Thayar Food Products, Rep. by Its Partner A.R. Ananda Krishnan Vs. M. Sundaram - Court Judgment

Order (No.171/2009)

S. Usha, Vice-Chairman:

1. This original rectification is for expunging the impugned trade mark “THAYAR” registered under No. 1291574 in Class 30 in respect of appalams, spices, masalas including sambar, rasam and turmeric power, sugar, rice, tapioca, sago, flour preparations from cereals, mustard, pepper, coriander, tamarind, dhalls under sections 47/57/125 of the Trade Marks Act, 1999 (hereinafter referred to as the Act).

2. The applicants are leading manufacturers and marketers of wet idly/dosa flour, wet adai flour, wet rava dosa flour, wet rava idly flour and other allied goods. The applicants are carrying on business since 1997 and have adopted the trade mark THAYAR. By high standard and quality in the products and effective sale promotion, the products bearing the said trade mark “THAYAR” had acquired high popularity and heavy demand from the customers. Because of the high standard and quality, applicants products had obtained ISO 9001-2000 and HACCP certificate. The applicants are technically competent and have infrastructure, equipments and facilities for preparing the ready to use wet flour products for marketing in retail packs. The applicants are also a registered small scale industrial unit.

3. The applicants are the first to introduce the concept of vending wet idly flour and other flours in sachets. The applicants state that due to their efforts a new entry has come into sales tax relating to “ready to use wet flour paste”.

4. The applicants have advertised their products through various medias and the mark has acquired distinctiveness and is exclusively associated by the public with the products of the applicants. The applicants trade mark “THAYAR” has acquired secondary meaning to denote and connote the product of the applicants alone. The applicants are the proprietors of the trade mark “THAYAR” registered under No. 132 8933. The applicants have also made arrangements for expansion of the products to market species, mixed masalas, pulses and other food preparation made of cereals under the trade mark “THAYAR”. They adopted the trade mark in May, 1997 and have obtained certificate of registration under TNGST and CST.

5. The applicants have furnished their sales turnover for the year 1997-98 which is about Rs.1,53,318/- and for the year 2006-07 the sale value is Rs.80,08,757/-. The advertisement expenses which was Rs.6000/- in the year 1998-99 had raised to Rs.6,20,684/- in the year 2006-07. The applicant further submitted that the respondent herein is only running a provisional store under the trading style of Thayar Diary and never marketed products under the trade mark “THAYAR”. The business of the respondent is only retail vending of general homeline products and diary products. In fact till November, 2006, the respondents were purchasing the goods from the applicant and selling. The registration of the impugned trade mark is in contravention of the provisions of the Act and is liable to be expunged.

6. The grounds of rectification are as hereunder: -

(i) The registration of the impugned trade mark is prohibited under section 9 (1) (a) of the Act, as the mark is devoid of any distinctive character nor it is capable of distinguishing the goods of the respondent from that of the applicants.

(ii) The impugned registration of the respondents trade mark Thayar in respect of identical goods and as the applicants are prior user, the use by the respondent would cause deception and confusion among the trade and public and liable to be cancelled as it is in violation of the provisions of section 9 (2) (a) of the Act.

(iii) The impugned trade mark is identical with the applicants trade mark and the goods are similar which is likely to cause confusion in the minds of the public and the public may associate the respondents goods bearing the said mark with that of the applicant and therefore, the registration is in contravention of the provisions of section 11(1) of the Act.

(iv) The impugned trade mark is liable to be removed as the respondent is not the proprietor of the trade mark within the meaning of section 18(1) of the Act.

(v) In order to maintain the purity of the Register the impugned trade mark may be expunged from the Register.

(vi) The respondent cannot claim benefit under section 12 of the Act, as their adoption is neither honest nor concurrent.

(vii) The registration has been obtained by the respondent by mis-representation as to the use and is liable to be removed as it would cause loss and irreparable hardship to the applicant if allowed to remain on the Register.

(viii) The applicants being prior in use of the trade mark are aggrieved by the respondents identical trade mark on the Register which is liable to be removed.

(ix) The impugned registration has been obtained by fraud and misrepresentation and the user claimed is also false and the mark ought to be removed.

7. The respondent herein filed their counter statement denying all the material allegations made in the application for rectification. The respondents predecessor in interest and the respondent had been using the trade mark “THAYAR” and trading style since 1927. The applicant is also aware of respondents ownership of the trade mark and the trading style.

8. One Mr. M.K. Ramanathan was carrying on the business of diary and Home Links since 1927 and applied for registration of the trade mark “THAYAR DIARY” as early as 1987 under No. 478710 and the same was registered and renewed till 2001. The respondent and Mr. M.K.Ramanathan entered into a lease agreement dated 01.09.1975 and thereby the respondent has been carrying on business from the year 1975 with his own capital and funds and the said lease agreement was renewed by another memorandum of agreement on 31.03.1981. The respondent has been paying taxes and other charges to the authorities concerned. Mr. M.K. Ramanathan passed away in the year 1997 and the respondent continued the business under the trade mark “THAYAR” and trading style “THAYAR DIARY”.

