R.G. Oswal Hosiery Industries vs Union Of India & Ors.
2010 Latest Caselaw 1547 Del

       IN THE HIGH COURT OF DELHI AT NEW DELHI

                               W.P.(C) No. 610 of 2010

       R.G.OSWAL HOSIERY INDUSTRIES              ..... Petitioner
                    Through: Mr. S.K. Bansal, Advocate.

                      versus

       UNION OF INDIA & ORS.                     ..... Respondents
                     Through: Mr. Atul Nanda and
                     Mr. Gaurav Gupta, Advocate for R-1/UOI.
                     Mr. Ajay Sahni with
                     Mr. Siddharth, Advocates for R-2.

        CORAM: JUSTICE S. MURALIDHAR

       1.      Whether Reporters of local papers may be
               allowed to see the order?                        No
       2.      To be referred to the Reporter or not?           Yes
       3.      Whether the order should be reported             Yes
               in Digest?

                                  ORDER

19.03.2010

W.P.(C) No. 610 of 2010 & CM No. 1298 of 2010 (for stay)

1. The Petitioner challenges an order dated 11th December 2009 passed

by the Intellectual Property Appellate Board („IPAB‟) allowing the

rectification application filed by the Respondent No.2 in respect of the

registration granted to the Petitioner for trade mark DOLLOR and the

label DOLLOR under Nos. 249986 and 291763 respectively in Class 25.

2. The Petitioner states that it is a partnership firm conducting business

under the name and style of M/s. R.G.Oswal Hosiery Industries engaged

in the business inter alia of manufacturing and marketing of socks,

hosiery articles, knitted articles for wear, readymade garments etc. The

Petitioner claims that it is the proprietor of the trademark/label DOLLOR W.P.(C) No. 610 of 2010 page 1 of 13 which it bonafidely and honestly adopted in the year 1966 in relation to

its goods and business. The Petitioner claims to be continuously and

uninterruptedly using the said trademark and label since the date of

adoption.

3. The Petitioner applied for registration of the wordmark DOLLOR

under No. 249986 in class 25 on 18th June 1968. It applied for

registration of the label DOLLOR No. 291763 in Class 25 on 31st

September 1973.

4. In para 13 of the writ petition, it has been stated that the Petitioner has

been keeping the registration renewed from time to time either by itself

or through its licensee/agent M/s. Kedia Knitwear, Delhi, the sole

proprietrix of which is Smt. Durga Devi Kedia. A licence user agreement

dated 1st May 1989 was entered into between the Petitioner and M/s.

Kedia Knitwear for a period of 21 years.

5. Pursuant to an order dated 1st February 2010 passed by this Court, the

Petitioner has filed an affidavit dated 8th March 2010 of Mr. Chaman Lal

Jain, one of the partners of the Petitioner. It is stated therein that the

initial registration of the trade mark DOLLOR under No. 249986 in class

25 which had been filed on 18th June 1968 was effective till 18th June

1975. The Petitioner filed an application for renewal for the period of

18th June 1975 to 18th June 1982 and then again for further periods from

18th June 1982 to 18th June 1989 and 18th June 1989 to 18th June 1996.

These renewals were advertised in the Trade Marks Journal.

W.P.(C) No. 610 of 2010 page 2 of 13

6. As far as the period after 18th June 1996 is concerned, an application

was filed by M/s. Kedia Knitwear for renewal of the registration under

No. 249986 for the period 18th June 1996 to 18th June 2003 and thereafter

again from 18th June 2003 to 18th June 2010.

7. It is stated that in the meanwhile, the aforementioned trade mark No.

249986 in Class 25 was wrongly shown to have been removed from the

Register and was notified in the Trademark Journal of 1st May 1990 and

that "the mistake crept in the Register was duly rectified after issuing the

renewal certificate of the Petitioner‟s aforementioned trademark in Class

25. It is not clear that as to how this mistake crept in and how it was

subsequently rectified.

8. Therefore as regards Trademark Application No. 249986 granted in

favour of the Petitioner, the renewal applications for the two periods

between 18th June 1996 to 18th June 2003 and 18th June 2003 to 18th June

2010 were filed, not by the Petitioner but by M/s. Kedia Knitwear.

9. As regards the registration of the trademark DOLLOR (label) under

No. 291763 in Class 25 the initial registration was effective till 31st

October 1980. Applications for renewal for the period 31st October 1980

to 31st October 1987 and 31st October 1987 to 31st October 1994 were

filed by the Petitioner. The said renewals were granted. For the period

31st October 1994 to 31st October 2001, the application for renewal was

filed by M/s. Kedia Knitwear. Thereafter, for the periods 31st October

2001 to 31st October 2008 and 31st October 2008 to 31st October 2014, W.P.(C) No. 610 of 2010 page 3 of 13 the applications for renewal were filed by the Petitioner. The renewals

have been granted.

