PETITIONER:
AMERICAN HOME PRODUCTS CORPORATION
Vs.
RESPONDENT:
MAC LABORATORIES PRIVATE LIMITED AND ANR.
DATE OF JUDGMENT30/09/1985
BENCH:
MADON, D.P.
BENCH:
MADON, D.P.
SEN, AMARENDRA NATH (J)
CITATION:
1986 AIR 137 1985 SCR Supl. (3) 264
1986 SCC (1) 465 1985 SCALE (2)933
ACT:
Trade Marks Act, 1940 (5 of 1940), ss.14(1) and 39(2)
and Trade and Merchandise Marks Act, 1958 (43 of 1958), ss.
18, 46(1)(a)(b) and 48 - "Trade Mark" - What is -
Registration of Valuable right on the proprietor whether
conferred - Infringement of rights - Remedies - What are.
Trade Marks Act, 1940 - s.14(1) - Trade mark 'Dristan'
Registration of.
Trade and Merchandise Marks Act, 1958 - S.46(1)(a)(b)
"Trade Mark" - Removal of from Register of Trade Marks - Two
conditions precedent under cl.(a) must be cumulatively
satisfied - Burden of proving applicability of s.46(1)(a)(b)
- On person seeking removal of trade mark - Distinction
between cls. (a) and (b) - What is - S.46(1) - Object of -
Trafficking in trade mark What is - Ascertainment of
bonafide intention to use trade mark Whether dependant on
the facts and circumstances of each case Whether continuous
chain of events even subsequent to the application for
registration to be considered - Intention to use trade mark
sought to be registered - Must be genuine and real at the
date of application for registration - Whether the words
"proposed to be used by him" in s.18 mean "proposed to be
used by the proprietor, his agents and servants" - Effect of
sub-s.(2) of s.48 on sub-s. (1) of s.18 - What is.
Trafficking in Trade Marks - What is.
Interpretation OF Statutes:
Deeming provision - Full effect to be given.
Construction leading to manifest absurdity, injustice,
inconvenience or anomaly to be avoided.
Precedents: Doctrine of
English decisions - Can be referred to, but
applicability would depend upon context of Indian laws,
legal procedure and practical realities of litigation in
India.
265
HEADNOTE:
The appellant-American Home Products Corporation, is a
Corporation incorporated in the United States of America.
One of its activities is, the manufacture and marketing of
pharmaceutical products and drugs carried on through its
division "Whitehall Laboratories". The appellant was dealing
with the Indian Company - Geoffery Manners & Co. Ltd.
through its subsidiary - Home Products International Ltd.
Some time prior to 1956 lt acquired 40% shareholding in the
Indian Company. In 1956 it introduced an anti-hystamin drug
in the American market under the trade-mark 'Dristan'. It
got the trade mark 'Dristan' registered as a distinctive
trade mark in the Trade Marks Register in the United States
and subsequently in several foreign countries.
The appellant entered into a technical collaboration
agreement with the Indian Company effective from Nov. 1,
1957. Under this agreement the Indian Company received the
formulae, manufacturing technology, and other assistance
essential for the efficient manufacture in India of various
products of the appellant. The appellant granted to the
Indian Company, for the duration of the agreement an
exclusive and non-transferable licence to make and sell the
"Licensed Products" in India under the name or marks of the
appellant. The agreement inter alia further provided that
rights of registered user will be extended to the Indian
Company in respect of each "Licensed Product" by the
appellant - proprietor of such trade mark.
Pursuant to the collaboration agreement the Indian
Company manufactured and marketed the products covered
thereunder and got itself registered as the registered user
in respect of the trade marks relating to the goods of which
the appellant was the registered proprietor. On and from
December 1957 it was decided that the Indian Company should
introduce in the Indian market nine new drugs of the
appellant including 'Dristan' tablets. On August 18, 1958,
the appellant filed an application under 8.14(1) of the
Trade Marks Act 1940, in Form TM-I for registration of the
trade mark 'Dristan' in class 5 claiming to be its
proprietor and that the same was proposed to be used by it.
The application was advertised as required by the Trade
Marks Rules 1942. No Notice of opposition to the
registration of the trade mark was filed by any one and the
trade mark 'Dristan' was registered on June 8, 1959 by the
Registrar of Trade Marks as trade mark No. 186511 in class
5. Thereafter, the Indian Company obtained a licence for the
purchase of a machine for manufacturing of 'Dristan' tablets
and installed the same.
266
On May 31, 1960, the first respondent - Mac
Laboratories Private Ltd. - applied for registration of the
trade mark 'Tristine' in class 5. On January 18, 1961, the
appellant filed a notice of opposition to the registration
of the mark 'Tristine' on the ground that it was deceptively
similar to its trade mark 'Dristan'. The appellant's
opposition was not accepted by the Assistant Registrar of
Trade Marks and by his order dt. March 27, 1962, he ordered
the trade mark 'Tristine' to be registered in Part A of the
Register of Trade Marks. The appellant thereupon filed an
appeal in the Bombay High Court which was allowed by a
Single Judge on Feb. 5, 1963. The appeal filet by the first
respondent before a division Bench was allowed with the
directions that the respondent's application be amended so
as to read the trade mark 'Tristine' as 'Tristine'.
During the pendency of the application of the first
respondent for registration of the trade mark 'Tristine' the
Indian Company on Sept. 23, 1960 applied to the Central
Govt. under s.11 of the Industries . (Development and
regulation) Act 1951 for a licence to manufacture the tablet
'Dristan' which was granted on January 19, 1961 for the
manufacture of 'Distran' tablets to the extent of 5 lakhs
tablets per month with the conditions that "no royalty would
be payable" ant that the products will be marketed with the
trade mark already in use or without any trade mark. It also
applied for an import licence for import of materials for
manufacture of 'Dristan' tablets, and got approval for
manufacture of 'Dristan' tablets.
On October 18, 1961 another agreement was entered into
between the appellant ant the Indian Soprano for granting to
the latter the non-exclusive right to use the trade mark
'Dristan' upon or in relation to the goods in respect of
which the said trade mark was registered during the
unexpired residue of the term of the registration of the
said `trade mark. Under this agreement the Indian Company
agreed to become the registered user of the trade mark
'Dristan' ant further agreed that the rights granted to it
under the agreement would not be deemed to entitle it to use
the trade mark otherwise than as the registered user
thereof.
On October 22, 1961, the 'Dristan' tablets were first
marketed in India by the Indian Company. On March 6, 1962, a
joint application in Form TM-28 was ate by the appellant ant
the Indian Company for registering the Indian Company as a
registered user of the trade mark 'Dristan' in respect of
the goods for
267
which it was registered subject to certain conditions or
restrictions. The application stated that the proposed
permitted use was without limit of period subject to the
right of the appellant registered proprietor to apply for
cancellation of the registered user forthwith after notice
in writing to the Indian Company.
The first respondent on April 10, 1961 filed with the
Registrar of the Trade Marks an application under 88.46 and
56 of the 1958 Act for rectifying the register of Trade
Marks by removing therefrom the appellant's trade mark
'Dristan' on the grounds:
(i) That the trade mark 'Dristan' is deceptively
ant confusingly similar to the trade mark
'Bistan'' already registered in class 5 ant which
has been used and is being used.
(ii) That the trade mark 'Dristan' is deceptively
similar to the trade mark 'Tristine' which the
Applicants have lawfully been using since October
1960 in respect of their medicinal preparation.
(111) That there has been no bona fide use of
trade mark 'Dristan' in India in relation to
the goods for which it is registered by
proprietor thereof for the time being upto
date one month before the date of this
application."
On May 5, 1961, the first respondent applied for
amendment of the Rectification Application by substituting
the submissions in support of the grounds taken earlier. The
submissions so substituted were :
"(1) That the trade mark 'Dristan' was not
distinctive mark and/or was not registerable trade
mark under s.6 of the Trade Marks Act, 1940
(corresponding to s.9 of Act No.40 of 1958),
except upon evidence of its distinctiveness ant no
such evidence was submitted to the registrar
before registration.
(ii) That the said trade mark was registered in
contravention of s.8 of the Trade Marks Act, 1940
(corresponding to s.11 of Act of 1958).
268
(iii) That the said trade mark offends against the
provisions of 6.11 of the Act.
(lv) That the trade mark 'Distran' is not
distinctive of the goods of the registered
proprietors.
(v) That the trade mark 'Dristan' was registered
without any bona fide intention on the part of the
Applicants that it would be used in relation to
their medicinal preparation for symptomatic
treatment of respiratory ailments by them and that
there has, in fact, been no bona fide use in India
of the said trade mark 'Dristan' in relation to
the said goods by the said proprietors upto a date
one month before the date of this application."
On December 7, 1964, the Registrar of Trade marks
dismissed the Rectification Application of the first
Respondent holding that the Whitehall Laboratories was a
division of the appellant and not a separate legal entity
and, therefore, the mark could not be registered in its name
but only in the name of the appellant and accordingly
ordered the entry in the Register relating to the Trade mark
'Dristan' to be varied by amending the registered
proprietor's name to read as "American Home Products
Corporation trading as Whitehall Laboratories." The appeal
filed by the first respondent was allowed by the Single
Judge holding (1) that at the date of the making Of the
application for registration the appellant did not have a
bona fide intention to use the trade mark 'Dristan' by
itself, (2) that the appellant had not at any time used the
said trade mark in relation to the goods in respect of which
it was registered, (3) that the legal fiction created by
8.48(2) of the 1958 Act came into play only after a trade
mark was registered and that an intention to use the trade
mark through someone who would subsequently get himself
registered as a registered user did not amount to an
intention on the part of the applicant for registration to
use the trade mark himself; and (4) that to accept the
appellant's contention would amount to permitting
trafficking in trade marks. In view of these conclusions the
Single Judge did not decide the question whether trade mark
'Dristan' was deceptively and confusingly similar to the
trade mark 'Bistan'.
In the appeal filed by the appellant the Division Bench
held that trade mark 'Dristan' was not deceptively and
confusingly similar to the trade mark 'Bistan'. Dismissing
the appeal it,
269
however, agreed with the view taken by the Single Judge in
respect of the construction which he had placed upon ss.18
and 48 of the 1958 Act to come to the conclusion that the
appellant had no bona fide intention to use itself the trade
mark 'Dristan' and that the appellant had not at any time
made use of the said trade mark.
In the appeal to this Court on behalf of the appellant
it was contended:
(1) the legal fiction created by sub-s.(2) of 8.48
18, as expressly stated in that sub-section, for
the purposes of y 46 or for any other purpose for
which such use is material under the 1958 Act or
any other law. To confine this fiction to a case
of an actual use of a trade mark by a registered
user is to confine it only to use for the purposes
of clause(b) of 8.46(1) which is contrary to the
purpose for which the fiction was created ant,
therefore, when 8.18(1) of the 1958 Act
(corresponding to 8.14(1) of the 1940 Act) uses
the words "proposed to be used, these words must
be read as "proposed to be used by a proposed
registered user".
(2) To register a trade mark which is proposed to
be used by a register d user does not per se
amount to trafficking in trade marks and whether
it does so or not must depend upon the facts and
circumstances of each case.
(3) The reliance placed by the High Court - both
by the Single Judge and the Division Bench - upon
the 'PUSSY GALORE' Trade marks Case [1967] R.P.C.
265, was unjustified and unwarranted inasmuch as
the provisions of the English Trade Marks Act,
1938, are radically different from those of the
1938 Act as also the 1940 Act and, therefore, that
case has no relevance 80 far as the construction
of 8.18(1) read with 8.48(2) of the 1958 Act is
concerned.
(4) The reliance placed by the High Court (both by
the Single Judge and the Division Bench) upon the
Shavaksha Committee Report ant the Ayyanagar
Report was equally misplaced as Parliament did not
accept the recommendation with respect to
registered users.
270
(5) The facts and circumstances of the case show
that the appellant had, at the date of the making
of the application for registration, a bona fide
intention to use the trade mark 'Dristan' through
a registered user.
(6) In any event, the appellant itself had made
bona fide use of the trade mark 'Dristan' up to a
date one month before the date of the First
Respondent's Application for Rectification.
On behalf of the First Respondent following contentions
were made.
(1) The words "proposed to be used" in 8.18(1) of
the 1958 Act 8.14(1) of the 1940 Act mean
"proposed to be used by the applicant for
registration, his servants and agents" and not by
any person who is proposed to be got registered as
a registered user and, therefore, the legal
fiction enacted in 8.48(2) cannot be imported into
8.18(1).
(2) A registered user can only come into being
after a trade mark is registered. Therefore, as at
the date of an application for registration of a
trade mark, there cannot be any person in
existence who is a registered user. The words
"proposed to be used" cannot therefore possibly
mean "proposed to be used by a proposed registered
user"
(3) To permit a trade mark to be registered when
the applicant himself does not propose to use it
but proposes to use it through someone else who
would subsequently be registered as a registered
user would be to permit trafficking in trade marks
which is contrary to the policy underlying the
Trade Marks laws.
(4) The only case which the 1958 Act per its the
registration of a trade mark when the applicant
for registration does not intend to use it himself
but intends to use it through another is the one
set out in 8.45, namely, where the registrar is
satisfied that a company is about to be formed and
registered under the Companies Act, 1956, and the
applicant intends to assign the trade mark to that
company with a view to the use thereof by the
company.
271
(5) The 1958 Act is, as the 1940 Act was, based
upon the English Trade Marks Act, 1938, and the
decision in the 'PUSSY GALORE' Trade mark case
(supra) concludes this point against the
appellant.
(6) The Shavaksha Committee Report and the
Ayyangar Report show the legislative intent not to
allow a proposed use be a proposed registered user
to be equated with a proposed u e by the applicant
for registration.
(7)The appellant had not at any relevant- time
made use of the trade mark 'Dristan'.
(8) The appellant had fradulently obtained
registration of the trade mark 'Dristan' by
stating in the application for registration that
it proposed to use the said trade mark itself and
by not disclosing the fact that it proposed to use
it through a proposed registered user.
(9) The trade mark 'Dristan' was deceptively and
confusingly similar to the trade mark 'Bistan'
and, therefore, lt cannot be allowed to remain on
the Register of Trade Marks.
(10) to allow the trade mark 'Dristan' to remain
on the Register of Trade Mark would be contrary to
the policy of the Government of India.
Allowing the appeal,
^
HELD : (1) The Judgment of the Division Bench of the
Calcutta High Court appealed against is reversed and the
order passed by it is set aside. Appeal No.165 of 1968 filed
by the appellant before the division Bench is allowed with
costs and the judgment and order of the Single Judge of the
High Court are reversed ant set aside. As a result, Appeal
No. 61 of 1965 filed by the First Respondent before the
Single Judge of the High Court is dismissed with costs and
the order of the Registrar of Trade Marks, Calcutta,
dismissing the First Respondent's Application for
Rectification, No.CAL-17 is confirmed. 1341 B-C]
2. Before a person can make an application under
8.46(1) to take off a trade mark from the Register he has to
be a "person
272
aggrieved". Undisputedly, the first Respondent was a "person
aggrieved" within the meaning of 8.46(1). Section 46(1)
provides for two cases in which a registered trade mark may
be taken off the Registrar in respect of any of the goods in
respect of which it is registered. The first case is set out
in cl.(a) of 8.46(1) and the second in cl.(b) of that sub-
section. Before cl.(a) can become applicable two conditions
are to be satisfied, namely, (1) that the trade mark was
registered without any bona fide intention on the part of
the applicant for registration that it should be used in
relation to those goods by him, and (2) that there has, in
fact, been no bona fide use of that trade mark in relation
to those goods by any proprietor thereof for the time being
up to a date one month before the date of the application
under 8.46(1). The only exception to the first condition is
of a case to which the provisions of 8.45 apply. Both the
conditions in cl.(a) are cumulative and not disjunctive.
Clause (a), therefore, will not apply where even though
there has been no bona fide intention on the part of the
applicant for registration to use the trade mark but, in
fact, there has been a bona fide use of the trade mark in
relation to those goods by any proprietor thereof for the
time being up to a date one month before the date of the
application under 8.46(1). Similarly, cl.(a) will not apply
where, though there had been a bona fide intention on the
part of the applicant for registration to use the trade
mark, in fact, there has been no bona fide use of the trade
mark in relation to those goods by any proprietor thereof
for the time being up to a date one month before the date of
the application under 8.46(1). [311 G-H; 312 A-E]
3. Clause (b) of s.46(1) applies where for a continuous
period of five years or longer from the date of the
registration of the trade mark, there has been no bona fide
use thereof in relation to those goods in respect of which
it is registered by any proprietor thereof for the time
being. An exception to cl.(b) is created by s.46(3). Under
8.46(3), the non-use of a trade mark, which is shown to have
been due to special circumstances in the trade and not to
any intention to abandon or not to use the trade mark in
relation to the goods to which the application . under
s.46(1) relates, will not amount to non-use for the purpose
of cl.(b). [312 P-H]
4. The distinction between cl.(a) and cl.(b) is that if
the period specified in cl.(b) has elapsed and during that
period there has been no bona fide use of the trade mark,
the fact that the registered proprietor had a bona fide
intention to use the
273
trade mark at the date of the application for registration
becomes immaterial and the trade mark is liable to be
removed from the Register unless his case falls under
8.46(3), while under cl.(a) where there had been a bona fide
intention to use the trade mark in respect of which
registration was sought, merely because the trade mark had
not been used for a period shorter than five years from the
date of its registration will not entitle any person to have
that trade mark taken off the Register. [313 A-B]
(5) Under both these clauses the burden of proving that
the facts which bring into play cl.(a) or cl.(b), as the
case may be, exist is on the person who seeks to have the
trade mark removed from the Register. Thus, where there has
been a non-User of the trade mark for a continuous period of
five years and the application for taking Off the trade mark
from the Register has been filed one month after the expire
of such period, the person seeking to have the trade mark
removed from the Register has only to prove such continuous
non-user and has not to prove the lack of a bona fide
intention on the part of the registered proprietor to use
the trade mark at the date of the application for
registration. Where, however, the non-user is for a period
of less than five years, the person seeking to remove the
trade mark from the Register has not only to prove non-user
for the requisite period but has also to prove that the
applicant for registration of the trade mark had no bona
fide intention to use the trade mark when the application
for registration was made. [313 C-E]
(6) The definition of "trade mark" contained in cl.(v)
of 8.2(1) shows that a trade mark is 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
to use the mark. It is, therefore, not necessary for the
purpose of registering a trade mark that those goods should
be in existence at the date of the application for
registration. If the position were that the mere non-user of
a trade mark for the period mentioned in cl.(a) of 8.46(1)
would make a trade mark liable to be taken off the Register,
it would result in great hardship and cause a large number
of trade marks to be removed from the Register, because the
c one month has elapsed, after the registration of a trade
mark had been ordered, a trade rival can make an application
on the ground set out in cl.(a) of 8.46(1) claiming that
there has been no bona fide w e of the trade mark up to a
date one month before the date of his application. It is in
order to revent such harassment and absurd result that the
two conditions specified in cl.(a) have been made
cumulative. [313 F-H; 314 A-C]
274
(7) The object underlying 8.46(1) is to prevent
trafficking in trade marks. This is, in fact, the object
underling all trade mark Laws. A trade mark is meant to
distinguish the goods made by one person fro tho made by
another. A trade mark, therefore, cannot exist in vacuo. It
can only exist in connection with the goods in relation to
which lt 18 used or intended to be used. Its object 18 to
indicate a connection in the course of trade between the
goods and some person having the right to use the mark
either with or without any indication of the identity of
that person. when a person gets his trade mark registered,
he acquires valuable rights by reason of such registration.
