# AMEkICAN H.P.COF.PN v. MAC LABS

- **Citation:** [1985] Supp. 3 S.C.R. 264
- **Court:** Supreme Court of India
- **Decided:** 1985-09-30
- **Case number:** Civil Appeal No. 2159 of 1970
- **Bench:** Amarendra Nath Sen, D.P. Madon
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/amekican-h-p-cof-pn-v-mac-labs-9122
- **Pages:** 78

## Headnote

Trade Marks Act, 1940 (5 of 1940), ss.14(1) and 39(2) and
Trade and Merchandise Marks Act, 1958 ( 43 of 1958), ss. 18,
46(l)(a)(b) and 48 - "Trade Mark" - What is - Registration of -
Valuable right on the proprietor whether conferred - Infringement
of rights - Remedies - What are.
Trade Marks Act, 1940 - s.14(1) - Trade matk 'Dristan' -
Registration of.
Trade and Merchandise Marks Act, 1958 - s.46(l)(a)(b) -
"Trade !'lark" -
Removal of from Register of Trade Marks -
Two
conditions precedent under cl.(a) must be cumulatively satisfied
D
- Burden of proving applicability of s.46(l)(a)(b) -
On person
seeking removal of trade mark - Distinction between els. (a) and
(b) - What is - S.46(1) - Object of - Trafficking in trade mark -
What is - Ascertainment of bonafide intention to use trade mark -
Whether dependant on the facts and circumstances of each case -
Whether continuous chain of events even subsequent to the appliE
cation for registration to be considered - Intention to use trade
mark sought to be registered - Must be genuine and real at the
date of application for registration -
Whether
the words
"proposed to be used by hill'" in s .18 mean "proposed to be used by
the proprietor, his agents and servants" - Effect of sub-s.(2) of
s.48 on sub-s. (1) of s.18 - What is.
F
G
Trafficking in Trade Marks - What is.
Interpretation of Statutes:
Deeming provision - Full effect to be given.
Construction leading to manifest absurdity, injustice,
inconvenience or anomaly to be avoided.
Precedents: Doctrine of
H
English decisions - Can be referred to, but applicability
would depend upon context of Indian laws, legal procedure and
practical realities of litigation in India.
AMEkICAN H.P.COF.PN. v. MAC LABS.
265
The appellsnt-American Home Products Corporation, is a
Corporation incorporated in the United States of America. ·0ne of
its activities is, the manufacture and marketing of pharmaceutical products and drugs carried on through its division."Whitehall
Laboratories". The appellant was dealing with the Ind1an Company
-
Geoffery Manners & Co. Ltd., through its subsidiary -
Home
Products International Ltd. Some time prior to 1956 it acquired
40% shareholding in the Indian Company. In 1956 it introduced an
anti-iiystamin drug in the American market under the trade'"1llllrk
'Dristan'. It got the trade mark 'Dristan' registered as a
distinctive trade mark in the Trade Marks Register in the United
States and subsequently in several foreign countries.
The appellant entered into a
technical collaboration
agreement with the Indian Company effective from Nov. l, 1957.
Under this agreement the Indian Company received the formulae,
manufacturing technology, and other assistance essential for the
efficient manufacture in India of various products of the
appellsnt. The appellant granted to the Indian Company; for the
duration of the agreement an exclusive aud non-transferable
licence to make and sell the "Licensed Products" in India under
the nsme or marks of the appellant. The agreement inter alia
further provided that rights of registered user will be extended
to the Indian Company in respect of each "Licensed Product" by
the appellant - proprietor of such trade mark.
Pursuant to the collsboration agreement the Indian Company
manufactured and marketed the products covered thereunder and got
itself registered as the registered user in respect of the trade
marks relsting to the goods of' which the appellant was the
registered proprietor. On and from December 1957 it was decided
that the Indian Company should introduce in the Indian market
nine new drugs of the appellsnt including 'Dristan' tablets. On
August 18, 1958, the appellant filed an application under s.14(1)
of the Trade Marks Act 1940, in Form TM-I for registration :>f
the trade mark 'Dristan' in class .5 claiming to be its proprietor
and that the same was proposed to be used by it. The application
wss advertised as required by the Trade Marks Rules 1942. No
Notice of opposition to the regi

## Text

_Characters 0–39,968 of 189,045. This is a partial read: ask again with offset=39968 for what follows._

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264
AMERICAN ID1E PRODUCTS CORPORATION
V•
MAC LABORATORIES PRIVATE LOOTED AND ANR.
SEPTEMBER 30, 1985
[AMARENDRA NATH SEN AND D.P. MADON, JJ.]
Trade Marks Act, 1940 (5 of 1940), ss.14(1) and 39(2) and
Trade and Merchandise Marks Act, 1958 ( 43 of 1958), ss. 18,
46(l)(a)(b) and 48 - "Trade Mark" - What is - Registration of -
Valuable right on the proprietor whether conferred - Infringement
of rights - Remedies - What are.
Trade Marks Act, 1940 - s.14(1) - Trade matk 'Dristan' -
Registration of.
