Bombay High Court: In an interim application filed by ATYATI Technologies (the plaintiff) , against COGNIZANT Technologies (the defendants) for infringing their device mark, for which the Court had granted an ex-parte ad interim injunction in favour of the plaintiff on the usage of the impugned mark by the defendants, the the single-Judge Bench of Firdosh P. Pooniwalla, J.* held that the injunction imposed earlier be discontinued due to suppression of material facts by the plaintiff. The Court found that the plaintiff had failed to adhere to the duties applicable on the party applying for an ex-parte ad interim relief, such as the disclosure of full material facts, some of which were suppressed by the plaintiff. , The Court held that the suppressed facts were important and should have been brought before the Court.
Background
The instant suit was filed by the plaintiff against the infringement of their device mark and registered trademark by the defendants, and against the passing off the impugned services of the services as the services and related products of the plaintiff.
However, the question before the Court was limited to the copyright subsisting in the artistic work/logo of the plaintiff, and the ex-parte order passed by the instant Court earlier, granting interim relief to the plaintiff, by restraining the defendants from infringing the device mark until the next date of hearing.
The defendants had filed an affidavit, praying for the discontinuation of the ex-parte order, claiming suppressions, misstatements, and false representations made in the plaint, which if were disclosed to the Court while seeking interim relief without notice to the defendants, the Court would not have granted the same reliefs to the plaintiff.
Court’s analysis and judgment
The Court firstly dealt with the question, whether the ex-parte ad interim injunction should be continued and answered the same by referring to Kewal Ashokbhai Vasoya v. Saurasbhakti Goods (P) Ltd., (2022) SCC OnLine Bom 3335, wherein the Court held that the continuation of an ex-parte ad interim relief can be opposed by filing an affidavit in reply.
The Court further referred to Kewal Vasoya (supra), highlighting the principles applicable to ex-parte application, which are:
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As a general principle, the court will hear both sides before rendering a decision, and an ex-parte application without notice is an exception.
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The court must be able to rely on the applicant to present the case fairly and evenly, provide full and reasonably accurate disclosure of material facts, and include anticipated defence of the absent party.
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The application or plaint must be neutrally and objectively presented to inspire the confidence of the court.
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The applicant must have made the necessary and proper enquiries before making the application.
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Despite the urgency in ex-parte applications, sufficient disclosure of the relevant material must be made, to ensure that the court is not misled on a material and relevant aspect.
The Court relied on Alexendar Tugushev . Vitaly Orlov, [2019] EWHC 2031 (Comm.), of Commercial Court of England and Wales, wherein the principles of a non-disclosure application were laid down, as under:
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An applicant for a without-notice injunction must make full and accurate disclosure of all the material facts, dutifully.
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Derogation from the basic principle of audi alteram partem is an exceptional course adopted by the court in cases of extreme urgency. Therefore, the court must be able to rely on the appearing party, and their arguments should not be merely designed to promote their own interests but draw attention to the evidence in a fair manner.
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Full disclosure must be linked with fair presentation and applicant must be able to inspire the confidence of the court.
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The applicant must also disclose the matters that they would have been aware of, had they made reasonable enquiries.
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The applicant is dutybound to aware the court of the potential issues and difficulties in the claim.
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A defendant must identify clearly the alleged failures, rather than adopt a scatter-gun approach.
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If material non-disclosure is established, the court must deprive the claimant who obtained injunctive relief, of any advantage they thereby derived.
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Whether the non-disclosure was innocent or not is an important consideration but not decisive.
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The court has the discretion to continue the injunction despite a failure to disclose, only exercised in the interest of justice.
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The interest of justice may require the continuation of an order, however, the failure of disclosure could be marked in other ways, such as through a costs order.
The Court relying on the afore-said principles, said that the ex-parte order did not record the reasons for granting the ex-parte ad interim injuction without notice, however, it did record the plaintiff’s claim of having learnt of the defendants’ usage of the mark in October 2023, and therefore, the earlier Court was persuaded to pass the order without notice.
However, the instant Court held that the plaintiff’s statement of the knowledge of the use of their mark was false, based on the following:
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The plaintiff stated in its Cease-and-Desist Notice that the defendants had adopted the impugned mark in 2022.
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In the same Notice, the plaintiff reproduced a diagram depicting the use of the impugned mark by the defendants from 2022 to present. The Court noted that the said diagram had been copied from the Logos-world.net website, wherein the relevant pages showed that from 1994 to 2018, the defendants were using a different logo and mark, and from 2018 to 2022 yet another mark, and the impugned mark was being used by them from 2022. The plaintiff did not disclose this website, the Court held that the plaintiff should be disallowed to content that the website shall not be looked at since the defendants missed to include it in their affidavit.
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The Court noted that the plaintiff was required to make a proper inquiry before filing the suit as to the date of usage, which the Court suspected the plaintiff had not performed, or they chose to suppress the findings of usage by the defendants, in their plaint.
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The impugned mark had been advertised by the defendants in the Trade Mark Journal in March 2023. The Court opined that since the plaintiff were aware of the defendant’s trademark application, therefore, it was impossible that they were unaware of the impugned mark advertised by the defendant in March 2023, yet the plaintiff chose to suppress this.
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The defendants’ application for the impugned mark in the US showed the first use in March 2022, which had also been suppressed by the plaintiff.
The Court noted that the plaintiff could not explain that it came to know about the defendant’s usage of the impugned mark only in October 2023, despite the aforementioned events.
The defendants had stated that they had remodelled their brand and created an artistic representation of their trade mark to better convey their business goals, and referring to the earlier two used marks by them, stated that “most recently” they were using the impugned logo-conveying that the logo was their most recent logo, and not that they had begun to use the logo recently.
The Court opined that, if the plaintiff had disclosed the afore-stated facts, especially about the knowledge of the date of usage of the logo, then the ad interim relief without notice would not have been granted to the plaintiff. Even otherwise, the Court opined that the plaintiff had suppressed the material facts. Therefore, the Court viewed that the ex-parte injunction should not be continued.
The Court was of the view that it was not in the best interests of justice to continue the impugned order, emphasising that disclosed facts were important and must have been brought to the knowledge of the Court, and that there was a need to encourage proper compliance with the duty of full disclosure on the applicant (plaintiff).
The Court held that the suppression of the facts by the plaintiff was deliberate, and that the interim relief order shall not continue.
[ATYATI Technologies (P) Ltd. v. COGNIZANT Technologies Solutions US Corp., 2024 SCC OnLine Bom 1680, decided on 13-06-2024]
*Judgment authored by: Justice Firdosh P. Pooniwalla
Advocates who appeared in this case :
For the applicant: Ashish Kamat, Senior Advocate, Mr. Hiren Kamod, Prem Kumar, and Abhishek Adke, Advocates
For the respondents: Virag Tulzapurkar, Senior Advocate, V. Mohini, Aarti Agarwal, Karan Khiani, Rashmi Singh, Rashmin Khandekar, and Anand Mohan, Advocates.
