Madras High Court
Hardie Trading Limited And Anr. vs Addisons Paints And Chemicals Ltd. And ... on 8 October, 1990
Equivalent citations: (1991)218MLJ1
JUDGMENT Janarthanam, J.
1. Messrs. Hardie Trading Limited, for short 'Hardie', is a foreign company having its registered office at No. 594 St. Kilda Road, Melbourne, Australia. Hardie is the registered owner of the trade mark SPARTAN and Warrior device, it having been registered on 18.6.1926 in Australia and on 6.8.1928 in Newzealand. Hardie registered the trade mark SPARTAN in India on 21.5.1946 under 122172 in Class 2, and on 25.5,1946 under 122173 in Class 3, and the trade mark SPARTAN VELOX on 25.5.1946 under 122174 in Class 2.
2. Messrs. Addisons Paints and Chemicals Limited, Huzur Gardens, Sembiam, Madras 11, for short 'Addison', was the selling agent of Hardie in India for the products under the SPARTAN trade mark from 1946 to 1949. In 1948 Addison commenced manufacture of its products under the supervision, technical know how and quality control of Hardie and until July, 1963, used the SPARTAN trade mark on its products all licencee of Hardie and from August, 1963 till the end of August, 1968, Addison used the trade mark of Hardie in its capacity as Registered User of Trade Mark by agreement dated 11.7.1963. On 31.8.1963, the registration of Addison as a Registered User of the trade mark SPARTAN was cancelled by Hardie. Notwithstanding the cancellation, the terms of the agreement of Registered User were extended from time to time by mutual consent and Addison continued to use the said trade mark till 1971. On 3.11.1971, Addison applied for registration in Nos. 276024 and 276025 in Classes 2.and 3 respectively, for the registration of the device of an ancient warrior in a standing posture within a circle with the words 'Superfine Products' imprinted in the bottom, in its name. This registration was subsequently allowed and Addison adopted the device of ancient warrior, and used the colour combination of blue and red, and green and red.
3. Hardie filed an application for the registration of composite marks SPARTAN and bust of a warrior on 6.12.1971 under Nos. 276724 and 276725. On opposition emerging from Addison for such registration, Hardie unconditionally withdrew the application on 26.4.1974. Addison thereafter filed Application Nos. 330810 and 330811 before the Assistant Registrar of Trade Marks on 18.11.1977 for the registration of the device of the bust of ancient soldier (warrior) in Class 3 and Class 2 respectively. These applications were advertised in the Trade Marks Journals and on 7.3.1980, Hardie filed notice of opposition to these applications. In the meantime, on 31.3.1977 Hardie had entered into a trade mark licence agreement with one Hansa Paints and Chemicals, New Delhi, for short 'Hansa'. Hardie assigned Hansa on 11.9.1984 the registered trade marks Nos. 122172, 122173 and 122174 (SPARTAN in Class 2, SPARTAN in Class 3 and SPARTAN VELOX in Class 2). On 8.5.1985, Hardie filed From TM-16 before the Deputy Registrar of Trade Marks to implead Hansa as co-opponent, and interlocutory petitions to take additional evidence. The Deputy Registrar by a common order dated 10.4.1987 allowed the applications.
4. During 1978, the parties resorted to agitate their rights before this Court as well as the High Court at Calcutta. Addison filed C.S. No. 204 of 1978 before this Court against Hansa, alleging inter alia that by reason of its continuous and extensive usage in India, the trade mark SPARTAN has become distinctive of the goods of Addison Hardie and Hansa filed C.S. Nos. 835 and 836 of 1978 respectively against Addison for alleged infringement of the trade mark SPARTAN. A consent order dated 22.2.1979 came to be passed by the High Court at Calcutta in and by which Addison was given the liberty to use the warrior device, Hardie and Hansa were not to object to Addison selling its products under the get up in which it was selling and similarly, Addison was not to object Hardie and Hansa selling their products under any get up, so long as they distinguished their goods from those of Addison. Hansa started using the composite trade mark SPARTAN and bust of warrior from 3.9.1979 onwards. Addison filed Application No. 3873 of 1979 in C.S. No. 204 of 1978 for contempt against Hardie and Hansa. This Court initially ordered status quo on 24.4.1979 but ultimately held by order dated 28.3.1980 that the status quo was to be governed by the terms of the consent order passed by the Calcutta High Court.