Trade and Merchandise Marks Act, 1958 - s.46(l)(a)(b) -
"Trade !'lark" -
Removal of from Register of Trade Marks -
Two
conditions precedent under cl.(a) must be cumulatively satisfied
D
- Burden of proving applicability of s.46(l)(a)(b) -
On person
seeking removal of trade mark - Distinction between els. (a) and
(b) - What is - S.46(1) - Object of - Trafficking in trade mark -
What is - Ascertainment of bonafide intention to use trade mark -
Whether dependant on the facts and circumstances of each case -
Whether continuous chain of events even subsequent to the appliE
cation for registration to be considered - Intention to use trade
mark sought to be registered - Must be genuine and real at the
date of application for registration -
Whether
the words
"proposed to be used by hill'" in s .18 mean "proposed to be used by
the proprietor, his agents and servants" - Effect of sub-s.(2) of
s.48 on sub-s. (1) of s.18 - What is.
F
G
Trafficking in Trade Marks - What is.
Interpretation of Statutes:
Deeming provision - Full effect to be given.
Construction leading to manifest absurdity, injustice,
inconvenience or anomaly to be avoided.
Precedents: Doctrine of
H
English decisions - Can be referred to, but applicability
would depend upon context of Indian laws, legal procedure and
practical realities of litigation in India.
AMEkICAN H.P.COF.PN. v. MAC LABS.
265
The appellsnt-American Home Products Corporation, is a
Corporation incorporated in the United States of America. ·0ne of
its activities is, the manufacture and marketing of pharmaceutical products and drugs carried on through its division."Whitehall
Laboratories". The appellant was dealing with the Ind1an Company
-
Geoffery Manners & Co. Ltd., through its subsidiary -
Home
Products International Ltd. Some time prior to 1956 it acquired
40% shareholding in the Indian Company. In 1956 it introduced an
anti-iiystamin drug in the American market under the trade'"1llllrk
'Dristan'. It got the trade mark 'Dristan' registered as a
distinctive trade mark in the Trade Marks Register in the United
States and subsequently in several foreign countries.
The appellant entered into a
technical collaboration
agreement with the Indian Company effective from Nov. l, 1957.
Under this agreement the Indian Company received the formulae,
manufacturing technology, and other assistance essential for the
efficient manufacture in India of various products of the
appellsnt. The appellant granted to the Indian Company; for the
duration of the agreement an exclusive aud non-transferable
licence to make and sell the "Licensed Products" in India under
the nsme or marks of the appellant. The agreement inter alia
further provided that rights of registered user will be extended
to the Indian Company in respect of each "Licensed Product" by
the appellant - proprietor of such trade mark.
Pursuant to the collsboration agreement the Indian Company
manufactured and marketed the products covered thereunder and got
itself registered as the registered user in respect of the trade
marks relsting to the goods of' which the appellant was the
registered proprietor. On and from December 1957 it was decided
that the Indian Company should introduce in the Indian market
nine new drugs of the appellsnt including 'Dristan' tablets. On
August 18, 1958, the appellant filed an application under s.14(1)
of the Trade Marks Act 1940, in Form TM-I for registration :>f
the trade mark 'Dristan' in class .5 claiming to be its proprietor
and that the same was proposed to be used by it. The application
wss advertised as required by the Trade Marks Rules 1942. No
Notice of opposition to the registration of the trade mark was
filed by any one and the trade mark 'Dristan' was registered on
June 8, · 1959 by the Registrar of Trade Marks as trade mark
No. 186511 in class 5. Thereafter, the Indian Company obtained a
licence for the purchase of a machine for manufacturing of
'.Driatan' tablets and installed the SSllie·
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SUPREME COURT REPORTS
[1985] SUPP.3 s.c.R.
OD May 31, 1960, the first respondent -
Mac Laboratories
Private Ltd. -
applied for registration of the trade mark
1Tristine 1 in claas 5. On Januaey 18, 1961, the appellant filed a
notice of opposition to the registration of the mark 'Tristine'
on the ground that it was deceptively similar to its trade mark
'Dristan'. The appellant 1 s opposition was not accepted by the
Aaaistant Registrar of Trade Marks and by his order dt. March 27,
19621
he ordered the trade mark 1Trist1.ne 1 to be registered in
Part A of the Register of Trade Marks. The Appell.ant thereupon
filed an appeal in the Bombay High Court which was allowed by a
Single Judge on Feb. 5, 1963.
The appeal filed by tne first
respondent
before
a ·Division Bench
was
allowed with the
directions that the respondent 1 s application be amended so as to
read the trade mark 'Tristine 1 as 'Tristina 1 •
During the pendency of the application of the first
respondent for registration of the trade mark
1Tristine' the
Indian Company on Sept. 23, 1960 applied
to the Central Govt.
under s .11 of the Industries (Development and Regulation) Act
1951 for a licence to manufacture the tablet 'Dristan' which waa
granted on January 19, 1961 for the manufacture of 'Dristan'
tablets to the extent of 5 lakhs tablets per month with the
conditions that "no , royalty would be payable" and that the
products will be marketed with the trade mark already in use or
without any trade mark. It also applied for an import licence for
import of materials for manufacture of 'Dristan' tablets, and got
approval for manufacture of 'Dristan' tablets.
