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An estimated 16-minute read

MAINTAINABILITY OF SUIT FOR INFRINGEMENT AND PASSING OFF AGAINST REGISTERED TRADE MARK HOLDER

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Introduction

Under the Indian Trade Mark Law, once a person attains registration for its trademark for a particular good or service, he thereby has the exclusive right to use that trademark in relation to the said good or service[1].

The right that has been created by Section 28(1) in favour of registered owner/proprietor is not an absolute right and is acquiescent to other provisions of the Trade Marks Act, 1999[2] (hereinafter referred to as the “Act”).

As per Section 27(2) of the Act, an action for passing off by an anterior user of a trade mark against a registered user of the same is maintainable and neither Section 28 nor any other provision of the Act bars the same. In other words, registration of a trade mark is no defence to the proceedings for passing off as under Section 27(2) of the Act. Therefore under the Act, a prior user of a mark can maintain an action for passing off against any subsequent user of an identical mark or nearly resembling mark, including a registered owner[3].

There may be cases wherein there are two registered owners of identical/nearly similar marks, and in that case the exclusive right of the registered trade mark holders to the use of any of those marks shall not operate against each other. The said reasoning stems from Section 28(3) read with Section 30(2) (e) of Act.

A. Suit for Passing off against Registered Trade Mark under Section 27(2)

As per Section 27(2) of the Act, no man is entitled to represent his goods or business of another whether such representation is made by the use of any mark, name, sign, symbol, device or other means.[4]

As per Section 27(2) of the Act, action of passing off is a common law remedy and registration of the trade mark is not relevant as under the action of passing off, utmost weightage is given to the user who has adopted the mark earlier in time, irrespective of registration of the mark.

In a suit for passing off, a mark claiming prior use is given the benefit over a later user or prior registrant due to former’s earlier existence in the market. This principle has been upheld in various cases of passing off in India. In the case of Consolidated Foods Corporation v. Brandon and Co., Private Ltd[5], it was observed that “Priority in adoption and use of a trade mark is superior to priority in registration”.

CASE LAWS ON PASSING OFF

1.1 N.R. Dongre and Ors. Vs.Whirlpool Corporation and Anr[6]

In the instant case, the Hon’ble Supreme Court of India confirmed with the observation of the Division Bench which states that “From the aforesaid facts including the extensive advertisements of the goods of the first respondent & its trade mark 'WHIRLPOOL' and the legal position adumbrated hitherto we are prima facie of the opinion that the trade mark 'WHIRLPOOL' has acquired reputation and goodwill in this country and the same has become associated in the minds of the public or potential buyers with the goods of the first respondent. Even advertisement of trade mark without existence of goods in the market is also to be considered as use of the trade mark. It is also not necessary however that the association of the plaintiff's marks with his goods should be known all over the country or to every person in the area where it is known best.”

The Hon’ble Supreme Court of India observed that “The concept and principle on which passing off action is grounded is that a man is not to sell his own goods under the pretence that they are the goods of another man. A trader needs protection of his right of prior user of a trade mark as the benefit of the name and reputation earned by him cannot be taken advantage of by another trader by copying the mark and getting it registered before he could get the same registered in his favour. We see no reason why a registered owner of a trade mark should be allowed to deceive purchasers into the belief that they are getting the goods of another while they would be buying the goods of the former which they never intended to do. In an action for passing off if should not matter whether misrepresentation or deception has proceeded from a registered or an unregistered user of a trade mark. He cannot represent his own goods as the goods of some body else.”

1.2 Century Traders Vs. Roshan Lal Duggar Co.[7]

The High Court of Delhi in the instant case held that “Further, that in order to succeed in an application for temporary injunction the appellant had to establish user of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action for passing off and the mere presence of the mark in the register maintained by the trade mark registry did not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trade marks.”

1.3 L.D. Malhotra Industries Vs. Ropi Industries[8]

The High Court of Delhi observed that prior use of a distinctive mark will acquire the right of property without considering extent of such use, “That a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly, the article having assumed a vendible character is launched upon the marker. Registration under the statute does not confer any new right to the mark claimed or any greater rights than what already existed at common law and at equity without registration.

 

B. Suit for Infringement against Registered Trade Mark

According to Section 28(1) of the Act, the registration of a trade mark ensures exclusive right to the registered proprietor to use of the registered trade mark and the right to obtain relief in respect of infringement of the trade mark. Only a registered proprietor or registered user can institute a suit for infringement against an identical or deceptively similar mark to his registered trade mark according to Section 27(1).

A Registered trade mark owner does not have an exclusive right to operate the identical/ nearly similar mark against another registered trade mark owner.

