Case: Kabushiki Kaisha Toshiba Vs. Tosiba Appliances Co.

BACKGROUND FACTS3. The factual matrix obtaining herein shorn of all unnecessary details is as under:Appellant claims itself to be the largest manufacturer of Heavy Electrical apparatus in Japan. The establishment started in the name of Shibaura Engineering Works in the year 1857. In 1890, Hakunetshu-Sha and Company Ltd. established the first plant for electric incandescent lamps in Japan. It later on diversified its product into consumer products. Hakunetshu-Sha and Co. Ltd. was renamed as Tokyo Electric Company in the year 1899. Shibaura Engineering Works Company Ltd. merged with Tokyo Electric Company to form Tokyo Shibaura Electric Company in the year 1939. However, the name of the company was changed to Kabushiki Kaisha Toshiba (for short, TOSHIBA). Appellant adopted the mark TOSHIBA in which `TO was taken from the Tokyo and `SHIBA was taken from the word Shibaura.4. An application was filed for registration of eight items of electrical apparatuses which fall in Class 07 of the Rules framed under the 1958 Actgenerators, induction motors (electric), electric washing machines, compressors (machinery) and electric tool set consisting of electric drills (machines), spin dryers and can openers being electrically operated tools, all being goods include in class 7.Registration was granted in respect of the said items being Trade Mark No.273758. Other registeration numbers were given in favour of the said group in respect of some other goods falling under Class IX and XI.6. Respondent herein is an Indian company. It claims to have been carrying on business of various electrical appliances and marketing auto irons, toasters, washing machine, extension cords, table lamps, etc. under the trademark TOSIBA since 1975.7. The following chart will show the range of goods registered in favour of TOSHIBA and which had been sought to be rectified by theNumberDateClassGoodsToshiba (Logo)1604425.9.19539Scientific, nautical, surveying & electrical apparatus, etc.Tosiba (Logo)1604435.9.195311Installations for cooking, refrigerating, drying, ventilating, water supply and sanitary purposesTOSHIBA27375826.7.19717Current generators, induction motors (electrical), electric washing machines, etc.TOSHIBA27375926.7.19719Various electronics & electrical goods falling in Clause 9.TOSHIBA27376026.7.197111Various goods including lamps, ovens, water heaters, fans, toasters, cookers, etc.It is stated that the appellant had since acquired about 35 trade marks registrations in India. The period of seven years expired in 1978. On the expiry thereof, it became conclusive of its validity in terms of Section 32 of the Act. The said registration has been extended from time to time. It has been extended upto 2016.9. In the year 1984, the name of the Tokyo Shibaura Electric Company was changed to Kabushiki Kaisha Toshiba (Toshiba Corporation). The said change was also duly incorporated in the trademarks register.On the premise that the respondent which had although not been producing or marketing washing machines or spin dryers, but has been using the trade name, which was deceptively similar to that of the appellant, a lawyers notice was served upon it,trade mark TOSHIBA is such a well known trade mark in India and abroad that its use or the use of a phonetic equivalent mark in respect of electronic and electrical goods would cause immense confusion and deception amongst the purchasing public and the trade. Our clients were surprised when they recently learnt of the adoption and use of the mark TOSIBA both as your trade mark and an essential feature of your trading style in respect of a range of electrical goods including electric irons. The adoption of the mark TOSIBA is clearly mala fide and amounts to infringement of our clients various registered trade marks including numbers 160443 and 273760.The word TOSIBA is phonetically and visually similar to our clients trade mark TOSHIBA and by the use of the said mark in respect of electrical goods, you are likely to cause immense confusion and deception amongst the purchasing public and the trade.Respondent was called upon to desist from using the trademark TOSIBA in respect of electrical goods including electric irons or any other goods whatsoever. No reply thereto was given.PROCEEDINGS BEFORE THE REGISTRAR11. It, however, filed an application purported to be under Section 46 and 56 of the Act read with Rule 94 of the Rules before the Registrar, Trade Marks which was marked as Application No. CAL No.573, praying for rectification of the said registered trade mark No.273758 in Class 7That the petitioners are using the mark TOSIBA in respect of Domestic Electrical Appliances viz. Auto Irons, Non-Auto Irons, Ovens, Toasters, Immersion Rods, Extension Cords, Table Lamps and Airy Fans etc. in class 9 since the year 1975. The mark in question offends against the provisions of section of the Trade and Merchandise Marks Act on the date of commencement of the proceedings between the parties.8. That the mark sought to be removed was not on the commencement of the proceedings, distinctive of the goods of the Registered proprietor.9. That the mark also offends Section 11(e) of the Trade and