' MUHAMMAD FARRUKH I RFAN KHAN, J . - - -Appellant herein is a public limited company and claims to be the creator, originator, owner and user of trademark "P" in stylized form (hereafter stylized "P" logo) which it claims to be using since the inception of its business of cement manufacturing, marketing and selling for more than two decades. It claims to have launched a new brand of cement for export to Afghanistan and Central Asian Republics with the stylized "P" logo and Two Elephants device. It is claimed that cement bags with the said trademark stylized "P" logo and Two Elephants device were designed and printed for the appellant first time by a company called Syntronics Limited in May 2010.
2. The appellant claims to have engaged respondent No,3, a Pakistani company having its office in Peshawar as its distributor and submits that respondent No,3, as a distributor of the appellant, entered into a contract with an Afghan company named Shirkat-ul-Faisal and started exporting cement to Afghanistan under the trademark stylized "P" logo with Two Elephants device. It is alleged that after some time relationship between the appellant and respondent No,3 came to an end, whereafter respondent No,3 contracted appellant's competitor, respondent No,1, and started exporting cement to Shirakat-ul-Faisal in Afghanistan under appellant's trademark stylized "P" .Logo with Two Elephants device in utter disregard of law and violation of business ethics and with dishonesty and mala fide.
3. It appears that appellant as well as respondent No,3 have filed their respective applications for registration of trademark comprising of stylized "P" logo and Two Elephants, device and the matter is still pending with the Registrar of Trademarks and none of the parties so far has obtained trademark registration thereof.
4. To restrain respondents from using the aforesaid trademark, the appellant filed a suit for infringement coupled ,with passing off the goods before the learned District Judge, Lahore, along with an application under Order XXXIX, Rules 1 and 2, C.P.C. And the learned Additional District Judge granted a restraining order on 24th June, 2011 which was withdrawn through the impugned order dated 29-3-2012.
5. The respondents resisted the suit and inter alia challenged the claim of proprietorship of the trademark by the appellant. Certain allegations about concealment of some facts concerning dealership were also raised and it was also asserted that Shirkat-ul-Faisal Limited has obtained registration of Two Elephants device in Afghanistan. Strong reliance by the respondents was placed on obtaining trademark registration in Afghanistan by Shirkat-ul-Faisal Limited in Afghanistan.
6. After hearing both sides the learned Additional District Judge dismissed the injunction application vide order dated 29-3-2012 which has been assailed by the appellant herein through the present appeal. In the operating part of the impugned order, the learned Additional District Judge has mentioned that it is an admitted fact that the Cdmpany (appellant herein) is using the trademark with Two Elephants and letter "P" for which plaintiff has applied for its registration and the application is still pending with the Trademarks Registry.
7. The learned Additional District Judge also specifically noted that the defendants (respondents herein) are selling their cement with similar get up with the difference that the letters "Ps" have been used instead of letter "P" and noted that in trademark cases most important factor is "who is prior user of the trademark". The main ground for refusing the injunction application which prevailed with the learned Additional District Judge was that though the appellant claimed to be using alleged trademark with Two Elephants with letter "P" but the appellant company did not produce any cogent and convincing material before the learned trial. Court in that regard and he also seems to be influenced by the argument that Shirkat-ul-Faisal Limited has obtained the trademark registration in Afghanistan.
8. The respective trade marks of the parties are reproduced below:-
9. I have heard the learned counsel representing the parties in detail, who mostly repeated the same arguments as they advanced before the learned Additional District Judge, and which have been succinctly mentioned in the impugned order and also noted above by me briefly.
10. I have gone through the impugned order, pleadings and documents attached thereto filed before the learned Additional District Judge and also the memo of appeal and I am constrained to observe that pleadings before the learned Additional District Judge have not been prepared and filed by the parties 'adequately and sufficiently as is necessary in trademark disputes. Also, unfortunately, the appellant has not made sufficient efforts to prepare the memo of appeal with clarity and sufficiency.
11. At the hearings both the counsel argued their respective cases very strenuously.
12. It appears that with the memo of appeal several documents have been filed, which were not accompanied with the plaint filed before the trial Court or thereafter and such A documents are inadmissible at this stage in Appeal against the impugned order. Reliance is placed on Messrs Ghulam Muhammad Dossul & Co. v. Messrs Vulcan Co. Ltd. And another (1984 SCM R 1024). Also no effort has been made by the appellant to make a separate application and seek permission of this Court to introduce such documents so that the Court, if it deemed appropriate, may have issued notice of such documents to the respondents; before allowing or disallowing such a request on merit.
13. The respondents have neither denied the existence of their distributorship with the appellant cement company at the relevant time nor export of cement in the said capacity to Afghanistan with the trademark in dispute. It was, however, strongly stressed by respondents that Do Pheel/two Elephants was the brainchild of respondent No,4 and appellant is not the proprietor thereof and therefore appeal be dismissed. On the facts and circumstances of the case this argument has no force at all.