However, prior to the landmark Judgment Clinique Laboratories LLC and Anr vs Gufic Limited and Anr[9] it was opined that under Sections 28(3), 30(1) (b)[10], 31[11] and 33[12] of the Act, a proprietor of a registered mark cannot file or initiate infringement action against another registered proprietor of an identical or similar mark. However, registered user had exclusive right in relation to goods against third persons in respect of which it had been registered.

In the landmark judgment Clinique Laboratories LLC and Anr vs Gufic Limited and Anr, the court held that a suit for infringement by a registered trade mark owner/proprietor is certainly maintainable against another registered trade mark owner/proprietor. It was further held that Section 124(5)[13] of the Act also allows the grant of an interim injunction in such suits for infringement. The view of the Hon’ble Court can be summed up from the following case laws -

1.1 Clinique Laboratories LLC and Anr vs Gufic Limited and Anr

Court, in the instant case, observed that Sections 28(3), 29 & 30(2) (e) cannot be read in isolation. As stated by the court, Section 31 makes registration of a trademark as only prima-facie evidence of validity thereof while giving the right for rectification before the Registrar. Therefore, intention of the legislature was not that there could be no action for infringement against the registered proprietor. Because if the intention was that as long as the registration exists it is valid, without any question of prima-facie or not, the courts would have had to wait for the outcome of the rectification proceedings.

Reference was made to the judgment in Singer Company Limited & Anr. Versus Ms. Chetan Machine Tools & Ors.[14] where it has been held on a prima facie view that a suit by a registered proprietor of a trade mark against another registered proprietor of the same trade mark cannot be refused to be entertained at the threshold - such a suit can lie but may have to be stayed pending adjudication of the defence raised by the defendant. However, in this judgment no final opinion was expressed on this issue and in any case the question of interim relief to be granted was not discussed.

1.2 Abbott Healthcare Pvt. Ltd. Vs. Respondent: Raj Kumar Prasad & Ors[15]

The question raised in the said case was whether the Court can entertain the present suit in view of Section 28(3) read with Section 30(2) (e) of the Act. With respect to the above question, It was stated by the court that, ‘This Court has already held that a suit for such an injunction would lie where the two trade marks are registered and Sections 28(3) and 30(2) (e) do not bar filing of a suit. Reference may be had to the judgment of Clinique Laboratories LLC and Anr. vs. Gufic Limited and Anr.(supra) where in para 14 this Court concluded as follows:-

14. I thus conclude that a suit for infringement of registered trade mark is maintainable against another registered proprietor of identical or similar trade mark and in such suit, while staying the further proceedings pending decision of the registrar on rectification, an interim order including of injunction restraining the use of the registered trade mark by the defendant can be made by the court, if the court is prima facie convinced of invalidity of registration of the defendant's mark.’

Court also relied on the judgment Rajnish Aggarwal & Ors. vs. M/s. Anantam[16], where this Court in paragraphs 21 to 22 held as follows,

21. Following the above-quoted observation, the learned single judge, as far as this issue was concerned, held as under: 14. I thus conclude that a suit for infringement of registered trade mark is maintainable against another registered proprietor of identical or similar trade mark and in such suit, while staying the further proceedings pending decision of the registrar on rectification, an interim order including of injunction restraining the use of the registered trade mark by the defendant can be made by the court, if the court is prima facie convinced of invalidity of registration of the defendant's mark.

22. In view of the finding given in the earlier paras above and the case law referred, I hereby hold that a suit for infringement is maintainable in the present case and that this court has got jurisdiction as per the averment made in the plaint.

The question whether Section 28(3) of the Act bars the Plaintiff from suing defendant no. 1 for infringement, since both are the registered proprietors of identical marks was also answered in the paragraph 17 of the very recent case of Dabur India Ltd. Vs. Real Drinks Pvt. Ltd. and Anr[17].

The Delhi High Court observed that,

17. In the first place, it must be noted that under Section 28 read with Section 31 of the TM Act, the protection to a mark is conditional upon its validity. Thus it becomes clear that the grant of registration is only a prima facie proof of its validity and the court has the power to examine the question of validity of registration of a mark in an infringement suit, if the registration of the trade mark was fraudulent, ex facie totally illegal or shocks the conscience of the court.

 

C. Infringement suit when identical/similar trade marks are registered with respect to different goods/services

As per Section 29 (4) of the Act, infringement suit can be filed even when the goods/services with respect to which identical/similar trade marks are used are entirely different, if the trade mark for which the suit is filed has acquired reputation and goodwill in India.

