Case: Kaviraj Pandit Durga Dutt Sharma Vs. Navaratna Pharmaceutical Laboratories

1. These two appeals, by special leave, are concerned with the validity of the respondent firms claim as the registered proprietor of a Trade Mark Navaratna Pharmaceutical Laboratories used by it on its medicinal preparations.The two appeals arise out of different proceedings but before narrating their history it would be convenient to briefly set out the facts upon which the claim of the respondent to the exclusive use of this Trade Mark is based. The respondent, as stated already, is a firm, and it carries on business at Ernakulam in the same name and style as the Trade Mark now in controversy - "Navaratna Pharmaceutical Laboratories". As its name indicates, the firm manufactures medicinal products. The business of the firm was founded sometime in 1926 by one Dr. Sarvothama Rao who is now no more. When started, the business was called Navaratna Pharmacy but from January 1945 the name of the business was changed to the present one - Navaratna Pharmaceutical Laboratories. From the very beginning the proprietors used the Trade Mark "Navaratna" on the products which they manufactured and sold. In December, 1928 the word Navaratna and the name Navaratna Pharmacy as connoting the products of the respondent-firm were registered by a declaration of ownership before the Registrar of Assurances, Calcutta. When a legislation substantially similar to the Indian Trade Marks Act, 1940 was enacted in the State of Cochin (Vide the Cochin Trade Marks Act 19 of 1119 (1944)) the respondent-firm registered the word Navaratna as a Trade Mark in respect of its medicinal preparations, on January 31, 1947 and another mark consisting of the words Navaratna Pharmaceutical Laboratories to denote the same products of February 17, 1948. There is evidence that the respondent-firm has been having an expanding business in the products which it manufactures and has been selling the same under the above and other cognate names, and this has continued ever since.The Trade Marks (Amendment) Act, 1946 (Act 12 of 1946) - inserted S. 82-A in the Trade Marks Act of 1940 and under this provision the Central Government was empowered to enter into reciprocal arrangements with Indian States for mutual recognition of Trade Marks registered in the other territory. There was a similar provision in S. 78A of the Cochin Act and availing itself of this provision the respondent-firm applied for the registration of the words Navaratna Pharmaceutical Laboratories in the Trade Marks Registry at Bombay. The application was advertised and no opposition having been entered, the Trade Mark was registered.Pausing here, certain facts have to be set out in relation to the appellant, since they are material for understanding the origin of the proceedings which have given rise to these appeals. The appellant has, for some years past, been carrying on business in the preparation of Ayurvedic pharmaceutical products at Jullundur City in East Punjab under the name of the "Navaratna Kalpa Pharmacy" and had been vending the medicines prepared by him under the name "Navaratna Kalpa". While so, in October, 1946 he applied for the registration of the words "Navaratna Kalpa" as a Trade Mark for his medicinal preparations. These applications was advertised in April, 1950 and the respondent- firm opposed the application for registration on the ground that the word "Navaratna" was descriptive and, having no distinctiveness, could not be registered. This objection prevailed and the registration was refused. This led to the proceedings which have culminated in these appeals.In the first instance, the appellant moved the Registrar of Trade Marks for removing from the register the trade mark "Navaratna" and the word "Navaratna" in the other mark of the respondent. By this date, however, the respondent had filed suit No. 233 of 1951 (from which C. A. No. 522 of 1962 arises) before the District Judge, Anjikaimal for a permanent injunction restraining the appellant from advertising, selling or offering for a sale any preparations under a trade mark combining the word Navaratna or any similar word etc. By reason of the pendency of this proceeding in which the validity of the registration of the respondents mark was directly involved the Registrar refused his application, and directed the appellant to move the High Court within whose jurisdiction the District Court was situated for the rectification of the register by deleting the respondent mark. The appellant accordingly filed O.P. No.19 of 1952 in the High Court of Travancore-Cochin praying that the registration of the word "Navaratna" by itself or as part of other marks as a trade mark for goods belonging to the respondent be removed from the register. Civil Appeal 523 of 1962 arises out of the order of the High Court on this petition. This original petition No. 19 of 1952 was kept pending in the High Court after it was ready for hearing and was heard along with the appeal against the decree of the District Judge in Original Suit No. 233 of 1951.The Original Suit was, as stated earlier, for a perpetual injunction against the appellant for using the word "Navaratna" and the cause of action for that suit was stated to be that the plaintiff (respondent before us) being proprietor of the two registered trademarks "Navaratna" and "Navaratna Pharmaceutical Laboratories" had an exclusive right to the use of those marks for his medicinal preparations and that the said right was infringed by the defendants (appellant before us) advertising his goods under the name "Navaratna Kalpa" with the trade origin of the goods being described as "Navaratna Kalpa Pharmacy". There was also an allegation that by use of these marks the defendant was passing off his goods as those of the plaintiff.By his written statement the defendant raised principally three points(a)...... That the word "Navaratna" in its etymological sense meant Ayurvedic preparations of a particular composition and that the word had been generally adopted by several firms and organisations for designating their preparations which they vended with that description. It was therefore submitted that the plaintiff could claim no exclusive title to the use of that word which was a common word for the description of the product as a trade mark to designate its pharmaceutical preparations.(b) As regards the trade mark "Navaratna Pharmaceutical Laboratories" which was in fact the name in which the plaintiff carried on its business, the defence was that the crucial integer in that mark was the expression "Navaratna" and that if the plaintiff was not entitled to the exclusive use of the word "Navaratna" to designate its products, the combination of that word with the two other words "Pharmaceutical" and "Laboratories" were ordinary English words descriptive of the place where medicines were prepared could not render the trade mark a registrable one. For these two reasons the defence was that no claim could be made to relief under S. 21 of the Trade Marks Act,Next, it was submitted that even on the basis that the plaintiff was entitled to the use of the word "Navaratna" either alone or in the combination "Navaratna Pharmaceutical Laboratories," still the use of the trade mark by the defendant of the words "Navaratna Kalpa" and "Navaratna Kalpa Pharmacy" were not either identical with nor deceptively similar to the plaintiffs marks and therefore he was not guilty of anyAs regards the claim for relief on the basis of passing off, the defendant laid stress upon the packing, get-up and the manner in which the trade origin of the goods was clearly brought out in the packages, in which his preparations were marketed and it was submitted that they clearly negatived any possibility of passing off.Appropriate issues were raised based on the pleadings and the contentions just now indicated and the learned District Judge found : (1) that having regard to the method of packing adopted and the other features of the getup etc. on which the defence had relied, the defendant was not guilty of passing off; (2) that the word "Navaratna" was a common word in Ayurvedic phraseology and consequently the plaintiff could not claim any exclusive title to the use of that word by reason of his having used it for his products even though this had been for a number of years. To reach this finding the learned District Judge pointed out that it was brought to his notice that there, were several concerns manufacturing and vending Ayurvedic preparations which had for a very long time past either used marks which included that word and had described their products by calling them "Navaratna" either alone or in combination with other words. The right of the plaintiff to relief on the ground of the infringement of the mark Navaratna was therefore disallowed, (3) dealing next with the question as to whether the mark "Navaratna Pharmaceutical Laboratories" could be validly registered and rights claimed for such a registration, the learned Judge answered it in the affirmative pointing out that no evidence was placed before the Court of the use by any other person, firm or concern of that name and that there was evidence which was uncontradicted that that trade name "Navaratna Pharmaceutical Laboratories" or some variant of the same had been used as a trade mark by the plaintiff for a very long time and had come in the market to denote exclusively the goods of the plaintiff. The learned District Judge further held the mark "Navaratna Pharmaceutical Laboratories" or its permissible variants had been used long before February 25, 1937 and having acquired factual distinctiveness, was registrable under the proviso to S. 6(3) of the Act. The Plaintiff was, therefore, granted a decree for an injunction confined to the trade mark "Navaratna Pharmaceutical Laboratories".From this judgment the appellant filed an appeal to the High Court and the learned Judges heard the appeal along with the Original Petition under S. 46 of the Act filed by the appellant. By a common judgment the learned Judges confirmed all the findings and the decree of the learned District Judge and made an order in the Original Petition conformably to this decision. These two appeals have been preferred by the appellant after obtaining special leave from this Court in these two matters respectively.

