Shriram Pistons and Rings Ltd, New Delhi and Others Vs. Usha International Ltd, New Delhi and Others - Court Judgment

Excerpt:
trade marks act, 1999 - section 11 -(circuit bench sitting at delhi) order (no. 231 of 2012) s. usha, vice chairman: ora/46/2004/tm/del, ora/29/2006/tm/del and ora/128/2006/tm/del 1. applications for removal of the trade marks registered under no.276104 in class 7, no.427014 in class 7 and 427015 in class 7. the applicant was incorporated in 1963 as sharma pistons and rings ltd. which started its commercial production in 1967 and in may 1972 was reorganized under shriram group and the companys name was changed to “shriram pistons and rings ltd”. they have been since the year 1973 exclusively using the trade mark which are for the past 33 years with respect to pistons, piston pins, piston rings, engine valves and valve train components. they have been engaged in the business of manufacturing and marketing of engine.....

Judgment:

(CIRCUIT BENCH SITTING AT DELHI)

ORDER (No. 231 of 2012)

S. Usha, Vice Chairman:

ORA/46/2004/TM/DEL, ORA/29/2006/TM/DEL AND ORA/128/2006/TM/DEL

1. Applications for removal of the trade marks registered under No.276104 in Class 7, No.427014 in Class 7 and 427015 in Class 7. The applicant was incorporated in 1963 as Sharma Pistons and Rings Ltd. which started its commercial production in 1967 and in May 1972 was reorganized under Shriram Group and the companys name was changed to “Shriram Pistons and Rings Ltd”. They have been since the year 1973 exclusively using the trade mark which are for the past 33 years with respect to pistons, piston pins, piston rings, engine valves and valve train components. They have been engaged in the business of manufacturing and marketing of engine components and also marketed their engine parts. They had been marketing pistons, piston rings, piston pins under the trade mark USHA and the USHA logo and the major user for the past 30 years in India and abroad. They had developed considerable expertise and technological specialization in their field over the years. The applicant have various quality accreditations like ISO 9001, QS 9000 and TS 16949. They have also received awards from the Auto Component Manufacturers Association in recognition of their quality standards. The customers associated the products bearing the trade mark USHA and the USHA logo only with the applicants goods and with none else. They are the largest exporter of pistons, piston rings and engine valves. They have sold their products to a large number of original equipment manufacturers in India like Maruti Suzuki, Honda Motorcycle and Scooters etc. The applicants sales under the trade marks USHA and the USHA logo have constantly been increasing over the past 30 years and more specifically in the past 8 years due to considerable investment in brand building, advertisement and promotional campaigns and marketing expenses besides the efforts of the management in building long term customer relationship.

2. Besides its common law rights over the trade marks the applicants also have valid and subsisting trade mark registrations in Class 6, 7 and 12 since 1975. The applicants goods bearing trade mark USHA and the USHA logo has acquired a tremendous reputation and goodwill among the public. The applicants are aggrieved by the impugned trade mark as it is wrongly registered in respect of “parts of diesel engines” in the name of the respondent. The respondents have neither used nor do they have any bonafide intention to use it. The impugned trade mark was initially registered in favour of Shriram Refrigeration Industries Limited and was later assigned to the present respondent. If at all the respondent had used the mark it was restriction to diesel engines and not with respect to the parts of diesel engines, that is, Pistons, Piston Pins, Piston Rings, Engine Valves, all Valve Train components etc. The respondents have not used the impugned trade mark in relation to the goods in respect of which registration have been obtained. The applicant became aware of the impugned registration only on 27.2.2002. The respondent being aware of the applicants use have with malafide intentions applied for and obtained registration. In fact in the year 1994 a Suit was filed before the Delhi High Court bearing No.2149 of 1994. The applicants registrations were mentioned in the Court order. A suit was filed by both the applicant and the respondent against third parties.

3. In the year 2004 the applicants herein filed a Suit against the registered proprietor before the Delhi High Court restraining the respondent from using the trade mark USHA and the USHA logo. The applicants are the “aggrieved persons” within the meaning of the Act. The registered proprietor has wrongly obtained registration in relation to the impugned goods and have in fact not used the trade mark for more than 30 years. The impugned trade mark is bound to cause confusion and deception amongst the public. The impugned trade mark therefore deserves to be expunged from the register.

4. The respondents herein filed their counter statement raising a preliminary objection as to the maintainability of the application for rectification. The respondent also raised the ground under Limitation Act. The mark was registered as early as 1975 and has been remaining on the register for almost 30 years on the date of the application for rectification. The respondents further stated that on inspection of the file relating to the registration of the impugned trade mark it has been clearly noted that the applicants herein had filed an application for registration of the trade mark “USHA” a logo mark as early as 17.9.1975. The applicants have relied on this impugned registration for obtaining registration of their application under No.308516. The applicants have filed an affidavit by one Mr. Ramesh A. Vaswani stating the said facts and are therefore estopped from asking for the cancellation/rectification of the impugned trade mark registration No.276104. The impugned mark had been on the register for nearly 30 years and the applicants having knowledge of the mark on the register cannot now seek a relief for cancellation. In view of this the application is liable to be dismissed. The applicants have never had or have any proprietory right in the trade mark and the trade mark logo. USHA logo in the four-block form was designed and is admittedly owned by M/s. The Jay Engineering Works Limited (JEW). The respondent has been using the trade mark and copyright in USHA logo with USHA written in four block form only on an express written permission and license from owners of the trade mark and copyrights. The permission was given by JEW in 1973 and was renewed every five years, the last being in 1994. The said permission has since been revoked. The applicant therefore has no locus standi to initiate any proceedings against the respondents herein. The applicant is therefore not a “person aggrieved” and cannot initiate any application for rectification.

5. The application is not maintainable as the applicant is prior adopter/user and registered proprietor of the trade mark in respect of diesel oil engines and parts thereof. The present application deserves to be dismissed as the applicant has suppressed the material fact that the applicants have been using the trade mark only under the permission obtained from M/s. The Jay Engineering Works Limited and subsequently the permission has also been withdrawn. The applicants have at no time acquired any rights independent in the said trademark as it is evident from the licence agreement. The respondents herein have filed separate applications for removal of the trade mark registered in Classes 6,7 and 12 as the applicants are only permitted user of the trade mark.