In the case of Ceat Tyres of India Ltd. vs. Jai Industrial Services and Anr[18], the court observed that “The trade mark 'CEAT' has achieved lot of reputation and has become very common and the plaintiff has been marketing goods under the said trade mark running into substantial amounts and had incurred lot of expenditure on having wide publicity. So even though for the sake of arguments it is to be assumed that the goods manufactured by the defendants have no trade connection with the good marketed by the plaintiffs, still the common customer who is purchasing the goods is likely to be deceived with the new products of the defendants in all probabilities considering the same as manufactured by the plaintiff because they are being marketed under the same trade mark”.

The absolute identical of the two competing marks or their close resemblance is only one of the tests for determining the question of likelihood of deception or confusion. It was emphasized that the trade connection between the different goods is another such test. Ex hypothesis, this latter test applies only when the' goods are different and these tests are independent tests. The Supreme Court observed that there is no reason why the test of trade connection between different goods should not apply. The Court assumed that liquid glucose is used in the manufacture of biscuits with glucose and held that there is a trade connection between the glucose and biscuits and a likelihood of confusion or deception arising there from would appear from the fact stated by the appellant that it received from a tradesman an inquiry for biscuits manufactured by it under its mark 'Glucovita'. The Supreme Court came to the conclusion that thee commodities concerned in the present case are so connected as to make confusion or deception likely. This judgment applies to the facts of the present case. Here also the tyres being manufactured by the plaintiff are from rubber or synthetic rubber and so also the fan belts and 'V' belts being manufactured by the defendants and thus, prima facie a trade connection is established in respect of these goods and an ordinary customer is likely to be confused or deceived while buying the goods manufactured by the defendant thinking that the said goods are in fact manufactured by the plaintiff.

Irrespective of the above, it depends upon the circumstances and facts of the case. It is at the discretion of the court to decide whether the facts of a particular case make it suitable for passing of injunction.

Conclusion

Form the above discussion, it can be concluded that a registered mark maybe challenged on the basis of law of passing off by an unregistered trade mark proprietor under Section 27(2) of the Act.

Further, the protection to a mark is conditional upon its validity. A suit for infringement by a registered trade mark owner is maintainable against another registered trade mark owner, as long as the validity of the defendant’s trade mark registration has been challenged either prior to the institution of the suit, or such a challenge has been raised in the plaint by the plaintiff who is also a registered trade mark owner. It is also clear that the grant of registration is only a prima facie proof of validity and the court has the power to examine the question of validity of registration of a mark in an infringement suit, if the registration of the trade mark was fraudulent, ex facie totally illegal or shocks the conscience of the court.


[1] Section 28(1) - Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act.

[2] Section 28 (3) - Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.

Section 30(2)(e)-the use of a registered trade mark, being one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.

[3] Section 27 (2) - Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof.

[4] B.K.Engineering v UBHI Enterprises AIR 1985 Del 210 (DB)

[5] AIR1965Bom35

[6] 1996V I A D(SC)710

[7] AIR1978Delhi250

[8] (1976)ILR 1Delhi278

[9] 2009(41)PTC41(Del)

[10] 30. Nothing in section 29 shall be construed as preventing the use of a registered trade mark by any person for the purposes of identifying goods or services as those of the proprietor provided the use—

(b) is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark.

[11] 31. Registration to be prima facie evidence of validity.—

(1) In all legal proceedings relating to a trade mark registered under this Act (including applications under section 57), the original registration of the trade mark and of all subsequent assignments and transmissions of the trade mark shall be prima facie evidence of the validity thereof.

(2) In all legal proceedings as aforesaid a registered trade mark shall not be held to be invalid on the ground that it was not a registrable trade mark under section 9 except upon evidence of distinctiveness and that such evidence was not submitted to the Registrar before registration, if it is proved that the trade mark had been so used by the registered proprietor or his predecessor in title as to have become distinctive at the date of registration.

[12] 33. Effect of acquiescence.—

(1) Where the proprietor of an earlier trade mark has acquiesced for a continuous period of five years in the use of a registered trade mark, being aware of that use, he shall no longer be entitled on the basis of that earlier trade mark—

(a) to apply for a declaration that the registration of the later trade mark is invalid, or

(b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used, unless the registration of the later trade mark was not applied in good faith.

(2) Where sub-section (1) applies, the proprietor of the later trade mark is not entitled to oppose the use of the earlier trade mark, or as the case may be, the exploitation of the earlier right, notwithstanding that the earlier trade mark may no longer be invoked against his later trade mark.

[13] 124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc.

(5) The stay of a suit for the infringement of a trade mark under this section shall not preclude the court from making any interlocutory order (including any order granting an injunction directing account to be kept, appointing a receiver or attaching any property), during the period of the stay of the suit.

[14] (2009) 159 DLT 135

[15] 2014(58) PTC225 (Del)

[16] 2010(43) PTC442 (Del)

[17] (2014(57) PTC213 (Del)

[18] 1991(1)ARBLR33(Delhi)

 

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