TaxTMI 
TaxTMI 
2003 (9) TMI 542
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....till today. The original trademarks as well as their modified forms, which were also subsequently registered, have been in use by Hardie or its predecessor in interest in respect of paints and lacquers and other surface coatings since that date. It is the case of Hardie that it also wanted to commence business in India and to this end took steps to have the words "Spartan" and "Spartan Velox" registered in this country as far back as in 1940. The words were entered in the Register of Trade Marks at Calcutta in Hardie's name. The registration was valid for what was then undivided India and other South Asian countries. 2. On 6-11-1946, a collaboration agreement was entered into between Hardie and the respondent (who will be described as Addisons) for a period of 20 years under which Addisons was to be Hardie's "Chief agent" in India and other named territories for selling surface coatings supplied by Hardie. The agreement also envisaged Addisons being the registered user of the trademarks during the period of the agreement and also the setting up of a factory by Addisons at Madras to manufacture the surface coatings according to Hardie's formulae. Addisons undertook that all fo....
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....ks and device on the surface coatings produced by it. 5. On 3-11-1971, Addisons applied for registration of a device which consisted of the frontal view of a standing helmeted warrior holding a shield and spear. On 11-11-1971, Addisons informed Hardie that with effect from 1-12-1971, it would discontinue the use of Hardie's trade marks and that Addisons had made arrangements to market its products in its own brand name. This was followed by several advertisements by Addisons in newspapers to the effect that Addisons' products would no longer be sold under the old trade marks but under the brand-name Addisons with the pictorial representation of the standing warrior. 6. On 6-12-1971, Hardie applied for registration of the composite marks of "Spartan" and Hardie's device in respect of surface coatings. However, the application was withdrawn on 26-4-1974. 7. In November 1976, Addisons obtained registration of the standing warrior device. In the same year it filed three applications before the Registrar of Trade Marks at Mumbai for registration of Hardie's trademarks. The applications were rejected on the grounds of identity and deceptive similarity with Hardie's registered tr....
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....cation in the Calcutta suit for stay of the rectification proceedings which were then pending before the Joint Registrar of Trade Marks at Calcutta. The application was dismissed by the learned Single Judge of the Calcutta High Court and the appeal therefrom dismissed by the Division Bench. The application for rectification filed by Addisons was allowed by the Joint Registrar of Trade Marks at Calcutta by his order dated 12-9-1985 as a result of which Hardie's trademarks were expunged from the Register of Trade Marks. Both Hardie and Hansa appealed against this order to the Calcutta High Court before a learned Single Judge. The appeal was dismissed on 6-7-1990. On a further appeal the Division Bench confirmed the learned Single Judge's order on 22-8-1997. The decision of the Division Bench is the subject matter of S.L.P. No. 206 of 1998. Pending the rectification proceedings in Calcutta, an application was filed by Hansa for stay of the registration proceedings relating to 'Spartan' and 'Spartan Velox'. The application was rejected by the Assistant Registrar, Madras on 19-6-1989. On the same day Addisons' application for registration of Hardie's device was allowed. Although five....
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....of Trade Marks at Bombay. It was also said that "extensive market research" had been done and it was discovered that the trademarks had not been used in India for over five years continuously. Addisons claimed that the trade marks registered in Hardie's name were identical or deceptively similar with the trademarks sought to be registered by Addisons giving it the locus to seek rectification of the Trademarks Register by expunging Hardie's trademarks therefrom. Addisons' applications for the removal of the trademarks which were registered in Hardie's name since 1946 were only under section 46(1) of the Act. 19. The relevant extracts of section 46 of the Act read as follows: "Removal from register and imposition of limitations on ground of non-use.-(1) Subject to the provisions of section 47, a registered trade mark may be taken of the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved on the ground... (b) that up to a date one month before the date of application, a continuous period of five years or longer had elapsed during which the trade....
