M/S. Neon Laboratories Limited vs M/S. Medical Technologies Ltd

] ... Plaintiffs

Vs 1. M/s. Medical Technologies Ltd. ]

Sapath II, 803, Gandhinagar Highway, ] Opp.Rajpath Club, Ahmedabad-300006 ]

2. M/s. Claris Lifesciences Ltd., ] Corporate Tower, Nr. Parimal Crossing ]

Ellibridge, Ahmedabad - 380006. ] ... Defendants

Mr. Virag Tulzapurkar, senior counsel with Mr. Amit Jamsandekar and Mr. Sunil M. Nair i/b Sunil M. Nair for the Plaintiff.

Mr. Janak Dwarkadas, senior counsel with Mr. Vinod Bhagat, Mr. Aditya Thakkar, Mr.Dhiren Karania and Mr. Jatin Trivedi i/b G.S. Hegde & V.A. Bhagat for the Defendants.

CORAM : S.J. VAZIFDAR, J.

SATURDAY, 31ST MARCH, 2012

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ORAL JUDGMENT :

1. This is an action for infringement and passing off.

2. The plaintiff is the registered proprietor of the mark "ROFOL".

The plaintiff claims to be the proprietor of the mark "PROFOL". Its

application made on 14th August, 1995, for registration of the mark

"PROFOL" is pending.

The defendant also claims to be the proprietor of the mark

"PROFOL".

As a result of the orders passed by the City Civil Court at

Ahmedabad and the Gujarat High Court in a suit filed by the

respondent on the basis that it is the proprietor of the mark

"PROFOL", the plaintiff is restrained from using the mark "ROFOL".

3. This interlocutory application is, therefore, restricted to the

claim for infringement of the plaintiff's registered mark "ROFOL" by

the defendant's use of the mark "PROFOL". The application, in as far

as it relates to passing off must await a modification, if any, of the

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orders of the Gujarat High Court and the City Civil Court at

Ahmedabad and in so far as it is based on the trade mark "PROFOL"

it must await the result of the plaintiff's application for the registration

thereof.

4. It is common ground that the impugned mark "PROFOL" is

deceptively similar to the plaintiffs registered mark "ROFOL". This,

indeed, is the basis of the respondent's suit filed in the City Civil Court

at Ahmedabad and this suit.

FACTS :

5. On 19th October, 1992, the plaintiff applied for registration of its

mark "ROFOL" under class 5. The application was made on the basis

of its proposed use of the mark. On 14 th August, 1995, the defendants

applied for registration of the mark "PROFOL" under class 5 also on

the basis of its proposed use of the mark. The defendants started using

the impugned mark "PROFOL" from April, 1998. The plaintiffs

started using the mark "ROFOL" from about 16th October, 2004, i.e.

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after the plaintiff's mark was registered. On 14 th September, 2001, the

plaintiffs application for registration of the mark "ROFOL" was

allowed. The registration of the plaintiffs mark is, however, as of the

date of the application i.e. 19 th October, 1992. On 13th October, 2006,

the plaintiff filed an opposition to the defendants application for

registration of the impugned mark, which is pending.

6. Mr. Dwarkadas opposed the Notice of Motion on the following

grounds:-

I. The action for infringement is not

maintainable although the plaintiff's mark was

registered prior to the defendant's use of the

impugned mark as the plaintiff used its mark only

after the defendant's used the impugned mark.

II. The injunction ought to be refused in view

of the interim order passed by the City Civil Court

at Ahmedabad and the order of the Gujarat High

Court confirming the same.

III. The grant of an injunction would render the

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marks sterile .

IV. The plaintiff had not applied for registration

of its mark with the bona-fide intention of using it

at the time of making the application or soon

thereafter, but solely with the view of trafficking

in it.

7. Mr. Dwarkadas submitted that the defendants use of the

impugned mark being prior to the use by the plaintiff of its registered

mark, the plaintiff is not entitled to maintain successfully, an action for

infringement. According to him, the plaintiff's mark having been

registered with effect from a date prior to the defendant's use of the

impugned mark does not entitle the plaintiff to an injunction against

infringement.

8. The main question, therefore, is whether the plaintiff is, by

virtue of it's mark having being registered prior to the impugned mark

being used by the defendant, entitled to an injunction against

infringement although it used it's mark after the defendants started

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using the impugned mark.

9. The following facts are important in relation to this question.

- 19th October, 1992 - The plaintiff's application for registration of

the mark "ROFOL" under class 5. This application, though

allowed on 14th September, 2001, relates to the date of the

application for registration viz. 19th October, 1992.

- April 1998 - The defendants commenced use of the impugned

mark "PROFOL".

- 14th September, 2001 - The plaintiffs application for registration of

their mark "ROFOL" was allowed.

16th October, 2004 - The plaintiffs started using the mark

-

"ROFOL".

10. The question is decided in favour of the plaintiffs in several

judgments of this Court which are binding on me. In Drums Food

International Private Limited v. Euro Ice Cream & Anr. 2011 (10)

LJSOFT 111 = 2011 (4) Bom.C.R., 691, and in Merck Kga & Anr. v.

Natro Pharma Limited & Anr., dated 9 th October, 2011, in Notice of

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Motion No.182 of 2010 in Suit No.16 of 2010. I decided this very

question against the defendant on authority and on principle. I dealt

with the question in considerable detail in the first judgment and

followed it in the second judgment.

11. I have not accepted Mr. Dwarkadas' submission that the

judgments are per incuriam. Nor have I been persuaded to take a

different view even if it was open for me to do so. In fact, after

hearing Mr. Dwarkadas, I am even more firmly of the opinion that a

view to the contrary would virtually erode one of the most important

aspects of the Trade Marks Act, 1999, viz. the purpose and benefit of

registration of trade marks.

12. I would normally have left it at that, as the question is covered

by authority and as I think that the answer to it is quite simple and

obvious. However, as Mr. Dwarkadas submitted that the judgments of

this Court and of the Madras High Court are per incuriam, as he

attempted to persuade me, albeit on nothing more than illustrations to

take another view and in view of the interim orders of the Gujarat

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High Court in the defendant's suit, I will go through the otherwise

unnecessary exercise of repeating most of what I said in those

judgments.

13. Sections 18(1), 23(1) and 34 of the Act read as under :-

"18. 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 registration of his trade mark.

23. Registration.-(1) Subject to the provisions of section 19, when an application for registration of a

trade mark has been accepted and either -

(a) the application has not been opposed and the time for notice of the opposition has expired, or

(b) the application has been opposed and the

opposition has been decided in favour of the applicant,

the Registrar shall, unless the Central Government otherwise directs, register the said trade mark within eighteen months of the filing of the application and

the trade mark when registered shall be registered as of the date of the making of the said application and that date shall, subject to the provisions of section 154, be deemed to be the date of registration.

34. Saving for vested rights. - Nothing in this Act

shall entitle the proprietor or a registered user of registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods or services in relation to which that person or a predecessor in

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title of his has continuously used that trade mark from a date prior -

(a) to the use of the first-mentioned trade mark in relation to those goods or services be the proprietor or a predecessor in title of his; or

(b) to the date of registration of the first-

mentioned trade mark in respect of those goods or services in the name of the proprietor of a

predecessor in title of his, whichever is the earlier, and the Registrar shall not refuse (on such use being proved) to register the second mentioned trade mark by reason only of the registration of the first- mentioned trade mark."

14.

