Section 12 of the Copyright provides solution. The Copyright does not subsist under the Ordinance, in any design the moment it is registered under the Patents and Designs Act, 1911. Law-makers may consider to provide similar provision as regard trade and service marks are concerned by analogous provision it may be provided that copyright may cease to exit the moment copyright, that is capable of registration as a trade mark or service mark under the Trade Marks Ordinance, 2001 is registered. Such amendment may perhaps save many from expensive litigation and at the same time save lot of Court time.
37. Till such time law is amended, in order to curb piracy and copy culture it is desirable, that the Registrar Copyright, from onwards, while entertaining applications for the registration of copyright in any artistic work, may ensure that, the Affidavit of the applicant and Author of artistic work must also contain a declaration to the effect, that "The Artistic work, applied for registration, is original creation and is neither copy nor imitation of work of any other author nor is copy or imitation of any design, trade mark or service mark". In terms of sub-rule (3) of rule 4 of Copyright Rules, 1967, declaration must also contain, statement to the effect. "To the best of my knowledge there is, no other person who is interested in the copyright of the work". And where there be any person interested a statement to the effect "A copy of the application has been sent to every other person interested in the copyright of the work. In proof thereof, copy of the Acknowledgement Due is also enclosed". Undertaking may also contain further declaration to the effect that "In case above declaration is found to be false or incorrect, copyright, if granted, is liable to be cancelled, in addition to any other action permissible under law including but not limited to blacklisting the author in future artistic work". Perhaps for fear of legal action. in case declaration is found false or incorrect, it may not altogether abolish piracy or copy culture but surely will serve as a deterrent or remedy for the vice and malady of piracy and copy culture rampant in Pakistan. In fact section 69 of the Copyright Ordinance, 1962 provides two years punishment for making false statement or statement knowing to be false for the purposes of deceiving or influencing any authority or officer in the performance of any of his functions under any of the provisions of the Ordinance.
38. Fact that the defendant No.2, either as a proprietor or as a partner of ABM Investment, not only morally, ethically but legally committed not to appropriate property comprised of trade and service .mark "AM-, vesting in the plaintiffs. Defendant No.2 either himself or through defendant No.1 or through any other defendants indirectly cannot be allowed to misappropriate the property of his master or principal. If such tendency is encouraged. it would be devastating for the corporate and commercial trade and practice in Pakistan and will deter foreign entrepreneurs to enter and make investment in Pakistan.
39. In view of the foregoing facts and circumstances plaintiffs have not only made out a prima facie but good case for the grant and confirmation of injunctive relief. C.M.A. No.8973 of 2004 was accordingly allowed and C.M.A. No.5478 of 2004 filed by the defendant No.1 was dismissed vide short order announced at the time of hearing of the applications on 7-2-2005.
40. Copy of this order may be sent to Securities and Exchange Commission of Pakistan, as well as to the Registrar Copyrights, to follow and comply with the directions contained above. Copy may also be sent to the Ministry as well as to Secretary Law, Justice and Parliamentary Affairs, to examine the amendment proposed in the Copyright Ordinance, 1962 for suggesting the same to the law- framers.