On October 18, 1961 another agreement was entered into
between the Appellant and the Indian Compan;r for granting to the
latter the non-exclusive r~t to use the trade mark 'Dristan 1
upon or in relation to the goods in respect of which the said
trade mark was registered during the unexpired residue of the
tem of the registration of the said' trade mark. Under this
agreement the Indian Company agreed to become the registered user
of the trade mark 'Dristan' and further agreed that the rights
granted to it under the agreement would not be deemed. to entitle
it to use the trade mark otherwise than as the registered user
thereof.
On October 22, 1961, the 'Dristan' tablets were first
marketed in India by the Indian Company. On March 6, 19621 a
joint application in Fom 'IM-28 was made by the appellant and the
Indian Company for registering the Indian Company as a registere,d
user of the trade mark
1Dristan 1 in respect of the goods for
AMERICAN H.P.CORPN. v. MAC LABS.
267
which it """ registered subject to certain conditions or restrictions. lbe application stated that the proposed permitted use was
without limit of period subject to the right of the appellant -
registered proprietor to appiy for cancellation of the registered
user forthwith after notice in writing to the Indian Company.
lbe first respondent on April 10, 1961 filed with the
lle,gistrar of the Trade Marks an application under ss.46 and 56 of
the 1958 Act for rectifying the Register of Tracie Marks by
removing therefrom the appellant's trade mark 'Dristan' on the
grounds:
(i) That the trade mark
1Dristan1 is deceptively and
confusingly similar to the trade mark 1Bistan 1 already
registered in class 5 and which has been used and is
being used.
(ii) That the trade mark 'Dristan' is deceptively
similar to the trade mark 'Tristine' which the Applicants have lawfully been using since October 1960 in
respect of their medicinsl preparation.
(iii) That there has been no bons fide use of trade
nark 'Dristan' in India in rei&tIOn to the goods for
which it is registered by proprietor thereof for the
time being upto date one month before the date of this
application.•
On May 5, 1961, the first respondent applied for amendment
of the Rectification Application by substituting the submissions
in support of the grounds taken earlier. The submissions so
substituted were :
"(i) That the trade mark 'Driatan • was not distinctive
nark and/or wAa not registerable trade mark under s.6
of the Trade Marks Act, 1940 (corresponding to s.9 of
Act No.40 of 1958), except upon evidence of its
distinctiveness and no such evidence was submitted to
the Registrar before registration.
(ii) That the said trade mark was registered in
contravention of s.8 of the Trade Marks Act, 1940
(corresponding to a.11 of Act of 1958).
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SUFREME COURl REPORlS
[1985] SUPP.3 s.c.R.
(iii) That the said trade mark offends against the
provisions of s.11 of the Act.
(iv) That the trade mark 'Dristan' is not distiDCtive
of the goods of the registered proprietors.
(v) That the trade mark 'Dristan' was registered
without any bona ~
intention on the part of the
Applicants thst it would be used in relation to their
medicinal preparation for symptomatic treatment of
respiratory ailments by them and thst there has, in
fact, been no bona fide uae in India of the said trade
mark 'Dr1.stan' in relation to the said goods by the
said proprietors upto a date one month before the date
of this application."
On December 7, 1964, the Registrar of Trade ~iarks dismissed
the Rectification Application of the first Respondent holding·
thst the Whitehsll Laboratories was a division of the appellant
and not a separate ·legal entity and, therefore, the mark could
not be registered in its name but only in the name of the
appellant and accordingly ordered the entry in the Regj.ster
relating to the Trade ~rk 'Dristan' to be varied by amending the
registered proprietor's name to read as "American Home Products
Corporation trading as Whitehall Laboratories." The appeal filed
by the first respondent was allowed by the Single Judge holding
(1) thst at the date of the making of the application for registration the appellant did not have a bona fide intention to uae
the trade mark ·'Dristan' by itself, (2) that the appellant had
not at any time used the said trade mark in relation to the goods
in respect of which it was registered, (3) that the legal fiction
created by s.48(2) of the 1958 Act came into play only after a
trade mark was registered and that an intention to uae the trade
mark through someone who would subsequently get himaelf registered as a registered user did not amount to an intention on the
part of the applicant for registration to uiie the trade mark
himaelf; and (4) that to accept the appellant's contention would
amount to permitting trafficking in trade marks.
In view of
these conclusions the Single Judge did not decide the question
whether trade mark 'Dristan' was deceptively and confusingly
similar to the trade mark 'Bistan'.
In the appeal filed by the appellant the Division BeDCh held
that trade mark 'Dristan' was not deceptively and confusingly
similar to the trade mark 'Bistan'.
Dismissing the 11ppeal it,
AMERICAN H.P.CORPN. v. MAC LABS.
269
however, agreed with the ·view taken by the Single Judge in
A
respect of the construction which he hsd·placed upon ss.18 and 48
of the 1958 Act to come to the conclusion that the appellant had
no bona fide intention to use itself the trade mark 'Dristan 1 and
thatthe apjjellsnt had not at any time made use of the said trade
mark.