In Williams Ltd. v. Massey Ltd. (1911) 28 RPC 512, the plaintiff

applied for registration of a mark on 21st October, 1910. Upto that

time, the defendants had not used the mark in connection with the

class of business under which registration was sought. It was held :-

"I am not sure - the point is a new one - that user within Section 41 means user by the sale of a single piece, or of a very few pieces of goods,

with the Trade Mark on. I am not at all sure that the Section means that; I am inclined to think that under section 41 substantial user is meant, and that there must be something like substantial user. But, supposing, as

Mr.Rutherford was bound to put it, that the sale of halfpenny piece of toffee, before the Plaintiffs had sold any at all, is sufficient, then I am not sure that that sale must not be a sale preceding the date on which the registration takes effect -

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that is to say preceding the date of the Application, because under the Act of 1905 the registration, when the Certificate is granted,

relates back to the date of the Application. If I am wrong in that point of view it gives rise to a very extraordinary state of things. Under the Act

of 1905 registration may precede user. User is not necessary to obtain registration of a mark under the Act of 1905. You can register a new mark and you get rights which the old Acts did

not give you. You get proprietary rights, and not merely a block in the way of litigation; you get, under the Act of 1905, rights which you had not before. I think that user in Section 41 must mean user prior to the Application. If it does

not mean that, then it must bring about this extraordinary state of things. A man applied on

the 1st of January for registration, and he does not get the Certificate of Registration untill the 31st of March. . Then if "user" for the purposes

of Section 41 means user at any time after the Application, user on the 2nd of April by another will prevent the registered proprietor from attacking him if the registered proprietor has

not in fact used it before the 2nd of April. It seems to me that is not the meaning of the Act of

Parliament."

I am entirely in agreement with the above observations. They

apply under our Act as well as is clear from a plain reading of section

34.

15(A) The case in Mohan Goldwater Breweries (Private)

Limited v. Khoday Distilleries Private Limited & Anr., 1977 IPLR 83

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(Madras) was of two appeals under section 102 of the 1958 Act

against the order of the Assistant Registrar of Trademarks rejecting the

appellant's opposition to the respondents application for registration of

its mark. The respondents had filed applications for registration on

10th November, 1969. The appellant filed a notice of opposition

contending that it had adopted a similar trademark since June, 1970;

that they had not used the mark and that a mere intention to use the

same was not sufficient to confer a proprietary right in the mark on the

respondent. The learned Judge held that under section 18 even a

person who intends to use a trademark can apply for registration and

that, therefore, the actual user of the mark is not necessary for

acquisition of a proprietary right in a trademark and an intention to use

and register the trademark is sufficient.

Following the judgment in Jellinek's application (1946) 63

R.P.C. 59 at p. 78, and Ciba Ltd. v. M. Ramalingam A.I.R. 1958

Bombay 58 at p.61, it was held that for the purpose of registration of a

trade mark the rights of the parties have to be usually determined as

on the date of the application. This view was also taken by a Division

Bench of this Court in Sunder Parmanand vs. Caltex (India) Ltd., AIR

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1969 Bom. 24 (paragraph 34).

The learned Judge at page 92 posed the following question and

answered the same as under :-

"The question then is, as between the applicants who have proposed to use the mark and have sought registration of the same in November, 1960 and the appellants who have chosen, to use the mark

subsequent to the date of such application for registration, who has got a preferential right to use or the proprietary interest in the trade mark. .............................

Since the applicant's entitlement to registration of a trade mark has to be decided with reference to the

facts as on the date of the application for registration, the evidence of user by the opponents subsequent to the said date cannot be relevant and will not entitle

them to put forward the plea of user in answer to the earlier application for registration."

(B) I am entirely in agreement with the judgment that the

applicant's entitlement to registration of a trade mark has to be

decided with reference to the facts as on the date of the application for

registration and that the evidence of user by the opponents subsequent

to the said date cannot be relevant and will not entitle them to put

forward the plea of user in answer to the earlier application for

registration.

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16. The question was considered by a learned single Judge of this

Court in Sun Pharmaceutical Industries Limited v. CIPLA Limited,

(2007) 109 BLR. That was a passing off action where the plaintiff

contended that as it had used the mark before the defendant had used

its mark, it was entitled to an injunction although the defendant's mark

was registered prior to the plaintiff's use of its mark. Thus the rights

of the plaintiff and the defendant were converse to the rights of a

plaintiff and a defendant in an infringement action. In other words,

the plaintiffs and the defendants rights in the present case correspond

to the defendants and the plaintiff's rights respectively in that case.

The learned Judge noted the submissions and held as under :-

"10. Dr.Tulzapurkar, the learned counsel for the plaintiff submitted that the plaintiff is entitled to an injunction against passing off only on the ground that their user on 1.12.2000 is prior to the defendant's user in July 2006.

According to the plaintiff, in such a case of passing off, the defendant's registration with effect from 26.2.1998, though prior to the plaintiff's user, is liable to be ignored, since the only right which registration confers is to

prevent another person from infringing the trade mark, particularly since the registration was not accompanied by use. The learned counsel for the plaintiff relied on Section 27 of the Trade Marks Act and several decisions in support of

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his case. It may be noted, however, that in none of the cases relied on by the plaintiff, an injunction was granted on the basis of a prior

user against the defendant whose registration was prior to such user.

.............

16. There is substance in the argument of Mr. Ravi Kadam, Advocate General, that it is necessary to examine with care the circumstances in which the plaintiff adopted

their mark. This is clearly necessary since it would otherwise be very easy for a trader to copy a mark pending registration, start using the mark and claim a priority on the basis of the user and even further obtain an injunction

restraining the defendant who had earlier applied for the registration of the mark, but who

happens to start using it later after registration is obtained."

The learned Judge dealt with the authorities cited on behalf of

the plaintiff and distinguished them, inter-alia, on the ground that in

those cases the adoption was not found to be honest. Apart from being

bound by, I am in respectful agreement with the judgment.

17. A learned single Judge of this Court held in Kamat Hotels

(India) Limited Vs.Royal Orchid Hotels Limited and Another 2011 (6)

LJSOFT 19 = 2011 (4) Mah L J 71 as under:-

"14. Section 34 carves out an exception and creates an overriding provision which within the sphere of its

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operation prevents a proprietor or registered user of a registered trade mark from interfering with the use of an identical trade mark or a mark which nearly

resembles the registered mark. Section 34 in consequence provides for a defeasance of the statutory entitlement which flows from the

registration of a trade mark. Before such a consequence ensues the conditions which Parliament has enacted must be fulfilled. The most fundamental requirement is four fold. ............................................

Fourthly, the mark in respect of which protection is sought must have been used from a date prior to the use of the registered trade mark or the date of registration of the registered trade mark whichever is earlier. Hence, as an illustration, if the user by the

Plaintiff is prior to registration, then the use by the Defendant must be established to be prior to the use

by the Plaintiff. If the Plaintiff has not used the mark prior to the date of registration, the use by the Defendant has to be prior to the date of registration

of the Plaintiff's mark. ................................................. ......................................" [emphasis supplied]

18(A) In Drums Food (supra) the position of the parties was

reversed as in that case the plaintiff sought a declaration that the cease

and desist notice issued by the defendant was an unjustified and

groundless threat and that the use of the mark by the plaintiff did not

constitute an infringement of the defendant's trademark. As that was

a case under section 124 of the Trade Marks Act, 1999, the rights of

the plaintiff and the defendant were converse to the rights of a plaintiff

and a defendant in an infringement action. In other words, the

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plaintiffs and the defendants rights in the present case correspond to

the defendants and the plaintiff's rights respectively in that case.

