Judgment:
Honble Z.S. Negi, Chairman:
This appeal under section 91 of the Trade Marks Act, 1999 (hereinafter referred to as the Act) is directed against the order dated 5.9.2007 passed by the Deputy Registrar of Trade Marks, Chennai whereby she allowed rectification No. MAS-55877 and ordered expunction of registered trade mark No. 454585 in class 03 from the register. The appellant has filed along with the appeal an application (being M.P.No. 9/2008) for stay of operation of the impugned order dated 5th September, 2007 and subsequently an affidavit request for early hearing of stay application. After hearing both the parties stay prayed for was granted until final decision of the appeal.
2. The case of the appellant, N.G.Subbaraya Setty, is that he is the proprietor of N.G. Subbaraya Setty and Sons, engaged in the business of manufacturing and selling agarbathies and dhoops since 1983. He adopted the distinctive trade mark EENADU on 26.5.1986 and applied for registration under No. 454585 in class 03 on the basis of proposed to be used. The said application was advertised in the Trade Marks Journal No.944 dated 1.10.1988 at page 768 and the mark was registered as no opposition was received. The trade mark has been renewed from time to time and is subsisting and the same is being openly and continuously used on agarbathies and dhoops from the date of filing application for registration.
3. The appellant is stated to have, in the year 2000, found that the respondent No.1 is infringing their registered mark by illegally adopting identical trade mark EENADU in respect of same goods and thereupon the appellant filed O.S. No. 3200 of 2000 against respondent No.1 before the City Civil Court, Bangalore and the court granted ad-interim injunction against the respondent No.1/defendant. However, the said interim injunction was subsequently vacated on the ground that the carton box of the plaintiff and defendant are not similar to each other and there cannot be any infringement. The court has stayed the suit in view of pending rectification proceedings before the Registrar. In the meantime, the suit O.S. No. 8029 of 2000 was filed by the respondent No.1 against the appellant and his son before the City Civil court, Bangalore for infringement of the registered copyright of respondent No. 1, wherein no interim injunction was granted because of the undertaking furnished by the appellant that they would not use the impugned colour combination and the same is posted for trial. An application filed by the appellant for cancellation of copyright of respondent No.1 was dismissed by the Copyright Board and against the said dismissal a writ petition was filed before the Karnataka High Court wherein stay was granted. However, on the submission of respondent No.1 at the final hearing that rectification proceeding was pending with respect to the registered trade mark, the appellant was persuaded to withdraw the writ petition.
4. It is stated that the respondent No.1 had filed two applications under No. 619177 and No. 671009 for registration of trade marks âASHIKAS EENADU and âEENADU AGARBATHI COMPANY (label), both in Class 03 and thereupon the appellant filed opposition Nos. MAS-58418 and MAS-215434, respectively, opposing the registration. The opposition No.MAS-215434 was allowed as the respondent No.1 failed to file counter-statement. In the meanwhile, one M/s. Ushodaya Enterprises Limited filed the suit against respondent No.1 and the Supreme Court has injuncted him from selling his goods under the brand of EENADU in the State of Andhra Pradesh; the said injunction continues till date, therefore, respondent No.1 as on date has no right to use the mark EENADU. The appellant has given details of certain cases, which the respondent No.1 filed against the alleged infringers of their trade mark/copyright, to highlight that same were dismissed on one ground or the other. The appellant states that it is relevant to point out that the Deputy Registrar in her impugned order has come to the finding that the respondent No.1 refers to his mark as âEENADU and not as âASHIKAS EENADU.
5. The appellant has further stated that on 9th May, 2000 the respondent No.1 trading as ASHIKA Incense Inc. has filed an application for rectification of the registered trade mark of the appellant on the grounds, inter-alia, that the respondent No.1 was an aggrieved party and that the appellants mark was never used from the date of registration and that the appellants mark was contrary to statutory provisions under the Act. The rectification was numbered as MAS-55877 in class 03 and after completion of the procedural formalities, the rectification was finally heard on 17th May, 2007 and the order appealed against was passed by the Deputy Registrar of Trade Marks, Chennai on 5th September, 2007.
