1996 Supreme(SC) 969

1996(5) Supreme 246
SUPREME COURT OF INDIA
K. Ramaswamy, Faizan Uddin and G.B. Pattanaik, JJ.
Cycle Corporation of India Ltd. -Appellant
versus
T.I. Raleigh Industries Pvt. Ltd. & Ors. -Respondents
Civil Appeal No. 8266 of 1966
(Arising out of SLP(C) No.3370 of 1995)
Decided on 10-5-1996

IMPORTANT POINT
There must be real trade connection between the proprietor of the trade and licensee of the goods and the intention to use the trade mark must exist at the date of the application for registration of the trade mark and such intention must be genuine and bona fide and continue to subsist in order to disprove the charge of trafficking in trade mark.

Headnote:Trade and Merchandise Market Act, 1958-Section 46(1)(b)-Removal from register and imposition of limitations on ground of non-use -Application for rectification-Permitted use of trade mark-It should be either by registered proprietor of trade mark or a person other than registered proprietor registered u/s 48(1)-Appellant entered into an agreement with S, a permitted user and used trade mark till 1976 and thereafter by registered user-Till date of filing of application apellant used trade mark in pasing off bicycles under trade mark of respondent--Whether appellant must be deemed to be bona fide user of trade mark, though there was no agreement nor was it registered u/s 48(1)?-(Yes)-Sub-section (3) of Section 46 not attracted to facts in this case.

       Held : That the appellant was a bona fide user of the trade mark of the respondent in passing off the bicycles under the trade mark of the respondent who, admittedly, is a registered proprietor. It is true, as held by this Court, that 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 it to others, the right to use it as a commodity would be trafficking in that trade mark. It requires to be prevented and prohibited. The Court would not lend assistance to such registered proprietors of the trade mark. There must be real trade connection between the proprietor of the trade and licensee of the goods and the intention to use the trade mark must exist at the date of the application for registration of trade mark and such intention must be genuine and bona fide and continue to subsist in order to disprove the charge of trafficking in trade mark. It is a question of fact in every case. The question is : whether the trade connection exists to dispel the charge of trafficking in the trade mark? (Para 9)

       It is seen that preceding the nationalisation of the cycle manufacturing industry under the IDR Act, the respondent had a collaboration agreement with Sen Raliegh who was a registered user under Section 48. From him, the appellant came to succeed by statutory operation. It was, therefore, not a case of getting the trade mark registered under the Predecessor Act and continuing under the Act for trafficking of the trade mark. It is true that under Section 48(1) either the registered proprietor or a permitted person is required to register as permitted user. The benefit of Section 46 would be available during the period for which the agreement registered and user continued in furtherence thereof. It appears that even an unregistered licensee, so long as there is unbroken connection in the course of the trade between the licensor and the passing off licensee s good under the trade mark, there would be sufficient connection in the course of the trade between the proprietor and bona fide user of the trade mark by unregistered user. It must, therefore, be held that though the deemed presumption under sub-section (2) of Section 48 is referable to the permitted user or the registered user and it does not extend to unregistered permitted user, the connecting link of passing off the goods between the licensor s trade mark and the licensee should bona fide be with the permission or consent which may be express or implied by long course of dealings. It would connect the registered proprietor and the user of the trade mark by the unregistered licensee. The appellant must be presumed by course of conduct that he is bona fide user for the purpose of Section 46(1)(b). (Para 10)

       Further held : It must be shown that the non-use of the trade mark is due to special circumstances of the trade and not due to some other cause which would have operated, whether the special circumstances had arisen or not. Although the special circumstances of trade taken by themselves would have prevented the use of the trade mark. If the non-user was, in fact, due to some other circumstances and would have occured whether the circumstances had followed or not, sub-section (3) would not apply. It must, therefore, be duty of the registered proprietor to show that non-user was strictly due to the special circumstances of trade and not of any intention on the part of the registered proprietor not to use the trade mark during the relevant period. (Para 12)

       Though there was a ban on import of the Raleigh cycles manufactured outside India and passed off under the registered mark of the respondents as a registered proprietor, the circumstances do not attract sub-section (3) of Section 46 to relieve the respondents to establish non-user, but on the facts of this case, we have the admitted position that Sen Raleigh, admittedly, was a registered user through which the appellant had bona fide used the registered trade mark of the registered proprietor. There is no discontinuance or non-use of the trade mark by the respondent to establish the special circumstances in this case. It is also not necessary to go into the question whether the application filed by the appellant under Section 48(1) and its pendency would be a special circumstance in favour of the respondent. Suffice it to hold that sub-section (3) of Section 46 is not attracted to the facts in this case. (Para 13)