Merchandise Marks Act, being disentitled to protection in a Court of Law.10. That the applicants are aggrieved parties as they have been served with a notice dated 24th April 1989 on behalf of the respondents to discontinue the use of the word TOSIBA which the petitioners adopted in the year 1975. They have been threatened with action under various provisions of Trade and Merchandise Marks Act and also under Article 36A of the Monopoly and Restrictive Trade Practices Act, 1969 alleging unfair trade practices. The respondents have no business in India. The threats made were unjustified. That the petitioners even approached the respondents attorneys for not to interfere with their long-standing business, but without any result, hence the petitioner are the aggrieved party within the meaning of Section 56 of Trade and Merchandise Marks Act competent to file the presentother applications were also filed for rectification of two other trade marks wherewith we are not concerned.12. Appellant filed a suit in the Delhi High Court against the respondent praying for a decree for permanent injunction for using the mark TOSIBA or any other deceptively similar mark in respect of electrical goods including electric irons, immersion rods, toasters, table lamps, ovens and stoves. The said suit is still pending.13. In its affidavit before the Registrar of Trade Marks, the appellantAnnexed to my affidavit and marked Annexure H are extracts from the Import and Export Policy of the Government of India (Ministry of Commerce) for the years:i) April 1985 to March 1988;ii) April 1988 to March 1991;iii) April 1990 to March 1992.Thus, the import and export policies for the period April 1985 to March 1991 show that electric motors, compressors and generators fall under Appendix 3 Part A of the policy which is a list of limited permissible items for which the import is not free but only against a licence. Washing machines being consumer goods fall under Appendix 2 part B which is the list of restricted items. It is, therefore, evident that the import of goods covered by registration No.273758 is not free but restricted.By reason of an order dated 12.5.1992, the Deputy Registrar of Trade Marks partially allowed the application for rectification filed by the respondent being Application No.CAL.573 and directed that the register of Trade Mark be rectified by deleting the goods `washing machines and ‘spin dryers from Trade Mark No.273758 in Class 7. Rectification was also directed on the other applications filed by the respondent being CAL-574 and 575.APPEAL BEFORE THE HIGH COURT15. An appeal was preferred thereagainst before the Calcutta High Court in terms of Section 109 of the Act. Appeals were also preferred against orders in respect of Class 9 and Class 11 registrations. The said appeal was allowed in part by the learned Single Judge of the High Court of Calcutta by an order dated 28.9.1993, upholding the order of the Deputy Registrar so far as the application related to Section 46(1)(a) of the Act but rejected the plea as regards Section 46(1)(b) thereof,first point to my mind which should be disposed of is the point as to the locus standi of Mr. Guptas client. It is the admitted position that until now the respondents have manufactured and sold articles only in class 11, and those are household electrical articles like electric iron, fan and toaster. They sell these under the mark ‘TOSIBA.It is not that the respondent has manufactured or sold washing machines or spin dryers at all or even that they have any finalized plans for so commencing the manufacture or sale of any of these items.In a paper book running to no fewer than 725 pages, not to mention a comparatively slim supplementary paper book, the only place where a connection between the respondent and washing machines or spin dryers is mentioned is at page 542, where it is recorded as stated before the Deputy Registrar in his order that the respondent also deals in some goods falling in class 7 such as washing machines and spin dryers and some other allied goods. If that statement was made before the deputy registrar, then that was a misstatement.XXX XXX XXXThe mark of the appellant `TOSHIBA and the status of the said word as a registrable mark is beyond dispute. It is almost admittedly an invented word, a hybrid between the name of the city Tokyo and the name of the company of origin, Shibaura. It is also in my opinion beyond dispute that the mark ‘TOSIBA is so similar to the mark `TOSHIBA as to give the appellant an indisputable right to call upon the respondent to cease to use that mark in relation to goods for which the appellant is registered, in case such registration can be maintained by the appellant on the register." (EmphasisHowever, with regard to the contention of the appellant that the respondent was not a person aggrieved or that the Registrar should not have used its discretionary jurisdiction, the learned judgea person obtains a registration at a time when the mark, according to his own estimate, is economically unusable, then he cannot be said to have had a bona fide intention at the time of registration that the mark should be used in relation to the goods. If, however, he waits and watches the