AMERICAN ID1E PRODUCTS CORPORATION v. MAC LABORATORIES PRIVATE LOOTED AND ANR.

264 A AMERICAN ID1E PRODUCTS CORPORATION V• MAC LABORATORIES PRIVATE LOOTED AND ANR.

SEPTEMBER 30, 1985

B

Trade Marks Act, 1940 (5 of 1940), ss.14(1) and 39(2) and Trade and Merchandise Marks Act, 1958 ( 43 of 1958), ss. 18, 46(l)(a)(b) and 48 - "Trade Mark" - What is - Registration of - Valuable right on the proprietor whether conferred - Infringement of rights - Remedies - What are. c Trade Marks Act, 1940 - s.14(1) - Trade matk 'Dristan' - Registration of.

Trade and Merchandise Marks Act, 1958 - s.46(l)(a)(b) - "Trade !'lark" - Removal of from Register of Trade Marks - Two conditions precedent under cl.(a) must be cumulatively satisfied D - Burden of proving applicability of s.46(l)(a)(b) - On person seeking removal of trade mark - Distinction between els. (a) and (b) - What is - S.46(1) - Object of - Trafficking in trade mark - What is - Ascertainment of bonafide intention to use trade mark - Whether dependant on the facts and circumstances of each case - Whether continuous chain of events even subsequent to the appli- E cation for registration to be considered - Intention to use trade mark sought to be registered - Must be genuine and real at the date of application for registration - Whether the words "proposed to be used by hill'" in s .18 mean "proposed to be used by the proprietor, his agents and servants" - Effect of sub-s.(2) of s.48 on sub-s. (1) of s.18 - What is. F Trafficking in Trade Marks - What is.

Interpretation of Statutes:

Deeming provision - Full effect to be given. G Construction leading to manifest absurdity, injustice, inconvenience or anomaly to be avoided.

Precedents: Doctrine of

H English decisions - Can be referred to, but applicability would depend upon context of Indian laws, legal procedure and practical realities of litigation in India.

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The appellsnt-American Home Products Corporation, is a A Corporation incorporated in the United States of America. ·0ne of its activities is, the manufacture and marketing of pharmaceuti- cal products and drugs carried on through its division."Whitehall Laboratories". The appellant was dealing with the Ind1an Company - Geoffery Manners & Co. Ltd., through its subsidiary - Home Products International Ltd. Some time prior to 1956 it acquired B 40% shareholding in the Indian Company. In 1956 it introduced an anti-iiystamin drug in the American market under the trade'"1llllrk 'Dristan'. It got the trade mark 'Dristan' registered as a distinctive trade mark in the Trade Marks Register in the United States and subsequently in several foreign countries.

The appellant entered into a technical collaboration c agreement with the Indian Company effective from Nov. l, 1957. Under this agreement the Indian Company received the formulae, manufacturing technology, and other assistance essential for the efficient manufacture in India of various products of the appellsnt. The appellant granted to the Indian Company; for the D duration of the agreement an exclusive aud non-transferable licence to make and sell the "Licensed Products" in India under the nsme or marks of the appellant. The agreement inter alia further provided that rights of registered user will be extended to the Indian Company in respect of each "Licensed Product" by the appellant - proprietor of such trade mark. E

Pursuant to the collsboration agreement the Indian Company manufactured and marketed the products covered thereunder and got itself registered as the registered user in respect of the trade marks relsting to the goods of' which the appellant was the registered proprietor. On and from December 1957 it was decided that the Indian Company should introduce in the Indian market F nine new drugs of the appellsnt including 'Dristan' tablets. On August 18, 1958, the appellant filed an application under s.14(1) of the Trade Marks Act 1940, in Form TM-I for registration :>f the trade mark 'Dristan' in class .5 claiming to be its proprietor and that the same was proposed to be used by it. The application wss advertised as required by the Trade Marks Rules 1942. No G Notice of opposition to the registration of the trade mark was filed by any one and the trade mark 'Dristan' was registered on June 8, · 1959 by the Registrar of Trade Marks as trade mark No. 186511 in class 5. Thereafter, the Indian Company obtained a licence for the purchase of a machine for manufacturing of '.Driatan' tablets and installed the SSllie· H

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A OD May 31, 1960, the first respondent - Mac Laboratories Private Ltd. - applied for registration of the trade mark 1 Tristine 1 in claas 5. On Januaey 18, 1961, the appellant filed a notice of opposition to the registration of the mark 'Tristine' on the ground that it was deceptively similar to its trade mark 'Dristan'. The appellant 1s opposition was not accepted by the B Aaaistant Registrar of Trade Marks and by his order dt. March 27, 1962 1 he ordered the trade mark 1Trist1.ne 1 to be registered in Part A of the Register of Trade Marks. The Appell.ant thereupon filed an appeal in the Bombay High Court which was allowed by a Single Judge on Feb. 5, 1963. The appeal filed by tne first respondent before a ·Division Bench was allowed with the directions that the respondent 1 s application be amended so as to c read the trade mark 'Tristine 1 as 'Tristina 1 •

During the pendency of the application of the first respondent for registration of the trade mark 1Tristine' the Indian Company on Sept. 23, 1960 applied to the Central Govt. under s .11 of the Industries (Development and Regulation) Act 1951 for a licence to manufacture the tablet 'Dristan' which waa granted on January 19, 1961 for the manufacture of 'Dristan' tablets to the extent of 5 lakhs tablets per month with the conditions that "no ,royalty would be payable" and that the products will be marketed with the trade mark already in use or without any trade mark. It also applied for an import licence for import of materials for manufacture of 'Dristan' tablets, and got approval for manufacture of 'Dristan' tablets.

