Needle Industries (India) Ltd. vs Super Thread Industries And Ors.

S. Usha, Technical Member

Appeal arising out of the order dismissing opposition No. DEL-T-583 and accepting application No. 495663 in class 23 for registration. The first

Respondent herein filed application No. 495663 on 8.8.1988 for registration of their trade mark, inter alia, consisting of the word 'PONY' with the

device of 'PONY' in class 23 in respect of yarn and threads under the provisions of the Trade and Merchandise Marks Act, 1958 (hereinafter

referred to as the Act), claiming user since 1987. After examination the application was advertised before acceptance in the Trade Marks Journal No.

1155 dated 16.6.1997 at page 837. The Appellant herein had filed their notice of opposition on 4.9.1997 to the said application objecting the registration

of the application under Sections 9, 11(a), 11(b), 11(e), 12(1), 12(3) and 18(1) of the Act. The first Respondent had filed their counter-statement to the

said opposition on 26.8.1998.

After completion of the formal procedures the matter was set down for hearing. The learned Assistant Registrar of Trade Marks dismissed the

opposition by holding that the first Respondent's mark was purely distinctive of their goods and the Appellant's objection under Section 9 of the Act

was rejected as baseless. As regards objection under Section 12(1) of the Act the learned Assistant Registrar held that the application under class 23

by the Appellant was pending registration and also that they were using the mark since 1995, which date was subsequent to that of the first

Respondent and as such the Appellant had no locus standi to raise the objection. The learned Assistant Registrar had also rejected the objection under

Section 11(a) of the Act stating that the Appellant's mark had acquired distinctiveness as far as class 26 goods are concerned and as far as goods

under class 23 the Appellant's use is only from the year 1996, as seen from the bills produced before the learned Assistant Registrar. The first

Respondent being the prior user and the genuine proprietor of the mark are entitled to have the mark registered and the objection under Section 18(1)

of the Act was rejected. Aggrieved by the said order of the learned Assistant Registrar, the Appellant had filed the appeal CM (M) 615/2000 before

the High Court of Delhi at New Delhi, which was subsequently transferred to this Board in terms of Section 100 of the Trade Marks Act, 1999 and

renumbered as TA/169/2003/TM/DEL. The Appellant had also filed a Miscellaneous Petition seeking exemption from filing certified copies of the

annexures. The same has been numbered as M.P. No. 11/2006.

The matter was taken up for hearing in the Circuit Bench at New Delhi on 11.9.2006. Learned Senior Counsel Shri Sanjay Jain assisted by Gaura

Mukherjee, Vadivelu Deenadayalan and Ms. Nitika Agarwal appeared for the Appellant and Learned Counsel Shri Mahabir appeared for the first

Respondent.

Learned senior counsel for the Appellant mainly contended that the goods falling in class 23 and 26 were allied and cognate goods and so the trade

channels were one and the same. He also brought to our notice Rule 137 of the Trade and Merchandise Marks Rules, 1959 which reads as under:

137 Textile Goods--The classes of goods in relation to trade marks to which Chapter IX of the Act shall apply and which are in the Act and the rules

referred to as textile goods shall be classes 22 to 27 (inclusive) of the Fourth Schedule.

Learned senior counsel submitted that they had adopted and started using the impugned mark 'PONY' along with the device of PONY since 1963 and

had got their trade mark registered as early as 7.7.1971 in class 26. The counsel for the Appellant also submitted that the Trade Mark has been

registered and some of the applications were pending registration throughout the world. The learned senior counsel drew our attention to the affidavit

filed by the first Respondent as evidence in support of his application wherein they had stated that they had adopted the impugned mark 'PONT' along

with the device of PONY on 24.12.1987 only.

Learned senior counsel for the Appellant further contended that their trade mark had acquired distinctiveness by long use and also contended that

the marks being identical with that of the Respondent, there was every possibility of confusion and deception being caused.

Learned senior counsel placed before us the judgment Needle Industries (India) Limited v. Sanjay Jaiswal and Ors. 2002 (24) PTC 646 (DB,)

Madras where the suit for passing off had been filed by the Appellant herein against the first Respondent herein. The Division Bench of the Madras

High Court had granted an order of interim injunction on 8.10.2001 against the first Respondent restraining them from using the impugned mark

'PONY' on the ground that the Appellants were prior users and also that the marks being identical the possibility of confusion was there.

Learned senior counsel also relied on various other judgments in support of his contention that even though the class of goods were different the

goods were sold through the same trade channels and that it would lead to confusion and passing off. He placed reliance on the judgment Needle

Industries (India) Limited v. Sanjay Jaiswal and Ors. (Supra) Madras in support of his claim that both the goods were cognate and were sold through

same trade channel, deception and confusion was not merely likely but certain having regard to the manner in which the mark was adopted and also

that the adoption of the identical trade mark by the Respondent was not honest.