Reasoning:
15. Of course, where the geographical area is very small there is a possibility of the inherent incapability to attain distinctiveness becoming attenuated, but we do not go into these details as they are unnecessary for our present purpose. The learned Counsel is therefore right in his submission that if the right of the respondent to the registration of his mark had to be considered solely on the terms of S. 6(1), the appellants submissions as regards the non-registrability of the respondents mark would have greatlearned District Judge has, on the basis of evidence recorded a finding that the mark or trade name Navaratna Pharmaceutical Laboratories had by user acquired distinctiveness in the sense of indicating the respondent and the respondent alone as the manufacturer of goods beading that mark and that finding has been affirmed by the learned Judges of the High Court. The learned District Judge has further held that the respondent has been using that mark or a permissible variant of that mark from long before the 25th February 1937, and that in consequence, notwithstanding that the mark might not satisfy the requirements of S. 6(1) as explained by sub-ss. (2) and (3) of that section, still it was registrable as a Trade Mark by virtue of the proviso to S. 6(3) of the Act. We do not find any error in the approach of the learned District Judge to this question. In the first place, there was the intention on the part of the proprietor of the mark to indicate by its use the origin of the goods on which was used. There was also indubitable evidence regarding the recognition of that mark as indicating origin on the part of that section of the public who buy these goods in the course of trade or for consumption. Thus the finding was that by reputation the mark had come to denote the goods of the respondent. Besides, the words were not a mere laudatory expression in relation to the goods, but descriptive though as such they would prima facie not be distinctive. Length of user would, of course be a material factor for the mark to become distinctive and the learned District Judge found that by such along user the mark had become exclusively associated with the goods of the respondent in the market.Though the learned Judges of the High Court have not discussed this question in their judgment, they have affirmed in general terms the conclusions recorded by the District Judge on this point. There being concurrent findings on the question as to whether the respondents mark has acquired distinctiveness as a matter of fact, and there being no error of law in the criteria applied for reaching them, it would not be open to the appellant to challenge the correctness of that finding and, indeed, learned Counsel for the appellant did not attempt to do so. What he, however, submitted was that on a proper construction of the proviso to S. 6(3) of the Act marks which from their very nature were inherently incapable of acquiring distinctiveness could not qualify for registration and the Courts below therefore erred in holding the marks which because of their being descriptive of the goods were inherently incapable of registration, to befeel unable to accept this construction, nor do we read the opening words of sub-s. (2) is necessarily leading to this result. Briefly stated, "distinctive" is defined in sub-s. (2) as "adapted to distinguish" and the latter phrase explained in language which might exclude what is negatived by S. 6(1)(d). But that, however, does not solve the problem created by the words of the proviso "shall not refuse registration by reason only of the fact that the trade mark is not adapted to distinguish as aforesaid". The use of the words "as aforesaid" takes one back first to sub-s. (3) and then on to sub-s. (2) and necessarily also to the provision in S. 6(1) (d) where marks which are incapable of acquiring distinctiveness are dealt with. Hence even on the terms of the proviso however construed it is not possible to escape the conclusion that a mark which is not "adapted to distinguish" by the application of the tests laid down in S. 6(1) could still qualify for registration by proof of acquired distinctiveness.For the present purpose it is unnecessary to enter into an examination of the general nature of a proviso and of its function in statutes. It is sufficient to point out that it would not be a reasonable construction of any statute to say that a proviso which in terms purports to create an exception and seeks to confer certain special rights on a particular class of cases included in it should be held to be otiose and to have achieved nothing merely because of the word distinctiveness used in it which has been defined elsewhere. A construction, which would lead to old marks and new marks being placed on the same footing and being subjected to the same tests for registrability cannot, in our opinion, beagain, we do not see any substance in this argument. A mark might have been used even prior to February 25, 1937; but it might not qualify for registration under the proviso to S. 6(3) by not having acquired that degree of factual distinctiveness which the Registrar considers is sufficient to enable it to qualify for registration. It is therefore possible to conceive of cases where even if the proviso to S. 6(3) were construed in the manner in which we have indicated, there would still be scope for the rejection by the Registrar of a trade mark in use prior to the specified date. That, in our opinion, is the true ratio of the decision of Mcnair J. in 49 Cal WN 425 on which Mr. Agarwala relied in this connection.The other ground of objection that the findings are inconsistent really proceeds on an error in appreciating the basic differences between the causes of action and right to relief in suits for passing off and for infringement of a registered trade mark and in equating the essentials of a passing off action with those in respect of an action complaining of an infringement of a registered trade mark. We have already pointed out the suit by the respondent complained both of an invasion of a statutory right under S. 21 in respect of a registered trade mark and also of a passing off by the use of the same mark.It appears to us that the conclusion reached by the Courts below