On October 18, 1961 another agreement was entered into between the Appellant and the Indian Compan;r for granting to the latter the non-exclusive r~t to use the trade mark 'Dristan 1 upon or in relation to the goods in respect of which the said trade mark was registered during the unexpired residue of the tem of the registration of the said' trade mark. Under this agreement the Indian Company agreed to become the registered user of the trade mark 'Dristan' and further agreed that the rights granted to it under the agreement would not be deemed. to entitle it to use the trade mark otherwise than as the registered user thereof.

On October 22, 1961, the 'Dristan' tablets were first marketed in India by the Indian Company. On March 6, 1962 1 a joint application in Fom 'IM-28 was made by the appellant and the Indian Company for registering the Indian Company as a registere,d H user of the trade mark 1Dristan 1 in respect of the goods for which it """ registered subject to certain conditions or restric- A tions. lbe application stated that the proposed permitted use was without limit of period subject to the right of the appellant - registered proprietor to appiy for cancellation of the registered user forthwith after notice in writing to the Indian Company.

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lbe first respondent on April 10, 1961 filed with the B lle,gistrar of the Trade Marks an application under ss.46 and 56 of the 1958 Act for rectifying the Register of Tracie Marks by removing therefrom the appellant's trade mark 'Dristan' on the grounds:

(i) That the trade mark 1Dristan 1 is deceptively and c confusingly similar to the trade mark 1Bistan 1 already registered in class 5 and which has been used and is being used.

(ii) That the trade mark 'Dristan' is deceptively similar to the trade mark 'Tristine' which the Appli- D cants have lawfully been using since October 1960 in respect of their medicinsl preparation.

(iii) That there has been no bons fide use of trade nark 'Dristan' in India in rei&tIOntothe goods for which it is registered by proprietor thereof for the time being upto date one month before the date of this application.•

On May 5, 1961, the first respondent applied for amendment of the Rectification Application by substituting the submissions in support of the grounds taken earlier. The submissions so substituted were :

"(i) That the trade mark 'Driatan • was not distinctive nark and/or wAa not registerable trade mark under s.6 of the Trade Marks Act, 1940 (corresponding to s.9 of Act No.40 of 1958), except upon evidence of its distinctiveness and no such evidence was submitted to the Registrar before registration.

(ii) That the said trade mark was registered in contravention of s.8 of the Trade Marks Act, 1940 (corresponding to a.11 of Act of 1958). H

268 SUFREME COURl REPORlS [1985] SUPP.3 s.c.R.

A (iii) That the said trade mark offends against the provisions of s.11 of the Act.

(iv) That the trade mark 'Dristan' is not distiDCtive of the goods of the registered proprietors. B (v) That the trade mark 'Dristan' was registered without any bona ~ intention on the part of the Applicants thst it would be used in relation to their medicinal preparation for symptomatic treatment of respiratory ailments by them and thst there has, in fact, been no bona fide uae in India of the said trade c mark 'Dr1.stan' in relation to the said goods by the said proprietors upto a date one month before the date of this application."

On December 7, 1964, the Registrar of Trade ~iarks dismissed the Rectification Application of the first Respondent holding· thst the Whitehsll Laboratories was a division of the appellant and not a separate ·legal entity and, therefore, the mark could not be registered in its name but only in the name of the appellant and accordingly ordered the entry in the Regj.ster relating to the Trade ~rk 'Dristan' to be varied by amending the registered proprietor's name to read as "American Home Products Corporation trading as Whitehall Laboratories." The appeal filed by the first respondent was allowed by the Single Judge holding (1) thst at the date of the making of the application for regis- tration the appellant did not have a bona fide intention to uae the trade mark ·'Dristan' by itself, (2) that the appellant had not at any time used the said trade mark in relation to the goods in respect of which it was registered, (3) that the legal fiction created by s.48(2) of the 1958 Act came into play only after a F trade mark was registered and that an intention to uae the trade mark through someone who would subsequently get himaelf regis- tered as a registered user did not amount to an intention on the part of the applicant for registration to uiie the trade mark himaelf; and (4) that to accept the appellant's contention would amount to permitting trafficking in trade marks. In view of these conclusions the Single Judge did not decide the question whether trade mark 'Dristan' was deceptively and confusingly similar to the trade mark 'Bistan'.

In the appeal filed by the appellant the Division BeDCh held that trade mark 'Dristan' was not deceptively and confusingly similar to the trade mark 'Bistan'. Dismissing the 11ppeal it, however, agreed with the ·view taken by the Single Judge in A respect of the construction which he hsd·placed upon ss.18 and 48 of the 1958 Act to come to the conclusion that the appellant had no bona fide intention to use itself the trade mark 'Dristan 1 and thattheapjjellsnt had not at any time made use of the said trade mark. B In the appeal to this Court on behalf of the appellant it · was contended:

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(1) the legal fiction created by sub-s.(2) of s.48 is, as expressly stated in that sub-section, for the purposes of s. 46 or for any other purpose for which c such use is material under the 1958 Act or any other law. To confine this fiction to a case of an actual use of a trade mark by a registered user 'is to confine it only to use for the purposes of clause(b) of s.46(1) which is contrary to the purpose for which the fiction was created and, therefore, when s.18(1) of the 1958 Act (corresponding to s.14(1) of the 1940 ·Act) uses the words "proposed to be used", these words must be read as "prop0sed to be used by a proposed registered user".

