India: Full Bench Bombay High Court Holds Infringement Claims Based On Trademarks Used As Part Of Corporate Name Will Be Governed Only By Section 29 (5) of TM Act

On 1 March 2017, the Full Bench of Bombay High Court (High Court), in the matter of Cipla Limited (CIPLA) v Cipla Industries Private Limited (Defendant)1, has held that claims for infringement of registered trademarks based on use as a part of a corporate name / business / trade name, will be governed by Section 29(5) of the Trademarks Act, 1999 (the TM Act) and not be considered under Sections 29(1), (2) or (4) of the TM Act.

Background

In 2012, CIPLA filed a suit for infringement of trade mark and passing off, on the basis of the registration of the mark "CIPLA" in Class 5 (in respect of pharmaceutical products). The Defendant is the registered proprietor of the mark CIPLA PLAST in respect of certain house hold articles falling in class 21.

It was contended by CIPLA that though the Defendant was not using the mark "CIPLA" in respect of pharmaceutical and medicinal preparations, (i) the use of the mark "CIPLA" as a part of "CIPLA PLAST" in respect of "household articles, such as soap dishes, photo frames, ladders", for which the Defendant had secured trade mark registration; and (ii) the use of "CIPLA" name in the Defendant's corporate name, amounted to infringement of CIPLA's well-known trade mark. It was further contended that the mark "CIPLA PLAST" was not being used by the Defendant in the manner that it had been registered.

The Hon'ble Justice GS Patel by his order dated 26 April 2016 expressed a view that he was not in agreement with the decision of the High Court's Division Bench in Raymond Limited v Raymond Pharmaceuticals Pvt Ltd (Raymond Case)2 and needed reconsideration. He was also of the view that in respect of a "well known mark", it is entirely possible that there may be an infringement by use of the trade mark as a trade name but for dissimilar goods, which situation was not contemplated in the Raymond Case. Accordingly, the matter came to be placed before a Full Bench of the High Court.

Judgment

The Full Bench of the High Court decided on the questions referred to it, as follows:

  • Where a party is found to be using a registered trade mark as a 'name', viz., as a corporate or trading name or style, though in respect of goods dissimilar to the ones for which the trade mark is registered, is the proprietor of the registered trade mark entitled to an injunction on a cause of action in infringement under Section 29(5) of the TM Act?

    • High Court held this in the negative.
  • Whether the use of a registered trade mark as corporate name, trading name or style is excluded from the purview of Sections 29(1), 29(2) and 29(4) of the TM Act, and whether these sections are restricted to the use of a trade mark 'as a trade mark', [i.e., in the 'trade marky' sense]?

    • High Court held this in the affirmative. They held that the sub-sections (1), (2) and (4) of Section 29 of the TM Act would apply only in the "trade mark versus mark" situations.
  • Whether Sections 29(4) and 29(5) of the TM Act operate in separate and mutually exclusive spheres, i.e., whether, if the defendant uses the registered trade mark only as a corporate name or trading name or style in respect of dissimilar goods, a plaintiff can have no remedy and is not entitled to an injunction?

    • High Court held this in the affirmative.

The rationale offered by the High Court are briefly set out below: -

  • The words "in the course of trade" and "in relation to goods or services" used in Sections 29 (1), (2) and (4) of the TM Act are not used in Section 29(5) Act and the words "if he uses such registered trademark, as his trade name, or name of his business concern or part of the name, of name of his business concern" used in Section 29(5) are not used in Sections 29(1), (2) and (4) of the TM Act. Accordingly, applying the plain and literal interpretation rule, it held that the intent of the legislature was that there must not be an overlap in the application of Section 29(4) and Section 29(5) of the TM Act. Section 29(5) alone would be applicable when a registered mark is used as a corporate name / trade name/ business name, even if the goods or services are not similar to those for which the trade mark is registered;
  • The statement and objects of Section 29 of the TM Act support the above view;
  • Section 29(5) of the TM Act as originally drafted did not include the words "dealing in goods or services in respect of which the trademark is registered". This language was introduced later based on the recommendation of the Parliamentary Standing Committee on Industry appointed by the Rajya Sabha of the Indian Parliament. The intent was therefore to curtail the claim of infringement when a registered mark is used as a corporate name in respect of a dissimilar business;
  • The fact that the definition of a mark includes "name" will not make a difference to the above interpretation.

Khaitan Comments

The decision delivered by the High Court comes as a huge blow for owners of well‑known trademarks. Mere use of a well-known mark as a part of a corporate name in respect of a business (relating to goods/ services) for which the mark is not registered may not constitute infringement. Nevertheless, the decision does not affect a plaintiff's ability to maintain an action for passing off.

In our view, the decision of the High Court does not consider the following:

  • Section 29(6) of the TM Act which sets out the meaning of the phrase "uses a registered trademark", even though the phrase is used in section 29(5) of the TM Act;
  • use as a part of a corporate name is necessarily to be construed as "use in the course of trade" and hence the absence of those words in section 29(5) of the TM Act ought not to make a difference;
  • the importance of the concept of a well-known mark, as discussed by Hon'ble Justice Patel in his order while making the reference, has not been discussed at all; and
  • there are no reasons attributed to arriving at the conclusion that the inclusion of "name" in the definition of "mark" makes no difference to the interpretation of Section 29 of the TM Act.

It would be interesting to see if the Hon'ble Supreme Court takes a different view if this decision is sought to be tested. It also remains to be seen how other Indian courts deal with this view expressed by the High Court considering that the Delhi High Court has earlier taken a different view.

Footnotes

1. Notice of Motion No 2463 of 2012 in Suit No 1906 of 2012 before the Bombay High Court

2. 2010 (44) PTC 25 (Bom)

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

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