10. Respondent No.2 claims to be using trademark/label DOLLAR since

1972. It was granted registrations under Nos. 410586 and 480223 in

class 25. The Petitioner claiming itself to be the registered owner of the

trademark DOLLOR along with Smt. Durga Devi Kedia sole proprietor

of M/s. Kedia Knitwear, filed Suit No. 2032 of 2000 against Respondent

No.2 herein alleging infringement of its registered trademark. The

Petitioner‟s case was that it has been continuously using the registered

trademark DOLLOR either by itself or through its licencee, M/s. Kedia

Knitwear. Respondent No.2 resisted the suit stating that although the

Petitioner herein had obtained registration of the trademark DOLLOR, it

never used DOLLOR in respect of the goods in question. The user

licence agreement dated 1st May 1989 between the Petitioner and M/s.

Kedia Knitwear was termed as a false and a fabricated document.

11.1 Respondent No. 2, on 23rd November 2001 filed a petition under

Sections 46/56/107 of the Trade & Merchandise Marks Act, 1958 („TM

Act, 1958‟) for removal of the marks registered in MS.249986 and

291763 in Class 25 in the name of the Petitioner. The grounds urged,

inter alia, were as under:

(a) The Petitioner had not used the said trademarks bonafide

in relation to the goods claimed for a period of more than 5

years prior to the filing of the rectification application.

(b) The trademark under No. 249986 having lapsed for non-

W.P.(C) No. 610 of 2010 page 4 of 13 renewal and having been removed from the Trademark

Journal no. 982 dated 1st May 1990 could not be renewed

under the TM Act, 1958.

(c) The Petitioner herein had never filed an application for

renewal of the registered trademark No. 249986 and the

renewal filed by M/s. Kedia Knitwear was void ab initio.

(d) To the knowledge of the Petitioner, M/s. Kedia Knitwear

was claiming itself to be the proprietor of mark in the public

notices. On account of the conflicting proprietary claims in

respect of the Petitioner on one hand and M/s. Kedia

Knitwear on the other, the continuation of its entry in the

Register of Trade Marks was bad in law.

(e) The renewal of the marks No. 249986 and 291763 in

class 25 was illegal and ultra vires the TM Act, 1958 as

neither the renewal fee nor renewal was filed in time.

Further the application for renewal was not filed by the

registered proprietor of the trademark and it was accordingly

liable to be struck off of the Register.

(f) Even as regards registration No. 291763 M/s. Kedia

Knitwear was claiming itself to be the proprietor of the said

trademark in the public notices and, therefore, there were a

conflicting claims as regards the ownership of the said

marks.

11.2 The Petitioner filed a reply to the said application. It is denied that

the registration was bad on the ground that the Petitioner herein did not W.P.(C) No. 610 of 2010 page 5 of 13 file the application for renewal. It was asserted that the application for

renewal of the Mark No. 249986 was "filed by a competent and

authorised person". It was maintained that M/s. Kedia Knitwear was a

licencee of the Petitioner and that in the public notices Kedia Knitwear

had made "no claim in instant proprietary rights and consequentially

there was no conflict of rights."

12. A rejoinder was also filed by the Respondent No. 2 to the above reply

of the Petitioner in the rectification application.

13. The IPAB agreed with the contention of the Respondent No.2 that an

application for renewal of a registered trademark could only be made by

the registered proprietor of the said mark and not by the licencee of the

registered proprietor. Inasmuch as the application for renewal in respect

of the registered Mark No. 249986 for the period 18th June 1996 to 18th

June 2003 and thereafter from 18th June 2003 to 18th June 2010 was filed

by M/s. Kedia Knitwear and not the Petitioner, no such renewal could

have been granted. The renewal of Registration No. 291763 for renewal

for the period 31st October 1994 to 31st October 2001 was in the

application has been filed by M/s. Kedia Knitwear. It was held that an

application for renewal made by a licencee of a registered proprietor

could not be entertained and the renewal of registration in such

circumstances ought to be declared as not valid.

14. This Court has heard the submissions of Mr. S.K. Bansal, learned W.P.(C) No. 610 of 2010 page 6 of 13 counsel appearing for the Petitioner and Mr. Ajay Sahni, learned counsel

for Respondent No. 2.

15. Mr. Bansal submits that the IPAB fell into error in holding that an

application for renewal had to be filed only by the registered proprietor.

