1987 PLP 1090 (SCMR)

In order to resolve the legal controversy arising in these appeals certain provisions of the Act require pointed attention. The very opening words of the Act describe it as 'an Act to provide for the registration and more effective protection of trade marks'. Trade mark has been defined in clause (1) of subsection (1) of section 2 of the Act in the following words:‑‑

"(1) 'trade mark' means a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indication of the identity of that person." The expression 'registered trade mark' has been separately defined in clause (j) (ibid) as follows:‑- "(j) 'registered trade mark' means a trade mark which is actually on the register." Section 20 dealing with the effects of registration of a trade mark makes provisions as hereunder: ‑-- "20‑(1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark unless such trade mark has been continuously in use since before the 25th day of February, 1937, by such person or by a predecessor‑in‑title of his and unless an application for its registration, made within five years from the commencement of this Act, has been refused; and the Registrar shall, on application in the prescribed manner, grant a certificate that such application has been refused. (2) Nothing in this Act shall be deemed to effect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof." Section 25 also requires examination as it protects vested rights of which care has been taken in subsection (2) of section

20. It reads as follows:‑ "

25. Nothing in this Act, shall entitle the proprietor or a registered user of a registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods in relation to which that person or a predecessor‑in‑title of his has continuously used that trade mark from a date prior‑ (a) to the use of the first‑mentioned trade mark in relation to those goods by the proprietor or a predecessor‑in‑title of his, or (b) to the registration of the first‑mentioned trade mark in respect of those goods in the name of the proprietor or a predecessor‑in-?title of his, whichever is the earlier, or to object (on such use being proved) to registration of that identical or nearly resembling trade mark in respect of those goods under subsection (2) of section 10." Section 73 the language of which has been the subject‑matter of long debate is enacted in the following words:‑ "

