P L D 1968 Karachi 276 (PLP)

12. Dr. Barth and the Eastern Boards of Management took exception to that stand: (See the reply marked L). They held that the deported members had ceased even to be members of the Eastern Boards of Management because they had resigned in anticipation of their departure and the charitable corporation being one organization with its seat at Jena, the‑a could be only one Board of Management. The deported members were informed that in the event of their refusal to give up their claim, an application would be made under the Thuringian Law for their removal. In reply (See the letter marked M) the deported members wrote on the 28th of January 1946, as follows:‑

"We fully agree with you, that due to legal and practical reasons, there can be only one solely responsible Board of Management with the seat in Jena, the difficult position created by the events of the last summer could be still worse to the disadvantage of the Stiftung if by any kind of dualism the highest power of Management practised by the Board of Management of both the Stiftungs under takings was split up legally and by reason of distance. In order to open for you the way to appointment as regular members of the Board of Management according to the statute, we proposed you at the end of June last year, to the Deputy of the Stiftung as our successors, and banded over the business to you. We wish to confirm clearly and without any doubt that since our removal from lens we have regarded you and would further regard you as the only and completely responsible Boards of the Stiftung undertakings both internally and externally. The signatories Henricbs and Hirsch regret to have led you to an error, apparently by the mistaken use of the term `second Board of Management' in the letter of 12‑10‑1945 as if they still assign to themselves the function and capacity and legal position of the Board of Management of the Glasswork Schott and Gen. It was by no means‑ intended. At any rate we thought that any doubt arising out of this' change, or other circumstances was removed with the discussion between Messrs Sandmann and Henrichs. We would however like to clarify this' point once more that after restoration of our freedom of action, we were sure of your agreement if we acted for the maintenance of the interest of the Stiftung in the territories not occupied by the Russians because till now you were factually not in a position to do this."

13. The above agreement was implemented by the authorities at Jena by granting a power of attorney, firstly, to two of the deported members and then, at the request of one other person. (See the letter marked Q) to three of them in respect of the optical works of West, Germany. A power‑of- attorney was also granted in respect of he glass works of West Germany. This was done in 1946. The deported members accepted this status and acted under the delegated authority, for about four years. During this period they received compensation from the American authorities for the material which the latter had taken away from Jena and employed the same, with the consent of the Board of Management of the optical works at Jena, in subscribing for shares, on behalf of the charitable corporation, in a company called "Opton" which was formed at Heidenheim. The names of the members of the Boards of Management of East Germany were on official registers of West Germany as the persons entitled to sign on behalf of the corporation until January 1951, and the deported members sold the goods produced at Jena as products of the charitable corporation. This situation continued notwithstanding the expropriation of the plants at Jena.

14. The change that took place in West Germany can be conveniently described in the words of Justice Cross. Counsel for neither party has referred to this part of the judgment, but I quote it, with respectful acknowledgement of its conciseness, in the belief that the facts stated in it are not controverted: "On the 23rd February 1949, the Minister of State of Wurtemberg ordered, first that Article 3 of the Statute of the Foundation should be amended to read: `The legal seat of' the Foundation is at Jena and Heid enheim'; and secondly, that Bouersfeld, Henrichs and Kuppen bender, who were described as members of the Board of Management of the firm Carl‑Zeiss since the date of their original appointments, should administer and represent the Carl‑Zeiss Foundation in accordance with Article, 114 of the Statute until a Special Board of the Foundation in accordance with Article 113 should have been reconstituted. On 3rd May 1949, this order was confirmed by the Minister of Education of Wurtemberg. On 15th January 1951, on the application of Bauerafeld, Henrichs and Kuppenbender, the District Court of Heidenheim registered the firm Carl‑Zeiss in the Commercial Register as a firm owned by the Carl‑Zeiss Foundation domiciled at Heidenlieim with a statement to the effect that the firm had transferred its seat atom Jena to Heidenheim. Following on this registration in the Commercial Register of Heidenheim, Bauersfeld, Henrichs and Kuppenbender were to have the other Registers th West Germany such as those at Berlin, Hamburg and Cologne altered by inserting their names as the persons entitled to sign on behalf of the firm Carl‑Zeiss in place of the names of the members of the Board of Management at Jena which had hitherto remained on those Registers notwithstanding the confiscation. Similarly, they procured entries to be made on the Registers of Patents and Trade Marks in Western Germany to the effect that the firm Carl‑Zeiss, in whose name the optical patents and trade marks owned by .the Foundation were registered, had been transferred from Jena to Heidenheim."

15. The agreement arrived at in 1946 broke down completely and tension rosq to breaking point in about 1953.

16. In 1954 certain events occurred in East Germany which are of legal importance and should be noted. On February 17, 1954, the East German Trade Marks law was enacted. In pursuance of it, the East German organization applied for ."the maintenance of its old trade marks" and entered into an agreement with the VEB's containing a declaration that the VEB's had been using the trade marks with consent of the charitable corporation and that they could continue to do so in terms pf the agreement.

