Needle Industries India Ltd. vs Narayan Prasad Tanwar And Ors.

Z.S. Negi, J

This appeal, being T.M.A. No. 10 of 1997 filed under Section 109 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as the

Act) before the High Court at Calcutta, is directed against the order dated 1.5.1997 passed by the Assistant Registrar of Trade Marks whereby he

dismissed the opposition and allowed the application for registration to proceed to registration.

It is the case of the appellant that the respondent No. 11 on 20.2.1987 filed application No. 467971 in class 10 for registration of the label mark

consisting of the word PONY and the device of pony claiming user since February, 1986 in respect to baby soothers, baby feeders and nipples for

feeding bottles and the said application was accepted and advertised in the Trade Marks Journal No. 999 dated 16th January, 1991 at page 1208. The

appellant filed opposition No. CAL- 2322 against the application for registration on the grounds, inter alia, that the appellant was the prior adopter and

user of the trade mark PONY and device of pony and therefore the respondent No. 1 could not claim to be the proprietor of the mark applied for

registration; that the appellant was the registered proprietor of trade mark PONY and the device of pony under Nos. 389762, 389764, 452598 and

452599 in class 26 in respect of safety pins, buttons of all kinds, etc.; that it was also registered proprietor in India in relation to the said trade mark and

device in class 10 and holder of copyright registration No. A-34686/81 under the Copyright Act, 1957 in relation to the said Pony label device;, that the

appellant's goods under the trade mark PONY and device due to extensive sale in India and other countries had acquired valuable and substantial

goodwill and reputation and the registration and use of mark applied by respondent No. 1 would lead to confusion and deception amongst members of

trade and public and that since the appellant was the prior adopter and user of the trade mark and the device , the respondent No. 1 could not claim to

be proprietor thereof and as such the appellant's opposition must succeed as the registration of the mark in the name of the respondent No. 1 would be

contrary to the provisions of sections 9, 11, 12 and 18 of the Act.

The case of the respondent No. 1 before the Trade Marks Registry was that the impugned label mark was continuously used since the year 1986;

that the rival goods of the parties were different, having no connection in the course of trade and that the likelihood of deception between the rival

goods and business of the parties was absolutely ruled out. After completion of the procedural requirements, the matter was set down for hearing

which took pace on 17.3.1997 and the respondent No. 2 passed the impugned order dated 1.5.1997, hence this present appeal is preferred by the

appellant against the said order.

The respondent No. 1 has not filed reply to the appeal before the Hon'ble High Court at Calcutta though the appellant on the direction of the High

Court served a copy of complete appeal paper-book upon the respondent No. 1. The appeal pending before the High Court at Calcutta stood

transferred to the Intellectual Property Appellate Board in pursuance of the provisions of Section 100 of the Trade Marks Act, 1999 and the same

stands renumbered by the Appellate Board as TA/06/2005/TM/KOL. The appeal came up for hearing twice before the Appellate Board on 14th

February and 6th June, 2007 but had to be adjourned as none represented the respondent No. 1. In the meantime, the appellant filed miscellaneous

petitions Nos. 105/2007 and 106/2007 seeking the permission of the Appellate Board for service of hearing notice on the respondent No. 1 through

publication in the Newspapers and permission to file additional documents, respectively. M. P. No. 105/2007 was allowed on 24.1.2008 and

accordingly the notice for hearing fixed for 20.6.2008 have been published in THE TIMES OF INDIA', Kolkata (English), dated 29.5.2008 and

'SUNMARG', Kolkata (Hindi), dated 29.5.2008. The respondent No. 1 remained unrepresented on 20.6.2008 also and the respondent was deemed to

have been served and we have heard the learned Counsel for the appellant.

Averment has been made in the miscellaneous petition No. 106/2007 that the appellant had filed Suit No. 3429 of 1992 before the High Court of

Delhi seeking permanent injunction against the respondent No. 1 herein (defendant in the suit) from using 'PONY LABEL' and rendition of accounts.

The respondent No. 1 filed written statement to the plaint on 4.5.1993 and the said suit was subsequently transferred to the Additional District and

Sessions Judge, Delhi on account of change in the pecuniary jurisdiction and the transferred suit was renumbered as Suit No. 270 of 2003. On

December 5, 2005, the said Suit was decreed in favour of the appellant and permanent injunction was granted against the respondent No. 1. The

judgment decree is final and binding upon the respondent No. 1 as, to the appellant's knowledge, no appeal has been preferred against the said

judgment decree. In justification of making the present application, it is stated that the documents sought to be filed are copies of the judgment and

decree dated 5.12.2005 and the plaint as well as written statement which will cause no prejudice to the respondent No. 1, as the respondent No. 1 is

already aware and is in possession of these documents. It is further stated that the appellant could not have filed the said documents even after

exercising due diligence since the said judgment and decree was passed only on 5.12.2005 that is to say after conclusion of the opposition proceedings

and commencement of the appellate proceedings and in any event, the present appeal before this Appellate Board is at a preliminary stage. The

documents sought to be filed will have an important bearing on the outcome of the appellate proceedings and if the said documents are not allowed to

be filed/not taken on record, it will cause grave injustice and damage to the appellant.