6. Aggrieved by the aforesaid order, the appellant has preferred this appeal on various grounds, inter-alia, that the Deputy Registrar erred in holding that the respondent No.1 is an aggrieved person within the meaning of section 57 of the Act; that the respondent No.2 failed to appreciate that the appellant is the first to use the mark; that the respondent No.2 failed to take note of the dishonest adoption of the impugned trade mark and dishonestly applied for registration by the respondent No.1; that the respondent No.2 failed to appreciate that the respondent No.1 refers to his mark as EENADU and not as ASHIKAS EENADU; that the respondent No.2 ought to have appreciated that the respondent No.1 added the prefix âASHIKAS to the mark âEENADU only after the O.S. No.3200 of 2000 was filed for injunction restraining him from using the said mark; that the respondent No.2 erred in coming to the conclusion that the mark has not been used since registration; that the findings of the respondent No.2 about the user or non-use of mark by the appellant is erroneous; that the respondent No.2 erred in concluding that the bills furnished as evidence of user are all fabricated; that the respondent No.2 erred in concluding that in the absence of CST or Sales Tax Registration numbers, the bills and invoices are fabricated; that the finding of the respondent No.2 that the provision of section 47(1)(b) of the Act are also satisfied is erroneous; that the respondent No.2 erred in rejecting the user furnished under the name and style of M/s. Taranga Commercials of India by failing to appreciate that it was by an unregistered user; that the finding of the respondent No.2 that the appellant had registered the mark with no bona fide intention to use it and that no user was established is contrary to the observations made by her in the impugned order; that the respondent No.2 has erroneously gone into the evidence furnished by the respondent No.1 against all rules of principles of natural justice, ignoring the dishonest adoption of mark by the respondent No.1; that the respondent No.2 ought to have held that the appellant has superior rights to the mark EENADU; that the respondent No.2 failed to appreciate that section 31 of the Act presumes the validity of the registered trade mark; that the respondent No.2 has erroneously concluded that the respondent No.1 has been using the mark all over India since 1st September, 1993; that the findings of the respondent No.2 that the impugned registration was obtained in fraud suppressing the extensive use of appellants EENADU mark in respect of identical goods and that such registration is hit by sections 9 and 11 of the Act is perverse; that the respondent No.2 failed to appreciate that the respondent No.1 did not respond to the notice of renewal sent to him by the Registry of Trade Marks; that the finding of the respondent No.2 that the impugned mark has been wrongly registered and is wrongly remaining on the register is liable to be set-aside and that the impugned order passed by the respondent No.2 is without jurisdiction.
7. The respondent No.1 filed his counter-statement denying the material averments made in the appeal. The respondent No.1 is stated to be carrying on the business of manufacturing and selling incense sticks for the past several years. The respondent No.1, during the course of his business, honestly conceived and adopted the trade mark EENADU on 1.9.1993 and has been continuously and extensively using the said mark without any interruption whatsoever from any quarter. He has been exporting the agarbathies under the said trade mark to USA and Sri Lanka. In order to safe guard his right over the said trade mark, the respondent No.1 applied for registration of the trade mark under No.619177 in class 03 and the same is under opposition filed by the appellant. The respondent No.1 states that appellant very well knew about the use of trade mark EENADU by the respondent No.1 but the appellant has not chosen to take any legal action against him till the respondent No. 1 filed application for rectification on 9.5.2000. The respondent No.1 has registered his trade mark label EENADU under the Copyright Act under No.A-53813/97. The respondent No.1 states that though the appellant has obtained registration of trade mark EENADU word per se on 26.5.1986 as proposed to be used but they have not renewed the said registration in time and the first and second renewal of the said registered mark for the period from 26.5.1993 to 25.5.2000 and from 26.5.2000 to 25.5.2007 was done on 16.3.2000 and such renewal is contrary to the provisions of rule 69 of Trade and Merchandise Marks Rules, 1959 and is not valid under the law. The respondent No.1 alleges that the appellant never manufactured or sold the agarbathies bearing the trade mark EENADU and as such the bills furnished by the appellant are all fabricated for the purpose of rectification proceedings. The sales tax registration numbers were scored of in certain bills and has not renewed the sales tax registration after 1996. The appellant has filed number of bills issued by the M/s Taranga Commercials of India purported to be in the same address having different sales tax registration and having the same telephone number. The said M/s. Taranga Commercials of India are also selling agarbathies bearing the trade mark EENADU which makes it clear that the appellant are not using the trade mark EENADU though renewal of registration has been obtained. The respondent No.1 states that he is the person aggrieved as suit against him has been filed by the appellant and is pending. The respondent No.1 states that M/s. Taranga Commercials of India has nothing to do with the present proceedings and the bills have been filed for the purpose of confusing the issue on hand. In the statement of accounts filed as document No.2, (sic) there is no trading style of the appellant and the lettering style in the bills are different for the same period and the bank hundies submitted by the appellant are only for the year 1987.
8. The appellant claimed to have used the trade mark after filing application for registration but have not cared to file the agarbathies carton bearing the impugned trade mark. The respondent No.1, after referring to the cancellation application filed before the Copyright Board which was dismissed by Copyright Board on the ground that the appellants mark is just a word mark without any artistic design and also in the writ petition to the High Court of Karnataka challenging the dismissal of application by the Copyright Board, no carton or label was produced. The respondent No.1 submitted that without a carton or label the agarbathies cannot be sold in the market and as such it could be seen that the appellant had not used the trade mark in question. With reference to the details of certain cases which the respondent No.1 has filed against the alleged infringers of their trade mark/copyright, the respondent No.1 has stated that their references in the appeal are irrelevant, the respondent No.1 claimed that, however, this leads to show that the appellant has not been continuously carrying on business using the trade mark EENADU since 1986 otherwise he would be the last person to keep quite without initiating legal action against the persons referred to in the appeal. It is stated that the respondent No.2, after thoroughly going to the evidence filed by both the parties, has rightly arrived at the right conclusion and ordered for expunging the registered trade mark of the appellant. The respondent No.1 has stated that he, at the time of adoption of the trade mark EENADU, had made a market survey and found that no one is using the trade mark EENADU in respect of agarbathies and only then started using the mark. The respondent No.1 has stated that the user by M/s Taranga Commercials of India is not a permitted one and no document in support of permitted use has been filed by the appellant and in the absence of the same, the respondent No.2 is right in not considering the bills of said M/s. Taranga Commercials of India. Since the respondent No.2 has rightly come to the conclusion that the appellants mark was not in use and, therefore, the question of dishonest adoption of mark by the respondent No.1 does not arise.