17. The East German organization invoked the advisory jurisdiction of the East' German Supreme Court for clarification of the relationship of that organization and of the expropriated plants to the adversary organization established in Heidenheim. In view of the nature of the proceedings the West German organization was not impleaded as a party to them. The Court presumed that the deported members had resigned. It decreed that the charitable corporation and the plants were not one entity but that the plants were a part of the corporation's property; that the corporation possessed a good deal of other assets whose book value was 20 million mark and whose real value much more than that; that the existence of the plant as a part of the charitable organization was unimpaired; that the products of the plants were "used for the benefit of the establishments of the Foundation (or the charitable corporation) to the same extent as before"; that the German Economic Commission bad accorded a special treatment to the organization, vide its resolution of June 16,. 1948, which ran as follows:‑ "In recognition and appreciation of the uniqueness of the work of Ernst Abbe and convinced of the necessity of the continuation and effectiveness of the Carl Zeiss Foundation in Jena, the Secretariat of the German Economic Commission has decided in its session of June 16, 1918, that the two people's owned plants Carl Zeiss and the Jena Glass Works Schott and Associates belonging to the Industrial Union for fine mechanical and optical instruments `Optics', (VVB) Union of People's Owned Plants‑have towards the Carl Zeiss, Foundation certain rights and duties, which will be established by Statute of the Foundation, which is 'to be drafted afresh." (Page 1373 of the Opinion) The Court further held that‑

"The continuation and realization of the general purposes of the Foundation . . . . . has rather experienced considerable revivification and extension in the changed social conditions of the German Democratic Republic, by comparison with the former situation. The same is true also regarding the provision for the employees and workers of the Foundation plants ands finally also regarding the continued existence and the flourishing of the Foundation plants, in general, for the benefit of the `working population of Jena and its immediate surroundings', which was particularly close to the heart of the founder as unmistakably expressed in Articles 1‑B, 3, 39, and 121 of the statute" ('Page 1381 of the Opinion). The Court additionally came to the conclusion that the constitutional changes did not affect the continuation of the charitable corporation: "On the contrary, these changes are entirely in accordance with Article 113 of the statute, which, when the representation of Foundation by the originally appointed state organs `becomes, untenable' especially requires their replacement by new state' organs which take their place, and as the founder expressed twice with special emphasis, 'within Thuringia'. Not to be disputed is the fact that in the formal sense then boards of Management of the two expropriated foundation businesses (Betriebe) which were transferred into people's. ownership, can no longer be considered organs of then Foundation itself. This however, is not decisive but, in this case, the economic condition which exists in reality must be decisive; that is, the highly propitious connection of unchanged, lasting domicile and objective, and the fulfiment of the purposes desired by the founder and the purposes given too his foundation. Any other interpretation of the statute would, be violently against the wish of the founder which was of such high social‑political deals."; (Pages` 1381‑82 of the Opinion):. That the plants and businesses were not persons beet dependent parts of the Corporation; therefore it was "conceptionally impossible for a dependent part to change its domicile without the other changing the domicile"; that the `Vest German authorities had purported to act in accordance with Par 87 of B G B (or the German Civil Code) read with Par 133 of the law implementing the B G Band the 'Reich laws of December 31, 1931, but under that law only the competent authority could act, which, in view of the fact that the domicile was in Jena, was the Thuringian State and not the West German power; that the German Code said nothing about the authority of a charitable corporation to change its domicile, therefore this subject was governed by the constitution of the charitable corporation itself, in consequence of which change of domicile of that corporation was permissible neither in law nor in view of the wishes of the founder, and that Par 87 B G B was irrelevant because the provision "gives to the public authority apart from the right to dissolve the Foundation, which is not here in question, only the right `to assign another purpose' to the .Foundation. This, however, was neither requested nor-contended for by the applicants, the former members of the Boards of Mangement, or by the State Ministry of Wuerttemberg‑Baden. On the contrary, they have said that by their action the purpose of the Carl‑Zeiss Foundation will be guarded and maintained and by doing so have themselves negatived the applicability of the condition which is mandatory by law to permit the interference by the public authority in the present case." (Page 1385 of the Opinion).

18. Armed with the above exposition of law by the highest legal authority of East Germany, the Council of Gera, in April 1954, brought an action in West Germany against the deported members and the West German organization to challenge their claims and their independent actions on the grounds that the Council of Gera was the "only rightful Special Board for the Carl Zeiss Stiftung (or the original charitable corporation) which as a juristic person has remained unaffected by the expropriation". The suit was dismissed in November 1960 by the Federal High Court which held that the constitution of the charitable corporation had become untenable, that the deported members had not resigned, but that, irrespective of whether they had resigned or not, the legal situation was that: "According to the' Soviet Zone view which, though it cannot claim to be valid in the territory of the Federal Republic, is decisive in determining the legal conditions existing in the Soviet Occupation Zone itself, the expropriation of the juristic person regularly produces even more far‑reaching effects. It covers not only individual items of assets, but fundamentally destroys the juristic person as a legal entity : (Supreme Court of Soviet Occupation Zone, 29th April 1950 --‑DCGG Dessau). Thus in the case of a Foundation it would also abolish the Statute." In consequence, the objection was upheld that: "the Council of the District of Gera neither constitutes the Special Board of the Stiftung in conformity with the Statute, nor can it for any other legal reason be recognised as the legal representative of the Stiftung." Attention should be paid to the words I have underlined in the first quotation of this paragraph and also to the dismissal of the action on the preliminary objection that the Council of Gera was not entitled to represent the East German organization. The underlined words emphasize that East German law was accepted in West Germany as paramount for determining the legal conditions prevailing in the Eastern Zone. The dismissal of the action on a preliminary objection makes obvious the fact that judgment on merits was unnecessary.

19. The East German organization thus failed to get itself and its property claims recognised in West Germany, but both Eastern and Western organizations are now equally to need of protecting the trade marks claimed by them in all of those countries in which their goods have, or can find, a market. Hence their applications in this country. Mention may, however, be profitably made here of certain aspects of the litigation which took place in England.