(B) The defendant's mark was registered with effect from 29 th

November, 2001, whereas the plaintiff started using the mark in

November, 2007. The same question, therefore, arose for

consideration viz. whether the plaintiff was entitled to an injunction

against the defendant despite the fact that it admittedly started using

the mark only after the date of the registration of the defendant's mark.

It was submitted that the plaintiff was entitled to an injunction

against passing off as it had used the mark before the defendant did

and that the mere registration of a mark made no difference if the

same was not actually used by the proprietor. As in this case, the

submission was sought to be supported by relying upon section 27 of

the Act. Referring to sections 18 and 34 and relying upon the

judgments in Sun Pharmaceutical Industries Ltd. Vs. CIPLA Ltd.

(2007) 109 BLR 445, Williams Ltd. v. Massey Ltd. (1911) 28 RPC 512

and Mohan Goldwater Distilleries Pvt. Ltd. v. Khoday Distilleries Pvt.

Ltd. & anr. 1977 IPLR 83 (Madras), I held :-

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"8. The right to have a mark registered is not dependent upon the actual use of the mark at the time of registration. Section 18(1) reads :-

...........................................

9. To hold that a registered mark does not take precedence over the use of the mark after the date of the application for registration would render section 18(1) otiose. The Act encourages proprietors to have their

marks registered. If the plaintiff's case is upheld, it would not only be contrary to, but destroy the object of the Act as it would positively discourage registration of trade marks.

10. To uphold the plaintiff's case would cause havoc and virtually erode the rights of the proprietors of

trademarks. There is always a time-lag between an application for registration of a mark and the order registering the same. Applications for registration are in

public domain. They are advertised. If Mr. Tulzapurkar's submission is upheld, upon an application for registration being made and advertised, it would be possible for any person to use it immediately, thereby

rendering the valuable rights of the registered proprietor in respect of the mark nugatory even before the mark is

registered. This would render an essential and substantial part of the Act redundant."

12. Section 34 of the Act reads as under:-

........................................................ If I am right in the view I have taken, the expression "date of registration" in section 34(b) must mean the date of the application for registration for that is the date to which the registration, when

granted, will relate. A view to the contrary would lead to an extremely peculiar situation. The date on which a mark is considered to be registered must be the same for infringement or for a passing off action. It would otherwise lead to conflicting orders in

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actions for infringement on the one hand and passing off actions on the other, which could never have been the intention of the Legislature.

13. If the defendants were to file an action for infringement in such circumstances, they would be

entitled to succeed, despite the plaintiff's user of the mark subsequent to the defendants registration of the mark. In other words, section 34 would not come to the plaintiff's aid if an action were brought by the

defendants for infringement against them. Whether the plaintiffs would succeed on any other ground is another matter altogether."

After referring to the judgment of the Madras High Court in Mohan

Goldwater Breweries Pvt. Ltd. (supra), in Drums Food I held :

"15. I am in respectful agreement with the above

observation. While considering the plaintiff's action for passing off vis-a-vis a registered trade mark also, the relevant date must be the date of the application for registration and not the date on which the

registration is actually obtained. I have already indicated the dangers in accepting a view to the

contrary. Absent any other factors such as deceit or abandonment on the part of the defendants, the use by the plaintiff of the mark after the date of the application for registration cannot sustain an action

for passing off against a registered trade mark.

In the circumstances, it must be held that absent anything else, the use of a trade mark after an application for registration by another of a similar mark cannot affect an action for infringement by the latter or support a passing off action by the former."

19. An identical submission was raised on behalf of the defendant

in Merck Kga & Anr. v. Natro Pharma Limited & Anr., dated 9 th

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October, 2011, in Notice of Motion No.182 of 2010 in Suit No.16 of

2010.

The facts were similar. The registration of the plaintiff's mark

was with effect from 24th July, 1997, whereas the defendant used the

impugned mark with effect from the year 2003. It was contended on

behalf of the defendant that as they had used the mark from the year

2003 prior to the plaintiff's use of their mark which was from January,

2009, the action for infringement could not succeed despite the fact

that the plaintiff's mark was registered prior thereto viz. on 24 th July,

1997. Relying upon my earlier judgment in Drums Food, I rejected

the contention and granted the injunction against infringement. While

considering the submission, I distinguished the judgment in

Consolidated Foods Corporation v. Brandon & Co. Pvt. Ltd., AIR

1965 Bom., 35.

20. Mr. Dwarkadas did not deny that these judgments directly deal

with his submission before me and that his submission is contrary to

these judgments. Indeed, the submission is contrary to the decisions

of this Court, of the Madras High Court and of the English Courts.

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Mr. Dwarkadas, however, submitted that all the judgments in

are per incuriam in view of the judgment in Consolidated Foods. In

Merck Kga, I had expressly dealt with the judgment in Consolidated

Foods and distinguished the same. In view thereof, the judgments

cannot be said to be per incuriam.

21. Mr. Dwarkadas then submitted that the judgments are per

incuriam in view of the judgment of the Supreme Court in Milmat

Oftho Industries v. Allergan Inc., (2004) 12 SCC 624.

That was an action for passing off in which the question neither

fell for consideration of nor was decided by the Supreme Court. It is

in the context of a passing off action alone that the Supreme Court

held that multinational corporations which have no intention of

coming to India or introducing their products in India should not be

allowed to throttle an Indian company by not permitting it to sell their

products in India if the Indian company has genuinely adopted the

mark and developed the product "and is first in the market. Thus, the

ultimate test should be who is first in the market." Neither the

plaintiff's nor the defendant's marks were registered in that case. The

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question, therefore, of the effect of the registration of a mark by one

being prior to the use of the impugned mark by another did not even

arise in that case. The judgments of this Court and of the Madras

High Court, therefore, cannot be said to be per incuriam on the ground

that the judgment of the Supreme Court was not noticed in those

cases.

22. If the judgments in Drums Food, Merck Kga and Sum

Pharmaceuticals are not per incuriam, Mr. Dwarkadas' submission

must be rejected on authority.

23. I will now deal with Mr. Dwarkadas' attempt to persuade me to

take a contrary view.

24. Mr. Dwarkadas submitted that the only way in which a mark

can be protected is by actually using it. Otherwise, it would be unfair

to a defendant who, during the pendency of the registration

proceedings, develops a huge reputation in respect of the mark before

the plaintiff's mark is actually registered. His rhetoric question is :

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"What happens to the poor person who, during the period between the

application for registration and the actual registration of the mark,

spends a large amount of money, time and other resources in

developing the mark?"

25. "Poor person?" I find it difficult to confer the appellation

"poor" upon an infringer be he negligent or dishonest. Mr. Dwarkadas

was understandably unable to answer the obvious response : "Why

must this "poor person" adopt another's trade mark"?

26. I have little hesitation in coming to the conclusion that the

defendants adoption of the impugned mark was dishonest. The

defendants explanation for adopting the mark is less than convincing.

In paragraph 4 of the affidavit in reply, it is averred that the defendants

or their predecessor in April, 1998, introduced the molecule propofol

in India. Thus, it is not as if the defendants discovered the molecule.

The molecule was known throughout the world. By the time the

defendants allegedly introduced the molecule to India, the plaintiff

had already applied for registration of its mark. If the defendants had

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taken a search of the register, they would have come to know of the

plaintiff's mark. Their adoption despite the same would then be

dishonest. If they took no search, their adoption would be negligent.

