Case: Hardie Trading Ltd. &amp; Another Vs. Addisons Paint &amp; Chemicals Ltd

it would be absurd to suppose he lost his trade market by not putting more goods in the market when it was glutted". 58. More recently, Justice Ungoed Thomas in BALI Trade Mark (Rectification Ch.D.) 1966 RPC 397 said: "It is quite clear, however, that the proprietors, the Bali Company, could not have used the token import scheme, unless an interested firm in this country made the appropriate application and no such application was made. It was thus not possible for the company to import under the token scheme, and that was not their fault. Further, what has to be considered is not merely the existence of an absolute prohibition to import, as might be thought from one passage in the Assistant Comptrollers decision, or a complete impossibility of importing, but in the words of Evershed, L.J. (supra), the existence of conditions "making impracticable the ordinary usages of international trade." "A trade mark is a commercial asset intended to be used commercially by business men, and it seems to me that "special circumstances" have to be understood and applied in a business sense. In my view, this token import scheme modification to the earlier general prohibition did not convert what was before impossible into what was in a business sense, practicable, even if a firm in this country had made the necessary application under the scheme. The non-use of the trade mark by the Bali Company, even during the token import scheme, is thus in my view, shown to have been due to special circumstances in the trade." (Emphasis supplied) 59. The Court of Appeal reversed this decision on another issue. The House of Lords in turn reversed the decision of the Court of Appeal and reaffirmed the decision of Justice Ungoed Thomas in Berlei (U.K.) Ltd. V. Bali Brassiere Co., Inc. 1969(2) ALL ER 812. 60. This view has been accepted as good law in this country. [See A.J. Vulcan vs. V.S. Palanichamy AIR 1969 Cal. 43 and Express Bottlers Services Pvt. Ltd. vs. Pepsi Inc. & Others 1989 PTC 14]. The law therefore is that even an economical impracticability would amount to special circumstances. 61. The indisputable evidence shows and the admitted position is that from 1946 to 1971 Addisons was using the trademark first as the chief agent of Hardie under the collaborative agreement, and then under the registered users agreement. Apart from the express clauses in the two agreement by which Hardie retained its rights over the trademarks, under Sections 48(2) read with S. 2(m): "The permitted use of a trade mark shall be deemed to be used by the proprietor thereof, and shall be deemed not to be used by a person other than the proprietor, for the purposes of Section 46 or for any other purpose for which such use is material under this Act or any other law." Addisons therefore never used the trade marks on its own account. For the purposes of Section 46, its use of the trademarks prior to 1971 was agreement and by the fiction created under Section 48(2), Hardies use. [See: Cycle Corporation of India Ltd. vs. T.I. Raleigh Industries Pvt. Ltd. (1996) 9 SCC 430 , 436]. Addisons had not even attempted to use the trademarks at any time subsequent to 1971 i.e. after it had publicly disassociated itself from the marks. In fact Addisons admitted that it did not use the trademarks from 1963 to 1977 in the written statements filed in the suits for infringement pending in Calcutta. 62. We cannot ignore the fundamental fact that what Hardie and Addisons had been engaged in together was the introduction and sale in the Indian market of the paints and lacquers prepared according to Hardies preparation and under Hardies trademark. In this background, where, by legal fiction atleast Hardie had used the trademarks from 1946 to 1961, it would be a legally insupportable proposition if we were to hold that the names Spartan and Spartan Velox were associated with Addisons and not with Hardie. Therefore, when the applications for rectification were made, there was nothing in law to associate Addisons with the trademarks in question. This background coupled with Hardies attempts to appoint Hansa as the registered user of the trademark in India must be kept in sight while considering the plausibility of the defence of special circumstances under the provisions of Section 46(3) of the Act.63. Hardie had brought on record the Import Trade Control Policies for the relevant years. We have considered the same and it is quite clear that paints, distempers, varnishes and lacquers could be imported only for use by actual users i.e. by manufacturers or producers of the paints etc. in India. Hardie had no such factory. There was in the circumstances no question of Hardie importing any paints and lacquers manufactured by it outside India into the country. There was a second restriction under the Import Control Policies even on actual users who imported paint for their own use. They had to use the imported goods for producing goods as specified only for export. The intention of the policy clearly was to keep the domestic market for the domestic producers of paints and lacquers. Concerns like Hardie could not, without making an enormous investment by setting up a factory, import the goods.64. In the circumstance, for Buttress to have said that it was not economically possible for Hardie to itself put its manufactured goods in the market immediately, cannot be taken as being a circumstance which was peculiar to Hardie alone. It was a circumstance which was generally applicable to all foreign manufacturers of paints and lacquers. Therefore, the conclusion of the Joint Registrar and the High Court that there were no special circumstances in the trade which justified the alleged non-user for he period in question was wrong. In view of our findings, it is not necessary to go into the further question of the discretionary power of the Registrar to refuse rectification even if the application is otherwise maintainable.