73. No suit for the infringement of a trade mark or otherwise relating to any right in a trade mark shall be instituted in any Court inferior to a District Court having jurisdiction to try the suit." Finally, proviso to section 76 subsection (1) and the material portion read as hereunder:‑ "76.‑(1) Save as otherwise expressly provided in this Act, an appeal shall lie, within the period prescribed by the Central Government, from any decision of the Registrar under this Act Dr the rules made thereunder to the High Court having jurisdiction; Provided that if any suit or other proceeding concerning the trade mark in question is pending before a High Court or a District Court, the appeal shall be made to that High Court or, as the case may be, to the High Court within whose jurisdiction that District Court is situated." The right in the trade mark existed even prior to the Act and that it was property and the rights in it remained protected admits of no serious doubt. Salmond in his Jurisprudence treats the trade mark has been treated as property and right in it as ownership, the property being incorporeal. This will appear from the following statement respecting such a right:‑‑ "He who by his skill and labour establishes a business acquires thereby an interest in the goodwill of it, that is to say, in the established disposition of customers to resort to him. To this goodwill he has an exclusive right which is violated by any one who seeks to make use of it for his own advantages, as by falsely representing to the public that he is himself carrying on the business in question. Special forms of this right of commercial goodwill are rights to trade names and trade marks. Every man has an exclusive right to the name under which he carries on business or sells his goods‑‑to this extent at least that no one is at liberty to use that name for the purpose of deceiving the public and so injuring the owner of it. He has a similar right to the exclusive use of the marks which he impresses upon his goods, and by which they are known and identified in the market as his." Similarly, section 54 of the Specific Relief Act enacted in the year 1877 contains an express provision that a trade mark is a property and invasion of the right therein may call for a perpetual injunction. The Penal Code as pointed out by the learned counsel for the respondent makes provisions in sections 478 to 486 with regard to protection of such a property right and punishing deliberate violations of it. In United Kingdom the Trade Marks Act of 1905 had a provision similar to what is contained in section 20 of our Act and at page 684 of Halsbury's The Laws of England, Volume 27 (1913 Edition) the following recital appears:‑‑ "1243. Unregistered marks can only be directly protected by an action for infringement when they were used before the 13th August, 1875, and have been refused registration. The owner of such mark may still bring an action for passing off." In monograph 1326 and 1327 at page 744 of the same volume the following elaborate discussion on the subject is contained:‑‑-- "1326. The only right the English law recognises in any name or mark other than a registered trade mark is the right of a person who uses such name or mark to prevent others using the same so as to deceive the public into thinking that the business carried on by such persons and the goods sold by them are his. In certain cases, however, this may amount to a practical prohibition of others using the name or mark. 1327. The cases of this class may be divided into those involving (1) the misuse of the trading name of a person or firm; (2) the misuse of the trade name of goods; and (3) the passing off of goods by means of get‑up. In all these cases there is really but one question, namely whether the defendant has knowingly done that which would pass off other goods or another business as and for the goods or business of the plaintiff. In many cases the evidence can be conveniently divided into two separate heads namely, the plaintiff's title to a name or get‑up and the defendant's infringement of that title; but these are not really separate issues, but classes of facts bearing on the one issue given above. The absence of any hard and fast line between the two branches of the plaintiff's case renders most of the so‑called rules referred to hereafter‑either as to what is a? distinctive name or mark, or as to what constitutes infringement?? merely secondary criteria for the guidance of the Courts, of use doubtless in the majority of cases, but liable to modification in view of special circumstances, the plaintiff's cause of action depending on the combined effect of the distinctiveness of the indicia on which he, relies and the nature of the defendant's acts. There is, therefore, an important distinction between these cases and those relating to trade marks, although of course both sprang from the same source, since in the case of trade? marks? the question of the plaintiff's title to the mark has been stereotyped by legislation, and has, therefore, to be treated separately. Further, in the case of trade marks, the question of the defendant's knowledge does not arise except on the question, of what relief should be granted. With???? regard to passing off, the following observation contained at monograph 1348 at page 765 in the same volume is important:‑‑ "The right to bring an action for passing off is founded on the same principles as those relating to actions for the misuse of trade names, and, in fact, actions for misuse of the trade names of goods are only particular instances of such actions. The most usual form of action is for the use of a distinctive mark or get‑up of goods. As the various grounds on which the right of action is based are only different instances of the same cause of action, the plaintiff may rely on some or all of them, and there are many cases where the use of a trade name not in itself distinctive, together with imitation of get‑up, or carelessness or fraud in supplying articles, or in the manner of trading, or the use of a label not in fact infringing the plaintiff's registered trade mark, have established a case of passing off." There is a clearer exposition of the manner in which trade mark is protected, in Harvard's Law Review, Volume 68 (1954‑1955) on the subject of Development In the Law ‑ Trade Marks And Unfair Competition, in the following words:‑-- "Basically a trade mark owner receives protection against use of his mark by another in such a way as is likely to lead consumers to associate the others' goods with the trade mark owner. This protection against trade mark infringement, that is, against sale of another's goods as those of the trade mark owner by use of the owner's mark, may be described as protection against 'passing off'. Passing however, also includes another method by which one person's goods are made to appear as ' they originated from another, whether or not a trade mark is involved. Thus, one could pass of his goods as those of a competitor by imitating just the appearance or shape of the competitor's product, because the consumer might be deceived as to the source of the product. Protection against passing off in this broader sense is afforded by the tort action of unfair competition." Trade names, is important‑-- "It has frequently been declared that the registration of a trade mark does not create or confer any additional substantive rights therein; the effect of registration statutes, ordinarily is merely to recognize rights which have already been acquired by appropriation, and to provide additional remedies for the protection thereof." The following recital in para. 961 of Halbury's Laws of England (Second Edition Vol.32) is relevant in the context:‑