Registration of his trade mark gives him the exclusive right
to the use of the trade mark in connection with the goods in
respect of which it is registered ant if there 18 any
invasion of this right by any other person using a mark
which is the same or deceptively similar to his trade mark,
he can protect his trade mark by u action for infringement
in which he can obtain injunction, damages or an account of
profits mate by other person. In such an action the
registration of a trade mark is prima facie evidence on its
validity. After the expiry of seven years from the date of
the registration, a trade mark is to be valid in all
respects except in the three cases set out in 8.32. The
proprietor of an unregistered trade mark whose mark is
unauthorisedly used by another cannot, however, use for the
infringement of such trade mark. His only remedy lies in
bringing a passing-off action, an inconvenient remedy as
compared to an infringement action. [314 C-H; 315 A-B]
7(i) In a passing-off action the plaintiff will have to
prove that his mark has by user acquired such reputation as
to become distinctive of the plaintiff's goods 80 that if it
18 used in relation to any goods of the kind dealt with by
the plaintiff, it will be understood by the trade ant public
as meaning that the goods are the plaintiff's goods. [315 B-
C]
7(ii) In an infringement action, the plaintiff is not
required to prove the reputation of his mark. Further, under
8.37 a registered mark is assignable and transmissible
either with or without goodwill of the business concerned
while under 8.38, an unregistered trade mark is not
assignable or transmissible except in the three cases set
out in 8.38(2). [315 C-D]
(8) As the registration of a trade mark confers
valuable rights upon the registered proprietor thereof, a
person cannot be permitted to register a trade mark when he
has not used it in relation to the goods in respect of which
it sought to be registered or does not intend to use
relation to such goods. [315 D-1]
275
Batt's case, (1898) 2 Ch-D 432, 436; s.c.15 R.P.C. 262,
266, (1898) 2 Ch. D. 432 at pages 439-442, sub nominee Johan
Batt & Co. v. Dunnett and another, (1899) A.C. 420; s.c. 16
R.P.C. 411 relied upon.
(9) To get a trade mark registered without any
intention to use lt in relation to any goods but merely to
make money out of it by selling to others the right to use
it would be trafficking in that trade mark. If there is no
real trade convection between the proprietor of the mark and
the licensee or his goods, there is roam for the conclusion
that the grant of the licence is a trafficking in the mark.
It is a question of fact and degree in every case whether a
sufficient trade connection exists. [316 A-B; 317 A-B]
Re American Greetings Corp.'s Application, [1983] 2 All
E.R. 609 & 619 [1984] 1 All E.R. 426, 433 relied upon.
(10) The intention to use a trade mark sought to be
registered must be genuine and real and the fact that the
mark was thought to be something which some day might be
useful would not amount to any definite ant precise
intention at the time of registration to use that trade
mark. The intention to use the mark must exist at the date
of the application for registration. Section 46(1)(a)
expressly speaks of "bona fide intention on the part of the
applicant for registration. which would mean "at the date
when such applicant makes his application for registration."
[317 C-E]
In re Ducker's Trade mark (1928) Ch.1 405, 409 referred
to.
(11) Intention is a state of mind. No person can make
out the state of mind or any other person- None the less
courts are often called upon for various purposes to
determine the state of a person's mind. The court can only
do to by deducting the existence of a particular state of
mind from the facts of a case. [317 B; 318 A]
(12) In the instant case, in order to ascertain the
intention of the appellant at the date of filing of
application for registration the facts could be summarised
with reference to three periods: (1) events which took place
upto the date of the application for registration, namely,
August 18, 1958, (2) events which happened between that date
and the date of Application for Rectification, namely April
10, 1961 and (3) events which happened subsequently to April
10, 1961. [320 D-E]
276
12(1) Prior to 1956, the appellant had acquired a
substantial shareholding to the extent of 40 percent the
Indian Company. In 1956 the appellant introduced 'Dristan'
tablets in the American market and got the trade mark
'Dristan' registered in the United States of America and in
several other countries. technical collaboration between the
Appellant and the Indian Company commenced from Nov. 1,
1957, and an agreement in that behalf was signed on May 16,
1958. In pursuance of the said collaboration agreement the
Indian Company manufactured and markets several produced of
the appellant. The appellant got registered its trade marks
in respect of such products and the Indian Company was
registered as the registered were in respect of such trade
marks. As early as December 1557, it was decided that the
Indian Company should introduced in the Indian market nine
new products of the appellant including 'Dristan' tablets.
On August 18, 1958, the appellant filed an application for
regls tratlon of the trade mark 'Drlstan' and the said trade
mark was tuly registered on June 8, 1959. [320 FiH; 321 A]
12(ii) During the period between August 18, 1958, and
the date of the First Respondent is Application for
Rectification, that is April 10, 1961 the Indian Company
applied for and obtained a licence for the purchase of a
Stokes Triple Layer Machine for manufacturing 'Dristan'
tablets and when the said machine was received installed it
at its Ghatkoper factory. It also obtained from the
appellant three units of 'Dristan' tablets as samples and
the manufacturing manual for the tablets. Further, lt
applied to the Central Government under 8.11 of the
Industrials (Development and regulation) Act, 1951, for a
licence to manufacture 'Dristan' tablets which was granted
to lt. It also applied for and obtained a licence to import
certain ingredients used in the manufacture of 'Dristan'
tablets and imported such ingredients. It further applied
for and obtained from the Director, Drugs Control
Administrating State of Maharashtra, permission to
manufacture 'Dristan' tablets. The appellant also filed a
notice of opposition to the First Respondent' Application
for registration of their mark 'Tristine'. [321 H; 322A-C]
12(iii) During the period subsequent to the First
respondent's Application for Rectification, that is
subsequent to April 10, 1961, on October 18 1961, the
registered user agreement was entered into between the
appellant and the Indian Company. On October 22, 1961 the
'Dristan' tablets were first marketed in India by She Indian
Company. On March 6, 1962, the appellant and the Indian
Company jointly made an application to register the Indian
Company as a registered user of the trade mark 'Dristan'.
[322 C-E]
277
12(iv) The facts set out above clearly show that each
of them is an integral link in a chain and that they cannot
be divided into three separate periods. m is continuous
chain of events establishes beyond doubt that the appellant
had an intention that the trade mark 'Dristan' should be
used in relation to the tablets in question by the
manufacture and sale of these tablets in India. [322 E-F]
(13) The appellant's application for registration of
the trade mark 'Dristan' was made under 8.14(1) of the 1940
Act and was registered under the Act. Under 8.14(1) only a
person claiming to be the proprietor of a trade mark used or
proposed to be used by him could apply for registration of
that trade mark. The provisions of 8.18(1) of the 1958 Act
are identical. [323 F-G]
(14) If the 1940 Act did not contain a legal fiction
similar to that enacted in s.48(2) of the 1958 Act, the
appellant's case would fall to the ground because then at
the date of its application for registration of the said
trade mark, its intention would be not to use it itself but
to use it through another. The 1940 Act, however, also made
provisions with respect to registered users and created a
similar legal fiction in 8.39(2) of that Act. [325 A-B]
(15) The only difference between 5.392) of the 1940 Act
and s.48(2) of the 1958 Act is that while under 8.39(2) the
legal fiction created by it applies "for any purpose for
which such use is material under this Act or any other laws,
under s.48(2) the legal fiction applies "for the purposes of
s.48 or for any other purpose for which such use is material
under this Act or any other laws. The addition of the words
"for the purposed of 8.46" in 8.48(2) does not make any
difference but clarifies the scope of the said legal
fiction. Clause (a) of s.48(1) refers both to bona fide
intention on the part of the applicant for registration that
the trade mark should be used in relation to those goods by
him as also to bona fide use of the trade mark in relation
to those goods by any proprietor thereof for the time being.
It cannot possibly be that when 8.48(2) expressly provides
that the permitted user f a trade mark by a registered user
is to be deemed to be user by the proprietor of the trade
mark for the purposes cf s.48, the fiction is intended only
to apply to the use of the trade mark referred to in the
second condition of cl.(a) of 8.46(1) and not to the use of
that trade mark referred to in the first condition of
cl.(a). Under 8.18(1), on application for registration of a
trade mark can only be made
278
by a person who claims to be the proprietor of that trade
mark. Therefore, the words applicant for registration" in
cl.(a) of s.48(1) would mean "the person claiming to be the
proprietor of the trade mark who is the applicant for
registration of that trade mark". The first condition of
cl.(a) would, therefore, read "that the trade mark was
registered without any bona fide intention on the part of
the person claiming to be the proprietor of that trade mark
who has made the application for registration that it should
be w ed in relation to those goods by him." So read, there
can be no difficulty in reading the words "by him" also as
"by a registered user". Similarly, the legal fiction in
.48(2) can also be applied to 8.18(1). S.18(1) in the light
of the legal fiction would read as "any person claiming to
be the proprietor of a trade mark used or proposed to be
used by him or by a registered user". By reason of the
provisions of 8.39(2) of the 1940 Act, 8.14 of that Act
should also be read in the same way. [325 B-U; 326 A-D]
East End Dwellings Co. Ltd. v. Finsbury Borough
Council, (1952) A.C.109 & state of Bombay y. Pandurang
Vinayak Chaphalkar and Or., [19531 S.C.K. 773 relied upon.
(16) The purposes for which the fiction has been
enacted are set out in 8.48(2). These purposes are the
purposes of 8.46 or for any other purposes for which such
use is material under the 1958 Act or any other law. To
confine the purpose only to a part of 8.46 would be to
substantially cut down the operation of the legal fiction.
The purpose for which the legal fiction is to be resorted to
is to deem the permitted use of a trade mark, which m the
use of the trade mark by a registered user thereof, to be
the use by the proprietor of that trade mark. [327 A-B]
(17) Section 17(1) of the English Trade Marks Act, 1938
(1 & 2 Geo, 6, c.22) sets out who can apply for registration
of a trade mark and is in pari materia with 8.18(1) of the
1958 Act. Under s.17(4), the refusal by a Registrar to
register the trade mark is subject to appeal to the Board of
Trade or to the Court at the option of the applicant. If the
appeal is to the Court, there can be further appeal to the
Court of Appeal ant from there to the House of Lords.
Section 26 provides for removal of a trade mark from the
Register and is in pari materia with 8.46 of the 1958 Act.
Section 32 teals with rectifying the entries in the Register
and is analogous to 8.56 of the 1958 Act. [327 E-F]
(18) Under 8.87 of the Patents, Desings and Trade Marks
Act, 1883 (46 & 47 Vict. c.57), any registered proprietor
could grant licences to use the mark subject to any equity.
The 1883 Act in
279
so far as it rel ted to Trade marks was repealed by the
Trade marks Act, 1905 (5 Edw. 7 c.15). The 1905 Act did
not, however, contain any power in the registered proprietor
to grant licences. the English Act of 1938, however,
introduced a system of official approval for licences to use
a trade mark particularly by providing for registering a
person other than the proprietor of the trade mark as the
registered user of the trade mark. [327 G-H; 328 A]
(19) The High Court was unduly impressed by Pussy
Galore Trade mark case and unnecessarily attached great
importance to it. The High Court was justified in relying
upon that case by referring to the case of Ashok Chander
Rakhit Ltd., [1955] 2 S.C.R. 252 but the High Court
overlooked that in Ashok Chander 'Rakhit's- case the
section of the 1940 Act which fell for interpretation was
not in pari materia with the corresponding section of the
English Act of 1938 which had been judicially interpreted by
the courts in England. [332 E-E]
The Registrar of Trade mark v. Ashok Chandra LTD.,
[1955] 2 S.C.R. 252 referred to.
(20) In the absence of any binding authority of an
Indian Court on a particular point of law, English decisions
in which judgments were delivered by judges held in high
repute can be referred to as they are decisions of courts of
a country from which Indian Jurisprudence and a large part
of Indian Law 18 derived, for they are authorities of high
persuasive value to which the court may legitimately turn
for assistance; but whether the rule Laid down in any of
these case can be applied by Indian courts lust, however, be
judged in the context of Indian laws and legal procedure and
the practical realities of litigation in India. [332 H; 333
A-B]
Forasol v. 011 and Natural Gas Commission, [1984] 1
S.C.R. 526, 549, 567; S.C. [1984] Supp. S.C.C. 263, 280, 295
referred to.
(21) The relevant provisions relating to registered
users IN the English Act and IN the 1958 Act are materially
different. The English Act creates two legal fictions". The
first is contained in 8.28(2) which relates to the permitted
w e of a trade mark. That fiction is for the purpose of 8.26
(Which correspond to section 46 of the 1958 Act) and for any
other purpose for which such use is material under the
English Act o-r at common law. The second 1- contained in
s.29(2) and relates to
280
intention on the part of an applicant for registration that
a trade mark should be used by him. The second fiction 18
for the purposes of paragraph(a) of 8.26(1) which
corresponds to cl.(a) of s.46(1) of the 1958 act. The 1958
Act, however, contains only one fiction. It is in 8.48(2),
which 18 in pari material with s.28(2) of the English Act.
The omission from the 1958 Act of a provision
similar to that contained in 8.29(2) of the
English Act does not make any difference if one were to see
6- (2) in its proper setting and contest. The English Act
does not prescribe, just as the 1958 Act does not, any
period of tile from the date of registration of a trade mark
within which an application for registering of a person as a
registered user of that trade mark should be made. Section
29(1) of the English Act, however, provides that an
application for registration of a trade mark can be
accompanied by an application for there registration of a
person as a registered user of that trade mark', if the
tribunal is satisfied that the proprietor of the trade mark
intend it to be used by that person in relation to those
goods and is also satisfied that person will be registered
ns a registered user thereof after the registration of the
trade mark, it will not refuse to register the trade mark.
The effect of 8.29(1), therefore, is that an application for
registering a person as a registered user can be made
simultaneously with the application for registering the
trade mark and if both are found to be satisfactory, the
application for registration would be granted and
immediately thereafter the registration of the registered
user would be allowed. In such a case, the intention on the
part of the applicant for registration that the trade mark
should be used by the registered user thereof is to be
deiced to be an intention to use that trade mark by the
applicant for registration. This is a special provision
applicable to a special case. The fiction created by s.29(2)
18 also made applicable to the case of a corporation above
to be constituted to which the applicant intends to assign
the trade mark. There is no such fiction relating to
intention expertly provided in the 1958 Act, nor is there
any provision for simultaneously making an application for
registration of a trade mark and an application for
registering a person a the registered user of that trade
mark. The purpose for which the fiction was created y
8.29(2) the respect to a registered user was to eliminate
all possibility of trafficking in a trade mark by a person
getting himself registered as the proprietor of a trade mark
and there after going in search of so the person who will w
e it as the registered user thereof. If the existence of the
special fiction created by 5.29(2) cuts down he full
operation of the general fiction enacted in s. 28(2), it
281
does not follow that the absence of such special fiction in
the 1958 Act will also cut down the operation of the fiction
in s.48(2) in the same way by limiting it to the actual use
of a trade mark only. In the 1958 Act wherever the phrase
"used by him occurs the fiction will apply. In other words,
the permitted use of a trade mark is, by the fiction enacted
in s.48(2), equated with use by the registered proprietor-
Consequently wherever the word e occurs with all its
permutations and commutations, as for instance in phrases
such as proposed to be used be him or intended to be used be
in, the fiction will apply. Form No.TM-2, which is the for
prescribed for an application for registration of a trade
mark prescribed by the English Trade Marks Rules, 1938, was
substituted in 1982 and under the substituted From a new
column is provided which requires details of an application
under s.29(1) to be given. The old Form No.TM-2 did not
contain this requirement nor does Form TM-1 appended to the
Trade and Merchandise Mark rules, 1959 [333 B-H; 334 A-G]
(22) Under the 1958 Act an application for registration
of a trade mark ad also an application for registering a
registered user are to be made to the Registrar and it is
the Registrar who has to grant both of them. The Registrar
would refuse the application if lt appears to him that the
grant thereof would tend to facilitate trafficking in a
trade mark. this question is to be considered by the
Registrar himself. provisions of the 1940 Act were the same
but the provisions of the 1958 Act are radically different.
