Supreme Court of India
HARDIE TRADING LTD. AND ANR.versusADDISONS PAINT AND CHEMICALS LTD.
- Citation
- 2003 INSC 476
- Decided
- 12 September 2003
- Disposal
- Appeal(s) allowed
- Bench
- RUMA PAL
Holding
For removal under s.46, the applicant must prove continuous non‑use and the absence of special circumstances, and the burden of proving special circumstances rests on the proprietor; Hardie's trademarks were not subject to removal and Addisons' registration applications were improper.
Summary
Hardie Trading Ltd. (Hardie) owned the trademarks "Spartan" and "Spartan Velox" and a warrior device, which it used in India under a 1946 collaboration agreement with Addisons Paint and Chemicals Ltd. (Addisons). After the agreement lapsed, Addisons applied to delete Hardie's marks under s.46 of the Trade and Merchandise Marks Act, claiming five years of non‑use and no special circumstances, and also sought registration of the device in its own name. The Supreme Court held that Hardie was not an absolute non‑user during the relevant period, that the statutory burden of proving special circumstances lies on the proprietor, and that the import‑control policies and economic impracticability constituted such special circumstances. Consequently, the rectification order expunging Hardie's marks was set aside and Addisons' applications for registration were rejected. The Court also clarified the interpretation of "use" under s.46(1)(b) and the meaning of "person aggrieved" for removal proceedings.
Issues considered
- The applicability of s.46(1)(b) of the Trade and Merchandise Marks Act to the alleged five‑year non‑use of Hardie's trademarks.
- Whether the applicant (Addisons) qualifies as a "person aggrved" under s.46 for removal of the marks.
- The existence of special circumstances under s.46(3) that justify Hardie's non‑use.
- The proper allocation of the evidential burden between the applicant and the trademark proprietor.
- The validity of Addisons' applications for registration of Hardie's device and marks under s.18.
- The correct interpretation of "use" and "person aggrieved" under the Act.
Legislation cited
- Foreign Exchange Regulation Act, 1973s. 28
- Trade and Merchandise Marks Act, 1958s. 102, s. 12, s. 18, s. 2(2)(b), s. 2(m), s. 46(1), s. 46(3), s. 48(2), s. 56, s. 69
Subjects
trademarknon‑useremovalspecial circumstancesperson aggrievedregistrationTrade Marks Actrectificationconsent orderregistered user agreementabandonment
Judgment
A HARDIE TRADING LTD. AND ANR.
v.
ADDISONS PAINT AND CHEMICALS LTD.
SEPTEMBER 12, 2003
B [RUMA PAL AND B.N. SRIKRISHNA, JJ.]
Trade and Merchandise Marks Act, 1958 s.46 (1)(3) r/w 2(2)(b),
48(2) r/w 2(m)-Removal ofregistered trademark on ground of non-user-
Registered user agreement between H, inventor and holder of registered
C trademarks comprising words 'Spartan' and 'Spartan Ve/ox' and rear
picture of upper body of helmeted warrior carrying shield and spear
(Hardie device), and 'A ', a manufacturer of paints and other surface
cuttings with technical know-how supplied by H- 'A's application for
registration of H's trademarks rejected on grounds of identity and
D deceptive similarity- 'A' thereafter applying for rectification of register
for deletion of H's trademarks-Application allowed and H's trademarks
expunged on ground of non-user-Appeals by H dismissed by the High
Court-Held, the order expunging H's trademarks was erroneous; there
was no absolute non-user of trademark by H during period offive years
and one month prior to applications for rectification; there were special
E circumstances which justified H's non-user of trademark-Further held,
the onus to establish the first two conditions in s. 46 before registered
trademark can be removed is on the applicant whereas burden ofproving
existence of special circumstances affecting use of trademark is on the
proprietor.
F
Trade and Merchandise Marks Act, 1958 s.18-Application for
registration of trademarks- 'A' applying for registration of trademark of
Hardie Device in 'A 's name-Order of Registrar granting registration
affirmed by High Court-Held, High Court erred in not dealing with 'A 's
G claim on merits and in concentrating only on the objections by H and its
agent Hansa-Further held, 'A's application for registration of H's
trademarks in its name ought to be rejected.
Trade and Merchandise Marks Act, 1958 ss.12, 18, 102-Application
to Registrar by 'A 'for registration of H's device-Objections of Hand its
H agent Hansa overruled and 'A's application automatically allowed by
686
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. 687
Registrar and affirmed by High Court-Whether orders of the Registrar A
an{i High Court sustainable-Held, the approach of the Registrar was
fallacious; the merits of 'A's application for registration was required to
be independently assessed by the Registrar irrespective of whether H and
Hansa were able to prove their right to use the device in question-Held,
fi1rther on facts 'A's application ought to have been rejected since there B
was no positive proof adduced by 'A' of an intention to use the device.
Interpretation of Statutes-Trade and Merchandise Marks Act, 1958
ss.46 and 56- 'person aggrieved'-Has, for the purposes of removal on
ground ofnon-user under s. 46 a connotation different from the phrase used
in s. 56 for canceling, expunging or varying an entry wrongly made in C
the Register-In latter case, locus standi would be ascertained liberally
since it would not only be against the interest of other persons carrying
on same trade but also in the interests of the public to have such wrongful
entry removed-Practice and Procedure.
D
The trademarks in dispute, invented by the predecessor in interest
of the first appellant H, consisted of the words 'Spartan' and 'Spartan
Velox' and a rear picture of the upper body of a helmeted warrior
carrying a shield and spear (Hardie device}. H entered into registered
user agreement on July 11, 1963 (initially for a period of three years
and operative upto August 31, 1968} under which 'A' would be the E
registered user of H's trademarks. 'A' would set up a factory at
Madras to manufacture the surface coatings according to H's formulae.
'A' undertook that all formulae and technical information which may
be supplied to it by H would be treated as strictly confidential.
Apart from the clauses which ensured H's strict supervision over the F
quality of the surface coatings manufactured by 'A', the agreement
specified :
"The said trade marks shall not be used in conjunction with or
in close juxtaposition to any other trade mark and shall at all times G
be so described as clearly to indicate that they are the trade marks of
the Proprietors and that they are being used by the Users only by way
of permitted use."
Hallowed 'A' to continue to use the tradema;ks and device till
December 1971. In November 1971, 'A' applied for registration of a H
688 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A device consisting of frontal view of a standing helmeted warrior
holding a shield and spear. In November 1976, 'A' obtained registra-
tion of the standing warrior device. In the same year it filed three
applications before the Registrar of Trade Marks at Mumbai for
registration of H's trademarks. These applications were rejected on the
B grounds of identity and deceptive similarity with 'H's registered
trademarks. 'H' had registered this trade mark in 1946, with the
Registrar of Trade Marks in Calcutta.
On March 31, 1977 an agreement was executed between Hand
its agent Hansa appointing the latter the registered user of H's
C trademarks in India. Two months later, 'A' applied in Calcutta under
s.46(1) of the Trade and Merchandise Marks Act, 1958 (Act) for
rectification of the register for deletion of H's trademarks. In November
1977. 'A' filed two applications for registration ofHardie's device and
three additional applications for registration of the device with the
D words 'Spartan' and 'Spartan Velox'. While these applications were
pending, H and Hansa filed suits in the Calcutta High Court for an
injunction restraining 'A' from dealing with H's trademarks or device.
'A' consent order was recorded in the suit permitting 'A' to use the
registered trademarks and device of standing warrior till the disposal
E of the suits.
In December 1979 'A' filed a civil suit in the Madras High Court
seeking a permanent injunction restraining H's agent Hansa from
selling paints in containers which were identical to or deceptively
similar to H's trademarks or device which 'A' claimed had been used
F by it since 1963. An application by 'A' alleging contempt was disposed
of by the Madras High Court with the direction that status quo was
to be continued in terms of the consent order recorded in the suit at
Calcutta.
G In the same month, H filed an application in the Calcutta suit for
stay of the rectification proceedings pending before the Joint Registrar
of Trade Marks at Calcutta. The application was dismissed by a Single
Judge of the Calcutta High Court and the appeal therefrom was
dismissed by the Division Bench. The application for rectification filed
H by 'A' was allowed by the Joint Registrar of Trade Marks at Calcutta
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. 689
by his order dated September 12, 1985 as a result of which H's A
trademarks were expunged from the Register of Trade Marks. The
appeal by both H and Hausa was dismissed by a Single Judge of the
Calcutta High Court and affirmed by the Division Bench. Hand Hausa
appealed to this court.