In the appeal to this Court on behalf of the appellant it ·
was contended:
(1) the legal fiction created by sub-s.(2) of s.48 is,
as expressly stated in that sub-section, for the
purposes of s. 46 or for any other purpose for which
such use is material under the 1958 Act or any other
law. To confine this fiction to a case of an actual
use of a trade mark by a registered user 'is to confine
it only to use for the purposes of clause(b) of
s.46(1) which is contrary to the purpose for which the
fiction was created and, therefore, when s.18(1) of
the 1958 Act (corresponding to s.14(1) of the 1940
·Act) uses the words "proposed to be used", these words
must be read as "prop0sed to be used by a proposed
registered user".
(2) To register a trade mark which is proposed to be
used by a registered user does not per se SDX>unt to
trafficking in trade marks and whether it does so or
not must depend upon the facts and circU111Btanc"s of
each case.
( 3) The reliance placed by the High Court - both by
the Single Judge and the Di vision Bench -
upon the
'PUSSY G6LOllll' Trade llarlr. Case (1967] R.P.c. 265, was
unjustified and unwarranted inss111UCh as the provisions
of the English Trade Marks Act, 1938, are radically
different from those of the 1958 Act as also the 1940
Act and, therefore, that case has no relevance so far
as the construction of s.18(1) read with s.48(2) of
the 1958 Act is concerned.
( 4) The reliance placed bY the High Court (both bY the
Single
Judge
and
the Division Bench)
upon
the
Shavaksha Committee Report and the Ayyanagar Report
was equally misplaced as Parliament did not accept the
recommendations with respect to registered users.
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SUPREME COURT REPORTS
[1985] SUPP.3 s.c.R.
(5) The facts awl circumstances of the case show that
the appellant had, at the date of the making of the
application for registration, a bona fide intention to
use the trade mark 'Dristan 1 through a registered
user.
(6) In any event, the appell.4nt itself had made bona
fide USe Of the trade mark 1Dristan I Up tO a date one
month before the date of the First Respondent's
Application for Rectification.
On behalf of the First Respondent following contentions were
made.
( l) The words "proposed to be used" in s .18( l) of the
1958 Act s.14(1) of the 1940 Act mean "proposed to be
used by the applicant for registration, his servants
awl agents" and not by any person who is proposed to
be got registered as a registered user awl, thetefore,
the legal fiction enacted in s.48(2) cannot be
imported into s.18(1).
(2) A registered user can only come into being after a
trade mark is registered. Therefore, as at the date of
an application for registration of a trade mark, there
cannot be any person in existence who is a registered
user. The words "proposed to be used" cannot therefore
posslbly mean "proposed to be used by a proposed
registered user".
(3) To permit a trade mark to be registered when the
applicant himself does not propose to use it but
proposes to use it through someone else who 1iOUld
subsequently be registered as a registered user would
be to permit trafficking in trade marka which i•
contrary to the policy underlying the Trade Marks
laws.
(4) The only case which the 1958 Act permita the
registration of a trade mark when the applicant for
registration does not intend to use it himself but
intends to use it through another is the one set out
in s.45, namely, where the Registrar is satiafied that
a company is about to be formed awl registered under
the Companies Act, 1956, awl the applicant intenda to
assign the trade mark to that company with a view to
the use thereof by the company.
AMERICAN H.P.CORPN. v. MAC LABS.
271
(5) The 1958 Act is, as the 1940 Act was, based upon
the English Trade Marks Act, 1938, and the decision in
the 'PUSSY G61.0BE' Trade llarlt cue (supra) concludes
this point against the appellant.
(6) The Shsvaksba eo...ittee Report and the Ayyanagar
Report show the legislstive intent not to allow a
proposed use by a proposed registered user to be
equated with a proposed use by the applicant for
registration.
( 7) The appellant bad not at any relevant· time made
use of the trade mark 'Dristan 1 •
(8)
The
appellant
bad
fradulently
obtained
registration of the trade mark 1Dristan' by stating in
the application for registration that it proposed to
use the said trade mark itself and by not discloaing
the fact that it proposed to use it through a proposed
registered user.
(9) The trade mark 'Dristan 1 was deceptively and
confusingly similsr to the trade mark 'Bistan' and,
therefore, it cannot be allowed to remain on the
Register of Trade Marks.
(10) to allow the trade mark
1Dristan' to remain on
the Register of Trade Marks would be contrary to the
policy of the Government of India.
Allowing the appeal,
HELD : ( l) The Judgment of the Di vision Bench of
the
Calcutta High Court appealed against is reversed and the order
passed by it is set aside. Appeal No.165 of 1968 filed by the
appellant before the Division Bench
is allowed with costs and
the judgment and order of the Single Judge of the High Court are
reversed and set aside. As a result, Appeal No. 61 of 1965 filed
by the First Respondent before the Single Judge of the High Court
is dismissed with costs and the order of the Registrar of Trade
Marks, Calcutta, dismissing the First Respondent's Application
for Rectification, No.CAL-17 is confirmed. [341 B-C]
2. Before a person can make an application under s.46(1) to
tske off a trade mark from the Register he bas to be a "person
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SUPREME COURT REPORTS
[1985] SUPP.3 s.c.R.