9. The appeal came up before us for hearing on 13.4.2009 when Shri Ram Kumar, Advocate, assisted by Ms. Vibhu, Advocate appeared for the appellant and Ms. P.V. Rajeswari, Advocate appeared for the respondent No.1.
10. Learned counsel Shri Ram Kumar contended that the respondent No.2 erroneously came to the conclusion that the respondent No.1 is person aggrieved within the meaning of section 57 of the Act by failing to appreciate that the appellant has honestly adopted and used the mark prior to the respondent No.1 and has established beyond doubt that he has been using the trade mark EENADU continuously and openly since the year 1986. The respondent No.2 has also failed to appreciate that in various litigations between the same parties the civil courts have held that the mark of respondent No.1 does not infringe the appellants mark and after having accepted such findings of the civil courts by respondent No.1 he cannot be held to be the person aggrieved for filing rectification before the respondent No.2.
11. Learned counsel for the appellant contended that the respondent No.2 has failed to appreciate that the appellant is the prior user of the mark and respondent No.1s adoption of identical mark is dishonest. Records show that the appellant has been in the business of manufacturing and selling agarbathies and dhoops since 1983 and using the trade mark in respect of those goods from the date of making application for registration of mark on 26.5.1986, whereas the respondent No.1 has claimed user from 1.9.1993. The impugned order is in contradiction to the finding recorded by the respondent No.2 which reads thus: â Further when the applicants filed their application for registration of trade mark EENADU, the impugned registered trade mark seems to have been cited as a conflicting markâ. He further contended that the respondent No.1 has in bad faith added the prefix âASHIKAS to âEENADU, after suit O.S. No.3200 of 2000 was filed by the appellant against him, to impress the court that his mark is not identical to the appellants mark, and subsequently he refers his mark as EENADU by omitting to refer ASHIKAS so as to bring his mark as near as possible to appellants mark to gain illegal benefit.
12. Learned counsel contended next that the respondent No.2 erred in concluding that the impugned mark has not been used on the ground that the bills invoices furnished to prove user are all fabricated for the purpose of rectification proceeding. The impugned order in respect of user or non-user of the mark is self contradictory. The observation of respondent No.2 that âThe user aspect, being a positive aspect, the burden lies on the Registered Proprietors to prove the userâ is absolutely contrary to the settled law. The burden to prove non-use of mark is on the applicant and if he discharges that burden then it shifts to the respondent to prove his user. By taking us through the internal pages 5-6 of the impugned order the learned counsel pointed out certain inconsistencies and submitted that such order cannot be sustained. Learned counsel clarified that the sales tax registration Number have been scored of from the bills/invoices as the appellant was at the relevant time not required to be registered under the provisions of the Central Sales Tax Act, 1956 (in short CST). He drew our attention to section 7 of the CST which deals with registration of dealers and submitted that sub-section (1) thereof provides registration of every dealer liable to pay tax under that Act and sub-section (5) thereof provides a registered dealer may apply for cancellation of registration. Likewise sub-section (1) of section 10 of the Karnataka Taxation Laws (Amendment) Act, 1997 require every dealer whose total turnover in any year is not less that two lakh rupees may get himself registered under that Act and sub-section (6) provide that a dealer registered under sub-section (1) of section 10 shall be entitled to have his registration cancelled subject to proving his turnover. Learned counsel submitted that small traders do not throw away the printed bills/invoices but they use the same after deleting or adding the changes necessitating therein. Refuting the observation of respondent No.2 that âIt is not known why they have stopped business before 1996. But it is certain that they are not carrying on any business after 1996â, learned counsel took us through to page No. 274 containing a printed copy of Lucky Strike (a prize scheme to promote product of the appellant and to increase sales by agents/dealers), introduced by the appellant for the period from 20.9.1987 to 20.10.1987 for promotion of appellants products including Eenadu, to prove bona fide intention of registration and actual use and to prove user on or after 1996 took us to pages 286 to 296 containing invoices from 1996 to 2000. Amongst other invoices of the appellant he took us to the latest invoice on record at page 291 containing invoice No.2377 dated 27.2.2000 to stress that the appellant has been using the mark continuously. Regarding the bills issued by Taranga Commercial of India, learned counsel submitted that the said concern is owned by the son of the appellant and he has permitted him to use the mark for the agarbathies. Such user is by an unregistered user of the mark which shall, for the purposes of section 47, shall be deemed to be used by the proprietor himself under sub-section (2) of section 48 of the Act. In support of his submission, learned counsel relied on the decision in the cases in Saroop Prakash Nayar v. Chesebrough Ponds Inc. and Anr., 2006 (33) PTC 499 (IPAB) and Safari International and Anr. v. Subhash Gupta and Ors., 2006 (33) PTC 616 (del.). The findings of the user or non-use of the impugned mark arrived at by the respondent No.2, without taking into account the evidence of user placed on record by the appellant, clearly indicate the non-application of mind in objective determination of use of the mark by the appellant. He also contended that the respondent No.2 has erroneously gone into the evidence furnished by the respondent No.1, by failing to look into the dishonest adoption of mark by the respondent No.1 and the claim of his user. Respondent No.2 has overlooked the well laid down principles of law that no amount of user can cure the case where the adoption of mark is dishonest and not bona fide in the first place, and as such the findings of respondent No.2 under sections 47 and 31 of the Act is liable to be set aside.
