Case Note & Summary
This appeal arose from trade mark rectification proceedings under the Trade and Merchandise Marks Act, 1958. The respondents owned twelve registered trade marks including "Raleigh" for bicycles, initially registered under the Indian Merchandise Marks Act, 1889 and the Trade Marks Act, 1940. The appellant company was the successor to Sen Raleigh Ltd, which had been nationalised and vested in the appellant under the IDR Act. The dispute centred on the appellant's application to remove the respondents' trade marks from the register on the ground of non-use. In 1948, the respondents entered into a technical know-how agreement with Sudhir Kumar Sen, leading to the formation of Sen Raleigh Ltd, which manufactured bicycles under the Raleigh trade marks. Sen Raleigh was recorded as a permitted user in 1954, and the agreement was extended to 1976. The Government of India took over Sen Raleigh in 1975 under the IDR Act, and the agreement was modified. On 20 December 1976, the appellant entered into an agreement as registered user for the twelve marks for a period of five years. Sen Raleigh was nationalised on 24 October 1980 and vested in the appellant. On 5 March 1982, the respondent informed the appellant that in the absence of a new agreement, it would prevent use of the trade marks from 1 April 1982. On 24 March 1982, the appellant filed a rectification application under Sections 32, 46 and 56 of the Act in the Calcutta High Court, alleging non-use for a continuous period of five years and lack of bona fide use. Simultaneously, the appellant sought registration of three trade marks in its favour. The Registrar of Trade Marks informed the appellant on 13 June 1984 that the registered user applications were abandoned. The learned single Judge dismissed the application on 13 September 1990, and the Division Bench confirmed the dismissal in Appeal No.13 of 1991. Hence the present appeal by special leave. The core legal issues were whether the High Court was right in refusing rectification under Section 46(1)(b); whether bona fide use includes use by an unregistered licensee; whether special circumstances under Section 46(3) existed; and whether the appellant's conduct barred relief. The appellant argued that there was no bona fide use by the registered proprietor or a registered user for a continuous period of five years, that the burden lay on the respondent to prove special circumstances, and that public interest favoured removal. The respondent argued that use by the appellant as an agent constituted bona fide use, that non-registration was due to the appellant's default, that prohibition on imports and pending applications were special circumstances, and that the appellant was estopped from claiming non-use. The Supreme Court analysed the statutory provisions. It noted that the High Court found that use by an unregistered licensee with a connection in the course of trade could constitute bona fide use; that non-registration was attributable to the appellant's default; and that discretion under Section 46 should not be exercised to allow a party to take advantage of its own wrong. The Court examined Sections 46(1)(b), 46(3) and 48, including the deeming provision that permitted use is deemed use by the proprietor. The provided text ends before the final pronouncement, so the final holding and operative directions are not available in the excerpt. The court was addressing the question posed, but the final order is not included in the text.
Headnote
A) Trade Marks - Rectification for Non-Use - Bona Fide Use by Unregistered Licensee - Trade and Merchandise Marks Act, 1958, Sections 46(1)(b), 48(2) - Dispute concerned whether a trade mark could be removed from the register for non-use where the registered proprietor had not directly used the mark but an unregistered licensee had used it with a connection in the course of trade. The High Court held that the expression "by any registered proprietors" in Section 46(1)(b) should not be restricted to user by proprietor or registered user but should include bona fide or authorised users. The Court considered that non-registration of the user agreement was due to the default of the appellant, who could not take advantage of its own wrong. B) Trade Marks - Registered Users and Deemed Use - Trade and Merchandise Marks Act, 1958, Sections 48(1), 48(2) - The appellant argued that harmonious construction of Sections 48(2) and 46 required that only use by the registered proprietor or a registered user under Section 48 could be considered bona fide use. The Court examined the deeming provision under Section 48(2) that permitted use of a trade mark shall be deemed to be use by the proprietor thereof. The issue was whether use by a non-registered user with a rational connection between the proprietor and the goods qualified as deemed use for purposes of Section 46. C) Trade Marks - Special Circumstances Defence - Trade and Merchandise Marks Act, 1958, Section 46(3) - The respondent claimed that prohibition on import of bicycles and the pending registered user application constituted special circumstances in trade preventing use of the mark. The Court considered whether non-use was shown to be due to special circumstances and not to any intention to abandon the mark. The appellant contended that the respondent failed to prove any period of import ban or intention to use, and that the burden lay on the respondent. D) Trade Marks - Discretionary Relief and Conduct of Applicant - Trade and Merchandise Marks Act, 1958, Section 46 - The High Court held that the power under Section 46 is discretionary and that the appellant, having used the trade mark and not withdrawn its registered user applications, could not seek rectification based on non-use. The Court considered public interest and commercial interest of the parties in deciding whether to exercise discretion in favour of removal. The appellant's conduct in taking advantage of its own wrong was a relevant factor.
Issue of Consideration
Whether the High Court was right in refusing to rectify and strike off the respondent's trade marks from the register under Section 46(1)(b) of the Trade and Merchandise Marks Act, 1958; and whether bona fide use includes use by unregistered licensee.
Law Points
- A trade mark may be removed from register for non-use if no bona fide use for continuous five years
- bona fide use includes use by registered user or authorised user with connection to proprietor
- non-use due to special circumstances in trade is defense
- power under Section 46 discretionary
- registered user's permitted use deemed use by proprietor.