"In the case of an action for infringement of a registered mark, the plaintiff need only assert his registered title and allege infringement. When, however, he is bringing a claim for passing off, whether alone or in conjunction with a claim for infringement, he must allege the facts on which the claim to distinctiveness of the name or the mark is based, and this applies also where he is complaining of confusion likely to be caused by the trading name of some other person. If he alleges fraud in the choice of such name, he must plead it specifically. An action for passing off lies against the manufacturer who sends out goods liable to deceive, or to his knowledge to be used to deceive, and/or against the retailer. A defendant is further liable for the misuse of a trade name or other act of passing off by his servants acting within the scope of their employment." On the basis of various decisions, Venkateswaran in his book Trade Marks Act, 1940 (1945 edition) has summarised the position of U.K. in the following words:‑-- "Therefore, the owner of an unregistered trade mark could not, after the passing of the Act of 1875, sue for an injunction to restrain the infringement of his mark. His right to relief was, however, not completely barred. An injunction could still be obtained at common law if he succeeded, in establishing that the defendant's act has actually resulted or was likely to result in passing off. The above provision has been re‑enacted in all the subsequent U.K. Acts." The same author while commenting on section 20 subsection (2) and in the light of similar provision contained in section 45 of the U.K. Act 1905, remarks as follows:‑ "As a matter of precaution it is usual for the plaintiff in an action or infringement to combine a claim for relief against passing off also, so that even if he fails in the statutory action for any reason, for instance, on the ground that his registration is not valid, or that it does not extend to the goods in question, or that the mark is ordered to be expunged from the Register, he may still rely on the fact that the defendant's wrongful act has resulted or is likely to result in passing off the defendant's goods as and for the plaintiff's. It follows from the above discussion that what is described as) passing off action may be a passing off action simpliciter or a case of infringement of trade mark coupled with passing off, the trade mark) being unregistered or registered. What subsection (2) of section 20 protects is the rights of "action against any person for passing off goods as the goods of another person or the remedies in respect thereof". Section 73 which provides a forum as that of the District Court does not impinge on any right so vested because the right in a forum is merely a procedural right and can get affected retrospectively as held in the case of Adnan Afzal v. Capt. Sher Afzal P L D 1969 S C

187. Section 73 of the Act talks also of a suit "otherwise relating to, any right in a trade mark". The word "otherwise" is of comprehensive significance and it is cut down in its scope and meaning only when it, is followed by an enumeration when it receives ejus dem generis construction. There being no enumeration, no restriction can be imported. Similarly, the word "relating to" brings in comprehensiveness and wider import. The‑meaning given by the learned counsel for the appellant has the effect of making this expression (otherwise relating to) redundant because according to him the opening words govern both the registered trade mark as well as unregistered trade mark described in section 20(1) of the Act. In a passing off action which is based on the infringement of an unregistered trade mark section 73 would clearly) be applicable and it is to such passing off cases that Venkateswaran in his treatise refers when he says "the words "otherwise relating to any right in a trade mark" suggest that the section applies also to actions for passing off". Such a position of the law has now been expressly recognized in section 105 of the Indian Trade and Merchandise Marks Act, 1958 in the following words:‑ "

105. Suit for infringement, etc., to be instituted before District Court.‑‑No Suit‑‑ (a) ......................... (b) ......................... (c) for passing off arising out of the use by the defendants of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered; shall be instituted in any Court inferior to a District Court having jurisdiction to try the suit." The distinguishing feature of the decision in Ram Krishna Bhagat and others is that in that case, there was no allegation in the plaint of the infringement of the trade mark and no right in the trade mark was the subject‑matter of investigation. It was a case of passing off simpliciter. It was a case of counterfeit and deceit in the matter of name and label. In the case before us the various portions of the plaint already reproduced clearly indicate that a right in the trade mark was claimed and infringement was alleged alongwith passing off. This position was further considered in Tak Chand Fillumal v. Western India Match Co. A I R 1955 All. 404 and the following observations are relevant:‑ "We are, therefore, of opinion that the passing off actions which are not affected by the provisions of the Trade Marks Act of 1940 are those actions which are unrelated to the use of the aggrieved person's trade mark. If they are related to it those suits will necessarily require the determination of the question whether there had been an infringement of the trade mark and therefore, would be affected by the provisions of section 73, Trade Marks Act." We have not referred to those decisions which concern provision of the Indian Trade and Merchandise Marks Act, 1958, nor to those which related to infringement of registered trade mark coupled with passing off. However, one case requires mention and it is of Sunshine Soap and Candle Works A I R 1951 Punj.