13. Learned counsel contended that the finding of respondent No.2 that the appellant had registered the mark without bona fide intention to use in respect of goods for which registration is obtained is extremely erroneous and contrary to law, especially in view of the provisions of section 18 (1) of the Act. The conclusion of the respondent No.2 that the user of EENADU by respondent No.1 on all India basis has been even before application of registration filed by the appellant is totally contrary to facts on records and the finding that the impugned registration was obtained in fraud suppressing the extensive use of EENADU mark of respondent No.1 in respect of identical goods and that the impugned registration also contravened the provisions of sections 9 and 11 at the commencement of these rectification proceedings is perverse in as much as the appellant had applied for registration in 1986, whereas the respondent No. 1 claimed user from 1993 only. When the appellant is prior adopter and user of the mark, it is fallacious to conclude that the appellant has played fraud in suppressing the extensive use of respondent No.1s mark when at the material time the respondent No.1 was not born in that trade. Relying upon the decision in the case of Bal Krishan Jindal v. Mohinder Singh and Anr., 2007 (34) PTC 136 (IPAB), the learned counsel submitted that simply alleging fraud is not sufficient, for the absence of particulars, the application would be incomplete.
14. The counsel for the appellant contended that the respondent No.2 has not given any reason for her finding that the impugned mark has been wrongly registered and is wrongly remaining on the register of trade marks. Such a non speaking finding or order is the result of improper evaluation of evidence and non-application of provisions of law. Learned counsel further contended that the impugned order has been passed by the respondent No.2 without any jurisdiction. In view of the defence taken by the respondent No.1 in the suit in O.S, No.3200 of 2000 on the file of City Civil Court, Bangalore, the jurisdiction lies with this Appellate Board under sections 124 and 125 of the Act. To fortify his contention, learned counsel relied upon the order of this Appellate Board in Sun Pharmaceutical Industries Ltd. v. Atadmed Pvt. Ltd. and Ors., 2006 (33) PTC 506 (IPAB).
15. Ms. P.V. Rajeswari, learned counsel for the respondent No.1, submitted that the applicant before the Registrar of Trade Marks (respondent No.1 herein) is the person aggrieved within the meaning of the Act as the appellant has filed O.S. No.3200 of 2000 before the City Civil Court, Bangalore against the applicant/respondent No.1. The appellant has obtained an order of interim injunction against the applicant/respondent No.1 which was though subsequently vacated but the suit is still pending. Therefore, the respondent No.2 has rightly held the applicant/respondent No.1 is the person aggrieved to institute the rectification proceedings against the appellant.
16. Learned counsel submitted that the respondent has made specific averment in paragraph 11 (ii) of the counter-statement that the question of prior user is not the issue on hand and the rectification proceedings was initiated on the ground of non-user. She submitted that the appellant has by raising non-issue in the matter tried to confuse the issue on hand. Otherwise also, the Registrar has after going through the records observed that in the absence of any evidence of user of the impugned mark since the date of its registration on 26.5.2986 till the filing of rectification proceedings on 17.5.2004, the inevitable conclusion is that the registration was obtained without bona fide intention to use and such absence of intention was followed by non-user. Learned counsel reiterates that the respondent No.1 is using his trade mark as Ashikas EENADU and submits that it is wrong to say that the respondent No.1 has adopted the mark in bad faith.