6. The respondent is a public limited company. It is a group company of M/s. The Jay Engineering Works.Ltd. The respondent is the prior adopter and user of the registered trade mark USHA logo for diesel oil engines and parts thereof. The registration of the respondents includes all the parts of Diesel Engines falling in Class 7. The said registration has been renewed and is subsisting as on date. The respondent company has been using the trade mark predominantly for diesel engines and to a lesser extent for the parts thereof since 1967. Their sales approximately has been Rs.51,935 lakhs all over the country. The respondents have nearly 700 dealers/distributors for its products. The respondent has been exporting the said products to various countries.

7. The applicants have been in fact using the trade mark under the license from the respondents group company, namely, The Jay Engineering Works. The applicant is therefore guilty of playing fraud in claiming proprietorship of the trade mark which has been revoked as of today. The USHA logo was designed by the respondent group namely, Jay Engineering Works Ltd. who were the pioneer company of the Shriram Group which was incorporated in the year 1935 and engaged in the business of manufacturing of sewing machines, electric fans and fuel injection equipments. The aforesaid USHA logo was designed as early as in 1960 and registered in April 1960. In the year 1970 the mark USHA was registered under the Copyrights Act. Jay Engineering Works and some other group companies including the applicant and the respondents have been using the mark as a licensee. In view of these facts, the application for rectification has to be dismissed in limine.

ORA/16 to 23/2005/TM/DEL AND ORA/48 to 55/2004/TM/DEL

8. Application for removal of the trade mark registered under No.308516 in Class 7, No.309092 in Class 7, No.426693 in Class 12, No.316156 in Class 7, No.426689 in Class 7, 312962 in Class 6, 310046 in Class 7 and 309086 in Class 7. The applicant company was incorporated in 1936. The applicants are in the field of marketing of various consumer durable goods including electric fans, sewing machines/diesel engines and a number of small appliances under the trade mark “USHA”. The flagship company is the Jay Engineering Works Ltd. who adopted the trade mark USHA for manufacturing and marketing sewing machines and other electrical goods. It was adopted and used by the said company since 1936. They have been doing extensive business all over India and abroad under the trade mark USHA. M/s. The Jay Engineering Works Ltd. created an artistic logo of the trade mark USHA in the year 1960 and obtained registration under the Copyrights Act. Meanwhile M/s. Shriram Refrigeration Industries Ltd., a group company of Shriram Group companies adopted the trade mark USHA independently for manufacturing and marketing of diesel oil engines and parts thereof. The products so manufactured were marketed by the applicant. The applicants predecessor used identical USHA logo/mark in the course of manufacturing and marketing of diesel oil engines and parts thereof in the year 1967 itself. This adoption was honest and without any challenge but with the knowledge of Jay Engineering Works Ltd. M/s. The Jay Engineering Works Limited permitted its group company to use its logo in respect of specific goods on specific terms and conditions. The basis of all such license agreement was same while The Jay Engineering Works Ltd. retained the ownership rights of the USHA logo, the group companies were allowed to use the logo for their products as licensees. The applicant herein filed and obtained registration of their trade mark USHA and logo mark in Class 7 as early as 1971. In the year 1973 Shriram Pistons and the respondents herein wanted the USHA logo for Pistons, Piston Pins and Piston Rings. The respondents approached the parent company, that is, Jay Engineering Works Ltd. for license to use the registered copyright logo. As Jay Engineering Works Limited had exclusive right over the artistic logo USHA the parent company gave license to use the logo for particular/specific goods in writing. The agreement was executed on 5.4.1973 for five years specifically for Piston, Piston Pins and Piston rings. The agreement was renewed every five years fom 1973 till 1993 which was thereafter not renewed. In 1993, the respondents sought permission to use the USHA logo for engine valves, engine valve guides, engine valve seats, engine valve catters, engine valve tappers. In 1994 the respondent insisted on a long-term license agreement for a period of 99 years. Even though Jay Engineering Works Limited granted permission by separate user license agreements, the respondent was declined a non-terminable agreement. Both the license agreements contained clauses for the termination of the agreement. The Jay Engineering Works Limited in the said license agreement permitted the respondents to secure registration under the Trade Marks Act for the goods in respect of which they were granted permission to use the trade mark with a condition that in the event of the termination of the agreement or the expiry of the agreement all the marks in the license agreements and registered should vest with Jay Engineering Works Limited. It is therefore submitted that the registration obtained by the respondents was only subject to the subsistence of the license agreement entered into between Jay Engineering Works Limited and the respondent. Such permission does not enable the respondent to acquire the proprietary rights under the Act. The applicant submits that the licensor Jay Engineering Works Limited had already filed application for rectification before this Board against the respondent herein for removal of the trade mark mentioned herein above.

9. On 11^th September, 1975 the applicant and the respondent entered into a buyer and seller agreement by which the respondent appointed the applicant as distributor of its products in the States of Bihar, Assam and Maharashtra. The said agreement did not mention about the use of the logo USHA because of the conditions mentioned in the licence agreement. The respondent has no right to permit others to use the logo USHA.