9. The said Mr. M.K. Ramanathan left a registered will dated 07.02.1996 bequeathing the said business to his sons namely Mr. Muthukrishnan and Mr. Chandrasekar with the authority to collect the lease rentals and other amount and thus became the owner of the property.

10. The respondent was carrying on business of Mr. M.K.Ramanathan at No. 31, Ranganathan Street, T.Nagar, Chennai-17. Mr. M.K.Ramanathan was a tenant of that property. After the death of Mr. M.K.Ramanathan the respondent along with his son purchased the said property on 26.06.1998. Subsequently on 01.02.1999, the sons of Mr. M.K.Ramanathan who acquired the business of their father through will transferred the business in the name of the respondent and his son by a sale deed. Therefore, the mark “THAYAR” and trading ‘THAYAR DIARY” was in use by late Mr. M.K.Ramanathan and the respondent since 1927 continuously till date.

11. Thereafter, the respondent came to know that the registration of the Trade Mark “Thayar Diary” under No. 478710 in class 29 was not renewed. The respondent immediately applied for registration of the trade mark under Nos. 1291575, 1291574 and 1291572 in classes 29, 30 and 42 respectively. The applicants are carrying on business of food products under the trade mark “THAYAR” only from 1997 subsequent to that of the respondent. The initial adoption of the trade mark by the applicant is with the knowledge of the existing and popular trade mark “THAYAR” belonging to the respondents. The inclusion of the letter ‘a - Thaayar instead of Thayar was only in the year 2004 and the applicants have not given any explanation as to why and how it was adopted.

12. The applicant and the respondent filed Civil Suit in C.S.No. 196 of 2007 and C.S. No. 300 of 2007 respectively on the file of the Honble High Court, Madras. The Honble High Court was pleased to grant an order of injunction in C.S. No. 196 of 2007 in favour of the respondent against which the applicant preferred an original side appeal. The Honble Division bench of the Madras High court modified the order of the Single Judge with a direction that the petitioner pays a sum of Rs. 10 lakhs every year before the Trial Court and also to maintain the accounts and submit the same once in three months before the Trial Court as an interim measure. The respondent had further denied the various allegations made in the grounds of appeal.

13. On completion of the pleadings the matter was set down for hearing at Chennai on 23.07.2009 where learned counsel Shri Prabhakar Reddy and Ms. S.B. Nirmala appeared for the applicant and learned counsel Shri S. Balachandran appeared for the respondent.

14. The learned counsel for the applicant reiterated what was stated in the application for rectification and brought to our notice various documents filed in support of his claim. The counsel drew out attention to the typed set of papers filed by the respondent at page 50 and submitted that the impugned registration application was filed on 21.06.1994 claiming user since December, 1995 and stated that to claim user since 1927 in their counter statement was not correct. The counsel also submitted that the respondent used the word “THAYAR” only as a name of the stores and not as a trade mark. In fact, the applicants adopted and started using the trade mark “THAYAR” since 1997 for their products – idli mix.

15. The counsel further submitted they started the business under the name Thayar Food Products as early as 1997 and brought to our notice the partnership deed dated 22.05.1997 filed at page 29 of the applicants typed set of papers along with the application for rectification. The Central Sale Tax registration and General Sales Tax registration certificates were also produced before us. The various invoices were shown to prove that they had supplied the wet flour bearing the trade mark “THAYAR” to the respondents. The applicants also produced the advertisement vouchers to prove their expenses incurred towards promotion of their products. The applicants brought to our notice the commercial taxes assessment order dated 09.11.1998 and also pointed out that it clearly proved their business since 1998. The respondents were in fact purchasing the goods bearing the trade mark THAYAR from the applicant upto November 2006 and thereafter issued a cease and desist notice to the applicant calling upon them to stop using the trade mark THAYAR. Subsequently settlement proposal was initiated and negotiations were on but failed.

16. The respondents though claim to have been using the mark since 1927 have claimed user since 1995 in the application for registration, which is totally false. The counsel further submitted that they were the first to introduce the concept of vending wet idly flour, whereas the respondents were only running a provision store under the name and style of Thayar Diary and had falsely represented and obtained Trade Marks Registration. The respondent was only running a provision store under the name and style of Thayar Diary and never marketed any product under the Trade Mark “THAYAR”. The counsel submitted that the respondents in their counter-statement have only denied the averments made in the application and they have not given any reasons for the same. The counsel also pointed out to the contents of the will dated 07.02.1996 filed at page 27 of the typed set of papers along with the counter-statement and submitted that the respondent was permitted to carry on business by obtaining licence from the concerned authorities at the said premises and nowhere it was stated about the trade mark. Even in the sale deed dated 01.02.1999 at page 45, the sons of Mr. M.K.Ramanathan had sold the business as a going concern with all furniture, electrical fittings and other fixtures only. He also pointed out to us to the purchase bills which were only pertaining to butter and ghee and some spice powder. He further submitted their objection was only with regard to class 30 and not for other classes.