17. Ms. Rajeswari submitted that the Registrar has rightly come to the conclusion after thoroughly going through the evidence filed by both the parties that the impugned mark has not been used. She submitted that the appellant has never manufactured or sold agarbathies bearing the EENADU trade mark as the bills /invoices furnished by the appellant are all fabricated for the purpose of rectification proceedings. She pointed out that the Sales Tax registration numbers in the bills are scored out and such registration has not been renewed after the year 1996 which goes to prove that the appellant has not carried on business after that year. She further pointed out that the appellant has filed number of bills issued by M/s. Taranga Commercials of India purported to be from the same premises having different Sales Tax registration but bearing the same telephone number and the said Taranga is selling the agarbathies bearing the same trade mark EENADU. The bills of said Taranga have been filed for the purpose of confusing the issue on hand as said Taranga have nothing to do with the present proceedings. She took us to pages 276, 277 and 280 containing invoice Nos.1222 dated 25.6.1993, 1215 dated 23.6.1998 and 1718 dated 28.6.1998 wherein telephone number mentioned are 608742, 608742 and 6678742, respectively, to show that it is very clear that the appellant had fabricated the bills for the purpose of rectification proceedings. Submission is made to highlight the defect of the statement of account filed by the appellant as document No.2 that there is no trading style of appellant mentioned and the lettering style in the bills are different for the same period. She submitted that the appellant has not been doing business as he has failed to place on record any carton or label as agarbathies cannot be sold in market without the carton or label. Learned counsel denied that the respondent No.1 has adopted the mark dishonestly by submitting that the respondent No.1 has adopted the mark after market survey made and found that no one is using the mark EENADU in respect of agarbathies and only then the respondent No.1 started using the trade mark.
18. Learned counsel submitted that the appellant has filed application for registration of trade mark EENADU as proposed to be used in respect of agarbathies and dhoops and till date has not disclosed the actual date of user of the mark and the label under which they are selling the agarbathies. She drew our attention to the conclusion arrived at by the Registrar which says that it is certain that the appellant are not carrying on any business after 1996. The appellant have no bonafide intention to use the mark is further fortified by the fact that they have though obtained the registration but not renewed the registration of the mark within the statutory period and got the renewal done after a lapse of 7 years on 16.3.2000, which renewal is contrary to the provisions of rule 69 of the Trade and Merchandise Marks Rules, 1959 and the evidence to prove user filed is either all fabricated for the purpose of rectification proceedings or unconnected to the proceedings i.e. bills coming from M/s.Taranga Commercials of India which is not a party to the proceedings. Learned counsel took us to internal page 6 of the order wherein the Registrar has recorded her finding that ââ¦.the conclusion is inevitable that the impugned registered trade mark was obviously registered without any bonafide intention on the part of the Registered Proprietors to use the same on the goods and such absence of intention was followed by non-user.â
19. In reply to the submission of learned counsel for the respondent No.1 relating to different telephone numbers mentioned on bill numbers 1215 dated 23.6.1998 and 1718 dated 28.6.1998, learned counsel for the appellant clarified that there was a change of telephone numbers in Bangalore and hence this difference in number. Besides this, the later telephone number is in 7 digits and the change is shown or affixed with rubber stamped number on the bill number 1718 dated 28.6.1998 strengthens the veracity of his clarification. In reply to the submission of counsel for respondent No.1 that the registration certificate was renewed after statutory period and is in contravention of rule 69 of Trade and Merchandise Marks Rules, 1959, learned counsel for the appellant relying upon the decision in Abdul Karim Sahib and Sons, etc, Tiruchirapalli v. Assistant Registrar of Trade Marks Madras, 1983 (3) PTC 55 (Mad) and Teragon Chemie (P) Ltd. v. Government of India and Anr., 2007 (35) PTC 875 (Karn.), submitted that the renewal is legally in order. Learned counsel submitted that the respondent No.1 has failed to respond to the notice of renewal sent by the Registry of Trade Marks calling upon him to intimate his objection in the restoration/renewal of the impugned trade mark and as such he has waived his right to raise any objection about the renewal of the impugned trade mark.
20. After carefully hearing the arguments of both the counsel and after going through the records, the first question to be determined is whether the respondent No.2 has rightly held that the respondent No.1 (applicant before respondent No.2) to be the person aggrieved under sections 47 and 57 of the Act to file the rectification application. The test for such determination is propounded in Powells Trade Mark 1894 (11) RPC 4. A person aggrieved includes the rivals in the same trade who are aggrieved by the entry of the rivals mark in the register or person whose legal rights would or might be limited if the mark remains on the register, he could not lawfully do that which, but for the existence of the mark on the register he could lawfully do. Honble Supreme Court in National Bell Co. (P) Ltd. and Anr. V. Metal Goods Mfg. Co. Ltd. and Another, PTC (Suppl) (1) 586 (SC) at p.593 has observed that the expression âaggrieved personâ has received liberal constrution from the courts and includes a person who has, before registration, used the trade mark in question as also a person against whom an infringement action is taken or threatened by the registered proprietor of such a trade mark. Person aggrieved includes rivals in the same trade who are aggrieved by the entry of rivals mark in the register of trade marks or persons who are in some way or the other substantially interested in having the mark removed from the register or persons who would be substantially damaged if the mark remained on the register. The respondent No.2 has found that both parties are rivals in the same trade and the appellant has filed suit and initially obtained interim injunction against the respondent No.1; the impugned mark of the appellant is affecting the business of the respondent No.1 and the impugned registration seems to have been cited as a conflicting mark, therefore, the respondent No.1 is the person aggrieved. In our opinion, there is prima facie sufficient evidence of respondent No.1/applicant being a person aggrieved. We therefore are in agreement with the finding of respondent No.2 that prima facie the respondent No.1 is the person aggrieved having locus to be heard.