10. The respondent cannot at any stretch of imagination claim ownership of the USHA logo. They had no right to this Trade Mark logo for the goods other than those for which the permission was granted in the licence agreement. When the respondent sought permission to use the trade mark for all kinds of automobile goods the same was declined by the applicant. When the respondent attempted to apply for registration, the applicants opposed the same. On receipt of the notice of opposition the respondent had withdrawn their applications for registration. In 1993, M/s. Shriram Refrigeration Industries discontinued the business of manufacturing engines and parts thereof as the applicants had by that time established their own market for such products, it continued to market such products by procuring them from independent vendors. The applicant has also acquired all the rights in the six trade marks for diesel engines, electric motors and parts thereof from M/s. Shriram Refrigeration Industries Ltd. by the deed of assignment dated 30.4.1994. By this deed of assignment the applicant became the subsequent proprietor of the six marks along with the goodwill attached to the mark since 1967. All the six trade marks were assigned in favour of the applicant and this was subsequently advertised in the Trade Marks Journal. The applicants step into the shoes of its predecessor and therefore are entitled to claim the use of the mark since 1967. The applicants use of the mark for the product, that is, diesel engines and parts thereof goes back to 1967. The applicants ever since have acquired the marks of Shriram Refrigerator Industries Ltd had become the exclusive user of the mark in relation to the goods for which the mark was registered both in India and abroad. The turn over and promotional expenses runs into several lakhs of rupees.

11. On 27.3.2000 the applicant company renewed the buyer and seller agreement dated 1.8.1993 by which the agreement stipulated geographical limitations for selling their goods. The applicant also marketed the goods covered in their registered trade mark other than the seven States in India but not manufactured by the respondent during the subsistence of the Memo of Understanding. Therefore the use of the mark in the name of the applicant is undisputable. On 27.3.2004 the respondent abruptly terminated the buyer and seller agreement and informed the applicant that the buyer and seller agreement has come to an end w.e.f. 31.3.2004. However the applicant continued marketing its products using USHA logo as it is the owner of the registered trade mark for the said goods. The respondent also knows that the applicant is the owner of the registered trade mark and their exclusive right to use the same. While that being so the respondent filed a Civil Suit before the Honble High Court of Delhi for infringement and passing off. The Honble High Court ordered notice and the said Suit is pending. The respondent knowing very well that a suit against the registered proprietor did not lie, filed the same only to harass the applicant. Any person who had adopted the same mark and used it subsequently has no right to file a Suit on account of passing off or for infringement. Despite this settled principle of law the respondent filed a Suit No.678/2004. The conduct of the respondent is nothing but an abuse of the process of law. The respondent immediately after filing the said suit filed a rectification application before this Board against application No.276104 in Class 7 on account of non-use.

12. The respondent in a Suit filed before the Honble High Court had clearly stated that they came to know of the sale of the impugned goods with the mark USHA in the course of the applicants export trade in the month of March, 2004. The respondent had also admitted the user of the applicants use of the goods, namely, Pistons, Piston Pins, Pistons rings and engine valves for stationery diesel engines under the trade mark USHA. Therefore on their own admission in the plaint about the use of the mark for the goods mentioned therein the applicant filed the rectification proceeding for the removal of the registered trade mark No.276104 on account of non use under Section 47 of the Act is clearly not maintainable. On receipt of the notice in the Suit and the rectification application, the applicants herein made a search in the Trade Marks Registry at Mumbai pertaining to the various trade mark registrations in the name of the respondent. The applicant submits that the respondent was permitted registration for specific goods so long as the licence agreement for use continued and mere reading of the agreement will make it clear that in the event of the termination of the agreement ownership of the marks rests with Jay Engineering Works Limited. Suppressing this vital fact before the Registrar the respondent had obtained registration. The registration has been obtained by playing fraud upon the Trade Marks Registry hence the mark is wrongly remaining in the name of the respondent.

13. In the instant case, the respondent had suppressed the licence user agreement and proprietary rights over the marks despite paying royalty for the use of the mark, under Section 18 of the Act on the date of application for registration. The respondent is the owner of the mark either by use on their own or by honest adoption. The mark registered by suppressing of material documents are wrongly remaining on the register. The applicants Jay Engineering Works Ltd. terminated the licence agreement entered into between the applicant and the respondent and filed a suit for infringement of copyright and passing off in Suit No.674 of 2004. In view of the termination and in the absence of any fresh licence further use of the logo amounts to infringement of copyrights. Apart from the above the respondent on the date of filing the application for registration were ineligible for registration under Section 12 of the old Act and Section 11 of the Trade Marks Act, 1999. The mark applied for in the name of the respondent is identical with or deceptively similar to the pre-existing registered trade mark existing as a conflicting mark in the name of Shriram Refrigeration Industries Limited.

14. In fact the Registrar objected to the registration of the impugned mark No.308516 specifically bringing to the notice of the respondent that the mark is already registered in the name of the applicants predecessor. The respondent in order to claim proprietary rights for the impugned trade marks advanced an incorrect submission that the conflicting registered mark were for different goods. The respondent was a licensee for two years on the date of application on payment of royalty to Jay Engineering Works Limited. The respondent could not claim registration under the Act. This fact had not been brought to the notice of the Registrar. The Registrar would not have granted the registration. This suppression of material facts is an act of fraud. The eight marks registered in the name of the respondent deserve to be rectified for reason of suppression of material facts.

15. Since the applicant is the prior user and owner of the registered trade mark in diesel engine and parts thereof which includes pistons, piston rings, engine valves for which the respondent wrongfully obtained registration on the basis of wrong representation of the marks liable to be rectified. When the buyer and seller agreement was in force the respondent attempted to appropriate an identical trade mark owned by the applicant in Classes 7 and 12. The applicant issued a notice demanding cease and desist and on receipt of the notice the respondent withdrew the application for registration acknowledging the applicants exclusive rights and interests in the registered trade mark. The applicants company granted the respondent permission to use the trade mark by way of licence agreement for specific goods. When the respondent wanted to use the USHA logo for all kinds of automotive parts the same was declined. Similarly when the respondent wanted to use the USHA logo for diesel oil engine and valves a specific licence agreement was executed. Jay Engineering Works Limited. has reiterated in the agreement that the use of the USHA logo has been permitted only for specific goods. Despite the above the respondent made several attempts to violate the terms of the agreement by using it on different goods. The conduct of the respondent by withdrawing the application when opposed by the applicant clearly proves the conduct of the respondent. The permission given by Jay Engineering Works Ltd will not automatically permit the respondent to acquire the proprietary rights. In fact the permission was granted only by way of license for royalty for a limited period.