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]29. The phrase person aggrieved is a common enough statutory precondition for valid complaint or appeal. The phrase has been variously construed depending on the context in which it occurs. Three sections viz. Sections 46, 56 and 69 of the Act contain the phrase. Section 46 deals with the removal of a registered trademark from the register on the ground ofThis section presupposes that the registration which was validly made is liable to to be taken off by subsequentSection 56 on the other hand deals with situations where the initial registration should not have been or was incorrectly made. The situations covered by this section includea) the contravention or failure to observe a condition for registration; (b) the absence of an entry; (c) an entry made without sufficient cause; (d) a wrong entry; and (e) any error or defect in the entry. Such type of actions are commenced for the purity of the register which it is in public interest to maintain. Applications under sections 46 and 56 may be made to the Registrar who is competent to grant the relief. "Persons aggrieved" may also apply for cancellation or varying an entry in the register relating to a certification trademark to the Central Government in certain circumstances. Since we are not concerned with a certification trademark, the process or registration of which is entirely different, we may exclude the interpretation of the phrase "person aggrieved" occurring in section 69 from consideration for the purposes of this judgment.30. In our opinion the phrase person aggrieved for the purposes of removal on the ground ofunder section 46 has a different connotation from the phrase used in section 56 for canceling or expunging or varying an entry wrongly made or remaining in the Register.31. In the latter case the locus standi would be ascertained liberally, since it would not only be against the interest of other persons carrying on the same trade but also in the interest of the public to have such wrongful entry removed.The observation of the Division Bench that apart from special circumstances, there was no other defence available to a proprietor in proceedings to remove his trademark from the register, is as we have already indicated, incorrect. The proprietor can show, as Hardie, has done in this case, that there was no intention to abandon the trademarks. If, that is established it is a complete defence to the action. The second erroneous finding of the Division Bench was that economic viability or existing market condition was outside the concept of special circumstances. The finding does not follow from the Section and is against the weight of authority.56. Special circumstances have been defined in Aktiebolaget Manus vs. R.J. Fullwood and Bland, Ltd., (1949) 66 RPC 71, as "some external forces as distinct from voluntary acts of an individual.." where the impact of local condition makes impractical the ordinary usage of international trade". In that case it was held prohibitive tariffs which were practically effective to keep out of England altogether machines manufactured abroad which had, till the tariffs had been imposed, been imported to the country amounted to special circumstances. The facts in Manus case are similar to the facts which we have to consider. In dispute were trademarks as applied to milking machines. The proprietor of the marks was a Swedish company. The machines had been imported into Britain through the defendant as its agent. When the import of the milking machines was stopped by the registered proprietors, the agent claimed the trademarks as its own and started manufacturing and selling milking machines bearing the same trademarks. The proprietor brought an action for infringement of its trademarks. The question before the Court was whether the actions of the defendant subsequent to the tapering off of the import of the Swedish Companys machines, were effective to appropriate to themselves what had been before the Swedish Companys property or as having been effective to destroy the distinctive character of the name as indicating the Swedish Companys business so as to put an end to its right to the name in England. The question was answered in the negative and it was held that thewas justified because of the special circumstances prevailing at the relevant period.57. In Mouson & Co. vs. Boechm (supra), it was said that "A man who has a trade mark may properly have regard to the state of the market and the demand for the goods; it would be absurd to suppose he lost his trade market by not putting more goods in the market when it was glutted".We cannot ignore the fundamental fact that what Hardie and Addisons had been engaged in together was the introduction and sale in the Indian market of the paints and lacquers prepared according to Hardies preparation and under Hardies trademark. In this background, where, by legal fiction atleast Hardie had used the trademarks from 1946 to 1961, it would be a legally insupportable proposition if we were to hold that the names Spartan and Spartan Velox were associated with Addisons and not with Hardie. Therefore, when the applications for rectification were made, there was nothing in law to associate Addisons with the trademarks in question. This background coupled with Hardies attempts to appoint Hansa as the registered user of the trademark in India must be kept in sight while considering the plausibility of the defence of special circumstances under the provisions of Section 46(3) of the Act.63. Hardie had brought on record the Import Trade Control Policies for the relevant years. We have considered the same and it is quite clear that paints, distempers, varnishes and lacquers could be imported only for use by actual users i.e. by