21. The next main issue is whether the appellant has applied for or obtained registration of the impugned mark without any bona fide intention to use the mark in relation to the goods for which the registration of impugned mark is obtained and whether the impugned mark is liable to be removed from the register under section 47 of the Act. Let us first see whether the appellant had bona fide intention to use the mark at the time of seeking registration, if the answer is yes, then a little later we would see whether the appellant has in fact actually used the mark in respect of goods for which registration was obtained. The appellant made application under sub-section (1) of section 18 of the Trade and Merchandise Marks Act, 1958, for registration of the impugned mark on the basis of proposed to be used. The language used in section 18(1) clearly provide that any person claiming to be the proprietor of a trade mark whether used or proposed to be used by him shall apply to the Registrar, therefore actual user is not necessary for acquisition of proprietary right in a trade mark and an intention to use and register the trade mark appears to be sufficient. In Kerly's law of Trade Marks and Trade Names 9th edition page 27 it has been stated in paragraph 48 that though at common law no protection could be secured for a mark which had not been used, the statutes dealing with registration of trade marks always encourage registration by saying that actual use is not necessary for registration as the traders are generally anxious before adopting and using a mark as a trade mark to ascertain whether it is registrable that the mark applied for may be one which is already in use or may be one which is proposed to be used by the applicants that if the applicants do not use the mark, they must have at that time of the registration some definite and present intention to deal in certain goods or description of goods and not a mere general intention of expanding their business at some future time to anything which he may think-desirable, and that the intention must be to use the mark as a trade mark by the applicants themselves in respect of the goods for which the registration is sought. Dr. S. Venkateswaran, in his treatise on the law and practice under the Trade Marks Act at page 311 says that in determining whether an applicant for registration of a trade mark had intended to use the mark in relation to the relevant goods as to justify registration, regard must be had to the difficulties and uncertainties of the time and a bonafide intention on the part of the applicant to use the mark as soon as conditions allow may be sufficient to support the application. In this case the appellant was a person who had proposed to use EENADU as a trade mark and sought for registration of the same. Presumably, on the date of the application for registration of that mark no one else had designed and proposed to use the same as there is no such allegation made or evidence placed on record. The appellant has filed copies of certain invoices from January to October 1987(as Document No.1 at pages 265 to 270), copies of Hundies (at pages 354 to 374) and a printed copy of Lucky Strike, a prize scheme for the appellants agents/dealers for the duration of 20th September to 20th October 1987 (to promote the products, including Eenadu, of the appellant) to prove bona fide intention to use the mark applied for. Even if the copies of invoices (since the credibility and evidentiary value of copies of invoices are disputed by the respondent No.1) are discarded, the copies of Hundies and the Lucky Strike prove the use of the mark as there cannot be any order for payment to be made to the transport company for cost of goods supplied and prize scheme cannot be launched without vendible product being available. Apart from this, the appellant has placed on record copies of certain invoices being invoice Nos.1222 dated 25.6.93, 215 dated 23.6.98, 1718 dated 28.6.98, 1789 dated 28.8.98, 768 dated 10.6.96, 901 dated 1.12.96, 958 dated 15.2.97, 2301 dated 1.1.2000, 2346 dated 1.2.2000, 2377 dated 27.2.2000, 2060 dated 26.5.99, 2025 dated 25.4.99, 1416 dated 24.10.97, 1453 dated 9.11.97, 189 dated 17.6.95, 139 dated 30.4.95, 1102 dated 2.7.93,1110 dated 3.7.93, 242 dated 8.8.95, etc. and all these invoices show that the appellant has been using the trade mark in respect of the goods for which registration was obtained. There is nothing on records or in the pleadings to come to a contrary conclusion. We are of the view that the appellant had definite and present intention immediately to deal in the agarbathies. Having found that the appellant had bona fide intention to use the mark let us see what the provisions of section 47 of the Act provide for. In the application for registration the applicant must have a definite and bona fide intention to use the mark and if the mark is registered without any bona fide intention to use it in relation to the goods, such registration can be removed from the register of trade marks under section 47 of the Act. Clauses (a) and (b) of sub-section (1) of section 47 of the Act provide for two alternative grounds for removal of the impugned mark from the register viz. it is required to be shown by the applicant under clause (a) that the impugned mark was registered without any bona fide intention that it should be used in relation to the goods in respect of which registration thereof had been obtained and also that there has in fact been no bona fide use of the mark in relation to those goods prior to filing of the rectification application. In other words both the grounds specified in clause (a), that the impugned mark was registered without any bona fide intention that the impugned mark should be used in respect of those goods and that there has in fact no bona fide use three months prior to filing of the application, should cumulatively exist. In the second alternative ground under clause (b), the applicant has to show that up to the date three months before the date of the application, a continuous period of five years from the date on which the trade mark is actually entered in the register or longer has elapsed on 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. Existence of one of the grounds alone will not be sufficient to order for removal of the impugned mark. The respondent No.1 had filed a suit in OS No.8029 of 2000 before the City Civil court, Bangalore and therefore the issue of non user does not lie.