market of the country in which he wishes to have registration, and then, as soon as the restriction is lifted, he obtains registration without delay, he can indeed then be said to have a bona fide intention that the goods should be used in the market in question. It is possible that if he waits for so long as that, he will no longer be able to get his registration at all, for another trader within the country might well have used up his name by then for the same goods. This is an unpreventable hazard. The trade mark law is a national code and not an international treaty, speaking broadly. If a country blocks international trade within itself, international names only cannot be registered and preserved in the blocked market. This would mean allowing international names to hold the market totally without goods, or give international marks a copyright value, and both these are impermissible and against the first principles of trade mark law. It cannot therefore in my opinion be said that in 1971 the appellants had a bona fide intention that the goods, namely, washing machines and spin dryers, should be traded in India under their trade mark `TOSIBA. Without the economic restrictions being lifted from the Indian market, trading, according to themselves, was and continued to be an unprofitable proposition. Such lack of intention can be gathered from the admitted stand taken by the appellant before me, and in the registry, where it was the respondent. The onus upon the respondent in appeal to show such lack of intention is thus fullycontention of the appellant was rejected,Gupta has conceded even from the time of the interlocutory application was heard in aid of this appeal that the order of the Deputy Registrar is to be so read as to restrict the rectification to the two items of washing machines and spin dryers only and it should not be read as the rectification application succeeding for the entire class. With recording of such concession, I dismiss the appeal but I do it on grounds of my own which I have mentioned above and not necessarily on the grounds given by the Deputy Registrar. The respondents would entitle to the costs of thiswas furthermore held that the special circumstances mentioned under sub-section (3) of Section 46 were not applicable.17. An intra court appeal was preferred thereagainst. Cross-objections were also filed by the respondent on the pleas that the mark should also be rectified under Section 46(1)(b), i.e., no bona fide use for a continuous period of five years and one month.IMPUGNED JUDGMENT18. By reason of the impugned judgment dated 8.12.2005, the said appeal was dismissed holding that the respondent was a person aggrieved,purpose of introducing the expression ‘person aggrieved in the statute is obviously to prevent action from persons who are interfering only from merely sentimental notions or personal vengeance and act as mere common informers. But in case where one trader, by means of having a trade mark wrongly registered in his name, narrows the area of business open to his rivals, in that case the rival is a person aggrieved. It may be that the rival is not immediately carrying on the trade. But if there is a reasonable possibility for the rival to carry on that trade in future in view of his presently carrying on a trade in the same class of goods then the rival trader is a person aggrieved. In other words, if a person or a corporation is in the trade of the same class of goods along with the company which has got a mark registered in its name and is thus the hampered in the possible expansion of his trade in that case the person or the corporation is a person aggrieved.The question as to whether requirements of Section 46(1)(a) of the Act were fulfilled or not was answeredthe date of registration was 26.7.1971 and the date of rectification application was 30.5.1989. In between there has been no use of the concerned goods by the registered proprietor except one advertisement which has already not been accepted by this Court as an instance of use. Therefore, in the facts of this case, the order of the Deputy Registrar of rectification by deletion of two items namely electric washing machine and spin dryers from the registered Trade Mark No.273758 in Class 7 goods is quite justified. It appears that the registration in favour of the appellant in Class 7 goods was in respect of various other goods and out of those goods only two have been deleted. This is quite permissible and is within the object and scope of Section 46 of the said Act.The Division Bench of the High Court did not go into the contention of the respondent that the appellant was not entitled to any relief in terms of Section 46(1)(b),learned Counsel for the respondents on the basis of the cross appeal has urged that the appellants are not entitled to the relief under Section 46(1)(b). But in view of the facts of this case which make the case against the appellants under Section 46(1)(a) so very clear that this Court need not decide the said cross appeal in any detail. This Court is of the view that the decision of the learned Judge under Section 46(1)(a) was right and the rectification which has been ordered by the Registrar cannot be interfered with."