Either way then, they must suffer an injunction. A Division Bench of

this Court in Bal Pharma Ltd. v. Centaur Laboratories Pvt. Ltd. &

Anr. 2002 (24) PTC 226, held :-

"9. Then we turn to the question of delay and acquiescence. Mr. Tulzapurkar, learned Counsel appearing

for the Respondent cites the judgment of the Supreme Court in Power Control Appliances and Others v. Sumeet Machines

Pvt. Ltd., 1994 (2) SCC 448 wherein the Supreme Court approvingly referred to the judgment of the Appeal Court in England in Electrolux LC v. Electrix and quoted a passage

therefrom in paragraph 34 of its judgment. Our attention was also drawn to the judgment in Electrolux itself. Reference to the judgment in Electrolux shows that there is no hard and fast rule that delay per se would defeat an application for

interlocutory injunction. The judgment indicates that in a situation where the defendant to an action has been using the

mark, even if concurrently, without making himself aware of the fact as to whether the same mark is the subject-matter of the registration and belongs to another person, the first person cannot be heard to complain for he has been using it negligently inasmuch as he has not take the elementary

precaution of making himself aware by looking at the public record of Registrar as to whether the mark in question is the property of another. If, however, he had taken search and, knowing full well that the mark was the property of another person, continues to use the mark, then he runs the risk of a

registered proprietor challenging his action for infringement and merely because it is done at a subsequent stage, he cannot be heard to complain on the ground of delay. Further discussion in the judgment shows that in order to deny an interlocutory injunction, the delay must be such as to have

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induced the defendant or at least to have lulled him into a false sense of security to continue to use the trade mark in the belief that he was the monarch of all he surveyed. In our

judgment, such are not the circumstances here. We are not satisfied from the record that a search was taken of the registry by the Appellant to assure itself that there was no

other person who owned the mark 'MICRODINE". Assuming that the search was taken, and the Appellant has done it consciously, then the Appellant has to thank itself for having gambled by investing large amounts in a risky venture.

Either way, we do not think that the defence can succeed, at this stage, at least."

The suggestion that this judgment is of no value for it was

rendered in an appeal against an ad-interim order requires merely to be

stated to be rejected. This judgment has been followed consistently by

this Court at the final hearing of several Notices of Motion, including

in Merck Kga.

27. To accept Mr. Dwarkadas' submission would, in fact, penalize a

proprietor who is not responsible for the delay in the mark going on

the register after the application for registration. Indeed, if Mr.

Dwarkadas' submission is accepted, even if the Registrar grants the

registration within a few days, the entire effect and the benefits of

registration conferred by the Act would be rendered nugatory. A

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vigilant infringer could then pick up the mark the moment the

application is made, put it to use and then contend, even if the

registration is granted within only a few days, that it is of no effect as

he put the mark to use before the registered proprietor did. This would

defeat the right to seek registration under section 18 without first using

the mark. The illustration in the passage from Williams Ltd. v. Masey

Ltd. quoted earlier is of the mark going on the register within a short

period of only three months of the application viz. from 1 st of January

to 31st of March.

28. Faced with this, Mr. Dwarkadas invited me to consider the

position of a person who uses a mark which is purely descriptive and

can never be registered. He submitted that there is no reason why a

person ought not to use such a mark merely because an application for

registration is made by another.

29. This submission is equally unfounded. It is true that a mere

application for registration does not prohibit the use of the mark by

another. I am not concerned with whether a quia timet action would

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lie or not by the applicant for registration. Statutes cannot be

interpreted on the basis of such illustrations. Valuable statutory rights

cannot be denied even if there was any substance in the illustration,

which I find there is not. The person who is to use a mark in respect

whereof an application for registration is made by another, must assess

for himself whether the mark is capable of being registered or not. He

must take the risk of an incorrect assessment. If, after following the

entire legal procedure, the Registrar comes to the conclusion that the

mark is entitled to be registered and that decision attains finality, a

defendant cannot possibly be heard to say either that the decision is

wrong or that there was a bona-fide difference in perception between

the Registrar and himself. To entertain such a submission would be

most dangerous to the law of trademarks and to the rights of the

registered proprietors of trademarks. It would throw, and I mean just

that, registered trade marks into the realm of uncertainty.

30. These submissions miss an important point. Proprietors expend

enormous resources, monetary and otherwise, in developing

trademarks. For instance, market research is conducted at considerable

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expense before creating and adopting a trademark in respect of

products and services to which they are to be applied. To accept any

of Mr. Dwarkadas' submissions would keep the field open to infringers

who would have the benefit of adopting and using trademarks

developed by another at considerable expense without any effort on

their part and without their incurring any expenses themselves.

31. Lastly, Mr. Dwarkadas relied upon the judgment of a learned

single Judge of this Court in Cluett Peabody & Co. Inc. v. Arrow

Apparals 1998 PTC 18 in support of his submission that priority in

use of a mark would prevail over a prior registration of the mark. Mr.

Dwarkadas, however, emphasized certain parts of the judgment in

support of this contention.

32. I had, in fact, in Drums Food, negated a similar submission.

Apart from being bound by the earlier view, I am in any event, unable

to accept his submission. I find that the judgment has been totally

misconstrued. As there is often a misplaced reliance upon this

judgment, I find it necessary to deal with in detail.

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33. Mr. Dwarkadas submitted that paragraph 27 in particular

supported his submission.

(A) It is important to note that the last sentence in paragraph 31

expressly states that the entire order is based only on the facts of the

case.

(B) That was also an action for infringement. In that case, the

plaintiff had obtained registration of the mark in the year 1955. The

defendant started using its mark in December, 1985 and applied for

registration thereof on 11th January, 1991. On 6th December, 1993, the

defendant sought rectification of the register in respect of the

plaintiff's mark. The plaintiff thereafter assigned its mark and entered

into user agreements in respect thereof. On 8 th November, 1983, the

defendant served the cease and desist notice upon the plaintiff. The

plaintiff filed the suit for infringement thereafter on 25th April, 1994.

On these facts, the learned Judge came to a finding of fact that

the defendant had used the mark from 1985 "to the knowledge of the

World at large and without any interruptions". This would obviously

also be a reference to the plaintiff in that case. The learned Judge,

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therefore, came to a finding of fact that the plaintiff's mark had

become a source of monopoly, which is not the object of the Act. The

learned Judge also came to a finding of fact that the plaintiff's mark

had lost its distinctiveness, had dropped out of use and was allowed to

die for non-user. The injunction was, therefore, refused.

(C) It is in this backdrop that paragraph 27, which was so strongly

relied upon by Mr. Dwarkadas, must be read. Paragraph 27 reads as

follows :-

"27. Now before going into facts, the following principles emerge under the Trade Marks Act which are required to be noted :

(a) An application for injunction is an infringement action based on Trade Marks. It is an application in

support of the right to property.

(b) Trade Marks is a property. A mark which is used in the course of trade to indicate a connection between the goods and the proprietor of the mark is a

Trade Mark (See Trade Marks by Shavaksha, Page

14). It is not a property in pervasive sense. It is property in the sense that proprietor is entitled to exclusive use of it or to prevent others from using it in relation to goods in respect of which it is registered or

used. It must be adopted and used to distinguish the goods of the proprietor from goods of others. The mark must be distinctive. It must show the source or the goods to the customer. Words like, 'Best', ' Superior ', etc. are not distinctive of the goods. They

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are only descriptive and hence cannot constitute trade mark. The vendor who sells his goods under a trade mark acquires a limited right to the use of the mark.

(c) An infringement action is based on invasion of the statutory right. The issues which arise in this action

are whether the plaintiff is a proprietor of the Trade Mark and whether the defendant's mark is identical or similar to trade mark of the plaintiff. In an infringement action the question of deception or confusion will not arise.

