1988 PLP 252 (CLC)

(6) Cooper's Incorporated v. Pakistan General Stores 1981 SCMR 103

8. Learned counsel for the respondent on the other hand supported the order of Registrar of Trade Marks and contended that before the tribunal the appellant failed to adduce any evidence to establish their bona fide intention to use the mark at the time of registration of the mark "DAZ" in their favour and secondly it was an admitted fact that ever since the registration of the mark "DA Z" in their favour the appellant failed to use that mark within the territories of Pakistan and as such the mark was rightly ordered to be removed from the register of the Trade Marks. With regard to the contention of the appellant that the import restriction regarding import of detergent in Pakistan constituted special circumstance within the meaning of section 37 of the Act, learned counsel contended that it did not constitute 'special circumstance' so as to entitle the respondent to seek continuation of their mark on the register of Trade Marks. After hearing the learned counsel for the parries at length I am of the view that the removal of the mark of appellant from the register of Trade Marks was not justified in the circumstances of the case. It is common ground between the parties that import of detergent E in Pakistan was banned/ prohibited. The appellant produced before the tribunal documents 'X‑2' to 'X‑6' to establish during the year 1976 import of 20 cases "DAZ" soapless detergent manufactured by them by a Pakistani firm. They also produced as X‑7 to X‑26, copies of advertisements in respect of their product "DA Z" which appeared in different issues of Readers' Digest. Time and News Week magazine from time to time. From the R & P of the case it appears that authenticity of these documents was not challenged by the respondent before the tribunal. From the above evidence it is quite reasonable to deduce that there was no abandonment of the mark "DA Z" by the appellant. It, however, remains to be determined that whether non‑user of the mark "DAZ" by the appellant after its registration in their favour on account of import ban imposed by the Government on the imports of detergent in Pakistan constituted a 'special circumstance' which justified non‑user of the registered mark by the appellant or this non‑user by the appellant justified removal of the mark under section 37 of the Act. Mr. Khalid Anwar, the learned counsel for the respondent while supporting the order of the tribunal urged that it is an admitted position in the case that the appellant while obtaining registration of mark "DA Z" in their favour knew very well that the import of detergent is banned in Pakistan and subsequent events proved that they could not sell their product in Pakistan at any time before the filing of rectification proceedings by the respondent. These facts according to learned counsel established that the appellant had no bona fide intention of using the mark in relation to goods produced by them, in Pakistan, at the time they obtained registration of the mark in their favour. To support the above contention the learned counsel relied on the cases of Chiswide Product Ltd. v. Registrar of Trade Marks P L D 1975 Kar. 421; and A.J. Vulcan v. S.V. Palanidramy A I R 1969 Cal. 43; In the first noted case the Court on the basis of the evidence in the case found that there was no use of the registered mark by its proprietor for 18 years after the registration of mark which was found as sufficient ground for removal of the mark from the Register of Trade Marks by the tribunal under section 37 of the Act. From the facts of that case it is quite clear that the registered proprietor of mark in that case did not plead existence of any 'special circumstances' which justified non‑user of the mark and on analysis of the evidence the court found that in fact there was no user of the mark by the registered proprietor for 18 years after its registration. This case is, therefore, distinguishable. In the 2nd case cited above, the registered proprietor, which was a foreign company, in appeal against the order of Deputy Registrar of Trade Marks, allowing removal of the registered mark of the appellant from the register of trade marks, pleaded ban on import of Safety Matches in India as 'special circumstances' for non‑user of the mark. The learned Judge while dealing with this contention observed as follows at pages 47‑48 of the report:‑ "