(2) To register a trade mark which is proposed to be used by a registered user does not per se SDX>unt to trafficking in trade marks and whether it does so or not must depend upon the facts and circU111Btanc"s of each case.

( 3) The reliance placed by the High Court - both by the Single Judge and the Division Bench - upon the F 'PUSSY G6LOllll' Trade llarlr. Case (1967] R.P.c. 265, was unjustified and unwarranted inss111UCh as the provisions of the English Trade Marks Act, 1938, are radically different from those of the 1958 Act as also the 1940 Act and, therefore, that case has no relevance so far as the construction of s.18(1) read with s.48(2) of G the 1958 Act is concerned.

( 4) The reliance placed bY the High Court (both bY the Single Judge and the Division Bench) upon the Shavaksha Committee Report and the Ayyanagar Report was equally misplaced as Parliament did not accept the recommendations with respect to registered users. H

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A (5) The facts awl circumstances of the case show that the appellant had, at the date of the making of the application for registration, a bona fide intention to use the trade mark 'Dristan 1 through a registered user. B (6) In any event, the appell.4nt itself had made bona fide USe Of the trade mark 1 Dristan I Up tO a dateone month before the date of the First Respondent's Application for Rectification.

On behalf of the First Respondent following contentions were c made.

( l) The words "proposed to be used" in s .18( l) of the 1958 Act s.14(1) of the 1940 Act mean "proposed to be used by the applicant for registration, his servants awl agents" and not by any person who is proposed to be got registered as a registered user awl, thetefore, the legal fiction enacted in s.48(2) cannot be imported into s.18(1).

(2) A registered user can only come into being after a trade mark is registered. Therefore, as at the date of an application for registration of a trade mark, there cannot be any person in existence who is a registered user. The words "proposed to be used" cannot therefore posslbly mean "proposed to be used by a proposed registered user".

(3) To permit a trade mark to be registered when the applicant himself does not propose to use it but proposes to use it through someone else who 1iOUld subsequently be registered as a registered user would be to permit trafficking in trade marka which i• contrary to the policy underlying the Trade Marks laws. G (4) The only case which the 1958 Act permita the registration of a trade mark when the applicant for registration does not intend to use it himself but intends to use it through another is the one set out in s.45, namely, where the Registrar is satiafied that H a company is about to be formed awl registered under the Companies Act, 1956, awl the applicant intenda to assign the trade mark to that company with a view to the use thereof by the company.

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(5) The 1958 Act is, as the 1940 Act was, based upon A the English Trade Marks Act, 1938, and the decision in the 'PUSSY G61.0BE' Trade llarlt cue (supra) concludes this point against the appellant.

(6) The Shsvaksba eo...ittee Report and the Ayyanagar Report show the legislstive intent not to allow a B proposed use by a proposed registered user to be equated with a proposed use by the applicant for registration.

( 7) The appellant bad not at any relevant· time made use of the trade mark 'Dristan 1 • c (8) The appellant bad fradulently obtained registration of the trade mark 1Dristan' by stating in the application for registration that it proposed to use the said trade mark itself and by not discloaing the fact that it proposed to use it through a proposed D registered user.

(9) The trade mark 'Dristan 1 was deceptively and confusingly similsr to the trade mark 'Bistan' and, therefore, it cannot be allowed to remain on the Register of Trade Marks. E

(10) to allow the trade mark 1Dristan' to remain on the Register of Trade Marks would be contrary to the policy of the Government of India.

2. Before a person can make an application under s.46(1) to tske off a trade mark from the Register he bas to be a "person H

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A aggrieved". Undisputedly, the First Respondent was a "person aggreived" within the meaning of s.46(1). Section 46(1) provides for two cases in which a registered trade mark may be taken off the Registrar in respect of sny of the goods in respect of which it is registered. The first case is set out in cl.(a) of s.46(1) and the second in cl.{b) of that sub-section. Before cl.(a) can become applicable two conditions are to be satisfied, nmnely, (l) that the trade mark was registered without sny bona fide intention on the part of the applicant for registration that !t should be used in relation to those goods by him, and ( 2) that there has, in fact, been no bona fide use of that trade mark in relation to those goods by sny proprietor thereof for the time being up to a date one month before the date of the application under s.46(1). The only exception to the first condition is of a case to which the provisiorul of s.45 apply. Both the conditions in cl.(a) are clllllllative and not disjunctive. Clause (a), therefore, will not apply where even though there has been no bona fide intention on the part of the applicant for registration to use the trade mark but, in fact, there has been a bona fide use of the trade matk in relation to those goods by any proprietor thereof for the time being up to a date one month before the date of the application under s.46(1). Similarly, cl. (a) will not apply where, though there had been a bona fide intention on the part of the applicant for registration to use the trade mark, in fact, there has been no bona fide use of the trade mark in relation to those goods by any proprietor thereof for the time being up to a date one month before the date of the application under s.46(1). [311 G-ll; 312 A-E]

3, Clause (b) of s.46(1) applie• where for a continuous period of five years or longer from the date of the registration of the trade mark, there has been no bona fide use thereof in relation to those goods in respect of which it is registered by any proprietor thereof for the time being. An exception to cl.(b) is created by s.46(3). Under s.46(3), the non-use of a trade mark, which is showu to have been due to special circumstances in the trade and not to any intention to abandon or not to use the trade mark in relation to the goods to which the application c; under s.46(1) relates, will not amount to non-use for the purpose of cl.(b). [312 F-il] .