5. Addison filed C.S. No. 557 of 1980 against Hansa for a permanent injunction restraining it from selling paints, lacquers or any other product in containers of the shape, colour scheme and get up as that of Addison and also for injunction restraining it from infringing the trade marks Nos. 331459 and 331461 dated 12.12.1977 and in Class 2 and from using the device of a bust of warrior or the device of a full figure of a warrior and for other consequential reliefs. Addison also filed Application No. 3971 of 1980 for interim relief and Sathia-dev, J. allowed it as prayed for in respect of goods to be manufactured on and from 31.10.1980. Aggrieved by this order, Hansa filed O.S.A. No. 126 of 1980. It appears that previous to the passing of the order by Sathiadev, J., certain proceedings had been initiated before the Calcutta High Court and orders had been passed in those proceedings, which were in conflict with the order passed by Sathiadev, J., in certain respects. This was brought to the notice of the Division Bench (Ismail, C.J. and Sengottuvelan, J.) and by judgment dated 16.12.1980, it was observed:
We are of the opinion that it will not be advisable for different Courts to pass orders in different proceedings concerning the same subject matter leading to the possibility of conflicting orders being in existence at one and the same time, placing the parties in a difficult and embarassing situation disabling them from complying with any one order without disobeying another order.
Having thus observed, the Division Bench stayed the order of Sathiadev, J. to the extent that it will be possible for the parties to obey the orders passed by the Calcutta High Court. Thereafter, further proceedings had been initiated before the Calcutta High Court in respect of the same subject matter culminating in the passing of orders, leading to the filing of appeal and cross-appeal and ultimately another Division Bench by Judgment dated 11.11.1987, held as follows:
... Both the parties have submitted before us that they are willing to abide by the order of 22nd February, 1979, and that the order passed by the learned trial Judge, against which this appeal has been preferred, is contrary to the same and no effect is to be given to the same. Accordingly, by consent of the parties the following order is passed. The last Paragraph of the Judgment of the learned trial Judge and the order to that effect is set aside. It is recorded that the parties shall give effect to the order of 22nd February, 1972.
6. The Assistant Registrar by order dated 19.6.1989, on a consideration of the materials placed before him, ordered Application No. 330813 in Class 3, and Application No.330811 in Class 2 for registration in the name of Addison, and directed the opponents Hardie and Hansa to pay Rs. 510 as costs in respect of those proceedings, giving rise to the filing of T.M.A. Nos. 5 and 6 of 1989.
7. The Assistant Registrar, while passing the aforesaid order, commented upon the non-filing of certain documents by the opponents Hardie and Hansa in proof of their case, and with regard to the affidavit filed by them he stated that it did not comply with the salutary rules in the sense of it being defective and consequently cannot merit serious consideration. The opponents, took the Wand that these views of the Astant Registrar were wrong, but, however filed C.M.P. Nos. 14217, 14218,15913 to 15916,16730 and 16731 of 1989, 422 to 426 and 1293 of 1990 (fourteen petitions in all), for reception of additional documents and affidavits and, on the other side raising no objection, these petitions were allowed by this Court.
8. Addison also filed three applications for registration of three trade marks viz., SPARTAN under 321470, SPARTAN VELOX under 321471 and SPARTAN along with device of the bust of a warrior under 321472. Hardie and Hansa opposed these applications and filed interlocutory applications for stay of the proceedings, in opposition to the registration. The Assistant Registrar, by order dated 19.6.1989, dismissed the interlocutory applications, in respect of the three trade-marks, giving rise to T.M.A. Nos. 7,8 and 9 of 1989.
9. Mr. S. Chellaswamy, learned Senior Counsel, appeared for the appellants, and Mr. U.N.R. Rao, learned Senior Counsel appeared for the first respondent. Their submissions may be couched in the broader perspective for consideration under the following heads:
(i) Maintainability of the opposition for registration.
(ii) Assignment in all its facets and legal consequences flowing therefrom, (iii) Determination of rights of parties - whether on date of application or on date of order, (iv) Blameworthy conduct attributable to abandonment and consent order of Calcutta High Court, having a bearing on public interest and the balance of convenience of the respective parties.
(v) The Registrar's power to stay the proceedings in opposition to registration.