14. If Do Pheel/Two Elephants was the brainchild of respondent No,4, a Director of respondent No,3, it seems inconceivable that they would continue to use it with stylized "P" logo, as stylized "P" logo is admittedly the trademark of appellant. This, prima facie, shows dishonesty on the part of the, respondents. In this respect even if, for argument's sake, it is considered that Two Elephants was the brainchild of respondent No,4, then if, as per respondent's own stance that their dealership was unlawfully cancelled by the appellant, it was their legal, moral and ethical duty to have only taken their alleged Two Elephants device trademark to respondents Nos,1 and 2 (Fecto Cement Limited) to start export with Two Elephants device replacing appellant's stylized "P" logo with that of Fecto's own logo. This was apparently not done for obvious reasons that respondents desired to take advantage of the reputation and goodwill acquired by Two Elephants and stylized "P" logo as a trademark of the appellant by virtue of its use on cement exported to Afghanistan.
15. There is a further aspect to respondents' prima facie dishonest act and their efforts to deceive the Courts. If Two Elephants was the braindhild of respondent No,4 (Mr. S. Mehtab Hussain), a Director of respondent No,3, then it is not understandable why they would allow Shirkat-ul-Faisal Limited, which is a separate entity, to register it in its name in Afghanistan and not in the name of the said respondent or respondent No,3. To my mind the above prima facie shows that respondents Nos,3 and 4 are not owners of the mark Two Elephants devices. After respondent No,3 was appointed distributor for Afghanistan through ,appellant's letter dated 29th March, 2010 for sale of Two Elephants brand cement, respondent. No,3 applied to register the said trademark in its own name on 31st August, 2,010, which is also much subsequent to the date of said distributor's appointment letter.
16. As far as registration of Two Elephants device and stylized "P" in Afghanistan is concerned, that has no bearing on the present proceedings as these are concerned with the manufacture, sale and export of cement from Pakistan. Also Shirkat-ul-Faisal is not a party to these proceedings.
17. Moreover, under subsection (2) of section 5 of the Trade Marks Ordinance, 2001 applying in Pakistan a trademark to the goods to be exported from Pakistan and any other act done in Pakistan in relation to goods to be so exported 'constitutes use of the trademark within Pakistan.
Therefore, even though cement under the trademark Two Elephants and stylized "P" logo was exported and sold in Afghanistan .But as the said trademark was applied to goods C within Pakistan, with an intention to export such goods to Afghanistan, it will be deemed as if the trademark Two Elephants and stylized "P" has actually been used in Pakistan by the appellant by virtue of the said provision of law and hence prior use and reputation and goodwill would be deemed to have existed in Pakistan as well giving the appellant a right to restrain the respondents from manufacturing or exporting cement under the trade mark in dispute to another country or selling it in Pakistan.
18. As far as Distributorship is concerned it is pertinent to note that respondents in their written statement have admitted the existence of distributorship and have, referred to it as well as attached a copy of said letter in paragraphs 1, 2 and 3 of the Factual Matrix of the- written statement as reproduced below:-- "(1) That the plaintiff approached defendant(s) Nos,3 and 4 in order to subscribe to their services as exclusive and sole distributor(s)/dealer(s). The plaintiff, at all material times, represented and assured that defendant No:3 would be engaged to the exclusion of all otheRs, It is submitted that Dho Pheel/(the two elephants) was the brainchild of defendant No,4, who is and was at all material times, the Director of defendant No,3.
(2) That the plaintiff through its General Manager (Marketing and Sales), Mr. Rizwari Butt, confirmed the appointment of defendant No,4 as the authorized Sole Distributor for Afghanistan and CARS (Central Asian Republics) through a letter dated 29-3-2010. A copy of the letter dated 29-3-2010 is placed herewith as Annex-E.
(3) That the albeit it is beyond the scope of the present proceedings, it is nevertheless the case that the plaintiff flagrantly breached the Dealership Agreement, which it had struck with defendant No,3.
Consequently, the latter, on the plaintiffs contractual repudiation, was but only impelled to enter into a Dealership Agreement dated 20-4-2011 with defendant No,1 (viz, Fecto Cement Limited). A copy of an email written by defendant No,4 to the General Manager of defendant No,1 substantiating these state of affairs is placed herewith as Annex -F."
19., Unless otherwise shown, the concept of a distributor in trademark matters is that a distributor is merely a representative of the owner of the trademark for a specified territory for supply or distribution of goods manufactured/assembled/packed by the 'owners under his trademark. For such service the distributor gets a certain commission. In such cases distributor - has no other D relationship with the manufacturer packer/assembler of goods, who is also the owner of trademark, and merely by distributing goods on behalf of the owner, a distributor does not, and cannot, become entitled to claim ownership of a mark to register the said trademark in his own name and even if he succeeds in securing trademark registration, that will .Be liable to be cancelled/rectified after the true owner obtains knowledge of existence of such registration.