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.... removal of a registered trademark from the register on the ground of non-use. This section presupposes that the registration which was validly made is liable to be taken off by subsequent non-user. Section 56 on the other hand deals with situations where the initial registration should not have been or was incorrectly made. The situations covered by this section include: - (a) the contravention or failure to observe a condition for registration; (b) the absence of an entry; (c) an entry made without sufficient cause; (d) a wrong entry; and (e) any error or defect in the entry. Such type of actions are commenced for the "purity of the register" which it is in public interest to maintain. Applications under sections 46 and 56 may be made to the Registrar who is competent to grant the relief. "Person's aggrieved" may also apply for cancellation or varying an entry in the register relating to a certification trademark to the Central Government in certain circumstances. Since we are not concerned with a certification trademark, the process for registration of which is entirely different, we may exclude the interpretation of the phrase "person aggrieved" occurring in section 69 from con....
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....se, to a certain extent; at any rate and I think the Applicants ought to show something approaching a sufficient or proper reason for applying to have the Trade Mark expunged. It certainly is not sufficient reason that they are at loggerheads with the Respondents or desire in someway to injure them.^1 Addisons' application was one under section 46 and the test to determine whether the applicant was a 'person aggrieved' within the meaning of that section should have been the one laid down by Romer, J. in Wright's case (supra) and not the one propounded by the House of Lords in the matter of Powell's Trade Mark (supra). The High Court and the Joint Registrar fell into error in not drawing this distinction. However, it is not necessary to dilate on this aspect of the matter as the appellant has really argued on the second and third aspects of section 46 viz., the alleged non-use of the trade marks by Hardie and special circumstances. (b) Non-use of the trademarks - Under section 46(1)(b) of the Act an application for removal of a registered trademark will be allowed only if a continuous period of five years or longer has elapsed upto the date of one month prior to the date of th....
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....se of the trademark on the goods in respect of which the trade mark is registered. He relied upon a letter written by Hansa's lawyers to Addisons dated 25th December, 1977 in which it was stated that Hansa had not manufactured or sold any goods under the trademarks, to hold - first, that neither Hansa nor Hardie had sold any goods during the relevant period and, second, that therefore there was no use of the registered trademarks. Both the Single Judge and the Division Bench appear to have proceeded on the same basis. The question therefore is - the word "use" in section 46(1) so limited? The phrase used in section 46 is "bona fide use thereof in relation to those goods". The phrase has been defined in section 2(2)(b) of the Act as : "to the use of a mark in relation to goods shall be construed as a reference to the use of the mark upon, or in any physical or in any other relation whatsoever, to such goods." This shows that the use may be other than physical. It may be in any other relation to the goods. Given this statutory meaning, we see no reason to limit the user to use on the goods or to sale of goods bearing the trademark. In Hermes Trade Mark 1872 RPC 425, the r....
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.... the words 'other relation' giving the words a much wider meaning. Reading this definition into section 46(1). It is clear that the word 'use' in section 46(1) may encompass actions other than actual sale. The error committed by the three fora below starting with the Joint Registrar was to read the intention to abandon as being limited to the special circumstances of the trade as if there could be no intention to abandon unless there was such special circumstances. Sub-section (3) to section 46 says that the applicant can rely on the non-use unless it is shown by the registered owner to be due to special circumstances in the trade and not to any intention either to abandon or not to use the trade mark. There is a distinction between the intention to abandon which is part of the 'no bona fide use in relation to those goods' in sub-section (1) of section 46 which gives a cause for removal of the trademark and the intention to use under sub-section (3) of section 46 provides a special defence to the registered proprietor and is inferred from the existence of special circumstances. That the proprietor's intention to abandon the trademarks is a necessary component of their non-use....
