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The first question, we have to consider, depends primarily on an appreciation of the nature and effect of the Trade Marks Act, 1940. As its preamble shows, it was enacted because it was expedient to provide for the registration and more effective protection of trade marks. The definition section is Section 2 and by sub-clause (i) "registered" (with its grammatical variation) means registered under this Act; (j) "registered trade mark" means a trade mark which is actually on the register and (l) "trade mark" means a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indication of the identity of that person. The procedure which has to be adopted in order to effectuate registration is contained in Chapter III and in section 18 provision is made for the duration and renewal of registration. By sub-section (1) of that section, registration of a trade mark shall be for a period of seven years, and it may be renewed from time to time in accordance with the provisions of the section. Then sub-section (2) provides for the renewal of registration after the initial seven years for periods of fifteen years, and sub-section (3) provides that at the prescribed time before the expiration of the last registration of the trade mark the Registrar shall send notice in the prescribed manner to the registered proprietor of the date of expiration and the conditions as to payment of fees and otherwise. Under a schedule which is referential to prescribed rules made under the Act the quantum of fees which have to be paid is provided for. Chapter IV is headed, "Effect of Registration," and commences with Section 20. Sub-section (1) of that section provides that no person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark unless such trade mark has been continuously in use since before the 25th of February, 1937, by such person or by a predecessor in title of his and unless an application for its registration, made within five years from the commencement of the Act, has been refused; and the registrar shall, on application in the prescribed manner, grant a certificate that such application has been refused. Sub-section (2) saves rights with regard to passing off actions. Section 21 sets out the rights conferred by registration and it is in these terms :-

Section 29 provides :-

"Notwithstanding anything in any other law to the contrary, a registered trade mark shall, subject to the provisions of this Chapter, be assignable and transmissible whether in connection with the goodwill of a business or not, and in respect either of all the goods in respect of which it is registered or of some only of those goods."

Section 30 which is concerned with the assignability of unregistered trade marks provides that an unregistered trade mark shall be assignable and transmissible whether in connection with the goodwill of a business or not, provided that, except in connection with the goodwill of a business, assignment or transmission shall be permissible only in the circumstances therein set out, which make it incumbent that the unregistered trade mark should be used in the same business as a registered mark and be assigned at the same time and to the same person as the registered and that it relates to goods in respect of which a registered mark or transmitted.

Speaking of the English Act of 1875, Lord Justice Cotton in Mitchell v. Henry said :-

"What the Act does, as I understand it, is this :- It enables persons to register a trade mark, and when they register it that is equivalent to evidence of public use of it by them, and during five years the registration is prima facie evidence of their exclusive right to it, and after the five years it is conclusive evidence of such right."

In the case before us it seems to me that the duration of the advantage gained by registration is uncertain, the fees only preserve it for specified periods, in the first instance seven years, and for subsequent periods of fifteen years. How can it be said, to use the words of Lord Cave, "to bring into existence an asset or an advantage for the enduring benefit of the trade ?" Can it be said that periods of 7 and 15 years are sufficiently permanent to make it enduring ? I think not. It could not, in may opinion, be disputed that if in order to protect these trade marks by registration, an annual fee had to be paid, that the payments so made would be revenue payments and deductible for tax purposes, and, in my opinion, the fact that the periodic payments are spaced by longer intervals cannot effect the principle, so long as the payments are recurrent and they are not made once and for all. But were the payments made for the purpose of maintaining a capital asset of the assessee company, or, have they created a new asset or altered or added to the original nature of the capital asset ? It does not seem to me that the payment of these fees appreciates the profit earning capacity of the company so far as the use of these trade marks is concerned. The trade marks remain the same as those which have been in use since before February 1937. In one sense every prudent expenditure improves the asset upon which it is laid out, e.g., the repainting and current repairs to business premises given to them at any rate temporarily some enhanced value. In my opinion, neither Section 20 nor Section 21 of the Trade Marks Act creates an enduring benefit, because, even before the Act, the assistance of the Court could be sought in cases of infringement and if registration is not renewed its benefit lapses. The sections take something away from trade marks which remain unregistered rather than they add anything from trade marks which remain unregistered rather than they add anything to those which become registered. But Sections 28 to 30 both inclusive with regard to assignment and transmissibility, do, in one sense, confer a new right, because before the Act you could not transfer a trade mark in gross. But is a separate or altered asset brought into existence ? It is suggested that the trade mark is now assignable at a separate value apart from the business or its goodwill. The reason for the change in the law is suggested in Bray and Underhay, book on the English Trade Marks Act of 1938, to be as follows :-

"The changes introduced by this section are far-reaching. The theory upon which the law of trade marks has been evolved hitherto has been that the public regarded a trade mark as indicating that the goods bearing the mark emanated from a particular business exclusively, and that, if the link between the mark and the business was broken, it would be contrary to public policy to recognize the continuance of any exclusive right to the mark. See, generally, Kerly, pp. 401 et seq. The questions as to how far a business might be split up and a part assigned as a separate business has never been settled in respect of unregistered trade marks."