Therefore respondents' admission to be distributors of appellant for selling Two Elephants brand cement to Afghanistan, prima facie, prevents them from claiming to be the owners of the' said trademark and, prima fade, the appellant is the owner of the said trademark as if respondents were the owners of the trademark dispute there was no need for the respondents to accept their appointment as distributors of appellant, and this aspect alone is sufficient to prima facie conclude that respondents are not the owners of the trademark in dispute.
20. The learned trial Court has stated the correct principle that in trademark cases most important factor is who is prior user of trademark. This principle is in particular E applicable when none of the contesting parties is armed with a registered trademark. Despite stating the correct principle, in my humble view, the learned trial Judge committed a 'serious error when he concluded that the plaintiff company (appellant) did not produce any cogent and convincing material in this regard.
This apparently reflects that the learned trial Judge did not pay much attention to the pleadings of the parties nor perused the documents available on the record. While it has been observed earlier that appellant did not diligently prepare and file the suit and supporting documents, the factual situation remains that at the time of arguments on application under Order XXXIX, Rules 1 and 2, C.P.C. And passing of impugned order the learned trial Court had on record the distributorship appointment letter from appellant to respondent No,3 appointing the latter distributor for sale of Two Elephants cement in Afghanistan and this letter of appointment of respondent No,3 as the distributor is admitted by the respondents inn their written statement in paragraphs 1, 2, and 3 of the "Factual Matrix" of the written statement as reproduced above filed by the respondents with their written statement.
21. It is a settled principle of Trade Mark law that prior use and hence proprietorship of an unregistered trademark can be, prima facie, proved at the interim stage by filing independent documentary evidence such as copies of undisputable sale invoices, advertisements, sale figures, publicity figures etc. Reference in this respect is mode to the cases of The Welcome Foundation Limited v. Messrs Karachi Chemicals Industries (Private) Limited (2000 YLR 1376), Mehtabur Rehman v. Saeed Ahmed and 2 others (1986 CLC Karachi 348) and Sved Muhammad Maqsood v. Naeem Ali Muhammad (1985 CLC Karachi 3015). I may add here' that such proof does not merely depend on the volume of the documents but on the quality and their undisputable character to clearly show that a certain party is a prior user, and hence prior proprietor of a trademark.
22. In the present case, however, there is admittance on the part of the respondents that respondent No,3 has acted as a distributor for the appellant and sold appellant's cement with the trademark stylized "P" and Two Elephants device to Afghanistan. Therefore, there is no denial or challenge that the trademark stylized "P" and Two Elephants device was not first used by the appellant and cement with this trademark was not sold in Afghanistan through respondent No,3 as a distributor of appellant and thus there is no denial that appellant is the prior user of the disputed trademark.
23. In my humble opinion the distributor's appointment letter and above admitted facts were sufficient to, prima facie, show that appellant was the prior user and prior owner of the Two Elephants and stylized "P" trademark for cement. Moreover the respondents have not explained the reason for their choice to use the stylized "P" logo along with Two Elephants, when respondent No,1 itself seems to be a well known company; it should have chosen to use its own independent logo and not that of its competitoRs, It is in particular not appreciable that big business groups resort to copying their competitors trademarks, as, prima facie, seems to be the case here.
24. In the light of the above, it clearly appears that the appellant has made out a prima facie case in its favour and is likely to suffer irreparable loss if the respondents are not restrained from using the stylized "P" logo and the Two Elephants device. I must add here that trademark rights are lifelines of businesses and unauthorized use of owner's trademark by third parties results in un- quantifiable loss and damage to its goodwill and business which is irreparable in nature. Thus the loss that the appellant is likely to suffer as a result of use of appellant's trademark by the respondents cannot be calculated in terms of monetary compensation and would be irreparable in nature. The balance of convenience is also in favour of the appellant. I must also observe that under section 46(2) of the Trade Marks Ordinance, 2001 all such reliefs by way of damages, injunction, accounts are available to the proprietor of a trademark simultaneously and not as an alternate to each other and just because in addition to interim injunction a plaintiff may claim damages and compensation in a suit relating to trademark rights, interim relief cannot be denied on that ground.
25. In the light of the above, this appeal is allowed and consequently the impugned order dated 29-3-2012, is set aside. The respondents are restrained to use the appellant's trademark stylized "P" logo and Two Elephants device till the final disposal of the suit. It is however noted that the observations made above are tentative in nature and would not influence the decision of the suit on merits after recording of evidence. As valuable rights of parties are involved it is ordered that the trial Court shall decide the suit within six months from the date of receipt of certified copy of this judgment.