In the case of SRMB Srijan Private Limited vs. Mahesh Agarwal & Ors., the Calcutta High Court dealt with a dispute involving trademark infringement claims related to the resale of TMT bars.
Seller’s Arguments
The plaintiff, Srmb Srijan Private Limited, manufacturer and seller of TMT bars, sought an interim injunction against the defendants, resellers of TMT bars, alleging unauthorized use of its registered trademarks “SRMB”, “WINGRIP”, and the distinct “X-Ribs” surface pattern. The SRMB, a leading manufacturer of construction materials, argued that the defendant’s actions constituted trademark infringement and passing off, as they were selling products bearing its marks without authorization.
The plaintiff highlighted that it held valid registrations for the “SRMB” and “WINGRIP” trademarks, as well as for the distinctive 3D surface pattern of “X-Ribs” on its TMT bars. It claimed to have invested heavily in promoting these marks, creating significant goodwill in the market. SRMB further contended that the defendants were fraudulently selling TMT bars under its marks, which caused confusion among consumers and diluted its brand reputation.
Reseller’s Arguments
In their defense, the defendants maintained that the goods in question were lawfully acquired from one of the plaintiff’s authorized distributors, Mishra Steel, based in Muzaffarpur. They invoked Section 30(3) of the Trade Marks Act, 1999, which provides that the resale of goods lawfully obtained from a trademark owner or its authorized dealer does not amount to infringement. The defendants submitted invoices and e-way bills to demonstrate that the products were purchased legally and without any alterations, thus falling within the permissible scope of resale under Section 30(3) of the Act.
The Court’s Decision
The court acknowledged that the plaintiff had valid trademark rights over the “SRMB”, “WINGRIP”, and “X-Ribs” marks. However, it also noted that the defendants had purchased the goods from an authorized dealer and had not altered or impaired the products in any way. The court referred to the statutory provisions allowing the resale of lawfully acquired goods, provided that the trademarks were applied with the consent of the proprietor and the goods had not been modified. As per the Court, the key issue raised by the plaintiff, regarding the territorial limits of Mishra Steel’s distributorship and the alleged collusion between the defendants and the distributor required further factual investigation.
Given the circumstances, the court found no immediate basis for granting the interim injunction, as the defendants had demonstrated a legitimate basis for their actions. The court directed both parties to exchange affidavits for a detailed examination of the plaintiff’s claims concerning unauthorized territory sales and alleged collusion. Consequently, the application for an interim injunction was denied, and the case was scheduled for further proceedings.
Resale and Trademark Infringement
The paragraphs from the case that discuss resale of trademarked products and related trademark infringement/exhaustion read as follows:
“15. Sub-clause (a) of sub-section (3) of Section 30 of the Trade Marks Act, 1999 deals with a situation where a registered proprietor of a trademark sells the goods bearing the trademark to a person and thereafter assigns the registered trademark to another person. The said another person cannot oppose further dealings in those goods by the person who has acquired those goods bearing the trademark. The sub-clause operates in a well-defined territory of its own. The situation contemplated by sub-clause (b) is the goods having been put on the market under the registered mark by the proprietor or with his consent are lawfully acquired by a person and further selling of the said goods in the market. It is here, where the issue of lawful acquisition of the goods, when put in the market and further sold in the market arises for consideration and whatever be the view taken i.e. the market contemplated being the international market or the domestic market would not make clause (a) otiose.
16. Where goods bearing a registered trademark are lawfully acquired by a person, the sale of the goods in the market by that person is not infringement of the trademark by reason only of the registered trademark having been assigned by the registered proprietor by some other persons after the acquisition of those goods. Where goods bearing a registration are put on the market and are lawfully acquired by a person, the sale of goods in the market by that person is not infringement of the trademark by a reason only of further sale in the market.
17. In the case of Kapil Wadhwa (supra), the Division Bench of the Delhi High Court held that sub-section (4) of Section 30 the Trade Marks Act, 1999, it would be relevant to note that further dealing in the goods placed in the market under a trade mark can be opposed where legitimate reasons exist to oppose further dealing and in particular where the condition of the goods has been changed or impaired. With respect to physical condition being changed or impaired, even in the absence of a statutory provision, the registered proprietor of the trade mark would have the right to oppose further dealing in those goods inasmuch as they would be the same goods improperly so-called, or to put it differently, if a physical condition of the goods is changed, it would no longer be the same goods. But sub-section (4) of Section 30 is not restricted to only when the conditions of the goods have been changed or impaired after they have been put on the market. The Section embraces all legitimate reasons to oppose further dealings in the genus legitimate reasons, which genus embraces other species as well.
18. In the present case, admittedly the plaintiff is having the registered trademark of SRMB, WINGRIP and X-ribs. It is also admitted that the defendants are also selling the goods having the said marks after purchasing the said goods from the dealers of the plaintiff. It is not the case of the plaintiff that the defendants are selling its goods by making any changes or impairment in the said goods. The defendants had supplied the documents to the plaintiff to establish that the defendants have purchased the materials from the dealer of the plaintiff, namely, “Mishra Steel”.
19. The plaintiff says that the plaintiff has given dealership of the said goods of the plaintiff having trademark of SRMB, WINGRIP and X-ribs to Mishra Steel is restricted to Muzaffarpur but the defendants are selling the product at Islampur. The plaintiff says that dealers should not encroach other dealers or distributors territory as per the company policy but in the present case, the defendants are selling the goods in different area than the Muzaffarpur after purchasing the materials from Mishra Steel at Muzaffarpur. The plaintiff also says that the e-way bills relied by the defendants are in connivance and colluded with Mishra Steel.
20. Considering the above, this Court finds that Mishra Steel is the distributor/ dealer of the plaintiff and the defendants have purchased the materials from the dealer of the plaintiff and are selling the same in the market without any changes and impairment. As regard whether the defendants are entitled to sell the products at Islampur or the e-way bills relied by the defendants are in connivance and colluded with the dealer of the plaintiff can be decided only after exchange of affidavits.
21. In view of the above, this Court did not find any prima facie case and balance of convenience in favour of the plaintiff at this stage. Accordingly, ad interim injunction as prayed for by the plaintiff is refused.”
Citation: SRMB Srijan Private Limited v. Mahesh Agarwal & Ors., I.A. No. G.A. (Com) 1 of 2024, I.P. (Com) No. 17 of 2024, (H.C. Calcutta Sept. 27, 2024). Available at: http://indiankanoon.org/doc/34125725/, Visited on: 06/10/2024.
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