22. In the rectification application, the onus is on the applicant as has been held by the Apex Court in the Hardie Trading Ltd. and Another v. Addisons Paint and Chemicals Ltd., (2003) 11 Supreme Court Cases 92 as under:-
â26. Thus before the High Court or the Registrar directs the removal of the registered trade marks they must be satisfied in respect of the following:
(1) that the application is by a "person aggrieved";
(2) that the trade mark has not been used by the proprietor for a
continuous period of at least five years and one month prior 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.
27. 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.
In the case on hand, the respondent No.1 has failed to discharge the onus of proving that the appellant has obtained registration without any bona fide intention to use the mark and up to one month before the date of application, a continuous period of five years from the date of actually entered the mark in the register or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to the goods by him. We have on the basis of evidence on record already seen that the appellant has used the mark in relation to the agarbathies till 27.2.2000. The application was filed on 9.5.2000 i.e. when application was filed the appellant had not used the mark for more than one month before 9.5.2000. The other condition that the appellant had not used the mark for a continuous period of five years is absent. We have already stated that the appellant has obtained registration with bona fide intention is established. In view of this the mark cannot be ordered for removal of the impugned mark from the register under section 47 of the Act. We are unable to persuade ourselves to agree with the findings of respondent No.2 that the user aspect being a positive aspect, the burden lies on the registered proprietors to prove the user; that it is certain that the appellant is not carrying on any business after 1996 and also that the provisions section 46 (1) (b) of old Act and corresponding section 47(1) (b) of new Act is attracted and as such we are of the firm opinion that the findings of respondent No.2 cannot be sustained. On the face of documents referred to in this paragraph, which are placed on record, it is beyond our comprehension as to what prompted respondent No.2 to come to the conclusion that â In the absence of any evidence of user of impugned mark since the date of its registration i.e.26.5.1986 till the filing of rectification proceedings on 17.5.2004 (in the second para of the impugned order the date mentioned is 9.5.2000), the conclusion is inevitable that the impugned registered trade mark was obviously registered without any bonafide intention on the part of the Registered Proprietors to use the same on the goods and such absence of intention was followed by non-user.â (Portion in brackets in italics is ours).
23. As regards the contention of the respondent No.1 that the appellant has not been doing business as he has failed to file carton or label without which agarbathies cannot be sold is concerned, the same is a frivolous contention at this stage. The use of carton by the appellant has been acknowledged by the respondent No.1 himself in paragraph 11 of his affidavit evidence in support of application for rectification before the respondent No.2 wherein he states âThe registered proprietor made an application for âEENADU and started using it on a carton shown as annexure 18 herein (red carton) and could hardly use it for a few weeks, as the product was a miserable failureâ. Further, in the order dated 26.8.2000 passed by the VIII Additional City Civil Judge, Bangalore City in I.A. Nos. 2 to 4 of 2000 in O.S.No. 3200/2000 (between the same parties) at paragraph 14 it is recorded thus: â The learned counsel for the defendants further invited my attention to packing and cartoons of Agarbathies manufactured by defendants and to the packing cartons of Agarbathies manufactured by the plaintiffs and submitted that the labels on the packings and cartons with description, colour scheme, get up and layout are entirely different and distinctive from that of the plaintiffs products and it cannot be said that they are deceptively similar.â In paragraph 18 of the same order it is also recorded that â⦠Copy of the label/cartoons of the plaintiff showing the trade mark âEENADU are produced. There are flowers with leaves and a woman carrying a basket on her head in the cartoon box. The name and address of the plaintiffs are also printed. The word âEENADU are written in big capital letters. The trade mark registration No. is also shownâ¦. Similarly in paragraph 8 of the order passed by the Copyright Board in case No.20/2000 between the same parties it is recorded that âA perusal of the artistic work which comprises of a carton of incense sticks used by the Petitioner M/s Subbaraya Setty and sons and the one used by the Respondent T.V..Venugopal are completely different except spelling of the word EENADU. The colour scheme, the design and the composition is such that one cannot be held to be identical to or a copy of the otherâ¦.â This clearly shows that the appellant had filed the cartons before the Copyright Board. The respondent No.1 has himself filed a copy of carton of the of the appellant at page 59 of his typed set of documents. Besides these, such a contention was neither raised or pleaded before respondent No.2 nor considered by the respondent No.2. Regarding the objection of the respondent No.1 about the difference of telephone numbers on the invoices and scored of sales tax registration number, we, after having clarified from the learned counsel for the appellant that the difference in telephone numbers on the invoices are due to change of telephone numbers in Bangalore and also that the Sales Tax registration number scored of in certain invoices is due to the reason that the appellant is not required to obtain such registration, are inclined to accept the same. There is no rebuttal to this clarification from the respondent No.1 and, therefore, we reject the above objections of the respondent No.1. Regarding the opposition about bills/invoices from M/s. Taranga Commercials of India (which are 5 invoices in all pertaining to years 1997 and 1998), the user of the impugned mark by the appellant is proved even if overlooking those bills/invoices on record as evidence. Since we have not taken the bills issued by Taranga Commercials of India into consideration as evidence of user, though it is claimed to be a concern of son of the appellant and having permission to use the mark and also claimed to be a permitted use under section 48 (2) of the Act, we therefore, do not consider it necessary to go into the credibility or evidentiary value of such bills.