332. The claim by an unregistered trade mark/name owner was of passing off by name/get‑up etc. and instituted in the Court of subordinate Judge First Class. Notwithstanding that it was held to be a case of passing off while concluding the judgment the following observations were made:‑ "Giving the case my very careful consideration, I find that the finding of the trial Court on issue No.3 is not open to challenge and that the name and style of the defendant's soap and its wrappers contravene, the trade mark or trade name of the plaintiff's soap." While deciding about the forum the Court observed as follows:‑ "There is no allegation in the plaint of the trade mark being registered, or an application for its registration having been refused. The plaintiff's action is a common law action of 'passing off' which existed and does exist independently of the provisions of the Trade Marks Act, 1940, and the right of action in regard to it has been expressly saved by section 20(2) of the Act.. The case, therefore, falls to be decided without reference to the provisions of the Trade Marks Act V of 1940." No reference was made to the wide words used in section 73 of the Act or the nature of the rights in the forum. It was possibly to correct such a view that clause (c) of section 105 of the Indian Act was enacted in such express words. It is, therefore, clear that the District Judge's Court was the) appropriate Court for instituting the claim filed by TABAQ, Lahore and the High Court of Sind correctly decided the question of forum of` appeal. The two appeals directed against it (C.A. 293 of 1986 and C.A. 294 of 1986) are dismissed with costs. When the question of grant of interim injunction came up before the District Judge, the trade mark of TABAQ, Lahore stood registered. For that reason, if for none else, there was a prima facie case, balance of inconvenience and likelihood of irreparable injury, all in favour of TABAQ, Lahore. The interim order passed by the District Judge was eminently a legal, just and proper order. Hence the appeal (C . A . 63 of 1987) is allowed with costs, the order passed by the High Court on '28‑1‑1987 is set aside and the interim order passed by the District Judge on 2‑12‑1986 is restored. Civil Appeals Nos. 63 of 1987 and 293 and 294 of 1986 NASIM HASAN SHAH, J.‑‑I agree with the conclusions reached by my learned brother and may perhaps usefully add that in this case the background was that while the suit filed by Tabaq, Lahore against Tabaq, Rawalpindi for a permanent injunction to restrain the latter from "passing off" their products under the trade name of Tabaq, Lahore and further seeking a decree for rendition of accounts was pending before the District Judge, Rawalpindi; at the same time the applications, which both the parties had submitted to the Registrar, Trade Marks, Karachi, for getting their respective Trade marks registered, were also under consideration. On 3‑6‑1985, the Deputy Registrar of Trade Marks, Karachi, accepted the application filed by Tabaq, Lahore for registration of its trade mark but rejected that of Tabaq, Rawalpindi. The last‑mentioned order by the Deputy Registrar was challenged in appeal before the Sind High Court which dismissed it on the ground that since the suit of the respondent (Tabaq, Lahore) for an injunction against the appellant (Tabaq, Rawalpindi) was pending in the District Court, Rawalpindi, the appeals brought against the grant of registration of Tabaq, Lahore and rejection of its application for registration were incompetent because on account of the snit pending before the District Judge, Rawalpindi; the said appeals were competent only before the Lahore High Court (within whose jurisdiction the Court of the District Judge, Rawalpindi, was situated). In this connection the Sind High Court referred to the terms of the proviso to section 76 of the Trade Marks Act, 1940 which provided:‑-- "76.‑‑(1) Save as otherwise expressly provided in this Act, an appeal shall lie from any decision of the Registrar under this Act to the High Court having jurisdiction: Provided that if any suit or other proceeding concerning the trade mark in question is pending before a High Court or a District Court, the appeal shall be made to that High Court or, as the case may be, to the High Court within whose jurisdiction that District Court is situated." It was held that on account of the provision to section 76 the appeals would lie to the Lahore High Court. The question agitated before this Court has been whether the Sind High Court was right in holding that the appeals were not competent before it. Under section 73 of the Trade Marks Act:‑ "No suit for the infringement of a trade mark on otherwise relating to any right in a trade mark shall be instituted in any Court inferior to a District Judge having jurisdiction ''to try the suit." But the case of the appellant was that the suit filed before the District Judge, Rawalpindi was not for the infringement of the trade mark or otherwise regarding to any right for a trade mark but was only a suit for the grant of a permanent injunction to retrain the respondent from "passing off" their products as those of the respondent. Such a suit was not covered by the provisions of section 73 of the Act and that such a suit could be instituted, a position statutorily recognised by subsection (2) of section 20 which provides:‑ "20‑(1) ......................................... (2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof." As regards the proviso to section 76 is concerned it was submitted that it dealt with the actions concerning infringement of registered trade marks under the provisions of the Trade Marks Act and not "passing off" actions which were outside the scope of the Trade Marks Act. Since the suit filed by the respondents was not a suit visualised under section 73 of the Act, the provisions of the proviso to section 76 were not attracted. Accordingly, the suit of the respondents could not, in fact, have been filed before the District Court and it ought to have been filed before the Court of first instance, namely, in the Court of a Civil Judge. Merely because the respondent's suit was pending before the District Judge, Rawalpindi was of no consequence as the District Judge was not competent to entertain it. It is well‑settled that "passing off" actions are designed to protect the property in the goods on account of its reputation and not in the trade mark and that "passing off" actions are essentially actions in tort and are filed in contradiction to suits filed for infringements of trade marks, where invasion tales place in one's rights in the property, for instance when some one imitates the goods of another. Hence if the suit filed by the respondent was a suit simpliciter for "passing off" and no infringement of the trade mark was involved therein, the suit undoubtedly lay before the Court of first instance, namely, the Court of a Civil Judge. But where a suit involves the infringement of a trade mark, it is also clear that such a suit must be filed before the District Judge‑: The question is what is the position if in a suit both the infringement of an unregistered trade mark is alleged coupled with allegations of "passing off"? In the judgment of my learned brother, it has been demonstrated by reference to the various averments in the plaint (of the suit filed by the respondents before the District Judge, Rawalpindi) that the infringement of the respondents' trade mark (until then still unregistered) was also being complained of. Thus, the suit filed by the respondents was a suit of the last mentioned category i.e. a suit alleging infringement of the trade‑mark as well as "passing off". Now it cannot be doubted that an unregistered trade mark also confers a right in property. This is evident from a perusal of section 54 of the Specific Relief Act, 1877 as is evident from the illustration (w) to section 54 of the Specific Relief Act:‑ "(w) A improperly uses the trade mark of B. B may obtain an injunction to restrain the user, provided that B's use of the trade mark is honest." Hence a suit is competent for any invasion of such a property right. Furthermore, where the infringement of a trade mark is alleged it must be instituted before the District Judge on account of the provisions of section 73 notwithstanding that these allegation are coupled with the allegations of "passing off". In the suit filed by the respondents a case of infringement of trade mark coupled with "passing off" was clearly made out. Undoubtedly, the respondents' trade mark was not yet registered when the suit was filed but for the purposes of section 73 of the Trade Marks Act this is immaterial because not merely suits for infringement of trade mark but also suits which "otherwise" relate to any right in a trade mark are comprehended under section