A
aggrieved". Undisputedly, the First Respondent was a "person
aggreived" within the meaning of s.46(1). Section 46(1) provides
for two cases in which a registered trade mark may be taken off
the Registrar in respect of sny of the goods in respect of which
it is registered. The first case is set out in cl.(a) of s.46(1)
and the second in cl.{b) of that sub-section. Before cl.(a) can
B
become applicable two conditions are to be satisfied, nmnely, (l)
that the trade mark was
registered without sny bona fide
intention on the part of the applicant for registration that !t
should be used in relation to those goods by him, and ( 2) that
there has, in fact, been no bona fide use of that trade mark in
relation to those goods by sny proprietor thereof for the time
being up to a date one month before the date of the application
C
under s.46(1). The only exception to the first condition is of a
case to which the provisiorul of s.45 apply. Both the conditions
in cl.(a) are clllllllative and not disjunctive. Clause (a),
therefore, will not apply where even though there has been no
bona fide intention on the part of the applicant for registration
to use the trade mark but, in fact, there has been a bona fide
use of the trade matk in relation to those goods by any
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proprietor thereof for the time being up to a date one month
before the date of the application under s.46(1). Similarly,
cl. (a) will not apply where, though there had been a bona fide
intention on the part of the applicant for registration to use
the trade mark, in fact, there has been no bona fide use of the
trade mark in relation to those goods by any proprietor thereof
E
for the time being up to a date one month before the date of the
application under s.46(1). [311 G-ll; 312 A-E]
3, Clause (b) of s.46(1) applie• where for a continuous
period of five years or longer from the date of the registration
of the trade mark, there has been no bona fide use thereof in
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relation to those goods in respect of which it is registered by
any proprietor thereof for the time being. An exception to cl.(b)
is created by s.46(3). Under s.46(3), the non-use of a trade
mark, which is showu to have been due to special circumstances in
the trade and not to any intention to abandon or not to use the
trade mark in relation to the goods to which the application
c;
under s.46(1) relates, will not amount to non-use for the purpose
of cl.(b). [312 F-il] .
4. The distinctio~ between cl.(a) and cl.(b) is that if the
period specified in cl.(b) has elapsed and during that period
there has been no bona fide use of the trade mark, the fact that
H
the registered proprietor had a bona fide intention to use the
r
AMERICAN H.P.CQRPN. v. MAC LABS.
273
trade m&rk at the date of the application for registration
becomes imllaterial and the trade oork is liable to be removed
from the Register unless his case falls under s.46(3), while
UDder cl. (a) where there had been a bona fide intention to use
the trade mark in respect of which regf&tr .. tion was sought,
merely because the trade mat:'< had not been used for a period
shorter than five years from the date of its registration will
not entitle any person to have that trade mark taken off the
l!egister. [313 A-BJ
(5) Under ·both these clauses the burden of proving that the
facts which bring into play cl.(a) or cl.(b), as tbe case may be,
exist is on the person who seeks to have the trade mark removed
from the Register, Thus, where there hes been a non-user of the
trade mark for a continuous period of five years and the
application for taking off the trade mark from the Register hes
been filed one month after the expiry of such period, the person
seeking to have the trade mark removed from the l!egister hes only
to prove such continuous non-user and hsa not to prove the la.ck
of a bona fide intention on the part of the registered proprietor
to use the trade merit at the date of the application for
registration. Where, however, the non-user is for a perie<! of
less than five years, the person seeking to remove the trade mark
from the Register hes not only to prove non-user for the
requisite period but hes also to prove that the applicant for
registration of the trade mark had no bona fide intention to use
the trade mark when the application for registration was made.
[313 C-E]
·.
(6) The definition of "trade mark" contained in cl.(v) of
s.2(1) shows that a trade mark is a mark used or proposed to be
used in relation to goods for the purpose of indicating or so ss
to indicat~ a connection in the course of trade between the goods
and some person having the right to use the mark. It is, therefore, not necessary for the purpose of registering a trade mark
that those goods should be in existence at the date of the
application for registration. If the position were that the mere
non-user of a trade mark for the period mentioned in cl. (a) of
s.46(1) would make a trade mark liable to be taken off the
Register, it would result in great hardship and cause a large
number of trade marks to be removed from the Register, because
the moment one month hes elapsed, after the registration of a
trade mark hes been ordered, a trade rival can make an application on the ground set out in cl.(a) of s.46(1) claiming that
there has been no bona fide use of the trade mark up to a date
one month before the date of his application. It is in order to
prevent such harassment and absurd result that the two conditions
specified in cl.(a) have been made cumulative. (313 F-ti; 314 A-CJ
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SUPREME COURT REPORTS
[1985) SUPP.3 s.c.R.