17. The counsel further submitted that the registration was in violation of the provisions of section 9 and 11 of the Act. The trade mark was neither distinctive nor capable of being distinctive as there was no use of the trade mark. The applicants had established business because of their high quality products and thus their products were known in the market whereby the public associate the said mark with the appellants only and with none else. Therefore, there would be a possibility of confusion and deception if the mark was allowed to remain on the register. The applicants have proved their user and the same has been admitted by the High Court in their order. It is now for the respondents to prove that they had been using it as a trade mark as they had been using it only as a trading style. The counsel for the applicant therefore prayed that the application for rectification be allowed and the impugned trade mark may be removed from the Register.

18. The counsel for the respondent submitted that one Mr. Ramanathan adopted the trade mark “THAYAR” as early as 1927. The counsel reiterated the facts stated in the counter-statement and explained as to how the respondent acquired the title to the said trade mark. The counsel further submitted that though the predecessor Mr. M.K.Ramanathan adopted the impugned trade mark in the year 1927 and had obtained registration as early as 1994 he did not renew the same and so the respondent had applied for registration and obtained the same. The counsel submitted that they had obtained registration in class 29 and 42 and stated that they have filed the certificates along with their counter-statement.

19. The counsel in reply to the averment that they were purchasing the goods from the applicant stated that the same was not correct as the address in those invoices were different. The counsel also submitted that the applicant was using “THAYAR” and had subsequently changed to “THAAYAR” only to deceive the public. The counsel finally submitted that the rectification application has been filed as a counter-blast to the Civil Suit filed by the respondent. The counsel, therefore, prayed that the mark ought not to be removed from the Register.

20. The counsel for the applicant in rejoinder submitted that they have no objection as to he respondent using the said mark for the goods in class 29 and 42 but the quarrel was only with respect to class 30. The counsel submitted that they had been using the said mark since 1997 and till 2006 there was no dispute. In fat in 2006, it was the respondents who issued cease and desist notice only out of trade jealousy.

21. We have heard the counsel for both sides and have gone through the pleadings and documents.

22. Any person may file an opposition as per the provisions of section 21 of the Act. An application for rectification can be filed only by a person aggrieved. Though the term “Person aggrieved” has not been defined in the Act, it has been liberally construed in several cases. The classis is Powells Trade Mark (1893) 10 RPC 195 P.201 C.A., wherein it was held that, “I should be very unwilling unduly to limit the construction to be placed upon these words, because although they were no doubt inserted to prevent officious interference by those who had no interest at all in the Register being correct, and to exclude a mere common informer, it is undoubtedly of public interest that they should not be unduly limited, in as much as it is a public mischief that there should remain upon the register a mark which ought not to be there and by which many persons may be affected, who, nevertheless, would not be willing to enter upon the risk and expense of litigation. Wherever it can be shown, as here, that the applicant in the same trade as the person who has registered the trade mark, and wherever the trade mark, if remaining on the Register, would or might limit the legal rights of the applicant, so that by reason of the existence of the entry on the Register he could not lawfully do that which, but for the existence of the mark upon the register he could lawfully do, it appears to me he has a locus standi to be heard as a person aggrieved”.

23. In Powells Trade Mark case, it was held that “persons who are aggrieved are persons who are in some way or other substantially interested in having the mark removed from the register, or persons who would be substantially damaged if the mark remained. It is very difficult to frame a narrower definition than that.”

24. The object of rectification is to purify the Register which is a public purpose. The applicants locus standi is determined on the principles as that in the public interest litigation. Here in the instant case the rival marks are identical/similar and the use of the same would cause confusion in the minds of the public. That apart the applicants had been using the same since 1997 continuously and the respondent has issued a legal notice in November 2006 by which the applicant is termed to be a person aggrieved. The grievance must always be legal, by which the aggrieved is likely to be legally injured. The applicant is a person aggrieved by the presence of the impugned trade mark on the register and has a locus standi to file this application for rectification, as the marks are identical.