The learned Counsel Shri Ajay Gupta submitted that the copies of documents sought to be filed may be permitted and taken on record as by taking

these documents on record, the respondent No. 1 will not be taken by surprise. The documents are within the knowledge and possession of respondent

No. 1 and besides this, the appellant has taken a ground in the appeal that the adoption of impugned trade mark by the respondent No. 1 is dishonest

as it was previously a dealer in respect of goods of the appellant under the trade mark PONY and device of pony. The respondent No. 1 has denied

the said ground and the respondent No. 2 has given cognizance to such denial in his impugned order but in paragraph 16 of the written statement the

respondent No. 1 has made a categorical admission that 'it is admitted that before 8-10 years, the defendant was the plaintiff's dealer; but, that

dealership was in respect of different goods'. Learned Counsel further submitted that apart from the documents which are within the knowledge and

possession of the respondent No. 1, no new document is sought to be filed. After having heard the learned Counsel for the appellant carefully, we

allowed the miscellaneous petition as the documents sought to filed are within the knowledge and possession of the respondent No. 1; the fact about

respondent No. 1 that it has been the dealer of the appellant has been mentioned in the appeal; the fact of suit No. 3429/92 having been filed in the

High Court of Delhi had been disclosed at paragraph (f) of the affidavit dated 8.4.1993 of Shri T.A. Devagnanam, Managing Director of the appellant,

which was filed as evidence in support of opposition before the respondent No. 2; the documents could not, after exercise of due diligence, be

produced by the appellant when the present appeal was filed as the judgment and decree was passed in December, 2005 and the documents will be of

help to decide the controversy between the parties. Accordingly, the documents were taken on record and relied on by the appellant during the course

of argument in the appeal on hand.

Learned Counsel while arguing for appeal submitted that the appellant is the registered proprietor of trade mark PONY and the device of pony

(label) which is being used since 1970 and is the holder of copyright registration of artistic PONY LABEL under the Copyright Act, 1957, and having

these facts in view, the very adoption of the impugned mark by the respondent No. 1 is dishonest and malafide. Apart from this, it is established

beyond doubt that the respondent No. 1 was previously a dealer in respect of the goods under the appellant's trade mark and device and the

respondent No. 1 was aware of the enviable goodwill and reputation of appellant's mark and device and, adoption of the identical or similar trade mark

and device subsequently by the respondent No. 1 is not accidental but clearly dishonest and with malafide intent to trade upon and to draw undue

benefit from the reputation and goodwill enjoyed by the appellant's trade mark and device. The appellant is not only extensively using its mark in India

but the goods under the trade mark are exported to other countries of the world. The finding of the respondent No. 2 that the claim of proprietorship

can only be questioned when the rival goods are similar is patently wrong, repugnant to the scheme, intent and purport of the Act. It was further

submitted that the respondent No. 2 despite observing that the respondent No. 1 did not have substantial sales turnover, grossly erred in concluding

that the adoption of the mark by the respondent No. 1 was not dishonest and he thus misdirected himself in not exercising the discretion under Sub-

section (4) of Section 18 of the Act against the respondent No. 1.

Learned Counsel submitted that the conclusion by the respondent No. 2 that the question of any likelihood of confusion and deception shall not arise

is drawn on the basis that the rival goods are totally of different description and have no similarity or connection whatsoever during their course of

trade is erroneous. The respondent No. 2 has ignored the established reputation and goodwill of the appellant. The question which the respondent No.

2 failed to appreciate was whether the use of the identical mark by the respondent No. 1, there is likelihood of confusion in the minds of unwary public

to think that those goods or products of the respondent No. 1 are in fact associated with or manufactured by the appellant or wonder to think that the

appellants might have diversified its business. Learned Counsel further asserted that the goods covered under the respective marks are consumers

goods or products which are purchased by and large by every strata of the populace. The trade channel is common and the customers or users of the

goods or products are common, such as ladies of all class and age, whether living in rural or urban areas, generally all use or purchase baby soothers,

baby feeders, nipples for feeding bottles, knitting pins, knitting needles, needles of all kinds, pins including safety pins, buttons of all kinds etc.

The learned Counsel lastly submitted that the respondent No. 2 did not even consider all the grounds rose before him and thus erroneously

dismissed the opposition and the grounds which he took into consideration; he misguided himself and came to wrong conclusions of fact and law. It

was the submission of learned Counsel that the respondent No. 2 erred in allowing the application of respondent No. 1 to proceed for registration with

amended specification of goods and area restriction for sale in the States of West Bengal, Bihar, Orisa and Assam failing to notice that the appellant

had extensive and substantial sale of its goods in those States as well.