10. The arena of discussion may revolve on the maintainability of the opposition for registration. There is no manner of doubt whatever that Hardie is the registered owner of the mark SPARTAN and Warrior device, it having been registered in Australia in 1926 and in Newzealand in 1928. The stark fact to be taken note of here is that Hardie registered the trade mark SPARTAN under 122172 in Class 2, and under 122173 in Class 3, and the trade mark SPARTAN VELOX under 122174 in Class 2, in India in the year 1946. To make the position fluidly clear, it is to be stated that Hardie did not register the pictorial mark viz., bust of a Warrior, in India and it merely registered the word marks as stated above. There is no pale of controversy whatsoever that Addison initially for some years sold the products of Hardie in India as its agent, that thereafter for some time Addison manufactured products of its own under the supervision, technical know how and quality control of Hardie using the SPARTAN trade mark on its product as a licensee of Hardie and that subsequently Addison used the trade mark of Hardie in its capacity as registered user of the trade mark, pursuant to the agreement entered into on 11.7.1963 which was extended thereafter till 1971. It is thus obvious that all these years, Addison had been using the Trade Marks SPARTAN and SPARTAN VELOX in marketing its products in India, either as agent, licensee or registered user. However, in addition, Addison in its own capacity, used the device of bust of a warrior also. Subsequently, the registered user agreement was cancelled in the year 1971 and on 31.11.1971 Addison applied under Nos. 276024 and 276025 in Classes 2 and 3 respectively for registration of the device of ancient warrior in a "standing posture within a circle with the words 'Superfine Products' imprinted in the bottom, in its name. The registration was allowed and Addison had been marketing its products in the said trade name with certain colour combinations worthwhile it is to mention here that Hardie never objected to the registration of the device of ancient warrior in a standing posture by Addison. In the year 1977 what Hardie did was that instead of opposing the registration of the device of ancient warrior in a standing posture, filed an application for registration of the composite marks SPARTAN and bust of warrior on 6.12.1971 under Nos. 276724 and 276725. Stout opposition was raised by Addison for such registration and the net result was that Hardie unconditionally withdrew the application on 26.4.1974. From this, it follows that Hardie was at no point of time the owner of the device 'bust of warrior'. Thereafter, on 18.11.1977, Addison filed Application Nos. 330810 and 330811 before the Assistant Registrar of Trade Marks for the registration of the device of bust of warrior in Classes 3 and 2 respectively. Opposition emerged to these registration proceedings from Hardie and Hansa. It is argued by learned Counsel for appellants that Hardie of Australia is the Proprietor of the device of bust of warrior and this is known to the first respondent and hence it ought not to have laid a claim to the proprietorship of the device of bust of warrior. Such an argument cannot be anything but one in desperation. The registration of a trade mark recognises proprietorship of the person only within the country in which it is registered. Admittedly, as adverted to earlier, the bust device as far as Hardie is concerned, is registered in Australia and Newzealand and not in India. As such, Hardie cannot make its claim on the basis of the registration in other countries. The only other mode of acquiring proprietorship is by user. It was never the claim of Hardie that it ever manufactured or marketed products of its own in India. As such, Hardie had no occasion to apply and use the said trade mark on its products. Pertinent it is to note here the essential components of trade mark as 'per the definition of trade mark under Section 2(v)(ii) of the Trade and Merchandise Marks Act, 1958, hereinafter referred to as 'the Act'. The three components couched therein are:
(i).User or proposed user in relation to goods, (ii) By a person who is either Proprietor or registered user, and
(iii) For indicating connection in the course of trade.
Applying the above components, it cannot be stated that Hardie can lay proprietorship rights to.' the device of bust of warrior in India, inasmuch as it never had the occasion to use it in the course of its trade in India. Regarding Hansa, it is stated to have derived its right from Hardie since 1979. When Hardie had zero rights, it had none to pass on to Hansa. In such state of affairs, Hansa also cannot claim any right to the device of bust of warrior. It is also to be noted here that admittedly Hansa did not use the bust of warrior device in marketing its products, earlier to the filling of application for the registration of the said trade mark by Addison, and the sordid fact is that Hansa started using the said device in its products long subsequent to the filing of the application by Addison. Even at the time of filing of the application, it cannot be stated that Addison had no tangible, definite and genuine intention of using the bust of warrior device in its products inasmuch as it was using in its products the device of warrior in a standing posture, which is more or less closely resembling the proposed user of the bust of warrior device. Subsequent to the filing of the application for registration, Addison could not use the bust of a warrior device in its products because of insurmountable obstacles coming its way in the shape of not any opposition proceedings by Hardie and Hansa, but also initiation of innumerable civil proceedings before various High Courts in India. Addison with all immaculate patience and prudence waited for the outcome of the proceedings for the use of the said trade mark. There is nothing wrong in such waiting to know Addisons entitlement to use such trade mark by way of legal sanction. In this connection, useful reference may be made to the decision in Ebrahim Currim v. Ess Abba Sait I.L.R. 24 Mad. 163. In that case, the facts and the decision given were:
Plaintiff claimed to have been for many years the sole importer into Bombay and Madras of umbrellas bearing a certain trademark. Defendant had recently commenced importing and selling in Madras umbrellas which, plaintiff contended, bore a trade-mark so similar as to be calculated to deceive purchasers so as to induce them to buy defendant's' umbrellas under the belief that they were buying 'plaintiffs. He asked for an injunction and damages. Defendant denied that plaintiff had been the sole importer of umbrellas bearing the trade-mark in question; or that he was the owner or entitled to the exclusive use of that trade-mark; or that umbrellas bearing that trade-mark had come to be known as umbrellas imported and sold by plaintiff alone. It was contended that the trade-mark belonged to and had, since 1884, been used by a Glasgow firm, who manufactured the umbrellas, and supplied them to defendant, through another. Defendant denied the alleged similarity of the trade-marks or that purchasers were calculated to be deceived as alleged, and contended that plaintiff could not lawfully use or claim it. For the purpose of the case it was assumed that the trade mark in question had been used by the Glasgow firm before it was used by plaintiff in India; and that it had never been used by the Glasgow firm in India before plaintiff so used it. On its being contended that inasmuch as the trade-mark had originally belonged to the Glasgow firm it could not be lawfully used or claimed by plaintiff, notwithstanding that the Glasgow firm had never used it in or imported umbrellas bearing it into India;
Held, that the contention could not be supported and that the prior use in Scotland did not justify the Scotch firm and the defendant in claiming that plaintiffs user of the trade-mark was illegal or otherwise than an exclusive user.