Court's reasoning:
The basis of the said submission, thus, appear to be two-fold:(1) As there is no evidence that the appellant had any intention to abandon the use of the said trademark, as a logical corollary thereof, the High Court ought to have held that the appellant had the intention of bona fide use of the trade mark not only at a point of time when an application for registration was filed but also continuously thereafter;(2) The provisions of clauses (a) and (b), if read in the aforementioned context, sub-section (3) of Section 46 would also come into play particularly when the words `non-use therein and clause (a) of sub-section (1) are identical, namely `not to have any intention to abandon or not to use the trade mark in relation to the goods to which the application relates and save and except in clause (a), the word ‘bona fide has been added.We do not find any force in the aforementioned submission. Clauses (a) and (b) operate in different fields. Sub-section (3) covers a case falling within clause (b) and not the clause (a) thereof. Had the intention of the Parliament been that sub-section (3) covers cases falling both under clause (b) and clause (a), having regard to the similarity of the expressions used, there was no reason as to why it could not be stated so explicitly.36. If the submission of Mr. Nariman is to be accepted, the result thereof would be that for all intent and purport, no distinction would exist in the situations covered by clause (b) and clause (a) except that whereas in the former no period is mentioned, in the latter a specific period is provided.37. There may be a case where owing to certain special circumstances, a continuous use is not possible. The trade mark for which registration is obtained is used intermittently. Such non-user for a temporary period may be due to any exigency including a bar under a statute, or a policy decision of the Government or any action taken against the registrant.The intention to use a trade mark sought to be registered must be genuine and real. When a trade mark is registered, it confers a valuable right. It seeks to prevent trafficking in trade marks. It seeks to distinguish the goods made by one person from those made by another. The person, therefore, who does not have any bona fide intention to use the trade mark, is not expected to get his product registered so as to prevent any other person from using the same. In that way trafficking in trade mark is sought to be restricted.A situation of this nature has not been considered in any of the precedents. The original application filed by the respondent was maintainable on three counts:1. Application of Section 46, both under clauses (a) and (b);2. Application of Section 56; and3. The common law principle that he had been served with a legal notice by the appellant desisting from using the word TOSIBA.50. It is difficult to hold that only because respondent had not been able to prove one of the grounds, namely, applicability of Section 56 of the Act, it loses its locus also. It would continue to be a person aggrieved even within the purview of Section 46 of the Act as it was slapped with a notice of action and it had a cause of action. It had a remedy. It invoked the jurisdiction of the Registrar on a large number of grounds. One of it was accepted, others were not.51. The petition, therefore, which was maintainable, did not cease to be so particularly when the respondent not only faced with a legal action but, in fact, later on a suit has also been filed by the appellant against it. We would leave the question at that.Appellant had to maintain the service centres because although they were not in a position to manufacture washing machines or spin dryers or market the same because of the ban imposed by the Central Government, but it had been rendering the services to those who had been importing the said machines. On the one hand, appellant had not been using its registered trade mark effectively but on the other hand there was a finding that it did not intend to abandon the said right. It intended to enforce its right under the Act as against the respondent, suit was filed by it as far back as in the year 1990. Mr. Gupta commented that the very fact that the appellant did not obtain any order of injunction as against the respondent for more than 17 years itself indicates that it was not serious in pursuing its case before the High Court.55. This is one side of the picture. The other side is that there has been no injunction as against the respondent. It was free to market its products in the name of TOSIBA. It had also, however, not been manufacturing washing machine and spin dryers. A finding of fact has been arrived at by the learned Single Judge, which has not been overturned by the Division Bench that the respondent never had any intention to manufacture the said goods.The balancing act between the user of registered trade mark and non-user should be such which leads to the possibility of neither of the parties being injured. The learned Single Judge has alsomark of the appellant `TOSHIBA and the status of the said word as a registrable mark is beyond dispute. It is almost admittedly an invented word, a hybrid between the name of the city Tokyo and the name of the company of origin Shibaura. It is also in my opinion beyond dispute that the mark `TOSIBA is so similar to the mark ‘TOSHIBA as to give the appellant an indisputable right to call upon the respondent to cease to use that mark in relation to goods for which the appellant is registered, in case such registration can be maintained by the appellant on the register.There was delay on the part of the respondent in filing the application under Section 46 of the Act. The delay, if any, on the part of the appellant did not cause any harm to the respondent. It had been using the word TOSIBA for such a long time without in any way being obstructed to do so by reason of an order of the Court or otherwise.