(d) In an infringement action, defendant is restrained from using the infringed mark whereas in passing off defendant is restrained from using the mark in such a way so as to pass off his goods as that of the plaintiff.

(e) The abovementioned limited exclusive right to the

use of the mark is acquired by use. It is recognized as property. A person can also acquire it by registration (See Para 1.01 of Narayanan). The proprietor of the mark gets a perpetual right to the exclusive use of it

in respect of particular goods in respect of which it is registered or used (See Para 1.02 of Narayanan).

Therefore, it can be acquired in three ways viz., Registration, User and Assignment.

(f) Object of the Act is to protect the right and not to be a source of monopoly. It is also to protect bona

fide interests of traders from harassment by registered owners of a trade mark, apart from protection of public fraud, by infringers of genuine trade mark.

(g) Registration enables the registered proprietor to sue for infringement of registered trade mark irrespective of the fact whether it is used or not used. Registration confers on the proprietor a monopoly right over the use of the mark. But, proprietary rights in a trade mark acquired by use are superior to rights

obtained by registration under the Act. This is the main defence put up on behalf of the defendants in this Notice of Motion. Therefore, prior user of the marks should be protected against monopoly rights conferred by the Act. (Pages 5 & 6 of Narayanan). A

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trade mark has no meaning even if it is registered unless it is used in relation to goods. Otherwise, its non-use may lead to its death. A trade mark which

drops out of the use dies. Where there are no goods offered for sale, there is no use of trade mark.

(h) Use of the trade mark does not mean user by affixing the word on the goods. It could be in the form of advertisements in Magazines, T.V. etc. It would be with regard to goods exported out of India . With advancement of technology and globalization after

1991, use of trade mark can take place in different ways. But, this case essentially concerns the period 1985-1990. Property in trade mark can be acquired by public use of it.

(i) The test as to "who gets it there first" is not applicable in cases where registration is sought under

Section 18 (Page 26 of Narayanan).

(j) The mark can loose its distinctiveness by non-user, (Para 26 of Narayanan). Therefore, the enforcement

of the Right of exclusive use of a trade mark will depend on continuous use of the mark by the proprietor. If he fails, piracy will result and the mark will become common to the trade because there is no

exclusive ownership of the symbol constituting a trade mark apart from the use of it in respect of vendible

goods, particularly in context of principles governing them. Acquisition of proprietary right is different from enforcement or rights/reliefs.

(k) Courts shall not protect this right of a proprietor

unless there is sale of the articles to which trade mark is attached or related to (Para 28 of Narayanan). Without use of the mark, the proprietor cannot restrain others from use of it on similar goods (Page 29 of Narayanan).

(l) An infringement action is a suit on trade mark and not on reputation. The defendant (infringer) who copies the mark cannot plead as a defence particularly because the defendant is dishonest as he has copied the mark. But, priority in use cannot be

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dishonest and, therefore, the defendant who has prima facie evidence of priority in use, could plead delay as a strong defence. This principle is in context of

defence to infringement action, particularly in context of this Notice of Motion."

34. None of the observations in paragraph 27 or any other part of

the judgment support the contention that the use of a mark by a party

subsequent to the registration of the plaintiff's mark disentitles the

plaintiff to maintain an action for infringement. The question, in fact,

neither arose for nor was considered in that case. The judgment, if

anything, is to the contrary. The error in Mr. Dwarkadas' approach

was in plucking out stray sentences and reading them in isolation.

(i) It is important to note that in paragraph 27(i), the learned Judge

expressly held that the test as to who gets there first is not applicable

in cases where registration is sought under section 18. Section 18(1)

of the 1958 Act is similar to section 18(1) of the 1999 Act. The

judgments of this Court are, in fact, to the same effect. This is in

conformity with section 34 of the 1999 Act as well.

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(ii) Paragraph 27(g) also militates against Mr. Dwarkadas'

submission. The very first sentence is to the effect that the registered

proprietor is entitled to sue for infringement "irrespective of the fact

whether it is used or not used".

(a) The third sentence in paragraph 27(g) : "But, proprietary rights

in a trademark acquired by use are superior to rights obtained by

registration under the Act" must be read in the context of the entire

paragraph. So read, it does not support the submission that the use of

a mark by the defendant after registration of the plaintiff's mark would

disentitle the plaintiff to maintain the action for infringement

successfully. The first sentence refers to the rights of a "registered

proprietor." The second sentence refers to registration conferring

rights upon the proprietor. It is obvious that the reference in the third

sentence is to such "proprietary rights" viz. rights of a proprietor of a

registered mark. The third sentence, therefore, is to the effect that the

proprietary rights of a registered trade mark acquired by use are

superior to rights obtained by registration alone. A view to the

contrary would render the various observations in paragraph 27 itself

to be contradictory to each other. The injunction was refused not

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because the defendants use of the mark was prior to the plaintiff's use

of the mark, but because the Court came to the conclusion that the

plaintiffs conduct had led to the mark loosing its distinctiveness,

dropping out of its use and dying for non-user.

(b) The sentence in paragraph 27(g): "Therefore, prior use of the

marks should be protected against monopoly rights conferred by the

Act" obviously refers to user prior to the registration of the mark. The

sentence is from paragraph 1.08(c) at pages 5 and 6 of the fourth

edition of Narayanan's work as stated in paragraph 27(g) itself. [The

learned Judge obviously referred to the fourth edition of Trade Marks

and Passing off by P. Narayanan published in the year 1991 as the

judgment was delivered on 24th October, 1997 and the fifth edition

was published in the year 2000.] The opening part of paragraph 1.08

and sub-paragraph (c) which makes this clear, read as under :-

"1.08 Basic principles of trade mark law. - The purpose of the Act, as stated in the preamble, is to provide for the registration and better protection of trade marks and to prevent the use of fraudulent marks on merchandise. In consonance with this

object the following fundamental principles of trade mark law are embodied in the various provisions of the Act:

...............

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(c) Property rights in a trade mark acquired by use are superior to similar rights obtained by registration under the Act. This is clear from the

preamble which refers to "better protection of trade marks", thereby necessarily implying the existence and availability of some protection under common

law. It, therefore, follows that prior users of trade marks should should be protected against any monopoly rights granted under the Statute. This principle is enacted in s.33." [emphasis supplied]

Section 33 of the 1958 Act corresponds to section 34 of the

present Act, which protects the proprietor of the impugned mark only

if he has used it prior to the use by the proprietor of the registered

mark and prior to the registration of the mark.

(iii) The doubt, if any, is set at rest by paragraphs 27(i) of the

judgment which expressly states that the test as to who gets there first

is not applicable in cases where registration is sought under section

18. As stated in paragraph 27(i), the statement is taken from page 26

of Narayanan's fourth edition. A reading of the entire paragraph from

which it is taken establishes what I have stated beyond any doubt.

The paragraph reads as under :-

"But it has been observed that the principle will not apply to cases of registration of trade marks under s. 18 which permits a person claiming proprietary

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interest and proposing to use the mark to apply for registration without actually using the same. If the principle of `who enters the field first' is adopted for

the purpose of registration, then s. 18 enabling a person proposing to use a trade mark to apply for registration will be meaningless, as any person using

that mark subsequently can easily defeat the earlier application for such registration. This principle is also not applicable where the mark is descriptive of the goods or otherwise not prima facie distinctive of

the goods." [emphasis supplied]

(iv) Paragraph 27 (k) of the judgment obviously refers to a passing

off action. Paragraph 27(k) of the judgment refers to page 28 of

Narayanan. (The reference to paragraph 28 appears to be a

typographical error.) The statement has obviously been taken from

paragraph 3.12 at page 28 of Narayanan. From a reading of the

paragraph itself it is clear that the discussion is in relation to an

unregistered mark. The commentary states that no protection can be

given where there has been no sale or offering for sale of the articles

to which the trademark is to be attached. It is further stated that

advertisement of the mark alone, not followed up by marketing of the

actual goods bearing the mark will not confer upon the person any

right of property in the trademark. It is clear from the words

"advertisement of the mark alone" that the reference is to an

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unregistered mark in respect whereof the application for registration

has been advertised or where the mark has been advertised in any

other manner. There is no reference to a registered mark in the

paragraph.