20. The East German organization brought an action in England against the West German organization and two companies of England for an injunction to restrain them from "passing off", in the course of their business, optical instruments or any article containing or consisting of glass, under or by reference to the name "Carl‑Zeiss", unless such be goods of the plaintiff or of an organization associated with the plaintiff. Objection was taken to the action on the preliminary ground that the proceedings had been started and were being maintained by "Solicitor acting in proceedings without authority". In Pakistan, a plea as to absence of authority would simply mean that the proceedings were not authorised by the plaintiff, but there apparently it included an objection to the legal existence pf the plaintiff as well as to the legal right of the plaintiff to commence and maintain the proceedings in question. The main arguments in support of the plea were that the deported members were members of the Boards of Management of the original charitable corporation founded by Abbe, that the existence of the original corporation in terms of its constitution, or statue, was legally not possible because of the confiscation of the two plants at Jena, that the trade marks were included in the confiscated property, and that the judgment of the Federal High Court of West Germany was a bar to the proceedings because of the doctrine of res judicata. Justice Cross rejected all these contentions. He, however, did not decide the question whether or not the domicile of the corporation was in Jena because he was requested on behalf of the defendants to assume that the plaintiff was domiciled in Jena. The defendants appealed successfully. The Court of Appeal, in the words of Herman, L. J., held that: "Upon the footing that here prevails that the Foundation is still an existing body, though only something in the nature of a holding company controlling assets remaining un-confis cated, it seems to me that the Special Board, if there be one; is the right person to authorise the action, the object of which is to preserve 'the goodwill of the Foundation. The licence agreement of the 8th April 1954, which I have mentioned; indicates that the confiscation only touched the physical trading assets of the business and not the trade mark, and, if so, clearly the Foundation through the Special Board has the duty to protect the remaining assets. Even if, as "is I suppose arguable, the only thing that remains for the Foundation is to dissolve .itself under Article 116 (a process which I believe under German law precedes winding up) it is clearly the duty of the Special Board to preserve the assets in the meanwhile." Further, as to the law which should govern the case, the Court held, following the decision in Banco de Bilbao V. Sancha and Same v. Rey ((1938) 2 K B 176) that: "The question what body of directors have the legal right of representing the Banco de Bilbao, a commercial entity organis ed under the laws prevailing in Bilbao and having its corporate home in Bilbao, must depend in the first place on the articles under which it is constituted. The interpretation of those articles and the operation of them, having regard to the general law, must be governed by the lex loci contractus (see per Lord Wrenbury in Russian Commercial and Industrial Bank v. Comptoir d'Escompte de Mulhouse), i.e. by the law from time to time prevailing at the place where the corporate home (domicillo social) was set up." The above are important decisions in favour of East Germany, but on the question as to whether the Council (or Rat) of Gera was the Special Board constituted by the Statute, it came to the conclusion that the Council being the creation of the German Democratic Republic, which was not a part of the Russian Government and was not recognised by the Government of the United Kingdom, the law and creatures of the German Democratic Republic including the Council of Gera and the acts of that Council, were not recognizable by the English Courts. Since the action was brought through the Council of Gera, it could not be maintained in law.

21. The plaintiff appealed to the House of Lords. It was not disputed in the appeal that the charitable corporation was in existence, that its functions and the capacity of its organs were to be determined by the law of its domicile, and that the decrees of West Germany transferring the domicile from Jena to Heidenheim were to be ignored. The Court held that the law of East Germany was the law of the plaintiff's domicile and that the best evidence as to what that law is was the opinion of the Supreme Court of the German Democratic Republic. I can with advantage reproduce here the words of Lord Reid: "What, then, is the law of the Eastern Zone with regard to these matters? It is well settled that you do not take the Code or statutes of other sources of' law and construe them according to English ideas. Foreign law is a question of fact to be decided by evidence. 'The evidence it is clear must be that of qualified experts in the foreign law. If the law is contained in a Code or written form, the question is not as to the language of the written law, but what the law is as shown by the exposition, inter pretation and adjudication (per Lord Wright in Lazard Brothers & Co. v. Midland Bank Ltd. 1933 A G 289, 298)'." On several occasions it has been necessary to decide in a case here what is the law of a foreign country on a point which has already been the subject of a decision by a Court of that country. A good example is Bankers and Shippers Insurance Co. of New York v. Liverpool Marine and General Insurance Co. Ltd. ((1926) 24 L1 L R 85 H L(E)). In that case the question was whether according to the law of New York State it was necessary to the validity of an award that an order of Court should have been obtained. The Court of Appeal in England held that it .was not. Then in another case, Bullard v. Morgan H. Grace & Co. ((1924) 206 N Y S 335) the Court of Appeal of New York decided that it was necessary. The House reversed the decision of the Court of Appeal and followed the American decision. Lord Buckmaster said: 'Unaided by that authority your Lordships would, I think, have supported the judgment appealed from.' Lord Sumner said: 'Evidence of the opinion of the highest Court of the foreign state whose law happens to form the subject‑matter of proof in this country, is obviously for an English Court the best available evidence upon the question, and is such that, if it is clearly directed to the point in dispute and is insusceptible of any but one interpretation, other evidence of that law could hardly be set against it.' There is a quotation with approval of what Scrutton, L. J. had said in the Court of Appeal: "I agree with the view of Lord Sterndale in Nanny's case that while it is almost certain that an English Court would not differ from a decision of the Supreme Court of the state on the law of that state, the decision of a subordinate Court is only an 'opinion of an expert on the fact, to be treated with respect, but not necessarily conclusive'.'.' As to the recognition of that law by English Courts, the Court held that Jena was a part of a dependency of Russia 'whose Government was recognised by the Government of the United Kingdom; therefore, the acts, laws and creature of the German Democratic Republic were to be recognised as a part and, parcel of Russia. The opinion of the East German Supreme Court being the exposition of the' proper law by the highest Court, it was conclusive "even if political considerations were apparent, it would remain true that what the Courts (of East Germany) have decided is in fact the law which is being enforced in the foreign country."