4. The distinctio~ between cl.(a) and cl.(b) is that if the period specified in cl.(b) has elapsed and during that period there has been no bona fide use of the trade mark, the fact that H the registered proprietor had a bona fide intention to use the trade m&rk at the date of the application for registration becomes imllaterial and the trade oork is liable to be removed from the Register unless his case falls under s.46(3), while UDder cl. (a) where there had been a bona fide intention to use the trade mark in respect of which regf&tr..tion was sought, merely because the trade mat:'< had not been used for a period shorter than five years from the date of its registration will not entitle any person to have that trade mark taken off the l!egister. [313 A-BJ

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(5) Under ·both these clauses the burden of proving that the facts which bring into play cl.(a) or cl.(b), as tbe case may be, exist is on the person who seeks to have the trade mark removed c from the Register, Thus, where there hes been a non-user of the trade mark for a continuous period of five years and the application for taking off the trade mark from the Register hes been filed one month after the expiry of such period, the person seeking to have the trade mark removed from the l!egister hes only to prove such continuous non-user and hsa not to prove the la.ck of a bona fide intention on the part of the registered proprietor to use the trade merit at the date of the application for registration. Where, however, the non-user is for a perie<! of less than five years, the person seeking to remove the trade mark from the Register hes not only to prove non-user for the requisite period but hes also to prove that the applicant for registration of the trade mark had no bona fide intention to use the trade mark when the application for registration was made. [313 C-E] ·.

(6) The definition of "trade mark" contained in cl.(v) of s.2(1) shows that a trade mark is a mark used or proposed to be used in relation to goods for the purpose of indicating or so ss to indicat~ a connection in the course of trade between the goods and some person having the right to use the mark. It is, there- fore, not necessary for the purpose of registering a trade mark that those goods should be in existence at the date of the application for registration. If the position were that the mere non-user of a trade mark for the period mentioned in cl. (a) of G s.46(1) would make a trade mark liable to be taken off the Register, it would result in great hardship and cause a large number of trade marks to be removed from the Register, because the moment one month hes elapsed, after the registration of a trade mark hes been ordered, a trade rival can make an appli- cation on the ground set out in cl.(a) of s.46(1) claiming that there has been no bona fide use of the trade mark up to a date H one month before the date of his application. It is in order to prevent such harassment and absurd result that the two conditions specified in cl.(a) have been made cumulative. (313 F-ti; 314 A-CJ

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A (7) The object uwierlying s.46(1) is to prevent trafficking in trade marks. 'lbia is, in fact, the object underlying all trade mark laws. A trade mark is meant to distinguish the goods made by one person from those made by another. A trade mark, therefore, cannot exist in vacuo. It can only exist in connection with the goods in relation to which it is used or intended to be used. B Its object is to indicate a connection in the course of trade between the goods and some person having the right to use the mark either with or without any indication of the identity of that person. When a person gets his trade mark registered, be acquires valuable rights by reaaon of such registration. Regis- tration of his trade mark gives him the exclusive right to the use of the trade mark in connection with the goods in respect of c which it is registered and if there is any invasion of this right by any other person using a mark which is the same or deceptively similar to his trade mark, be can protect his trade mark by an action for infringement in which he can obtain injunction, damages or an account of profits made by other person. In such an action, the registration of s trade mark is prima facie evidence on its validity. After the expiry of seven years from the date of D the registration, a trade mark is to be valid in all respects except in the three cases set out in s.32. The proprietor of an unregistered trade mark whose mark is unsuthorisedly used by another cannot, however, use for the infringement of such trade mark. His only remedy lies in bringing a passing-off action, an inconvenient remedy as compared to an infringement action. E [314 C-i!; 315 A-BJ

7(i) In a passing-off action the plaintiff will have to prove that his mark has by user acquired such reputation as to become distinctive of the plaintiff's goods so that if it is used in relation to any goods of the kind dealt with by the plaintiff, it will be undl'!rstood by the trade and public as meaning that the goods are the plaintiff's goods. (315 B-C]

7(11) In an infringement action, the plaintiff is not required to prove the reputation of his mark. Further, under s.37 a registered mark is assignable and transmissible either with or without goodwill of the business concerned while under s.38, an unregistered trade mark is not assignable or transmissible except in the three cases set out in s.38(2). [315 C-ll]

(8) As the registration of a trade mark confers valuable rights upon the registered proprietor thereof, a person cannot be permitted to register a trade mark when he has not used it in relation to the goods in respect of which it sought to be regis- tered or does not intend to use relation to such goods. [315 ~)

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A llatt:'a case, (1898) 2 Cb.D 432, 436; s.c.15 R.P.C. 262, 266, (1898) 2 Cb. D. 432 at pages 439-442, sub nmf111tt John Batt lo Co. -v. Dmmett and another, (1899) A.C. 420; s.c. 16 R.P.C. 411 relied Ul'On•

