Interpretation or Cancellation of Trademark Registration in Cochin

Interpretation or Cancellation of Trademark

Sections 46(1)(b), 48(1), 48(2) and 56 of the Trade and Merchandise Marks Act,  read as under “Section 46 – interpretation or Removal from register and imposition of limitations on ground of non-use –

(1) Subject to the provisions of section 47, a registered trademark may be taken off the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved on the ground either?

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 (a) that up to a date one month before the date of the application, a continuous period of five years or longer had elapsed during which the trademark was registered and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being: Provided that, except where the applicant has been permitted under sub-section (3) of section 12 to register an identical or nearly resembling trademark in respect of the goods in question or where the tribunal is of opinion that he might properly be permitted so to register such a trademark, the tribunal may refuse an application under clause (a) or clause (b) in relation to any goods, if it is shown that there has been before the relevant date or during the relevant period, as the case may be, bona fide use of the trademark by any proprietor thereof for the time being in relation to goods of the same description, being goods in respect of which the trademark is registered.

Section 48 – Registered users

1) Subject to the provisions of section 49, a person other than the registered proprietor of a trademark may be registered as the registered user thereof in respect of any or all of the goods in respect of which the trademark is registered otherwise than as a defensive trademark; but the Central Government may, by rules made in this behalf, provide that no application for registration as such shall be entertained unless the agreement between the parties complies with the conditions laid down in the rules for preventing trafficking in trademarks.

(2) The permitted use of a trademark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor, for the purposes of section 46 or for any other purpose for which such use is material under this Act or any other law.

Section 56-Power to cancel or vary registration and to rectify the register

(1) On application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved, the tribunal may make such order as it may think fit for cancelling or varying the registration of a trademark on the ground of any contravention, or failure to observe a condition entered on the register in relation thereto.

(2) Any person aggrieved by the absence or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error of defect in any entry in the register, may apply in the prescribed manner to a High Court or to the Registrar, and the tribunal may make such order for making, expunging or varying the entry as it may think fit.

(3) The tribunal may in any proceeding under this section decide any question that may be necessary or expedient to decide in connection with the rectification of the register.

(4)The tribunal, of its own motion, may, after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard, make any order referred to in sub-section (1) or sub-section (2).

(5) Any order of the High Court rectifying the register shall direct that notice of the rectification shall be served upon the Registrar in the prescribed manner that shall upon receipt of such notice rectify the register accordingly.

(6) The power to rectify the register conferred by this section shall include the power to remove a trademark registered in Part A of the register to Part B of the register.” Indisputably, the scope of the provisions for removal from Register in terms of Section 46 and 56 of the Act stand on different footings. Whereas Section 46 had a limited application, Section 56 of the Act is wider in nature. Concernedly, clause (a) of sub-section (1) of Section 46 is not attracted in the case.

For the purpose of appreciation of the rival contentions, we may notice the findings of the Board as also the High Court. There cannot be any doubt or dispute that the registration of a trademark confers a very valuable right. The person in whose name the trademark has been registered may take action against any person for passing off the goods as that of the registered owner. It confers an exclusive right of use of the trademark in relation to the goods in which the trademark is registered. The same is an assignable right in terms of Section 36 of the Act, whereas an unregistered trademark is not.

Non-user of the said mark, therefore, entails the consequences laid down under clause (b) of Sub-section (1) of Section 46. However, such an application can be filed only by a person aggrieved. When the applicant before the Board establishes the fact in regard to non-user of the mark for a period of more than five years on the part of the registered owner, the latter may show that his case falls within the purview of sub-section (3) of Section 46.

The question which, therefore, arises is as to who can prove that he had the bona fide intention to use the trademark on the date of application for registration. Indisputably, it would be the registered proprietor. Section 46 is a penal provision. It provides for civil or evil consequences. It takes away the valuable right of a registered proprietor. It, therefore, can be taken away only when the conditions laid down therefor are satisfied. While we say so, we are not oblivious of the fact that trafficking in trademark is to be discouraged. A registered proprietor of a trademark should not be permitted to circumvent the law of user of the trademark for a long time by assigning the same from time to time. But then such a case has to be made out. Allegation of trafficking is a serious one. It must be proved in presence of the person against whom such allegations are made. At the time of grant of original registration, advertisements are issued and objections are called for. Renewal of registration, in a sense, also is not automatic. A person who had been using the said trademark as a proprietor thereof by users is supposed to keep itself abreast with such applications filed by another either for registration of the trademark or renewal thereof. The non-user for a long time would disentitle a registered proprietor from renewal of the registration.