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....eluctant to find an abandonment". Under the majority rule, evidence of abandonment must be clear and convincing. The New York Court of Appeals stated that "Abandonment being in the nature of a forfeiture, must be strictly proved." As far as this country is concerned, section 46(3) of the Act statutorily prescribes the intention to abandon as an essential component of non-use for the purposes of section 46(1). In American Home Products Corpn. v. Mac Laboratories (P.) Ltd. [1981] 1 SCC 465 (sic ), this Court was called upon to decide whether there was any bona fide use of the trade mark in relation to goods by the proprietor or for the purposes of section 46(1)(a) of the Act. Under section 46(1)(a), the trade marks which were registered without any bona fide intention to use them in relation to the goods and which have in fact not been used by the proprietor from the date of such registration up to the date of the application of registration, are liable to be taken off the register. The Court held that both the intention of the proprietor not to use the trade mark at the time of registration and also the actual non-use of the trade mark subsequent thereto had to be proved. The evi....
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....the registered user. Indeed that would be the inevitable and logical result of reading section 46(1) with section 48(2) of the Act. "The permitted use of a trade mark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor, for the purposes of section 46 or for any other purpose for which such use is material under this Act or any other law." [See also 'Astronaut' Trade Mark 1972 RPC 655] It is a moot point whether the onus to prove this aspect of non user is on the applicant or on the registered user. Irrespective of the onus of proof, the question is was there any evidence of such intention on Hardies' part either not to use the trade mark itself or through the registered user during the relevant period ? The evidence on record certainly does not support any such intention. The correspondence exchanged between Hardie and Hansa demonstrates that at least from 6th October, 1971 i.e., prior to the period in question, Hansa and Hardie were negotiating a registered user agreement under which Hansa, in effect, would do what Addisons had done under its agreement with Hardie. The initial hurdle to the negotia....
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....demarks by Hardie during the period of five years and one month prior to the applications for rectification. This is sufficient for this Court to allow the appeal. (c) Special circumstances - Apart from the fact that it had no intention not to use the trademarks during the statutory period Hardie also claimed that it was unable to use its trademarks directly in India because of special circumstances within the meaning of sub-section (3) of section 46. It relied upon the Import Trade Control Policy for the period April 1972 to March 1974 and April 1974 to March 1975 to contend that the import of paints and varnishes was prohibited, a prohibition which continued much beyond the date of the making of the applications by Addisons for removal of Hardie's trademarks. In fact, because of the declared import trade control policy, even Hansa's application for registration as a registered user in India of the trademarks was refused by the Assistant Registrar of Trademarks on the ground that it was against the policy of the Government to allow registration of foreign trademarks for use in India. The Joint Registrar rejected Hardie's submission that there were any special circumstances w....
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..... The second erroneous finding of the Division Bench was that economic viability or existing market condition was outside the concept of special circumstances. The finding does not follow from the section and is against the weight of authority. Special circumstances have been defined in Aktiebolaget Manus v. R.J. Fullwood & Bland Ltd. [1949] 66 RPC 71 as "some external forces as distinct from voluntary acts of any individual"..... where the impact of local condition makes impractical the ordinary usage of international trade". In that case it was held prohibitive tariffs which were practically effective to keep out of England altogether machines manufactured abroad which had, till the tariffs had been imposed, been imported to the country amounted to special circumstances. The facts in Aktiebolaget Manus' case (surpa) are similar to the facts which we have to consider. In dispute were trademarks as applied to milking machines. The proprietor of the marks was a Swedish company. The machines had been imported into Britain through the defendant as its agent. When the import of the milking machines was stopped by the registered proprietors, the agent claimed the trademarks as its ow....
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....al circumstances in the trade." [Emphasis supplied] The Court of Appeal reversed this decision on another issue. The House of Lords in turn reversed the decision of the Court of Appeal and reaffirmed the decision of Justice Ungoed Thomas in Berlei (U.K.) Ltd. v. Bali Brassiere Co., Inc. [1969] (2) All ER 812. This view has been accepted as good law in this country. [See Aktiebolaget Jonkoping Vulcan v. V.S. V. Palanichamy Nadar AIR 1969 Cal. 43 and Express Bottlers Services (P.) Ltd. v. Pepsi Inc. 1989 PTC 14. The law therefore is that even an economical impracticability would amount to special circumstances. The indisputable evidence shows and the admitted position is that from 1946 to 1971 Addisons was using the trademark first as the chief agent of Hardie under the collaborative agreement, and then under the registered users agreement. Apart from the express clauses in the two agreement by which Hardie retained its rights over the trademarks, under section 48(2), read with section 2(m): "The permitted use of a trade mark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor, for the purposes of ....
