TaxTMI 
TaxTMI 
2005 (4) TMI 642
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....de and Merchandise Marks Act, 1958 was dismissed by order dated 19th September,1997 in CO no. 10 of 1982 by a learned Single Judge holding that the application of the appellants under Section 46 of Trade & Merchandise Marks Act, 1958, hereinafter referred to as `Act(tm) was barred under Section 137 of the Limitation Act,1963 and that the respondent no. 1 had established his intention to use the trade mark and he could not effectively use the trade mark owing to the restriction imposed by the Government. 3. To comprehend these disputes, the following relevant facts need consideration. Fedders Quiogan Corporation had entered into an agreement dated 21st May, 1956 with M/s Llyod Electric and Engineering Company, a partnership company of Pandit Kanhaia Lal Punj, Mr. Suraj Prakash Punj, Mr. I.P. Punj, Mr. V.P. Punj and S.P. Sawhney. Under this agreement, Fedders Quiogan Corporation had to furnish technical information to the partnership concern and a license was granted for five years to deal in air-conditioners, manufactured with parts and technology provided by the said Corporation under the trade name and label Fedders. The partnership firm applied for registration of the trade ma....
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....with the demands and continued using trade mark `Fedders' without any agreement and authorization from respondent no. 1. 6. In view of unauthorized use of trade mark `Fedders(tm) by appellants, a suit for injunction for infringement of copyright and passing off was filed by respondent no. 1 on 26th July, 1972 before the Calcutta High Court against the appellants. A single Judge of the Calcutta High Court granted an interim injunction by order dated 31st May, 1974 in favor of respondent No. 1 and against the appellants. However, the operation of the interim injunction was stayed by a Division Bench of the Calcutta High Court and subsequently, the order staying the injunction was confirmed by order dated 21st January, 1975 till the disposal of the appeal. The said appeal filed by the appellants was disposed off by an order dated 4th March, 1980 and the injunction order granted by the single Judge, which was stayed, was confirmed and the suit for infringement of trade mark and passing off filed by the respondent No. 1 against the appellants was expedited. 7. On 10th August, 1982, the appellant filed an application under Section 46 and 56 of the Trade and Merchandise Marks Ac....
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....ion of using trademark `Fedders(tm) in relation to air conditioners and air conditioning machinery and parts & fittings and, Therefore, was included in Class 11 under the Trade and Merchandise Marks Act, 1958. The respondent no. 1 has made use of the trademark `Fedders(tm) in relation to its goods within India, but was not able to make more extensive use of this trade mark on account of the restriction placed under the Import Policy at the relevant time. The respondent no. 1 propounded restrictions under import policies as 'special circumstances' and filed affidavit dated 30.10.1986 of Mr. Sam Muscarnera along with appendix of import policies and other documents Exhibits A to I. Exhibit A is the agreement dated 21.05.1956. Exhibit B is the agreement dated 10.10.1963. Exhibit C is the agreement dated 11.10.1963. Exhibit D is the photocopy of the Appendix 4 to the Import Policy for the period from April 1978 to March 1979 published by the Government of India. That Appendix provides for a list of banned items and Item 96 in that list reads as under: Any consumer goods, however described, of industrial, agricultural or animal origin, not appearing individually in Appen....
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.....1984:- 1. Did respondent no. 1 not use the trademark `Fedders(tm) as alleged in the petition and the trademark is liable to be rectified on that ground? OPP 2. Is the petition liable to be allowed for any of the reason stated in the petition? OPP 3. Have Delhi Courts no jurisdiction to entertain and try the petition? OPR 4. Is the petition mala fide and if so what is its effect? 5. Are the petitioners or any of them, not persons aggrieved within the meaning of Section 56 of the Trade and Merchandise Marks Act, 1958? OPP 6. Relief 13. The appellants(tm) application under Section 46 of the Trade and Merchandise Marks Act, 1958 was dismissed by order dated 19th September,1997 in CO no. 10 of 1982 by the learned Single Judge holding that the application of the appellants under Section 46 of Trade & Merchandise Marks Act, 1958 was barred under Section 137 of the Limitation Act,1963 and that the respondent no. 1 had established his intention to use the trade mark and he could not effectively use the trade mark owing to the restriction imposed by the Government. 14. In the present appeal, appellants have impugned the judgment of....
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.... governed by the Limitation Act. 16. Impugning the judgment of the learned Single Judge on the ground of existence of special circumstances, the appellants contended that the respondent No. 1 has failed to satisfy that non-use was due to special circumstances in the trade. It was contended that the plea of the respondent No. 1 that there was a complete ban on the respondent No. 1's articles is wrong as the import of air-conditioners and refrigerators under the Import Policy for the period July 1977 to August 1982 was allowed for the Government or agencies and undertakings owned and controlled by the Central Government for defense purposes. It was further contended that goods were importable by diplomatic personnel, consulate officers and trade commissioners in India and thus, there was not a complete ban as has been alleged by the respondent No. 1 and the he could not contend that nothing could be imported and marketed in India on account of ban under Import Policies. 17. The appellants further impugned the existence of special circumstances relied on by respondent No. 1 under Section 46(3) of the Act on the ground that no publicity or promotion of the impugned mark was u....
