S. Syed Mohideen v. P. Sulochna Bai

CITATION2016 (66) PTC 1 (SC)
COURTSupreme Court of India
JUDGES/CORAMJustice H.L. Dattu and Justice A.K. Sikri
DATE OF JUDGEMENT17.03.2015

Introduction

More often than not, very similar trademarks are registered by two different parties. This causes a great amount of dispute and litigation between the two. The courts then, in deciding the dispute, rely upon the principle of priority in adoption and use, along with prior registration. The same principle is reflected under Section 34 of the Trade Marks Act, 1999 also. The present case is concerned with such a situation of two vendors having registered the same trademarks, for the same product, but in different years.

Facts

The plaintiff in the present case, P. Sulochna Bai ran a ‘halwa’ shop in Tirunelveli and was a registered trade mark owner of “Iruttukadai Halwa”. Though the business of halwa dated back to 1900, started by her father-in-law and then carried on by her husband followed by her, the mark was registered only in 2007. Due to century-old business, the plaintiff’s halwa had assumed a unique household name and was famous even outside of Tirunelveli and India. The Irrutukduai Halwa became so famous, that the shop came to be recognised by the name of Irrutukudai.

The opposite party, the defendant owned a shop by the name ‘Raja Sweets’, which was opposite to Tirunelveli Railway Station, where he also sold halwa. Soon, he opened another shop, 5 kilometres away from the plaintiff’s shop and named it ‘Nellai Raja Sweets’. The new shop did not affect the plaintiff’s sales. But when the defendant opened another shop by the name of ‘Tirunelveli Iruttukudai Halwa’, the public thought that the new shop belonged to the plaintiff and the same was brought to the notice of plaintiff. The defendant got ‘Tirunelveli Iruttukudai Halwa’ registered in 2008.

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After issuing a legal notice to the defendant, plaintiff filed a suit in the Trial Court to obtain an injunction against the infringers. When by appeals, the case reached the Supreme Court of India, a two-judge bench comprising Justice H.L. Dattu and Justice A.K. Sikri confirmed the Trial Court’s and High Court’s decision and dismissed the appeal of the defendant/appellant.

Issues

The main issue in this case is: Whether or not the registration of trademark by the defendant, which was the same as registered trademark of plaintiff, protects him from being restrained by any injunction.

Summary of court decision and judgment

At first, the suit was instituted in the Trial Court. Plaintiff filed the suit for declaration, permanent injunction against defendants and rendition of accounts. The third prayer of rendition of accounts was refused by the Trial Court, but the rest were granted and decreed in 2011. The reasoning given by the Trial Court for grant of injunction was that the plaintiff’s family, having been in business since 1900 were prior user of the trademark ‘Irrutukudai Halwa’ and thus were rightly entitled to its protection and injunction for the same.

The defendant then appealed against the said order of the Trial Court in the High Court of Madras. The High Court having found no merits in contentions of appellant, confirmed the Trial Court’s order and decree in its judgement in 2013. The High Court affirmed the decision keeping in view that the respondent was a prior user of the mark, as well as registered the trademark prior in time. That prior use had made their halwa a household name with distinct reputation and goodwill. The Court also took note of the fact that the trademark was registered by the respondent which gave her rights under Section 34 of the Trade Marks Act, 1999.

The appellant aggrieved by the High Court’s decision as well, appealed to the Supreme Court. The Supreme Court on the same grounds of prior use and distinct reputation confirmed the lower courts’ decision and dismissed the appeal.

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Analysis

In the present case, it is of high importance to note that the defendant and plaintiff had both registered their trade marks. This registration was done in accordance to Chapter III of the Trade Marks Act, 1999 which gives ‘Procedure for and duration of registration’. In brief, the two important requirements under this chapter, relevant to the present case are:

  1. On receiving and accepting an application for registration of a trademark, a public notice is to be issued by the Trade Marks Registry by publishing an advertisement, which affords an opportunity to anyone to oppose the said application[1].
  2. While considering any such opposition to application, the Registry has to consider whether the new trademark would cause confusion in the minds of public. If it is affirmative, the Registrar can refuse the registration.

In the present case, no such opposition was taken by the respondent when the notice was duly issued. Still, owing to the exclusive right of usage conferred by Section 27 and right to obtain relief of infringement conferred by Section 28, the plaintiff was entitled to injunction. But in conflict to these two provisions is Section 28(3), as per which plaintiff is not entitled to sue just because he has registered the trademark in his name, when the defendant also has the mark registered under his name. To resolve the conflict, a wholesome reading of Sections 27, 28, 29 and 34 of the Trade Marks Act reveals that right conferred by virtue of registration are subject to prior use of trademark. In other words, when the same trademark is registered in the name of two separate parties, weightage is to be given to prior usage of the trademark. Even if, statutory provisions are kept aside, rights in passing off emanate from common law originally. This implies that registration under the Act does not create any new rights; it only recognizes common law rights[2]. The three ingredients of passing off[3] are as follows

  1. Goodwill,
  2. Misrepresentation, and
  3. Damage
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In the present case, all three ingredients have been clearly satisfied and thus it can be said that the defendant is guilty of passing off. Hence, registration of trademark does not straightaway protect one from any action against him. When situations like these arise, it is the bounden duty and obligation of the Court not only to protect the goodwill and reputation of the prior user, but also to protect the interest of the consumers. Thus, the court gave the correct decision.

Conclusion

Hence, the prior user and registered owner enjoy superior rights regarding his registered trademark and are entitled to its exclusive use. Though prior search for a similar, conflicting and registered trademark to the proposed mark is not compulsory yet, some provision or mandate must be put in place for the same as it will reduce related litigations and subsequently the burden on the courts will also lessen.


[1] Section 20 and 21

[2] Century Traders v. Roshan Lal Duggar Company, AIR 250, (Delhi: 1978)

[3] Laxmikant V. Patel v. Chetanbhat Shah & Anr., 3 SCC 65, (2002)

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