16. The applicant became an aggrieved person only after the Civil Suit No.678 of 2004 was filed and thereafter the rectification application was filed before this Board in the month of July, 2004.

17. In view of the above facts and circumstances of the case the applicant had initiated this rectification proceeding on the following grounds.

(i) The date for determining the rights of the parties to claim ownership of a mark is the date of application. On the date of application the respondent was under a license agreement on royalty basis for a limited period. The licensee cannot claim to be the proprietor of any mark. The mark that has been secured on the basis of a false claim is illegal and therefore liable to be rectified.

(ii) On 17.9.1975, when the respondent filed the trade mark application the applicants identical trade mark USHA logo under registration No.276104 in Class 7 for identical goods was on the register. The registered trade mark in favour of the applicants predecessor is a legal impediment for the respondent to claim proprietary rights under Section 11 and 12 of the Act. However, the respondent mislead the Registrar by making him to believe the conflicting marks are registered in respect of different goods. Admittedly the applicant under No.276104 in Class 7 or the respondents trade mark under No.308516 in Class 7 are one and the same. If the goods are different the respondent has no occasion to initiate rectification proceedings against the registered trade mark No.276104. The logo used by the respondent is an infringement of copyright registered in the name of Jay Engineering Works.

(iii) The logo used by the respondent is the copyright owned by Jay Engineering Works Limited. Having acknowledged their copyright and paying royalty for the use of the same logo under license in writing amounts to infringement of copyright. As the use of the logo amounts to infringement of copyright the mark registered and remaining on the register is in contravention of the provisions of the Act. As the respondent have acknowledged and undertaken to use it subject to the continuance of the licence user agreement the respondent should have stopped using the logo mark on receipt of the termination notice. Further use in the absence of a fresh agreement is a civil wrong as well as a crime under the copyright Act. The respondent has not challenged the termination notice. As the license user agreement is terminated the use of the copyright in USHA logo by the respondent amounts to infringement. Hence the mark is wrongly remaining on the register.

(iv) As per the licence agreement the mark vests in favour of Jay Engineering Works Limited, after the termination the registered trade mark in the name of the respondent are being owned in the name of Jay Engineering Works Limited. Hence the name of the respondent should be removed from the register.

(v) Use of the trade mark is liable to be prohibited under Section 11(3) of the Act. Jay Engineering Works Limited after terminating the license agreement filed a Civil Suit for passing off and infringement of copyright. In view of the above facts and that it is in contravention of Section 11(3) of the Act all the eight marks are liable to be rectified.

(vi) The respondent acknowledges the applicants right in USHA logo and therefore withdrew their respective trade marks applications in Class 7 and Class 12. Having acknowledged the applicants right the respondent is now estopped from claiming right over the registered trade mark particularly after the termination of the license agreement. The registration obtained after the termination will be only a mark which is wrongly remaining on the register without sufficient cause.

(vii) When the license user agreement is valid and subsisting the respondents right to claim proprietorship in respect of their goods is not valid. The respondent withdrew the claim of proprietary rights in respect of two applications for registration. Therefore the marks impugned in the names of such person are liable to rectified under Section 57 of the Act.

(viii) The respondent at no point of time claimed proprietary rights. The respondent before adoption and use of the marks sincerely and regularly sought permission for using it on each of the goods. Despite the above factual position the respondent is retaining the registrations without obtaining sufficient permission. The mark is without any legal right to use and is liable to be rectified as it is wrongly remaining on the register.

18. The respondent herein filed their counter statement stating that they are a public limited company which was incorporated in 1963 as Shama Pistons and Rings Ltd. It started its commercial production in 1967. The management was recognised under Shriram Group in May 1972. The Companys name changed to Shriram Pistons and Rings Ltd. The respondent company has been the only company of Shriram Group exclusively using the trade mark USHA for the past 33 years with respect to pistons, piston pins, piston rings, circlips, engine valves and valve train components. The respondents have been engaged in the manufacture and marketing of engine components, that is, Pistons, piston pins etc. and also marketing of other engine parts like cylinder liners, valve train components etc. under the trade marks USHA and the USHA logo for the past 30 years in India and abroad. The respondents diversified its business in 1993 and has been marketing engine valves and valve train components etc. under the trade mark USHA and the USHA logo in India and abroad. The respondent has been manufacturing its products under a technical collaboration agreement with world leaders. It has developed considerable expertise in technical specialization in its field over the years. Its products are marketed and sold under the trade mark USHA and the USHA logo. The respondents have been successfully selling their products and is one of the companies which has established “Made in India” brand for its products in the international market and has been marketing its products in India and abroad. Therefore with the continuous use of USHA and the USHA logo the said trade marks are associated and well recognised and has become a source identifier. The trade mark USHA and the USHA logo when used in relation to the impugned products in the market place are clearly associated with the products of the respondent due to continuous use and is a preferred product in the market due to its high reputation and goodwill for quality, customer service, and customer relationship. The respondents sales under the trade marks has consistently been increasing and specifically in the past eight years due to considerable investment in brand building. Besides common law rights the respondent has valid and subsisting trade mark registrations for its products under Class 6, 7 and 12 since 1975. The respondent by virtue of long, extensive and continuous use have acquired rights over the trade mark and the trade mark logo and are thus the proprietors of the trade mark as provided under the Act.

19. The applicant has tried to deflect the main issue and raised irrelevant issues based on the agreement and its unlawful termination. The basic intent of the agreement relating to the copyright logo has been to delineate respective spheres of activities amongst various companies of the Shriram Group (which includes Jay Engineering Works Limited, the respondent and the applicant) to ensure mutual co-existence and cooperation and to avoid conflicts with respect to their respective spheres of activities. To end this, the respondent has entered into such an internal arrangement, the first one in 1973 and the latest one in March 1994 which basically had the effect of demarcating the applicants and respondents field of activity. This agreement also intends to protect the trade mark from being misused by any third party. This agreement does not have any connotation of any trade mark license as it is clear from a number of factors that the trade mark when used In relation to the impugned products is solely associated with the respondent. Moreover there is no quality control from Jay Engineering Works in respect of goods manufactured by the respondent nor do they have requisite technology for the same in respect of high precision products of the respondent. It follows from the above that the trade mark rights of the respondent in relation to the impugned products are independent of the copyright agreement. Hence it is merely an internal family arrangement. The trade marks accrue to the respondent by virtue of long, continuous and extensive user as well as in subsisting trade mark registrations.