(9) To get a trade mark registered without any intention to use it in relation to any goods but merely to make money out of it by selling to others the rif,ht to use it would be trafficking in that trade mark. If there is no real trade connection between the proprietor of the mark and the licensee or his goods, there is room for the conclusion that the grant of the licence is a (, trafficking in the mark. It is a question of fact and degree in every case whether , a sufficient trade connection exists• [316 A-B; 317 A-BJ

Re Allleric:an Greetinp Corp. 's Application, [1983) 2 All E.R. 609 & 619 [1984] l All E.R. 426, 433 relied upon. D (10) The intention to use a trade ma_rk sought to be registered must be genuine and 1real and the fact that the mark was thought to be something which some day might be useful would not·amount to any definite and precise intention at the time of registration to use that trade mark. The intention to use the mark must exist at the date of the application for registration. E Section 46(l)(a) expressly speaks of "bona fide intention on the part of the applicant for registration" which would mean "at the date when such applicant makes his application for registration.· [317 C-E)

In re Ducter's trade Mark (1928) Ch.l 405, 409 referred to. F (11) Intention is a state of mind. No person can make out - the state of mind or any other person. None the leas courts are often called upon for various purposes to determine the state of a person's mind. The courts can only do oo by deducting the existence of a particular state of mind from the facts of a case. [317 H; 318 A] G

(12) In the instant case, in order to ascertain the inten- tion of the appellant at the date of filing of application for registration the facts could be smunarised with reference to three periods: (l) events which took place upto the date of the application for registration, namely, August 18, 1958, (2) events which happened between that date and the date of Application for H Rectification, namely April 10, 1961 and (3) events which happened subsequently to April 10, 1961. [320 D-E)

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A U(i) Prior to 1956, the appellant had acquired a sub- stantial shareholding to the extent af 40 per cent in the Indian Company. In 1956 the appellant introduced 'Dr is tan' tablets in the American market and got the trade mark 'Dristan' registered in the United States of America and in several. other countries, A technical collaboration between the Appellant and the Indian B Company cmppenced froa Nov. 1, 1957, and an agreement in that behalf was signed on May 16, 1958. In pursuance of the said collaboration agreement the Indian Company manufactured and markets several produced of the appellant. The appellant got registered its trade marks J.n respect of such products and the Indian Company was registered as the registered user in respect of such trade marks. As early as December 1957, it was decided c that the Indian Company should introduce in the Indian market nine new products of the appellant including 1Dristan' tablets, On August 18, 1958, the appellant filed an application for regis- tration of the trade mark 1Dristan' and the said trade mark was duly registered on June 8, 1959. [320 F-ti; 321 A]

12(11) During the period between August 18, 1958, and the date of the First Respondent 1a Application for Rectification, that is, April 10, 1961 the Indian Company applied for and obtained a licence for the purchase of a Stokes Triple Layer Machine for manufacturing 'Dristan' tablets and when the said machine was received installed it at its Ghatkoper factory. It also obtained from the appellant three units of 'Dristan' tablets as samples and the manufacturing manual for the tablets. Further, it applied to the Central Government under s.11 of the Industries (Development and Regulation) Act, 1951, for a licence to manu- facture 1Dristan' tablets which was granted to it. It also applied for and obtained a licence to import certain ingredients used in the manufacture of 'Dristan 1 tablets and imported such ingredients. It further applied for and obtained from the Director, Drugs Control Administration, State of Maharashtra, permission to manufacture 'Dristan' tablets. The appellant also filed a notice of opposition to the First Respondent's Appli- cation for registration of their mark 'Tristine'. [321 Ii; 322A-CJ

G 12(111) During the period subsequent to the First Respon- dent 1s Application for Rectification, that is subsequent to April 10, 1961, on October 18, 1961, the registered user agreement was entered into between the appellant and the Indian Company. On October 22, 1961 the 'Dristan' tablets were first marketed in India by the Indian Company. On March 6, 1962, the appellant ana the Indian Company jointly made en application to register the Indian Company as a registered user of the trade mark 'Dristan'. [322 C-E]

AMERICAN H.P.CORPN. V• MAC LABS. 277 l2(iv) The facts set out sbove clesrly show that esch of them is sn integral link in a chain and that they cannot be divided into three separate periods. This continuous chain of events establishes beyond doubt that the appellant had an intention that the trade mark 1Dri.stan' should be used in relation to the tablets in question by the manufacture and sale of these tablets in India. [322 E-FJ B (13) The appellant's application for registration of the trade mark 'Dristan' was made under s.14(1) of the 1940 Act and was registered under the Act. Under s.14(1) only a person claim- ing to be the proprietor of a trade mark "used or proposed to be used by him" could apply for registration of that trade mark. The c provisions of s.18(1) of the 1958 Act are identical. [323 F-G)

(14) If the 1940 Act did not contain a legal fiction similar to that enacted in s.48(2) of the 1958 Act, the appellant's case would fall to the ground because then at the dste of its appli- cation for registration of the said trade mark, its intention D would be not to use it itself but to use it through another. 'll1e 1940 Act, however; also made provisions with respect to regis- tered users and created a similar legal fiction in s.39(2) of that Act. [325 A-BJ