An application filed by Hausa for stay of the registration proceed-
B
ings relating to 'Spartan' and 'Spartan Velox' was rejected by the
Assistant Registrar of Trade Marks of Madras on June 19, 1989. On
the same day, 'A's application for registration of H's device was
allowed. By a common judgment, a Singh Judge of the Madras High
Court dismissed H's appeals. By a majority of2: 1, the Division Bench C
affirmed the judgment of the Single Judge. H then appealed to this
Court. The decision of the Registrar at Madras allowing 'A's application
for registration of 'Spartan' and 'Spartan Velox' was also appealed
against. While admitting the appeals, this Court directed continuation
of the status quo. D
Allowing the appeals, the Court
HELD : 1.1. There was as such no "absolute non-user" of the
.. trademarks by H during the period of five years and one month prior
to the applications for rectification. The evidence negates H's alleged E
intention to abandon the use of the trademarks. This was sufficient for
this Court to allow the appeal by H. (708-F)
1.2. The use of the goods as contemplated by s.2(2)(b) of the Act
may be other than physical use. It may be in any other relation to the F
goods. There is no reason to limit the use on the goods or to sale of
goods bearing the trademark. (702-H, 703-A)
1.3. There is a distinction between the intention to abandon which
is part of the 'no bonafide use in relation to those goods' in sub section G
(1) of s.46 which gives a cause for removal of the trademark and the
intention to use under sub section (3) of s.46 provides a special defence
to the registered proprietor and is inferred from the existence ofspecial
circumstances. [704-D]
1.4. An intention to use does not necessarily mean that the H
690 SUPREME COURT REPORTS (2003] SUPP. 3 S.C.R.
A proprietor must show the marketing of the goods under the trademark.
The intention to use the trade marks required for the proprietor would
include the intention to permit the user of the trade mark by the
registered user. Indeed that would be the inevitable and logical result
of reading s.46(1) with s.48(2) of the Act. (707-B-C)
B Hermes Trade mark, (1872) RPC 425; Bon Martin Trade Mark,
(1989) RPC 536; Mauson & Co. v. Boehm, 26 ch. D. 398; Eaglin v.
Cusenier Co. 221 US 580, 596-598; American Home Products Corporation
v. Mac Laboratories Pvt. Ltd, (1981) 1 SCC 465 and "Astronaut" Trade
Mark, (1972) RPC 655, referred to.
c
McCarthy in Trademarks and Urifair Competition, (3rd Edn.) Vol.
2 para 17.03, referred to.
2.1. The conclusion of the Joint Registrar and the High Court that
D there were no special circumstances in the trade which justified the alleged
non-user for the period in question was wrong. It was not economically
possible for H to itself put its manufactured goods in the market
immediately, can not be taken as being a circumstance which was peculiar
to 'H' above. It was a circumstance which was generally applicable to all
foreign manufacturers of paints and lacquers. (713-E, F)
E
2.2. When the applications for rectification were made, there was
nothing in law to associate 'A' with the trademarks in question. This
coupled with H's attempts to appoint Hansa as registered user had to be
kept in sight while considering the defence of special circumstances under
F s.46(3) of the Act. The law is that even an economical impracticability
would amount to special circumstance. (713-A, 712-A, HJ
2.3. 'H' had shown that there was no intention to abandon the
trademarks. It is a complete defence to the action. The onus to establish
the first two conditions in s.46 of the Act lies with the applicant,
G whereas the burden of proving the existence of special circumstances
is on the proprietor of the trade marks. These conditions are not to
be cumulatively proved but established seriatim. There is no question
of the third condition being established unless the second one has
already been proved and there is no question of the second one even
H being considered unless the High Court or the Registrar is satisfied as
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. 691
to the locus standi of the applicant. [710-C, 698-G-H, 699-A) A
Aktiebolaget Manus v. R.J Fullwood and Bland, Ltd., (1949) 66 RPC
71; Mauson & Co. v. Boehm, 26 Ch. D. 398; Bali Trade Mark (Rectification
' Berlei (UK) Ltd v. Bali Brassiere Co. Inc., (1969)
Ch.D.) 1966 RPC 387;
2 ALL ER 812; A.J. Vulcan v. V.S. Palanichamy, AIR (1969) Cal. 43; B
Express Bottlers Services Pvt. Ltd. v. Pepsi Inc. 1989 PTC 14; Cycle
Corporation ofIndia Ltd v. T.I. Raleigh Industries Pvt. Ltd., (1996) 9 SCC
430, referred to.
,·
3.1. This was a fit case where the Assistant Registrar at Madras
should have exercised his discretion under s.18 and rejected 'A's C
application for registration. Not only was no positive proof of an
intention to use the device or the trade mark adduced by 'A' but even
the evidence shows a conscious abandonment of the device in 1971 by
the issuance of the public advertisements. (718-H, 719-A]
D
3.2 If the manufacturer was the first to use the device as a trade
mark, he alone can claim property over the name as a trade mark.
Taking into consideration the continued user of the mark since 1979
by Han_sa, it should have been assumed that the device had over the
period of so many years become distinctive of Hausa's product and
therefore to allow registration of the device in 'A's name might deceive E
the public. (719-8, C, 715-C]
Law of Trade Marks (Trade Marks Act, 1999) and Passing Off by
P. Narayanan Fifth Edition P.34, referred to
F
3.3. The approach of the Court that once the objections of H and
Hansa to the application for registration were overruled, 'A's
applications for registration of the device were to be automatically
allowed, was fallacious. (714-E, G]
4. The phrase "person aggrieved" for the purposes of removal on G
the ground of non-use under s.46 has a different connotation from the
phrase used in s.56 for cancelling or expunging or varying an entry
wrongly made or remaining in the Register. In the latter case the locus
standi would be ascertained liberally, since it would not only be against
the interest of other persons carrying on the same trade but also in the H
692 SUPREME COURT REPORTS [2003) SUPP. 3 S.C.R.
A interest of the public to have such wrongful entry removed.
[699-H, 700-A, BJ
Powell's Trade Mark (1894 (11) RPC 4); Wright, Crossley, Tm :
1998 (15) RPC 133, 377, referred to.
B CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5307-11
of 1993.
From the Judgment and Order dated I 6.4. 92 of the Madras High
Court in T.M.S.A. Nos. 2 to 6 of 1990.
c WITH
C.A. Nos. 5312 and 12A-E/93 and 7294 of 2003.
H.N. Salve, Preetish Kapur, Rajan Narain, Sajan Narain, Ashim
D Aggarwal, Rajiv Jha and Manmohan Singh for the Appellants.
Ramamoorthy, V. Balaji, Ms. T.S. Shanthi, Ms. Aarthi Radhakrishnan
and A.T.M. Sampath for the Respondent.
The Judgment of the Court was delivered by
E RUMA PAL, J. : The trademarks which are the subject matter of
dispute in these appeals were invented by James Hardie and Company
Private Ltd., the predecessor in interest of the first appellant (who will be
referred to as Hardie). The trademarks consist of the words 'Spartan' and
'Spartan Velox' and a rear picture of the upper body of a helmeted warrior
F carrying a shield and spear (which will be referred to hereafter as the
Hardie device). Registration which was granted in respect of the trademarks
in Australia and New Zealand in 1926 and 1927 continues till today. The
original trademarks as well as their modified forms, which were also
subsequently registered, have been in use by Hardie or its predecessor
G in interest of paints and lacquers and other surface coatings since that
date.
It is the case of Hardie that it also wanted to commence business in
India and to this end took steps to have the words "Spartan" and "Spartan
Velox" registered in this country as far back as in 1940. The words were
H entered in the Register of Trade Marks at Calcutta in Hardie's name. The
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 693
registration was valid for what was then undivided India and other South A
Asian countries.