20. Without prejudice to the above contentions, it is submitted that it is a matter of record that there is no instance of breach of agreement with Jay Engineering Works by the respondent. The letter dated 3.5.2004 terminating the agreement dated 15.3.1994 does not set out any ground for determination which is clearly wrongful and illegal. The applicants by its letter dated 17.5.2005 had rebutted each and every allegation for termination that not only are there any grounds of termination but also the procedure mandated in the agreement dated 15.3.1994 was not valid which further makes the termination ineffectual. Thus it is clear that both from the intent as well as the working of this arrangement that it was merely a mechanism for ensuring demarcation of respective spheres of activity and by no stretch of imagination to give monopoly of the trade mark to any one company. It is also pertinent to note that the applicant and respondent were co-plaintiffs in the case of Smt. Charat Ram Vs. Usha Rectifier (1996) PTC 610. The Trade Marks Registry order dated 11^th May 2004 upheld the mutually exclusive and co-extensive nature of trade mark rights between the various group companies of the Shriram/USHA group that were parties in the above mentioned Suit. The applicant has also repeatedly urged its trade mark registration being No.276104 because of its width, happens to cover the impugned goods. It is submitted that one of the conditions of registration is that there needs to be bonafide use of the trade mark in relation to the goods covered by the registration which the applicant has not done for the past more than 30 years in relation to the impugned goods except as the respondents distributor or export agent. It is also submitted that neither Shriram Refrigeration Industries nor the applicant ever had any intention to use nor had any bonafide intention to use this particular trade mark bearing No.276104. The respondent has subsequent and more specific registrations. It pertains specifically to the impugned goods. The applicants registration in hand covers a wide array of goods which happens to encompass the respondents goods. The applicant is well aware of the respondents registration and has been aware of the respondents continuous and extensive use for the past more than 30 years It is only by default that the width of this registration covers the goods of the respondent. The applicant is trying to defend its commencement of use in bad faith by relying on the wide registration in clear conflict with the actual business reputation of the respondent. The respondent realises the malafide intention of the applicant and has filed a rectification application in No.276104 for expunging the mark for which the applicant is trying to enter the business in bad faith. The fact that the applicant has never been engaged in the independent manufacture and sale of its products is evident even from the applicants own public documents. The Annual Reports filed give the details of the products and commercial activities and clearly show that the applicant is not involved in any independent dealing in the impugned products.

21. The applicant has come with unclean hands and has filed a petition in a clearly collusive move and not with any genuine grievance. The applicant in spite of being a distributor for several decades had started soliciting with the intent of starting to source the impugned products from other third party manufacturers and selling them under the trade mark USHA. On coming to know of the illegal acts and intent, the respondent filed a Suit against the applicant seeking to restrain them from using the trade mark USHA (word per se and logo). The applicant is not a person aggrieved since the respondent has been continuously and extensively using the trade mark USHA and logo for the past 30 years which has been with the knowledge of the applicant. The rest of the contentions were denied by the respondent.

22. We have heard Learned Senior Counsel Shri Sanjay Jain, assisted by Ms. Sahay, Shri Ashish Marbanging and Shri Deepak Gogai for the applicant and Learned Counsel for the respondent Shri N.K. Anand, assisted by Shri M.S. Bharath, Shri Shivendra Pratap Singh and Shri Sunil Mishra during the Circuit Bench Sitting held at Delhi on 23^rd April 2012.

23. The issues involved in all the 19 matters are one and the same. Both the counsel advanced common arguments.

24. The learned senior counsel commenced his arguments stating that the Jay Engineering Works Limited merged with Usha International Limited and so the name was changed to Usha International Limited. Therefore all the matters namely ORA/16-23/2005 and ORA/48-55/2004 against 8 trade marks registered in the name of Shriram Pistons and Rings Limited are one and the same. The other matters – ORA/46/2004, ORA/29/2006 and ORA/129/2006 are filed by Shriram Pistons and Rings Limited against Usha International Limited.

25. The word Usha was used as a trade mark. The four block logo Usha was a copyright. The applicants had the trade mark registered as early as 1994. M/s. Jay Engineering Works Limited granted permission to the respondents to use the word Usha as a trade mark. The applicants obtained registration as early as 1994. The licence agreement was for a period of 5 years in the year 1973 which continued for several years. The counsel drew our attention to the agreement entered into between M/s. Jay Engineering Works Limited and the respondent M/s. Shriram Pistons and Rings Limited at page 231 marked as Annexure C and submitted that in the agreement it is stated the Jay Engineering Works Limited has the exclusive right to use and the licensee (M/s. Shriram Pistons and Rings Limited) wishes to use the mark. The agreement was terminable by either of them.

26. Extracts from the minutes of the Board meeting were produced before us where it was admitted by the respondents that the copyrighted logo belonged to the applicant. The respondents wished to use the USHA copyrighted logo. It was therefore decided in the meeting that the respondents were authorized to use the copyrighted logo as their brand name in terms of the draft agreement. This meeting was on 26.02.1973.

27. The applicants started using the trade mark since 1972. The counsel further submitted that the applicants are the absolute owners of the trade mark. By letter dated 05.02.1994, the applicant had granted permission to the respondents to use the Usha Copyrighted logo for piston both in India and abroad with a condition that it will be only in respect of piston, piston rings, piston pins and circlips. The permission would be only to market the specified products and not for any other parts / components or accessories. It could be used in the different languages. Respondents were aware of the applicants use and registration.

28. On 15.02.1994, the applicants granted permission to use Usha Copyrighted logo with a condition that it will be used only in respect of piston, piston rings, piston pins and circlips to be marketed in India and abroad. It was also that the products on which the logo will be used will be of good quality.