Under the 1958 Act, though both the application for
registration of a trade mark and the application for
registration of registered user are to be made to the
registrar, the Registrar has the power to grant the
application for registration of the trade mark only. So far
as the application for registering a person as a registered
user is concerned, he has to forward lt together with his
report to the Central Government and it for the Central
Government to decide whether to permit such application to
be granted or Lot- in order to decide this, the Central
Government or to take into account the matters set out in
subs-s.(3) of .49 and on rule 85 of the Trade Marks Rules
1959. The matter to be considered by the Central Government
include not only whether the permitted use, if allowed,
would about to trafficking in trade mark but also the
interested of the general public and the development of any
industry, trade or commerce in India. After the Central
Government has taken its decision the Registrar is to
dispose of the application in accordance with the directions
issued by the Central Government. Thus while under the
English Act the authority to decide an
282
application for registering a registered user is the same as
the authority for registering a trade mark, under the 1958
Act they are different and 80 are the considerations which
are to be taken into account. [334 h; 335 A-E]
(23) Under the 1958 Act an application for registering
a registered user can only be made after a trade mark is
registered. If an intended use by a person who will be
registered as a registered user is not to be included in the
legal fiction created by section 48(2), it would make that
fiction operate within a very narrow compass an almost
render the provision relating to registered users
meaningless. It 16 in very rare circumstances that a person
will get a trade mark registered as proposed to be used by
himself, use it in relation to the concerned goods, and
thereafter permit it to be used by another as a registered
user. It is also not open to everyone who wants to register
a trade mark to for a company to which after the trade mark
is registered and the proposed company is incorporated, the
trade mark will be assigned. These things are not practical
realities and Parliament could not have intended such absurd
results. 1335 F-H]
(24) It is not necessary that the appellant should have
got the trade mark registered with the intention that it
will itself use the trade mark and in order to effectuate
that intention the appellant should have set up a factory
and manufactured and marketed the tablets 'DRISTAN' and then
either assigned the trade mark to the Indian Company or to
get the Indian Company registered as the registered user of
that trade mark. By reason of foreign exchange and
industrial policies in India it is not possible for a
foreign company to establish its own industry India. It can
only do so by entering into a collaboration with Indian
entrepreneurs in which the foreign company would not be
permitted to have more than 40 per cent shareholding and
would be subject to other restriction. Even if a foreign
proprietor of a trade mark were to establish an industry of
his own in India, it would be absurd to imagine that it
would thereafter cease manufacturing the goods and allow
someone else to do 80. It is equally illogical that the
appellant and the Indian Company should have jointly applied
for registration of the trade mark 'DRISTAN'. The appellant
was already in collaboration with the Indian Company. There
was no need for it to seek other collaborators to establish
a new company. To assign the trade mark to the Indian
Company or to make jointly with the Indian Company an
application for registration of the trade mark 'DRISTAN'
would be to destroy the appellant's proprietorship in that
trade nark. [336 A-D]
283
(25) It is a well-known principle of interpretation of
statutes that a construction should not be put upon a
statutory provision which would lead to manifest absurdity
of futility, palpable injustice, ox absurd inconvenience or
anomaly. While placing construction on 6.48(2), the High
Court did not apply this principle and failed to give to the
legal fiction enacted by 8.48(2) its full force and effect.
[336 E-F]
'BOSTITCH' Trade Mark (1963) R.P.C. 183 and 'PUSSY
GALOK' Trade Mark, 119671 R.P.C. 265 inapplicable.
(see: - Beneath and Ore. v. Muddala Veeramallappa and
Ck.) [1961] 2 S.C.R. 295, 303 referred to.
Aston v. Harlee Manufacturing company, (1959-60) 103
C.L.R. 391 relied upon.
(26) The Parliament did not accept the recommendation made
in Shavakasha Committee Report and Ayyanagar Report. These
Reports, therefore, cannot be referred to for ascertaining
the intention of Parliament when enacting the relevant
provisions of 1958 Act. [337 G]
(27) In the instant case, the facts on the record show
that only when it was decided to introduce 'DRISTAN' tablets
in the Indian market through the Indian Company that the
appellant made its application to register the trade mark
'DRISTAN'. There was a close connection in the course of
trade between the appellant and the Indian Company. The
appellant owned 40 per cent of the shareholding in the
Indian Company. It had entered into a technical
collaboration agreement with the Indian Company which
provided for strict quality control and for formulae and
services to be provided by the appellant. The manufacture,
marketing and advertising of all products under the
agreement were to be under the control of the appellant.
There was no royalty payable by the Indian Company to the
appellant in respect of the use of the trade mark 'DRISTAN'.
In the event of the collaboration agreement being terminated
by reason of the happening of any of the events mentioned in
the agreement, amongst which events was the shareholding of
the appellant becoming less than 40 per cent, the Indian
Company was to cease to be entitled to manufacture the
tablets 'DRISTAN'. There was here, therefore, no question of
any trafficking in a trade mark. In these circumstances, the
intention of the appellant to use the trade mark 'DRISTAN'
through the Indian Company which was subsequently to get
itself registered as the registered user of the said trade
mark cannot but be characterised as bona fide. [338 Lr; 339
A]
284
(28) The two conditions of cl-(d) of 8-46(1) are
cumulative and since the first condition has not been
satisfied in this case, it la unnecessary to consider the
question whether the appellant had in addition to having a
bona fide intention to use the trade mark 'Dristan' had also
used it within a period of one mouth before the date of
Application for Rectification. 339 A-C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2159 of
1970
From the Judgment and Decree dated 16.12.69 of the
Calcutta High Court in Appeal No. 165 of 1968.
F.S. Nariman, J.I. Mehta, Michal Fysh, T.M. Ansari, V.
Tulzapurkar, C.M. Maniar, Ashok Sagar, Aditia Narayan, Alok
Vidyalankar and D.N. Misra for the Appellant.
Dr.V. Gouri Shankar, K.L. Hathi, Manoj Arora,
Narendrabhai Zaveri, Ms. Malati Jhaveri and Vijay F. Shah
for Respondent No.l.
Ex-parte for Respondent No. 2.
T.U. Mehta and V. Dave for Intervener.
The Judgment of the Court was delivered by
MADON, J. This Appeal has been filed pursuant to a
certificate granted by the Calcutta High Court against its
judgment and order dated December 16, 1969, in Appeal . 165
of 1968. The certificate has been given by the High Court
under sub-clause (a) and (c) of clause (1) of Article 133
prior to the substitution of that clause by a new clause (1)
by the Constitution (Thirtieth Amendment) Act, 1972. The
grounds on which the certificate has been given are (i) that
the value of the subjectmatter in dispute in the court of
the first instance and still in dispute on appeal was and is
not less than Rs.20,000 and that as the judgment in appeal
was one of affirmance, the appeal involves a substantial
question of law, and (ii) that the case was a fit one for
appeal to the Supreme Court. The High Court obserbed:
The appeal raises a question of great importance
in Trade Marks Law, that is to say whether a
proprietor
285
of a trade mark who intends to use it solely by a
registered- user is entitled to registration of
his trade mark, under Sec. 18 of the Trade Mark
Act, or to put it differently, do the words
‘proposed to be used by him’ in Sec. 18 mean
‘proposed to be used by the proprietor, his
agents and servant’ only…. The case also
involves the question of construction of sub-
section (2) of Sec. 48 and consideration of the
effect of that sub-section on sub-section (1) of
sec. 18 of the Trade and Merchandise harks Act,
1958.
The questions so posed by the High Court resolve themselves
into the following two questions :
(1) Whether a proprietor of a trade mark who
intends to use it solely by a registered user is
entitled to registration of high trade mark under
section 18 of the Trade and Merchandise Marks Act,
1958 ?
(2) Whether by reason of the provisions of sub-
section (2) of section 48 of the Trade and
Merchandise marks Act, 1958, the words proposed to
be used by him in sub-section (1) of section 18 of
the said Act mean proposed to be used by the
proprietor, his agents and servants only or do
they also include a proposed user by someone who
will get himself registered under section 48(1) of
the said Act as a registered user?
The High Court further observed :
The matter is of considerable importance to
foreign proprietors of trade marks, to registered
users of trade marks in general and to the
Industry and Commerce at large.
Before embarking on a discussion of the above questions
it will be convenient to relate first the facts which have
given rise to this Appeal.
The Appellant, American Home Products Corporation, is a
multi-national corporation incorporated under the laws of
the State of Delaware in the United States of America. One
of the activities of the appellant is the manufacture and
marketing of pharmaceutical products and drugs. The division
of the Appellant
286
which at all relevant times carried on and still carries on
this activity is called the Whitehall Laboratories .
Geoffrey Manners & Co. Ltd. (hereinafter referred to as the
Indian Company ) is a company registered as a public limited
company under the Indian Companies Act, 1913, and is a
public company within the meaning of the Companies Act,
1956. Home Products International Limited is a wholly owned
subsidiary of the Appellant and at all material times
represented the Appellant in its dealings with foreign
distributors, licences and subsidiaries. In the present case
the said Home Products International Limited had carried or
correspondence on behalf of the Appellant with the Indian
Company. International Chemical Company Limited is another
wholly owned subsidiary of the Appellant. Some time prior to
1956, the Appellant acquired a substantial shareholding to
the extent of 40 per cent in the Indian Company. In 1956 the
Appellant introduced an anti-hystamin drug in the American
market under the trade mark ‘DRISTAN’ for the treatment of
respiratory ailments in the form of a decongestant tablet
for symptomatic relief for cold and congestion. The
Appellant got the trade mark ‘DRISTAN’ registered as a
distinctive trade mark in the Trade Marks Register in the
United States and subsequently thereto between 1957 to 1961
in about 39 other foreign countries. These countries
included Great Britain, Ireland, Belgium, Denmark, France,
Holland and other countries in the Continent of Europe,
Canada, Mexico, and several countries in south America, Asia
and Africa.
By an agreement signed on May 16, 1958, effective from
November 1, 1957, the Appellant entered into a technical
collaboration agreement with the Indian Company. The
recitals of the said agreement are material and may be
reproduced. They read as follows :
WHEREAS, American Home Products Corporation
directly or through its wholly owned subsidiaries
is one of the leading American manufacturers of
drugs, pharmaceuticals, biologicals, vaccines,
antibiotics, nutritionals and medicinal
preparations and conducts continuously active
research in its various Laboratories for the
discovery of new and improvement of existing
therapeutic products, and
WHEREAS, American Home Products Corporation
prepared to provide Geoffrey Manners on the terms
and conditions of this Agreement the formulae and
manufacturing technology and other assistance
287
essential for the efficient manufacture in India
of various American home Products Corporation
products, and
WHEREAS, Geoffrey Manners has access to and use of
lands and buildings and has the experience,
facilities, equipment and personnel needed or
desired for successful production, sale and
distribution of the aforementioned products in
India.
The said agreement related to two classes of products,
namely, Whitehall Products and Whet Products . We are
concerned in this Appeal with Whitehall Products. m e term
“Whitehall Products’ was defined in the said agreement as
meaning all formulations owned by or whose sales are
promoted under the direction of Whitehall Laboratories
Division of American Home Products Corporation or
International Chemical company Limited which are
manufactured and sold under the name or trade marks of
Whitehall Laboratories Division of American home Products
Corporation or International Chemical Company Limited and
packaged in form for sale and distribution by the trade to
the ultimate costumer . The term “Licensed” Products was
defined in the said agreement as meaning those Whitehall
Products whose import, manufacture, sale or distribution in
India by Geoffrey Manners are licensed under and pursuant to
the terms of this Agreement. These shall include those
identified in Schedule a annexed hereto and made a part
hereof. Schedule A to the said agreement set out four
products, namely, ‘Anacin’, ‘Kolynos’ Dental Cream,
‘Bismag’, and ‘Anne French’ Cleansing Milk. ‘DRISTAN’ was
thus not mentioned in the said Schedule A. Under the said
agreement, the Appellant agreed to furnish or cause to be
furnished to the Indian Company the manufacturing technology
and other assistance essential for the efficient manufacture
by the Indian Company of inter alia the Licensed Products
and further agreed that qualified employees of the Indian
Company may visit the laboratories, PLANTS and facilities of
the Appellant to observe and learn for the period required
to obtain the necessary working knowledge, the methods and
equipment for the production of the Licensed Products and
that qualified members of the appellant would be assigned to
discuss such method and equipment with such qualified
employees of the Indian Company during the period of their
visits. The Indian company likewise agreed that qualified
employees of the appellant may visit the laboratories,
plants and facilities of the Indian Company in order to
observe and examine the methods being employed and the
equipment being
288
used for the Licensed Products. The Appellant further agreed
to supply to the Indian company a written description of
each process utilized for the production of Licensed
Products including flowsheets of processes, necessary test
methods and basic specifications for apparatus and equipment
unitized in production and that thereafter the Appellant and
the Indian Company should furnish each other with all
significant information which either of them developed and
was free to disclose concerning improvements in the
processes and in the equipment, raw materials and
intermediates used therein. It was further agreed that
before making any offer to a third party or contracting any
commitment with a third party for the purpose of manufacture
and sale in India of any Whitehall Products, the Appellant
would offer to the Indian Company, upon the thermic and
conditions set out in the said agreement, the right to
manufacture, sell and/or distribute such products in India.
In the event of such offer being accepted by the Indian
Company in respect of any Whitehall products such product
would be deemed a Licensed Product for the purposes of the
said agreement. During the period of the said agreements the
Indian Company agreed not to manufacture, distribute of sell
any new products whose production or sale would compete with
the production and sale of the Licensed Products except with
the prior consent thereto in writer obtained from the
Appellant, and the Appellant granted to the Indian Company
for the duration of the said agreement an exclusive and non-
transferable license to make and sell the Licensed Products
in India under the name or marks which for these purposes
the Appellant would design or cause to be designed for such
products. Clause (a) of Article IV of the said agreement
inter alia provided that Rights of registered user will be
extended to Geoffrey Markers in respect of each Licensed
Product by the proprietor of such trade mark . Furthers
under the said agreement the Appellant was to furnish to the
Indian Company the manufacturing technology applicable to
each Licensed Product and to provide reasonable engineering
and technical assistance and instructions to those
representatives of the Indian Company who were to direct or
supervise the manufacture of such products and who would
visit the Appellant’s plants for such assistance and
instructions. The advertising expenditures, plans and
budgets for each fiscal year with respect to each Licensed
Products was to be determined annually and approved by the
Appellant and the selection, appointment of all advertising
agencies by the Indian Company for promoting the sale and
distribution of the Licensed Products was to have the
previous agreement in writing of the Appellant. The said
agreement also sat out in detail the various
289
services which were to be rendered by the Appellant to the
Indian Company. The said agreement was to continue in force
for an indefinite period of time subject to its sooner
termination in the event of any of the eventualities set out
in the said agreement taking place, one of them being that
of the Appellant ceasing to be the owner of at least 40 per
cent of the issued and outstanding share capital of the
Indian Company. The said agreement contained a secrecy
clause and upon the termination of the said agreement, the
Indian Company had to return to the Appellant all
manufacturing technology received by it from the Appellant
and not to make any use of it thereafter.
In pursuance of the said collaboration agreement the
Indian Company manufactured and marketed the products
covered thereunder and got itself registered as the
registered user in respect of the trade marks relating to
the said goods of which the Appellant was the registered
proprietor. The correspondence on the record shows that on
and from December 1957 it was decided that the Indian
Company should introduce in the Indian market nine new
products of the Appellant including ‘DRISTAN’ tablets. On
August 18, 1958, the Appellant filed an application under
section 14(1) of the Trade Marks Act, 1940 (Act No. V of
1940) in the prescribed form T-I for registration of the
trade mark ‘DRlSTAN’ in class 5 (which includes
pharmaceutical substances) as a medicinal preparation for
treatment of respiratory ailments claiming to be the
proprietor of the said mark by whom the said mark was
proposed to be used. The said application was advertised as
required by the Trade Marks Rules, 1942. No notice of
opposition to the registration of the said trade mark was
filet by anyone and the trade mark ‘DRISTAN’ was registered
by the Registrar of Trade Marks, Bombay, as Trade Mark No
186511 in class 5 on June 8, 1959. With effect from November
25, 1959, the Trade marks Act, 1940, was repealed and
replaced by the Trade and Merchandise Marks Act, 1958 (Act
No. 43 of 1958).
Thereafter the Indian Company applied for and obtained
a licence for the purchase of a Stokes Triple Layer Machine
which could produce two-layered tablets, the intention being
to use this machine for the purpose of manufacturing
‘DRISTAN’ tablets. The Indian Company intimated this fact to
the Appellant asking it to supply urgently the manufacturing
manual for ‘DRISTAN’ tablets. The Indian Company also wrote
to the Appellant asking lt to supply free of cost three
units (comprising twenty four tablets in all) of ‘DRISTAN’
tablets as samples. me MANUFACTURING manual as also the
samples were duly sent by the Appellant to 1 the Indian
Company.
290
On May 31, 1960, Mac Laboratories Private Limited, the
First Respondent in this Appeal, applied for registration of
the trade mark ‘TRISTINE’ in class 5 in respect of its
medicinal preparation for symptomatic treatment of
respiratory airlines. On January 1, 1961, the Appellant
filed a notice of opposition to the registration of the said
mark ‘TRISTINE’ on re ground that it was deceptively similar
to its trade mark ‘DRISTAN’. The Appellant’s opposition was
not accepted by the Assistant Registrar of Trade Marks,
Bombay, and by his order dated March 27, 1962, he ordered
the trade mark ‘TRISTINE’ to be registered in Part A of the
Register of Trade Marks. The Appellant thereupon filed an
appeal in the Bombay High Court which was allowed by a
learned Single Judge of that High Court on February 5 1963.
The First Respondent thereupon filed an appeal before a
division Bench of the said High Court and the Division Bench
on April l 1968, allowed the said appeal but directed that
the Respondent application be amended so as to read the
trade MARK ‘TRISTIN’ as ‘TRISTINA’.
In the meantime, while the First Respondent’s
application for registration of the trade mark ‘TRISTINE’
was pending, the Indian Company applied on September 23,
1960, to the Central Government under section 11 of the
Industries (Development and Regulation) Act, 1951, for a
licence to manufacture the tablets ‘DRISTAN’. In the said
applications the Indian Company stated :
No Royalty payment is involved. This new product
will be marketed under the trade mark ‘DRISTAN’
which belongs to American Home Products
Corporation, New York who own 40 of the Company’s
capital and whose products are manufactured and
distributed by us in India.
The Indian Company installed the said Stokes machine at its
Ghatkopar factory on October 5, 1960 and also informed the
appellant that as the said machine was installed, the Indian
Company would be working on experimental batches of
‘DRISTAN’ tablets after completing a few formalities which
the Governments It also wrote to the said Home Products
International Limited requesting it for a sample of 200 gms
of Phenindamine Tartarate U.S.P., one of the ingredients
used in the manufacture of ‘DRISTAN’ tablets. The Indian
Company also applied for an import licence for import of
Phenylophrine Hydrocloride and Phenindamine Tartarate to the
value of Rs. 6,000 and Rs. 12,000 c.i.f. Bombay respectively
for the purpose of initial production of ‘DRISTAN’
291
tablets. The licence under the Industries (Development and
Regulation) Act, 1951 was granted to the Indian Company on
January 19, 1961, for the manufacture of ‘DRISTAN’ tablets
to the extent of five lakh tablets per month. Two of the
conditions of the said licence were that no royalty would be
payable and that the product will be marketed with the trade
mark already in use or without any trade mark . A further
condition was that no special concession in regard to the
import of basic raw materials and ingredients would be
sought in relaxation of the general policy in force from
time to time. On January 23, 1961, the Indian Company
applied to the Director, Drugs control Administration, State
of Maharashtra, for permission to manufacture ‘DRISTAN’
tablets. The said application was approved by the Drugs
Controller on February 10, 1961. Meanwhile, on January 18,
1961, the Appellant had filed a notice of opposition to the
application for registration of the mark ‘TRISTINE’. As a
counterblast to the said notice of opposition, the First
Respondent on April 10, 1961, filed with the Registrar of
Trade Marks, Calcutta, an application, being Application No.