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....ng made by the respondent no. 1, the partnership assigned registration of the trade mark `Fedders' in favor of the respondent no. 1 and it got registered on 20th August,1958 in the name of respondent no. 1. However, on 16th January, 1957, a company Fedders Llyod Corporation Private Limited, appellant no. 1 herein was incorporated which was controlled by persons who were in control of M/s Lloyd Electrical and Engineering Company, partnership firm and had taken over the business of M/s Llyod Electrical & Engineering Company. The appellant no. 1 had also sought permission from respondent no. 1 to use the word `Fedders(tm). An agreement dated 11.10.1963 was executed between the appellant no. 1 and the respondent no. 1. This agreement of 1963 categorically stipulated that the appellant no. 1 will not represent in any way that it has any right or title to the ownership of the trade name of respondent no. 1. It was also categorically incorporated in the agreement that the trade name or trademark and the registration thereof will continue to be in the ownership of respondent No. 1. 20. The appellant no. 1 even after expiry of the term of five years of agreement which was executed in....
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....r such trade-mark. Upon termination of this license for any reason, including, without limitations the willful default of either party, all finished stocks of the said products manufactured by Lloyd and already bearing the trade name and/or trade-mark of Fedders, in compliance with the provisions of this agreement, may be sold by Lloyd in the usual and customary manner. Subject to the preceding sentence, Lloyd shall destroy all material containing any reference to trade-mark, and shall no longer use any such trade name or trade-mark in the addition to, but not in limitation of any other rights and remedies to which Fedders may be entitled by the terms of this agreement or otherwise, and despite any provision for arbitration hereinafter contained, Fedders shall have the right to seek, apply for and obtain by independent application in the Supreme Court of the State of New York, and in Lloyd, a mandatory injunction to enforce the provisions of this paragraph 8 of this agreement, and Lloyd does hereby consent to the entry of a decree or decrees to that effect in all or any of said courts. 22. It is a common ground that even under the agreement dated 21.05.1956 between Fedd....
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.... The expression `person aggrieved' appears in a number of sections under the Trade and Merchandise Marks Act, 1958 and is to be construed depending upon the context in which it occurs. Since Section 46 deals with the removal of the registered trade mark from the register on the ground of non-use, it pre-supposes that the registration was made validly and is liable to be taken off on account of subsequent non-use. Considering the connotation of 'person aggrieved' in different Sections, it is apparent that the said phrase has different connotation under Section 46 of the Act than the same phrase occurring in other sections of the Act for cancelling or expunging or varying any trade mark entry wrongly made. A non-use of trade mark does not render the entry incorrect but gives the right to a person whose interests are affected to apply for its removal. Under Section 46 of the Act, an applicant claiming to be a 'person aggrieved' has to show that in some possible way he has suffered damages or will suffer damages and has been injured or will be injured, if the trade mark is allowed to stand and not removed despite its non use. In a case where the original registratio....
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....) it is meant possible in a practical sense, and not merely in a fantastic view.. All cases of this kind, where the original registration is not illegal or improper, ought to be considered as questions of commonsense, to a certain extent, at any rate; and the applicants ought to show something approaching a sufficient to proper reason for applying to have the Trade Mark expunged. It certainly is not sufficient reasons that they are loggerheads with the Respondents or desire in someway to injure them. 27. Applying these yard sticks and test, it is inevitable to infer that the appellants are persons aggrieved and we, thus agree with the submission of Learned counsel for the appellants that the appellants are persons aggrieved as contemplated under Section 46 of the Act and had locus standi to file the application for removal of the trade mark of the respondent no. 1 as has been held by the learned Single Judge. 28. For the appellants to succeed, the second requirement which they have to establish under Section 46 of the Act for removal of trade mark of respondent no. 1 on account of non-use, is that the trade mark has not been used by the respondent no. 1 for a continuous perio....
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.... defense on account of existence of special circumstances. Under Section 46(1) of the Act, the intention to abandon for non-use is an essential component. Under Section 46(1)(a), the trade marks which are 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 application of registration, are liable to be taken off the register. It has been held by the Courts that 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 is also to be established. In American Home Products Corporation v. Mac Laboratories Pvt. Ltd. and Anr. AIR1986SC137 , the Supreme Court had dismissed an application for rectification and had held: - A person who intends to manufacture goods or has made preparations for the manufacture of goods but the manufacture has not commenced and, Therefore, goods have not been marketed is nonetheless entitled to get the trade mark which he proposes to use in relation to those goods registered. In the present day world of commerce and industry,....
