The question of granting temporary injunctions is always a knotty one, and requires establishing whether the injunction-seeker has a prima facie case, whether the balance of convenience lies in their favour, and if the temporary injunction is not granted, that the they would suffer irreparable loss or injury. The challenge before a court is to determine which facts must be considered when assessing the request for such an injunction.
This issue came up in a recent application moved before the Madhya Pradesh High Court, as part of a six-year long continuing design case, involving a wide range of fora – trial courts, the registrar of designs, the High Court and the Supreme Court. The High Court, in Skol Breweries Ltd. Vs. Som Distilleries and Breweries Ltd. (M.A. No.2745/2018, Order of 14 November 2018), said that while deciding an appeal against the rejection of a temporary injunction, and while forming an opinion as to whether a prima facie case was established or not, the court could examine the subsequent developments that took place while the appeal was pending.
Understanding the court’s order requires a brief explanation of the turn of events that led to this application coming about in the first place.
Both parties are in the business of brewing beer, as well as selling beer and other beverages. The plaintiff, Skol Breweries, sells its beer under the brand, “Haywards 5000”, in a bottle with a registered design. The defendant, Som Distilleries and Breweries, sells beer under the name, “Black Fort”, which is filled either in their own bottles, or in empty bottles bought and recycled from the junk market. The plaintiff alleged that these recycled bottles were actually the plaintiff’s discarded bottles containing the registered design, bought from the junk market for a meagre price of one or two rupees per bottle (as against a manufacturing cost of almost Rs.20/- per bottle). Besides arguing that such use was illegal, the plaintiff alleged that the defendant was using these bottles with mala fide intent to get the benefit of reputation owned by the plaintiff in the market, and to increase its sale and confuse the customers to believe that the beer bottles were a product of plaintiff.
A complex multi-pronged litigation followed, which is summarised briefly here:
- The plaintiff filed a suit in 2012 before a District Court in Raisen, Madhya Pradesh, seeking, among other things, an injunction against the defendant for selling the appellant’s bottle bearing registered design
- In February 2012, a temporary injunction was granted to the plaintiff, stating that “till next date of hearing the defendant is restrained from taking out the design registered bottles of the plaintiff”.
- Later that same month, the Additional District Judge hearing the matter, dismissed the plaintiff’s application, thus removing the temporary injunction.
- In July 2012, an appeal was moved before the Madhya Pradesh High Court, but that too was rejected in January 2013.
- The plaintiff filed a special leave petition (SLP) in the Supreme Court against the January 2013 order of the Madhya Pradesh High Court.
- The SLP was decided in July 2015, giving liberty to the plaintiff to move the trial Court afresh by taking aid of the March 2015 order of the Design Registry passed by the competent authority rejecting the application of the defendant for seeking cancellation of registration of the plaintiff’s design.
- Meanwhile, in February, 2013, the defendant filed an application before “the competent authority” (presumed to be the Design Registry), seeking cancellation of the registration of the plaintiff’s design.
- The cancellation application was rejected by the Design Registry two years later, in March 2015.
- The defendant appealed against this March 2015 order of the Design Registry before the Calcutta High Court, which is still pending.
- The plaintiff independently instituted a suit against the defendant before the Bombay High Court seeking permanent injunction restraining the defendant from infringing its registered trademark in 2018, but the suit was soon withdrawn.
Second (current) suit:
- Further to the July 2015 order of the Supreme Court, the plaintiff then filed a fresh application seeking an injunction, as per liberty granted. But, in a February 2018 order, the Trial Court again rejected the application for an injunction.
- This February 2018 order of the trial court rejecting the second request for an injunction was under appeal in the present case.
- The plaintiff/appellant’s grounds for appeal rested on two main points: firstly, that the trial court had appeared to have apparently concluded that a prima facie was made out, but still chose to reject its request for an injunction. And secondly, that there was a material addition to the existing facts, i.e., that the application submitted by the defendant for cancellation of the plaintiff’s design registration had been rejected by the competent authority.
Note that all the actions overlap each other at some stage or other. The court was faced with the following question: In order to form an opinion about whether or not a prima facie case was established, could the court examine the subsequent developments that took place during the pendency of the appeal?, or should the court confine itself only to the material available on record before the trial court at the time of considering the temporary injunction application?
In this case, the court decided in the respondent’s favour, refusing the appeal against the rejection of the temporary injunction (in effect, no injunction exists against the respondent in the suit). The respondent had argued that the trial court had concluded the evidence in the suit, and the case was fixed for final arguments, because of which there was no reason for granting a temporary injunction at this stage. The court laid particular stress on the fact that no temporary injunction had been granted by any court over a period of six years, even though the matter had reached the Supreme Court, and that the trial court had recorded evidence in the matter. Specifically, it said, “To form an opinion this Court cannot shut its eyes ignoring the stage of the suit, especially when admittedly evidence has been closed by the parties and case is fixed for final arguments.”
One key learning from this case is that the odds of being granted a temporary injunction after a previous application for the same has been rejected are slim, even if, in the interim, the IP authority recognises the IP-holder’s right. In the present case, the plaintiff had, critically, failed to offer any conclusive evidence showing use of its bottles by the defendant for the purpose of selling their beer. Had it been otherwise, the course of events may well have taken a different turn.