22. The above statement of the background of facts and of the contentions of law, makes it now possible to 'understand the intent and purpose of the applications made by the parties in this country for the registration of the word "Zeiss" as their trade mark and explains the keenness of each party to offer determined existence to the other's application. The West German organization applied at Karachi on the 27th of April 1954, and the East German organization on the 1st of November 1954, for the registration of the trade mark. Each of them gave notice of "opposition", and submitted its grounds in support of its opposition. Evidence was produced by them in the form of affidavits to which a number of documents were attached. The affidavits of Dr: David, Dr. J. Thumbler, Mr. W. Bertz and Dr. Paul Henrich were produced on behalf of the West German organization and those of Dr. Reichrath and Dr. Shrade on behalf of the East German organization. The Registrar of Trade Marks heard counsel for the parties and gave his judgment on the 18th of September 1961. These appeals were preferred against the judgment as mentioned above.

23. Before the Registrar, as in these appeals, the essential questions for decision have been as to whether the East German or the West German organisation is, in terms of its 'constitution, or statute, the rightful claimant to the cheritable corporation that was founded by Abbe and as such the proprietor of the trade mark that is in dispute; and whether, independently of this consideration, the East or West German organization can have the trade mark registered in Pakistan by virtue of its use in this country. The contentions that were raised in explanation of these questions were mainly founded on sections 8 and 14 of the Trade Marks Act, 1940 of this country, the provisions of the constitution, or the statute framed by Abbe ; the decrees of the West German Government; the judgment of the Federal High Court of West Germany; the orders of sequestration and expropriation of the Russian Military authorities, and the Opinion of the Supreme ,Court of East Germany.

24. The arguments that were advanced before the Registrar of Trade Marks were not only fewer than in these appeals but also in certain; important respects different. For instance, it was urged before him on behalf of the West German organization that the expropriation of the Optical and Glass Works by the Russian authorities had no effect outside the East German territory; therefore, the trade marks could not, be used by that organization inside. East Germany but could be used outside that territory by the West German organization. Mr. Lloyd urged a different point of view in this Court. He took the position that the application of the East German organization deserved to be rejected "in Limine" because the applicant was not the proprietor of the disputed trade mark in terms of the ‑ law of this country in general and in terms of subsection (1) of section 14 of the Trade Marks Act, 1940 in particular, because the goods on which the trade marks were used were products of those plants which had been expropriated. He concluded that the goods did not belong to the East German organization; therefore, that organization could lay no claim to the trade marks which were used by the producers on them. This was in his view so simple and direct an argument that it was unnecessary for this Court to ascertain the. East German law and, to decide whether the East or the West German organization is the charitable corporation originally founded by Ernst Abbe. Two considerations arise from this point of view. Firstly, if decision is to be given exclusively according to the law of this. country, then the East German decrees of expropriation should be disregarded rather than recognised by this Court, which means that the plants should not be treated as expropriated Secondly, Mr. Lloyd's reliance on West German decrees, which purported to change the domicile of the charitable corporation,, also loses its force. He was not prepared to recognise this inconsistency which would have remained hidden from the view if the applications of East and the West German organizations were decided separately. In fact, counsel did criticise the Registrar in unkind words for not deciding the applications by separate orders. His chagrin is understandable but not his attack on the Registrar because an application was made on behalf of his client that the two matters be heard together. He further criticised the Registrar for not referring the difficult question of title to the trade marks to a Civil Court under section 10 (3) of the Trade Marks Act, 1940. But in this regard also he conveniently forgot that it, was his side which had successfully opposed the Registrar's proposal to refer the question.

25. The Registrar has taken the view that the corporation: is governed by the laws of its domicile and has found that the domicile of the East German organization is at Jena. He has examined the effect of the orders SMAD 64 and, SMAD 124 of East German military authorities and come to' the conclusion that the rights of the organization to its trade marks were not confiscated'. He found support for this view in the fact that the East German organization is registered according to the law of its domicile as the owner of the trade mark. He also held that the functions which the organs of the organization performed being internal affairs concerning the Management of the organization must be treated as they are treated at the place of its domicile. In addition he concluded that the con fiscated works were fulfilling the purpose of the original corporation. As to the judgment of the Federal High Court of West Germany he has held that it is not conclusive in terms of section 13 of the Code of Civil Procedure of this country because the parties to that suit were different from the parties. to these proceedings.

26. The order of the Registrar was criticised by Mr. Lloyd with such harshness and misplaced arrogance that the criticism amounted to condemnation. He requested me to reject the order outright as not worthy of being looked at and to hear the case afresh. He had not himself appeared before the Registrar and was not personally in a positron to form an accurate idea about whether or not the Registrar made a good job of what was presented to him on behalf of the West German organization. I have no reason to be dissatisfied with the performance of the Registrar. However that might be, counsel could not argue these appeals in disregard of what was omitted by his side during the proceedings before the Registrar. For instance, no reference on behalf of the West German organization to unsuitability of the trade mark "Zeiss" to distinguish goods was made in the notice of opposition, nor is there any mention of such a contention in the order of the Registrar. But Mr. Lloyd took the stand that the trademark was a surname and as such not adaptable for this purpose. He sought to justify the introduction of this new contention on the grounds that section 6 of the Trade Marks Act, 1940 is generally mentioned in ground No. 7 of the appeals. Apart from the vulnerability of Mr. Lloyd's own case to this objection and the possible inference from this aspect that the objection was deliberately not taken before the Registrar, I disallow the contention because its decision involves questions of fact. Secondly, he raised a new contention that the deported members had resigned under duress because the East German organization had virtually threatened to report them (See the letter marked L) for denazification. There is no reference to this argument in the notice of opposition, no such discussion in the order of the Registrar and no particulars of alleged duress on the record of these appeals. This contention is also disallowed. Thirdly, Mr. Lloyd criticised the Registrar for not examining the possibility of registering the trade mark under subsection (2) of section 10 of the Trade Marks Act, 1940, and permitting its registration in favour of both the parties. The subsection is as follows:‑

"(2) In case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do he may permit the registration by more than one proprietor of trade marks which are identical or nearly resemble each other in respect of the same goods or description of goods, subject to such conditions and limitations, if any, as the Registrar may think fit to impose." No such contention was raised before the Registrar. Counsel has not shown even in these appeals how there was "honest concurrent use" of the trade mark and what "conditions and 'limitations " were practicable and proper. Ultimately he gave tip the stand.