Cal-17, for rectifying the Register of Trade Marks by
removing therefrom the Appellant’s trade mark ‘DRISTAN’. On
May 5, 1961, the first Respondent applied for amendment of
the said Recitification Application by substituting the
paragraph containing the submissions in support of the
grounds taken therein by a new paragraph. This application
for amendment was allowed.
On October 18, 1961, an agreement was entered into
between the Appellant and the Indian Company for granting to
the Indian Company the non-exclusive right to use the trade
mark ‘DRISTAN’ upon or in relation to the goods in respect
of which the said trade mark was registered during the
unexpired residue of the term of the registration of the
said trade mark and during all extensions of the same
subject to the determination of the said agreement as
provided therein. By the said agreement, the Indian Company
agreed to become the registered user of the said trade mark
‘DRISTaN’ and further agreed that the rights granted to it
under the said agreement would not be deemed to entitle it
to use the said trade mark otherwise than as the registered
user thereof. Clauses 3, 4, 5, 6 and 7 of the said
agreement provided as follows :
“3. The Indian Company shall follow the formulae
and specifications prescribed and supplied by the
American Company. The Indian Company will conform
to the technical advice tendered, will use the
quality
292
control methods prescribed by or on behalf of the
American Company in the course of manufacture of
the goods and will not place upon the market any
goods which do not attain to the standard of
quality fixed by the American Company.
4. To ensure maintenance of standards, the Indian
Company will submit to the American Company or to
laboratories designated by the American Company
for test purposes batch samples of the goods
manufactured and also permit duly authorised
representatives of the American Company to examine
and inspect the Indian Company’s installations and
manufacturing processes and control methods used
in the manufacture of the said goods on the
premises of the Indian Company at any time.
5. The Indian Company convenants that it will not
u e the said Trade hark in any manner whatsoever
which may jeopardize the significance,
distinctiveness or validity of the said Trade Mark
and the Indian Company will take all steps within
its power to protect and defend or assist in
protecting defending the right of the American
Company in and to the said Trade Mark.
6. All use of the said Trade lark by the Indian
Company shall clearly show its ownership by the
American Company and its ownership by the Indian
Company only by permission of the American
Company. The Indian Company therefore will apply
and use the said Trade mark only in such form and
manner as the American Company may from time to
time direct and all labels, containers, packing,
pamphlets, advertising and the like shall show the
said Trade mark in manner, design and use as the
American Company so directs and with the prior
approval in writing of the American Company.
7. There is no royalty or other remuneration
payable by the Indian Company to the American
Company for the proposed permitted use of the said
trade mark.
The said agreement provided that in the event of any breach
or default by the Indian Company of any of the conditions
contained in the said agreement, the appellant would have
the right to prohibit forthwith further use by the Indian
Company of the trade
293
mark ‘DRISTAN’. The said agreement was to remain in force
until determined by either party by ninety days’ notice in
writing and in the event of such termination the Indian
Company was to discontinue all further use of the said trade
mark and to deliver to the Appellant the manufacturing
technology relating to the said tablets ‘DRISTAN’ including
formulae, raw materials, finishing materials and packing
materials supplied by or on behalf of the Appellant and to
hold a the disposition of the Appellant or its authorized
representative all stocks of finished goods ready for
transfer to any party or parties to whom the Appellant or
its authorized representative may direct delivery against
payment of any accrued or unpaid manufacturing charges with
respect to the same.
On October 22, 1961, the ‘DRISTAN’ tablets were first
marketed in India by Indian Company. On March 6, 1962, a
joint application in Form TM-28 was made by the Appellant
and the Indian Company for registering the Indian Company as
a registered user of the trade mark ‘DRISTAN’ in respect of
the goods for which it was registered subject to the
following conditions or restrictions set out in the said
application :-
The Trade Mark is to be used by the registered
user in relation to the goods only so long as the
goods are manufactured in accordance with the
formulae and specifications prescribed and
supplied by the registered proprietor, only so
long as the registered user conforms to the
technical advice tendered and uses the quality
control methods prescribed by or on behalf of the
registered proprietor in the course of manufacture
of the goods and only so long as the registered
proprietor has a right to inspect, on the premises
of the registered user, the goods, the
installations, manufacturing processes and control
methods used in the manufacture of the goods and
is supplied on request with samples of the goods.
In the said application it was stated that the proposed
permitted use was without limit of period subject to the
right of the registered proprietor, namely the Appellant, to
apply for cancellation of the registered user forthwith
after giving ninety days notice in writing to the Indian
Company. The said application was accompanied by an
affidavit of Kenneth A. Bonham, the executive Vice President
of the Appellant, affirmed on October 18, 1961, that the
trade mark ‘DRISTAN’ was not till then used in India. In
294
view of the said rectification proceedings, the said
application for registering the Indian Company as registered
user of the trade mark ‘DRISTAN’ was not processed but kept
pending until the final decision of the Rectification
Application made by the First Respondent.
On December 7, 1964, the Registrar of Trade Marks,
Calcutta, dismissed with costs the First Respondent’s
Rectification Application. The First Respondent thereupon
filed an appeal in the Calcutta high Court, being Appeal
No.61 of 1965, making the Second Respondent before us the
Registrar of Trade Marks, Calcutta, the Second Respondent
thereto. A learned single Judge of the said high Court by
his judgment delivered on May 10, 13 and 14, 1968, reported
as Mac Laboratories private Ltd. v. American home Products
Corporation and Anr. A.I.R. 1969 Cal. 342, allowed the said
appeal with costs and set aside the order of the Registrar
of Trade marks. Thereupon, the Appellant filed a further
appeal, being Appeal No. 165 of 1968. A Division Bench of
the said High Court by its judgment and order dated December
1, 1969, reported as American home products Corpn. v. Mac
Laboratories Private Ltd. and Anr. (1970-71) 75 C.W.N. 118,
S.C., L194 Fleet Street Reports 215, dismissed the said
appeal with no order as to costs. It is against this
judgment and order that the present Appeal by certificate
has been filed .
In order to appreciate what was held by the Registrar
of Trade Marks and the learned Single Judge and the Division
Bench of the Calcutta high Court and to test the correctness
of the rival submissions advanced before us, it is now
necessary to refer to the relevant statutory provisions.
The first legislation in India relating to trade marks
was the Trade Marks Act, 1940 (Amt No. V of 1940),
hereinafter referred to as the 1940 Act . The 1940 Act was
repealed and replaced with effect from November 25, 1959,
by the Trade and Merchandise Marks Act, 1958 (Act No. 43 of
1958), hereinafter referred to as the 1958 Act . Section 2
of the 1958 Act is the definition section. Clause (v) of
section 2(1) defines the expression trade mark inter alia as
meaning 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 definition
of the expression trade mark contained in clause (1)
295
of section 2 of the 194 Act was the same as the portion of
clause (v) of section 2(1), of the 1958 Act reproduced
above. Under clause lb) of section 22) any reference to the
use of a mark in relation to the goods is to 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 . Clauses
(q), (r) and (s) of section 2(1 define the expressions
registered proprietor , registered trade mark and registered
user . They read as follows :
“(q) ‘registered proprietor’, in relation to a
trade mark, means the person for the time being
entered in the register as proprietor of the trade
mark;
‘registered trade mark’ means a trade mark which
is actually on the register;
(s) ‘registered user’ means a person who is for
the time being registered as such under section 49
.
Clause (x) of section 2(1) defines the expression tribunal
as meaning the Registrar or, as the case may be, the High
Court, before which the proceeding concerned is pending .
The other definition which is relevant for our purpose
is that of the expression permitted use contained in clause
(m) of section 2(1). That definition is as follows :
(m) ‘permitted use’, in relation to a registered
trade mark, means the use of a trade mark –
(i) by a registered user of the trade mark in
relation to goods
(a) with which he is connected in the course of
trade; and
(b) in respect of which the trade mark remains
registered for the time being; and
(c) for which he is registered as registered user;
and
(ii) which complies with any conditions or
restrictions to which the registration of the
trade mark is subject .
296
Section 6 provides for the maintenance of a record
called the Register of Trade Marks in which all registered
trade marks are to be entered. Under section 71), the
Register is to be divided into two parts called respectively
Part A and Part . Under section 72), the register or Trade
Marks existing at the commencement of the 1958 Act is to be
incorporated with and to form part of Part A of the
Register. The Appellant’s trade mark ‘DISTAN’ leaving been
registered under the 194 Act, it became part of Part A of
the Register of Trade Marks under the 1958 Act. Under
section 136(2), a registration made under the 1940 Act is,
if in force at the commencement of the 1958 Act, to continue
in force and have effect as if trade under the corresponding
provision of the 1958 Act. Sub-section (1) of section 9 of
the 1958 Act, which corresponds to sub-section (1) of
section 6 of the 1940 Act sets out the requisites for
registration cf a trade mark. Under it a trade mark is not
to be registered in Part A of the Register unless it
contains or consists of at least one of the essential
particulars set out in that sub-section. One of the
essential particulars set out in section 9(1) is one or more
invented words .
Sub-section (1) and (4) of section 1 provide as follows
:
1. Application for Registration. –
(1) Any person claiming to be the proprietor of a
trade mark used or proposed to be used by him, who
is desirous of registering it, shall apply in
writing to the Registrar’ in the prescribed manner
for the registration of his trade mark either in
Part A or in Part of the Register.
x x x x x x
(4) Subject to the provisions of this Act, the
Registrar may refuse the application or may accept
it absolutely or subject to such amendments,
modifications, conditions or limitations, if any
as he may think fit.
The Appellant’ application for registration of the trade
mark ‘DRISTAN’ was made under section 14(1) of the 1940 Act
which provided a follows :
“14. application for registration.-
297
(1) Any person c np- to be the proprietor of a
trade mark used or proposed to be used by him who
is A desirous of registering it shall apply in
writing to the Registrar in the prescribed manner,
and subject to the provisions of this Act, the
Registrar may refuse the application or may accept
lt absolutely or subject to such amendments,
modifications, conditions or limitations, if any,
as he may think fit-
It is pertinent to note that both under section 141) of the
1940 Act and section 18(1) of the 1958 Act, an application
for registration must be a person claiming to be the
proprietor of a trade mark used or proposed to be used by
him. Therefore, unless it is the case of an applicant for
registration that he is the proprietor of a trade mark which
has been used by him or which is proposed to be used by him,
he is not entitled to registration. Admittedly, in this case
the trade mark ‘DRISTAN’ was not at any time used by the
Appellant in India at the date when it made its application
for registration on August 18, 1958, nor did it claim in its
application that the said trade mark had been 80 used by it.
that was stated in the said application as that the said
trade mark was proposed to be used by it. Once an
application for registration is made a accepted by the
registrar, the Registrar has to cause the application to be
advertised and within three months from the date of the
advertisement, any person may lodge with the Registrar a
notice of opposition in writing to the registration of such
mark. A copy of such notice of opposition is to be served
upon the applicant. These provisions made in sections 20 and
21 of the 195 Act correspond to section 15 of the 1940 Act.
Under section 23(1), if the application has not been opposed
and the time for giving the notice of opposition has expired
or if the application has been opposed and the opposition
has been decided in favour of the applicant, the Registrar
is “unless the Central Government otherwise directs to
register the said trade mark in Part A or Part of the
Register, as the case may be The trade mark when registered
is to be registered as of the date of the making of the
application for registration and such date is to be deemed
to be the date of registration. A similar provisions existed
in section 16 of the 1940 Act. to notice of opposition to
the registration of the trade mark ‘DRISTAN’ was ever lodged
by anyone, and accordingly it was ordered to be registered
by the Registrar of Trade marks. In view of the provisions
of section 16 of the 1940 Act, the said trade mark ‘DRISTAN’
was to be deemed for the purposes of the 1940 Act to be
registered from the date of the application for its
298
registration namely, from August 18, 1958 and even after the
coming into force of the 1958 Act to be deemed to be
registered from the same date for the purposes of one 1958
Act. under section 25 of the 1958 Act, which corresponds to
section 1 of the 190 Act, the registration of a trade mark
is to be for a period of seven years, but can be renewed
from time to time on application made by the registered
proprietor of the trade mark in the prescribed manner and
within the prescribed period and subject to the payment of
the prescribed fee. The renewal of the registration of a
trade mark is to be for a period of seven years from the
date of expiration of the original registration or the last
renewal of registration, as the case may be.
The registration of a trade mark confers very valuable
rights upon the registered proprietor of that trade mark.
Under section 27(1) of the 1958 Act, no person can institute
any proceeding to prevent, or to recover damages for, the
infringement of an unregistered trade mark. however, his
right of action against any person for passing off goods as
the goods of another person or the remedies in respect
thereof is not affected by reason of the fact that his trade
mark is an unregistered one. Under section 28(1) of the 1958
Act, subject to other provisions of the Act, the
registration of a trade mark, if valid, gives to the
registered proprietor of the trade mark the exclusive right
to the use of the trade mark in relation to the goods in
respect of which the trade mark is registered and to obtain
relief in respect of that a company is about to be formed
and registered under the Companies Act, 1956, and that the
applicant intends to assign the trade mark to- that company
with a view to the use thereof in relation to those goods by
the company.
(2) The tribunal may, in a-case to which sub-section
(1) applies, require the applicant to give security for the
costs of any proceedings relative to any opposition or
appeal, and in default of such security being duly given may
treat the application an abandoned.
(3) Where in a case to which sub-section (1) applies, a
trade mark in respect of any goods is registered in the name
of an applicant who relies on intention to assign the trade
mark to a company, then, unless within such period as may be
prescribed, or within such further period not exceeding six
months as the Registrar may, on application being made to
him in the prescribed manner, allow, the company has been
registered as the proprietor of the trade marks in respect
of those goods, the registration
299
shall ceased to have effect in respect thereof at the
expiration of that period, and the Registrar shall amend the
register accordingly.
An important section for the purpose of the present
Appeal is section 46 which provides for removal of a
registered trade mark from the Register. The infringement of
the trade mark in the manner provided by the 1958 Act. A
similar provision was to be found in section 21(1) of the
1940 Act. Section 29 of the 1958 Act defines what
constitutes infringement of a trade mark while section 30
sets out the acts which do not constitute an infringement of
the right to the use of a registered trade mark. Under
section 36, a registered proprietor of a trade mark has the
power to assign the trade mark. Under section 37, a trade
mark is assignable and transmissible whether with or without
the goodwill of the business concerned and that in respect
either of all the woods in respect of which the trade mark
is registered or of some only of those goods. Under section
38, an unregistered trade mark is not assignable or
transmissible except in the cases set out in sub-section (2)
of that section.
Section 45 provides as follows :
“45 Proposed use of trade mar by company to be
formed.-
(1) No application for the registration of a trade
mark in respect of any goods shall be refused, nor
shall permission for such registration be
withheld, on the ground only that it appears that
the applicant does not use or propose to use the
trade mark, if the Registrar is satisfied material
provisions of section 46 are as follows :
46. Removal from register and imposition of
limitations on ground of no-use.
(1) Subject to the provisions of section 47, a
registered trade mark may be taken off 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
either
(a) that the trade mark was registered without any
bonafide intention on the part of the applicant
for
300
registration that it should be used in relation to
those goods by him or, in a case to which the
provisions of section 45 apply, by the company
concerned, and that there ha, in fact, been no
bona fide use of the trade mark in relation to
those goods by any proprietor thereof for the time
being up to a date one month before the date of
the application; or
(b) that up to a date one month before the date of
the application, a continuous period of five years
or longer had elapsed during which the trade mark
was registered and during which there was no bona
fide use thereof in relation to those goods by any
proprietor thereof for the time being:
Provided that, except where the applicant has been
permitted under sub-section (3) of section 12 to
register an identical or nearly resembling trade
mark in respect of the goods in question or where
the tribunal is of opinion that he might properly
be permitted so to register such a trade mark, the
tribunal may refuse an application under clause
(a) or clause (b) in relation to any goods, if it
is shown that there has been, before the relevant
date or during the relevant period, at the case
may be, bona fide use of the trade mark by any
proprietor thereof for the time being in relation
to goods of the same description, being goods in
respect of which the trade mark is registered.
x x x x x
(3) An application shall not be entitled to rely
for the purpose of clause (b) of sub-section (1)
or for the purposes of sub-section (2) on any non-
use of a trade mark which is shown to have been
due to special circumstances in the trade and not
to any intention to abandon or not to use the
trade mark in relation to the goods to which the
application relates.”
The First Respondent’s said application for
rectification was made both under section 46 and 56 of the
1958 Act. Under section 56(2), any person aggrieved by any
entry made in the Register of Trade Marks without sufficient
cause or by any entry wrongly remaining on the Register may
apply in the prescribed
301
manner to a High Court or to the Registrar, and the tribunal
may make such order for making, expunging or varying the
entry as it A may think fit. Under section 56(4), this power
can also be exercised by the High Court or the Registrar of
its own motion after giving notice to the parties concerned
and after giving them an opportunity of being heard. This
power includes the power to cancel or vary the registration
of a trade mark. Against such an order made by the Registrar
rectifying, cancelling or removing a trade mark from the
Register of Trade Marks, an appeal lies under section 109 to
a Single Judge of the High Court and against an order made
by the Single Judge of the High Court, a further appeal lies
to a Bench of the High Court.
What is now required to be set out is section 48 of the
1958 Act, the interpretation of which is crucial for the
purpose of deciding this Appeal, for that section provides
for registration of a registered user and the effect of such
registration.
Section 48 provides as follows :
48. Registered users.-
(1) Subject to the provisions of section 49, a
person other than the registered proprietor of a
trade mark may be registered as the registered
user thereof in respect of any or all of the goods
in respect of which the trade mark is registered
otherwise than as a defensive trade mark; but the
Central Government may, by rules made in this
behalf, provide that no application for
registration as such shall be entertained unless
the agreement between the parties complies with
the conditions laid down in the rules for
preventing trafficking in trade marks.
(2) The permitted use of a trade mark shall be
deemed to be use by the proprietor thereof, and
shall be deemed not to be use 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.
