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Case Law On Infringement Of Trademark

July 28, 2011
1)   Case Law : Infringement of trademark: In order to constitute infringement, it is not necesthat the impugned trademark should be an absolute replica of the registered trademark GREAVES COTTON LIMITED V MOHAMMAD RAFI & ORS[ DEL] Section 28,29(1) of Trademarks Act, 1999. Decided on : 03/06/2011 The plaintiff Company (“GREAVES COTTON LIMITED”) engaged in the manufacture of a wide range of industrial products and equipments had a registered trademark  “GREAVES” in its name. Defendant No.1 who is the proprietor of Defendant No.2, made an application for registration of the trademark “GREAVES INDIA” claiming use of aforesaid mark since 1.12.2004 in respect of products which are exactly of the same type as the pumps of the plaintiff company. The plaintiff company sent a legal notice dated 26.12.2007 to the defendant No.1 calling upon it to cease and desist from using the aforesaid mark. The High Court of Delhi passed an order for permanent injunction on the following grounds: i)   The word/mark “GREAVES” is an essential and prominent feature of plaintiff's trade name, corporate name and business style and also the trademark GREAVES is the surname of the founder of the plaintiff s predecessor GREAVES COTTON AND COMPANY LIMITED. ii)    By using the word “GREAVES INDIA” the defendant No.1 lifted and adopted the whole of  the registered trademark of the plaintiff company, thereby causing infringement of that trade mark. iii)  Mere use of the word “INDIA” would make no difference since the word “GREAVES” is not only an essential but also the main component of the trademark “GREAVES INDIA” being used by the defendant No.1. Use of the word “INDIA” as a suffix and not as a prefix is also a strong indicator that the defendant No.1 wanted to encash upon the popularity, goodwill and reputation of the word “GREAVES.” 2)  A person/accused who is required to answer the charge must know not only the accusation but also the testimony by which the accusation is supported, when a request is made for the same. PRICE WATERHOUSE v. SEBI [SAT] Appeal No. 8 of 2011 Decided on : 01/06/2011 The appellant ”Price Waterhouse”, was the auditor of Satyam from April 1, 2000 to September, 2008.  According to the Securities and Exchange Board of India(Board), the inaccurate financial statements  on the basis of which the audit report were prepared and certified by the auditors, distorted the decision of millions of investors and induced them to trade in the securities of Satyam. Accordingly, the appellants were asked by the Board to show cause as to why appropriate action should not be taken against them under Section 11 and 11B of the Act and Regulation 11 the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (for short the FUTP Regulations).The appellants replied to the show cause notices and requested to provide the statements of certain persons recorded by the Board during investigations and also requested for cross examination of certain witnesses whose statements have been relied upon. The Board refused their request. An appeal to the Securities Appellate Tribunal was made by the appellant. The Securities Appellate Tribunal (SAT) allowed the appeal of the auditors on the following grounds: I)  It is an elementary principle of law that a person who is required to answer the charge must know not only the accusation but also the testimony by which the accusation is supported. ii)  They must be given a fair chance to hear the evidence in support of the charge and to put such relevant questions by way of cross-examination and must also be given a chance to rebut the evidence led against them. 4)   Conversion of unsecured loans into shares on Rights Issue does not attract Sec. 81(3) of Companies Act, 1956 if the existing loan does not carry an option to convert them into shares and  when the issue is made to all on right basis under section 81(1) of the Companies Act, 1956 SRM ENERGY LIMITED V. SEBI & ANR [SAT] DECIDED ON 06/ 06/2011 SRM Energy Limited (Appellant Company) has came out with a rights issue and decided to issue shares on rights basis to its shareholders. The Spice Energy Pvt. Ltd (SEPL), the promoter of the appellant was holding 71.19 per cent shares, its entitlement in that issue worked out to 4,19,25,000 shares. On a oral understanding between appellant company and SEPL, an amount of Rs. Rs. 4052.05 lakhs was brought in and which were shown as unsecured loans in the books of the appellant and authorized the appellant. company to adjust the unsecured loans hitherto in the proposed rights issue making it clear that if there was any short fall, the same would be subscribed by the promoter (SEPL). The Securities and Exchange Board of India (SEBI) on receipt of the letter of offer examined the same and informed the merchant banker that it does not approve the adjustment of loan against the share money as it falls under Section 81(3) of Companies Act, 1956. The Securities Appellate Tribunal (SAT) has set aside the order of the SEBI on the following grounds: 1.  Payment by adjustment in the books of account is a well recognized mode by all accounting standards and there is no fault with this mode being adopted. 2.   In the strict sense of the term, it is not a conversion of a loan into equity. The debt equity ratio has improved and this may enable it to get further loans from financial institutions but this does not mean that the promoter loses its right to make payment for the shares by way of adjustment of its unsecured loans. 3.  The promoter of the appellant do not meet the requirements of section 81(3) of the Companies Act. The methodology adopted was only a mode of payment for the shares received in the rights issue and since all the necessary disclosures have been made by the appellant in the offer document(s), it was satisfied that in the circumstances of this case, Section 81(1) of the Companies Act alone is applicable. 4)  Procedural aspects of notice & quorum in the court convened meetings has to be judged on the basis of Chairman’s report and the Regional Director cannot object to the scheme of arrangement u/s 391 and 394 of Companies Act, 1956 ALCHEMIST LTD AND ALCHEMIST FOODS LTD DECIDED ON 1ST NOVEMBER 2010 BY DELHI HIGH COURT The petitioner Alchemist Ltd (“ the transferor company”) has filed this petition under sections 391 and 394 of the Companies Act, 1956 for the demerger of its “Food Division” and its merger with its subsidiary Alchemist Foods Ltd. (“the transferee company”) as per the scheme of arrangement. The Regional Director in his reply has objected to the scheme of arrangement due to the following reasons:
  • The quorum was not present in the meetings of unsecured creditors and the fixed deposit shareholders.
  • The appointed date in the scheme is before the date of incorporation of transferee company.
The Delhi High Court upheld the contention of the Regional Director and approved the scheme of arrangement under Section 391 and 394 of the Companies Act, 1956 on the following grounds:
  • The Chairman’s report has mentioned about the fact of service of notice under certificate of posting and actions taken during the creditors'/deposit holders' meeting to accommodate the “Quorum” in order to comply with the provisions of the Companies Act, 1956 .
  • The appointed date is only for the purpose of identifying the assets and liabilities, which form part of the “food division” and for the quantification of the value of the food division.
 

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