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....plea of the appellants that despite the ban, to constitute user the respondent no. 1 ought to have established user by demonstrating that they had been advertising their product, is not born out from the requirement of the relevant provision. A mere use of trade mark in advertising or other publication media is insufficient as `use(tm) because if advertisement will connote `use' within the meaning of Section 46 of the Act, it will give impetus to legal trafficking in trade mark by not using it but keeping it alive by advertisements only and such an act without other circumstances, can not be constituted as `use(tm) under Section 46 of the Act. Similarly it was held that use abroad and advertisement abroad outside the place where the mark is registered are not material in A.J. Vulcan (supra) which is clearly distinguishable from the facts of the present case. The case of Cluett Peabody & Co (supra) was also regarding passing off and infringement and clearly distinguishable from the case of appellants. In M/s J.N. Nichols (supra) it was rather held that use of mark does not postulate actual sale of the goods bearing such a mark and `use(tm) can be in any form or way and does not ....
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....be reasonably inferred that there was intention on the part of the respondent no. 1 to use the trade mark. In any case an ex-license can not deny the rights of an owner of trade mark as was held in J.K. Jain v. Ziff Davies, 2000 PTC 244. The appellant no. 1 has admitted the technical collaboration agreement of 1963 in which in clause 8 it was specifically incorporated that appellant no. 1 agrees that in using the said trade name and/or trade mark upon the products made by it under authorization, it will not represent in any way that it has any right or title to the ownership of the said trade name and/or trade mark, or to the eventual registration thereof, since it was understood that such trade name and /or trade mark and the registration thereof will continue to be in the ownership of `Fedders(tm) respondent no. 1. 35. To resist the application of `person aggrieved(tm) for removal of trade mark, an onerous duty is also cast upon the registered proprietor not only to show that there is no intentional abandonment or intent not to use the trade mark, in relation to the goods, but there must also exist a definite intent to use the mark and a continuation of the same throughout the....
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....at a trade mark is a commercial asset intended to be used commercially by a businessman and consequently, the expression special circumstances has to be understood and applied in a business sense. Token import of a product for consumption by the Government or the diplomatic personnel does not make the trade practical in the business sense. The evidence produced by the respondent no. 1 and the statement made on his behalf leads to a probable inference that import of the goods would have been impractical in business sense as the import was banned under the Import Policy for general public. The law that an economic impracticability will amount to special circumstances, as has been laid by the Courts in this country, is accepted as good law. Reliance may be placed on A.J. Vulcan v. V.S. Palanichamy AIR1969Cal43 and Express Butler Pvt. Ltd. v. Pepsi Inc. and Ors., 1989 PTC 14. In A.J. Vulcan (supra) it was held: For S.46(3) to apply, the actual non-user of the trade mark must be shown to have been due to the special circumstances of the trade and secondly that non-use must be not due to any intention to abandon or not to use the trade mark in relation to the goods to which appl....
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....the Trade & Merchandise Marks Act, 1958. We are thus in agreement with the findings of learned single Judge on these issues that the trade mark of respondent no. 1 is not liable to be removed on the ground of non use as contemplated under section 46 of the Act as there were special circumstances on account of ban under the import policy entailing non use of trade mark by the respondent no. 1. 40. The next point for consideration is whether the application of the appellants was barred by time or not. In the application filed by the appellant it was not pleaded specifically as to when the cause of action arose in favor of the appellants or that the cause of action was continuous. Even the respondent no. 1 did not take the plea in reply that the application for removal under Section 46 of the Act was barred by time. In the replication again appellants did not contend that the cause of action on account of non use is continuous and application under Section 46 is within time. The learned Single judge, however, considered the limitation in filing the application by the appellants and held that their application was barred by time. 41. The respondent no. 1 has contended that as the....
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....fore in the facts and circumstances what is to be considered is whether the application of the appellants was filed beyond the period of limitation. It is also to be considered whether the period of limitation commenced, when the suit for injunction for violation of trade mark and passing off was filed by respondent no. 1 in 1972 against the appellants. 45. The plea of respondent no. 1 that the appellants ought to have filed the application for rectification within three years after five years and one month of non use after the right to sue accrued in 1972, cannot be inferred from a perusal of the relevant provisions. In our view, as the Trade and Merchandise Marks Act, 1958 is substantive and procedural also in nature, Article 137 of the Limitation Act, 1963 will not be applicable in case of applications to be filed for rectification of a trade mark on account of non-use under Section 46 of the Act, as the provision itself contemplates a period after which such applications can be filed. Every day non use continuing for five years and one month before the institution of application for removal of trade mark on account of non 'use' under Section 46 of the Act will entitl....
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....ation under section 46 of the Act. 47. On a conjoint reading of the provisions under the Trade and Merchandise Marks Act, 1958 and the Limitation Act, 1963, it is apparent that the application under Section 46 of the Act can be filed after there has been 'non-use' of the trade mark for a continuous period of five years and one month. The provision does not contemplates that the application has to be filed just after completion of five years and one month of 'non use' and cause of action will crystallize on that date irrespective of continuous non use by the proprietor of trade mark. The provision also does not stipulate as to when the cause of action will start. Emphasis is not on the time when the cause of action will start but that at the time of filing the application, a continuous period of five years and one month must elapse of such non use before an application can be filed. Thus, what is relevant is not when the right to sue commenced but when the right to sue matured for institution of the application under Section 46 of the Trade & Merchandise Marks Act, 1958. The non use in such case on everyday gives a new cause of action and will not extinguish on ac....