On 6th November 1946, a collaboration agreement was entered into
between Hardie and the respondent (who will be described as Addisons)
for a period of 20 years under which addisons was to be Hardie' s "Chief B
agent" in India and other named territories for selling surface coatings
supplied by Hardie. The agreement also envisaged Addisons being the
registered user of the trademarks during the period of the agreement and
also the setting up of a factory by Addisons at Madras to manufacture the
surface coatings according to Hardie's formulae. Addisons undertook that C
all formulae and technical information which may be supplied to it by
Hardie would be treated as strictly confidential.
Pursuant to the collaboration agreement, between 1946 to 1949,
Hardie' s products were marketed in India through Addisons under Hardie' s D
registered trademarks and device. By 1948 Addisons had set up its own
factory at Chennai for manufacturing paints and lacquers and other surface
coatings with the technical know-how supplied by Hardie to Addisons. The
products were then sold by Addisons under the trade mark and device of
Hardie for which Addisons paid Hardie royalty at agreed rates. The
registered-user agreement between Hardie and Addisons was executed on E
I Ith July 1963. Apart from the clauses which ensured Hardie's strict
supervision over the quality of the surface coatings manufactured by
Addisons, the agreement specified :
"The said trade marks shall not be used in conjunction with F
or in close juxtaposition to any other trade mark and shall at all·
times be so described as clearly to indicate that they are the trade
marks of the Proprietors and that they are being used by the Users
only by way of permitted use."
G
This agreement also contained a clause giving Addisons the option
to acquire Hardie's rights in the trade marks for a consideration calculated
on the basis of the royalties payable for three years as mentioned in the
collaboration agreement. The registered user agreement was initially for a
period of three years and was operative upto 31st August, 1968. H
694 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A In 1967, Hardie had agreed to assign its rights in the trademarks to
Addisons for a sum payable in pound sterling. The Reserve Bank of India
allegedly refused permission to Addisons to remit the amount. Whatever
the reason, it is not in dispute that the consideration was not paid. One of
the disputes raised in these appeals relates to the effect of this agreement.
B To return to the narration of facts. In anticipation of the assignment the
Registered User's agreement was cancelled on 3 I st August, I 968. However,
since the consideration was not paid and the assignment did not come
through, Hardie requested Addisons to discontinue the use of Hardie's
trademarks. Correspondence was exchanged between the parties. Addisons
requested for permission to continue to use the trademarks and device
C Hardie allowed them to do so till December, 1971. During this period,
Addisons continued to use Hardie' s trademarks and device on the surface
coatings produced by it.
On 3rd November 1971, Addisons applied for registration of a device
D which consisted of the frontal view ofa standing helmeted warrior holding
a shield and spear. On I Ith November, 1971 Addisons informed Hardie
that with effect from !st December 1971, it would discontinue the use of
Hardie's trade marks and that Addisons had made arrangements to market
its products in its own brand name. This was followed by several
E advertisements by Addisons in newspapers to the effect that Addisons'
products would no longer be sold under the old trade marks but under the
brand-name Addisons with the pictorial representation of the standing
warrior.
On 6th December, 1971, Hardie applied for registration of the
F composite marks of "Spartan" and Hardie' s device in respect of surface
coatings. However, the application was withdrawn on 26th April, 1974.
In November I 976, Addisons obtained registration of the standing
warrior device. In the same year it filed three applications before the
G Registrar of Trade Marks at Mumbai for registration ofHardie's trademarks.
The applications were rejected on the grounds of identity and deceptive
similarity with Hardie's registered trademarks.
During this period, that is between 1972 to 1977, negotiations took
place between Hardie and Hansa, the second appellant before us, for
H appointing Hansa, the registered user of Hardie' s trademarks in India. The
HARDIE TRADING LTD. ,·.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 695
agreement was ultimately executed on 31st March, 1977. A
About two months later, on 30th May, 1977 Addisons applied in
Calcutta for rectification of the Register of Trademarks by deleting
Hardie' s trademarks under Section 46(1) of the Act.
On 18th November, 1977, Addisons filed two applications for B
registration of Hardie' s device. Addi sons also filed three additional
applications for registration in class (2) of the Hardie's device and the word
'Spartan' in class (2) for the wor.ds of 'Spartan Velox' and for class (3)
for Hardie's device with the word 'Spartan'.
During the pendency of these applications for rectification and
c
registration, Hardie and Hansa filed two suits (Suit Nos. 835 and 836 of
1978) in the Calcutta High Court in November, 1978, for inter alia an
injunction restraining Addisons from dealing in paints al)d other surface
coatings under Hardie's trademarks or device. Interlocutory applications D
were filed by Hardie and Hansa in these suits which were disposed of by
a consent order on 22nd February, 1979. The consent order in effect
allowed Hardie and Hansa to continue to use the registered trademarks and
device of Hardie, and allowed Addisons to use its registered trademarks
and device of the standing warrior until the disposal of the suits. The suits
are still pending. The scope and effect of this consent order is also one of E
the issues to be determined in these appeals.
December 1979 saw Addisons file a civil suit in the Madras High
Court (C.S. No. 204of1978) against Hansa seeking a permanent injunction
restraining Hansa from selling paints in containers which were identical to p
or deceptively similar with Hardie's trademarks or device which Addisons
claimed had been used by it since 1963. An application was filed by
Addisons in the suit pending before the High Court in Madras in 1979,
alleging that Hardie and Hansa had committed contempt by using Hardie's
device. This was disposed of eventually by the Madras High Court with G
the direction that status quo was to be continued in terms of the consent
Order dated 22nd February, 1979 in the Calcutta High Court proceedings.
The suit is pending.
In the same month, Hardie filed an application in the Calcutta suit
for stay of the rectification proceedings which were then pending before H
696 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A the Joint Registrar of Trade Marks at Calcutta. The application was
dismissed by the learned Single Judge of the Calcutta High Court and the
appeal therefrom dismissed by the Division Bench. The application for
rectification filed by Addisons was allowed by the Joint Registrar of Trade
Marks at Calcutta by his order dated 12th September, 1985 as a result of
B which Hardie's trademarks were expunged from the Register of Trade
Marks. Both Hardie and Hansa appealed against this order to the Calcutta
High Court before a learned Single Judge. The appeal was dismissed on
6th July, 1990. On a further appeal the Division Bench confirmed the
learned Single Judge's order on 22nd August, 1997. The decision of the
C Division Bench is the subject matter of S.L.P. No. 206 of 1998.
Pending the rectification proceedings in Calcutta, an application was
filed by Hansa for stay of the registration proceedings relating to 'Spartan'
and 'Spartan Velox'. The application was rejected by the Assistant
Registrar, Madras on 19th June 1989. On the, same day Addisons'
D application for registration of Hardie's device was allowed. Although five
appeals were preferred in respect of each of the separate applications before
the Madras High Court the learned Single Judge dismissed all the five
appeals by a common judgment.
The matter came up before the Division Bench. There was a
E difference of opinion. The Third Judge agreed with the view that the
appeals should be dismissed. The majority decision is the subject matter
of challenge in C.A. Nos. 5307-5311 of 1993.
Till the decision of the Madras High Court Hansa's and Hardie's
F opposition to Addisons' applications for registration of' Spartan' and' Spartan
Velox' were still pending. On 2nd June, 1992, the applications were
allowed by the Registrar at Madras. This has been challenged in C.A. Nos.
5312 & 12A - E of 1993.
When leave was granted on the special leave petition filed by Hansa
G and Hardie on 8th October, 1993 impugning the order of the Madras High
Court, this Court had directed the continuation of the status quo. That status
quo is still operative. This in brief is the background of the appeals.
We propose to deal with the issue ofrectification (which is the subject
H matter of SLP 206 of 1988) first and then the question of registration of
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 697
Hardie's device and trademarks separately (which are the subject matter A
of C.A. No. 5307-11/1993 and C.A. No. 5312 and 12A-E of 1993
respectively.
S.L.P. (C) No. 206 of 1998
Rectification of the Trademarks Register B
Leave granted.
In the rectification applications filed on 27th May, 1977 by Addisons,
it was stated that Addisons had "invented and adopted" the trademark of C
Addison's and the device of warrior in 1971 to distinguish the goods
manufactured by it from others. The collaboration agreement was referred
to in passing but the details were not given, as, according to Addison's
statement, they were not necessary for the determination of the application
for rectification.