25. The other issues are that the registration of the impugned trade mark is in contravention of the provisions of the Act. Unless it is shown that the mark has acquired a distinctive character as a result of use before the date of application or is a well known mark, such registration will be in contravention of the provisions of section 9 of the Act. The applicants claim user since December 1995 which has not been satisfied. The main contention of the respondent was that one Mr. M.K.Ramanathan had adopted the trade mark “THAYAR” in the year 1927 and the business was leased out to the respondent by a lease agreement dated 31.03.1981. He also further stated that the said Mr. Ramanathan had applied for registration of the trade mark in the year 1987 in his own name. If that be so, then only the business was leased out and even further looking into the lease agreement will only show that there is no mention about the trade mark. Mr. Ramanathan passed away in the year 1997 and the sons of Mr. Ramanathan had acquired the title of the said business by a will dated 07.02.1996 which was subsequently transferred to the respondent herein on 01.02.1999. Even here, there is no mention of the trade mark. Considering the above facts, it is clear that, if at all the respondents use is to be taken it can be only from the year 1999 and it is not clear as to how the respondent has claimed user since December 1995. The registration has, therefore, been in contravention of the provisions of section 18 of the Act.

26. The next objection was that the registration was in contravention of the provisions of section 11 of the Act. When the registration is hit by the provisions of section 11 of the Act, the trade mark is to be cancelled. The risk of likelihood of confusion is present when the mark and the goods are identical. Here in the instant case, there is no doubt that the marks are identical. The goods are also similar for which the registration has been granted while assessing the likelihood of confusion, the type of persons – consumers has to be considered. The goods here are wet idly flour which is being purchased by both illiterate and literate people. The possibility of confusion is not only likely but also certain. In fact, though the respondent has obtained registration for the trade mark “THAYAR” has not used it for the goods registered and if at all is using it, he is using it for other goods and the word “THAYAR” is being used as the name of their provisional stores. On perusal of the bills it is clear that the respondents are not dealing with the goods falling under class 30. It is, therefore, seen that the respondent is using the mark as a trading style alone and not as a trade mark and is not vending its products bearing the said impugned trade mark.

27. Coming to the issue of the respondent obtaining registration claiming benefit under section 12 of the Act, we will have to consider the factors for registration. As per the dictum of Lord Tomlin the following factors are to be considered for allowing registration under section 12 of the Act;

i) The extent of concurrent use;

ii) The quality and the area of trade;

iii) The degree of confusion likely to ensue from the resemblance of the marks, which is to a large extent, indicative of the measure of public inconvenience;

iv) Honesty of concurrent use;

v) Whether any instances of confusion has been proved;

vi) Relative inconvenience which would be cause if the marks in suit was registered, subject, if necessary, to any conditions and limitations.

28. The onus of establishing a case for registration under section 12 of the Act lies on the applicant, by proving their honest adoption. In the instant case, we do not find any reason given by the respondent for adoption, whereas, it is evident from the records that the respondent has not adopted the trade mark on his own, but states that he acquired from a third person. In fact, there is no whisper of the transfer of the trade mark in ay of documents say lease agreement, will or the transfer deed. The use of the mark will not be sufficient but the adoption must be honest. In case of benefit under section 12 of the Act, the likelihood of confusion need not be proved in case of honest concurrent use. The same has not been satisfied. The objection under section 12 of the Act is also answered in favour of the applicants.

29. Next will be the issue to maintain the purity of the Register. The purity of the Register of trade marks has been considered to be an important aspect.

30. It is noteworthy to quote the law laid down in Paine Vs. Daniell (1893) 10 RPC217 (CA) 232 – “The purity of the register of trade marks is of much importance to trade in general; quite apart from the merits or demerits of particular litigants. If on a motion like the present, the attention of the court is called to an entry or the register of trade marks which cannot in law be justified as a trade mark, it seems to me that the courts duty may well be whatever be the demerits of the applicant – to purify the register and to expunge the illegal entry in the interests of trade, as was done in Stone Ales Case.”

31. An illegal entry may be expunged whatever be the merits or demerits of the applicant for rectification. Here the registration is improper in our view and has got to be removed.

32. Now, finally we shall deal with the issue of fraudulent registration. A trade mark could be expunged from the register if registration was obtained by fraud. Registration obtained by making a false claim to be the proprietor of the mark is a registration obtained by fraud. The applicant has pleaded fraud in this application for rectification. We find that the registration has been obtained by claming wrong proprietorship. In fact, the user claimed is not proved by the respondent. The date of user in the application for rectification is not substantially proved. As already observed in the earlier para, the respondent even though seems to claim the right from the erstwhile proprietors has not proved the same for the date claimed in the application for registration. The registration is to be expunged for this reason too.

33. We, therefore, are of the view that the respondent has used the mark only as a trading style for their provisional stores and not as a trade mark. The respondent though has obtained registration for the goods falling under class 30 has not sold any of the goods.

34. For the reasons given above, the application for rectification is allowed. The Registrar of Trade Marks is directed to remove the impugned trade mark “THAYAR” registered under No. 1291574 in class 30 from the Register.