1955 (4) TMI 34 - SC - Companies Law

Supreme Court Upholds Registrar's Decision on Trade Mark Disclaimer

The Supreme Court upheld the Registrar of Trade Marks' decision to require a disclaimer of the word 'Shree' in the respondent company's trade mark. The ... Disclaimer of part of a trade mark - jurisdictional facts for imposition of disclaimer under section 13 of the Trade Marks Act, 1940 - non-distinctive character / matter common to the trade - exercise of discretionary power by the Registrar - requirement of good cause for imposing disclaimer - purpose of disclaimer to define the proprietor's rights under registration - proviso preserving proprietor's rights outside registrationJurisdictional facts for imposition of disclaimer under section 13 of the Trade Marks Act, 1940 - non-distinctive character / matter common to the trade - Whether the statutory jurisdiction to require a disclaimer existed in respect of the word 'Shree' as part of the respondent company's registered device - HELD THAT: - The Court held that section 13 conditions the tribunal's power to require a disclaimer on the existence of one of two jurisdictional facts: (a) that the trade mark contains any part not separately registered by the proprietor or (b) that it contains matter common to the trade or otherwise of a non distinctive character. In the present case both jurisdictional facts were present. The device registered as trade mark No. 3815 prominently contained the word 'Shree' which was not separately registered and both the Registrar and the High Court found that 'Shree' was not adapted to distinguish. Consequently the statutory preconditions for the exercise of the power to require a disclaimer were established.Statutory jurisdiction to impose a disclaimer in respect of the word 'Shree' was present.Exercise of discretionary power by the Registrar - requirement of good cause for imposing disclaimer - purpose of disclaimer to define the proprietor's rights under registration - proviso preserving proprietor's rights outside registration - Whether the Registrar acted properly in exercising his discretion to require a disclaimer of the word 'Shree' and whether the High Court was justified in setting aside that exercise of discretion - HELD THAT: - The Court explained that even after the jurisdictional fact is established and a finding made that the proprietor is not entitled to exclusive use of a part, imposition of a disclaimer remains discretionary and must be exercised for good cause and not capriciously. The underlying purpose of disclaimer is to define the rights conferred by registration and to prevent proprietors from expanding statutory protection beyond legitimate bounds. The proviso to section 13 preserves any rights of the proprietor arising outside the Act (e.g., passing off or criminal prosecution) which are unaffected by disclaimer. Applying these principles, the Registrar was entitled to take into account not only an established Registry practice but also the material before him showing that the respondent had repeatedly claimed 'Shree' as its mark, had prosecuted alleged infringers, and had given clear indications (including counsel's statement) that it intended to treat registration as conferring an exclusive statutory right in the word itself and to pursue infringement actions. Those considerations furnished a good reason to impose a disclaimer to define the statutory rights conferred and to prevent oppressive or extravagant claims based solely on registration. The High Court, by focusing on uniformity of practice and not addressing the specific evidential and practical reasons relied on by the Registrar, failed to engage with a determinative consideration and therefore erred in interfering with the Registrar's bona fide exercise of discretion.The Registrar did not err in imposing the disclaimer; the High Court should not have interfered with the Registrar's bona fide exercise of discretion.Final Conclusion: The appeal is allowed: the Registrar's order inserting a disclaimer of the exclusive use of the word 'Shree' is upheld as a lawful exercise of the discretionary power under section 13 read with section 46(4) to define the statutory rights of the proprietor; the High Court's order setting aside the disclaimer is reversed and costs are awarded to the appellant. Issues Involved:1. Whether the Registrar of Trade Marks was justified in requiring a disclaimer of the word 'Shree' in the respondent company's registered trade mark.2. Whether the High Court was correct in reversing the Registrar's decision to insert a disclaimer.Issue 1: Justification of the Registrar's Requirement for a DisclaimerThe Registrar directed the rectification of the register by inserting a disclaimer of the word 'Shree' in the respondent company's trade mark, based on the provisions of Section 13 read with Section 46(4) of the Trade Marks Act, 1940. The Registrar found that the word 'Shree' was commonly used by Hindus as an auspicious symbol and was not adapted to distinguish the respondent company's goods. The Registrar's decision was influenced by the established practice in the Registry, which either refused registration of the word 'Shree' or required a disclaimer if it was part of a trade mark. The Registrar emphasized that the respondent company was claiming a proprietary right to the name 'Shree,' which was evident from their affidavit and previous actions, including prosecutions for infringement. The Registrar concluded that a disclaimer was necessary to prevent the respondent company from asserting an exclusive right to the word 'Shree' and to avoid potential infringement actions based solely on the registration.Issue 2: High Court's Reversal of the Registrar's DecisionThe High Court reversed the Registrar's decision, holding that there was no ground for the order as the respondent company had never claimed an exclusive right to the word 'Shree.' The High Court acknowledged that 'Shree' had numerous meanings and was not exclusively indicative of the respondent company's goods. However, the High Court reasoned that the Registrar's decision was primarily based on an inflexible practice rather than a specific finding of non-distinctiveness in this case. The High Court found the case analogous to the Cadbury Brothers' Application, where the Registrar's practice of requiring a disclaimer was overruled. The High Court concluded that the Registrar's decision lacked good cause beyond the desire for uniform practice and set aside the order of rectification.Supreme Court's Analysis and ConclusionThe Supreme Court examined the scope and purpose of Section 13 of the Trade Marks Act, emphasizing that the power to require a disclaimer is discretionary and must be exercised for good cause. The Court noted that the Registrar had considered the respondent company's claim to the word 'Shree' and the potential for misuse of the registration. The Court found that the High Court had not fully appreciated the Registrar's reasoning and the necessity of a disclaimer to define the respondent company's rights under the registration. The Supreme Court held that the Registrar had exercised his discretion properly and that the High Court had erred in interfering with the Registrar's decision. Consequently, the Supreme Court allowed the appeal, reinstating the Registrar's order for a disclaimer and awarding costs to the appellant.