(15) The only difference between s.39(2) of the 1940 Act and E s.48(2) of the 1958 Act is that while under s.39(2) the legal fiction crested by it applies "for any purpose for which such use is material under this Act or any other Liw", under s.48(2) the legal fiction applies "for the purposes of s.46 or for any other purpose for which such use is material under this Act or any other law". The addition of the words "for the purposes of s.46" in s.48(2) does not make any difference but clarifies the scope of the said legal fiction. Clause (a) of s.46(1) refers both to bona fide intention on the part of the applicant for registra- tioD that the trade mark should be used in relation to those goods by him• as also to bons fide use of the trade mark in relation to those goods by liiiY" proprietor thereof for the time being". It cannot possibly be that wheo s.48(2) expressly provides that the permitted user of a trade mark by a registered user is to be deemed to be user by the proprietor of the trade mark for the purposes of s.46, the fiction is intended only to apply to the use of the trade mark referred to in the second condition of cl.(a) of s.46(1) and not to the use of that trade mark referred to in the first condition of cl.(a). Under s.18(1), V1 application for registration of a trade mark can only be made H

278 SUPREME COURT REPORTS [1985J SUPP.3 s.c.R.

A by a person who claims to be the proprietor of tbat trade mark. Therefore, the words "applicant for registration" in cl.(a) of 8046(1) would mean "the person claiming to be the proprietor of the trade mark who is the applicant for registration of that trade mark", The first condition of cl.(a) would, therefore, reed "that the trade mark Wiiii registered without any bona fide inten- B tion on the part of the person claiming to be the proprietor of that trade mark 'Who has made the application for registration that it should be used in relation to those goods by him.• So read, there can be no difficulty in reeding the words "by him" alao as "by a registered user". Similarly, the legal fiction in s.48(2) can also be applied to s.18(1). S.18(1) in the light of the legal fiction would read as •any person claiming to be the c proprietor of a trade mark w.ed or proposed to be used by him or by a registered user". By reason of the provisions of s.39(2) of the 1940 Act, s.14 of that Act should also be read in the S8r'I! way. [325 E-11; 326 A-DJ lut lad J)op1J1ngn Co. Ltd. v. Finsbury Borough Coomc11, (1952) A.C, 109 & State of Bmlbay V• Pandunng Vinayak Oiepbalker D and Ore., [1953J s.c.a. 773 relied upon.

(16) lbe purposes for which the fiction hes been enacted are set out in a.48(2). These purposes are the purposes of s.46 or for any other purposes for which such use is material under the 1958 Act or any other law. To confine the purpose only to a part E of s.46 would be to substantially cut d0"'2 the operation of the legsl fiction. Tbe purpose for whlch the legal fiction is to be resorted to is to deem the permitted use of a trade mark, which means the use of the trade mark by a registered user thereof, to be the use by the proprietor of that trade mark. [327 A-BJ

F (17) Section 17(1) of the Engliah Trade Marks Act, 1938 (l & 2 Ge<>, 6, c.22) sets out who can apply for registtation of a trade mark and is in pari materia with s.18(1) of the 1958 Act. Under a.17(4), the refusal by a Registrar to register the trade mark is subject to appeal to the Board of Trade or to the Court at the option of the applicant. If the appeal is to the Court, G there can be further appeal to the Court of Appeal and from there to the Houae of Lords. Section 26 provides for removal of a trade mark fraa the Register and is in pari materia with s.46 of the 1958 Act. Section 32 deals with rectifying the entries in the Register and is analogous to a.56 of the 1958 Act. [327 E-F)

H (18) Under s.87 of the Patents, Designs and Trade Marks Act, 1883 (46 & 47 Viet. c.57), any registered proprietor could grant licences to use the mark subject to any equity. l'be 1883 Act in so far as it related to trade marks was repealed by the Trade A Marks Act, 1905 (5 F.dw. 7 c.15). The 1905 Act did not, however, contain any power in the registered proprietor to grant licences. 'lhe English Act of 1938, however, introduced a system of official approval for licences to use a trade 11Brk particularly by provid- ing for registering a person other than the proprietor of the trade mark as the registered user of the trade mark. [327 G-ii; B 328 A]

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(19) The High Court was unduly impressed by l'usay Galon! 'frllde Mark case and unnecessarily attached great importance to it. The High Court was justified in relying upon that case by referring to the case of Ashok a..mder llakhit Ltd., [1955] 2 C s.c.a. 252 but the High Court overlooked that in Ashok Chander llakhit's case the section of the 1940 Act which fell for inter- pretation was not in psri materia with the corresponding section of the English Act of 1938 which had been judicially interpreted by the courts in England. [332 E-G] D 'I.be llegiatrar of Trade llarlul V• Asholt Chandra llakhit Ltd., [1955] 2 s.c.a. 252 referred to.