D
The application went on to say that from 1971 onwards Addisons "felt
the necessity of having a second trade mark of distinguishing certain goods
manufactured and sold by it. After giving the matter serious thought, it
decided to use a trade mark containing a device of a warrior and the legend
Spartan". The application also says that Addisons came to know of the E
registration of the trademarks in Hardie's name only after Addisons'
application for registration of the trademarks was rejected by the Registrar
of Trade Marks at Bombay. It "'.as also said that "extensive market
research" had been done and it was discovered that the trademarks had not
been used in India for over five years continuously. Addisons claimed that
the trade marks registered in Hardie' s name were identical of deceptively F
similar with the trademarks sought to be registered by Addisons giving it
the locus. to seek rectification of the Trademarks Register by expunging
Hardie' s trademarks therefrom.
Addisons' applications for the removal of the trademarks which were G
registered in Hardie's name since 1946 were only under Section 46(1) of
the Act.
The relevant extracts of Section 46 of the Act read as follows :
"Removal from register and imposition of limitations on ground H
698 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A of non-use. - (!) Subject to the povisions of Section 47, a
-
registered trade mark 111ay 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 mannrr to a High Court or to the Registrar
by any person aggrieved on the ground ...
B (b) that up to a date one month before the date of 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 :
c
(3) An application shall not be entitled to rely for the purpose
of clause (b) of sub-section (I) .............. (on any non-use of
a trade mark which is shown to have been due to special
D
circumstances in the trade and not to any intention to
abandon or not to use the trade mark in relation to the goods
to which the applicaton relates."
Thus before the High Court or the Registrar direct the removal of the
E registered trademarks they must be satisfied in respect of the following :
(I) That the application is by a 'person aggrieved';
(2) That the trade mark has not been used by the proprietor for
continuous period of at least five years and one month prior
F
to the date of the application;
(3) There were no special circumstances which affected the use
of the trade mark during this period by the proprietor.
G The onus to establish the first two conditions obviously lies with the
applicant, whereas the burden of proving the existence of special
circumstances is on the proprietor of the trade marks. These conditions are
not to be cumulatively proved but established seriatim. There is no question
of the third condition being established unless the second one has already
H been proved and there is no question of the second one even being
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 699
considered unless the High Court or the Registrar is satisfied as to the locus A
standi of the applicant.
(a) Person aggrieved - On this issue the Joint Registrar held that
Addi sons was a "person aggrieved". The principal ground of doing so was
the fact that Addisons carried on the same trade and its applications for
registration had been rejected on the ground of the existence of Hardies B
marks.
The learned Single Judge upheld the decision of the Registrar on this
issue because Addisons was in the same trade as Hardie "and may be able
to 11se the said mark in relation to own goods but for the existence of the C
registered marks in the name of Hardie". The Division Bench affirmed this
view.
The phrase "person aggrieved" is a common enough statutory
precondition for a valid complaint or appeal. The phrase has been variously
construed depending on the context in which it occurs. Three sections viz. D
Section 46, 56 and 69 of the Act contain the phrase. Section 46 deals with
the removal of a registered trademark from the register on the ground of
non-use. This section presupposes that the registration which was validly
made is liable to be taken off by subsequent non-user. Section 56 on the
other hand deals with situations where the initial registration should not E
have been or was incorrectly made. The situations covered by this section
include : - (a) the contravention or failure to observe a condition for
registration; (b) the absence of an entry; (c) an entry made without
sufficient cause; (d) a wrong entry; and (e) any error or defect in the entry.
Such type of actions are commenced for the "purity of the register" which p
it is in public interest to maintain. Applications under Sections 46 and 56
may be made to the Registrar who is competent to grant the relief.
"Person's aggrieved" may also apply for cancellation or varying an entry
in the register relating to a certification trademark to the Central Government
in certain circumstances. Since we are not concerned with a certification
trademark, the process for regisfratfon of which is entirely different, we G
may exclude the interpretation of the phrase "person aggrieved" occurring
in section 69 from consideration for the purposes of this judgment.
In our opinion the phrase "person aggrieved" for the purposes of
removal on the ground of non-use under section 46 has a different H
700 SUPREME COURT REPORTS [2003) SUPP. 3 S.C.R.
A connotation from the phrase used in section 56 for cancelling or expunging
or varying an entry wrongly made or remaining in the Register.
In the latter case the locus standi would be ascertained liberally, since
it would not only be against the interest of other persons carrying on the
B same trade but also in the interest of the public to have such wrongful entry
removed. It was in this sense that the House of Lords defined "person
aggrieved" in the matter of Powell's Trade Mark, (1894) 11 RPC 4 :
" ... although they were no doubt inserted to prevent officious
interference by those who had no interest at all in the Register
C being correct, and to exclude a mere common informer, it is
undoubtedly of public interest that they should not be unduly
limited, inasmuch as it is a public mischief that there should
remain upon the Register a Mark which ought not to be there, and
by which many persons may be affected, who, nevertheless,
D would not be willing to enter upon the risk and expense of
litigation.
Wherever it can be shown, as here, that the Applicant is in
the same trade as the person who has registered the Trade mark,
and wherever the Trade Mark, if remaining on the Register,
E would, or might, limit the legal rights of the Applicant, so that by
reason, of the existence of the entry on the Register he could not
lawfully do that which, but for the existence of the mark upon the
Register, he could lawfully do, it appears to me he has a locus
standi to be heard as a person aggrieved."
F (Emphasis added)
But if the ground for rectification is merely based on non-user i.e.
under Section 46 of the Act, that is not really on account of any public
mischief by way of an incorrect entry. The non-user does not by itself
render the entry incorrect but it gives a right to a person whose interest
G is affected to apply for its removal. An applicant must therefore show that
"in some possible way he may be damaged or injured if the Trade Mark
is allowed to stand; and by "possible" I mean possible in a practical sense,
and not merely in a fantastic view ..... All cases of this kind, where the
orginal registration is not illegal or improper, ought to be considered as
H questions of common sense, to a certain extent, at any rate; and I think the
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 701
Applicants ought to show something approaching a sufficient or proper A
reason for applying to have the Trade Mark expunged. It certainly is not
sufficient reason that they are at loggerheads with the Respondents or
desire in someway to injure them." 1
Addisons' application was one under Section 46 and the test to
determine whether the applicant was a 'person aggrieved' within the B
meaning of that section should have been the one laid down by Romer,
J. in Wright's case and not the one propounded by the house of Lords in
the matter of Powell's Trade Mark (supra). The High Court and the Joint
Registrar fell into error in not drawing this distinction. However, it is not
necessary to dilate on this aspect of the matter as the appellant has really C
argued on the second and third aspects of section 46 viz. the alleged non-
use of the trade marks by Hardie and special circumstances.
(b) Non-use of the trademarks : Under Section 46 (I )(b) of the Act
an apP.lication for removal of a registered trademark will be allowed only
if a continuous period of five years or longer has elapsed upto the date of D
one month prior to the date of the application during which there was no
bona fide use by the proprietor of the trademark sought to be removed.
Since Addisons' applications for rectification were filed on 30th May,
1977, the relevant period for consideration of the question of non-use is
from 30th April, 1972 to 30th April, 1977.
E
Hardie has contended that there was no non-use of the registered
trademarks during that period. It is submitted that in any event it is only
such non-use as evinced an intention to abandon the trademarks which
would enable an applicant to apply for removal of the trade-marks. It is
said that Addisons had failed to plead or establish this.
F
The word 'use' according to the respondent means 'actually putting
the mark in the business and utilizing the same for selling the goods'. It
is said that there had been no use of the trade mark by Hardie and no efforts
taken to manufacture goods using the trade mark since I 971 and, therefore,
it must be taken that Hardie had abandoned the trade mark. It is also urged
in the written submissions that the 'plea of user' had not been argued either G
before the Single Judge or the Division Bench of the High Court.
The last submission does not appear to be correct. The Division
L Wright, Crossley, Tm: 1898 (15) RPC 131 at p. 133 per Romer. J affirmed un
appeal ( 1898) 15 RPC 377. H
702 SUPREME COURT REPORTS [2003] SUPP. 3 S.C'.R.
A Bench had addressed itself to the question and as far as the intent to use
the existing trademark was concerned it was said that there was
" ..... an onerous duty cast onto the registered proprietor not
only to show that there is no intentional abandonment or intent
to use the trade mark, in relation to the goods, but there must exist
B a definite intent to use the mark and a continuation of the same
throughout the entire period as envisaged in the statute but all his
efforts were rendered fruitless by reason of the statutory ban on
imports. Th affidavit of Buttress, however, negates such a situa-
tion and as such the issue under Section 46(3) being answered in
C favour of the appellant does not and cannot arise".