18. For the appellants Swedish Match Company the facts definitely are against their contention. I shall briefly summarise the facts. The first fact is that they chose a time to register their trade mark in India when according to their own affidavit, namely paragraph 5 of the affidavit of A nil Chandra Daphtary affirmed on the 6th October, 1964, the severe import restrictions amounted practically to prohibition even from 1942. The registration, therefore, by the Swedish Match Company of their trade mark in India on the 24th February, 1944 was at a time when there was almost total prohibition on imports of foreign matches. To quote the language of Anil Chandra Daphtary this is what he says:‑ "To my knowledge, the import of matches into India from the year 1942 has been subject to severe import restrictions amounting practically to prohibition". , To the same effect is the affidavit of Mr. Walter Emanuel Thulin, the Managing Director of the appellant when he says in paragraph 11 of his affidavit affirmed on the 3rd September, 1964, "I state that, on account of Government policy regarding the import of matches of foreign manufacture, the matches of Jonkoping under their Registered Three Stars lable could not be sold in India during the relevant period". The second fact is that the Indian market was completely closed for all practical purposes against any use by the appellant company of its foreign matches in the Indian Market. Registration therefore of the Swedish Match Co's mark on the 24th February 1944, knowing that there was a virtual prohibition of importation of all foreign matches was unfortunate in its effect on its probable use. The only excuse, not proved, might have been that the appellant thought that those restrictions in 1944 were temporary. But such a thought is also without substance because according to its own affidavit quoted above it had already gone on for more than two years. It was still possible I suppose for the appellant to think that when the war would be over, for at the time when the registration took place the last Second World War was on, there would be relaxation with regard to these imports. However, reasonable that thought may be it can only be a matter for speculation. The third fact is that throughout these long number of years, until today 1968, a period of about 24 years this mark has been a dead mark. It was an abortive registration. Except that it appears on the Indian Trade Mark register and has been renewed from time to time during these years this mark has never been in use in the Indian market in respect of the matches of the Swedish Match Company for which it was registered. There is no association in the mind of the Indian public that this mark of the appellant Swedish Match Company is a mark associated with it.

19. If it wanted to show its intention not to abandon the mark, it could at least have issued some publicity or advertise ment from time to time but there has been no publicity and no advertisement during these 24 years. There is no proof or no instance of any sale or use of the appellant's matches with this trade mark, not even use in the embassies consulates of Sweden operating in India. There is not even use by way of samples or otherwise. In fact, there is no evidence of any use almost anywhere in the Indian market. Some vague suggestion has been made that this trade mark was used in Goa when it was a Portuguese territory. But use of the Indian registered trade mark in territories outside India cannot help. It may be pointed out here that there is no evidence that since the merger of Goa with India there has been any use of this trade mark by the appellant on its matches even in Goa, as naturally there could not be under the Indian prohibition." From the above quoted observations in the case it is quite clear that it has not been held in the above case that existence of ban/import restriction on the import of goods did not constitute 'special circumstances' justifying non‑user of the mark by the registered proprietor within the meaning of section 37 of the Act (which is equivalent to section 46 of Indian Trade and Merchandise Mark Act (1958) . On the contrary it was found in that case that the mark was in fact abandoned by the registered proprietor, who failed to establish any publicity of their mark, or its use even by way of samples or use in the Swedish Consulates, in India. It may be mentioned here that in the same case the learned Judge while interpreting section 46 (3) of the Indian Act (which is almost identical to subsection (3) of section 37 of our Act) at page 46 of the report observed as under:‑ "On an interpretation of the above language of Section 46(3) of the statute certain points are abundantly clear. The actual non‑use of the trade mark must be shown to have been due to the special circumstances of the trade. Secondly, that non‑use must be not due to any intention to abandon or not to use the trade mark in relation to the goods to which the application relates. Bearing these express words in Section 46(3) of the statute it will be useful to look at the authorities, mostly English, which have been cited from the Bar on this point. The expression 'special circumstances in the trade' has been held to mean not any special circumstances merely attendant on or attached to any particular individual business. It must be a kind of special circumstance for all the trade in those particular goods." In Aktiebalaget Manus v Fullwood & Bland Ltd. (1949) 66 RPC, Evershed L.J., while interpreting the expression 'special circumstances' in the section 26 (3) (which is equivalent of section 37(3) of