Reliance was also placed on the judgment Burcombe and Company Ld., 1999 RPC 179 and J. Lyons and Company Ld., 1959 RPC 120 to say what

are the judicial tests to be followed to determine the description of goods.

In support of his contention that even if the goods were either allied or cognate they were of the same nature and that chances of deception was

more. He also relied on the judgments W.W.F. International v. Mahavir Spinning Mills Ltd. 1994 (14) PTC 250 (DEL,) Prakash Industries Ltd. v.

Rajan Enterprises 1994 (14) PTC 31 (DEL), Daffodils Perfumes and Chemicals Indus v. Daffodil Chemical (P) Ltd. 1996 (16) PTC 153 (DEL).

In support of his claim that though the goods were different in description, well established reputation cannot be allowed to be diluted by registration of

an identical mark in respect of other goods he relied on the judgments Daimler Benz Aktiegesellschaft and Anr. v. Hybo Hindustan 1994 (14) PTC

287 (DEL) : 1994 (14) PTC 287 (Del), Pradeep Kumar Dhoot and Anr. v. Jai Prakash Gupta and Ors. 2005 (31) PTC 121 (IPAB)C, aterpillar Inc. v.

Jorange 1998 (18) PTC DB

Learned Counsel for the first Respondent forcefully argued that their adoption of the impugned mark 'PONY' was honest. He also submitted that

they had adopted the mark as early as 1987 and had applied for registration in 1988. He also drew our attention to the sales turnover mentioned in the

counter-statement filed before the Registrar of Trade Marks. Learned Counsel for the first Respondent also contended that the Appellant had not

produced any evidence to prove that they had been using the mark since 1967 as claimed, wherein only some vouchers were filed which were of the

year 1989 and not earlier to that. He also submitted that the Appellants had not made any submission that the goods are allied and cognate either in

their notice of opposition or in the grounds of appeal before the Board and vehemently contended that a new plea cannot be raised at this stage. He

also submitted that the affidavits filed by the Appellant from various people are only stereotype affidavits and cannot be relied on.

Learned Counsel for the first Respondent also submitted that their adoption of the impugned mark was honest and that they were honest and

concurrent users. He also further stated that the judgments relied on by the Appellant were not relevant in the case on hand and relied on various

judgments in support of his contentions:

The counsel for first Respondent relied on the judgment Jolen Inc. v. Assistant Registrar of Trade Marks and Anr. 2005 (30) PTC 542 (IPAB) in

support of his contention that in the passing off suit between the same parties, the injunction granted by the Division Bench of the Madras High Court

will not affect the issue regarding registration of the marks.

Nestle Products Ltd. and Ors. v. M/s Milkmade Corporation and Anr. AIR 1974 Delhi 4 0was relied on to submit that the Appellants herein have not

been able to establish prima facie case that there is trade connection between the goods and the trade marks to constitute infringement.

He relied on the judgment United Brothers v. United Traders 1997 (17) PTC 603 to state that goods though were sold in the same counter they fall in

different classes and that question of deception or confusion does not arise.

Reliance was placed in support of his contention that the burden was on the Respondent to prove that there was no reasonable possibility of confusion,

but when looking in to the facts no instance of confusion has occurred and held that the goods being different possibility of confusion does not arise -

London Rubber Company Ltd. v. Durex Products PTC (Suppl) (1) 246 (SC).

We have carefully considered the contentions of both the counsel. We find that in order to qualify for registration the mark should be distinctive of

the goods and if not distinctive should be capable of distinguishing the goods of the Appellant from others. Here we find that the first Respondent had

adopted the mark on 24.12.1987 and made an application on 8.8.1988. The first Respondent's mark has no capacity to acquire distinctiveness by use

of the mark which is only for a period of 8 months prior to the filing of application for registration. To acquire distinctiveness and with a view to be

capable of distinguishing, the mark should have been in use for a considerable period of time. The Appellants had been using the impugned mark

'PONY' along with the device of PONY since 1971 as seen from the Trade Mark Registration Certificate whereas the first Respondent has been

using the mark only since 1987 and hence the objection under Section 9 of the Act by the Appellant sustains.

We also find that the first Respondent's trade mark 'PONY' long with the device of PONY being identical with that of the Appellant, there is

every possibility of confusion and deception being caused. The Respondent's goods emanate from the same source and as such needles and thread

being related goods, are sold across the e same counter. We also hold that the goods being cognate and are sold through the same trade channels and

the consumers being the same for both the goods, there is every possibility of confusion to attract disqualification under Section 11 of the Act. The

possibility of confusion or deception is not merely likely to be caused but it is almost certain considering the way in which the first Respondent has

adopted the mark, as the first Respondent's mark, has been a virtual copy as that of the Appellant.