(7) The object uwierlying s.46(1) is to prevent trafficking
in trade marks. 'lbia is, in fact, the object underlying all trade
mark laws. A trade mark is meant to distinguish the goods made by
one person from those made by another. A trade mark, therefore,
cannot exist in vacuo. It can only exist in connection with
the goods in relation to which it is used or intended to be used.
Its object is to indicate a connection in the course of trade
between the goods and some person having the right to use the
mark either with or without any indication of the identity of
that person. When a person gets his trade mark registered, be
acquires valuable rights by reaaon of such registration. Registration of his trade mark gives him the exclusive right to the
use of the trade mark in connection with the goods in respect of
which it is registered and if there is any invasion of this right
by any other person using a mark which is the same or deceptively
similar to his trade mark, be can protect his trade mark by an
action for infringement in which he can obtain injunction,
damages or an account of profits made by other person. In such an
action, the registration of s trade mark is prima facie evidence
on its validity. After the expiry of seven years from the date of
the registration, a trade mark is to be valid in all respects
except in the three cases set out in s.32. The proprietor of an
unregistered trade mark whose mark is unsuthorisedly used by
another cannot, however, use for the infringement of such trade
mark. His only remedy lies in bringing a passing-off action, an
inconvenient remedy as compared to an infringement action.
[314 C-i!; 315 A-BJ
7(i) In a passing-off action the plaintiff will have to
prove that his mark has by user acquired such reputation as to
become distinctive of the plaintiff's goods so that if it is used
in relation to any goods of the kind dealt with by the plaintiff,
it will be undl'!rstood by the trade and public as meaning that the
goods are the plaintiff's goods. (315 B-C]
7(11) In an infringement action, the plaintiff is not
required to prove the reputation of his mark. Further, under s.37
a registered mark is assignable and transmissible either with or
without goodwill of the business concerned while under s.38, an
unregistered trade mark is not assignable or transmissible except
in the three cases set out in s.38(2). [315 C-ll]
(8) As the registration of a trade mark confers valuable
rights upon the registered proprietor thereof, a person cannot
be permitted to register a trade mark when he has not used it in
relation to the goods in respect of which it sought to be registered or does not intend to use relation to such goods. [315 ~)
AMERICAN H.P.CORPN. v. MAC LABS.
275
llatt:'a case, (1898) 2 Cb.D 432, 436; s.c.15 R.P.C. 262, 266,
(1898) 2 Cb. D. 432 at pages 439-442, sub nmf111tt John Batt lo Co.
-v. Dmmett and another, (1899) A.C. 420; s.c. 16 R.P.C. 411
relied Ul'On•
(9) To get a trade mark registered without any intention to
use it in relation to any goods but merely to make money out of
it by selling to others the rif,ht to use it would be trafficking
in that trade mark. If there is no real trade connection between
the proprietor of the mark and the licensee or his goods, there
is room for the conclusion that the grant of the licence is a
trafficking in the mark. It is a question of fact and degree in
every
case whether , a
sufficient trade connection exists•
[316 A-B; 317 A-BJ
Re Allleric:an Greetinp Corp. 's Application, [1983) 2 All E.R.
609 & 619 [1984] l All E.R. 426, 433 relied upon.
(10) The intention to use a trade ma_rk sought
to
be
registered must be genuine and 1real and the fact that the mark
was thought to be something which some day might be useful would
not·amount to any definite and precise intention at the time of
registration to use that trade mark. The intention to use the
mark must exist at the date of the application for registration.
Section 46(l)(a) expressly speaks of "bona fide intention on the
part of the applicant for registration" which would mean
"at
the
date
when
such applicant makes
his
application for
registration.· [317 C-E)
In re Ducter's trade Mark (1928) Ch.l 405, 409 referred to.
(11) Intention is a state of mind. No person can make out
- the state of mind or any other person. None the leas courts are
often called upon for various purposes to determine the state of
a person's mind. The courts can only do oo by deducting the
existence of a particular state of mind from the facts of a case.
[317 H; 318 A]
(12) In the instant case, in order to ascertain the intention of the appellant at the date of filing of application for
registration the facts could be smunarised with reference to
three periods: (l) events which took place upto the date of the
application for registration, namely, August 18, 1958, (2) events
which happened between that date and the date of Application for
Rectification, namely April 10, 1961 and (3) events which
happened subsequently to April 10, 1961. [320 D-E)
A
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SUPREME COURT REPORTS
[1985] SUPP.3 s.c.R.
