Automatic Reversion of Trademarks – The High Court held that the transfer of trademarks "MANSION HOUSE" and "SAVOY CLUB" from UTO to Tilaknagar was subject to conditions under Section 31 of the Transfer of Property Act, 1882. Upon breach of these conditions, the trademarks automatically reverted to UTO – Paras 82, 91, 93, 127, 128, 132.

Passing Off and Goodwill – The Court found that Tilaknagar failed to establish the "classic trinity" of passing off (goodwill, misrepresentation, and damage) as it had no actionable goodwill due to the automatic reversion of the trademarks to UTO – Paras 119, 120, 121, 137, 138.

Acquiescence and Section 33(2) of the Trade Marks Act – The Court held that acquiescence by UTO in Tilaknagar's use of the marks did not divest UTO of its proprietary rights. Tilaknagar could not seek an injunction against UTO or its assignees under Section 33(2) – Paras 114, 115, 118, 133.

Suppression of Material Facts – The Court found that Tilaknagar suppressed material facts regarding its earlier stance in the Hyderabad Suit, where it had claimed that the rival marks were dissimilar. This suppression disentitled Tilaknagar from seeking equitable relief – Paras 134, 135, 136.

Prosecution History Estoppel – The Court applied the doctrine of prosecution history estoppel, holding that Tilaknagar was estopped from claiming relief for passing off after having previously argued that the marks were dissimilar in the Hyderabad Suit – Paras 135, 136.

Held:

Automatic Reversion – The Court held that the trademarks automatically reverted to UTO upon Tilaknagar's breach of conditions under Section 31 of the Transfer of Property Act, 1882 – Paras 82, 91, 93, 127, 128, 132.

Passing Off – The Court dismissed Tilaknagar's claim for passing off, holding that it had no actionable goodwill due to the automatic reversion of the trademarks – Paras 119, 120, 121, 137, 138.

Acquiescence – The Court held that UTO's acquiescence did not divest it of its proprietary rights, and Tilaknagar could not seek an injunction under Section 33(2) of the Trade Marks Act, 1999 – Paras 114, 115, 118, 133.

Suppression of Facts – The Court found that Tilaknagar had suppressed material facts, disentitling it from seeking equitable relief – Paras 134, 135, 136.

Prosecution History Estoppel – The Court applied the doctrine of prosecution history estoppel, holding that Tilaknagar was estopped from claiming relief for passing off – Paras 135, 136.

Major Acts:

1. Trade Marks Act, 1999 – Sections 27(2), 28(3), 33(2) – Discussed in Paras 61, 71, 114, 115, 118, 123, 133, 141.

2. Transfer of Property Act, 1882 (TP Act) – Section 31 – Discussed in Paras 82, 91, 93, 127, 128, 132.

Subjects:

• Trademark Reversion – Automatic reversion of trademarks upon breach of conditions – Paras 82, 91, 93, 127, 128, 132.

• Passing Off – Failure to establish goodwill, misrepresentation, and damage – Paras 119, 120, 121, 137, 138.

• Acquiescence – Acquiescence as a shield, not a sword – Paras 114, 115, 118, 133.

• Suppression of Facts – Suppression of material facts disentitles equitable relief – Paras 134, 135, 136.

• Prosecution History Estoppel – Estoppel based on prior inconsistent pleadings – Paras 135, 136.

Facts:

1. Nature of the Litigation – The case involved a dispute over the trademarks "MANSION HOUSE" and "SAVOY CLUB" between Tilaknagar Industries Ltd. (Tilaknagar) and Herman Jansen Beverages Nederland B.V. (UTO), with Allied Blenders and Distillers Private Limited (ABD) as a subsequent assignee of UTO – Paras 1, 2, 3.

2. Remedy Sought – Tilaknagar sought an injunction to restrain UTO and ABD from using the trademarks, while ABD sought leave to introduce products under the "MANSION HOUSE" mark in West Bengal – Paras 1, 2, 3.

3. Reason for Filing – The dispute arose from a 1987 agreement where UTO ceded the trademarks to Tilaknagar, subject to conditions. Tilaknagar breached these conditions, leading to the automatic reversion of the trademarks to UTO – Paras 4, 82, 91, 93.

4. Previous Decisions – The learned Single Judge had previously held that UTO had waived its right to enforce the conditions, but the High Court found that the issue of automatic reversion was not addressed – Paras 86, 87, 88, 127.

Issues:

1. Automatic Reversion of Trademarks – Whether the transfer of trademarks from UTO to Tilaknagar was invalidated automatically upon breach of conditions under Section 31 of the Transfer of Property Act, 1882 – Paras 82, 91, 93, 127, 128, 132.

2. Passing Off – Whether Tilaknagar could establish the "classic trinity" of passing off (goodwill, misrepresentation, and damage) to seek an injunction against UTO and ABD – Paras 119, 120, 121, 137, 138.

3. Acquiescence – Whether UTO's acquiescence in Tilaknagar's use of the marks barred UTO from asserting its proprietary rights under Section 33(2) of the Trade Marks Act, 1999 – Paras 114, 115, 118, 133.

4. Suppression of Material Facts – Whether Tilaknagar's suppression of its earlier stance in the Hyderabad Suit disentitled it from seeking equitable relief – Paras 134, 135, 136.

5. Prosecution History Estoppel – Whether Tilaknagar was estopped from claiming relief for passing off due to its prior inconsistent pleadings in the Hyderabad Suit – Paras 135, 136.

Submissions/Arguments:

• Tilaknagar – Argued that it was the rightful owner of the trademarks and that UTO had waived its right to enforce the conditions. Tilaknagar also contended that the marks had acquired goodwill through its use – Paras 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64.

• ABD – Argued that the trademarks had automatically reverted to UTO due to Tilaknagar's breach of conditions. ABD also contended that Tilaknagar had suppressed material facts and was estopped from claiming relief for passing off – Paras 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124.

Ratio:

• Automatic Reversion – A transfer of property (including trademarks) subject to conditions under Section 31 of the Transfer of Property Act, 1882, will automatically revert to the transferor upon breach of those conditions – Paras 82, 91, 93, 127, 128, 132.

• Passing Off – To succeed in a passing off claim, the plaintiff must establish the "classic trinity" of goodwill, misrepresentation, and damage. The plaintiff cannot claim goodwill if the trademarks have reverted to the original owner due to breach of conditions – Paras 119, 120, 121, 137, 138.

• Acquiescence – Acquiescence by the original trademark owner in the use of the mark by another party does not divest the original owner of its proprietary rights. The subsequent user cannot seek an injunction against the original owner under Section 33(2) of the Trade Marks Act, 1999 – Paras 114, 115, 118, 133.

• Suppression of Facts – Suppression of material facts in legal proceedings disentitles the party from seeking equitable relief – Paras 134, 135, 136.

• Prosecution History Estoppel – A party is estopped from claiming relief based on prior inconsistent pleadings in previous legal proceedings – Paras 135, 136.