Stationery producer fails to have ex parte injunction erased

The Delhi Appeal Court has refused to interfere with the decision of a single judge to grant an ex parte restraining order to stationery producer Hindustan Pencils Ltd (HPL). The order enjoined competitor Faber-Castell from using the marks PLASTO and NO DUST on pencil erasers. The appellate court directed that Faber-Castell present its contentions, such as its claim that the marks are non-distinctive, to the first instance judge (FAO(os) 115/2004).

Upon discovering that Faber-Castell was using the marks PLASTO and NO DUST on pencil erasers, HPL filed a suit on April 29 2004 against Faber-Castell and its Indian subsidiary Puma Stationery Limited. HPL sought an ex parte restraining order precluding Faber-Castell from using PLASTO and NO DUST, basing its claim on its long-standing use of the same marks for the same products. The court granted the ex parte interim injunction. Faber-Castell appealed, arguing that:

• the names Plasto and No Dust are common in the trade;
  
  
• these words are descriptive for pencil erasers; and
  
  
• there had been a considerable delay in filing the action since Faber-Castell has been using the names Plasto and No Dust for pencil erasers since 2001.

Faber-Castell also requested to be allowed to sell its $15,000-worth of PLASTO and NO DUST trademarked goods pending the decision. HPL counter-claimed that its marks had acquired secondary meaning.

The Appeal Court dismissed the appeal. After hearing the arguments from both parties, the court refused to interfere with the injunction order granted by the single judge. It (i) directed that Faber-Castell put all of the above contentions before the single judge at full trial, and (ii) accepted HPL’s offer to produce a guarantee in the form of a bank deposit equivalent to the value of the trademarked goods that Faber-Castell has in stock.

Ranjan Narula, Rouse & Co International, Dubai