our Act) observed as follows:‑ "It is not, in my view, necessary that the 'special circumstances' should be such as to afflict all traders equally or indeed to afflict all of them at all. It is important to my mind to note that the relevant phrase is used in contrast to that which immediately follows, 'and not to any intention not to use or to abandon the market'. In that context it seems to me... that the words must be taken to refer to circumstances which are 'special in the sense of being peculiar or abnormal and which are experienced by persons engaged in a particular trade as the result of the working of some external forces as distinct from the voluntary acts of any individual trader. According to such a test no less than (in my view) the ordinary and common sense meaning of the words the impact of war conditions making impracticable the ordinary usages of international trade would amount to special circumstances in the trade, and, if the non‑user of his mark by a particular trader was in fact due to the effect upon his business of those conditions, then he would, in my view, be within the protection of subsection (3)." The above observations of Evershed L.J., have been quoted with approval in a number of subsequently reported cases both from the English as well as Indian jurisdiction including the "Bulova" case (1967) RPC 229 cited by the learned counsel for the appellant. In "Bulova's" case, the import restrictions were pleaded as special circumstances by the registered proprietor for non‑user of the mark for 5 years and one month before the making of application for removal of mark. The Assistant Controller of Trade Marks expunged the mark "Bulova" disagreeing with the contention of registered proprietor that import restrictions constituted "special circumstances" for non‑user of the ‑mark relying on the observation of Evenshed L.J. , quoted above. The operative part of the order of Assistant Comptroller in Bulova's case was as under:‑ "The words used by Lord Evershed were 'the impact of war conditions making. impracticable the ordinary usages of international trade', and, in order to construe this passage, I have to decide what is meant by the words 'the ordinary usages of international trade'. After very careful consideration, I have come to the conclusion that the two alternative courses open to the registered proprietors (that is to say, the establishment of a factory in the United Kingdom and/or the purchase of a quota from other importers) can be considered to be the ordinary usages of international trade. Both of these courses had been successfully adopted by other importers in foreign watches, the purchase of quotas having been used in the case of Junghans and Zodiac by other (unnamed) companies which are referred to in the evidence of Mr. Day. It is clear from the correspondence which is exhibited to Mr. Day's declaration that the Government of the United Kingdom was prepared to assist in a very substantial manner to enable the registered proprietors to establish the manufacture of their watches in this country to the extent of paying for the construction of the necessary factory. It also appears that, in order to assist the registered proprietors in their efforts to start such a factory, the importation of a certain number of watches and watch movements would be permitted. Accordingly, I have come to the conclusion that the ordinary usages of international trade were not impracticable." Ungeod Thomas, J. who heard the case in appeal from the order of Assistant Comptroller of Trade Marks in Bulova's case did not agree with the above conclusions of Comptroller of Trade Marks, and relying on the very passage of Evershed L.J. which was referred by the Comptroller in his order, held existence of import ban on the import of goods as constituting 'special circumstances' for non‑user of the mark by the registered proprietor. These were the observations of Ungeod Thomas, J.:‑ "These crucial passages appear to indicate that the Assistant Comptroller made his decision on the ground that the Import Order did not render the ordinary usages of international trade impracticable within the meaning of Evershed, L.J.'s judgment, but, if the Import Order did not so render the ordinary usages impracticable, then, in accordance with Evershed. L.J.'s judgment (at any rate, in the absence of any suggestion of any other basis for founding special circumstances), there would be no special circumstances at all. This is contrary to the concession which has been maintained throughout this case that the Import Order constitutes a special circumstance, and from this it follows, in accordance with Evershed L.J.'s judgment (at any rate in the circumstances of this case) that it makes impracticable the ordinary usages of the trade within the meaning of the judgment. This contradiction between the respondents' concession, and what seems to be the basis of the Assistant Comptroller's decision, appears to arise because the Assistant Comptroller treats Evershed, L.J.'s judgment