In any event the contention has been expressly raised in the special
leave petition and argued extensively by counsel for the appellants.
Submissions have been equally extensively made both in the counter
affidavit and by Addison's counsel in the course of arguments before us.
D In the circumstance we do not think that it would at all be proper not to
decide the issue.
The Joint Registrar construed the word "use" in section 46(l)(b) to
mean use of the trademark on the goods in respect of which the trade mark
is registered. He relied upon letter written by Hansa' s lawyers to Addisons
E dated 2.5th Dece!Rber 1977 in which it was stated that Hansa had not
manufact\lred or sold any goods under the trademarks, to hold - first, that
neither Hansa nor Hardie had sold any goods during the relevant period
and, second, that therefore there was no use of the registered trademarks.
Both the Single Judge and the Division Bench appear to have proceeded
F on the same basis.
The question therefore is - is the word "use" in Section 46(1) so
limited? The phrase used in Section 46 is "bonafide use thereof in relation
to those goods". The phrase has been defined in Section 2(2)(b) of the Act
as:
G "to the use of a mark in relation to goods shall be construed as
a reference to the use of the mark upon, or in any physical or in
any other relation whatsoever, to such goods".
This shows that the use may be other than physical. It may be in any
H '-
other relation to the goods. Given this statutory meaning, we see no reason
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 703
to limit the user to use on the goods or to sale of goods bearing the A
trademark.
In Hermes Trade Mark 1872 RPC 425, the registered proprietor had
inserted advertisements in which the trademark appeared in relation to the
watches it manufactured in the annual trade publication. It was also in B
evidence that the registered proprietor placed an order for parts of the
watches during the period of alleged non-use although the actual sale of
the watches took place subsequently. In this factual background, the words,
'other relation' in an identical statutory provision in the United Kingdom
were construed to mean "something other than actually being upon the C
goods or in physical relation to them - that would cover the use of the mark,
............... ., for example, in advertisements, in invoices, in orders and so
on". It was also said, the phrase 'in the course of trade' must be wide
enough to embrace the steps necessary for the production of the goods as
well as the actual placing of them on the market. It was held that even D
though there was no use of the mark upon or in physical relation to the
"gogds, but it was used in "other relation", i.e. to say in non physical use .
.A mon1 recent example of the law in England of such "non-physical
use" is to be found in Bon Matin Trade Mark 1989 RPC 536. The trade
mark was registered in the United Kingdom in 1979 in respect of .a~ange E
of cosmetics. The registered proprietor was a resident of France and
manufactured and sold the goods there. In 1984, an application was made
to expunge the registration on the ground that there had been no bona fide
use of the mark in the United Kingdom for a continuous period of five
years. The only use of the mark prior to the date of the application was F
by issue of price lists and promotional literature on two occasions. A
distributor was appointed by the proprietor in the United Kingdom
subsequent to the application for rectification and the first sale of the goods
took place 3 years after that. The Court held that the intention of the
registered proprietor to seek to establish a market not on any temporary G
basis but on the basis of continuous sales had been proved. As they had
been struggling to market the goods in the United Kingdom and ultimately
were successful in fuding a distributor, it was held that this was sufficient
use of the mark by the proprietor for tiJ.e purpose of defeating the
application for its removal. H
704 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A In Section 2(2)(b) of the Act, we have the additional words "any" and
"whatsoever" qualifying the words 'other relation' giving the words a
much wider meaning. Reading this definition into Section 46(1 ). It is clear
that the word 'use' in Section 46(1) may encompass actions other than
actual sale.
B
The error committed by the three fora below starting with the Joint
Registrar was to read the intention to abandon as being limited to the
special circumstances of the trade as if there could be no intention to
abandon unless there were such special circumstances. Sub-section 3 to
Section 46 says that the applicant can rely only on the non-use unless it
c is shown by the registered owner to be due to special circumstances in the
trade and not to any intention either to abandon or not to use the trade mark.
There is a distinction between the intention to abandon which is part of
the 'no bonafide use in relation to those goods' in subsection (I) of Section
46 which gives a cause for removal of the trademark and the intention to
D use under sub-Section (3) of Section 46 provides a special defence to the
registered proprietor and is 'inferred from the existence of special
circumstances.
That the proprietor's intention to abandon the trademarks is a
E necessary component of their non user justifying their removal, was
recognized as early as 1884 by Chitty, J. in the case of Mauson & Co. v.
Boehm, 26 Ch.D. 398. In that case, the owner of the trade mark, Boehm
had adopted a trade mark for a particular kind of soap. The soap was
manufactured and sent to the United Kingdom in large qualities for about
two years. In the next six years, the "manufacture and sale of soap thus
F marked fell off until it practically ceased and the existence of the particular
mark was forgotten" by Boehm. The same mark was registered in the U.K.
in respect of soaps by Mouson & Co. Boehm sued Mouson & Co. inter-
alia to restrain the infringement of his trade mark and for removal of the
trade mark from the Register. Mouson' s defence was that Boehm had
G abandoned the trade marks. In negativing this, Chitty, J. held :
"Mr. Boehm retained that mark, he did not break up the moulds
according to the practice which he stated he adopted when he
intend to give up any particular mark. He did not even erase the
H trade-mark from his books, and there were persons in the market
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 705
who got the goods from him who were endeavouring to effect A
sales, and he by sending over those price lists to the number of
1200 during the years spoken to was himself endeavouring to
effect sales ....... .
Here it appears to me there was no absolute non-user for any B
sufficient time, taken in connection with all the circumstances, to
show an intention to abandon ............. .
The trade-mark was not of very great value to him (and on that
I will make an observation presently), still I think it was his trade-
mark before, and he has not lost it by adandonment." C
The same view appears to have prevailed in the United States. This
was expressed by the Supreme Court of the United States in 1911 in Bag/in
v. Cusenier Co., 211 US 580, 596-598 :
"But the loss of the right of property in trademarks upon the D
ground of abandonment is not to be viewed as a penalty either for
nonuser or for the creation and use of new devices. There must
be found an intent to abandon, or the *property is not lost; and
while, of course, as in other cases, intent may be inferred when
the facts are shown, yet the facts must be adequate to support the E
finding".
The law has since been changed so that at present as 'intent not to
resume' use of the mark is to be proved2 • Nevertheless, "since abandonment
results in a forfeiture of rights, the courts are reluctant to find an p
abandonment". Under the majority rule, evidence of abandonment
must be clear and convincing. The New York Court of Appeals stated
that "Abandonment being in the nature of a forfeiture, must be strictly
proved."
As far as this country is concerned, Section 46(3) of the Act statutorily G
prescribes the intention to abandon as an essential component of non-use
for the purposes of Section 46(1). In American Home Products Corpora-
tion v. Mac Laboratories Pvt. Ltd. and Anr., [1981] l SCC 465, this Court
2. See McCarthy in Trademarks and Unfair Competition (3rd Edn.) Vol. 2 para 17.03 H
706 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A was called upon to decide whether there was any bonafide use of the trade
mark in relation to goods by the proprietor or for the purposes of Section
46(l)(a) of the Act. Under Section 46(l)(a), the trademarks which were
registered without any bona fide intention to use them in relation to the
goods and which have in fact not been used by the proprietor from the date
B of such registration upto to the date of the application of registration, are
liable to be taken off the register. The Court held that both the intention
of the proprietor not to use the trade mark at the time of registration and
also the actual non-use of the trade mark subsequent thereto had to be
proved. The evidence in that case was that prior to registration, the
C proprietor had entered into a collaboration agreement with an Indian
company to manufacture and. market its products. Subsequent to the
registration, the Indian company obtained a licence for the purpose _of
imposing a machine to manufacture proprietor's goods, obtained samples
from the proprietor and took other steps to manufacture the goods, but no
products were in fact put on the market. After the application for
D rectification was filed, a registered user agreement was entered into
between the proprietor and the Indian company. It was not in dispute that
the goods had not been sold during the alleged period of non-use.