Section 49 prescribes the procedure for registration of a
registered user and is in the following terms :
49. Application for registration as registered
user.-
302
(1) Where it is proposed that a person should be
registered as a registered user of a trade mark,
the registered proprietor and the proposed
registered user shall jointly apply in writing to
the Registrar in the prescribed manner, and every
such application shall be accompanied by –
(i) the agreement in writing or a duly
authenticated copy thereof, entered into between
the registered proprietor and the proposed
registered user with respect to the permitted use
of the trade mark; and
(ii) an affidavit made by the registered
proprietor or by some person authorised to the
satisfaction of the Registrar to act on his
behalf,-
(a) giving particulars of the relationship,
existing or proposed, between the proprietor and
the proposed registered user, including
particulars showing the degree of control by the
proprietor over the permitted use which their
relationship will confer and whether it is a term
of their relationship that the proposed registered
user shall be the sole registered user or that
there shall be any other restriction as to persons
for whose registration as registered users
application may be made;
(b) stating the goods in respect of which
registration is proposed;
(c) stating the conditions or restrictions, if
any, proposed with respect to the characteristics
of the GOODS to the mode or place of permitted
use, or to any another matter;
(d) stating whether the permitted use is to be for
a period or without limit of period, and, if for a
period, the duration thereof; and
(iii) such further documents or other evidence as
may be required by the Registrar or as may be
prescribed.
(2) When the requirements of sub-section (1) have
been complied with to his satisfaction, the
Registrar shall forward the application together
with his report and all the relevant documents to
the Central Government.
303
(3) On receipt of an application under sub-section
(2), The Central Government, having regard to all
the circumstances of the case and to the interests
of the general public, and the development of any
industry, trade or commerce in India, may direct
the Registrar
(a) to refuse the application; or
(b) to accept application either absolutely or
subject to any conditions, restrictions or
limitations which the Central Government may think
proper to impose;
Provided that no direction for refusing the
application or for its acceptance conditionally
shall be made unless the applicant has been given
an opportunity of being heard.
(4) The Registrar shall dispose of the application
in accordance with the directions issued by the
Central Government sub-section (3).
(5) The Central Government and the Registrar
shall, if so requested by the applicant, take
steps for securing that information given for the
purpose of an application under this section
(other than matters entered in the register) is
not disclosed to rivals in trade.
(6) The Registrar shall issue notice in the
prescribed manner of the registration of a person
as a registered user, to ocher registered users of
the trade mark, if any.
As we have seen, before a person can be registered as a
registered user of a registered trade mark, the registered
user’s agreement between the parties is to comply with the
conditions laid down in the Rules for preventing trafficking
in trade marks. section 133 confers upon the Central
Government, by notification published in THE Official
Gazette and subject to the condition of previous
publication” the power to make rules to carry out the
purposes of the 1958 At. Under section 134, all rules so
made are to be laid for not less than thirty days before
each house of Parliament as soon as may be after they are
made and are to be subject to such modification as
Parliament may make in the session in which they are so laid
or the session immediately
304
following In exercise of this power the Central Government
has made the Trade and Merchandise Marks Rules, 1959.
Chapter V of these Rules consisting of Rules 82 to 93
relates to registered users. Under Rule 82, an application
for registering a person as a register user is to be made in
Form TM-28 jointly by the proposed registered user and the
registered proprietor of the trade mark and is to be
accompanied inter alia by the agreement in writing or a duly
authenticated copy thereof entered into between the
registered proprietor and the proposed registered user with
respect to the permitted use of the trade mark. Rule 85 is
in the following terms :
85. Consideration by the Central Government.-
The Central Government, on receipt of an
application for registration as registered user
forwarded to it by the Registrar under sub-section
(2) of section 49, shall, if satisfied that the
application and the accompanying documents comply
with the provisions of the Act and the rules,
consider whether the APPLIED cation should be
allowed having regard to the matters specified in
sub-section (3) of that section, and in doing so
may take into account all or any of the following
matters :-
(1) whether the permitted use if allowed would
contravene the policy of the Act which is to
prevent trafficking in trade marks;
(2) whether the registered proprietor has
registered the trade mark without any bona fide
intention to use it in relation to his goods in
the course of trade or solely or mainly for the
purpose of permitting others to use it under
agreements for registered user; and
(3) whether the registered proprietor has acquired
title to the trade mark by assignment without any
bona fide intention to use it in relation to his
goods in the course of trade or solely or mainly
for the purpose of permitting others to use it
under agreements for registered user.
Explanation I. – For considering the bona fides of the
registration of the trade mark under clause (2) regard shall
be h had inter alia to –
305
(a) whether the goods for which the trade marks is
registered are similar to or are different from
the goods in which the registered proprietor has
been trading or dealing before the registration or
the mark;
(b) whether the registered proprietor has ever
used the mark in question in relation to his goods
in the course of trade before the date or the
agreement for registered user, and if so, the
amount and duration of such user;
(c) whether the terms as to royalty and other
remuneration payable by the proposed registered
user and reasonable taking into account the
expenses which the registered proprietor is likely
to incur i exercising over the permitted use.
Explanation II. – For Considering the bona fides of
the I acquisition of title under clause (3) regard shall be
had, besides the matters SEL out in Explanation I to the
following further matter, namely, whether the registered
proprietor has obtained assignment of other registered trade
mark and if o, whether he ha dealt with such other marks by
way of assignment or registered user.
Three grounds were taken in the First Respondents
Application for Rectification. lt will facilitate an
understanding of the controversy between the parties if we
were to reproduce these grounds. They are :
(i) ‘That the said trade mark ‘DRISTAN’ is
deceptively and confusingly similarity the mark
‘BISTAN’ Registered under No 122391 in class 5
(advertised in T.M. Journal No. 47) in the name of
Messrs Prof. Gajjar’s Standard Chemical Works
Ltd., of Bombay. The said trade mark ‘BISTAN’ has
been used and is being used by its said
proprietors in respect of their medicinal
preparation since several years pat.
(ii) That the Registered Proprietor on the said
trade mark ‘DRISTAN’ alleged in the said
opposition No. Bom. 76 that the said trade mark
‘DRUSTAN’ is deceptively similarity the said trade
mark ‘TRISTINE’ which the
306
Applicants have lawfully been using since October
1960 in respect of their medicinal preparation.
(iii) That there has been no bonafide use of the
said trade mark ‘DRISTAN’ in India in relation to
the goods for which it is registered by any
proprietor thereof for the time being upto date
one month before the date of this application.
The second ground mentioned above was taken in order make
out that the First Respondent was a person aggrieved for the
purposes of section 46 and 56(2) of the 195 Act. The
Appellant had contested this position but this particular
controversy does not survive for it is no more in dispute
that the First Respondent was person aggrieved.
The submission set out in the said Application for
Rectification in support of the above three grounds were
substituted by fresh submissions by an amendment as
mentioned earlier. These submissions define the scope of the
controversy between the parties. The submissions so
substituted were
(i) That the said trade mark ‘DRISTAN’ was not
distinctive mark and nor was not regenerable trade
mark under Sec.6 of the Trade marks Act, 1940
(corresponding to Section 9 of Act No. 40 of
1958), except upon evidence of its distinctiveness
and no such evidence was submitted to the
Registrar before registration.
(ii) That the said trade mark was registered in
contravention of Section 8 of the Trade Marks Act,
1940 (corresponding to Section 11 of the present
Act, of 1958).
(iii) That the said trade mark offends against the
provisions of Section 11 of the Act.
(iv) That the said trade mark ‘DRISTAN’ is not
distinctive of the goods of the registered
proprietors.
(v) That the said trade mark ‘DRISTAN’ was
registered without any bonafide intention on the
part of the Applicants for registration that it
should be used in
307
relation to their medicinal preparation for
symptomatic treatment of respiratory ailments by
them and that there has, in fact, been no bona
fide use in India of the said trade mark ‘DRISTAN’
in relation to the said goods by the said
proprietors upto a date one month before the date
of this application.
All the above submissions were rejected by the
Registrar. In coming to the conclusion that the Appellant
had the bona fide intention to use the trade mark ‘DRISTAN’
the Registrar relied upon the decision of Lloyd-Jacob, J.,
in the case of ‘BOSTITCH’ Trade Mark, (1963) R.P.C. 183.
Accordingly, the Registrar dismissed the said Rectification
Application. During the course of the proceedings, a carton
of ‘DRISTAN’ tablets was filed along with an affidavit made
on behalf of the First Respondent. The legend upon the said
carton read as follows :
MADE IN INDIA BY ; GEOFFREY MANNERS & CO. LIMITED,
Magnet House, Doughall Road, Bombay for the
Proprietors Whitehall Laboratories, New York,
N.Y., U.S.A.”
The Registrar held that Whitehall Laboratories was not a
separate legal entity and, therefore, the mark could not be
registered in its name but only in the name of the Appellant
of which it formed a par and accordingly the Registrar
ordered the entry in the Register relating to the Trade Mark
‘DRISTAN’ to be varied by amending the registered
proprietor’s name to read as ‘American Home Products
Corporation ( a corporation organised under the laws of the
State of Delaware, United States of America) trading as
Whitehall Laboratories . In the appeal filed by the First
Respondent against the order of the Registrar the learned
single Judge held that at the date of the making of the
application for registration the Appellant did not have a
bona fide intention to use the trade mark ‘DRISTAN’, by
itself. In coming to this conclusion the learned Single
Judge relied upon the decision of the word of Trade in
England in the case of ‘PUSSY GALORE’ Trade Mark, (1967)
R.P.C. 265, 1954 (hereinafter referred to as the Shavaksha
Committee Report ), and the Report of Mr. Justice Rajagopala
Ayyangar on Trade Marks Law Revision, 1955 (hereinafter
referred to as the Ayyangar Report ). The learned Single
Judge further held that the Appellant had not at any time
used the said trade mark in relation to the goods in respect
of which it was registered. According to the learned Single
Judge, the legal fiction created by section 48(2) of the
1958 Act came
308
into play only after a trade mark was registered and that an
intention to use a trade mark through someone who would
subsequently get himself registered as a registered user did
not amount to an intention on the part of the applicant for
registration to use the trade mark himself. The learned
Single Judge held that to accept the Appellant’s said
contention would amount to permitting traffic hang in trade
marks. In view of the conclusion he had reached, the learned
Single Judge did not decide the question whether trade mark
‘DRISTAN’ was deceptively and confusingly similar to the
trade mark ‘BISTAN’. The learned Single Judge accordingly
allowed the said appeal. In further appeal the Division
Bench rejected the contention that the trade mark ‘DRISTAN’
was deceptively and confusingly similar to the trade mark
‘BISTAN’. It, however, confirmed the judgment of the learned
Single Judge in respect of the construction which he had
placed upon section 18 and 48 of the 195 Act in order to
come to the conclusion that the Appellant had no bona fide
intention to use itself the trade mark ‘DRISTAN’ and that
the Appellant had not at any time made use of the said trade
mark. It accordingly dismissed the Appellant’s further
appeal. The main judgment of the division each was delivered
by S.K. Mukherjee, J., with whom A.K. Mukherjee, J., agreed
and at the conclusion of his judgment S.K. Mukherjee, J.,
pointed out the hardship which the construction placed by
the Division Bench upon section 18 and 48 of the 1958 Act
would lead to. These observations are (at page 143) :
“It is neither good sense nor good policy to be
plus royaliste que le roi, to be more of a
royalist than the king himself. A legal situation
which permits use of a registered trade mark by a
registered user but disqualifies the proprietor
from registering his mark if he intends to use it
only through a registered user even when a user is
available who is ready and willing to be
registered on terms which are unexceptionable, is
a situation fraught with three-quarters irony and
the rest unconscious humour.
It is not for the Courts of Law to provide relief
where relief should be provided by the legislature
by ignoring a conscious departure the statute has
made, strain its construction and assume powers
which ore properly belong to the legislature.”
(Emphasis supplied.)
309
proper construction of the relevant sections of the 1958 Act
shows that there is neither any cause for sardonic merriment
nor any need to shed tears.
The submissions made at the hearing of this Appeal by
Mr. F.S. Nariman, learned counsel for the Appellant, may be
thus summarized :
1. The leal fiction created by sub-section (2) of
section 48 is, as expressly stated in that sub-section, for
the purposes of section 46 or for any other purpose for
which such use is material under the 195 Act or any other
law. To confine this fiction to a case of an actual use of a
trade mark by a registered user is to confine it only to use
for the purposes of clause (b) of section 46(1) which is
contrary to the purpose for which the said fiction Was
created and, therefore, when section 1(1) of the 15 Act
(corresponding to section 14(1 of the 1940 Act) uses the
words proposed to be used”, these words must be read as
proposed to be used by a proposed registered user.
2. To register a trade mark which is proposed to be
used by a registered user does not per se amount to
trafficking in trade marks and whether it doe so or not must
depend upon the facts and circumstances of each case.
3. The reliance placed by the High Court, both by the
learned single Judge and Division Bench upon the ‘PUSSY
GALORE’ Trade Mark Case was unjustified and unwarranted
inasmuch as the provisions of the English Act, namely, the
Trade Marks Act, 1938, are radically different from those of
the 1958 Act as also the 194 Act an, therefore, that case
has no relevance so far as the construction of section 18(1)
read with section 48(2) of the 1958 Act is concerned.
4. The reliance placed by the High Court (both by the
learned single Judge and the Division Bench upon the
Shavaksha Committee Report and the Ayyangar Report was
equally misplaced as Parliament did not accept the
recommendations with respect to registered users made in
either of these reports.
5. The facts and circumstances of the case show that
the appellant had at the date of the making of the
application for registration a bona fide intention to use
the trade mark ‘DRISTAN’ through a registered user.
310
6. In any event, the Appellant itself had made bona
fide use of the said trade mark up to a date one month
before the date of the First Respondent’s Application for
Rectification.
The submissions made by Dr. Gauri Shankar, learned
Counsel for the First Respondent, were as follows :
1. The words proposed to be used” in section 18(1) of
the 1958 Act and section 14(1) of the 1940 Act mean proposed
to be used by the applicant for registration, his servants
and agents and not by any person who is proposed to be got
registered as a registered user and, therefore, the legal
fiction enacted in section 48(2) cannot be imported into
section 18(1).
2. A registered user can only come into being after a
trade mark is registered. Therefore, as at the date of an
application for registration of a trade mark, there cannot
be any person in existence who is a registered user, the
words “proposed to be used” cannot possibly mean proposed to
be used by a proposed registered user
3. To permit a trade mark to be registered when the
applicant himself does not propose to use it but proposes to
use it through someone else who would subsequently be
registered as a registered user would be to permit
trafficking in trade marks which is contrary to the policy
underlying the Trade Marks laws.
4. The only case in which the 1958 Act permits the
registration of a trade mark when the applicant for
registration does not intend to use it himself but intends
to use in through another is the one set out in section 45,
namely, where the Registrar is satisfied that a company is
about to be formed and registered under the Companies Act,
1956, and the applicant intends to assign the trade mark to
that company with a view to the use thereof by the Company.
5. The 1958 Act is, as the 1940 Act was, based upon the
English Trade Marks Act , 1938, and the decision in the
‘PUSSY GALORE’ Trade Mark Case concludes this point against
the Appellant.
6. The Shavaksha Committee Report and the Ayyangar
Report show the legislative intent not to allow a proposed
use by a proposed registered user to be equated with a
proposed use by the u applicant for registration.
311
7. The Appellant had not at any relevant time made use
of the trade mark ‘DRISTAN’
8. The Appellant had fradulently obtained registration
of the trade mark ‘DRISTAN’ by stating in the application
for registration that it proposed to use the said trade mark
itself and by not disclosing the fact that it proposed to
use it through a proposed registered user.
9. The trade mark ‘DRISTAN’ was deceptively and
confusingly similar to the trade mark ‘BISTAN’ and,
therefore, it cannot be allowed to remain on the Register of
Trade Marks.
10. To allow the trade mark ‘DRISTAN’ to remain on the
Register of Trade Marks would be contrary to the policy of
the Government of India.
We will no test the correctness of these rival
submissions.
The first Respondent’s Application for Rectification
was stated to be made under section 46 and 56 of the 1958
Act and Rule 94 of the Trade and Merchandise Marks Rules,
1959. Rule 94 is irrelevant because it merely prescribes in
which form an application for rectification of or for
varying or expunging any entry in the Register of Trade
Marks is to be made and by what documents such an
application is to be accompanied. Under section 56 an entry
wrongly remaining on the Register of Trade Marks is liable
to be expunged therefrom. An entry relating to a mark the
use of which would be likely to deceive or cause confusion,
would be an entry wrongly remaining on the Register and,
therefore, liable to be expunged therefrom.
The principal challenge of the First Respondent to the
trade mark ‘DRISTAN’ remaining on the Register was under
clause (a) of section 46(1). The main question before us,
therefore, is whether the entry in the Register relating to
the said trade mark falls within the mischief of the said
clause (a); for if it does, it is liable to be taken off the
Register. The relevant provisions of section 46 have already
been set out above. Before a person can made an application
under section 46(1) to take off a trade mark from the
Register he has to be a “person aggrieved”. It is now no
more disputed that the First Respondent was a “person
aggrieved” within the meaning of section 46(1). Section
46(1) provides for two cases in which a registered trade
mark may be taken off the Register in respect of any of the
goods in respect of which it is
312
registered. The first case is set out in clause (a of
section 4(1) and the second in clause (b of that sub-
section. There are two conditions to be satisfied before
clause (a) can become applicable. These conditions are
1. that the trade mark was registered without any bona
fide intention on the applicant for registration that it
should be used in relation to those good `by him, and
2. that there has, in fact, been no bona fide use of
that trade mark in relation to those good by any proprietor
thereof or the time being to a date one month before the
date of the application under section 46(1)
The only exception to the first condition set out above
is of a case to which the provisions of section 45 apply,
that is, if the trade mark of which registration is sought
is proposed to be used by a company which is about to be
formed and registered under the Companies Act, 1956, and to
which the applicant intends t() assign the trade mark. Both
the conditions set out in clause (a) are cumulative and not
disjunctive. Clause (a), therefore, will not apply where
even though there had been no bona fide intention on the
part of the applicant for registration to use the trade mark
but, in fact, there has been a bona fide use of the trade
mark in relation to those goods by any proprietor thereof
for the time being up to a date one month before the date of
the application under section 46(1). Similarly, clause (a)
will not apply where, though there had been a bona fide
intention on the part of the applicant for registration-to
use the trade mark, in fact, there has been no bona fide use
of the trade mark in relation to those goods by any
proprietor thereof for the time being up to a date one month
before the date of the application under section 46(1).
Clause (b) of section 46(1) applies where for a
continuous period of five years or longer from the date of
the registration of the trade mark, there has been no bona
fide use thereof in relation to those goods in respect of
which it is registered by any proprietor thereof for the
time being. An exception to clause (b) is created by section
46(3). Under section 46(3), the non-use of a trade mark,
which is shown to have been due to special circumstances in
the trade and not to any intention to abandon or not to use
the trade mark in relation to the goods to which the
application under section 46(1) relates, will not amount to
non-use for the purpose of clause (b).