29. The applicants had been using the copyrighted block Usha logo since the year 1936 as was seen from the trade mark application No.195536. The counsel also submitted that the licence agreement was renewed for a period of every five years only for the goods i.e. Piston, piston rings, piston pins and circlips.

30. The applicants had opposed the respondents registration in India and abroad. The respondents had withdrawn the application. The counsel then relied on the letter dated 24th May 2004 and stated that as per the licence agreement the respondent was permitted to obtain trade mark registration only for the licenced products. The trade mark registration would vest with the applicant after the termination of the licence agreement. The letter dated 25.10.2002 was placed to show that the JEW had become a BIFR company and also about the royalty to be paid. The respondent replied to this letter stating that the terms of the agreement are fair and also stated that there are no legal consequences which could arise due to the company becoming BIFR Company. The counsel further submitted that from 1972 to 2004 neither of us had made pistons.

31. Group of companies constitute one economic entity for the purpose of proprietary rights. The counsel relied on the judgments reports in 2004(28) PTC 347 (Del) George V. Records, SARL vs. Kiran Jogani and Another and 2004 (29) PTC 273 (IPAB) Sakthi Traders Vs. Sakthi Sugars and Anr. in this context.

32. The counsel for applicant therefore prayed that the marks registered cannot continue on the register and ought to be removed.

33. The counsel for the respondent in reply submitted that whatever evidence which were not supported by proper documents cannot be considered and are to be ignored. The company JEW was incorporated in the year 1936. The word Usha is JEWs trade mark then to say the copyright belongs to the applicant is what is to be decided. Without the letters USHA the blocks would be meaningless.

34. The counsel then referred to the mark under No.426693 in class 12 at page 1026 Vol.IV of the convenience file and submitted that it was a word mark. The application was made on 04.09.1984 as proposed to be used which was associated with No.316156 which was used since 1972. Classes 7 and 12 are overlapping. In 1973, there was a Board Resolution. Usha was always used as a four block logo only and not as a word mark. Only because they rely on the four block logo there has been an association with 316156. The counsel relied on the 1973 Board resolution and submitted that they were allowed to use the copyrighted logo. The applicants have not produced any evidence of use. The respondents had various other trade marks like Shuran Pistons etc.

35. The copyright and trade mark are not separable and are incomplete without the other. The respondent relied on the award passed in the arbitration proceedings and the licence agreement. The applicants became aware of the respondents registration as early as 1978. The counsel submitted that clause 4 of the letter dated 03.05.2004 was irrelevant wherein it was stated that a specific permission to use the copyrighted Usha logo was given only to use for the piston parts for motor land vehicles and other usage was not permitted. On 18.10.2004 in their reply it was accepted to use it as a logo.

36. Licence to use a copyright as a Trade Mark does not mean that it is a trade mark licence. The respondent had used Usha as a trade mark prior to the 1973 licence agreement as seen from the application claiming user since 1972 specifically for piston, piston rings etc.

37. The goodwill in the mark acquired from the respondents use and not on their own. So it was for this reason that the trade mark was assigned which will no more be property of the respondent. The counsel then relied on 169 (2010) Delhi Law Times 414 – Marie Stopes Int. Vs. Parivar Seva Sanstha in this context.

38. The respondents relied on few judgments as regards the licence agreement. It was held in one judgment that if a person is allowed to use a trade mark and after the termination of the agreement the aggrieved person is to seek for remedy by way of suit and not by rectification.

39. The judgments relied on by the applicant were distinguished. In rejoinder, the counsel for the applicant submitted that the judgments relied on by the respondent were relating to services and not goods and therefore not relevant. In reply to the argument that goodwill in the trade mark was acquired by the respondents use was denied and the applicant submitted that the goodwill in a different business and therefore not applicable. Goodwill is not in the copyright if it is used for a specific goods, then it cannot be a monopoly for one person. Licence only for copyright and not trade mark.

40. In the agreement dated 05.04.1973 it is admitted that Jay Engineering Works Limited is the owner of the copyright of the Usha Logo and they have the exclusive right to use the same. M/s. Shriram Pistons and Rings Ltd wishes to use it as a trade mark.

41. The caution notice issued by the respondents were denied by the applicants. They relied on the 1973 board resolution. Where again in the assignment deed it was admitted by the respondent that the applicant is the absolute owner of the trade mark.

42. The royalty was based on the sales. It was also that the licensee ie. the respondent clearly mention the name of the trade mark owner the licensor ie. the applicant. When the application for registration of the trade mark has been filed in 1976 claiming user since various dates then the newspaper article stating that the mark was in use for 4 years cannot be accepted. The foreign judgments relied on by the respondent are adverse to the respondent.

43. The right to use will not be a grant or permission to obtain registration. The use of the Usha Logo/trade mark will amount to passing off. The counsel also referred to Section 48 as well Rule 80 and 81.

44. We have heard and considered the arguments of both the counsel. The matters were heard in common and a common order is being passed.

45. We shall now deal with the preliminary issue as to maintainability of the rectification application. The right of a person to file a rectification application will depend on the aspect as to how the applicant is injured or affected by the mark on the register.

46. The applicant in ORA/48-55/2004 will be referred to as (JEW), the applicant in ORA/16-23/2005 as UIL and the applicant in ORA/46/2004, ORA/29/2006 and ORA/128/2006 as SRP, and they will be so referred throughout for the sake of convenience.

ORA/46/2004

47. The impugned trade mark application No.276104 has been filed on 06.11.1971 claiming user since the year 1967. The mark is in respect of diesel oil engines and parts thereof included in class 7. The registration was granted on 25.08.1973. The mark is four block Usha logo.

48. In an application for rectification the onus is always on the applicant to show how they are affected or aggrieved by the impugned trade mark on the register. Filing of suit against a person will alone not make a person aggrieved. In this matter the main grounds of the application for rectification is non use of the impugned trade mark. The justification for a person aggrieved is that they are carrying on business in the similar goods or identical goods. The respondents herein have filed a suit for infringement of their trade mark. No doubt a plaintiff or a defendant is a person aggrieved.

