India: Field Marshall: SC Clarifies On Removal From Register And Grounds On Non-Use

Last Updated: 20 March 2009

The provision on Removal from register and imposition of limitations on ground of non-use came up for clarification before the Supreme Court of India in Thukral Mechanical Works v. P.M. Diesels Pvt. Ltd & Anr. [2009 (39) PTC 193]. The mark "Field Marshall" has occupied a significant place in the litigation scenario. The mark having been registered in 1964, the same was being used for Diesel engines by P.M. Diesels Pvt. Ltd. M/s Jain Industries engaged in the business of manufacturing and selling centrifugal pumps also under the mark `Field Marshall'. P.M. Diesels, on the pretext of being the proprietor of the said mark by reason of long user and, thus, having acquired a reputation issued a legal notice questioning the right to use the said mark in respect of centrifugal pumps by Jain. This was followed by a suit for the grant of a decree of permanent injunction in respect of which an ex parte order had been passed in favour of P.M. Diesels. During the course of proceedings M/s. Jain Industries by a deed of assignment had assigned the said trade mark along with its goodwill in favour of Thukral Mechanical Works.

The Court examined the litigation proceedings that had taken place prior to the present appeal. The Court noted that in the pursuance of rights over the Trademark, a rectification application had been filed as well, which was transferred to the Intellectual Property Appellate Board, which thereafter dismissed the same. The Court also noted that a writ petition had been filed by P.M. Diesels, which the Division Bench of the High Court while disposing of both the writ petition and the Letters Patent Appeal allowed the writ petition and set aside the order of the Intellectual Property Appellate Board and directed it to adjudicate the dispute on merits. This order of the Division Bench was clarified to be under challenge in the present appeal.

The Supreme Court noted that the core question for our consideration was whether in the application made under Section 46(1)(b) was maintainable as under the facts and circumstances of the case. Looking at the provisions of the various provisions, the Court noted that the scope of the provisions for removal from Register in terms of Section 46 and 56 of the Act stand on different footings. The Court opined that Section 46 had a limited application, while Section 56 of the Act was wider in nature. Rendering due consideration to the decisions of the Board and the High Court, the Supreme Court opined that the Trade and Merchandise Marks Act, 1958 was enacted to provide for registration and better protection of trademarks for a period of seven years and to prevent the use of fraudulent marks of merchandise. It was noted that the prayer in the application was to take off the registered trade mark from the register in respect of centrifugal pumps (goods) so far as the registration made in favour of the Thukral was concerned.

The Court propounded that in the situation, it was upon them to determine the meaning of the words `for the time being' occurring in Section 46(1)(b) of the Act. They put forth two interpretations to the term:

  1. the said words would denote non-use of the trade mark in relation to the goods by the appellant for a period of five years or longer; and
  2. The mark had not been used for a period of five years or longer either by the present proprietor thereof or his predecessor.

The Court clarified that the phrase `for the time being' would mean differently in different situations. Depicting it to mean `the moment or existing position', the Court referred to several precedents to substantiate this explanation.

Looking at the nuances of Section 46 (1)(b), the Court stated that it was necessary to depict a bona fide intention to use the trade mark on the date of application for registration. Indisputably, it would be the registered proprietor. Further, it was stated that a registered proprietor of a trade mark should not be permitted to circumvent the law of user of the trade mark for a long time by assigning the same from time to time. The allegation of trafficking was said to be necessarily proven in presence of the person against whom such allegations are made. The Court taking note of the procedure involved stated that at the time of grant of original registration, advertisements are issued and objections are called for and that renewal of registration, in a sense, also is not automatic. The Court stated that a person using a trade mark as a proprietor is supposed to keep itself abreast with such applications filed by another either for registration of the trade mark or renewal thereof. Being a non-user for a long time would disentitle a registered proprietor from renewal of the registration. Emphasizing on Section 46(1)(b), the same was stated to provide for a special remedy.

Placing due reliance on authorities in the subject, the Court averred that while construing a statute, it takes into consideration the parliamentary intent in amending the provisions thereof. A case of speculative assignment was said to be specifically required to be made out. It was said that 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.

Going back to the interpretations to Section 46(1)(b) rendered, the Court delivered that certain basic principles of construction of statute must be kept in mind and that since the provision took away somebody's right, it deserved strict construction. Interpreting the provision, it was said that the right of a registered trade mark was not lost automatically on the expiry of five years and one month. Further, a title to a trade mark derived on assignment as provided for under the Act cannot be equated with a defective title acquired in any other property as admittedly on the date of assignment, the right of the registered trade mark was not extinguished. Stating that an assigner can transfer only such right which he possesses, the Court stated that if his title is not extinguished by reason of a provision of a statute for non-user of the trade mark for a period of five years, any assignment made shall be valid subject to such situation where both original registrants and assignee are impleaded as parties. Stating so, the appeal was pronounced to have been allowed.

© Lex Orbis 2009

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