(20) In the absence of any binding authority of an Indian Court on a particular point of law, English decisions in which judgments were delivered by judges held in high repute can be E referred to as they are decisions of i:ourts of a country from which Indian jurisprudence and a large part of Indian law is derived, for they are authorities of high persusdve value to which the court may legitimately turn for assistance; but whether the rule laid down in any of these casea can be applied by Indian courts must, however, be judged in the context of Indian laws and legal procedure and the practical realities of litigation .in F India. [332 B; 333 A-BJ romaol v. 011 and llatural Gas c..dsston, [1984 J 1 s.c.a. 526, 549, 567; s.c. [1984] Supp. s.c.c. 263, 280, 295 referred to. G (21) The relevant proviaioDB relating to registered users in the English Act and in the 1958 Act are materially different. '1'he English Act crest es two legal fictions. 'l'he first is contained in s .28(2) which relates to the permitted .use of a trade mark. That fiction is for the purpose of s.26 (which corresponds to section 46 of tbe 1958 Act) and for any other purpose for which such use is material under the E.nslish Act or H at common law. The second is contained in s.29(2) and relatee to

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A intention on the part of an applicant for registration that a trade mark should be used by him. The second fiction is for the puq>oses of paragraph(a) of s.26(1) which corresponds to cl.(a) of s.46(1) of the 1958 Act. The 1958 Act, however, contains only one fiction. It is in s.48(2), which is in pari materia with s.28(2) of the English Act. The omission from the 1958 Act of a B provision similar to that contained in s.29(2) of the English Act does not make any difference if one were to see s.(2) in its proper setting and context. The English Act does not prescribe, just as the 1958 Act does not, any period of time from the date of registration of a trade mark within which an application for registering of a person as a registered user of that trade mark should be made. Section 29(1) of the English Act, however, c provides that an application for registration of a trade mark can be accooipanied by an application for the registration of a person as a registered user of that trade mark, and if the tribunal is satisfied that the proprietor of the trade m<lrk intends it to be used by that person in relation to those goods and is also 1111tis- fied that person will be registered 118 a registered user thereof after the registration of the trade mark, it will not refuse to register the l:rade mark. The effect of s.29(1), therefore, is that an appliCJ•tion for registering a person as a registered user can be made simultaneously with the application for registering the trade mark and if both are found to be satisfactory, the application for registration would be granted and immediately thereafter the registration of the registered user would be al.loved. In such a case, the intention on the part of the applicant for registration that the trade mark should be used by the registered user thereof is to be deemed to be an intention to use that trade mark by the applicant for registration. This is a special provision applicable to a special case. The fiction crested by s.29(2) is also made applicable to the case of a F corporation about to be constituted to which the applicant intends to assign the trade niark. There is no such fiction relating to intention expressly provided in the 1958 Act, nor is there any provision for simultaneously making an application for registration of a trade mark and "" application for registering a person as the registered user of that trade mark. The purpose for which the fiction waa crested by s.29(2) with respect to " registered user was to el:lminste all possibility of trafficking in a trade mark by a persoa getting himself registered as the proprietor of a trade mark and thereafter going in search of SOi!le person who will use it as the registered user thereof. If the existence of the spec.1.al Hction crested by s.29(2) cuts down the full operation of the general fiction enacted in s. 28(2), it does not follow that the absence of such spE1cial fiction in the A. 1958 Act will also cut down the operation of the fiction in s, 48( 2) in the same way by limiting it to the actual use of a trade mark only, In the 1958 Act wherever the phrHe "used by him" occurs the fiction Will apply. In other words, the pennitted use of a trade mark ia, by the fiction. enacted in s.48(2), equated with "use by the registered proprietor". Conse- B quently wherever the word "use" occurs With all its permutations and c0111111tations, as for instance in phrases such as "proposed to be used by him" or "intended to be used by him", the fiction Will apply. Form Jio,'IM-2, which is the form prescribed for an appli- cation for registration of a trade mark prescribed by the Rnglish Trade Marks Bules, 1938, was substituted in 1982 811'! under the c substituted Form a new column is provided which requires details of an application wider s.29(1) to be given. The old Fonn No.'IM-2 did not contain this requirement nor does Form Tll-1 appended to the Trade and Merchandise Marita Rules, 1959. [333 B-1i; 334 A.-G]

p. 281 Copy page pinpoint

(22) Under the 1958 Act, an application for registration of D a trade mark as also an application for registering a registered user are to be made to the Begistrar and it is the Begistrar who bas to grant both of them. The Begistrar would refuse the application if it appears to him thst the grant thereof · would tend to facilitate trafficking in a trade mark. This question is to be considered by tt.e Begistrar himself. The provisions of the E 1940 Act were the same but the provisions of the 1958 A.ct are radically different. Under the 1958 Act, though both the appli- cation for regist~ation of a trade mark and the application for registration of registered user are to be made to the Begistrar, the Registrar bas the power to grant the application for regis- tration of the trade mark only. So far as the application for registering a person as a registered user is concerned, he has to F ~orward it together with his report to the Central Government and it is for the Central Govermnent to decide whether to permit such application to be granted or uot. In order to decide this, the Central Government has to take into account the matters set out in sub-s.(3) of s.49 and in rule 85 of the Trade Marks llules,