27. Here it would be convenient to dispose of two minor contentions of Mr. Lloyd and to mention that two other contentions which occupied the attention of the English Courts and the Supreme Court of East Germany have not been raised in these appeals. The two, minor contentions are: firstly, that according to Mr. Lloyd, some of the contents of the East German application for registration (Form TMI) and its opposition to the application of West Germany (Form TM 48) were defective or objectionable. He criticised the East German‑application for registration by pointing out that the words "trading style‑if any", and the words "proposed to be used" were deleted from it and in response to a query by the Registrar, the words "manufacturers and traders" were added. This deletion and addition, according to counsel, made evident that the East German organization neither claimed to be the proprietor of the trade mark nor did it propose to use it in terms of subsection (1) of section 10 of the Trade Marks Act, 1940; therefore, the application for registration became invalid and did not constitute valid opposition to the application of counsel's client. Mr. Falconer rightly pointed out on behalf of the East German organization that the deletion and addition, to which objection was taken, actually disclosed extra care for accuracy. If there is any merit in the objection now raise by Mr. Lloyd, it ought to have been pressed before the Registrar so that the opportunity of making further changes in the application fortes could be used more meticulously. In reality the objection is an off‑shoot of Mr. Lloyd's contention that the charitable corporation had ceased to exist in East Germany owing to the confiscation of its works. This contention will be dealt with later. Secondly, Mr. Lloyd argued that the Registrar was "wholly wrong" in applying the principles of Conflict of Law, because he could at his discretion reject the application of the East German organization under subsection (1) of section 14 of the Trade Marks Act, 1940‑on the ground that it was neither the proprietor of the trade made nor capable of using it but was only likely to deceive and cause confusion in terms of clause (a) of section 8 of the Act. This likelihood o deception and confusion was according to him, indisputable because the domicile of the corporation had been transferred to West Germany by the West German decrees (W. D. 9 and 10 of David I) which being acts of State were not questionable in these proceedings. The argument is self‑contradictory because whereas it is advanced to exclude from consideration the principles of Conflict of Laws, its own authority is derived from those principles. One of the principles is that the law of domicile of a corporation governs it in respect of its constitution Dicey's on Conflict of Laws, 7th Edn., rule 78 and the other is that‑Court has no jurisdiction to entertain an action where its ground involves an act of State Dicey's on Conflict of Laws 7th Edn., rule 21 (2). The argument, therefore, cannot prevail Discretion cannot be exercised independently of the principle of proper law which law, in respect of a foreign corporation must be determined with reference to the principles of Conflict of Laws.

28. The question as to whether the application on behalf of the East German organization has been made with or with the authority of that organization and that question as to whether the Council of Gera or any other organ of the East German organization is properly constituted have not been raised in th appeals and are not, therefore, arguable before this, Court.

29. Apart from the statement of the above‑mentioned facts and the discussion of the above points of view, counsel for the parties dealt in detail with more basic arguments. The East German organization has been mostly on the defensive though some counter‑attacks were made on its behalf; which were‑-- (i) that the deported members had resigned before their departure to West Germany, had subsequently accepted the East German organization as paramount, had not only agreed to act as their agents but did actually do so for several years, and even set up the Opton Optical Works of West Germany as a subsidiary of the East German organization‑their conduct proves that their subsequent claim of membership is contrary to the original intention and conduct of the parties ; (ii) that the West German Government and the Federal High Court of West Germany had no authority or jurisdiction in terms of the constitution framed by Abbe or the German Civil Code to change or transfer by decree or judgment the domicile of the charitable corporation founded by Abbe‑--the purported change or transfer of the domicile is, therefore, invalid and void and effects no legal change in the ownership of the trade mark ; (iii) that the use of the trade mark by the West German organization outside Pakistan has been an act of piracy which confers no legal right. Moreover, its use in Pakistan which began from 1950 has been insignificant as compared to its use by the East German organization from 1910 ; and (iv) that the decision by Justice Cross of the High Court of England that the deported members had resigned has become res judicata between the parties for these proceedings. On the other hand, the following arguments were advanced on behalf of the West German organization:‑-- (i) that the sequestration and, expropriation orders of the Russian military authorities made it impossible for the charitable corporation of East Germany to use the trade mark in terms of (a) the law of East Germany, as proved by the evidence of W. David; (b) its own constitution or statute ; (c) section 14 of the Trade Marks Act, 1940 of this country. (ii) that the deported members were, in terms of the constitution, or the statute, framed by Abbe the genuine and accredited representativescl of the original charitable corporation which had, in view of item (i) above, become legally defunct in East Germany ; (iii) that the transfer of the domicile of the corporation to Heidenheim was concluded by virtue of the West German decrees, which were acts of State ; (iv) that the judgment of the Federal High Court of West Germany has not only created the bar of res judicata in these proceedings under section 13 of the Code of Civil Procedure but is also to be preferred to the mere Opinion of the Supreme Court of East Germany; therefore, continuation of the deported members in the membership of the Boards of Management and invalidity of the East German organization cannot now be questioned ; (v) that the judgments of the English Courts are irrelevant ; (vi) that the registration of the trade mark as the property of the East German organization will, in terms of section 8 (a) of the Trade Marks Act, 1940 cause deception and confusion because it has been almost exclusively used in Pakistan by West Germany since 1950 ; (vii) that, in any case, the proper applicants on behalf of the East German organization would be the VEB's. Let it be noted here that the most important consideration in the whole case, according to counsel for the West German organization is the effect, on the existence of the charitable corporation, of the expropriation of its works in East Germany combined with exclusive export of its goods into Pakistan by West Germany from 1950; and according to counsel for the East German organization, is the resignation of the deported members. It appears that, if counsel for the West German organization succeeds in showing that expropriation has disabled the East German organization, then effective existence of that organisation ceases, and with it, all opposition from that quarter. Similarly, if counsel for the East German organization succeeds in his contention, then the only feasible link between the tyro organizations is severed, and the West German organization can have no basis to claim any right in the trade marks which originated in East Germany. It is, therefore, proper to begin with the examination of these two contentions.