313
The distinction between clause (a) and clause (b) is
that if the period specified in clause (b) has elapsed and
during that A period there has been no bona fide use of the
trade mark, the fact that the registered proprietor had a
bona fide intention to use the trade mark at the date of the
application for registration becomes immaterial and the
trade mark is liable o be removed from the Register unless
his case falls under section 46(3), while under clause (a)
where there had been a bona fide intention to use the trade
mark in respect of which registration was sought, merely
because the trade mark had not been used for a period
shorter than five years from the date of its registration
will not entitle any person to have that trade mark taken
off the Register-
Under both these clauses the burden of proving that the
facts which bring into play clause (a) or clause (b), as the
case may be, exists is on the person who seeks to have the
trade mark removed from the Register. Thus, where there has
been a non-user of the trade mark for a continuous period of
five years and the application for taking off the trade mark
from the Register has been filed one month after the expire
of such period. the person seeking to have the trade mark
removed from the Register has only to prove such continuous
non-user and has not to prove the lack of a bona fide
intention on the part of the registered proprietor to use
the trade mark at the date of the application for
registration. Where, however, the non-user is for a period
of less than five years, the person seeking to remove the
trade mark from the Register has not only to prove non-user
for the requisite period but has also to prove that the
applicant for registration of the trade mark had no bona
fide intention to use the trade mark when the application
for registration was made.
The reason why the two conditions specified in clause
(a) are made cumulative is obvious. As the definition of
trade mark” contained in clause (v) of section 2(1) shows, a
trade mark is 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 to use the mark. It is,
therefore, not necessary for the purpose of registering a
trade mark that those goods should be in existence at the
date of the application for registration. 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
none the less entitled to get the trade mark which the
proposes to use
314
in relation to those goods registered. In the present day
world of commerce and industry, a manufacturing industry can
neither be commenced nor established overnight. There are
innumerable preparatory steps required to be taken and
formalities to be complied with before the manufacture of
goods can start and the manufactured goods marketed. The
processes must of necessity take time. If the position were
that the mere non-user of a trade mark for the period
mentioned in clause (a) of section 46(1) would make a trade
mark liable to be taken off the Register it would result in
great hardship and cause a large number of trade marks to be
removed from the Register, because the moment one month has
elapsed after the registration of a trade mark has been
ordered, a trade rival can make an application on the ground
set out in clause (a) of section 461 claiming that there has
been no bona fide use of the trade mark up to a date one
month before the date of his application. It is in order to
prevent such harassment and absured result that the two
conditions specified in clause (a) have been made
cumulative.
The object underlying section 46(1) is to prevent
trafficking in trade marks. This is, in fact, the object
underlying all trade mark laws. A trade mark is meant to
distinguish the goods made by one person from those made by
another. A trade mark, therefore, cannot exist in vacuo. It
can only exist in connection with the goods in relation to
which it is used or intended to be used. Its object is to
indicate a connection in the course of trade between the
goods and some person having the right to use the mark
either with or without any indication of the identity of
that person. Clause (v) of section 2(1) which defines the
expression ‘trade mark’ makes this abundantly clear. Trade
marks became important after the Industrial Revolution a
distinguish goods made by one person from those made by
another; and soon the need was felt to protect traders
against those who were unauthorizedly using their marks and
accordingly registration of trade marks was introduced in
England by the Trade Marks Registration Act, 1875, which was
soon replaced by more detailed and advanced legislation.
When a person gets his trade mark registered, he acquires
valuable rights by reason of such registration. Registration
of his trade mark gives him the exclusive right to the use
of the trade mark in connection with the goods in respect of
which it is registered and if there is any invasion of this
right by any other person using a mark which is the same or
deceptively similar to his trade mark, he can protect his
trade mark by an action for infringement in which he can
obtain injunction, damages or an account of profits made
315
by the other person. In such an action, the registration of
a trade mark is prima facie evidence of its validity. After
the expiry of seven years from the date of the registration
a trade mark is to be valid in all respects except in the
three cases set out in section 3. The proprietor of an
unregistered trade mark whose mark is unauthorisedly used by
another cannot, however, sue for the infringement of such
trade mark. His only remedy lies in bringing a passing-off
action, an inconvenient remedy as compared to an
infringement action. In a passing-off action the plaintiff
will have to prove that his mark has by user acquired such
reputation as to become distinctive of the plaintiff’s goods
so that if it is used in relation to any goods of the kind
dealt with by the plaintiff, it will be understood by the
trade and public as meaning that the goods are the
plaintiff’s goods. In an infringement action, the plaintiff
is not required to prove the reputation of his mark.
Further, under section 37 a registered mark is assignable
and transmissible either with or without goodwill of the
business concerned while under section 38 an unregistered
trade mark is not assignable or transmissible except in the
three cases set out in section 3(2).
As the registration of a trade mark confers such
valuable rights upon the registered proprietor thereof, a
person cannot be permitted to register a trade mark when he
has not used it in relation o the goods in respect of which
it is sought to be registered or does not intend to use it
in relation to such goods. The reason for not permitting
such trade marks to be registered was thus stated by Romer,
J., in In re the Registered Trade-Marks of John Batt Co.
and In re Carter’s Application for a Trade-Mark:, (1898) 2
Ch. D. 432, 436, S.C. 15 R.P.C. 262, 266.
” …one cannot help seeing the evils that may
result from allowing trade-marks to be registered
broadcast, if I may use the expression, there
being no real intention of using them, or only an
intention possibly of using them in respect of a
few articles. The inconvenience it occasions, the
cost it occasions, is very large, and beyond that
I cannot help seeing that it would lead in of
cases to absolute oppression, and to persons using
the position they have obtained as registered
owners of trade marks (which are not really bona
fide trade marks) for the purpose of trafficking
in then and using the as a weapon to obtain money
from subsequent persons who may want to use bona
fide trade marks in respect of some classes in
respect of which they find those bogus trade-marks
registered.
(Emphasis supplied)
316
The judgment of Romer, J., in Batts case was confirmed by
the Court of Appeal, (1898)2 ch.D.432 at pages 439-442, and
by the house of Lords sub nominee John Batt & co.v. dunnett
and Anr. (1986) A.C.420; S.C. 16 R.P.C. 411.
To get a trade nark registered Without any intention to
use it in relation to any Gods but merely to make money out
of it by selling to others the right to use it would be
trafficking in that trade mar. In Re American Greetings Cor
Application, [1983] 2 ALLEY. ALL E.K. 609, 619, Dillon, L.
J., said in the Court of Appeal :
“Trafficking in a trade mark has from the outset
been one of the cardinal sins of trade mark law.
but there is no statutory definition of
trafficking, and one may suspect that, as with
usury in the middle Ages, though it is known
to be a deadly sin, it has become less and less
clear, as economic circumstances have developed,
what the sin actually comprehends.
Trafficking must involve trading in or dealing
with the trade mark for money’s worth, but it is
not all dealing with a trade mark or money that is
objectionable,, since it has always been accepted
that it is permissible o sell trade mark together
with the goodwill of the business in the course of
which the trade Mark has teen used.
(Emphasise supplied.)
In the same case, Lord Brightman in the house of Lords,
[1984] 1 All E.K.. 426,433, summed up the position in law
thus:
” My Lords, although as a matter of ordinary
English, trafficking in trade marks might mean the
buying and selling of trade marks, it seems
obvious that it is to have a more specialised
meaning in a trade mark context. I have no quarrel
with the definitions suggested by the assistant
registrar and by Sir Denys Buckley, but perhaps
one further attempt on y part may not be out of
place. The courts have to grope for some means of
delineating the forbidden territory, and h
different modes of expression may help to indicate
boundaries which are not and cannot be marked out
with absolute precision. To my mind, trafficking
in a trade
317
mark context conveys the notion dealing in a
trade mark primarily as, commodity in its won
right and not primarily for the purpose of
indentifying or promoting merchandise in which the
proprietor of the nark is interested. if tiler is
no real trade connection between the proprietor of
the mark and the licensee or his goods, there is
room for the conclusion that the grant of the
licence is a trafficking in the ark. It is a
question of fact and degree in ever case whether a
sufficient trade connection exists.
We have no hesitation in accepting the meaning given to the
expression trafficking in a trade Dillon, LJ., and Lord
Brightman.
The intention to use a trade mark sought to be
registered must be, therefore, genuine and real and as
pointed out by J Tomlin, J., in In re ducker’s Trade mark
(1928) Ch. L 405, 409, the fact that the mark was as
thought to be something which some day might be useful would
not amount to any definite and precise intention at the time
of registration to use that mark. The intention to use the
mark must exist at the date of the application for
registration and such intention must be genuine and bona
fide. In fact, section 46(1)(a) expressly speaks of “bona
fide intention on the part of the application for
registration which would mean “at the date when such
applicant makes his application for registration
We will now address ourselves to the question whether
the facts which bring into play clause (a) of section 46(1)
exist in the present case. What is first required to be
ascertained for this purpose is whether the Appellant had an
intention that the trade mark ‘DRISTAN’ should be used in
India in relation to the concerned goods. Assuming the
Appellant had such an intention, the next question which
will fall to be determined is whether this intention was an
intention on the part of the Appellant to use the said
trade mark itself or to use it through a registered user and
if he intention was to use it through a registered user,
whether clause (a) of section 46(1) would be attracted. The
third question will be whether such intention on the part of
the Appellant was a bona fide one.
Intention is a state of mind. No person can make out
the state of mind of another person. None the less courts
are often
318
called upon for various purposes to determine the state of a
person’s mind. The Courts can only do so by deducting the
existence of a particular state of mind from the facts of a
case section 14 of the Indian Evidence Act, 187, provides as
follows:
“14. Facts Showing existence of state of mind, or
of body or bodily feeling.-
Facts showing the existence of any state of mind,
such as intention, knowledge, good faith,
negligence, rashness, ill-will or good-will
towards any particular person, or showing the
existence of any state of body or bodily feeling,
are relevant, when the existence of any such state
of mind or body or bodily feeling is in issue or
relevant.
Explanation 1. A fact relevant as showing the
existence of a relevant state of mind must show
that the state of mind exists, not generally, but
in reference to the particular matter in question.
x x x x
The second Explanation to that section is not material for
out purpose .
It was submitted by Dr. Gauri Shankar, learned Counsel
for the First Respondent, that in order to ascertain what
the Appellant’s intention was,. the Court can only look at
events previous to the relevant date, namely, the date of
the application for registration made by the Appellant, that
is, August 18, 1958, and not to any events subsequent
thereto. Whether subsequent events are relevant or not would
depend upon the facts and circumstances of each case and the
question at issue therein. In Srinivas Mall Bariroliya and
Anr. v. Emperor, A.I.. 1947 P.C. 135, Appellant No. 1, a
Salt Agent for the District Magistrate, was inter alia
charged with having abetted Appellant No.2, who had been
appointed by him, in selling salt to licensed retail dealers
to whom allocations of specific quantities of salt had been
made by the Central Government, on three specified dates at
a price exceeding the maximum price which had been fixed by
the District Magistrate. Appellant No.1 was convicted and
sentenced to imprisonment under Rule 81(4) of the Defence of
India Rules, 1939, relating to the control of prices. In
addition to the evidence of the three dealers to whom
319
the salt was sold, nine other dealers who had bought salt
from appellant No.1 and had to deal with Appellant No.2 and
had obtained salt from him at a price exceeding the fixed
maximum price, were also called in evidence as prosecution
witnesses. The transactions with the other nine dealers took
place not only during and shortly before the dates on which
the offences were committed but also after the period
covered by the dates of the offences. The Judicial Committee
of the Privy Council held (at page 139 :
“… The evidence was relevant to the charge of
abettin, because it showed an intention to aid
the commission of the offence and an intentional
omission to put a stop to an illegal practice,
which, it need hardly be added, was an ‘illegal
omission’. The evidence was thus admissible to
prove intention under s. 14 Evidence Act.’
(Emphasis supplied.)
Dr. Gauri Shankar then submitted that in any event
facts subsequent to the date of the First Respondent’s
Application for Rectification, namely, April 1, 1961, could
not be looked at by the Court. We are equally unable to
agree. As we nave pointed out earlier, where a trade mark
has been registered on the round that the applicant for
registration proposes to use such trade mark, a trade rival
in order to cause vexation and harassment to the registered
proprietor can file his application immediately after the
expiry of one month from the date of the order registering
the trade mark. As pointed out by us, where a trade mark is
proposed co be used, the manufacture and marketing of goods
in relation to which such trade mark is proposed to be used
SL of necessity case time; and not to look at events
subsequent to the date of the Application for Rectification
would result in great injustice
It was next submitted by Dr. Gauri Shankar that for the
purpose of ascertaining the intention of the Appellant, the
Court cannot look at the technical collaboration agreement
and the registered user agreement inasmuch as neither these
agreements nor copies thereof were produced before the High
Court bu copies the were produced for tile first time during
the course of the hearing or this Appeal his argument also
cannot be accepted. Both these agreement have been referred
to in the ii affidavits filed before the Registrar and the
High Court and also
320
dealt with by the Registrar, the learned Single Judge and
the Division Bench in their respective judgments. In this
connection, it will not be out of place to set out here the
circumstances in which copies o these agreements came not be
produced before this Court. During the course of the hearing
of the peal, w called upon learned Counsel for the Appellant
to file before us copies of the application for registration
of the trade mark `DRISTAN’ and the application for
registering the Indian Company as the registered user of the
said trade mark. The original file relating to the trade
mark `DRISTAN’ was before the Registrar when he heard the
First Respondent’s Application for Rectification and also
before the High Court when the matter was heard by the
learned Single Judge and the Division Bench Copies, however,
of the said two applications were not on the record, and we
wanted to ascertain for ourselves what was stated in those
applications. At that time learned Counsel for the first
Respondent got up and requested Us that the Appellant should
also be asked to produce copies of the said two agreements
and accordingly we directed the Appellant to file copies of
those two agreements also, which it did.
It is because the intention of the Appellant at the
date of filling the application registration is to be
ascertained from the facts existing in this case that we
have related them at some length in the earlier part of our
judgment. We will now summarize these facts with reference
to three periods : (1) events which took place up to the
date of the application for registration, namely, August 18
1958, (2) events which happened between that date an the
date of he Application for Rectification, namely, April 10,
1961 and (3) events which happened subsequent to April 10,
1961.
So far a the period up to August 18, 1958 concerned,
prior to 156, the Appellant had acquired a substantial
shareholding to the extent of 40 per cent in the Indian
Company. In 1956 the Appellant introduced ‘DRISTAN’ TABLES
in the American market and got the trade mark ‘DRISTAN
REGISTERED i the United States of America and in several
other countries. technical collaboration between the
Appellant and the Indian. Company commenced from November 1,
1957, and an agreement in that behalf was signed on May 16,
1958. In pursuance of the said collaboration agreement the
Indian Company manufactured and marketed several products of
the Appellant. The Appellant got registered its trade marks
in respect of such products and the Indian Company was
registered as the registered user in respect
321
of such trade marks. As early as December 1957, it was
decided that the Indian Company should introduce in the
Indian market nine new products of the Appellant including
‘DRISTAN’ tablets. On August 18, 1958, the Appellant filed
an application for registration of the trade mark ‘DRISTAN’
and the said trade mark was duly registered on June 8, 1959.
Dr. Gauri shankar, however, submitted that the
collaboration agreement was irrelevant because ‘DRISTAN’
tablets were not mentioned in Schedule A to the sail
agreement, and, therefore, the intention to introduce
‘DRISTAN’ tablets in the Indian market and the facts
relating thereto did not have anything to do with the said
collaboration agreement. In this behalf, Dr. Gauri Shankar
relied upon the definition of ‘Licensed Products’ given in
the said agreement. This submission is wholly without
foundation. That definition related to Whitehall Products in
respect of whose marketing, manufacture, sale or
distribution in India, the Indian Company was to be licensed
under and pursuant to the terms of the said collaboration
agreement and it further stated that “these shall include
those identified in Schedule Annexed hereto and made a part
hereto”. lt is true that Schedule A to the said agreement
does not mention ‘DRlSTAN’ tablets but the products set out
in schedule A are not exhaustive of the Licensed Products to
which the said collaboration agreement related and this is
made clear by the rule of the word “include” with
reference to the products identified in Schedule A. There is
no dispute that ‘DRISTAN’ tablets are Whitehall Products.
The division of the Appellant, which at all relevant times
carried on and still carries on the activity of
manufacturing and marketing pharmaceutical products, is
called the Whitehall laboratories and it was for this reason
that the Registrar ordered the entry relating to the trade
mark ‘DRISTAN’ to be amended so as to show the Appellant
trading as ‘Whitehall Laboratories. The definition of
“Licensed Products” in the said collaboration agreement
comprehended not only the Whitehall Products set out in
Schedule A to the collaboration agreement but also other
products in respect of which the Indian Company would be
licensed for import, manufacture, sale or distribution in
India under the terms of the said agreement. The
correspondence between the parties leaves no doubt that the
manufacture and of the ‘DRISTAN tablets by the Indian
Company in India was to be under the said collaboration
agreement.
So far as the second period is concerned, namely, that
. between August 18, 1958, and the date of the first
Respondent’s
322
Application for Rectification, that is, April 10, 1961,
during that period the Indian Company applied for and
obtained a licence for the purchase of a Stockes Triple
Layer Machine for manufacturing ‘DRlSTAN’ tablets and when
the said machine was received installed it at its Ghatkopar
factory. It also obtained from the Appellant three units of
‘DRISTAN’ tablets as samples and the manufacturing manual
for the said tablets. Further, it applied to the Central
Government under section 11 of the Industries (Development
and Regulation) Act, 1551, for a licence to manufacture
‘DRISTAN’ tablets which was granted to it. It also applied
for and obtained a licence to import certain ingredients
used in the manufacture of ‘DRISTAN’ tablets and imported
such ingredients. It further applied for and obtained from
the Director, Drugs Control Administration, State of
Maharashtra, permission to manufacture ‘DRISTAN’ tablets.
The Appellant also filed a notice of opposition to the First
Respondent’s Application for registration of their mark
‘TRISTINE’.
During the third period, namely, the period subsequent
to the First Respondent’s Application for Rectification,
that is, subsequent to April 10, 1961, on October 18, 1961,
the said registered user agreement was entered into between
the Appellant and the Indian Company. On October 22, 1961,
the ‘DRISTAN’ tablets were first marketed in India by the
Indian Company. On March 6, 1962, the Appellant and the
Indian Company jointly made an application to register the
Indian Company as a registered user of the trade mark
‘DRISTAN’.