The above decision was followed by a Division Bench of this Court in Hayajana Ele. Co. v. The Associated Elec & Elec. Industries (1974) 1 M.L.J. 392. In the case, the trade mark 'SHARP' belonged to a Japanese firm and it sought to prevent an Indian firm from claiming proprietorship rights for the word mark 'SHARP' on the ground that it will be likely to deceive or cause confusion or it would otherwise be disentitled to protection in a Court under Section 11(1) and (e) of the Act. The claim was negatived and the Indian firm was held entitled to apply for registration of the said mark. The decisions cited above are quite applicable to the facts of the case on hand. In view of the discussion made above, it goes without saying that the opposition emerging from Hardie and Hansa to the registration proceedings initiated by Addison for the registration of the trade mark of bust of a warrior, cannot hold water.
11. Attention may now be delved deep to consider the question of assignment in all its facets and legal consequences flowing therefrom. The circumstances for Hansa coming to the picture are rather startling and puzzling. For the first time, Hansa came into the picture on 31.3.1977 by entering into a trade mark licence agreement with Hardie. It is to be noted here that the concept of trade mark agreement is alien to the Trade Marks Law, as contained in the salient provisions of the Act. Obviously, realising this legal lacuna, the deed of assignment was entered into between them on 11.9.1984. A perusal of the said deed would point out in no uncertain terms that the registered trade mark Nos. 122172, 122173 and 122174 (SPARTAN in Classes 2 and 3 and STARTAN VELOX in Class 2) alone were assigned. To put it otherwise, the device of bust of warrior, was not the subject matter of assignment in the said deed. This deed was utilised by Hardie for bringing in Hansa as a co-opponent in opposition to the registration proceedings. The Deputy Registrar of course admitted this deed of assignment and allowed Hansa to be brought on record as a co-opponent. True it is that the admission of this document and allowing of Hansa to be a co-opponent, were not at all challenged by further agitation before the competent forum. Learned Counsel for first respondent/Addison would submit that the fact that the said assignment was not further challenged in the proper forum, can by no stretch of imagination prevent Addison from taking a legalistic stand that such document is inadmissible in evidence and the same could not have been allowed to be marked. Learned Counsel for appellants/Hardie and Hansa would however repel such submissions but in vain. In support Of his submission, learned Counsel for first respondent placed reliance on the decision in Koz Singh v. Deko Bai , wherein it was held that under Order 41, Rule 33, C.P.C., the High Court was competent to pass a decree for the enforcement of the charge in favour of a party notwithstanding the fact that the party did not file any appeal from the decree. Learned Counsel for first respondent also placed reliance on the following observations of the Supreme Court in Dhangir v. Madan Mohan A.I.R. 1928 S.C. 54:
The sweep of the power under Rule 33 is wide enough to determine any question not only between the appellant and respondent, but also between respondent and co-respondents. The Appellate Court could pass any decree or order which ought to have been passed in the circumstances of the case. The Appellate Court could also pass such other decree or order as the case may require the words 'as the case may require' used in Rule 33 of Order 41 have been put in wide terms to enable the Appellate Court to pass any order or decree to meet the ends of justice. The only constraint on the power are these: That the parties before the lower Court should be there before the Appellate Court. The question raised must properly arise out of the judgment of the lower Court. If these two requirements are there, the appellate Court could consider any objection against any part of the judgment or decree of the lower Court. It may be urged by any party to the appeal.