Dismissing the application for rectification, this Court held :
E "A person who intends to manufacture goods on has made
preparations for the manufacture of goods but the manufacture has
not commenced and, therefore, goods have not been marketed is
nonetheless entitled to get the trade mark which he proposes to
use in relation to those goods registered. In the present day world
of commerce and industry, a manufacturing industry can neither
F be commenced nor established overnight. There are innumerable
preparatory steps required to be taken and formalities to be
complied with before the manufacture of goods can start and the
manufactured goods marketed. The process must of necessity take
time. If the position were that the mere non-user of a trade mark
G for the period mentioned in clause (a) of Section 46(1) would
make a trade mark liable to be taken off the Register, it would
result in great hardship and cause a large number of trade marks
to be removed from the Register, because the moment one month
has elapsed after the registration of a trade mark has been ordered,
H a trade rival can make an application on the ground set out in
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 707
clause (a) of Section 46(1) claiming that there has been no bona A
fide use of the trade mark up to a date one month before the date
of his application."
Although the decision was given in the context of Section 46(l)(a)
nonetheless it would show that an intention to use does not necessarily B
mean that the proprietor must show the marketing of the goods under the
trademark. This decision is also an authority for the proposition that the
intention to use the trade marks required of the proprietor would include
the intention to permit the user of the trade mark by the registered user.
Indeed that would be the inevitable and logical result of reading section
46(1) with Section 48(2) of the Act. C
"The permitted use of a trade mark shall be deemed to be
used by the proprietor thereof, and shall be deemed not to be used
by a person other than the proprietor, for the purposes of Section
46 or for any other purpose for which such use is material under D
this Act or any other law".
[See also "Astronaut" Trade Mark 1972 RPC 655]
It is a moot point whether the onus to prove this aspect of non user
is on the applicant or on the registered user. Irrespective of the onus of E
proof, the question is, was there any evidence of such intention on Hardies'
part either not to use the trademark itself or through the registered user
during the relevant period? The evidence on record certainly does not
support any such intention. The correspondence exchanged between
Hardie and Hansa demonstrates that at least from 6th October, 1971 i.e. F
prior to the period in question, Hansa and Hardie were negotiating a
registered user agreement under which Hansa, in effect, would do what
Addisons had done under its agreement with Hardie. The initial hurdle to
the negotiations was the fact that the registered user agreement between
Hardie and Addi sons required Hardie to give one month's notice to
Addisons to cease use of Hardie's trademarks. The notice period in this G
case expired only on !st December, 1971. After Addisons' public declaration
of its intention not to use Hardie's trademarks, negotiations went ahead
between the officers of Hardie and Hansa. The letters record several
meetings and also show that a draft registered user agreement in respect
of trademarks was prepared by 6th February, 1973. The second hurdle as H
708 SUPREME COURT REPORTS [2003) SUPP. 3 S.C.R.
A appearing from the correspondence disclosed, was a lack of communication
between Hardies' Attorneys, Remfry & Sons at Calcutta, and Hansa.
Ultimately by a letter dated 15th October, 1973 to Hansa the Attorneys said
that the registered user agreement had been approved by Hardie. In terms
of clause 4 of the approved draft agreement, Hansa was required to make
B payments of royalty in Australian dollars to Hardie for the period of the
agreement, the first of such payments being made within "one month of
the grant of approval of this agreement by the Government of India and
other authority/authorities whose approval may be required". This approval
was the third hurdle to the negotiations. Hansa and Hardie applied to the
Reserve Bank of India but in 1976 the Reserve Bank of India refused to
c approve the payment of the royalty in foreign exchange under Section 28
of the Foreign Exchange (Regulation) Act, 1973. On 26th November,
1976, Remfry & Sons advised Hardie that getting the Reserve Bank to
grant the required permission in the "atmosphere" prevailing would be
futile. As such it recommended that the payment of royalty clause should
D be scrapped and the agreement revised to state that in consideration of the
rights granted, Hansa would maintain a watch on and report cases of
infringement and/or passing off of the trademarks and would bear the costs
of any legal action that may have to be resorted to in such cases. It was
in these circumstances that, the original draft was revised, and on 31st
E March, 1977 i.e. within the period in question, the registered user
agreement was ultimately executed between Hardie and Hansa.
This evidence, which was not disbelieved by any of the fora below,
negates Hardies' alleged intention to abandon the use of the trademarks.
There was as such no "absolute non-user" of the trademarks by Hardie
F during the period of five years and one month prior of the applications for
rectification. This is suffcient for this Court to allow the appeal.
(c) Special Circumstances: Apart from the fact that ithad no intention
not to use the trademarks during the statutory period Hardie also claimed
G that it was unable to use its trademarks directly in India because of special
circumstances within the meaning of sub section 3 of Section 46. It relied
upon the Import Trade Control Policy for the period April 1972 to March
1974 and April 1974 to March 1975 to contend that the import of paints
and varnishes was prohibited, a prohibition which continued much beyond
H the date of the making of the applications by Addisons for removal of
HARDIE TRADING LTD. v.ADDJSONS PAINT AND CHEMICALS LTD. [RUMA PAL] 709
Hardie's trademarks. Jn fact, because of the declared import trade control A
policy, even Hansa's application for registration as a registered user in
India of the trademarks was refused by the Assistant Registrar ofTrademarks
on the ground that it was against the policy of the Government to allow
registration of foreign trademarks for use in India.
The Joint Registrar rejected Hardie' s submission that there were any
B
special circumstances within the meaning of sub-Section (3) of Section 46
which would protect Hardie' s trademarks from removal on the ground of
non-user. According to him.
"The non-use was due to considerations of the Registered C
Proprietors own business interests and is not attributable to
circumstances affecting the trade in general".
The learned Single Judge affirmed the finding of the Registrar and
held that there was no total ban on import of paints and lacquers but the D
reason for non-use of the trademarks by Hardie were "economic, commer-
cial and other factors which were applicable only to the appellants". The
Division Bench while noting the submissions on the Import Trade Policy
did not give any finding on whether there was a restriction on the import
of paints and lacquers for domestic use during the relevant period but rested E
its approval of the view taken by the Registrar and the learned Single Judge
on a paragraph in an affidavit affinned by Andrew Buttress on behalf of
Hardie before the Registrar. The paragraph reads :
"Assuming but not admitting that there was no import restriction
at the relevant time, my company could not have the trade mark F
used in India by a registered user immediately after the applicants
ceased using the marks in 1971 but carried on negotiations with
Hansa Paints & Chemicals in 1972, but as is quite natural in such
cases, it took some time to finalise such agreement. Further,
having regard to the state of the market and the demand for the G
goods in question, and also my company's commitments in other
countries, it was not possible nor was it considered economical
to put more goods on the market immediately".
Construing this paragraph the Division Bench held that economic H
710 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A viability or existing market conditions was outside the concept of "special
circumstances", and since the statute only provided for the defence of
special circumstances, "any other defence apart from the existence of
special circumstances does not and cannot rise."
B The observation of the Division Bench that apart from special
circumstances, there was no other defence available to a proprietor in
proceedings to remove his trademark from the register, is as we have
already indicated, incorrect. The proprietor can show, as Hardie, has done
in this case, that there was no intention to abandon the trademarks. If, that
is established it is a complete defence to the action. The second erroneous
C finding of the Division Bench was that economic viability or existing
market condition was outside the concept of special circumstances. The
finding does not follow from the Section and is against the weight of
authority.
D Special circumstances have been defined in Aktiebolaget Manus v.
R.J. Fullwood and Bland, Ltd, (1949) 66 RPC 71 as "some external forces
as distinct from voluntary acts of any individual" .......... where the impact
of local condition makes impractical the ordinary usage of international
trade". In that case it was held phohibitive tariffs which were practically
E effective to keep out of England altogether machines manufactured abroad
which had, till the tariffs had been imposed, been imported to the country
amounted to special circumstances. The facts in Manus' case are similar
to the facts which we have to consider. In dispute were trademarks as
applied to milking machines. The proprietor of the marks was a Swedish
company. The machines had been imported into Britain through the
F defendant as its agent. When the import of the milking machines was
stopped by the registered proprietors, the agent claimed the trademarks as
its own and started manufacturing and selling milking machines bearing
the same trademarks. The proprietor brought an action for infringement of
its trademarks. The question before the Court was whether the actions of
G the defendant subsequent to the tapering off of the import of the Swedish
Company's machines, were effective to appropriate to themselves what had
been before the Swedish Company's property or as having been effective
to destroy the distinctive character of the name as indicating the Swedish
Company's business so as to put an end to its right to the name in England.