The facts set out above clearly show that each of the
is an integral link in a chain and that they cannot be
divided into three separate periods as contended by Dr.
Gauri Shankar. This continuous chain of events establishes
beyond doubt that the Appellant had an intention that the
trade mark ‘DRISTAN’ should be used in relation to the
tablets in question by the manufacture and sale of these
tablets in India.
This brings us to the question whether the intention of
the Appellant to market and manufacture ‘DRISTAN’ tablets in
India was to do so itself or to do so through a registered
user. Mr. Nariman, learned Counsel for the Appellant
submitted that as the intention of the Appellant was to
market ‘DRISTAN’ tablets in India, it could translate that
intention into action either by getting it manufactured and
marketed by a registered user in India or as exporting the
tablets to India and if the import
323
policy did not permit this to be done, it could export the
tablets to India when the import policy was relaxed. This
argument is contrary to the facts on the record and must be
rejected. A person’s intention is shown by the facts of a
case and not by statements made at the Bar. The facts of
this case clearly establish that the Appellant’s intention
in applying for registration of the trade mark ‘DRISTAN’ was
to use it in relation to goods to be manufactured and
marketed by the Indian Company and that for this purpose the
Indian Company would get itself registered as the registered
user of the said trade mark. Further, in the affidavit sworn
on April 13, 1962, by S. Waldron, Vice-President of the
Appellant, it is categorically stated as follows :
“It was intended that the product bearing the
‘DRISTAN’ trade mark be introduced in India
through Geoffrey Manners & Co. Ltd. should be
registered as registered user in India of the
trade mark ‘DRISTAN’. For this reason all
applications to Government authorities and Drug
Control authorities were made by Geoffrey Manners
& Co. Ltd. In implementation of the intention to
appoint Geoffrey Manners & Co. Ltd. as registered
users of the trade mark ‘DRISTAN’, preparations
were undertaken to appoint Geoffrey Manners & Co.
Ltd. as registered users and these culminated into
execution of registered user agreement between the
Registered Proprietors and Geoffrey Manners & Co.
Ltd. which has been dated the 18th October,
1961″‘.
In view of this sworn statement made on behalf of the
Appellant it is not open to Counsel to submit that the
proposed use by the Appellant could also have been by
exporting ‘DRISTAN’ tablets to India.
The Appellant’s application for registration of the
trade mark ‘DRISTAN’ was made under section 14(1) of the
1940 Act and was registered under that Act. Under the said
section 14(1), only a person claiming to be the proprietor
of a trade mark “use or proposed to be used by him” could
apply for registration of that trade mark. The provisions of
section 18(1) of the 1958 Act are identical. This brings us
to the crucial question whether the words “proposed to be
used by him” would include “proposed to be used through a
registered proprietor”. In other words, the question is
whether a proposed user by a registered user of a trade mark
can be equated with a proposed user by the proprietor of the
trade mark.
324
On behalf of the Appellant it was submitted by Mr.
Nariman that the two phrases “proposed to be used by him”
ant “proposed to be used by a registered user” must be
equated by reason of the statutory legal fiction created by
section 48(2) of the 1958 Act which corresponds to section
39(2) of the 1940 Act. According to Mr. Nariman, unless the
legal fiction enacted in section 48(2) applied also to the
provisions of section 18(1), it would have a very limited
operation and can apply only so far as the second condition
of clause (a) of section 46(1) and clause (b) of that sub-
section are concerned, which, according to him, would render
nugatory the words “or for any other purpose for which such
use is material under this Act or any other law” occurring
in section 48(2).
Dr. Gauri Shankar on behalf of the First Respondent,
however submitted that both under the 1940 Act and the 1958
Act a registered user is not the same person as the
proprietor of a registered trade mark for a registered user
can only be some person other than the proprietor of the
trade mark and that no registered user can come into being
unless and until a trade mark has been registered and
thereafter an application for registration as the registered
user thereof has been made and granted. He also submitted
that the legal fiction enacted in section 48(2) of the 1958
Act and section 39(2) of the 1940 Act cannot for this reason
apply to the provisions of section 18(1) or to the first
condition of clause (a) of section 46(1) of the 1958 Act
and, therefore, the Appellant was not entitled to seek the
protection of the said legal fiction. According to Dr. Gauri
Shankar, if the proprietor of a trade mark intended to use
it through another, he could only do it by having resort to
section 45 of the 1958 Act, which corresponds to section 36
of the 1940 Act, by getting it registered for the purpose of
assigning it to a company to be formed and registered under
the Companies Act, 1956. In Dr. Gauri Shankar’s submission
the only three ways in which, therefore, the trade mark
‘DRISTAN’ could have been used in India were for the
Appellant to have resort to section 45 by floating a company
to which, when incorporated, the trade mark would be
assigned or by manufacturing the tablets ‘DRISTAN’ it self
in India and thereafter by assigning it to the Indian
Company or by Jointly applying along with the Indian Company
to have the Indian company registered as the registered user
of the said trade mark.
The Appellant’s application for registration of the
trade mark ‘DRISTAN’ was made under the 1940 Act and its
registration was also ordered under that Act. The
application for registering
325
the Indian company as the registered user was, however, made
under the 1958 Act. If the 1940 Act did not contain a legal
fiction similar to that enacted in section 48(2) of the 1958
Act, the Appellant’s case would fall to the ground because
then at the date of its application for registration of the
said trade mark, its intention would be not to use it itself
but to use it through another. The 1940 Act, however, also
made provisions with respect to registered users and created
a similar legal fiction in section 39(2) of the Act. Section
39 of the 1940 Act provided as follows :
“39. Registered users.-
(1) A person other that the proprietor of a trade
mark may be registered as a registered user
thereof in respect of all or any of the goods in
respect of which it is registered (otherwise than
as a defensive trade mark) and either with or
without conditions or restrictions.
(2) The permitted use of a trade mark shall be
deemed to be use by the proprietor thereof, and
shall be deemed not to be use by a person other
than the proprietor, for any purpose for which
such use is material under this Act or any other
law. “The only difference between section 39(2) of
the 1940 Act and section 48(2) of the 1958 Act is
that while under section 39(2) the legal fiction
created by it applies “for any purpose for which
such use is material under this Act or any other
law”, under section 48(2) the legal fiction
applies “for the purposes of section 46 or for any
other purpose for which such use is material under
this Act or any other law”. The addition of the
words “for the purposes of section 46” in section
48(2) not only does not make any difference but
clarifies the scope of the said legal fiction. As
we have seen, clause (a) of section 46(1) refers
both to “bona fide intention on the part of the
applicant for registration that it (that is, the
trade mark) should be used in relation to those
goods by him” as also to “bona fide use of the
trade mark in relation to those goods do any
proprietor thereof for the time being.” It cannot
possibly be that when section 48(2) expressly
provides that the permitted user of a trade mark
by a registered user is to be deemed to be user by
the proprietor of the trade mark for the purposes
of section 46, the fiction is intended only to
apply to the use of the trade mark
326
referred to in the second condition of clause (a) of section
46(1) and not to the use of that trade mark referred to in
the first condition of the said clause (a). Under section
18(1), an application for registration of a trade mark can
only be made by a person who claims to be the proprietor of
that trade mark. Therefore, the words “applicant for
registration” in clause (a) Of section 46(1) would mean ‘the
person claiming to be the proprietor of the trade mark who
is the applicant for registration of that trade mark”. The
first condition of clause (a) would, therefore, read “that
the trade mark was registered with out any bona fide
intention on the part of the person claiming to be the
proprietor of that trade mark who has made the application
for registration that it should be used in relation to those
goods by him”. So read, there can be no difficulty in
reading the words “by him.” also as “by a registered user”.
Similarly, we see no difficulty in applying the legal
fiction in section 48(2) to section 18(1). Section lb(l) in
the light of the said legal fiction would read Is any person
claiming to be the proprietor of a trade mark used or
proposed to be used by him or by a registered user”. By
reason of the provisions of section 39(2) of the 194C Act,
section 14(1) of that Act should also be read in the same
way.
In celebrated passage Lord Asquith of Bishopstone in
East End Dwellings Co. Ld. v. Finsbury Borough Council
(1952) A.C. 109, said (at page 132) :
” If you are bidden to treat an imaginary state of
affairs as real, you must surely, unless
prohibited from, doing so, also imagine as real
the consequences and incidents which, if the
putative state of affairs had in fact existed,
must invitably have flowed from or accompanied it.
In the State of Bombay v. Pandurang Vinayak Chaphalkar
and Others [1953] S.C.R.773, this Court held (at page 132)
while approving the above passage of Lord-Asquith :
“When a statute enacts that something shall be
deemed to have been done, which in fact and truth
was not done, the court is entitled and bound to
ascertain for what purposes and between what
persons the statutory fiction is to be resorted to
and full effect must be given to the statutory
fiction and it should be carried to its logic
conclusion.”
327
The purposes for which the said fiction has been
enacted are set out in section 48(2). These purposes are
the purposes of section 46 or for any other purpose for
which such use is material under the 1958 Act or any other
law. To confine the purpose only to a part of section 46
would be to substantially cut down the operation of the
legal fiction. The purpose for which the legal fiction is to
be resorted to is to deem the permitted use of a trade mark,
which means the use of the trade mark by a registered user
thereof, to be the use by the proprietor of that trade mark.
Having regard to the purposes for which the fiction in
section 48(2) was created and the persons between whom it is
to be resorted to, namely, the proprietor of the trade mark
and the registered user thereof, and giving to such fiction
its full effect and carrying it to its logical conclusion,
no other interpretation can be placed upon the relevant
portions of section 18(1) and of clause (a) of section 46(1)
than the one which we have given.
In reaching the conclusion which they did, the learned
Single Judge and the Division Bench of the High court relied
heavily upon the PUSSY GALORE’ Trade Mark Case. In order to
understand what was held in that case it is necessary first
to refer to some of the provisions of the English Trade
Marks Act, 1938 (1 & 2 Geo. 6, c. 22), as the 1958 Act is
based largely upon the provisions of the English Act though
with certain important differences. Section 17(1) of the
English Act sets out who can apply for registration of a
trade mark and is in pari materia with section 18(1) of the
1958 Act. Under section 11(4), the refusal by a Registrar to
register the trade mark is subject to appeal to the Board of
Trade or to the court at the option of the applicant. If the
appeal is to the court, there can be further appeal to the
Court of Appeal and from there to the House of Lords,
Section 2h provides for removal of a trade mark from the
Register and is in pari materia with section 46 of the 1958
act. Section 32 deals with rectifying the entries in the
Register and is analogous to section 56 of the 1958 Act.
Under section 87 of the Patents, Designs and Trade
Marks Act, 1883 (46 & 47 Vict. c. 57), any registered
proprietor could grant licences to use the mark subject to
any equity. The 1883 Act in so far as it related to trade
marks was repealed by the Trade marks Act, 1905 (5 Edw. 7 c.
15). The 1905 Act did not, however, contain any power in the
registered proprietor to grant licences. The English Act of
1938, however, introduced a system of official approval for
licences to use a trade mark
328
Particularly by providing for registering a Person other
than the proprietor of the trade mark as the registered user
of the trade mark. It will be useful to set out the
provisions cf the English Act of 1938 relating to registered
users in order to Focus our attention on the differences
between the English Act and the 1958 Act with respect to
registered users.
Sub-sections (1), (2) and (4) to (2) of section 28
provide as follows :
“28. “Registered users.-
(1) Subject to the provisions of this section, a
person other than the proprietor of a trade nark
mark may be registered as a registered user
thereof in respect of all or any of the goods in
respect of which it is registered (otherwise than
as a defensive trade mark) and either with or
without conditions or restrictions.
The use of a trade mark by a registered user
thereof in relation to goods with which he is
connected in the course of trade and in respect of
which for the time being the trade mark remains
registered and he is registered as a registered
user, being use such as to comply with any
conditions or restrictions to which his
registration is subject, is in this Act referred
to as the ‘permitted use’ thereof.
(2) The permitted use of a trade mark shall be
deemed to be use by the proprietor thereof, and
shall be deemed not to be use by a person other
than the proprietor, for the purpose of section
twenty six of this Act and for any other purposes
for which such use is material under this Act or
at common law.
(4) Where it is proposed that a person should be
registered as a registered user of a trade mark,
the proprietor and the proposed registered user
must apply in writing to the Registrar in the
prescribed manner and must furnish him with a
statutory declaration made by the proprietor, or
by some person authorised to act on his behalf and
approved by the Registrar-
(a) giving particulars of the relationship,
existing or proposed, between the proprietor and
the proposed
329
registered user, including particulars showing the
degree of control by the proprietor over the
permitted use which their relationship will confer
and whether it is a term of their relationship
that the proposed registered user shall be the
sole registered user or that there shall be any
other restriction as to persons for whose
registration as registered users application may
be made;
(b) stating the goods in respect of which
registration is proposed;
(c) stating any conditions or restrictions
proposed with respect to the characteristics of
the goods, to the mode or place of permitted use,
or to any other matter, and
(d) stating whether the permitted use is to be for
a period or without limit of period, and if for a
period, the duration thereof; and with such
further documents, information or evidence as may
be required under the rules or by the Registrar.
(5) When the requirements of the last foregoing
subsection have been compled with, if the
Registrar, after considering the information
furnished to him under that sub-section, is
satisfied that in all the circumstances the use of
the trade mark in relation to the proposed goods
or any of them by the proposed registered user
subject to any conditions or restrictions which
the Registrar thinks proper would not be contrary
to the public interest, the Registrar may register
the proposed registered user as a registered user
in respect of the goods as to which he is so
satisfied subject as aforesaid.
(6) The Registrar shall refuse an application
under the foregoing provisions of his section if
it appears to him that the grant thereof would
tend to facilitate trafficking in a trade mark.
Sub-section (1) and (2) of section 29 provide as follows :
“29. Proposed use of trade mark by corporation to
be constituted. etc.
330
(1) No application for the registration of a trade
mark in respect of any goods shall be refused, nor
shall permission for such registration be
withheld, on the ground only that it appears that
the applicant does not use or propose to use the
trade mark,
(a) if the tribunal is satisfied that a body
corporate is about to be constituted, and that the
applicant intends to assign the trade mark to the
corporation with a view to the use thereof in
relation to those goods by the corporation; or
(b) if the application is accompanied by an
application for the registration of a person as a
registered user of the trade mark, and the
tribunal is satisfied that the proprietor intends
it to be used by that person in relation to those
goods and the tribunal is also satisfied that
person will be registered as a registered user
thereof immediately after the registration of the
trade mark.
(2) The provisions of section twenty-six of this
Act shall have effect, in relation to a trade mark
registered under the power conferred by the
foregoing sub-section, as if for the reference, in
paragraph (a) t. of sub-section (1) of that
section, to intention on the part of an applicant
for registration that a trade mark should be used
by him there were substituted a reference to
intention on his part that it should be used by
the corporation or registered user concerned.”
In the ‘PUSSY GALORE’ Trade mark Case a company filed
forty-six applications for registering different trade marks
in respect of goods falling under seventeen different
classes. official objection was raised that, owing to the
very large and diverse range of goods covered by the several
applications, the Registrar was not satisfied that the
applicant company had itself the necessary intention to use
the marks applied For. All the marks sought to be registered
related to novels written by the late Ian Fleming. Thirty-
nine of the said applications related to marks ‘James Bond
Secret Agent’ and ‘007 Secret Agent’, James Bond being the
hero of those novels and ‘007’ being his official code
number. The remaining seven applications were in respect of
the mark ‘PUSSY GALORE’. Pussy Galore was a character
featuring in Ian Fleming’s novel ‘Godfinger’, being a female
with Jew’
331
unorthodox morals and a name which would appear to be an
obscene pun in very questionable taste. The Registrar heard
one of the said applications which related to the trade mark
‘PUSSY GALORE’. The other relevant facts appear in the
decision of the Registrar. The relevant passage is as
follows (at page 266) :
” The mark in suit and the others to which I have
referred all contain references either directly or
indirectly to the well-known fictional character
James Bond and Mr. Bevan explained that the
applicant company were closely connected with the
devisor of that character, the late Mr. Ian
Fleming and that his widow has some interest in
the company. Mr. Bevan further explained that at
the time the various applications were filed the
applicants did not propose to use the mark
themselves but were filed of the intention to seek
others who would put the mark to use either as
registered users or as licensees. The application
was not however accompanied by application to
register users as specified in section 29(1)(b).
Mr. Bevan stated that it was a convenient
commercial practice to operate through registered
users but the latter might not be agreeable so to
act Until the mark was registered. He submitted
that the requirements of the Act as to intention
to use are satisfied in these conditions.”
The Registrar took the view that the English Act of 1938
required that, to qualify as an applicant, the proprietor of
the mark must either possess the intention to use the mark
himself at the time of application or have applied under the
conditions of clause (a) or clause (b) of section 25(1). The
Registrar accordingly refused the application. The applicant
appealed to the Board of Trade and the appeal was heard by
G.W. Tookey, Esq., Q.C., who dismissed the appeal’. The
relevant passages from the judgment of the Board of Irade
are as follows (at pages 269 and 27C) :
” Having carefully considered the relevant
sections of the Act, I conclude that the
Registrar’s decision is right. In My view, section
17 has the limited meaning attributed to it by the
Registrar. There is no difficulty about the case
of servants and agents, because although various
executive acts may be performed by them on behalf
of their principal who is the applicant for the
Dark, the use of the mark
332
vis-a-vis the public is by the applicant and no
one else. As regards registered users, when
section 17 was framed by the legislature, the
effect of the introduction into trade mark law for
the first time of registered user provisions must
have been borne in mind. It would be obvious from
the provisions of section 28, and also from the
definition of ‘trade mark’ in section 68, that
actual use of a trade mark might be exclusively by
a registered user and not by the proprietor at all
I agree with the Registrar that section 28 is
dealing with matters which arise after
registration, and has no such bearing upon the
interpretation of section 17 and 29 as the
applicants have contended. As above indicated, my
view is that section 29 state the only case in
which an intended use, ex hypothesi not a use by
the applicant, can be regarded as justifying
dispensation from the requirements of section 17.
What happens after registration calls for
different consideration both as regards the use of
marks in accordance with the provision of the Act
and as regards the consequences of use otherwise
than in accordance with the provision of that
Act.”
In our opinion, the High Court was unduly impressed by
this case and unnecessarily attached great importance to it.