(v) Paragraph 27(l) is, in fact, entirely against the defendants. It is

stated therein that an infringer who copies the plaintiff's mark cannot

plead delay. The third sentence in paragraph 27(l) is also of no

assistance to the defendants. I will presume that the words "priority in

use" in the third sentence actually read "priority in registration". It

would make no difference. I will even assume that the Court is

entitled to consider whether the registration was dishonest. In the

facts of the present case, the same has not been established. In fact, a

submission to this effect has been expressly rejected by the order of

the IPAB which I will refer to shortly. Secondly, the defence of delay

referred to in the third sentence is not delay per se. It would be delay

of the nature discussed in the judgment viz. where the use by the

defendant was known to the world and where the plaintiff has allowed

by reason of non-user of the mark for a long period of time to loose its

distinctiveness or to let the mark drop out of its use in trade or the

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mark is allowed to die. These facts have not even been remotely

established in the present case as I will indicate later.

35. Mr. Dwarkadas' submission is, therefore, rejected. The

defendants having used the impugned mark after the plaintiff's mark

was registered, cannot succeed in this action for infringement.

36.

Mr. Dwarkadas, however, raised another point in the alternative.

He submitted that irrespective of the judgments of this Court and even

the correct position of law, the plaintiff is not entitled to an

interlocutory injunction against infringement in view of an interim

order passed by the City Civil Court, Ahmedabad and the Gujarat

High Court, restraining the plaintiff from using its registered mark.

The interim order, he submitted, impliedly held, albeit prima facie,

that the defendants are entitled to use the impugned mark by virtue of

their having used it prior to the use by the plaintiff of its registered

mark. He submitted, therefore, that although by virtue of the binding

judgments of this Court, which hold that the prior use by the

defendants of a mark would not entitle them to resist an action for

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infringement as the use was not prior to the registration of the

plaintiffs mark, this Court is barred from granting relief against

infringement, in view of the judgments in the proceedings filed by the

defendants in Gujarat.

37. The defendants had filed Civil Suit No.1244 of 2005 in the City

Civil Court at Ahmedabad. By an ad-interim order dated 22 nd July,

2005, the City Civil Court at Ahmedabad restrained the plaintiff from

manufacturing or marketing its products under its trademark

"ROFOL" and also restrained the plaintiff from committing an act of

passing off. By an order dated 17th October, 2005, the ad-interim

order was confirmed. The plaintiffs filed A.O. No.361 of 2005 in the

Gujarat High Court which was dismissed by an order and judgment

dated 19th December, 2005. The Gujarat High Court upheld the

order granting the injunction on the ground that the defendants used

the impugned mark prior to the plaintiff having used its mark. The

Gujarat High Court held that the plaintiffs mark having been

registered earlier made no difference.

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38. I am, with respect, unable to agree with the judgment of the

Gujarat High Court which is admittedly contrary to the judgments of

this Court. I will, however, presume as contended by Mr. Dwarkadas,

that even assuming that the judgment of the Gujarat High Court is

contrary to the judgments of this Court on the question of law, it

would make no difference and even in that event this Court ought not

to pass an order which would be contrary to the injunction granted by

the Gujarat High Court.

39. Mr. Tulzapurkar submitted that this Court, in any event, would

be entitled to consider this matter without reference to the order and

judgment of the Gujarat High Court in view of an order of the

Supreme Court dated 30th January, 2006 in an SLP filed by the

plaintiffs against the said order. The Supreme Court disposed of the

SLP with the following order :-

"No interim order except that the respondents shall maintain accounts.

Liberty to mention for early date of hearing. We make it clear that so far as the parties are concerned, whatever rights they have in law may be urged in proceedings pending before the other Courts."

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I will presume that the order of the Supreme Court does not

entitle this Court to ignore the legal effect, if any, of the order of the

Gujarat High Court and that if the effect of the order of the Gujarat

High Court otherwise entitles the defendants to resist the present

application they would be entitled to urge the same.

40.

There is indeed a conflict of opinion between the judgments of

this Court, the Madras High Court and the English Courts on the one

hand and the said order and judgment of the Gujarat High Court on

the other. This Court would undoubtedly consider the judgment of

any other Court with utmost respect, but it is not bound by the same. I

am certainly of the view not only that the plaintiff is entitled to an

injunction against infringement but that the plaintiff can never in this

case be restrained from using its registered trade mark. Despite the

same, it would not be permissible and, in any event, it certainly would

not be desirable for this Court to pass an injunction which would be in

conflict with the injunction granted by the Gujarat High Court. In

other words, it would not be permissible for this Court to pass an

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order permitting the plaintiff to use its mark for that would be contrary

to the order of the Gujarat High Court. However, granting the

plaintiff an injunction restraining the defendants from infringing its

registered trademark would not be contrary to the injunction granted

by the City Civil Court at Ahmedabad. There is a difference between

a conflicting judgment on a question of law and a conflicting order. A

court may be barred from or may in its discretion refrain from passing

an order which conflicts with the order of another court. That does

not, however, prevent the court from taking another view on law or

even on merits if it is not otherwise barred from doing so and passing

an order which does not conflict in its operation with the order of the

other court. A court is not barred from taking a conflicting view on a

question of law or on merits, except in certain circumstances such as

by reason of a binding judgment or res judicata or issue estoppel. The

order of the Ahmedabad City Civil Court and the Gujarat High Court

do not impose any such bar. Moreover, neither the judgment of the

City Civil Court at Ahmedabad, nor the Gujarat High Court even

considered the question whether the plaintiff is entitled, on the basis

of its mark being registered, to an injunction against infringement.

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41. The effect of the observation of the Gujarat High Court must

also be considered in the light of a subsequent development. The

defendants filed an application for rectification of the Register by the

removal of the plaintiffs mark. The application was heard finally and

rejected by the Intellectual Property Appellate Board (IPAB) by an

order dated 29th May, 2009. The defendants raised various contentions

in support of the application, including those raised by Mr.

Dwarkadas, which were expressly put in issue by the plaintiff. The

IPAB noted the plaintiffs response to each of these submissions, most

of which were also raised before me in this hearing. These issues

were decided finally by the IPAB.

42. I will refer to each of the relevant findings at the appropriate

place in this judgment. It is necessary to note, however, that in Indo-

Pharma Pharmaceutical Works Pvt. Ltd. v. Pharmaceutical Company

of India 1977 BLR 73, a learned single Judge of this Court followed

the judgment of the High Court of Mysore in K.R. Chinna Krishna

Setty v. Amball & Co. AIR 1973, Mysore 74, which held that the

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decision given in earlier proceedings between the same parties with

regard to registration of a trademark operated as res judicata in a

proceeding under section 105 for infringement. The Mysore High

Court held that the decision in the matter of trademark application and

the opposition thereto would govern the rights of the parties in the suit

for infringement. In other words, the principle was applied although

the earlier decision was not one in a suit and the same could not be

brought within the four corners of the Code of Civil Procedure.

43. In relation to the present point three contentions raised by the

defendants and the finding of the IPAB in respect thereto are relevant.