30. To decide the effect of expropriation on the existence of the East German organization, it is necessary to discover the proper law which governs the question. Counsel for the East German organization has contended that the domicile of a corporation is the country under whose law it is created See Rule 76 of Dicey's on Conflict of Laws Edn VII, Gasque v. Inland Revenue Commissioners ((1940) 2 K B 80 at p. 84), Abdur Rab v. Registrar of Joint Stock Companies, East Pakistan (P L D 1960 Dacea 541) acid that the law of its domicile which in his situation is also lex loci contractus in respect of its existence governs all matters concerning the interpre tation of its constitution.‑See Note to Rule 75 of Dicey's Conflict of Laws Edn. VII, Lazard Brother & Co. v. Midland Bank (1933 A C 219 at p. 297) Rule 78(2) of Dicoy's Conflict of Laws Edn. VII and functions and powers of its organs or officers‑See Russian Commercial and Industrial Bank v. Comptoir D'Escorapte de Mulhouse (1925 A C 112 at p.149). These propositions of law support contention No. 11 (para graph 29 above) of Mr. Falconer.

31. The above propositions were not directly disputed by a counsel for the West German organization who took the stand‑‑ . (a) that principles of Conflict of Laws were irrelevant because these cases should be decided entirely on the interpretation of section 14 (1) of the Trade Marks Act, 1940 of this country; (b) that the orders of expropriation were confiscatory in nature because they gave no right to compensation and thus were not recognizable in Pakistan. Their effect inside East Germany was to make VEB's the users of the trade marks; therefore, the registration of the trade mark in Pakistdn in favour of the East German organization would amount to giving effect to the East German acts of confiscation; , (c) that the dispute has been concluded by the transfer of domicile of the corporation by the West German decrees which being acts of State must be unquestioningly accepted by Courts. All doubts about the effect of the decrees have been removed by the judgment of the Federal High Court of West Germany to which both organizations‑of East and West‑were parties. This threefold contention begs the question, because if the law of domicile governs the existence, capacity, functions and powers 'of a foreign corporation, its organs and officers, and if the law of domicile of the East German organization, that was originally founded by Abbe, is the law of East Germany, then section 14 (1) of the Trade Marks Act, 1940, the so‑called confiscatory decrees of East Germany, and the authority of the Federal Republic of West Germany with respect to the change of domicile will have to be understood and decided in accordance with East German laws. Counsel for the East German organization rightly described the approach of counsel for West Germany to be "wholly wrong". As he pointed out, so long as the proposition that the domicile of a corporation is the place of its origin and that the law of domicile governs its existence and functions, hold good, the argument of Mr. Lloyd is fallacious because by implication it assumes that the decrees or decisions' of West German Courts, or other objections alien to East German law can change the domicile inconsistently with that law.

32. The only stand which Mr. Lloyd could validly take in view of the authority of the law of domicile was that the law of East Germany was in favour of his contention. He did attempt to take this stand by interpreting the decree of expropriation according to the evidence of W. David. In this attempt he was confronted with a different interpretation placed upon it in the evidence of Reichrath.

33. This brings us to the value of the evidence which has been produced in this case. A question arises as to whether the evidence of W. David or that of Reichrath, or that of neither, is acceptable as expert evidence on East German law. The witnesses were not examined before the Registrar. Only their affidavits were produced. There is no evidence of their legal education and training as lawyers. Attempts were made by counsel to imply that they had legal education, but it was conceded by both sides that they are not, and have never been, practising lawyers. Their experience was confined to their advisory capacity as employees of the parties to these appeals; thus they may be regarded as experts on their legal affairs. Reichrath was adviser to the East German organization from 1953, but David neither lived in East Germany nor handled legal affairs in that country since he left in 1945.1 He has, therefore, not seen the radically new concepts of law in practice. I am, therefore, not in a position to accept either of them as an expert on East German law. The relevant observations of Wright, J. in A. G. Der Manujacturen I. A. Woronin Leutschig and Cheshire v. Frederick Huth & Co. (79 L I L Rep. 262 at p. 265) are of interest in this respect.

34. After discarding the affidavits of the two witnesses as evidence of the East German law, we have to consider the judgment of the Federal High Court of West Germany and the Opinion of the Supreme Court of East Germany. It is obvious that the view of the West German Courts cannot be authoritative on the meanings, implications, connotations and significance of the East German law which was not only fundamentally different but also inconsistent with the legal concepts prevailing in East Germany. The Opinion of the Supreme Court of East Germany has been criticised in these proceedings on two ground only: that the West German organization was not represented in those proceedings, and that it was a mere Opinion. This leaves out of consideration the legal validity and importance of the advisory jurisdiction of that Court and also the distinction between the doctrine of res judicata or estoppel on the one hand and authoritative exposition of taw on the other. The 'Opinion does not bind the West German organization as a party to it; but it remains the most commanding enunciation of law.

35. This discussion of proper law and of its authoritative exposition disposes of the following contentions of the West German organization set out in paragraph 29 above: (i) except for (c), that is, the effect of section 14 .of the Trade Marks Act, 1940; (iii) except for the statements that the West German decrees were acts of State; (iv) except for the effect of section 13; C. P. C., on the West German decisions.