49. In the case on hand there are two issues involved. The SRP has filed the suit for infringement of the trade mark in the year 2004 as well as filed this instant rectification application on the ground of non use. The rectification application is therefore not maintainable on the ground that the trade mark was not in use on the date of rectification. The SRP also claims to be a person aggrieved because of the non use of the registered trade mark. The SRP have not made out any case for the mark to be expunged. The Annexure D – the invoices filed along with the counter statement is evidence of use by UIL. We find no reason to remove the trade mark which has been on the register for several years. The impugned trade mark will continue on the register restricting the goods to read as in respect of stationary diesel oil engines and parts thereof. UIL shall not be entitled to use the mark in respect of piston, piston rings, piston pins. The rectification application is ordered accordingly.

ORA/128/2006

50. The trade mark impugned is a word mark Usha registered under No.427015. The trade mark was proposed to be used on the date of application i.e. on 12.09.1984. It was to be associated with trade mark No.276104. The goods were diesel oil engines and pars thereof involved in class 07. The registration was granted on 12.11.1984.

51. The main ground of the SRP is that the UIL have not used the trade mark though they had obtained registration. The use if at all is restricted only to diesel engines and has not been used to parts of diesel engines ie. Piston, piston rings, piston pins etc. The applicants had no intention of using the trade mark for all goods falling in class 7 of the IV schedule.

52. The impugned trade mark is a word mark. The mark is associated with the other mark under No.276104 which is a four block logo mark used since 1967. The only grievance of the SRP is that the mark if at all used is only for diesel oils engines and not for other goods falling in class 7. As regards, the issue of non use the SRP have admitted that the UIL plan of launching the goods identical to the respondents line of business in June 2004 in the Civil Suit filed before the Honble High Court of Delhi. If that be the case, the issue of non use does not lie, since there is a bonafide intention to use.

53. The trade mark is associated with trade mark No.276104. We therefore are of the view that the four block logo mark No.276104 when is allowed to continue on the register this mark also can remain on the register. This mark will be in respect of diesel oil engines excluding piston, piston rings and piston pins. Consequently the rectification is ordered accordingly.

ORA/29/2006

54. The trade mark is a four block logo mark registered under No.427014. The application has been made on 12.09.1984 claiming user since 1967. The mark was in respect of diesel oil engines and parts thereof included in class 7. The trade mark has been registered on 12.11.1984. In this case again the SRPs main grievance is non use of the mark. The SRP is an aggrieved person as the mark and the goods are deceptively similar and identical. We do not find any reason to accept the ground of non use as the civil suit has been filed based on the use. The SRP has admitted in the plaint that the UIL are planning to launch the product and that was the date on which the cause of action for filing the civil suit arose. The goods in respect of which the registration has been granted is restricted to diesel oil engines and UIL will not be entitled to use in respect of piston, piston rings and piston pins. The rectification application is ordered accordingly.

55. We shall now deal with the original rectification application filed by Usha International Limited.

56. The original rectification applications are filed by Jay Engineering Works and Usha International Limited respectively. Jay Engineering Company is the flag ship company of Shriram Group of Companies which adopted the trade mark Usha in the year 1936. M/s. Shriram Refrigeration Industries is one of the companies in Shriram Group of Companies. The predecessors of Usha International Limited were using the trade mark with the knowledge of Jay Engineering Works, along with Shriram Refrigeration Industries. In 1973, when Shriram Industries has discontinued the business, Usha International Limited continued the business. By a deed of assignment dated 30.04.1994, Usha International Limited had acquired all the rights in the impugned trade marks. By a scheme of arrangement, Jay Engineering Works Limited had merged with Usha International Limited. Therefore the rectification applications are by one and the same applicants.

57. On 01.08.1993, the applicants ie. Usha International Limited and Shriram Pistons and Rings Limited entered into a buyer and seller agreement. The UIL continued to market the products as owners of the registered trade mark. The SRP filed a civil suit for infringement against the UIL for infringement before the Honble High Court of Delhi based on the impugned registrations.

ORA/48/2004 AND ORA/21/2005

58. The impugned trade mark is registered under No.312962 in class 6. The application for registration was filed on 06.03.1976 for four block Usha logo. The mark was proposed to be used on the date of application. The mark has been registered on 03.07.1979.

59. The grounds of rectifications are that the SRP was under a licence agreement on the date of application for registration and so cannot be a proprietor as per Section 18 of the Act. The registration has been obtained by fraud suppressing the material facts. The UIL are aggrieved by the registration, as they too are carrying on business in the same trade as well as the marks are identical. Based on their impugned registration the SRP have filed a civil suit before the Honble High Court of Delhi.

60. The application for registration has been made by the SRP when they were under a licence agreement. But though the SRP have filed the application in the year 1976 proposing to use the trade mark and have obtained the registration in the year 1979 but have not placed any proof of use as regards the goods gudgeon pins.

61. The impugned application though has been filed when SRP were under a licence agreement the registration has been known to the UIL as well and the UIL were aware of the SRP use. The mark deserves to be rectified for the reason that there is no proof of use of the mark for goods falling in class 6. Any way the licence agreement was only with respect of pistons, piston rings and piston pins.

62. Consequently, the original rectifications are allowed and the registration under No.312962 in class 6 stands rectified.

ORA/49/2004 and 18/2005 AND ORA/55/2004 and 19/2005

63. The first set of rectification application ie. ORA/49/2004 and ORA/18/2005 are against the trade mark Usha word per se in class 12 for parts of motor land vehicles including clutch plates, differential gears and cylinder linears under No.426693.

64. The second set of rectification application ie. ORA/55/2004 and ORA/19/2005 are against the trade mark Usha four block logo in class 12 in respect of parts included in class 12 for internal combustion engines for land vehicles under No.316156.

65. The trade mark registered under No.426693 was filed on 04.09.1984 proposing to use the trade mark Usha word per se. The trade mark registered under No.316156 was filed on 24.06.1976 claiming user since 01.08.1972. The mark is four block logo mark.