73. Moreover, while a 'trade mark' means a "mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indication of the identity of that person". Under the Act, a "registered trade mark" means "a trade mark which is actually on the register". In section 73 however, any suit relating to the infringement of a "trade mark" (and not any infringement of a "registered trade mark") is visualised. Thus, any suit relating to an infringement of a trade mark whether registered or unregistered would come within its ambit. Hence the suit filed by the respondents before the District Judge, Rawalpindi was rightly instituted in that Court. Accordingly the appeals from the decisions of the Deputy Registrar Trade Marks were competent only before the High Court within whose jurisdiction the said District Court was situated, namely, the Lahore High Court. As the suit before the District Judge was competent as it, inter alia, involved the violation of the trade mark, the decision of the Sind High Court that it had no jurisdiction to hear the appeals was right. 1, therefore, agree that Civil Appeals Nos. 293 and 294 of 1986 are liable to be dismissed, with costs. I also agree with my learned brother that Civil Appeal No.63 of 1987 instituted by Tabaq, Lahore against the order of the Lahore High Court dated 28‑1‑1987 refusing the temporary injunction must also be allowed because after the trade mark of Tabaq, Lahore stood registered viz on 3‑6‑1985 it was entitled to the issuance of the temporary injunction to restrain Tabaq, Rawalpindi from continuing his business under the same name viz. "Tabaq" and the order of the High Court, Lahore dated 28‑1‑1987 refusing to grant the temporary injunction cannot be sustained. M.B.A. /T‑9/S???????????????????????????????????????????????????????????????????????????????????? Order accordingly.