A
U(i) Prior to 1956, the appellant had acquired
a
substantial shareholding to the extent af 40 per cent in the Indian
Company. In 1956 the appellant introduced 'Dr is tan' tablets in
the American market and got the trade mark 'Dristan' registered
in the United States of America and in several. other countries, A
technical collaboration between the Appellant and the Indian
B
Company cmppenced froa Nov. 1, 1957, and an agreement in that
behalf was signed on May 16, 1958. In pursuance of the said
collaboration agreement the Indian Company manufactured and
markets several produced of the appellant. The appellant got
registered its trade marks J.n respect of such products and the
Indian Company was registered as the registered user in respect
of such trade marks. As early as December 1957, it was decided
c
that the Indian Company should introduce in the Indian market
nine new products of the appellant including 1Dristan' tablets,
On August 18, 1958, the appellant filed an application for registration of the trade mark 1Dristan' and the said trade mark was
duly registered on June 8, 1959. [320 F-ti; 321 A]
12(11) During the period between August 18, 1958, and the
D
date of the First Respondent 1 a Application for Rectification,
that is, April 10, 1961 the Indian Company applied for and
obtained a licence for the purchase of a Stokes Triple Layer
Machine for manufacturing 'Dristan' tablets and when the said
machine was received installed it at its Ghatkoper factory. It
also obtained from the appellant three units of 'Dristan' tablets
E
as samples and the manufacturing manual for the tablets. Further,
it applied to the Central Government under s.11 of the Industries
(Development and Regulation) Act, 1951, for a licence to manufacture 1Dristan' tablets which was granted to it. It also
applied for and obtained a licence to import certain ingredients
used in the manufacture of 'Dristan 1 tablets and imported such
F
ingredients. It further applied for and obtained from the
Director, Drugs Control Administration, State of Maharashtra,
permission to manufacture 'Dristan' tablets. The appellant also
filed a notice of opposition to the First Respondent's Application for registration of their mark 'Tristine'. [321 Ii; 322A-CJ
G
12(111) During the period subsequent to the First Respondent 1s Application for Rectification, that is subsequent to April
10, 1961, on October 18, 1961, the registered user agreement was
entered into between the appellant and the Indian Company. On
October 22, 1961 the 'Dristan' tablets were first marketed in
India by the Indian Company. On March 6, 1962, the appellant ana
H
the Indian Company jointly made en application to register the
Indian Company as a registered user of the trade mark 'Dristan'.
[322 C-E]
I
AMERICAN H.P.CORPN. V• MAC LABS.
277
l2(iv) The facts set out sbove clesrly show that esch of
them is sn integral link in a chain and that they cannot be
divided into three separate periods. This continuous chain of
events establishes beyond doubt
that the appellant had an
intention that the trade mark
1Dri.stan' should be used in
relation to the tablets in question by the manufacture and sale
of these tablets in India. [322 E-FJ
(13) The appellant's application for registration of the
trade mark 'Dristan' was made under s.14(1) of the 1940 Act and
was registered under the Act. Under s.14(1) only a person claiming to be the proprietor of a trade mark "used or proposed to be
used by him" could apply for registration of that trade mark. The
provisions of s.18(1) of the 1958 Act are identical. [323 F-G)
(14) If the 1940 Act did not contain a legal fiction similar
to that enacted in s.48(2) of the 1958 Act, the appellant's case
would fall to the ground because then at the dste of its application for registration of the said trade mark, its intention
would be not to use it itself but to use it through another. 'll1e
1940 Act, however; also made provisions with respect to registered users and created a similar legal fiction in s.39(2) of
that Act. [325 A-BJ
(15) The only difference between s.39(2) of the 1940 Act and
s.48(2) of the 1958 Act is that while under s.39(2) the legal
fiction crested by it applies "for any purpose for which such use
is material under this Act or any other Liw", under s.48(2) the
legal fiction applies "for the purposes of s.46 or for any other
purpose for which such use is material under this Act or any
other law". The addition of the words "for the purposes of s.46"
in s.48(2) does not make any difference but clarifies the scope
of the said legal fiction. Clause (a) of s.46(1) refers both to
bona fide intention on the part of the applicant for registratioD that the trade mark should be used in relation to those
goods by him• as also to bons fide use of the trade mark in
relation to those goods by liiiY" proprietor thereof for the time
being". It cannot possibly be that wheo s.48(2) expressly
provides that the permitted user of a trade mark by a registered
user is to be deemed to be user by the proprietor of the trade
mark for the purposes of s.46, the fiction is intended only to
apply to the use of the trade mark referred to in the second
condition of cl.(a) of s.46(1) and not to the use of that trade
mark referred to in the first condition of cl.(a). Under s.18(1),
V1 application for registration of a trade mark can only be made
A
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F
G
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B
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D
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F
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278
SUPREME COURT REPORTS
[1985J SUPP.3 s.c.R.
by a person who claims to be the proprietor of tbat trade mark.
Therefore, the words "applicant for registration" in cl.(a) of
8046(1) would mean "the person claiming to be the proprietor of
the trade mark who is the applicant for registration
of
that
trade mark", The first condition of cl.(a) would, therefore, reed
"that the trade mark Wiiii registered without any bona fide intention on the part of the person claiming to be the proprietor of
that trade mark 'Who has made the application for registration
that it should be used in relation to those goods by him.• So
read, there can be no difficulty in reeding the words "by him"
alao as "by a registered user". Similarly, the legal fiction in
s.48(2) can also be applied to s.18(1). S.18(1) in the light of
the legal fiction would read as •any person claiming to be the
proprietor of a trade mark w.ed or proposed to be used by him or
by a registered user". By reason of the provisions of s.39(2) of
the 1940 Act, s.14 of that Act should also be read in the S8r'I!
way. [325 E-11; 326 A-DJ
lut lad J)op1J1ngn Co. Ltd. v. Finsbury Borough Coomc11,
(1952) A.C, 109 & State of Bmlbay V• Pandunng Vinayak Oiepbalker
and Ore., [1953J s.c.a. 773 relied upon.
