Importer of product cannot claim to be proprietor of label mark belonging to Exporter

In order to claim the proprietory right on the trade mark of the exporter, the importer has to show that the mark has become inextricably connected with him in the eyes of the public. 

The present matter relates to seeking relief of interim injunction in a passing off suit brought up an issue of Reverse passing off. An order of injunction was sought to restrain the defendant from using the trade mark “LIPU” or any other mark which is similar to it. Plaintiff in the present matter was dealing in the business of importing sewing machines, cutting machines etc. and selling them in the Indian market under the trade mark “LIPU” – a label mark consisting of the device of a triangle on the left side of the word “LIPU”. The defendant was also an importer and seller of these machines, using the mark “LIPU”. The dispute was with regard to the trade mark “LIPU” used by the parties on the cutting machines.

An interesting question that arose was whether an importer can claim proprietorship over the mark of an exporter or manufacturer like the one in the present case where mark actually belonged to exported based in China. 

If there is a dispute between the manufacturer and the distributor/importer with respect to proprietorship of a trademark, the decision of the court would depend on peculiar facts of each case, the guiding factor being that as a general rule, the brand belongs to the manufacturer and not to the importer/distributor.” The importer has to show that the mark has become inextricably connected with him in the eyes of the public. Only then he can claim proprietorship rights. Claim of the Plaintiff was based on the basis of averment that the machines were manufactured in China on their instruction and the mark “LIPU” was imprinted on the machines, on their instructions.

Defendant on the other hand submitted that both the parties are importers and distributors, importing and distributing products of the same manufacturer. The word “LIPU” is derived from a geographical region in China. Defendant invoked the doctrine of reverse passing off – which basically means that a person’s passing off a product as his own having no right himself but representing that somebody else’s goods to be his. 

It was held that “LIPU” is a region in China. The sewing machines which were straight plate cloth cutting machines were imported from Chinese manufacturers by both the parties. Two of these exporters/manufacturers were using the word “LIPU”. It was the case of Plaintiffs that they were importing and selling the above machines with the trademark “LIPU” and that this trademark would appear on the machines, their packaging, invoices, challans, bills and other documents. In view of the fact that the invoices were raised by the Chinese manufacturers and that the manufacturing activity had taken place in China, it was held as difficult to believe that the trade mark “LIPU” was coined by the Plaintiffs and supplied by them to the manufacturers who affixed it on the goods. The brand “LIPU”, was accordingly held to be belonging to the Chinese exporter and manufacturer and not of any of the parties.

[Sunny Sales vs. Binod Khanna]
(Calcutta HC, 10.11.2014)