He submits that although Section 25(2) of the TM Act, 1958 read with

Rules 66 and 67 of the Trade & Merchandise Marks Rule, 1959 (TM

Rules, 1959) envisage an application for renewal "made by the

registered proprietor of a trademark" permit a registered user or a

licencee of a trademark can act on behalf of the registered proprietor. In

particular, he refers to Section 48 of the TM Act, 1958 which states that a

person other than the registered proprietor of a trademark may be

registered as a registered user. In response to a query whether in terms of

Section 49 of the TM Act 1958 M/s. Kedia Knitwear has been a

registered user of the marks, in the instant case, Mr. Bansal answered in

the negative but added that in view of the decision of the Supreme court

in Cycle Corporation of India Ltd. v. T.I. Raleigh Industries Pvt. Ltd.

AIR 1996 SC 3295 even an unregistered licencee could act on behalf of

the registered proprietor. He also placed reliance on the judgment of the

Supreme Court in American Home Products Corporation v. Mac

Laboratories Pvt. Ltd. AIR 1986 SC 137 and the decision of this Court in

Thukral Mechanical Works v. Nitin Machine Tools P. Ltd. 1998 PTC

(18). He also referred to Rule 63(2) of the Trade Marks Rules, 2002

(„TM Rules, 2002‟) which states that an application for renewal may be

filed by an agent of the registered proprietor. Finally, it was submitted

that the filing of an application for renewal by M/s. Kedia Knitwear on W.P.(C) No. 610 of 2010 page 7 of 13 one occasion in respect of renewal of Registration No. 291763, and on

two occasions in respect of the renewal of Registration No. 249986 can at

the best be considered to be irregularity and not an illegality. For such

irregularity, the Petitioner should not be punished with the extreme

punishment of removal of the marks themselves. He submits that this

shows that it is not an invariable rule that the application for renewal had

to be filed only by the registered proprietor.

16. Mr. Ajay Sahni, learned counsel appearing for Respondent No.2

points out that the documents filed by the Petitioner before the IPAB

themselves falsified the case being set up. Referring to the licence

agreement dated 1st May 1989 purportedly entered into between the

Petitioner and M/s. Kedia Knitwear, he states that in terms of Clause 2(b)

thereof M/s. Kedia Knitwear could use trademark DOLLOR and

DOLLOR label "only by way of permitted use". Nevertheless, two

caution notices were published by Mr. Shravan Kumar Bansal, Advocate

on behalf of M/s. Kedia Knitwear in which it was claimed that "our

clients M/s. Kedia Knitwear, 355, Teliwara, Delhi-6 are the Registered

Proprietors of the Trade Mark "DOLLOR" in respect of the goods in

Class-25" and further that "the said trademark is registered under No.

291763 in respect of socks (for wear) and hosiery in Class-25. The said

trademark is also registered under No. 291763 in respect of hosiery,

knitted articles for wear, readymade garments..." This was published in

the Hosiery Times of 9th October 1992 and again repeated in the 25th

October 1992 issue of the Hosiery Report Weekly.

W.P.(C) No. 610 of 2010 page 8 of 13

17. It is pointed out that a perusal of the applications filed for renewal of

both registrations 249986 and 291763 in Form 12 showed that M/s.

Kedia Knitwear projected itself as the registered proprietor of the said

marks. There was no provision in the TM Act, 1958 or TM Rules, 1959

for a licencee to file such a renewal application. Mr. Sahni, points out

that even under Rule 63(3) of the TM Rules 2002 where the application

for renewal is not by the proprietor, an affidavit will have to be shown to

demonstrate "continuity of title" from the registered proprietor in whose

name the last renewal was effected "to the present owner along with the

supporting chain of documents." He submits that since no renewal could

have been granted of the aforesaid registered marks at the instance of

M/s. Kedia Knitwear, the IPAB was right in holding that the said marks

ought to be removed since all subsequent renewals could not validate the

renewal of the registrations which ought not to have been granted in the

first place.

18. In order to appreciate the above submission, a reference may be made

first to Section 25(2) of the TM Act, 1958 which requires the application

for renewal of registration to be made "by the registered proprietor of a

trademark." Consistent with that requirement, Rule 66 of the TM Rules

1959 requires "an application for the renewal of registration of the mark

to be made on Form TM-12" which in turn reads "I (or We).....hereby

leave the prescribed fee ...for renewal of registration of the Trademark

No.... in class..." Against the words (I or we) there is a footnote which

reads "insert name and address of the registered proprietor." Therefore, it

is plain that at least till the time of coming into force of the TM Act, 1999 W.P.(C) No. 610 of 2010 page 9 of 13 and the TM Rules, 2002 the procedure that had to be followed required

the application for renewal to be made only by the registered proprietor

of a trademark.

19. It may be noticed here that although Section 48 of the TM Act, 1958

recognises a registered user of a trademark, as distinct from the registered

proprietor, it does not help the Petitioner in the instant case. Admittedly,

the procedure required to be followed under Section 49 for "registration

as registered user" was not followed in the instant case. Therefore M/s.