As per the ratio laid down in these decisions, it goes without saying as contended by learned Counsel for first respondent, that there is no bar for questioning the admissibility of the deed of assignment. Learned Counsel for first respondent would base his claim of inadmissibility of the said document, on the premise of the provision of Section 44(1) of the Act which reads thus:
Registration of assignments and transmissions:
(1) Where a person becomes entitled by assignment or transmission to a registered trade mark, he shall apply in the prescribed manner to the Registrar to register his title, and the Registrar shall, on receipt of the application and on proof of title to his satisfaction, register him as the proprietor of the trade mark in respect of the goods in respect of which the assignment or transmission has effect, and shall cause particulars of the assignment or transmission to be entered on the register;
Provided that where the validity of an assignment or transmission is in dispute between the parties, the Registrar may refuse to register the assignment or transmission until the rights of the parties have been determined by a competent Court."
Under Rule 71 of the rules framed under the Act, the assignee shall apply in Form TM-23 or TM-24 to the Registrar to register his title, and the Registrar on proof of his title shall register him as Proprietor of that trade mark. Admittedly, nothing is available on record to point out that Hansa ever filed any such application before the Registrar to register it as Proprietor of the said trade mark. At this juncture, it may be noted that under Section 44(2) of the Act, no document evidencing title which had not been entered on the Register shall be admitted in evidence. In the case on hand, since the alleged assignment had not been entered in the non est, as contended by learned Counsel for the first respondent. Learned Counsel for appellants would however argue that it is not as if the matter is so simple, as adverted to by the other side, and what he would state is that the Registrar is having ample power under Section 44(2) even to admit a document in evidence, in the absence of the same being entered in the Register under the Act, if there are circumstances justifying the reception. Learned Counsel for first respondent would counter this argument by stating that such argument cannot be expected to commend acceptance at the hands of Court, inasmuch as the perusal of the order of the Deputy Registrar would demonstrably show the absence of any exceptional circumstance justifying the reception. He would further point out that the moment the deed of assignment had been admitted in evidence, it is but proper for the Deputy Registrar to add Hansa as a party to the opposition proceedings, removing Hardie as a party to the opposition proceedings, the reason being the rights of the assignor and assignee are mutually exclusive and they cannot co-exist. To put it otherwise, he would say that the moment the assignee Hansa is substituted as a party, Hardie, the assignor cannot at all be there as a party in such proceedings inasmuch as it being an assignor, it cannot at all be having any sort of interest. The confounding confusion is evident from the fact that even after receiving the deed of assignment as admissible in evidence, Hardie had been allowed to continue as a party in the opposition proceedings along with Hansa, the assignee. It is clear from the above arguments that once the trade mark is assigned, the assignor cannot in the eye of law have any interest in the trade mark assigned and the assignee alone, as a person interested in the trade mark assigned, can represent in opposition proceedings as a party to protect its interest.
12. Learned Counsel for first respondent would *, make a scathing attack on the deed of assignment as it offends the provisions of Section 28(2) of the Foreign Exchange Regulation Act, 1973, for short 'FERA', which reads as follows:
Where any such person or company (including its branch) as is referred to in Sub-section (1) acts or accepts appointment as such agent, or technical management adviser, permits the use of any such trade mark, without the permission of the Reserve Bank, such acting appointment or permission, as the case may be, shall be void.
Learned Counsel would also point out that, since the deed of assignment involves payment of consideration of Rs. 100 by Hansa, an Indian Company, to Hardie, a foreign company, it also offends Section 9 of the FERA, prosecutable under Section 56 of the FERA. He drew my attention to Section 23 of the Indian Contract Act which provides that consideration or object of an agreement is lawful, unless it is forbidden by law and that every agreement of which the object or consideration is unlawful is void. Drawing inspiration from Section 23 of the In dian Contract Act, learned Counsel contended that the assignment deed in this case must be construed as unlawful and consequently void. Learned Counsel for the appellants would however submit that the permission contemplated under Section 28(2) of the FERA is riot necessarily a prior permission and obtaining of subsequent permission is also allowed as laid down by the Supreme Court in Escorts Ltd. v. Union of India, (1958)57 Comp Cas. 241. Learned Counsel for first respondent did not all dispute the proposition of obtaining subsequent permission, but what he would state is that Rule 76 states that in cases of assignment involving transmission of moneys outside India, the Registrar shall not register the title of a person who becomes entitled to a trade mark by an assignment which involves such transmission except on production of the permission of the authority specified in such law for such transmission. Admittedly, in this case neither the Reserve Bank of India nor the Government of India accorded any such permission. In these circumstances, it is too much for the appellants to contend that Hansa would become entitled to the trade mark by virtue of the assignment made in its favour by Hardie, and that Hansa acquired any proprietorship interest in the same.