H The question was answered in the negative and it was held that the
HARDIE TRADING LID. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL) 711
non-user was justified because of the special circumstances prevailing at A
the relevant period.
In Mauson & Co. v. Boehm (supra), it was said that 'A' man who
has a trade mark may properly have regard to the state of the market and
the demand for the goods; it would be absurd to suppose he lost his trade B
mark by not putting more goods in the market when it was glutted."
More recently, Justice Ungoed Thomas in BALI Trade Mark
(Rectification Ch.D.) 1966 RPC 387 said :
"It is quite clear, however, that the proprietors, the Bali Company,
c
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 D
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 Evetshed, L.J
(supra) the existence of conditions "making impracticable the
ordinary usages of international trade." "A trade mark is a E
commercial asset intended to be used commercially by business
men, 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 F
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, is thus in my view, shown to have been due to
special circumstances in the trade." G
(Emphasis supplied)
The Court of Appeal reversed this decision on another issue. The
House of Lords in turn reversed the decision of the Court of Appeal and
reaffirmed the decision of Justice Ungoed Thomas in Ber/ei (U.K.) Ltd. v.
Bali Brassiere Co. Inc .. (1969) 2 All ER 812. H
712 SUPREME COURT REPORTS (2003] SUPP. 3 S.C.R.
A This view has been accepted as good law in this country. [See A.J
Vulcan v. V.S. Palanichamy, AIR (1969) Cal. 43 and Express Bottlers
Services Pvt. Ltd v. Pepsi Inc. & Ors., (1989) PTC 14.] The law therefore
is that even an economical impracticability would amount to special
circumstances.
B
The indisputable evidence shows and the admitted position is that
from 1946 to 1971 Addisons was using the trademark first as the chief
agent of Hardie under the collaborative agreement, and then under the
registered users agreement. Apart from the express clauses in the two
C agreement by which Hardie retained its rights over the trademarks, under
Sections 48(2) read with S.2(m) :
"The permitted use of a trade mark shall be deemed to be used
by the proprietor thereof, and shall be deemed not to be used by
a person other than the proprietor, for the purposes of Section 46
D or for any other purpose for which such use is material under this
Act or any other law".
Addisons therefore never 'used' the trade marks on its own account. For
the purposes of Section 46, its use of the trademarks prior to 1971 was
E agreement and by the fiction created under Section 48(2), Hardie's use.
(See : Cycle Corporation ofIndia, Ltd v. T.J. Raleigh Industries Pvt. Ltd.,
[I 996] 9 SCC 430, 436.) Addisons had not even attempted to use the
trademarks at any time subsequent to 1971 i.e. after it had publicly
disassociated itself from the marks. In fact Addisons admitted that it did
not use the trademarks from 1963 to I 977 in the written statements filed
F in the suits for infringement pending in Calcutta.
We cannot ignore the fundamental fact that what Hardie and Addisons
had been engaged in together was the introduction and sale in the Indian
market of the paints and lacquers prepared accordingto Hardie' s preparation
G and under Hardie' s trademark. In this background, where by legal fiction
atleast Hardie had used the trademarks from I 946 to 196 I, it would be a
legally insupportable proposition if we were to hold that the names Spartan
and Spartan Velox were associated with Addisons and not with Hardie.
Therefore, when the applications for rectification were made, there was
H nothing in law to associate Addisons with the trademarks in question. This
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 713
background coupled with Hardie' s attempts to appoint Hansa as the A
registered user of the trademark in India must be kept in sight while
considering the plausibility of the defence of special circumstances under
the provisions of Section 46(3) of the Act.
Hardie had brought on record the Import Trade Control Policies for B
the relevant years. We have considered the same and it is quite clear that
paints, distempers, varnishes and lacquers could be imported only for use
by actual users i.e. by manufacturers or producers of the paints etc. in India.
Hardie had no such factory. There was in the circumstances no question
of Hardie importing any paints and lacquers manufactured by it outside C
India into the country. There was a second restriction under the Import
Control Policies even on actual users who imported paint for their own use.
They had to use the imported goods for producing goods as specified only
for export. The intention of the policy clearly was to keep the domestic
market for the domestic producers of paints and lacquers. Concerns like
Hardie could not, without making an enormous investment by setting up D
a factory, import the goods.
In the circumstance, for Buttress to have said that it was not
economically possible for Hardie to itself put its manufactured goods in
the market immediately, cannot be taken as being a circumstance which E
was peculiar to Hardie alone. It was a circumstance which was generally
applicable to all foreign manufacturers of paints and lacquers. Therefore,
the conclusion of the Joint Registrar and the High Court that there were
no special circumstances in the trade which justified the alleged non-user
for the period in question was wrong. In view of our findings, it is not F
necessary to go into the further question of the discretionary power of the
Registrar to refuse rectification even if the application is otherwise
maintainable.
For all these reasons, we set aside the decisions impugned and allow
the appeal with costs. G
Civil Appeal No. 5307-5311 of 1993
These arise out of five appeals of which three relate to the refusal to
stay the registration of Hardie' s trademarks in Addisons name and two H
714 SUPREME COURT REPORTS [2003) SUPP. 3 S.C.R.
A from orders allowing Addisons' application for registration of Hardie's
device. In so far as the High Court affirmed the order of the Assistant
Registrar rejecting Hansa's application for stay of the registration proceed-
ings, the appeals have really become infructuous as the application for
registration of Hardie' s trade marks was allowed by the Assistant Registrar
B subsequent to the decision of the Madras High Court. That decision is the
subject matter of separate appeals before us and is dealt with subsequently.
We confine our consideration only to the correctness of the decision of the
High Court in so far as it affirmed the order of the Registrar granting
registration of Hardie's device in Addisons's name.
c The Madras High Court held that since the device was not registered,
the only right which could be claimed in opposition was the right of 'bare
user' of the device by Hansa subsequent to 1979. According to the High
Court such user could not be countenanced as a valid ground for refusing
registration of the device in Addison's name as Hansa's use of the device
D was only subsequent to the consent order in the Calcutta suit with full
knowledge of the pendency of the Addison's application for registration
of the device.
What appears to have been overlooked by the High Court is that
E irrespective of whether Hardie and Hansa were able to prove their right
to use the device in question, the merits of the applications of Addisons
for registration would have to be independently assessed by the Registrar
under Section 18 of the Act. It was for Addisons to have adduced evidence
in support of its applications for registration, first, that it was the proprietor
of the device and second, that the device had been used by it or that it had
F a bona fide intention to use the device. Concentrating only on Hardie' s and
Hansa's claim, the Court appears to have proceeded on the basis that once
the objections of Hardie and Hansa to the application for registration were
overruled, Addi sons' applications for registration of the device were to be
allowed automatically. Apart from the fallacious approach, we are of the
G view that the conclusion of the majority on the question of Hardie' s and
Hansa' s right to use the device in question was incorrect.
There is no dispute that the device was invented by Hardie or its
predecessor-in-interest prior to 1926. There is also no dispute that the
H device is registered in Hardie's name in Australia and New Zealand and
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL) 715
that Hardie has been using the device all these years in the international A
market. The High Court has erroneously held that Hardie never used the
mark and had never by itself manufactured and marketed the goods,
namely paints and other allied products in India either under the word
marks or under the device. In our narration of facts at the outset, we have
noted that admittedly Hardie had sold the products manufactured by it B
through Addisons between the period 1946 to 1949 pursuant to the
collaboration agreement. It is noody's case that Hardie's pro~ucts when
they were marketed in India through Addisons were not under the
registered marks and device.
It is well established that if the manufacturer was the first to use the C
device as a trade mark, he alone can claim property over the name as a
trade mark'. The factual findings of the High Court that Hardie had never
marketed goods manufactured by it in India was, therefore, not only wrong
but it had serious repercussions on the maintainability on Addison's
application for registration. The High Court did not give sufficient D
importance to the fact that Hardie continued to be the registered proprietor
of the device outside this country. This coupled with the fact that the initial
entry of Hardie's goods was made under the trade marks much prior to
Addisons even setting up its factory, would put Addisons' claim for
registration of the device as proprietor in considerable doubt. There has E
been no discussion on this aspect· of the matter at all by the High Court.