as requiring that all the ordinary usages of international trade under which the trade mark might in general be put to the required use should be impracticable; but what the judgment requires is that a particular trader's decision not to use the trade mark should be due to special circumstances‑‑I quote from the judgment ‑‑‑!in the sense of being peculiar or abnormal and which are being experienced ....as the result of the working of some external forces', and the reference to 'the impact of war conditions making impracticable the ordinary usages of international trade' is only referred to as an instance of what would satisfy the test and 'amount to special circumstances'. There is no requirement in Evershed, L.J.'s judgment that the special circumstances should make impracticable all the usages of international trade under which use of such a trade mark might in general be impracticable. Evershed, L.J.'s emphasis that the words in the section 'non‑use due to special circumstances' contrast with the following phrase 'intention not to use or to abandon the trade mark'. It seems to me that both what Evershed, L.J. refers to as 'the ordinary and common‑sense meaning of the words' of the section and his own observations lay down that, if 'peculiar or abnormal' 'external' circumstances exist due to which there is non‑use, then the requirement of the Section is satisfied. Thus, it is enough that there are the special circumstances in the sense of circumstances making any ordinary usage of international trade impracticable, if that is the reason for the trader's non‑use of a mark." In Bali's case (1966) RPC 387 which was also incidentally decided by Ungeod Thomas, J. the existence of import restriction on goods was pleaded as constituting 'special circumstances' for non‑user of the mark and the learned Judge while upholding this plea observed as under at page 406 of the report:‑ "The Assistant Comptroller rightly concludes in his decision that it is 'clear that the registered proprietors did not intend to abandon their trade mark in relation to the goods to which their application relates'. Then, however the Assistant Comptroller adds: 'The fact that they were unable to obtain the necessary licensees when Mr. Stein' ‑‑‑who is the President of the Bali Company‑ ‑‑'visited the United Kingdom in 1959 is due, in my opinion, to the ordinary give and take considerations of the trade, and not due to special circumstances within the meaning of Section 26(3)'. It is quite clear, however, that the proprietors, the Bali Company, could not have used the token import scheme unless an interested firm in this country made the appropriate application, and no such application was made. It was thus, not possible for the company to import under the token scheme, and that was not their fault. Further, what has to be considered is not merely the existence of an absolute prohibition to import, as might be thought from one passage in the Assistant Comptroller's decision, or a complete impossibility of importing, but, in the words of Evershed, L.J. , (supra), the existence of conditions 'making impracticable the ordinary usages of international trade.: A trade mark is a commercial asset intended to be used commercially by businessmen, and it seems to me that 'special circumstances' have to be understood and applied in a business sense. In my view, this token import scheme modification to the earlier general prohibition did not convert what was before impossible into what was, in a business sense, practicable, even if a firm in this country had made the necessary application under that scheme. The non‑use of the trade mark by the Bali Company, even during the token import scheme period, is thus, in my view, shown to have been due‑ to special circumstances in the trade. Similarly, I conclude on the first issue under section 11 that the Bali Company has not since the registration of its trade mark become disentitled to protection by reason of circumstances over which it has had control." On the basis of decision in Bali's case an Indian Court in the case of the Plaza Chemical Industries v. Kohinoor Chemical Co. (AIR 1973 Bombay 191) held that import restrictions on goods in India constituted 'special circumstances' for non‑user of the mark by the registered proprietor within the meaning of section 46(3) of the Indian Act. These are the observations in Plaza Chemical Industries case:‑ "

7. Section 46 of the Act lays down the circumstances under which a trade mark may be removed from register. Reliance is placed upon the provisions of Section 46 (1)(b) in the present case to support the application for removal. It is as under:‑ '46(1) Subject to the provisions of Section 47 a registered trade mark may be taken off the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a High Court or to the Registrar by any person aggrieved on the ground either‑ (a) x x x x x x x x x x x x x x (b) that up to a date one month before the date of the application, a continuous period of five years or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being'. On the evidence before the Joint Registrar the conditions laid down in subsection 1(b) above were fulfilled. However, that by itself is not sufficient to remove the trade mark from register in view of the provision of subsection (3) of Section