13. Learned Counsel for first respondent would submit that even assuming for argument sake that the assignment deed gave Hansa any vested interest in the trade mark, it cannot be stated that the case of Haride is advanced to any further extent. Worthwhile it is to note here that what is sought to be transferred under the assignment deed is the word marks SPARTAN and STARTAN VELOX and not the device of bust of warrior in respect of which registration proceedings had been initiated by Addison. In this view of the matter, this submission of learned Counsel for first respondent commends acceptance.
14. There is also a dismal feature pertaining to assignment producing startling results. Admittedly, the assignment came into existence on 11.9.1984 and it was received as an admissible piece of evidence by the Deputy Registrar on 10.4.1987. There is also no dispute that the Joint Registrar of Trade Marks removed on 13.9.1985 even the three word marks of Hardie from the Register, pursuant to the rectification proceedings initiated by Addison. The net result is that in law these marks did not exist in the Register on the date when the assignment deed had been accepted as evidence of assignment. In such an eventuality, Hardie cannot be stated to have any proprietary interest even in the three word marks on the date when assignment was accepted. The further consequence flowing therefrom is rather obvious, in the sense of Hansa deriving nothing from the assignment. Yet another significant aspect to be taken note of is that under Section 38 of the Act, unregistered trade mark shall not be assignable or transferable except along with the goodwill of the business concerned. It is to be mentioned here that the device of bust of warrior said to have been registered as a trade mark in Australia by Hardie had not been registered in India. Admittedly, Hardie not having manufactured paints at any time in India could not have used the device of bust of warrior and built up reputation and goodwill. Hardie, thus having neither business nor goodwill with respect to the device of bust of warrior, in the trade of paints, could not have assigned the mark to Hansa. As such, Hansa cannot claim to be the assignee with respect to the unregistered device of bust of warrior, either on law or on facts.
15. The discussion made above would clinchingly point out that looked at from any angle, the reliance placed by learned Counsel for appellants on the assignment deed, merits little acceptance.
16. Discussion may now be extended to the point whether the rights of the parties have to be determined as on the date of application or on the date of order. The primary contention of the appellants is that the application of Section 11(a) dealing with the circumstances of likelihood to deceive or cause confusion, should be considered as on the date of disposal of the opposition proceedings and not as on the date of the application. In support of the said contention, learned Counsel for appellants placed implicit reliance on the following passage occurring in Page 165 of Kerly's Law of Trade Marks and Trade Names, XII Edition, under Section 11 - Deceptive or Scandalous Marks:
Date at which Section 11 applies: In relation to an application for registration, the primary question to be decided is whether the mark was deceptive (or otherwise 'disentitled to protection') at the date of the application to register. It is submitted, however, that registration ought to be refused if the mark is deceptive at the date of the decision whether or not to register, regardless of the position at the date of application. Whether in such a case registration necessarily is forbidden by Section 11 is not clear; the section says 'it shall not be lawful to register' (which would seem clearly to operate, at the moment of registration, notwithstanding that a completed registration will date back); but it applies only to marks 'disentitled to protection in a Court of Justice', and those words would seem applicable (...) if and only if the proprietor is to blame for the deceptiveness. Even, however, if the mark has become deceptive through no fault of the proprietor, it is submitted that registration of a deceptive mark should be refused as a matter of discretion.
Mention may be made here that the opposition application was filed on 18.11.1977 and the decision was rendered on 19.6.1989, after a lapse of about twelve years. During this period, parties resorted to initiation of proceedings before various forums and obtained interim orders as regards the subject matter in dispute. Pursuant to the consent order of the Calcutta High Court dated 22.2.1979, Hansa had been using the composite trade mark SPARTAN and bust of warrior in marketing its products, and it claims to have built up a lucrative turnover of several crores, after incurring considerable expenses on advertisements. On this aspect of the matter, innumerable documents in the shape of affidavits, invoices, auditor's reports, etc., had been filed and the same is not disputed by the first respondent. On such factual foundation, learned Counsel for appellants submitted that if registration is granted in favour of the first respondent, it would cause confusion and offend Section 11(a) and (e) of the Act. In this view of the matter, he further urged that the rights of parties have to be determined as on the date of the order and not on the date of the application. Learned Counsel for the first respondent would submit that law is laid down in this country not by Kerly, but by Legislatures and Judicial precedents. Elaborating his submission, hestated that the Law on the above aspect of the matter had been laid down in the following two decisions:
(i) Mohan Cold Water Breweries (P) Limited v. Khoday Distilleries (P) Limited and Anr. A.A.O. Nos. 456 and 457 of 1974, order dated 11.10.1976, by Ramanujam, J., reported in (1977)1 P.L.R 83.