A look at the impugned order indicates that the Assistant registrar had proceeded on the basis that the goods are different and that the Appellant's

trade mark acquired reputation only in class 26 and not in class 23. Taking into consideration the observations made in the well known ""Benz's case

Daimler Benz Aktiegesellschaft and Anr. v. Hybo Hindustan AIR 1994 Del 239 : 1994 (14) PTC 287 (De l)is that if a globally well known mark is

used by another in respect of different kinds of goods, the possibility of confusion in market was still there. The said judgment was confirmed by the

Supreme Court. We are, therefore, of the view that the Appellant's mark has acquired wide reputation and goodwill in the market the use of the said

mark by the Respondent for their product would mislead the public to think that the Respondent's goods emanate from the Appellants which will

deface the goodwill of the Appellant.

From the above principles laid down by the Supreme Court, we are of the opinion that irrespective of the fact that the goods are different, if the

Respondents are allowed to use the well reputed trade mark of the Appellants, it would certainly deface the reputation and goodwill of the Appellants

and as such cannot be permitted.

As decided by the Division Bench of the Madras High Court we agree to hold that the Appellant's goods fall under class 26, a well known mark

and the use of the same mark for goods falling under class 23 would lead to confusion. Here we find it worth to extract some portion of the judgment

of the Division Bench of the Madras High Court inN eedle Industries (India) Limited, Chennai v. Sanjay Jaiswal and Ors. 2002 (24) PTC 646 (DB)

for better appreciation of the arguments of the Appellant and for conclusive finding in determining the dispute before us.

In paras 22 and 23 page 652, the learned Judges have observed:

In this case, there can by no doubt whatsoever that the mark used by the Defendants is a mere copy of the Plaintiffs mark. The mere addition of

the name of the Defendants as manufacturer or stockists, does not in the least make a difference to the average purchaser who looks at the mark

'Pony' and label and would assume that the sewing threads sold by the Defendants emanates from the same source as the needles manufactured by

the Plaintiff, needles and threads being related goods sold across the same counter. The confusion or deception in the case is not merely likely, but

almost certain, having regard to the manner in which the mark and the label had been copied by the Defendants.

The Defendants have offered no explanation whatsoever for the adoption of this mark. It is not a mark invented by the Defendants. It is evident

that the second Defendant having been the dealer of the Plaintiff, being familiar with the mark and being will aware of the enormous goodwill attached

to that mark, had sought to ride piggyback on the good will at the cost of the Plaintiff. The Defendants' conduct is not one which can be regarded as

bona fide. The adoption f of that trade mark by the Defendants was deliberately and consciously done with a view to profit from the good will earned

by the Plaintiff for the mark and label. The fact that the mark has been registered in favour of the first Defendant for sewing threads recently does

not make any difference, as registration of the mark in a different class is not by itself a complete defence in an action for passing off. While such

registration may be permissible, the registration does not confer immunity against an action for passing off.

From the above extract, it is clear that the Division Bench has come to a conclusion that the Appellant has made out a prima facie case. With due

respect to the learned Judges we agree with their views and hold that the Appellant as prior user in point of time have valid rights than that of the first

Respondent.

As regards Section 12 of the Act the first Respondent has not given any valid explanation for adoption of the mark. As such the adoption of the

trade mark by the Respondent is not bona fide. We also find from the records that the Respondent has adopted the impugned mark only to gain

unlawful profit and to enrich themselves at the cost of the Appellant. It is also a well settled proposition of law that concurrent use should be of a long

period, unhindered, uninterrupted. Mere use of a mark for a period of 8 months cannot be taken to be a concurrent use for the purpose of Section

12(3) of the Act. Apart from that short span of user, dishonesty is manifest at the beginning itself even before the grant of registration. On perusal of

the document filed as annexure 'A' alongwith the Notice of Opposition, it is seen that the first Respondent has put 'R' in a circle along with the words

Regd. TM No. 495663 in the label even before registration. This dishonesty itself disentitles him the benefit of Section 12(3) of the Act.

While we hold that the mark has not acquired any distinctiveness and the adoption of the mark by the first Respondent being dishonest, the rights

under Section 18 of the Act is also not available to the first Respondent.

In view of the above reasons we allow the appeal by setting aside the order of the learned Assistant Registrar of Trade Marks disallowing the

opposition and allowing the application No. 495663 to proceed for registration. There shall be no order as to costs. As the main appeal itself has been

allowed the MP No. 11/2006 does not survive and becomes infructuous.