36. The contentions Mr. Lloyd which remain un-dis posed of may now be taken up. Contention No. 1 (c) is founded on section 14 of the Trade Marks Act, 1940. The section runs as under:‑‑ "Any person claiming to be the proprietor of a trade mark used or proposed to be used by him who is desirous of registering it shall apply in writing to the Registrar in the prescribed manner, add subject to the provisions of this Act, the Registrar may refuse the application or may accept it absolutely or subject to such amendments, modification, conditions or limitations, if any, as he may think fit. (2) In the case of ‑a refusal or conditional acceptance the Registrar shall, if required by the applicant, state in writing the grounds of his decision and the materials used by him in arriving thereat. (3) The tribunal may at any time, whether before or after acceptance, correct any error in or in connection with the application, or may permit the applicant to amend his application upon such terms as it may think fit." The argument of counsel was that a trade mark should indicate a connection "in the course of trade" between the goods and the alleged proprietor, that is, the East German organization, but that this qualification did not exist in these cases because by virtue of expropriation of the two plants, which produce the goods, the public of the East German Zone became their proprietor. The result, according to counsel, is that the East German organization has ceased to be the owner of those goods and has no connection, in the course of trade, with the goods produced by the plants. That organization can, therefore, legally neither use the trade mark nor even propose to use it. The fallacy of this argument is that proprietorship and the effect of expropriation are sought to be understood according to ideas which are not those of East German Law. The whole argument fails as soon as the exposition of law as given by the Supreme Court of East Germany is accepted as final. It is final in respect of the interpretation of the constitution of the East German organization as well as the functions and mutual relationship of the organs of that organization. With this view of the matter, it is unnecessary to examine over again the aspects emphasised by counsel, for purposes of sections 2 (I) (g) and (l), 14 (1) and 39(1) and (2) of the Trade Marks Act, 1940.

37. Contention No. (ii) of Mr. Lloyd, as set out in paragraph 29 above, is the counterpart of contention No. I of Mr. Falconer. The deported members had admitted that they had resigned and that they had proposed their own supcessors (See paragraph 12 above). Later they accepted the status of agents of the East German organization and have even sold goods which were manufactured by the VEB's (See paragraph 13 above) as those of the charitable corporation that was founded by Abbe. Mr. Lloyd made an effort in these proceedings to get rid of their admission by saying that it was made under w::essFOwing to the threat of the East German organization to report them under Thuringian law for denazification, which threat meant possible hardship to those friends and relatives of the deported members who were in East Germany. This plea does not entirely explain the conduct of the deported members, nor was it raised before the Registrar. There is no evidence in support of it. It is merely an after‑thought just as the plea of resignation itself is and was so found to 'be by Cross, J.

38. The next argument of Mr. Lloyd that the West German decrees (Exhs. W. D. 9 and 10 of David I) which purported to change the domicile of the charitable corporation of Abbe were acts of State (item (iii) in paragraph 29 above), has from the start failed to convince me. He has cited Adeyinka Oyekan v. Musendiku Adele (PLD1958PC8) and Vajesingji Joravarsingji v. Secretary of State for India in Council ((1923)511A357at p.360) according to which treaties conquests and occupation of territory by sovereign powers are acts of State and cannot be subjected to the scrutiny of municipal Courts; but the first question is whether the decrees were acts of State. They purport to have been issued in terms of the; municipal law of West Germany. This aspect in itself is enough to exclude them from the category of acts of State‑See Secretary of State v. Hari Bhanji (I L R 5 Mad 273; 279); The Zamindar of Remnad v. The Zemindar of Yettiapooram ((1859) 7 M I A 476, 489‑90); State of Gujrat v. Vora Fiddali (A I R 1964 S C 1043, 1069) and Muhammad Ibrahim v. Government of Pakistan (P L D 1960 Lah. 1073, 1077). But supposing for the sake of argument that they were acts of State; they could create no effect: on the organization of the East German Zone because they had no authority in the territory. The decrees are not confiscatory; therefore, if the West German organization was merely a part of the property of the East German organization, the ownership must remain) immune from their effects.

39. As to section 13, Civil Procedure Code (item No. (iv) in paragraph 29 above), it has no application because the Council of Gera of East Germany was a party to the proceedings) before the Federal High Court of West Germany. The partition to these proceedings are different from the parties to those proceedings.

40. The judgments of the English Courts (item No. (v) in paragraph 29 above) are not irrelevant since they contain valuable discussion and thoughts on a number of points the' have been raised in these proceedings. The Courts of tars country, as of other countries, try to follow the principles of soundest human thought and reasoning. They attempt to conform to the principles of logic‑deductive as well as inductive‑and to the most general standards of fair thinking. In this sense they can and do learn from each other whenever they come across analysis of similar situations or discussion of allied principles. It is not out of place to mention that counsel for the parties had agreed in the course of these appeals that most of the narration by Cross, J. of the facts of this case could be adopted by this Court for the sake of convenience, because the evidence produced before the Registrar was far less methodical and organised than the statement of the case by the learned Judge. This, however does not mean that the English judgments are binding in these proceedings, nor were they so viewed.