We then come to the question of actual use of the device by Addisons.
Till 1971 the collaboration agreement was in operation. Clause 16 of the
agreement provided :
F
"All labels used in connection with surface coatings manufactured
or marketed by Addison shall bear the correct name of such
surface coatings and shall prominently display the trade marks of
Hardie Trading. The final design of such labels shall be mutually
agreed upon by the parties hereto.
G
The design which was agreed to, included not only the registered
trademarks but also the device.
3. See: Law of Trade Marks (Trade Marks Act, 1999) and Passing Off by P. Narayanan
Fifth Edition P. 34. H
716 SUPREME COURT REPORTS [2003) SUPP. 3 S.C.R.
A Addisons also stated in its application for rectification :
"It may be mentioned here that prior to December, 1971, for about
25 years, the applicants were using, under a collaboration agree-
ment, a trade mark containing a device ofa warrior and the legend
Spartan."
B
This was obviously why in Addison's advertisements issued in
several newspapers in 1971 the device has been crossed out and the public
introduced to the new brand name of the word Addisons with the picture
of the standing warrior.
c The registered user agreement was not put an end to by the agreement
for assignment as contended by Addisons. The assignment was conditional
upon the payment of consideration and it is not even Addison's case that
any consideration was paid to Hardie. Besides the assignments were never
registered as Section 44 mandates and it is doubtful whether the documents
D pertaining to assignment were at all admissible as evidence under Section
44(3), which expressly excludes unregistered assignments from being
accepted as evidence. Moreover, the episode regarding the aborted assign-
ment had taken place in 1967 and the renouncement of the marks and
device by Addisons was in 1971, four years subsequent thereto. Had there
E been any assignment of the trademarks in 1967, why did Addisons ask for
Hardie' s permission to use the trademarks between 1968 to 1971 and
renounce such user in 1971?
As with the registered word marks 'Spartan' and 'Spartan Velox', no
evidence has been brought on record by Addisons to show that it had ever
F taken any steps, apart from making the applications for registration, to use
Hardie' s device of warrior-rear subsequent to 1971 right up to the time it
made its application for registration in December 1977. There is also no
evidence that Addisons had attempted to use the device subsequent to 1977
to 1979 when the consent order was passed in the Calcutta suit.
G
The consent order was misunderstood and misinterpreted by the
Madras High Court. The consent order which is dated 22nd February 1979
reads as follows :
"Upon reading an application of the plaintiffs pursuant to the
H notice dated the twenty second day of November, one thousand
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 717
nine hundered and seventy eight and upon hearing Mr. B.N. Sen A
(Mr. Bhaskar Sen appearing with him) advocate for the plaintiffs
and Mr. D.K. De (Mr. K. Ganguly appearing with him) advocate
for the defendant and upon the defendant by its advocate under-
taking to this Court that the defendant shall not use the mark
Spartan and the device Warrior referred to in paragraph 5 of the B
statement of case annexed to the affidavit in opposition of the
defendant, affirmed by Vaithinatha Ranga Krishna on the twenty
first day of December, one thousand and nine hundred and
seventy eight till the disposal of this suit or until further order of
this Court.
c
It is ordered that the defendant shall be at liberty and entitled
to use the warrior device which the defendant got registered in its
name and it is further ordered that the plaintiffs shall not object
to the defendant selling its products under the get up in which it
is selling its products. And it is further ordered that similarly the D
defendant shall not object to the plaintiffs selling their products
under any get up so long as they distinguish their goods from
those of the defendant. And it is further ordered that the parties
herein shall be at liberty to apply before this Court for necessary
directions if so advised. And it is further ordered that the costs E
of and incidental to this application be costs in the suit."
Therefore, Addisons voluntarily undertook to the High Court that it
would not use the mark 'Spartan' or the device of the warrior-rear until
the disposal of the suit. It is not in dispute that the suit is still pending. It F
has never been and is not Addisons' case that the consent was obtained
by any fraud or by exerting undue pressure. In fact on 30th April 1982,
there is an order of the High Court of Calcutta which records Addisons'
reiteration that it would not use the mark warrior-rear which was claimed
by Hardie and Hansa. Irrespective of whether these orders sanctioned the
use of warrior-rear by Hansa and Hardie, the question is whether they show G
that Addisons had ever used or showed any intention to use the device of
warrior-rear in respect of which the applications for registration had been
made. The consent order also records that Addisons would be entitled to
use the warrior standing device which was registered in his name and
Hardie and Hansa would not object to Addisons, "selling its products under H
718 SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R.
A the get up in which it is selling its products". Therefore, till 1979 the "get
up" under which Addisons was selling its products was not under the
device of the warrior-rear.
The third part of the consent order is that Addisons would not object
B to Hardie and Hansa selling their products as long as they distinguish their
goods from those of Addisons. Pursuant to the consent order dated 22nd
February 1979 w.e.f. 3rd September 1979 Hansa started using the 'Spartan'
trade mark with the warrior device of Hardie on the products manufactured
by it and has continued to do so.
C It has not been shown to us how a consent order differs from any other
form of agreement except that it may have additional sanctity by reason
of the imprimatur of the Court. And yet, the High Court came to the
conclusion that Hansa's use of the device subsequent to the consent order
was "by brute use in controversial circumstances". We are at a loss to
D understand how the High Court could have deduced that the use of the
mark by Hansa during the pendency of the proceedings was not bona fide.
The High Court in wrongly casting the onus on Hardie and Hansa by
saying that they had not been able to produce "any other relevant material
to indicate that there was no bona fide intention on the part of Addisons
E to use the mark at the time when they made their applications" did not
consider whether Addisons had positively proved its use and intention to
use the device.
We are of the view that the dissenting judgment of Swamidurai, J.
F was correct. The learned Judge had correctly emphasised that Hardie had
manufactured and was the first to market its goods under its registered trade
mark and device in India. The learned Judge also correctly construed the
consent order. No one had frog-marched Addisons into giving its consent.
That is also not Addi sons' case. There are other factual errors in the
majority view but it is not necessary to go into those as what we have found
G is sufficient to set aside the decision impugned an& to allow the appeals.
Even if we had held in Addisons' favour on all other points we would
have thought that this was a fit case where the Assistant Registrar should
have exercised his discretion under Section 18 and rejected Addisons'
H application for registration. Not only was no positive proof of an intention
HARDIE TRADING LTD. v.ADDISONS PAINT AND CHEMICALS LTD. [RUMA PAL] 719
to use the device or the trade marks adduced by Addisons but the evidence A
shows a conscious abandonment of the device in 1971 by the issuance of
the public advertisemetns. When did Addisons' intention to use the device
form? What was the necessity to revive the use of the device mark in
respect of paints after an interval of almost 7 years? The answer to these
issues would be relevant on the question of the bona fide of the Addisons' B
applications and yet was neither raised nor considered either by the
Registrar or by the High Court. On the other hand taking into consideration
the continued user of the mark since 1979 by Hansa, it should have been
assumed that the device had over the period of so many years become
distinctive of Hansa' s product and therefore to allow registration of the C
device in Addisons name might deceive the public.
We, therefore, allow these appeals and set aside the decision of the
High Court without any order as to costs.
CIVIL APPEAL NO. 5312-A & 12A-E OF 1993 D
There is no dispute that the marks which were the subject matter of
Addison's application for registration before the Registrar of trademarks
at Madras were identical with Hardie' s marks of Spartan and Spartan
Velox. Although, the appellant has impugned the decision of the Registrar
inter alia on the ground that the order passed by the Registrar on 2nd June, E
1992 was without notice to the appellant and in violation of Section 102
of the Act, it is not necessary to express any opinion on the submissions.
The appeals must be allowed on the short ground that we have held that
hardie's trademarks could not have been removed from the Register and
as long as the registration of the marks continue in the name of Hardie, F
the application for registration of the same marks in the absence of any
plea of bonafide concurrent user under Section 12 would not arise.
These appeals are therefore allowed and the order of the Registrar at
Madras is set aside.
G
S.M. Appeals allowed.
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