Firstly, in paragraph 13, the IPAB noted the defendants

contention that the plaintiff was not entitled to interfere with the

defendants use of the impugned mark as it had started using the same

before the plaintiff used its mark. This contention was sought to be

supported by relying upon section 34 of the Act.

Secondly, the defendants relied upon the action for passing off

filed by them in the City Civil Court, Ahmedabad being Civil Suit

No.1244 of 2005 and the interim orders passed therein, in the first

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instance, by the City Civil Court and thereafter by a learned single

Judge of the Gujarat High Court.

Thirdly, the defendants expressly contended that they were the

proprietors of the impugned mark. This contention is referred to in

various paragraphs of the judgment of the IPAB. For instance, in

paragraph 11, it is noted that the defendants contended that the

plaintiff had copied the defendants trademark "PROFOL" by simply

removing or deleting the letter "P". In paragraph 12, the IPAB noted

the defendants contention that the plaintiff had started using its mark

since October, 2004, which clearly showed that the plaintiff "could not

be called the proprietor of the trademark "ROFOL"." It was further

contended that the defendants had coined and adopted the impugned

mark in the year 1998, which had achieved distinctiveness and that the

coinage, adoption and use of the mark by the defendants satisfied the

requirements of section 18 of the Trade Marks Act, 1999.

44. In paragraph 16, the IPAB noted the plaintiffs contention that

the registration of its mark was prior to the use by the defendants of

the impugned mark; that the mark is deemed to have been registered

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on the date of the application for registration; that the plaintiff had, in

fact, applied for the registration of the mark with an intention to use it

and that the application for rectification, therefore, ought to be

dismissed. Paragraphs 17 and 18 of the order note the plaintiff's

assertion that it had adopted its mark honestly and independently

without reference to any third party's mark, that it is the first adopter,

coiner and proprietor of the marks "ROFOL" and "PROFOL" and that

it was the proprietor of the mark "ROFOL".

45. The defendants had, therefore, raised the issue of proprietorship

and asserted that they were the proprietors of the mark. The plaintiff,

on the other hand, denied that the defendants were the proprietor of

the mark and asserted its proprietorship of the marks.

46. I will assume that the question of proprietorship strictly

speaking does not arise in the present case which deals only with the

plaintiffs mark "ROFOL" and the defendants use of the impugned

mark "PROFOL". For the purpose of this order I will ignore the

plaintiffs application for registration of the mark "PROFOL" and its

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claim to proprietorship in respect thereof. I will assume that the

question of proprietorship of marks which are only deceptively similar

does not arise as the plaintiff is the proprietor of its registered mark

and the defendant is the proprietor of the impugned mark and that

merely because the impugned mark is deceptively similar to the

plaintiffs mark and is liable, therefore, to be injuncted from using it,

does not make the plaintiff the proprietor of the deceptively similar

mark. It makes no difference in this case. It is necessary to note,

however, that the defendants did contend that the plaintiff was not the

proprietor of the mark as it had not used the same whereas the

defendants had used the impugned mark. This contention was rejected

by the IPAB.

47. In paragraph 24 of the order, the IPAB posed the correct

question as to who is the prior and bona-fide adopter and user of the

mark. It was held as under :-

"25. We have already stated that the respondent No.1 (plaintiff) has adopted the impugned mark and got it registered much prior to the applicant (defendant). Hence, the allegation made by the applicant that the impugned mark dishonestly copied by the respondent

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No.1 by simply removing or deleting letter/word is unsustainable because of the reason that a prior adopter of mark in no way can copy a trade mark which was not

in existence at the material time. It is fallacious to presume that the respondent No.1 while adopting its mark ROFOL in 1992 might have foreseen or visualized

that the applicant would in 1998 adopts its trade mark PROFOL. We are inclined to agree with the learned counsel for the respondent No.1 that the adoption of mark by the applicant is not bona fide and honest as the

applicant has not stated that they caused a search to be made by the Registry of Trade Marks regarding availability of the mark for registry. If the applicant had got the search made they would have come to know that a conflicting mark is already on the register or pending

registration. They have knowingly that a conflicting mark is already there, adopted the Mark PROFOL,

hence the allegation of the applicant that the respondent No.1 has copied their mark by simply deleting the letter `P', the same recoils to the applicant. The ground of

dishonest adoption of mark by the respondent No.1 is unsustainable."

The issue of proprietorship, therefore, was squarely answered

by the IPAB at the final hearing of the rectification application in the

plaintiffs favour. Apart from my agreeing with the same, the finding

has its own effect upon the rights of the parties in the present interim

application.

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48. The matter relating to the rectification application did not end

there. The defendant filed a clarificatory application contending that

IPAB had not dealt with certain submissions made on behalf of the

defendants and had decided certain issues which had not been raised

before the IPAB. The defendants contended that the IPAB had not

dealt with the effect of the injunctive relief granted in its favour by the

City Civil Court, Ahmedabad and the Gujarat High Court.

49.

In paragraph 6 of the order, the IPAB held as under :

"6. We have heard both the parties carefully. We find that there is no substance in the contention of the applicant that the Appellate board has completely bypassed the vital issue that in view of the injunctive

relief granted in favour of the applicant holding that the use of the mark by the respondent No.1 amounts to

passing off, and that the respondent No.1 is not the true and rightful proprietor of the said trade mark and registration thereof is prohibitive of section 18 of the Act as the Board has not considered nor mentioned nor even

decided this issue."

Thus, the defendants once again expressly raised the issue of

proprietorship between the plaintiffs and themselves. The IPAB

rightly rejected the contention. What is important, however, is that the

issue of proprietorship was yet again raised by the defendants and was

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finally decided against it. The application was rejected by the IPAB.

50. The order of the Gujarat High Court was at an interim stage,

whereas the order of the IPAB finally decided the disputes between the

parties. As I noted earlier, the IPAB expressly held that the plaintiff

was the proprietor of its said mark and that it was not liable to be

removed from the Register. The issue between the parties in this

regard was, therefore, finally determined by a competent tribunal. In

that view of the matter, a finding to the contrary, as alleged by Mr.

Dwarkadas, regarding the proprietorship of the marks would not

prevent this Court from deciding the present Notice of Motion on the

basis of the decision of the IPAB on the issues finally decided by it,

including that the plaintiff is the proprietor of the mark.

The interim orders passed by the City Civil Court at Ahmedabad

and the Gujarat High Court, therefore, also do not disentitle the

plaintiff to the injunction against infringement.

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51. It was suggested on behalf of the defendant that the registration

of the plaintiff's mark is invalid in view of section 47 of the Act as

well as in view of section 57(2) read with sections 11(3) and 18 of the

Act. Section 18 was relied upon in view of the defendants contention

that they are the proprietors of the impugned mark.

52. Even assuming I am entitled to consider the validity of the

registration of the plaintiff's mark, it would make no difference for

independent of the decision of the IPAB, I see no infirmity in the

registration.

53. The IPAB has dealt with in detail the contention regarding

section 47 and rejected the same. The defendant has challenged the

order of the IPAB by filing a writ petition in this Court. That issue

will, therefore, be decided in the writ petition. In any event, section

47 requires a cumulative test to be satisfied as held by the Supreme

Court in Hardie Trading Ltd. & Anr. v. Addisons Paint & Chemicals

Ltd., (2003) 11 SCC 92, paragraphs 25, 26 and 27. The defendant has

failed to establish even the first test. As I will indicate shortly, the

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defendants have not established that the plaintiff's mark was registered

without any bona-fide intention on the plaintiff's part that it should be

used in relation to goods.