41. Mr. Llyod laid emphasis on exclusive export of goods to Pakistan by the West German organization from 1950 (item (vi) of paragraph 29 above), and drew the conclusion that the products of the organization have acquired a reputation in this country which should be protected against deception and confusion in terms of section 8 (a) of the Trade Marks Act, 1940. The section is as follows: "No trade mark nor part of a trade mark shall be registered which consists of, or contains, any scandalous design, or any matter the use of which would‑ (a) by reason of its being likely to deceive or to cause confusion or otherwise, be disentitled to protection in a Court of Justice; or (b) be likely to hurt the religious susceptibilities of any class of the citizens of Pakistan; or (c) be contrary to, any law for the time being in force or to morality." Council for the patties agreed that the evidence on record proves that between 1910 and 1948 the goods of the original charitablel corporation came from the territory which is now within the East German Zone, to the territories which are now Pakistan, thereafter, from 1950, the goods came to Pakistan from West Germany‑under the trade mark "Zeiss" or "Carl Zeiss/Jena" up to 1953. Dr. J. Thumbler of the West German organization has indicated in paragraph 8 (d) of his affidavit, dated the 7tb of November 1958, that the word "Jena" was also used in some of the trade 'marks under which goods were sent by the West German organization to Pakistan between 1950 and 1953. In that year the use of the word was completely dropped. This is understandable because the domicile of the West German organization was Jena as well as Heidenbeim (see W. D. 9 David I) until the 22nd of May 1954, when reference to Jena as the domicile of the charitable corporation was deleted (see W. D. 10 of David 1). In other words, reference to Jena was dropped by the West German organization from its goods for only one 3‑ear before they applied in 1954 for registration of the trade mark in Pakistan. The reputation of the East German organization was never superseded because at no time was any reference to the West German organization included in the trade marks that were used on the goods exported to Pakistan by that organization. In effect this means that no change in the place of production from Jena to Heidenheim could be inferred from the trade marks. There was nothing to enable the customer in this country to connect the good with West Germany as their origin and much less to connect them exclusively with that source: (See Richards v. Blucher. ((1890) 7 R P C 288). Mr. Lloyd's reply was that there were indications of the change in the advertisements that were issued by that organization in this country. He referred to 113 handbills and brochures, which contain indications that the goods were manufactured in West-Germany, but there is no evidence of the extent of their circulation, nor is there anything to show the years in which they were published or distributed in Pakistan. Mr. Falconer said that the letters and figures like "HZ XII/55 Uoo" which appear on them indicated the months and the years in which they were printed. According to such signs most of them were printed after 1954, which is the year in which applications for registration of the trade mark in this country were made. Mr. Lloyd replied that there is no evidence to support this interpretation of the letters and figures. He had a valid point, but it is also possible that all of those advertisements were printed and/or published subsequent to 1954 and are thus irrelevant to these proceedings. (See Jellinek's Application for a Trade Mark ((1946) 63 R P C 59, 62) and Pan Press Publications Lid's. Application to Rectify the Register ((1948) 65 R P C 193, 197).

42. The above criticism is in addition to the proposition of law that use of a trade mark in advertisements does not in itself become user in the sense in which the law of trade mark contemplates it. A connection between advertisement and the origin of the goods should be shown to exist before the reputation gained by such advertisement may be said to cause deception or confusion. Such connection cannot ordinarily exist unless the advertised mark accompanies the actual goods (See Notes of Official Rulings ((1928) A 45 R P C App.). No such connection is traceable in Pakistan. The conclusion, therefore, is that the handbills and the brochures have no evidentiary value in this case.

43. Mr. Falconer has criticised the use of the trade mark at all places of the world by the West German organization as amounting to "piracy". His basic argument was that ownership was never transferred to that organization which itself was only a part of the East German organization in spite of the West German decrees and the disloyalty of the deported 'members. As to the use of the trade mark in. Pakistan, he argued that the reputation of the goods which came here from that territory which now falls in East Germany extended over a period of 38 years, from 1910 to 1948. If there was an interruption for four or five years then, in the language of Mr. Falconer, this could not "banish" the reputation which had made a home in this country‑(See Aktiebolaget) Manus v Fullwood and Bland Ltd. ((1948) 65 R P C 329, 338); Vitamins Ltd's. Application (Trade Mark) ((1956) 1 R P C 1, 12) and Lecouturier v. Rey (1910 A C 262, 269). The so‑called ' interruption is in reality no interruption as there is evidence to indicate that a change in the origin of the goods was brought to the notice of the customers in Pakistan. On the contrary, the word "Jena" was used till 1953 as a part of a trade mark which would create an impression that there was no change. In conclusion, therefore, contention No. (vi) of Mr. Lloyd fails and the opposing contention of Mr. Falconer No. (iii) succeeds.

44. Mr. Lloyd has suggested (see item (vii) in paragraph 29 above) that in any case the VEB's, and not the charitable corporation of East Germany, could apply in Pakistan for the registration of the trade mark. This was beside the point, because the question is hot who could apply, but only whether those who did apply could or not legally do so. If the suggestion was made only to clinch the argument against the applicant from East Germany, then it would work more against the application of the West German organization because the VEB's had become licensees of the applicant from East Germany (See Exh T. R. 1). There is no such arrangement to support the claim of the West German organization. The West German organization has no locus standi to arise whether the VEB's or the applicant from East Germany should apply, because Mr. Lloyd does agree that one of them is competent and we are aware that there is no dispute between them in this respect. Additionally, the suggestion was made in disregard of the authoritative exposition of law by the Supreme Court of Fast Germany that the VEB's are organs of the charitable corporation which continue to perform the same functions and serve the same ends which they did before expropriation. Taking into consideration this view of their mutual relationship, the suggestion is erroneous.

45. Lastly, the contention of Mr. Falconer (item (iv) of paragraph 29 above) that the decision of Cross, J. on the resignation of the deported member had become res judicata because no appeal was preferred against it, raises for the first time a mixed question of law and 'fact in thee appeals. There is no material in these proceedings to support his contention. In this judgment the deported members have been found indepen dently of that plea to have voluntarily resigned.

46. In final conclusion of the foregoing discussion, the appeals are dismissed with costs.

47. In the end I acknowledge the valuable assistance rendered in these appeals by the Advocate of this Court, and particularly, by the English Barristers and Solicitors. Mr. Falconer's accuracy combined with scrupulous fairness made his presentations distinctive in these appeals. A. H Appeal dismissed.