1959. The matters to be considered by the Central Government G include not only Tihether the pennitted use, i f allowed, would amo-.int to trafficking in trade lll!lrks but also the interests of the general public and the developll>!!nt of any industry, trade or c<lllJDerce in India. After the Central Government has taken its decision, the Registrar is to dispose of the application in accordance with the directions issued by the Central Goverlllllent. Tlrus, Tihile under the English Act the authority to decide an H

p. 282 Copy page pinpoint

A application for registering a registered user is the 6"Jlle aa the authority for registering a trade mark, under the 1958 Act they are different and so are the considerations which are to be taken into account. [334 ll; 335 A-E] B (23) Under the 1958 Act an application for registering a registered user can only be made 'after a trade mark is registered. If an intended use by a person who will be registered as a registered user is not to be included in the legal fiction created by section 48(2), it would make that fiction operate within a very narrow compass an alloost render the provisions relating to registered users meaning less. It is in very rare c circumstances that a person will get a trade mark registered aa proposed to be used by himl3elf, use it in relation to the concerned goods, and thereafter permit :lt to be used by another aa a registered user. It is also not open to everyone who wants to register a trade mark to form a company to which after the trade mark is registered and the proposed company is incorpora- ted, the trade mark w:!'ll be assigned. These things are not practical realities and Parliament could not have intended such absurd results. [335 F-l:l]

(24) It is not necessary that the appellant should have got the trade mark registered with the intention that it will itself use the trade mark and in order to effectuate that intention the appellant should have set up a factory and manufactured and marketed the tablets 'DRISTAN' and then either assigned the trade mark to the Indian Company or to get the Indian Company regis- tered aa the registered user of that trade mark. By reason of foreign exchange and industrial policies in India it is not possible for a foreign company to establish its own industry in F India. It can only do so by entering into a collaboration with Indian entrepreneurs in which the foreign company would not be permitted to have more than 40 per cent shareholding and would be subject to other restrictions. Even if a foreign proprietor of a trade mark were to establish an industry of his own in India, it would be absurd to imagine that it would thereafter cease G manufacturing the goods and allow someone else to do so. It is equally illogical that the appellant and the Indian Company should have jointly applied for registration of the trade mark 'DRISTAN 1 • The appellant was already in collaboration with the Indian Caopany. lhere was no need for it to seek other collabora- tors to establish a new company. To assign the trade mark to the Jl Indian Caopany or to make jointly with the Indian Company an application for registration of the trade mark 'DRISTAN' would be to destroy the appellant's proprietorship in that trade mark. [336 A-DJ

p. 283 Copy page pinpoint

(25) It is a well-known principle of interpretation of A statutes that a construction should not be put upon a statutory provision which would lead to manifest absurdity of futility, palpable injustice, or absurd inconvenience or anomaly. While plsclng construction on s.48(2), the High Court did not apply this principle and failed to give to the legal fiction enacted by s.48(2) its full force arid effect. [336 E-F] B

'l!llSTlTCB' Trade Maxk (1963) R.P.C. 183 and 'PVSSY GAL<llE' Trade Haxlt, (1967] R.P.c. 265 inapplicable.

(see: II.. Pentiah and Ors. v. Mnc!dala Veer81P81Jappa and Ors.) (1961] 2 s.c.R. 295, 303 referred to. c

Astm v. Harlee Manufacturing Caopany, (1959-60) 103 c.1.R. 391 relied upon.

(26) The Parliament did not accept the recommendation made in Sbavakasba Committee Report and Ayyanagar Report. These D Reports, therefore, cannot be referred to for ascertaining the intention of Parliament when enacting the relevant provisions of 1958 Act. [337 G)

(27) In the instant case, the facts on the record show that only when it was decided to introduce 'DRISTAN' tablets in the Indian market through tbe Indian Company that the appellant made its application to register the trade mark 'DRISTAN'. There was a close connection in the course of trade between the appellant and the Indian Company. The appellant owned 40 per cent of the shareholding in the Indian Canpany. It bad entered into a technical collaboration agreement with the Indian Company which provided for strict quality control and for formulae and services to be provided by the appellant. The manufacture, marketing and advertising of all products under the agreement were to be under the control of the appellant. There was no royalty payable by the Indian Company to the appellant in respect of the use of the trade mark 'DRISTAN ' • In the event of the collaboration agreement being terminated by reason of the happening of any of the events mentioned in the agreement, amongst which events was the shareholding of the appellant becom- ing less than 40 per cent, the Indian Company was to cease to be entitled to manufacture the tablets 'DRISTAN'. There was here, therefore, no question of any trafficking . in a trade mark. In these circumstances, the intention of the appellant to use the trade mark 'DRISTAN ' through the Indian Company which was subse- H quently to get itself registered as the registered user of the said trade mark cannot but be characterised as bona fide. [338 D-1!; 339 A)

p. 284 Copy page pinpoint

A (28) The two corulitioUI! of cl.(d) of s-46(1) are cumulative and since the first eowlition has not been satisfied in this case, it is unuecessary to consider the question whether the appellant had in addition to having a bona fide intention to use the trade mark 'Dristan' had also used""Tt:within a period of one month before the date of Application for Rectification. [339 A-C]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2159 of 1970.

From the Judgment and Decree dated 16.12.69 of the Calcutta High Court in Appeal No. 165 of 1968.

c F.s. Nariman, J,I. Mehta, Michal Fysh, T.M.. Ansari, v. Tulzapurkar, C.M.. Maniar, Ai,hok Sagar, Aditia Narayan, Alok Vidyalankar and D.N. Misra for the Appellant.

Dr. v. Gouri Shankar, K.L. Hathi, Manoj Arora, Nareudrabhai Zaveri, M.s. M.alati Jhaveri and Vijay F. Shah for Respondent No.l. D Ex-parte for Respondent No. 2.

T.U. Mehta and V. Dave for Intervener.