46. The relevant part of subsection (3) lays down that an applicant shall not be entitled to rely for the purpose of clause (b) of subsection (1) on any non‑use of a trade mark which is shown to have been due to special circumstances in the trade mark in relation to the goods to which the application relates. Question arises whether it is established in the present case that the non‑use of the trade mark for the requisite period constitutes a special circumstances within the meaning of section 46 (3) of the Act. It is well‑settled in view of the decision in Bali Trade Mark (1966) RPC 387 that import restrictions constitute special circumstances within the meaning of Section 46 (3) of the Act. It was laid down in that case that "special circumstances in the trade justifying non‑use of the trade mark did not end when the Government restrictions on importation from America were eased, but continued as long as importation was impracticable in a business sense. It is not disputed in the present case that right from the year 1954 on wards in view of the import policy declared from time to time by the Government of India, import of cosmetics is prohibited in this country. These special circumstances exist due to which the respondents were unable to use their registered trade mark in India. Their case is, therefore, covered by the provisions of Section 46(3) and even though the conditions laid down in Section 46(1)(b) are fulfilled in present case, they will not be entitled to have the respondents' registered trade mark removed from the register." From the above discussion it is quite clear that whether "special circumstance" existed in a case which justified non‑user of the mark by the registered proprietor within the meaning of section 37(3) of the Act is to be decided with reference to the facts and circumstances of each case. The important factor however, to be kept in mind while deciding the above fact is whether the actual non‑user of the trade mark resulted on account of any intention on the part of the registered proprietor to abandon the mark or on account of certain other factor which would amount to special circumstances for such non‑user. Here, again, while considering the other factors, it is not merely the attendant or attached circumstance to any particular individual business which is relevant but a special circumstances of 1 the kind which affects or applies to all the traders in that particular trade. In other words if peculiar or abnormal circumstances exist which has resulted in the non‑use of the trade mark and over which the registered proprietor had no control then the requirement of section 37(3) regarding existence of special circumstance for non‑use of the mark shall be deemed to have been fulfilled. It will thus be seen that if there are circumstances which make ordinary uses of international trade impracticable then such circumstance would amount to existence of a 'special circumstance' resulting in the non‑user of the mark by the registered proprietor. In the case before me it is common case between the parties that there existed from the beginning a complete ban on the import of detergent in Pakistan. These restrictions on the import of detergent in Pakistan are not restricted to affect the business of any particular individual but all the traders dealing in the import of detergent are affected by these restrictions. I am, therefore, of the view that non‑use of mark by the appellant on the goods is the result of import restriction on such goods, which constituted a special circumstance within the meaning of section 37 the Trade Marks Act, and, therefore, the Registrar was not justified in ordering removal of their mark from the register. The learned counsel for the respondent also contended that their clients had used the mark "DA Z" on their product for a long time in Pakistan an have thus acquired a right in that mark, and, are, therefore, entitled to get the mark of appellant removed from the Register of Trad Marks as they have never used the same in Pakistan. These facts alone did not entitle the respondent to get the mark of appellant removed from the Register of Trade Marks as section 37 of the Act clearly provides that in spite of the fact that the Registrar may not be inclined to expunge a mark from the register under section 37 of the Trade Marks Act on the ground of non‑user on account of existence of special circumstances, he has discretion if the circumstances justify to allow registration of identical or similar mark on the ground o concurrent and honest user. I accordingly accept these Appeals and set aside the orders of the Registrar of Trade Marks. However, the parties are left to bear their respective costs. M. Y. H./P‑36/K Appeals accepted.