manufacturers or producers of the paints etc. in India. Hardie had no such factory. There was in the circumstances no question of Hardie importing any paints and lacquers manufactured by it outside India into the country. There was a second restriction under the Import Control Policies even on actual users who imported paint for their own use. They had to use the imported goods for producing goods as specified only for export. The intention of the policy clearly was to keep the domestic market for the domestic producers of paints and lacquers. Concerns like Hardie could not, without making an enormous investment by setting up a factory, import the goods.64. In the circumstance, for Buttress to have said that it was not economically possible for Hardie to itself put its manufactured goods in the market immediately, cannot be taken as being a circumstance which was peculiar to Hardie alone. It was a circumstance which was generally applicable to all foreign manufacturers of paints and lacquers. Therefore, the conclusion of the Joint Registrar and the High Court that there were no special circumstances in the trade which justified the allegedfor he period in question was wrong. In view of our findings, it is not necessary to go into the further question of the discretionary power of the Registrar to refuse rectification even if the application is otherwise maintainable.Therefore, Addisons voluntarily undertook to the High Court that it would not use the mark Spartan or the device of theuntil the disposal of the suit. It is not in dispute that the suit is still pending. It has never been and is not Addisons case that the consent was obtained by any fraud or by exerting undue pressure. In fact on 30th April 1982, there is an order of the High Court of Calcutta which records Addisons reiteration that it would not use the markwhich was claimed by Hardie and Hansa. Irrespective of whether these orders sanctioned the use ofby Hansa and Hardie, the question is whether they show that Addisons had ever used or showed any intention to use the device ofThe third part of the consent order is that Addisons would not object to Hardie and Hansa selling their products as long as they distinguish their goods from those of Addisons. Pursuant to the consent order dated 22nd February 1979 w.e.f. 3rd September 1979 Hansa started using the Spartan trade mark with the warrior device of Hardie on the products manufactured by it and has continued to do so.78. It has not been shown to us how a consent order differs from any other form of agreement except that it may have additional sanctity by reason of the imprimatur of the Court. And yet, the High Court came to the conclusion that Hansas use of the device subsequent to the consent order was "by brute use in controversial circumstances". We are at a loss to understand how the High Court could have deduced that the use of the mark by Hansa during the pendency of the proceedings was not bona fide.79. The High Court in wrongly casting the onus on Hardie and Hansa by saying that they had not been able to produce "any other relevant material to indicate that there was no bona fide intention on the part of Addisons to use the mark at the time when they made their applications: did not consider whether Addisons had positively proved its use and intention to use the device.80. We are of the view that the dissenting judgment of Swamidurai, J. was correct. The learned Judge had correctly emphasised that Hardie had manufactured and was the first to market its goods under its registered trade mark and device in India. the learned Judge also correctly construed the consent order. No one hadAddisons into giving its consent. That is also not Addisons case. There are other factual errors in the majority view but it is not necessary to go into those as what we have found is sufficient to set aside the decision impugned and to allow the appeals.81. Even if we had held in Addisons favour on all other points we would have thought that this was a fit case where the Assistant Registrar should have exercised his discretion under Section 18 and rejected Addisons application for registration. Not only was no positive proof of an intention to use the device or the trade marks adduced by Addisons but the evidence shows a conscious abandonment of the device in 1971 by the issuance of the public advertisements. When did Addisons intention to use the device form? What was the necessity to revive the use of the device mark in respect of paints after an interval of almost 7 years? The answer to these issues would be relevant on the question of the bona fides of the Addisons applications and yet was neither raised nor considered either by the Registrar or by the High Court. On the other hand taking into consideration the continued user of the mark since 1979 by Hansa, it should have been assumed that the device had over the period of so many years become distinctive of Hansas product and therefore to allow registration of the device in Addisons name might deceive the public.There is no dispute that the marks which were the subject matte of Addisons application for registration before the Registrar of trademarks at Madras were identical with Hardies marks of Spartan and Spartan Velox. Although, the appellant has impugned the decision of the Registrar inter alia on the ground that the order passed by the Registrar on 2nd June, 1992 was without notice to the appellant and in violation of Section 102 of the Act, it is not necessary to express any opinion on the submissions. The appeals must be allowed on the short ground that we have held that Hardies trademarks could not have been removed from the Register and a long as the registration of the marks continue in the name of Hardie, the application for registration of the same marks in the absence of any plea of bonafide concurrent user under Section 12 would not arise.