After carefully hearing the learned Counsel, we proceeded to examine whether the respondent No. 1 is the proprietor of the mark applied for as

the law provides that any person claiming to be the proprietor of a trade mark whether used or proposed to be used by him may make application for

registration of trade mark. In the matter of Vitamin Ltd.'s Appl., (1956) RPC 1, Llyod Jacob J observed thus ""A proprietary right in a trade mark

sought to be registered can be obtained in a number of ways. The mark can be originated by a person or can be acquired, but in all cases it is

necessary that the person putting forward the application should be in possession of some proprietary right which, if questioned, can be substantiated.

The point of proprietorship is to be determined on the date of application. Where an identical or similar trade mark is already registered in the name of

other person, the applicant cannot claim to be the proprietor unless he shows that he has adopted the same honestly and bonafidely and such mark has

acquired distinctiveness by user. It is well settled that the onus of proving that the applicant's trade mark when registered and used will not cause

confusion or deception is on the applicant. The respondent No. 2 has observed in the impugned order that 'even if the applicant was aware of the

opponent's mark, even then the use by him of the impugned mark in relation to an altogether different goods cannot take away his proprietary rights in

the impugned mark'. He has further observed that 'however I do not find any dishonesty on the part of the applicant in adopting the impugned mark.'

The respondent No. 1 has not given any explanation as to how it came to adopt the impugned mark that too a mark similar to the appellant's registered

mark for whose goods it was a dealer previously. Though the respondent No. 1 has denied in the proceedings before the respondent No. 2 to be a

dealer of the goods of the appellant but in the written statement filed before the High Court of Delhi in suit No. 3429 of 1992 admitted at para 16

wherein it has stated thus: "" Regarding the contents of paragraph 16 of the plaint, it is submitted that before 8-10 years, the defendant was the

plaintiff's dealer; but, that dealership was in respect of different goods. The knowledge of the reputation and goodwill, if any, of the plaintiff's trade

mark, by the defendant is irrelevant because the defendant's goods are different from that of the plaintiff."" It is obvious that when the appellant is

manufacturing different goods, the dealership might have been for those different goods of the appellant. The documents produced in proof of

dealership have been brushed aside by the respondent No. 2 on illogical reasons. The said documents marked as Exhibit 'D' to the affidavit evidence

dated 8.4.1993 of Shri T.A. Devagnanam, M. D. of the appellant which consist of is a voucher dated 27.3.1984 evidencing goods supplied by the

appellant to Laxminarayan Tanwar and a money receipt dated 24.6.1986 issued by Laxmi Narayan Twanr evidencing security refund received from

the appellant. It is clear that the address given in the said documents and respondent NoVs address are same and the respondent is trading as Laxmi

Narayan Tanwar but the respondent No. 2 has observed that 'Regarding the point of dealership of the applicant-it may be stated here that exhibit-D of

the opponent cannot be regarded as a conclusive evidence in this connection. Exhibit-D is merely a receipt issued by one Laxminarayan Tanwar, who

is not the applicant herein.' From the records available, it is established that the respondent No. 1 was a dealer. If that be so, it is impossible think that

the respondent No. 1 was unaware of the trade mark of appellant, its use reputation and goodwill. The respondent No. 1 has also no where said that it

had no knowledge of the appellant's trade mark and its usage, etc. Only at one place Mr. Narayan Prasad Tanwar has in his affidavit stated that he

strongly assert that the trade mark under reference was chosen just out of fancy. This explanation in our view is not plausible, reasonable and

sufficient explanation for adopting the impugned mark.

The next issue is whether use of the impugned mark of respondent No. 1 is likely to cause confusion and deception during the course of trade. In

National Match Works v. S.T. Karuppanna Nadar it was held as under:

In order to come to the conclusion whether one mark is deceptively similar to another the broad and essential features of the two are to be considered.

They should not be placed side by side to find out if there are any differences in the design and if so, whether they are of such a character as to

prevent one design from being mistaken for the other. It would be enough if the impugned mark bear such an overall similarity to the registered trade

mark as would be likely to mislead a person usually dealing with one to accept the other if offered to him. There is overall similarity between the two

marks, the main feature of which is the squirrel, whether it be the squirrel sitting on its hid legs and keeping its forelegs up with a nut in those legs or

whether it be standing on all its legs on a smaller or longer branch of a tree. In these circumstances, Single judge erred in thinking that there is no

similarity between the two marks.