54. Section 11(3) prohibits the registration of a trademark if or to

the extent that its use in India is liable to be prevented by virtue of any

law in particular of passing off protecting an unregistered trademark

used in the course of trade.

55. The submission based on section 11(3) read with section 57(2)

was founded only on the interim order of the Ahmedabad City Civil

Court and the Gujarat High Court. I have already indicated that I am

unable to agree with the decision therein. The IPAB has also rejected

the contention based on the orders passed by the City Civil Court at

Ahmedabad and the Gujarat High Court. The question as to whether

the IPAB did so rightly or not would, I presume, be decided in the writ

petition. In any event, the IPAB dealt with a case of registration at the

final hearing. It was obviously, therefore, not bound by the finding of

the interim orders passed in the proceedings filed in Gujarat. I cannot,

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therefore, proceed on the basis that the registration of the plaintiff's

mark is invalid.

56. Indeed, in the event of the registration being set aside for any

reason, the defendant is always at liberty to file an appropriate

application even in the present proceedings.

57.

Mr. Dwarkadas' third submission that an injunction against

infringement would not be in public interest for it would render the

mark sterile is not well founded. This Court having come to a

conclusion that the plaintiff is entitled to an injunction against

infringement is bound to enforce the plaintiffs rights. Having come to

such a conclusion, a refusal to grant an injunction would result in the

plaintiff's mark being diluted, indeed eroded in the event of the

plaintiff ultimately succeeding.

58. Nor do I agree with Mr. Dwarkadas' fourth submission that the

plaintiff had no intention of using the mark on the date on which it

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applied for the registration thereof. He relied upon the judgment in

Cluett Peabody & Co. Inc. v. Arrow Apparals 1998 PTC 18 to contend

that the plaintiff is disentitled to any reliefs in view of it not having

used the mark for a period of twelve years from the date of its

registration. He submitted that the ratio of the judgment is that if for a

long period of time after registration, there is non user, the Court

ought to infer that the mark was registered only to claim a monopoly

and to harass the traders.

59. Firstly, this was put in issue by the parties before the IPAB. The

IPAB dealt with the same exhaustively and held against the

defendants.

60. The defendants contended before the IPAB that the plaintiff

made the application for registration on 19 th October, 1992, by making

a false statement about its intention to use the mark. It was contended

that the falsity of this contention was clear from the fact that the

plaintiffs had not used the mark till 16 th October, 2004. The plaintiffs

had no bona-fide intention to use the mark at the time of making the

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application and that it had applied for registration only to block the

same.

61. The issue, whether the plaintiff had applied for registration of its

mark with a bona-fide intention to use the mark in relation to the

goods for which the registration was sought and obtained, was

answered in the plaintiffs favour as is evident from paragraphs 21 and

22 of the order. The issue was dealt with in considerable detail. I am,

with respect, entirely in agreement with the reasons furnished by the

IPAB in this regard.

62. I am, in any event, not inclined to accept the submission on

behalf of the defendants in this regard either. I have proceeded on the

basis that Mr. Dwarkadas' submission that the intention to use the

mark even in future must be present at the time of the application for

its registration is well founded. It is, therefore, not necessary to refer

to the judgment in 1898 Vol. XV RPC 534 - In the matter of the

registered trademarks of J. Batt & Co. The mark was registered on

19th October, 1992.

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63. The mere fact that the mark was not used until 2004 does not

establish either that the plaintiff abandoned the same or that it never

had any intention on the date of the application of using it. A mere

delay in the use of a mark does not ipso facto warrant a conclusion to

this effect. This is not a case where the registration was renewed

mechanically with no intention of ever using it. The applicability of

the ratio in Cluett Peabody & Co. Inc. would depend upon the facts of

each case. It is only upon the facts of each case that the Court can

decide whether by reason of the non-user the plaintiffs mark loses its

distinctiveness or if the trade drops out of its use or the mark has been

allowed to die for non-user. In the facts of the present case, these

requirements are not satisfied.

64. The plaintiffs mark is registered with effect from 19 th October,

1992 i.e. the date of the application for registration. It was, however,

registered only on 14th September, 2001. Thus, till 14th September,

2001, an action for infringement was not maintainable. The plaintiff,

in fact, started using the mark with effect from 16 th October, 2004. The

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non-user of a mark pending registration cannot, at least, normally be

held against the proprietor for any reason. It accounts for good

business sense for a party to use a mark only after it is registered. The

proprietor may understandably not want to run the risk of using the

mark if it is ultimately not registered. The reasons are obvious. The

use of a mark involves enormous time, effort and expenses. The

proprietor may understandably not want to incur the same unless he is

certain that there is no impediment to its registration. This he can be

at least reasonably certain of only upon the mark being registered.

65. Further, often a mark is not used till the product to which it is to

be applied is ready to be marketed. The ability to market a product is

dependent upon a variety of events and requirements not the least of

which are market research and development. Many large organizations

have independent research and development divisions. The entitlement

to market a product is also dependent upon a variety of factors such as

obtaining statutory clearances and approvals. The trademark can well

be thought of in contemplation of the sale of products or the provision

of services under such marks. Thus, the mark would be applied to the

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products and in respect of services after some time.

66. The facts of the present case indicate that the plaintiff intended

at the time of making the application to use the mark. This is evident

from the fact that it used the mark from 16th October, 2004. That it did

so after three years of the mark being registered does not satisfy the

test in Cluett Peabody's case. The plaintiff has also been vigorously

defending its mark. The defendants licencee Claris Lifesciences

Limited applied for registration of the mark "PROFOL" on 25th

September, 2003. On 8th July, 2005, the plaintiffs filed an opposition

to the same. Claris Lifesciences Limited thereupon withdrew its

application for registration.

The plaintiff has also been defending and prosecuting diligently

the suit filed by the defendants in the City Civil Court at Ahmedabad.

That suit was filed on 19th July, 2005. The plaintiff also prosecuted

diligently and succeeded in the defendants application for rectification

of the register by removing the plaintiffs mark. The plaintiff filed the

present suit on 14th December, 2005. The plaintiff therefore, cannot

be said to have abandoned the mark or in having acquiesced in the

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defendants using the impugned mark.

67. That the defendant may have spent a large amount of money in

the meantime is totally irrelevant. The defendants obviously knew of

the plaintiffs mark and, in any event, must be deemed to have known

about the same. Had they taken a search they would have found the

plaintiffs mark. The use of the impugned mark would then be

dishonest. If the defendants had not taken search of the register, they

must be held to have been negligent and they cannot, in that case, be

permitted to take advantage of their negligence. In any event, at least

from the year 2005, the defendants were aware of the plaintiffs mark.

If they spent a large amount of money thereafter, they did so at their

own risk. Between April, 1998 i.e. the date on which the defendants

allegedly started using the mark and 14th September, 2001, the plaintiff

could, in any event, not have filed this action as the mark had not been

registered till then.

68. The submission that the plaintiff intended trafficking in the

mark requires merely to be stated to be rejected. The above facts

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establish that the plaintiff always intended using the mark and, in fact,

started using the same. There is nothing on record which even

remotely suggests that the plaintiff intended trafficking in the mark.

The plaintiff is a well established pharmaceutical company which uses

several marks.

69. In the circumstances, the Notice of Motion is made absolute in

terms of prayer (b). Liberty to the plaintiffs to apply for reliefs in

terms of prayer (c) relating to passing off in the event of the orders of

the City Civil Court at Ahmedabad and the Gujarat High Court being

modified or ceasing to operate for any reason.

This order is stayed upto and including 11th May, 2012.

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