66. We find force in the averments and arguments of the UIL that SRP claim of use since 01.08.1972 is not proved. The Shriram Pistons and Rings Limited had been using the trade mark Usha either as a word mark or label mark only under the licence agreement dated 05.04.1973. If that be the case, then the user claimed since 01.08.1972 cannot be accepted. The registration is in contravention of the provisions of Section 11(3)(a) and (b) of the Act. The UIL have stated that they are aggrieved as a civil suit has been filed based on the impugned registration. The suit has been filed for infringement of their trade mark.

67. In the instant case, again the SRP has not proved their use. They claim use since 1972 which is again a wrong statement in our considered opinion. The only evidence is that of a caution notice of the year 2004. This Board has held in other matters that if the use claimed in the application for registration is not proved then the mark cannot be allowed to continue on the register for wrong statement. In view of this, we think the mark has to be removed from the register. The four rectification applications are allowed and the impugned trade marks are removed.

ORA/50/2004 and 23/2005, ORA/51/2004 and 22/2005, ORA/52/2004 and 17/2005, ORA/53 and 20/2005 AND ORA/54/2004 and 16/2005

68. ORA/50/2004 and 23/2005 are against registration under No.309086 in class 7. ORA/51/2004 and 22/2005 are against No.310046 in class 7. ORA/52/2004 and 17/2005 are against No.309092 in class 7. ORA/53/2004 and 20/2005 against No.426689 in class 7 and ORA/54/2004 and 16/2005 against No.308516 in class 7. All the five sets of applications are for the registration of the four block Usha logo.

69. The impugned trade mark under No.309086 was filed on 08.10.1975 claiming user since 01.08.1972 in respect of piston and piston rings. The impugned trade mark was associated with No.308516 which is the subject mater of ORA/54/2004 and 16/2005, No.310046 subject matter of ORA/51/2004 and 22/2005 and No.309092 subject matter of ORA/52/2004 and 17/2005. The registration was granted on 02.05.1977. The trade mark was a label mark in respect of piston and piston rings.

70. The trade mark Usha a label mark was registered under No.310046. The application was dated 14.11.1975 and the user was claimed since 31.08.1972 in respect of piston and piston rings. This mark was associated with 308516, 309086 and 309092. The registration was granted on 04.07.1977.

71. The registration under No.309092 was applied for on 08.10.1975 for the trade mark Usha a label marks. The registration was granted on 04.07.1977. The user claimed was since 01.08.1972. The mark was associated with Nos.308516, 309086 and 310046. The goods were piston and piston rings.

72. The impugned trade mark No.426689 was applied for registration on 04.09.1984 in class 7 in respect of piston and piston rings included in class 7. The user was proposed to be used. The registration was granted on 15.09.1998. The mark was associated with No.310046.

73. The trade mark registered under No.308516 in class 7 in respect of piston and piston rings was applied for on 17.09.1975 and registration was granted on 14.04.1977. The user claimed is since 01.08.1972. The mark was associated with Nos.309086, 309092 and 310046.

74. The five marks are therefore dependent on the other. The marks has been put to use since 1972 according to the respondents. In the Autoguide – June 1976 at page 2280 at 2283It is clearly stated that,“the company manufactures a wide range of pistons, pin, rings for commercial vehicle, cars, two wheelers and stationary engines and very shortly plan to enter into tractor field also. In this short span of 4 years USHA piston and rings have gained wide popularity with original equipment manufacturers, state transport undertakings and the trade.” This shows user from 1972 (4 years prior to 1976). There are also few caution notices of the year 1976 and 1990. We thereof are of the view that the trade marks registered has been put to use and shall continue on the register restricting their goods only to pistons, piston rings and piston pins and not to other goods falling in class 7 of the IV schedule. The SRP has also established a reputation during the period from 1973 till date in respect of piston, piston rings and piston pins.

75. We are not going into the validity of the licence agreement whether there was a trade marks right or copyright right. There is no doubt the applicants ie. Jay Engineering Works had granted a licence to the SRP to use the trade mark. On a bare perusal of the records, it is seen that both the UIL and the SRP were carrying on business with the knowledge of the other. Not only the business was carried on by both, both had obtained registration of the trade mark. The UIL were aware of the SRP registration as early as 1994 itself. It is also seen that both the UIL and the SRP have joined together and filed suits against third parties. The registrations obtained have been mentioned in the suit. SRP had been carrying on business along with UIL. The adoption of the trade mark by SRP was honest since inception. Both SRP and UIL were carrying on business until the family dispute arose. It could also be stated that after the termination of the buyer and seller agreement, there were litigations against each other. The impugned registrations have been on the Register for several years. When the adoption has been honest and the mark has been concurrently used, this is a special circumstance for the mark to continue on the register. We are of the view, that the mark which has been on the Register for several years deserves to continue in the register.

76. We are not dealing with the case laws cited by both the parties as we have not dealt with the validity of the licence agreement.

77. Both the parties have been carrying on business with the knowledge of the other. Having allowed the other to grow for more than 2 decades, we do not think it necessary to remove the mark. We only impose a condition on both the applicants and the respondents restricting the goods. The UIL will have their trade mark restricted to diesel oil engines. The SRP will have the trade mark restricted to piston, piston rings and piston pin.

To sum up :-

a) ORA/46/2004, ORA/128/2006 and ORA/29/2006 are ordered accordingly excluding piston, piston rings and piston pins.

b) ORA/48/2004 and 21/2005 are allowed and the registrations stand rectified.

c) ORA/49/2004 and 18/2005 and ORA/55/2004 and 19/2005 are allowed and the mark registered are removed from the register.

d) ORA/50/2004 and 23/2005, ORA/51/2004 and 22/2005, ORA/52/2004 and 17/2005, ORA/53 and 20/2005 and ORA/54/2004 and 16/2005 are dismissed and the marks shall continue on the register in respect of piston, piston rings and piston pins only.

78. All the Miscellaneous Petitions are allowed.

79. There shall be no order as to costs.