In Sunder Parmanand Lalwani and Ors. v. Caltex (India) Ltd. the Division Bench of Bombay High Court held as under:

One must never forget that what Section 11(a) requires to be decided is whether the mark sought to be registered is likely to deceive or cause

confusion. That likelihod must vary on the facts of each case. Human conduct is varied and complex. The importance of a particular fact or facts may

vary in the perspective of the totality of the facts of each case. The importance of a particular fact may increase or diminish when considered in

combination with different sets of facts. What has to' be decided in a case is whether on the totality of the facts of that case. It is likely that there

would be deception or confusion. It would therefore be totally misleading to rely only on some individual fact or facts from a decided case and put

emphasis on them without taking into account other facts in combination with which that particular fact was looked upon as yielding any principle. All

factors which are likely to create or allay deception or confusion must be considered in combination. Broadly speaking factors creating confusion

would be for example the nature of the mark itself the class of customers the extent of the reputation, the trade channels, the existence of any

connection in the course of trade and several others. Of course, it need not be stated that it would not be that all such factors would exist in each and

every case.

By applying the above principles, when the rival mark-s are compared we find that device of pony with the word PONY is identical with slight

difference of back ground and TOP NIPPLES additionally written in the label of respondent No. 1 .In our considered view the addition of words

below the word PONY does not make much difference. What a man of average intelligence will remember is the device of pony which is prominent

and common in both the marks. The mark adopted by the respondent No. 1 is a mere copy of the appellant's mark. Though the goods are different,

one should not forget that reputation and goodwill enjoyed by the appellant's prior registered mark is enviable. The sales figure of the appellant for the

year 1986-87, when the respondent No. 1 allegedly began to use the impugned mark, was Rs. 9.18 lakhs whereas respondent's sales figure was Rs.

The respondent has written, against the column for advertisement expenses, 'NIL Due to ban on advertisement' without any explanation as to the

reason and circumstances of the alleged ban and the respondent No. 2 has not taken note of this or ignored this fact. We find there is considerable

force in the assertion of the learned Counsel that the trade channel and consumers are common in both the rival goods bearing the mark PONY or

device of Pony and there is strong possibility or likelihood of causing deception and confusion by the mark of the respondent No. 1 as the unwary

public may think that the goods of the respondent No. 1 are in fact associated with or manufactured by the appellant. We are of the view that the

possibility of confusion or deception is not merely likely to be caused but it is almost certain considering the way in which the respondent No. 1 has

adopted the mark, as the trade mark has been a virtual copy as that of the well reputed/known mark of the appellant.

In the order dated 9.3.2008 this Appellate Board in Needle Industries (India) Private Limited v. Vinod Kumar Agarwal in ORA/113/06/TM/DEL,

observed as under:

The provision is that a trade mark is not registrable if by its very nature deceive the public or cause confusion. Here in this instant case, we are of the

opinion that there is every possibility of confusion and deception being caused among the public as the rival marks are identical. The applicants

adoption of the trade mark being prior in use and also that the applicant's mark is a well known mark and has gained good reputation among the public

use of the mark which is identical by the respondents would definitely cause confusion among the public making the public to think that goods bearing

the impugned trade mark emanate from the applicant. The essentials for prohibition under Section 11(2) of the Act is that the trade mark sought to be

registered must be identical or similar to an earlier trade mark, the goods in respect of which registration is sought are not similar to those for which

earlier trade mark is registered the earlier trade mark is a well known mark in India and that use of the later mark without due cause would take unfair

advantage of or be detrimental to the distinctive character of the earlier trade mark. The applicant's mark here is registered as early as 1971 and has

also gained good reputation among the public and is a well known mark and as such the use of an identical mark by the respondent would cause

confusion among the public and thus does not qualify for registration under Section 11(2) of the Act.

In the instant appeal, the trade mark sought to be registered by the respondent No. 1 is identical to the earlier trade mark of the appellant but goods

are different. The appellant's trade mark claiming user since August 1970 was registered in 1986 and is a well known mark, in view of this, the use of

the respondent No. 1's later mark without due cause would take unfair advantage of or be detrimental to the distinctive character of the appellant's

earlier trade mark and thus the use of respondent No. 1's mark will cause confusion among the public.

We are inclined to agree that the respondent No. 2 has not gone into the, issue raised under sections 9 and 12 of the Act. When there is no finding

of the respondent No. 2 on the grounds of objections raised under those sections, we do not consider it necessary to go into those issues at this stage.

The respondent No. 2 has come to the conclusion that the rival goods are different and the registration and use of the mark applied for by the

respondent No. 1 will cause no confusion and deception, if that be so, then imposition of area restriction for sale of goods of the respondent No. 1 goes

against the conclusion arrived at by the respondent No. 2.

In view of the above, the impugned order of respondent No. 2 is unsustainable and deserves to be set aside. Accordingly, we allow the appeal and

set aside the impugned order dated 1.5.1997. There shall be no order as to costs.