24. Now we would come to the next findings of respondent No.2 that the impugned trade mark has been wrongly registered and is wrongly remaining on the Register and also the impugned registration was obtained in fraud and suppressing the extensive use of applicants mark (respondent No.1s mark) in respect of the identical goods. The onus to prove that the registration has been obtained wrongly and is wrongly remaining on the Register is on the applicant and there is nothing on record to show that the registration has been obtained wrongly and so remaining on the Register. It is evident from the records that the appellant is the first to adopt and use the impugned mark. It is not the case of the respondent No.1 that at the time of making application for registration of the impugned mark by the appellant, some other person had designed and proposed to use the similar mark for similar goods, therefore the impugned mark was not hit by sections 9 and 11 of the Act. In respect of fraud, the law is very clear that to prove fraud one has to give particulars of the fraud, only bald allegation is not sufficient to prove fraud, [see Zenith Colour Trading Co. V. Taherally (1956) 58 Bom. LR 912 p.916]. Respondent No.1 in the statement of case in the rectification application has averred that he made application for registration on 10.2.1994. if that be so how the evidence of extensive user of respondent No.1 mark could be suppressed at the time of registration of appellants impugned mark requires elaboration which is missing in the impugned order. Contrary to the facts of the case on hand, it might be a fraud for a person to procure the registration of trade mark which he knows is in use by another trader (see Gyromin (1961) R.P.C. 408 at 414). It is difficult to sustain the above findings of respondent No.2.
25. The next issue is that the impugned order is passed by the respondent No.2 without jurisdiction. It is undisputed that suit O.S.No. 3200 of 2000 is filed by the appellant and he has mentioned in paragraph 14 of the counter-statement to the rectification application about the filing of the said suit. The appellant has averred in the appeal the respondent No.1 has taken the defence in that suit by challenging the validity of the appellants registered trade mark , only this Appellate Board has jurisdiction to hear the rectification proceedings under section 125 of the Act. The respondent No.1 has in his counter-statement only replied that grounds Nos. (XIX) to (XXVII) are mere repetition of what was stated earlier and therefore do not require any comments. In the case on hand the respondent No. 2 has concluded that â a conclusion would be inevitable that the impugned registration was obtained in fraud suppressing the extensive use of applicants EENADU mark in respect of identical goods and that the impugned registration also contravened the provisions of sections 9 and 11 at the commencement of these rectification proceedingsâ is arrived at without jurisdiction. In Sun Pharmaceutical Industries case (supra), this Appellate Board by following the decision in Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai, 1998 PTC (18) 717 ( SC ), observed that when the suit for infringement is pending before the High Court, the Deputy Registrar of Trade Marks has no power to entertain the application for rectification and the rectification proceeding should be tried before the appropriate High Court. The Honble Apex Court in the Whirlpool Corporation case (supra) held as under:-
â59. The extent of jurisdiction conferred by Section 56 on the Registrar to rectify the Register, is however, curtailed by Section 107 which provides that an application for rectification shall, in certain situations, be made only to the High Court. These situations are mentioned in sub-section (1) of section 107, namely, where in a suit for infringement of the registered trade mark the validity of the registration is questioned by the defendant or the defendant, in that suit, raises the defence contemplated by Section 30(1) (d) in which the acts which do not constitute an infringement, have been specified, and the plaintiff in reply to this defence questions the validity of the defendants Trade Mark. In these situations, the validity of the registration of the Trade Mark can be determined only by the High Court and not by the Registrar.
60. Section 107 thus impels the proceedings to be instituted only in the High Court. The jurisdiction of the Registrar in those cases which are covered by Section 107 is totally excluded. Significantly, Section 107 (2) provides that if an application for rectification is made to the Registrar under Section 46 or Section 47(4) or Section 56, the Registrar may, if he thinks fit, refer that application, at any stage of the proceeding, to the High Court.â
The validity of the registration of the impugned trade mark can be determined by the Appellate Board only not by the respondent No.2. The respondent No.2 ought to have in exercise of powers conferred by sub-section (2) of section 107 of the Trade and Merchandise Marks Act, 1958 or sub-section (2) of section 125 of the Act, as the case may be, referred the application to the High Court or the Appellate Board. Since the respondent No.2 has chosen to hear and pass the impugned order the same is passed without jurisdiction and such order cannot be sustained.
26. When we have found above that the impugned order is passed by the respondent No.2 without jurisdiction, to consider the remaining issues become irrelevant. Accordingly, we set aside the impugned order dated 5.9.2007 passed by the Deputy Registrar of Trade Marks Chennai. There shall be no order as to costs.