that the appellants mark is deceptively similar to that of the respondents cannot be stated to be erroneous. Besides, this question of deceptive similarity is a question of fact, unless the test employed for determining it suffers from error. In the present case, it was not suggested that the Courts below had committed any error in laying down the principles on which the comparison has to be made and deceptive similarity ascertained. (See per Lord Watson in Attorney-General for the Dominionof Canada v. Attorney-General for Ontario, 1897 AC199. As there are concurrent findings of fact on this matters, we do not propose to enter into a discussion of this question de novo, since we are satisfied that the conclusion reached is not unreasonable.Lastly, it was submitted that this was a case of honest concurrent user within S. 10 (2) of the Act. This point was, however, not raised in any of the Courts below and we do not propose to entertain it for the first time in thisthe matter had to be decided in terms of S. 6(1) alone without reference to the terms of the proviso to(3) to which we shall advert presently, we see great force in the submission of the learned Counsel.Judged by this test it could not be seriously contended that the prohibition in S. 6(1) (d) would be attracted to this mark. In the present case, the words Pharmaceutical and Laboratories would have a direct reference to the character of the goods since the trade marks to which it is claimed to attach them are medicinal or pharmaceutical products. In this connection reference may also be made to a decision of the House of Lords to which Mr. Agarwala drew our attentionYorkshire Copper Works Limiteds Application for a Trade Mark, (1954) 71 RPC 150Yorkshire Copper WorksLtd. v. Registrar of Trade Marks70) was an appeal from the Court of appeal affirming the decision of the Divisional Court which rejected an appeal against an order of the Registrar refusing to register the trade Mark "Yorkshire" for "solid drawn tubes and capillary fittings all made of copper orcopper alloys". The refusal to register was on the ground of the word being geographical and so being disqualified for registration under a provision of the U. K. Trade Marks Act of 1938identical in terms with S. 6(1)(d) of the Act. The applicants led evidence to establish and claimed that they had established that everyone conceived in the trade in copper tubes understood "Yorkshire Tubes" as meaning the products of the applicant. It was therefore contended that the word Yorshire had lost its primary geographical significance and had become 100 per cent distinctive of the applicants goods. In dismissing the appeal Lord Simon the Lord Chancellor observedam content to accept the statement reiterated by their learned Counsel that the mark had acquired 100 per cent distinctiveness. In spite of this fact the Registrar refused registration and has been upheld in his refusal byJ. and the unanimous opinion of the Court of appeal ...... Here I must express my emphatic dissent from the proposition which was strenuously urged by Counsel for the Appellants that distinctiveness in fact is conclusive at any rate, if there is what he called 100 per cent distinctiveness. In my opinion the decisions of this house in Wand G case, (1913 AC624) and the Glastonburycase, (1938 AC557) are fatal to this proposition and I am content to accept as accurate the clear exposition of those cases given by the learned Master of the Rolls in the present case. He took the view which I share that the Court of Appeal had in the Liverpool Cable case, (1928) 46 RPC 99, rightly interpreted the opinion of Lord Parker in the W. and G, case, (1913 AC 624) and that this House, in its turn, in the Glastonburycase, (1938 AC557) endorsed that interpretation. Accepting that view of the law, which indeed, if the matter were res integra, I should not hesitate to commend to your Lordships. I do not see how the Registrar could have come to any other conclusion. Unless, having found distinctiveness in fact, he heeded to no regard to the other factor of inherent adaptability, he was faced by the fact that there could not well be a geographical name less "inherently adapted" than Yorkshire to distinguish the goods of the Appellants. I do not propose to try to define this expression. But I would say that, paradoxically perhaps, the more apt a word is to describe the goods of a manufacturer, the less apt it is to distinguish them for a word that is apt to describe the goods of A, is likely to be apt to describe the similar goods of B. It is, I think, for this very reason that a geographical name is prima facie denied registrability. For, just as a manufacturer is not entitled to a monopoly of a laudatory or descriptive epithet, so he is not to claim for his own a territory, whether country, or town, which may be in the future, if it is not now, the seat of manufacture of goods similar to his own.That, however, is not the positionis therefore possible to conceive of cases where even if the proviso to S. 6(3) were construed in the manner in which we have indicated, there would still be scope for the rejection by the Registrar of a trade mark in use prior to the specified date. That, in our opinion, is the true ratio of the decision of Mcnair J. in 49 Cal WN 425 on which Mr. Agarwala relied in thisAs regards the first contention regarding disclaimer and the reference to S. 13, the matter stands thus. Under the terms of S. 13 of the Act, an order directing disclaimer could have been passed only by the High Court when dealing with the appellants application under S. 46(2) of the Act. The application that he filed contained no prayer to direct a disclaimer, and no submission appears to have been made to the High Court when dealing with the petition or even with the appeal that the respondent should be directed to disclaim. In these circumstances, we do not consider it proper to permit the appellant to urge this argument beforethis proceeds, in our opinion, on ignoring that the appellant is not, as we have explained earlier, entitled to insist on a disclaimer in regard to that word by the respondent. In these circumstances, the trade mark to be compared with that used by the appellant is the entire registered mark including the word Navaratna.