The High Court justified its reliance upon that case by
referring to the following passage from the judgment of this
Court in The Registrar of Trade Marks v. Ashok chandra
Rakhit Ltd. [1955] 2 S.C.R. 252. (at pages 259-60) :
“As the law of Trade Marks adopted in our Act
merely reproduces the English Law with only slight
modifications, a reference to the judicial
decisions on the corresponding section of the
English Act is apposite and must be helpful.”
What the High Court overlooked was that in Ashok Chandra
Rakhit’s Case the section of the 1940 Act which fell for
interpretation was in Pari materia with the corresponding
section of the English Act of 1938 which has been judicially
interpreted by the court in England. As pointed out by this
Court in Forasal v. Oil d Natural Gas Commission [1984] 1
S.C.R. 526, 549, 567; s.c. (1984) Supp. S.C.C. 263, 280,
295, in the absence of any binding
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authority of an Indian Court on a particular point of law,
English decisions in which judgments were delivered by
judges held in high repute can be referred to as they are
decisions of courts of a country from which Indian
Jurisprudence and a large part of our law is derived, for
they are authorities of high persuasive value to which the
court may legitimately turn. for assistance; but whether the
rule laid down in any of these cases can be applied by our
courts must, however, be judged in the context of our own
laws and legal procedure and the practical realities of
litigation in our country.
The relevant provisions relating to registered users in
the English Act and in the 1958 Act are materially
different. The English Act creates two legal fictions. The
first is contained in section 28(2) which relates to the
permitted use of a trade mark. That fiction 18 for the
purpose of section 26 (which corresponds to section 46 of
the 1958 Act) and for any other purpose for which such use
18 material under the English Act or at common law. The
second is contained in section 29(2) and relates to
intention on the part of an applicant for registration that
a trade mark should be used by him. The second fiction is
for the purposes of paragraph (a) of section 26(1) which
corresponds to clause (a) of section 46(1) of the 1958 Act.
The 1958 Act, however, contains only one fiction. It 18 in
section 48(2), which is in pari materia with section 28(2)
of the English Act. In our opinion, the omission from the
1958 Act of a provision similar to that contained in section
29(2) of the English Act toes not make any difference if one
were to see the said section 29(2) in its proper setting and
context. The English Act does not prescribe, just as the
1958 Act does not, any period of time from the date of
registration of a trade mark within which an application for
registering a person as a registered user of that trade mark
should be made. Section 29(1) of the English Act, however,
provides that an application for registration of a trade
mark can be accompanied by an application for the
registration of a person as a registered user of that trade
mark, and if the tribunal is satisfied that the proprietor
of the trade mark intends lt to be used by that person in
relation to those goods and is also satisfied that person
will be registered as a registered user thereof after the
registration of the trade mark, lt will not refuse to
register the trade mark. The effect of section 29(1),
therefore, is that an application for registering a person
as a registered user can be made simultaneously with the
application for registering the trade mark and if both are
found to be satisfactory, the application for registration
would be granted and
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immediately thereafter the registration of the registered
user would be allowed. In such a case, the intention on the
part of the applicant for registration that the trade mark
should be used by the registered user thereof is to be
deemed to be an intention to use that trade mark by the
application for registration. This is a special provision
applicable to a special case. The fiction created by section
29(2) is also made applicable to the case of a corporation
about to be constituted to which the applicant intends to
assign the trade mark. There is no such fiction relating to
intention expressly provided in the 1958 Act, or is there
any provision for simultaneously making an application for
registration of a trade mark and an application for
registering a person as the registered user of the trade
mark. It appears to us that the purpose for wh ch fiction
was created by section 29(2) with respect to a registered
user was to eliminate all possibility of trafficking in a
trade mark by a person getting himself registered as the
proprietor of a trade mark and thereafter going in search of
some person who will use it as the registered user thereof.
Assuming that the existence of the special fiction created
by section 29(2) cuts down the full operation of the general
fiction enacted in section 28(2), it does not follow that
the absence of such special fiction in the 1958 Act will
also cut down the operation of the fiction in section 48(2)
in the same way by limiting it to the actual use of a trade
mark only. As pointed out earlier, in the 1958 Act wherever
the phrase “used by him” occurs the fiction will apply. In
other words, the permitted use of a trade mark is, by the
fiction enacted in section 48(2), equated with “use by the
registered proprietor”. Consequently wherever the word “use”
occurs with all its permutations and commutations as for
instance in phrases such as “proposed to be used by him” or
‘intended to be used by him”, the fiction will apply. At
this stage, it is pertinent to note that form No. TM-2,
which is the form prescribed for an application for
registration of a trade mark prescribed by the English Trade
Marks Rules, 1938, was substituted in 1982 and under the
substituted Form a new column is provided which requires
details of an application under section 29(1) to be given.
The old Form No. TM-2 did not contain this requirement nor
does form TM-l appended to the Trade and Merchandise Marks
Rules, 1959.
There is another vital point of distinction between the
provisions of the English. Act and those of the 1958 Act
relating to registered users. Under the 1958 Act, an
application for registration of a trade mark as also an
application for
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registering a registered user are to be made to the
Registrar and it is the Registrar who has to grant both of
them. The Registrar would refuse the application if it
appears to him that the grant thereof would tend to
facilitate trafficking in a trade mark. This question is to
be considered by the Registrar himself. The provisions of
the 1958 Act were the same but the provisions or the 1958
Act are radically different. Under the 1958 . Act, though
both the application for registration of a trade mark and
the application for registration of a registered user are to
be made to the Registrar, the Registrar has the power to
grant the application for registration of the trade mark
only. So far as the application for registering a person as
a registered user is concerned, he has to forward it
together with his report to the Central Government and it is
for the Central Government to decide whether to permit such
application to be granted or not. In order to decide this,
the Central Government has to take into account the matters
set out in sub-section (3) of section 49 and in rule 85 of
the Trade Marks Rules, 1959. The matters to be considered by
the Central Government include not only whether the
permitted use, if allowed, would amount to trafficking in
trade marks but also the interests of the general public and
the development of any industry, trade or commerce in India.
After the Central Government has taken its decision, the
Registrar is to dispose of the application in accordance
With the directions issued by the Central Government. Thus,
while under the English Act the authority to decide an
application for registering a registered user is the same as
the authority for registering a trade mark, under the 1958
Act they are different and so are the considerations which
are to be taken into account-
Under the 1958 Act an application for registering a
registered user can only be made after a trade mark is
registered. If an intended use by a person who will be
registered user is not to be included in the legal fiction
created by section 48(2) it would make that fiction operate
within a very narrow compass and almost render the
provisions relating to registered users meaningless. It is
in very rare circumstances that a person will get a trade
mark registered as proposed to be used By himself, use to no
relation to the concerned goods, and thereafter permit it to
be used by another as a registered user. It is also not open
to everyone who want to register a trade mark to form a
company to which after the trade mark is registered and the
proposed company is incorporated, the trade mark will be
assigned. These things are not practical realities and
Parliament could not have intended such absurd results. The
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argument of Dr. Gauri Shankar that the Appellant should have
got the trade mark registered with the intention that it
will itself use the trade mark and in order to effectuate
that intention the Appellant should have set up a factory
and manufactured and marketed the tablets ‘DRISTAN’ and then
either assigned the trade mark to the Indian Company or to
get the Indian Company registered as the registered user of
that trade mark is illogical. By reason of our foreign
exchange and industrial policies it is not possible for a
foreign company to establish its own industry in India. It
can only do 80 by entering into a collaboration with Indian
entrepreneurs in which the foreign company would not be
permitted to have more than 40 per cent shareholding and
would be subject to other restrictions. Even assuming that a
foreign proprietor of a trade mark were to be established an
industry of his own in India, it would be absurd to imagine
that it would thereafter cease manufacturing the goods and
allow someone else to do 80. Equally illogical is the
argument of Dr. Dr. Gauri Shankar that the Appellant ant the
Indian Company should have jointly applied for registration
of the trade mark ‘DRISTAN’. The Appellant was already in
collaboration with the Indian Company. There was no need for
it to seek other collaborators to establish a new company.
To assign the trade mark to the Indian Company or to make
jointly with the Indian Company an application for
registration of the trade mark ‘DRISTAN’ would be to destroy
the appellant’s proprietorship in that trade mark. It is
well-known principle of interpretation of statutes that a
construction should not be put upon a statutory provision
which would lead to manifest absurdity or futility, palpable
injustice, or absurd inconvenience or anomaly. (see: M.
Pentiah and Ors. v. Muddala Veeramallappa and Ors. [1961]
S.C.R. 295, 303. The Division Bench of the Calcutta High
Court saw the absurdity, inconvenience and hardship
resulting from the construction which was placed by it upon
section 48(2), as is shown by the passages from its judgment
reproduced earlier. It, however, forget the above principle
of construction and failed to give to the legal fiction
enacted by section 48(2) its full force and effect.
The ‘PUSSY GALORE’ Trade Mark Case was a decision of
the Board of Trade and not of any English Court. As against
that case, we have the decision of the High Court of
Australia in Aston v. Harlee Manufacturing Company, (1959-
60) 103 C.L.R. 391, on which Fullagar, J., held (at pages
402-3) :
“I would only add that the ‘registered user’
provisions of the Trade Marks Act were introduced
in
337
1948, and an intention to take advantage of those
provisions would, in my opinion, be a sufficient
‘intention to use’.”
So far as the ‘BOSTITCH’ Trade Mark Case relied upon by
the Registrar is concerned, it has no relevance to the
question which we have to decide. It turned upon its own
facts and what was held in that case was that the provisions
of section 28 of the English Act are not mandatory but
permissive.
The high Court also took the assistance of the
Shavaksha Committee Report and the Ayyangar Report to enable
it to place the construction which it did upon section
48(2). When it was intended to revise the 1940 Act, the
Government of India set up in 1953 that Trade Marks enquiry
Committee under the Chairmanship of Mr. K.S. Shavaksha, the
then, Registrar of Irade Marks. The Report of the Shavaksha
Committee was made in 1954. The Government thereafter
appointed Mr. Alagiriswami, who had acted as the Secretary
of the Committee, as Special Officer to consider L the
Shavaksha Committee Report, and he made his own
recommendations. The Government, therefore, felt that the
Shavaksha Committee Report and the recommendations made by
the Special Officer should be further examined by a judicial
authority and it accordingly appointed Mr. Justice
Rajagopala Ayyangar to examine the matter. Both the learned
Single Judge and the Division Bench were of the opinion that
the recommendation made in the Ayyangar Report were accepted
by the Government. This is, however, not correct. The
Shavaksha Committee had recommended the insertion of a
provision similar to clause (b) of section 29(1) of the
English Act in section 36 of the 1940 Act which corresponds
to section 45 of the 1958 Act. The Ayyangar Report did not
accept this recommendation but had recommended the addition
of a provision to the effect that a registered proprietor
should not be entitled to permit use by registered user
unless such proprietor had used the mark in relation to
goods in the course of trade for a period of at least two
years before the date of the application for registration of
a registered user. Parliament did not accept the
recommendation made in either of these Reports. These
Reports, therefore, cannot be referred to for ascertaining
the intention of Parliament when enacting the relevant
provisions of the 1958 Act.
From what we have said above, we must not be understood
to mean that a person, who does not intend to use a trade
mark himself can get it registered and when faced with an
application
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under clause (a) of section 46(1) to have that trade mark
removed, turn round and say that he intended to use it
through some person who was proposed to be got registered as
a registered user. This would clearly amount to trafficking
in a trade mark. ‘PUSSY GALORE’ Trade Mark Case could easily
have been decided on the ground that the applications for
registration made therein, if granted, would amount to
trafficking in trade marks. This has been pointed out in
Halsbury’s Laws of England, Fourth Edition, Volume 48, in
footnote 6 to paragraph 30 at page 25.
In our opinion, to enable the proprietor of a trade
mark who has got it registered on the ground that he intends
to use the trade mark to avail himself of the fiction
created by section 48(2), he must have had in mind at the
date of his application for registration some person to whom
he intends to allow the use of the trade mark as a
registered user. This would eliminate all chances of
trafficking in a trade mark. If an applicant for
registration did not have at the date of his application for
registration a particular registered user in view, he cannot
be said to have had a bona fide intention to use the trade
mark and in such an event he cannot resist ar. application
made under clause (a) of section 46(1) of the 1958 Act.
Turning now to the present Appeal, the facts on the
record show that only when it was decided to introduce
‘DRISTAN’ tablets in the Indian market through the Indian
Company that the Appellant made its application to register
the trade mark ‘DRISTAN’. There was a close connection in
the course of trade between the Appellant and the Indian
Company. The Appellant owned 40 per cent of the shareholding
in the Indian Company. It had entered into a technical
collaboration agreement with the Indian Company which
provided for strict quality control and for formulae and
services to be provided by the Appellant. The manufacture,
marketing and advertising of all products under the said
agreement were to be under the control of the Appellant.
There was no royalty payable by the Indian Company to the
Appellant in respect of the use of the trade mark ‘DRISTAN’.
In the event of the collaboration agreement being terminated
by reason of the happening of any of the events mentioned in
the said agreement, amongst which events was the
shareholding of the Appellant becoming less than 40 per
cent, the Indian Company was to cease to be entitled to
manufacture the tablets ‘DRISTAN’ or to use its formula or
to use the trade mark ‘DRISTAN’. There was here, therefore,
no question of any trafficking in a trade mark. In these
circumstances, the intention of the Appellant to use the
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trade mark ‘DRISTAN’ through the Indian Company which was
subsequently to get itself registered as the registered user
of the said trade mark cannot but be characterized as bona
fide.
Mr. Nariman, learned Counsel for the Appellant, also
urged that in addition to having a bona fide intention to
use the trade mark ‘DRISTAN’, the Appellant had also used it
within a period of one month before the date of the
Application for Rectification. For this purpose, learned
Counsel relied upon the samples sent by the Appellant to the
Indian Company. In the view which we have taken that the two
conditions of clause (a) of section 46(1) are cumulative and
that the first condition has not been satisfied in this
case, we find it unnecessary to consider this point.
It was also submitted by Dr. Gauri Shankar, learned
Counsel for the First Respondent that the Appellant was not
entitled to retain the trade mark ‘DRISTAN’ on the register
because it had obtained its registration by making a false
statement in its application for registration inasmuch as it
had not stated in the said application that the said trade
mark was proposed to be used by a registered user but
instead stated that it was to be used by the Appellant who
claimed to be the proprietor thereof. This point was not
raised at any time before the Registrar or the High Court
and it is not open to the First Respondent to take this E
point for the first time in this Appeal by certificate.
Apart from that, there is no substance in this point. Form
TM-l appended to the Trade and Merchandise Marks Rules,
1959, does not contain any column similar to the column in
the new Form No. TM-2 appended to the English Trade Marks
Rules, 1938. The relevant portion of Form TM-l is as follows
:
” Application is hereby made for registration in
Part A(a)/B of the register of the accompanying
trade mark in class (b) …. in respect of (c)
…. in the name(s) of (d)…… whose address is
(e) ……… who claim(s) to be the proprietor(s)
thereof (and by whom the said mark is proposed to
be used) (f) or (and by whom and his (their)
predecessor(s) in title (g) the said mark has been
continuously used since ….. 19….. ) in respect
of the said goods(h).”
The Appellant, therefore, cannot be said to have practised
any deception in stating in its application that it intended
to use
340
the trade mark itself. In our opinion, it would be better if
the Central Government were to amend Form TM-l to require
the applicant to state whether he proposes to use the trade
mark himself or through a registered proprietor and if so,
to state the particulars of the proposed registered user.
It was next sought to be argued by Dr. Gauri Shankar
that the trade mark ‘DRISTAN’ was deceptively and
confusingly similar to the trade mark ‘BISTAN’ of which the
registered proprietor is M/s. Prof. Gajjar’s Standard
Chemical Works Ltd. This is not one of the questions upon
which the certificate was granted by the High Court and it
is not open to the First Respondent to take this point in
this Appeal. In any event, this point too is without any
substance. It was rejected by the Registrar. The learned
single Judge did not deal with it. Though the Division Bench
was of the opinion that it was not necessary to decide that
question, it recorded the facts relating thereto which would
justify the rejection of that contention. These facts are
that though the proprietor of the said trade mark ‘BISTAN’
had made an affidavit supporting the First Respondent in the
proceedings for rectification of the Register it had not
either opposed the registration of the trade mark ‘DRISTAN’
nor had it at any time alleged, apart from the said
affidavits that there would be any confusion or deception by
the use of the trade mark ‘DRISTAN’.
In the written submissions filed by the First
Respondent after the hearing before us was concluded it was
contended that the Court’s discretion should be exercised
against the trade mark ‘DRISTAN’ remaining on the Register
inasmuch as to allow it so to continue would be contrary to
the policy of the Central Government with respect to brand
names belonging to foreign companies and also because two of
the ingredients used in the formula for the manufacture of
‘DRISTAN’ tablets were banned by the authorities. In support
of this contention copies of some circulars and
notifications were filed along with the written submissions.
This point was not at any time taken before the Registrar or
the High Court nor does the certificate granted by the High
court cover it. It is not fair to produce copies of any
circular or notification along with written submissions
after oral arguments have closed because the other side has
no opportunity to meet this case. For ought we know, after
some ingredients in the composition of the ‘DRISTAN’ tablets
were banned, the manufacturers may have changed the formula.
We are not concerned in this Appeal with this question. The
application for registering the Indian Company as the
registered user of the
341
said trade mark is still pending and when the Central
Government comes to consider that application, it will
decide the matter for itself. After all, the best guardian
of the policy of the Central Government is the Central
Government itself and not a private limited company, namely,
Mac Laboratories Private Limited, the First Respondent
before us, which has a vital interest in having the trade
mark ‘DRISTAN’ removed from the Register.
For the reasons given above, this Appeal must succeed
and is allowed and the judgment of the Division Bench of the
Calcutta High court appealed against is reversed and the
order passed by it is set aside. Consequently, Appeal No.
165 of 1968 filed by the Appellant before the Division Bench
of the Calcutta High Court is allowed with costs and the
judgment of the learned Single Judge of that High Court and
the order passed by him are reversed and set aside. As a
result Appeal No. 61 of 1965 filed by the First Respondent
before the learned Single Judge of the Calcutta High Court
is dismissed with costs and the order of the Registrar of
Trade Marks, Calcutta, dismissing the First Respondent’s
Application for Rectification No. CAL-17 with costs is
confirmed.
The First Respondent will pay to the Appellant the
costs of this Appeal.
A.P.J. Appeal allowed.
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