(ii) Messrs.Mohan Meakin Breweries Ltd. v. Mc Dowell and Co. Ltd. A.A.O. No. 660 of l976, dated 3.10.1980.
Learned Counsel for first respondent submitted that the law laid down in these two cases is that for the purpose of registration of a trade mark, the rights of the parties have to be determined as on the date of application and not on any subsequent date. He further submitted that under Section 23, registration relates back to the date of application, and if the law were otherwise, the provision under Section 18 enabling application on the basis of proposed use, can be frustrated and nullified by unprincipled parties like the appellants herein using the subject matter of the mark during the pendency of the proceedings. In order to off-set the effect of the above two decisions, learned Counsel for appellants drew my attention to the following observations of the Supreme Court in Dristan Trade Mark, 1986 R.P.C. No. 9 161:
In determining the intention of an applicant for registration it was proper to have regard to events subsequent to the date of application including any registered user agreement. In the present case there was a continuous chain of events from a date prior to the application to register the mark up to the date of the registered user agreement which established beyond doubt that the appellants intended that the mark should be used in India by the manufacture and sale thereof the goods in question.
Based on the above observation, he would submit that the ratio laid down in the abovesaid two deceisions is per incuriam and consequently they should be deemed to have been overruled by the decision of the Supreme Court in Dristan Trade Mark 1986 R.P.C.9161. To this submission of the learned Counsel for the appellants, I am unable to affix my seal of approval. The reasons are obvious. The issue raised by the appellants in the case on hand is that the grant of registration for the mark applied for, will be hit by Section 11(a) and (e)i.e. use of which is likely to deceive or cause confusion or otherwise be disentitled to protection. This necessitated the determination of the date with reference to which the issue is to be determined. The two decisions cited by the learned Counsel for first respondent declare that the crucial date for determination of the rights of parties is the date of the application under Section 18(1) of the Act. Worthwhile it is to note that till the passing of the Trade Marks Act, 1938 in England, only one who claims to be the Proprietor of the mark, could apply for registration, and one who merely proposes to use a trade mark was not eligible to apply for registration before 1938. The Indian Acts of 1940 and 1958 in Secs.15 and 18 took away this concept. He further contended that this facility will become a nugatory if the contention of the appellants counsel that the rights of the parties shall be determined on the date of the order and not on the date of the application, is accepted. The observation of Ramanujam, J. in Mohan Coldwater Breweries (Private) Limited v. Khoday Distilleries Private Limited and Anr. (1977) 1 P.L.R. 83, which highlights this aspect of the matter is scintillating and is worth reproduction here:
... right to have a mark registered under Section l8(1) by a person devising and proposing to use it can in all cases be defeated by unscrupulous rival trader giving the nature of the mark proposed to be registered and using the same before the mark is actually registered and putting forward the opposition to the application for registration on the ground of user of the mark...
The issue in Distan Trade Mark 1986 R.P.C. No. 9 161 was in the context of rectification proceedings under Section 46 and not in the context of application for registration. The Supreme Court had to determine whether at the time of filing the application, the applicant has got any bona fide intention to use the mark. In order to determine the state of mind, the subsequent conduct of the applicant had to be determined. As such, as rightly contended by learned Counsel for the first respondent, the situation has no parallel to the situation currently under adjudication and consequently it cannot be applied to the facts of the case. In these circumstances, the two decisions cited by the learned Counsel for the first respondent must be construed to reflect the real legal position as on date and the contention of the learned Counsel for appellants that these decisions are per incuriam cannot be accepted.
17. Divergent hues of views revolving on the blameworthy conduct attributable to abandon mentand consent order of the Calcutta High Court, having a bearing on public interest and the balance of convenience of respective parties may now fall for discussion and decision. It may be recapitulated that the first respondent on and from the date of cancellation of the registered user agreement started manufacturing its products and marketing them with the device of an ancient warrior in a standing posture within a circle with the words 'Superfine Products' imprinted in the bottom, in its name. While doing so, it made announcement to the public to erase and brush off their memory of its products having been associated with SPARTAN and the device of bust of warrior. The appellants would contend that this amounts to abandonment of the device of bust of warrior associated with their products. They would further contend that this act of the first respondent is a blameworthy conduct further aggravated by the consent order of the Calcutta High Court. Learned Counsel for first respondent, on the other hand, would state that the appellants are rather oblivious of the legal position and that perhaps was the reason for such a submission. He would further elaborate and state that the act of the first respondent in switching to the device of warrior in a standing posture, from the time of cessation of registered user agreement, can by no stretch of imagination be stated to be abandonment in the eye of law. But the act of Hardie, he would say, in withdrawing unconditionally the application for registration of the composite mark and bust of warrior, amounts to abandonment. In support of such submission, he would draw my attention to Section 102 of the Act which throws light on the question of abandonment and it reads as under:
Where, in the opinion of the Registrar, an appellant is in default in the prosecution of an application filed under this Act or any Act relating to trade marks in force prior to the commencement of this Act, the Registrar may by notice require the applicant to remedy the default within a desired an opportunity of being heard, treat the application as abandoned, unless the default is remedied within the time specified in the notice.