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....the domestic producers of paints and lacquers. Concerns like Hardie could not, without making an enormous investment by setting up a factory, import the goods. In the circumstances, for Buttress to have said that it was not economically possible for Hardie to itself put its manufactured goods in the market immediately, cannot be taken as being a circumstance which was peculiar to Hardie alone. It was a circumstance which was generally applicable to all foreign manufacturers of paints and lacquers. Therefore, the con- clusion of the Joint Registrar and the High Court that there were no special circumstances in the trade which justified the alleged non-user for the period in question was wrong. In view of our findings, it is not necessary to go into the further question of the discretionary power of the Registrar to refuse rectification even if the application is otherwise maintainable. For all these reasons, we set aside the decisions impugned and allow the appeal with costs. Civil Appeal Nos. 5307-5311 of 1993 21. These arise out of five appeals of which three relate to the refusal to stay the registration of Hardie's trademarks in Addisons name and two from orders allo....
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....at the device is registered in Hardie's name in Australia and New Zealand and that Hardie has been using the device all these years in the international market. The High Court has erroneously held that Hardie never used the mark and had never by itself manufactured and marketed the goods, namely paints and other allied products in India either under the word marks or under the device. In our narration of facts at the outset, we have noted that admittedly Hardie had sold the products manufactured by it through Addisons between the period 1946 to 1949 pursuant to the collaboration agreement. It is nobody's case that Hardie's products when they were marketed in India through Addisons were not under the registered marks and device. It is well established that if the manufacturer was the first to use the device as a trade mark, he alone can claim property over the name as a trade mark.^1 The factual findings of the High Court that Hardie had never marketed goods manufactured by it in India was, therefore, not only wrong but it had serious repercussions on the maintainability on Addison's application for registration. The High Court did not give sufficient importance to the fact that ....
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.... 27. As with the registered word marks 'Spartan' and 'Spartan Velox', no evidence has been brought on record by Addisons to show that it had ever taken any steps, apart from making the applications for registration, to use Hardie's device of warrior-rear subsequent to 1971 right up to the time it made its application for registration in December 1977. There is also no evidence that Addisons had attempted to use the device subsequent to 1977 to 1979 when the consent order was passed in the Calcutta suit. 28. The consent order was misunderstood and misinterpreted by the Madras High Court. The consent order which is dated 22nd February 1979 reads as follows : "Upon reading an application of the plaintiffs pursuant to the notice dated the twenty second day of November, one thousand nine hundred and seventy eight and upon hearing Mr. B.N. Sen (Mr. Bhaskar Sen appearing with him) advocate for the plaintiffs and Mr. D.K. De (Mr. K. Ganguly appearing with him) advocate for the defendant and upon the defendant by its advocate undertaking to this Court that the defendant shall not use the mark Spartan and the device warrior referred to in paragraph 5 of the statement of case annexed to....
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....nd February 1979 w.e.f. 3rd September 1979 Hansa started using the "Spartan' trade mark with the warrior device of Hardie on the products manufactured by it and has continued to do so. 30. It has not been shown to us how a consent order differs from any other form of agreement except that it may have additional sanctity by reason of the imprimatur of the Court. And yet, the High Court came to the conclusion that Hansa's use of the device subsequent to the consent order was "by brute use in controversial circumstances". We are at a loss to understand how the High Court could have deduced that the use of the mark by Hansa during the pendency of the proceedings was not bona fide. 31. The High Court in wrongly casting the onus Hardie and Hansa by saying that they had not been able to produce "any other relevant material to indicate that there was no bona fide intention on the part of Addisons to use the mark at the time when they made their applications" did not consider whether Addisons had positively proved its use and intention to use the device. 32. We are of the view that the dissenting judgment of Swamidurai, J. was correct. The learned Judge had correctly emphasised tha....