Kedia Knitwear was not a "registered user" in terms of Section 48 of the

TM Act, 1958. On the other hand, the applications made by M/s. Kedia

Knitwear to the trademarks registry for renewal of the aforementioned

marks in Form TM-12 shows that M/s. Kedia Knitwear held itself out to

be the registered proprietor of the marks. The application dated 5th

January 1995 for renewal of registration of trademark No. 249986 in

class 25 states "We M/s. Kedia Knitwear, 355, Teliwara, Delhi-6..." and

the application has been filed by S.K. Bansal, Advocate. Likewise, the

application in respect of the renewal of Trademark No. 2491763 dated

31st August 1994 in TM-12 reads the same. Therefore when M/s. Kedia

Knitwear filed the above applications, the Trademarks Registry perhaps

proceeded on the footing that they were the registered proprietors of the

marks. There is no indication anywhere in the said two forms that M/s.

Kedia Knitwear is a licencee of the Petitioner in terms of the licence user

agreement dated 1st May 1989 and that in view of such arrangement, M/s.

Kedia Knitwear was authorised to act on behalf of the Petitioner and

apply for renewal of registrations.

W.P.(C) No. 610 of 2010 page 10 of 13

20. The inescapable conclusion is that M/s. Kedia Knitwear made a false

statement before the Trade Marks Registry that it was the registered

proprietor of the marks, when it obviously was not. Therefore, the

renewal of the trademarks granted on that basis clearly stood vitiated.

Such renewals simply cannot be permitted in the eye of law.

21. Consequently, the Petitioner cannot take advantage of the observation

of the Supreme Court in Cycle Corporation of India Ltd. where in para

12, the Supreme Court held that "even an unregistered licensee, so long

as there is unbroken connection in the course of the trade between the

licensor and the passing of licensee‟s goods under the trade mark, there

would be sufficient connection in the course of the trade between the

proprietor and bonafide user of the trade mark by unregistered user." If

the Petitioner and M/s. Kedia Knitwear had been forthright and disclosed

the true facts about their inter se relationship in terms of the licence

agreement dated 1st May 1989, the genuineness of which is doubted by

Respondent No.2, then it would have become necessary to examine if the

Trade Marks Registry was required to enquire into the question whether

such relationship of licensor and licencee permitted a licencee to apply

for renewal of registration for and on behalf of a licensor. However,

since no such disclosure was made, the Trade Marks Registry was not

under any obligation in law to entertain an application for renewal filed

by M/s. Kedia Knitwear which was not the registered proprietor of the

trademarks.

22. Even in terms of the Rules 63(2) and (3) of the TM Rules 2002, an W.P.(C) No. 610 of 2010 page 11 of 13 application for renewal has to essentially be made by the registered

proprietor of the trademark. Rule 63(3) requires that if the applicant for

renewal is not the registered proprietor then an affidavit will have to be

filed "along with supporting chain of documents," by the subsequent

owner "to show continuity of title from the registered proprietor to the

present owner." This also does not therefore permit a mere licencee of a

registered proprietor to apply for renewal. The word "agent" used in

Rule 63(2) has to be understood in terms of Section 145 of the TM Act,

1999 which defines an agent either to be a legal practitioner or a

trademarks agent or a person in the employment of the principal. Here

again the question of a licencee of a registered proprietor applying for

renewal of registrations does not arise as a „licencee‟ is not an „agent‟.

23. Therefore the legislative intent even under the new regime brought

out by the TM Act, 1999 and the TM Rules, 2002 is that an application

for the renewal of the registration of a trademark can be made only by a

registered proprietor and not by a licencee of such registered proprietor.

24. This Court is not able to accept the submission of learned counsel for

the Petitioner that what has happened in this case is a mere irregularity.

The renewal of registrations in respect of both marks on the basis of

applications of M/s. Kedia Knitwear stood vitiated since M/s. Kedia

Knitwear has made a false submission in the applications that they were

not in fact the registered proprietors. By inserting its name in the space

in TM-12 following the letter "We" where the name of the registered

proprietor had to be inserted, M/s. Kedia knitwear held out that they were W.P.(C) No. 610 of 2010 page 12 of 13 in fact the registered proprietors. The subsequent renewals thereafter,

even if made on the basis of applications filed by the Petitioner itself,

cannot cure the illegality of the earlier renewals. Consequently, this Court

finds no reason to interfere with the impugned order of the IPAB.

25. The writ and the application are dismissed.

S. MURALIDHAR, J.

MARCH 19, 2010
dn




W.P.(C) No. 610 of 2010                                        page 13 of 13