On the face of such a provision, the contention of learned Counsel for first respondent deserves acceptance. The act of the first respondent cannot at all be construed in the eye of law as abandonment amounting to a blameworthy conduct. The other facet of the argument is that the consent order of the Calcutta High Court also reflects blameworthy conduct on the part of the first respondent. Such a contention cannot be given credence or weight. As per the consent order, the first respondent was given the liberty to use the device of warrior, Hardie and Hansa were not to object Addison selling its products under the get up in which it was selling and, similarly, Addison was not to object Hardie and Hansa selling their products under any get-up, so long as they distinguished their goods from those of Addison. At this juncture, it has to be clarified that the consent order did not at all state specifically that Hardie and Hansa could use the device of bust of warrior, but what Hansa did was, it started using the composite trade mark and bust of warrior subsequent to the consent order. The use of bust of warrior device by Hansa had been done with the full knowledge of the pendency of the application by the first respondent for registration of the device of bust of warrior. In such circumstances, it can be stated without any hesitation that no one else is to be blamed except Hansa for such user. Even if justification is sought for, for the use of the impugned bust device on the ground of consent order, the answer is, as rightly contended by learned Counsel for first respondent, that when a suit is filed, the rights of parties are frozen as on the date of suit any interim order passed with or without consent of parties, cannot have the effect of frustrating the ultimate result, even if goodwill and reputation had been built by consent of parties in the course of interim orders. The party which has built up such a goodwill, will be deemed to have done so, at its risk and has to account for it under Section 106 of the Act at the end of the trial. If the appellants continue t6 trade, despite the pendency of the suit, they are doing so at their own risk and responsibility. Otherwise, the right to have a mark registered under Section 18(1) by a person devising and proposing to use it, can in all cases be defeated by unscrupulous rival traders giving the nature of the mark proposed to be registered and using the same, before the mark is actually registered and coming forward with opposition applications on the ground of user of the mark. In this view of the matter, it cannot be stated that allowing the application of Addison/first respondent and proceeding to registration can have any bearing on public interest, leave alone balance of convenience. It may be stated that public interest and balance of convenience cannot at all be focused in a situation like the one on hand, as the right of parties has to be decided as on the date of the application and not on the date of the decision. Considering the facts and circumstances of the case it is not necessary for me to refer to the elaborate submissions and the catena of decisions relied upon by the learned Counsel for the appellants, revolving on public interest and balance of convenience of parties. In such state of affairs, it cannot at all be stated that there is any blameworthy conduct on the part of the first respondent, encouraging the appellants to spend huge amounts on advertisements and build up reputation of the trade mark, viz., bust of Warrior, and if at all if there is any blameworthy conduct, it is attributable to the appellants' own making of acting in a hurly-burly fashion and in an imprudent manner, without waiting for the final verdict.
18. The last submission falling for consideration is the Registrar's power to stay proceedings in opposition to registration. The first respondent also filed three applications for registration of three trade marks, viz., SPARTAN, SPARTAN VELOX and SPARTAN along with bust of a warrior, under different Classes. The appellants notified their intention to oppose the registration and they filed application for stay of the said proceedings, contending that by order dated 13.9.1985, the Joint Registrar of Trade Marks removed the three registered trade marks of Hardie under Nos.122172, 122173 and 122174, pursuant to rectification proceedings filed by the first respondent, that they filed appeal in the Calcutta High Court and that therefore the proceedings are required to be stayed till the appeal is decided. The first respondent opposed the application stating that the petition is mala fide, that the matter of stay had been rejected and dismissed on four occasions by the Calcutta High Court, that under the Act, the Registrar has no power to stay the proceedings arid that even if the appellants win their case in the Calcutta High Court, the first respondent is entitled to the benefits of such registration under Section 12(3). The Registrar's exercise of discretion in refusing to grant stay accepting the well-founded contentions of the first respondent cannot be stated to be a perverse exercise of power calling for interference, especially when the proceedings had been pending before him without any progress for well over a period of twelve years as a result of the obstructive tactics resorted by the appellants by. initiation of proceedings in different forums. The last submission also has no merit in it.
19. For the foregoing reasons, the appeals deserve to be dismissed and they are accordingly dismissed. In the circumstances of the case, there will be no order as to costs in these appeals.