(16) lbe purposes for which the fiction hes been enacted are
set out in a.48(2). These purposes are the purposes of s.46 or
for any other purposes for which such use is material under the
1958 Act or any other law. To confine the purpose only to a part
of s.46 would be to substantially cut d0"'2 the operation of the
legsl fiction. Tbe purpose for whlch the legal fiction is to be
resorted to is to deem the permitted use of a trade mark, which
means the use of the trade mark by a registered user thereof, to
be the use by the proprietor of that trade mark. [327 A-BJ
(17) Section 17(1) of the Engliah Trade Marks Act, 1938 (l &
2 Ge<>, 6, c.22) sets out who can apply for registtation of a
trade mark and is in pari materia with s.18(1) of the 1958 Act.
Under a.17(4), the refusal by a Registrar to register the trade
mark is subject to appeal to the Board of Trade or to the Court
at the option of the applicant. If the appeal is to the Court,
there can be further appeal to the Court of Appeal and from there
to the Houae of Lords. Section 26 provides for removal of a trade
mark fraa the Register and is in pari materia with s.46 of the
1958 Act. Section 32 deals with rectifying the entries in the
Register and is analogous to a.56 of the 1958 Act. [327 E-F)
(18) Under s.87 of the Patents, Designs and Trade Marks Act,
1883 (46 & 47 Viet. c.57), any registered proprietor could grant
licences to use the mark subject to any equity. l'be 1883 Act in
AMERICAN H.P.CORPN. v. MAC LABS.
279
so far as it related to trade marks was repealed by the Trade
A
Marks Act, 1905 (5 F.dw. 7 c.15). The 1905 Act did not, however,
contain any power in the registered proprietor to grant licences.
'lhe English Act of 1938, however, introduced a system of official
approval for licences to use a trade 11Brk particularly by providing for registering a person other than the proprietor of the
trade mark as the registered user of the trade mark. [327 G-ii;
B
328 A]
(19) The High Court was unduly impressed by l'usay Galon!
'frllde Mark case and unnecessarily attached great importance to
it. The High Court was justified in relying upon that case by
referring to the case of Ashok a..mder llakhit Ltd., [1955] 2
C
s.c.a. 252 but the High Court overlooked that in Ashok Chander
llakhit's case the section of the 1940 Act which fell for interpretation was not in psri materia with the corresponding section
of the English Act of 1938 which had been judicially interpreted
by the courts in England. [332 E-G]
'I.be llegiatrar of Trade llarlul V• Asholt Chandra llakhit Ltd.,
[1955] 2 s.c.a. 252 referred to.
(20) In the absence of any binding authority of an Indian
Court on a particular point of law, English decisions in which
D
judgments were delivered by judges held in high repute can be
E
referred to as they are decisions of i:ourts of a country from
which Indian jurisprudence and a large part of Indian law is
derived, for they are authorities of high persusdve value to
which the court may legitimately turn for assistance; but whether
the rule laid down in any of these casea can be applied by Indian
courts must, however, be judged in the context of Indian laws and
legal procedure and the practical realities of litigation .in
F
India. [332 B; 333 A-BJ
romaol v. 011 and llatural Gas c..dsston, [1984 J 1 s.c.a.
526, 549, 567; s.c. [1984] Supp. s.c.c. 263, 280, 295 referred
to.
(21) The relevant proviaioDB relating to registered users
in the English Act and in the 1958 Act are materially different.
'1'he English Act crest es
two legal fictions. 'l'he first is
contained in s .28(2) which relates to the permitted .use of a
trade mark. That fiction is for the purpose of s.26 (which
corresponds to section 46 of tbe 1958 Act) and for any other
G
purpose for which such use is material under the E.nslish Act or
H
at common law. The second is contained in s.29(2) and relatee to
A
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280
SUPREME COURT REPORTS
[1985] SUPP.3 s.c.R.
intention on the part of an applicant for registration that a
trade mark should be used by him. The second fiction is for the
puq>oses of paragraph(a) of s.26(1) which corresponds to cl.(a)
of s.46(1) of the 1958 Act. The 1958 Act, however, contains only
one fiction. It is in s.48(2), which is in pari materia with
s.28(2) of the English Act. The omission from the 1958 Act of a
provision similar to that contained in s.29(2) of the English Act
does not make any difference if one were to see s.(2) in its
proper setting and context. The English Act does not prescribe,
just as the 1958 Act does not, any period of time from the date
of registration of a trade mark within which an application for
registering of a person as a registered user of that trade mark
should be made. Section 29(1) of the English Act, however,
provides that an application for registration of a trade mark can
be accooipanied by an application for the registration of a person
as a registered user of that trade mark, and if the tribunal is
satisfied that the proprietor of the trade m<lrk intends it to be
used by that person in relation to those goods and is also 1111tisfied that person will be registered 118 a registered user thereof
after the registration of the trade mark, it will not refuse to
register the l:rade mark.