India: NSTA POWER vs. AMCO INSTA POWER – Suit For Declaration

Last Updated: 27 March 2006
Article by Manisha Singh

Tractors and Farm Equipment Ltd is a reputed manufacturer of tractors and farm equipments. They started a division to manufacture and market tubular and flat batteries to be used in UPS, Inverters etc. Amco Batteries limited is an associate company. Amco Batteries Limited granted a licence in favour of the Tractors and Farm Equipment Ltd to use the trademark AMCO.

The appeal filed was in pursuance of the suit filed for declaration that the expression "INSTA POWER" is descriptive, referring to "INSTANT POWER" and that the respondent, K.S. Sunil Kumar cannot claim monopoly over the two words asserting an exclusive right and for permanent prohibitory injunction restraining against the use of the expression. Further more, the prohibitory injunction was to prevent the Sunil Kumar from threatening the Tractors and Farm Equipment Ltd of taking legal action for the use of the expression "AMCO INSTA POWER" in any manner. A claim for liquidated damages amounting to Rs. 1,00,000 was also made.

The Trial Court dismissed the suit finding that the phrase "INSTA POWER" was in use since 1998 and that Tractors and Farm Equipment Ltd was using its trademark, the word "AMCO", even though it was not prominently written. It seemed likely that the public would be deceived by such a representation Sunil Kumar claimed that he had already applied for the registration of the words "INSTA POWER".

Tractors and Farm Equipment Ltd was using the trademark in conjunction with the registered trademark AMCO and its logo. Therefore, a composite term is being used, and not the term INSTA POWER per se. The court held that the term INSTA POWER is an abbreviated form of Instant Power provision of which is the aim of the batteries manufactured by the Tractors and Farm Equipment Ltd.

Sunil Kumar issued a legal notice to Tractors and Farm Equipment Ltd. claiming that they were renowned manufacturers of storage batteries and that the owners of the trademark INSTA POWER. The Tractors and Farm Equipment Ltd was called upon to give up the use of the trademark, failing which legal action was proposed.

Tractors and Farm Equipment Ltd contended that the issue of the notice was a threat u/s 120 of the Trade and Merchandise Marks Act, 1958 Further they said that they were not using the term INSTA POWER alone but AMCO INSTA POWER and that there existed no likelihood of deception or confusion. It was also argued that INSTA POWER was a generic term, used by many people and that the Sunil Kumar could not claim proprietary over a generic expression.

Sunil Kumar, in his written statement said that the registration of the trademark lay pending before the Registrar of Trade Marks, Chennai. He also stated that even if the Tractors and Farm Equipment Ltd is using a composite trademark, it is violation of this trademark, and that the Tractors and Farm Equipment Ltd is only a subsequent user and that the suit is not maintainable u/s 120 of the Trade and Merchandise Marks Act, 1958.

The court declared that the suit was maintainable. On the merits of the case, the trial Court found that the suit was not entitled to use the trademark even as a composite trade mark. This was reviewed u/s 58 of the Trade and Merchandise Marks Act, 1958 according to which the Tractors and Farm Equipment Ltd is not entitled to add or alter the trademark. To invoke the remedy u/s 27(2) Trade and Merchandise Marks Act, 1958 w.r.t passing off, it is not necessary that the trademarks be registered. The possibility of the public being deceived by using the expression INSTA POWER in big prominent letters was considered. Tractors and Farm Equipment Ltd was not entitled to get a prohibitory declaration as prayed for. The claim for damages was also found against.

The decision of the trial court was held to be wrong as it ignored Section 34 of the Trade and Merchandise Marks Act, 1958. It was also said to be wrong in stating that the remedy availed by Sunil Kumar was legal and was a groundless threat. It also contended that it was wrong in saying that the Tractors and Farm Equipment Ltd had no case. It also stated that the trial court should have granted the relief prayed.

Tractors and Farm Equipment Ltd said that the trial court had gone wrong while applying S-58 Trade and Merchandise Marks Act, 1958.According to the counsel the only issue that must be addressed is whether the term INSTA POWER is a generic term or not and whether the Tractors and Farm Equipment Ltd has a cause of action u/s 120 of the Trade and Merchandise Marks Act, 1958.

The Respondent contended that S-120 of the Trade and Merchandise Marks Act, 1958 contemplates a suit for declaration to the effect that it threats are unjustifiable. It was further said that in the plaint, the declaration is sought if the term INSTA POWER is a descriptive term and that the respondent cannot claim any monopoly over the said words. It is also contended that the Registrar of Trademarks is a competent authority to give registration and since the matter is pending before the Registrar, the trial court was justified in not entering a finding on that aspect.

The point for consideration whether Tractors and Farm Equipment Ltd was justified in filling a suit u/s 120 of the Trade and Merchandise Marks Act, 1958 was contemplated by the court and held that they were justified in filing a suit for injunction under the said section. The court also held that the trial court was wrong is dismissing the suit on finding that the use of the term AMCO INSTA POWER by Tractors and Farm Equipment Ltd, would be a mode of deceiving the public. Thus both the points were held in favour of Tractors and Farm Equipment Ltd. The appeal was allowed. Though the case was with regard to damages, no contentions were made by either of the parties. Hence in this matter the prayer was not allowed.

© Lex Orbis 2006

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