It must not, however, be forgotten that Section 46(1)(b) provides for a special remedy. As a person obtains a right on and from the date of trademark registration and/or renewal thereof, he can ordinarily be deprived of his right unless it is shown that the assignment thereof by his holder was not a bona fide one or had been made by way of camouflage. If the assignee has obtained assignment for bona fide use, he may not be fastened with any liability owing to non-user on the part of his predecessor. In other words, the mistake of the predecessor should not be visited with non-use of the present registered owner. It must, however, be observed that whether a use is for bona fide purpose would essentially be a question of fact. Whether Section 46(1)(b) read with Section 48 of the Act would bring within its purview, not only a registered proprietor but also the proprietor who had otherwise acquired a right would depend upon the facts and circumstances of each case.

In Kabushiki Kaisha Toshiba versus Tosiba Appliances Co. & Ors., this Court held: “We do not find any force in the aforementioned submission. Clauses (a) and (b) operate in different fields. Sub-section (3) covers a case falling within clause (b) and not the clause (a) thereof. Had the intention of the Parliament been that sub-section (3) covers cases falling under clause (b) and clause (a), having regard to the similarity of the expressions used, there was no reason as to why it could not be stated so explicitly.

It was furthermore opined: “There may be a case where owing to certain special circumstances; a continuous use is not possible. The trademark for which registration is obtained is used intermittently. Such non-user for a temporary period may be due to any exigency including a bar under a statute, or a policy decision of the Government or any action taken against the registrant.”

It was observed that in cases of intermittent use also, clause (b) shall apply. In Kabushiki Kaisha Toshiba, this Court relied upon Hardie Trading Ltd. & Anr. versus  Additions Paint & Chemicals Ltd. case, “In our opinion, the phrase “person aggrieved” for the purposes of removal on the ground of non-use under Section 46 has a different connotation from the phrase used in section 56 for canceling or expunging varying an entry wrongly made or remaining in the Register. The submission of Mr. Sudhir Chandra that the appellant was an infringer both of the right of M/s. Jain Industries as also the first respondent and, thus, its use was not bona fide in a case of this nature cannot be accepted. If appellant infringed the right of M/s. Jair Industries, it was for it to take action therefor. It did not. First respondent itself accepts that at least immediately prior to the institution of the suit, appellant had been using the same.

We are not concerned herein as to since when it had been doing so. It obtained an or of injunction. The order of injunction was vacated. For one reason or the other, the said order attained finality. Prima facie, therefore, appellant has been held to be the registered owner of the trademark. It is one thing to say that for the purpose of frustrating an application for rectification, the appellant had colluded with its predecessor for the purpose of trafficking by entering into the deed of assignment which is otherwise illegal and bad in law but it is another thing to say that the appellant could be proceeded against alone for non-user of the registered trademark for a period of more than five years. For the purpose of making out such a case, both the original registrants as also the assignee were required to be impleaded as parties.

The Court while construing a statute takes into consideration the parliamentary intent in amending the provisions thereof. It seeks to enhance the period of moratorium of use of the registered trademark from one month to three months so as to prevent speculative assignment. Thus, a case of speculative assignment is specifically required to be made out. Such an application may be maintainable in terms of Section 56 of the Act but strictly not in terms of Section 46(1)(b) thereof and that too in the absence of the original registered proprietor.

We do not think that the approach of the learned author is entirely correct. An assigner can transfer only such right which he possesses. If his title is not extinguished by reason of a provision of a statute for non-user of the trademark for a period of five years, any assignment made shall be valid subject to such situation which we have noticed in paragraph 25 supra.

For the views we have taken, we are of the opinion that the impugned judgment cannot be sustained. It is set aside accordingly. The Board shall, however proceed to determine afresh the application filed by the first in the light of the legal principles explained above.

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