IMPORTANT POINT
In the context of Section 46(1)(a) of the Trade Marks Act, an intention to use does not necessarily mean that the proprietor must show the marketing of the goods under the trademark.

Headnote:Trade and Merchandise Act-Section 46-Rectification of Register of Trademarks-Application for removal of trademarks which were registered in Hardie s name since 1946-Trademarks consist of words Spartan and Spartan Velox and a rear picture of upper body of a helmeted warrior carrying a shield and spear-Registration which was granted in respect of trademarks in Australia and New Zealand in 1926 and 1927 continues till today-Original trademarks have been in use in respect of paints and lacquers and other surface coatings-Collaboration agreement between Hardie and Addisons, respondent in 1946 for use of trademark in India-From 1946 to 1971 Addisons was using the trademark first as chief agent of Hardie and then under registered users agreement-Hardie retained its rights over trademarks-Addisons disassociated themselves from use of trademarks subsequent to 1971-Hardie s attempts to appoint Hansa as registered user of trademark in India-Special circumstances for non user-Rectification application held liable to be dismissed.
       Held : Before the High Court or the Registrar direct the removal of the registered trademarks they must be satisfied in respect of the following :
        (1) That the application is by a person aggrieved ;
        (2) That the trade mark has not been used by the proprietor for continuous period of at least five years and one month prior to the date of the application;
        (3) There were no special circumstances which affected the use of the trade mark during this period by the proprietor.
       The onus to establish the first two conditions obviously lies with the applicant, whereas the burden of proving the existence of special circumstances is on the proprietor of the trade marks. These conditions are not to be cumulatively proved but established seriatim. There is no question of the third condition being established unless the second one has already been proved and there is no question of the second one even being considered unless the High Court or the Registrar is satisfied as to the locus standi of the applicant. (Paras 25 and 26)
       Under Section 46(1)(b) of the Act an application for removal of a registered trademark will be allowed only if a continuous period of five years or longer has elapsed upto the date of one month prior to the date of the application during which there was no bona fide use by the proprietor of the trademark sought to be removed. Since Addisons applications for rectification were filed on 30th May, 1977, the relevant period for consideration of the question of non-use is from 30th April, 1972 to 30th April, 1977. (Para 34)
       Evidence, which was not disbelieved by any of the fora below, negates Hardies alleged intention to abandon the use of the trademarks. There was as such no "absolute non-user" of the trademarks by Hardie during the period of five years and one month prior to the applications for rectification. (Para 52)
       We cannot ignore the fundamental fact that what Hardie and Addisons had been engaged in together was the introduction and sale in the Indian market of the paints and lacquers prepared according to Hardie s preparation and under Hardie s trademark. In this background, where, by legal fiction atleast Hardie had used the trademarks from 1946 to 1961, it would be a legally insupportable proposition if we were to hold that the names Spartan and Spartan Velox were associated with Addisons and not with Hardie. Therefore when the applications for rectification were made, there was nothing in law to associate Addisons with the trademarks in question. This background coupled with Hardie s attempts to appoint Hansa as the registered user of the trademark in India must be kept in sight while considering the plausibility of the defence of special circumstances under the provisions of Section 46(3) of the Act. (Para 64)
       Hardie had brought on record the Import Trade Control Policies for the relevant years. We have considered the same and it is quite clear that paints, distempers, varnishes and lacquers could be imported only for use by actual users i.e. by manufacturers or producers of the paints etc. in India. Hardie had no such factory. There was in the circumstances no question of Hardie importing any paints and lacquers manufactured by it outside India into the country. There was a second restriction under the Import Control Policies even on actual users who imported paint for their own use. They had to use the imported goods for producing goods as specified only for export. The intention of the policy clearly was to keep the domestic market for the domestic producers of paints and lacquers. Concerns like Hardie could not, without making an enormous investment by setting up a factory, import the goods. In the circumstance, for Buttress to have said that it was not economically possible for Hardie to itself put its manufactured goods in the market immediately, cannot be taken as being a circumstance which was peculiar to Hardie alone. It was a circumstance which was generally applicable to all foreign manufacturers of paints and lacquers. Therefore, the conclusion of the Joint Registrar and the High Court that there were no special circumstances in the trade which justified the alleged non-user for the period in question was wrong. (Paras 65 and 66)

JUDGMENT

Ruma Pal, J.-The trademarks which are the subject matter of dispute in these appeals were invented by James Hardie and Company Private Ltd., the predecessor in interest of the first appellant (who will be referred to as Hardie). The trademarks consist of the words Spartan and Spartan Velox and a rear picture of the upper body of a helmeted warrior carrying a shield and spear (which will be referred to hereafter as the Hardie device). Registration which was granted in respect of the trademarks in Australia and New Zealand in 1926 and 1927 continues till today. The original trademarks as well as their modified forms, which were also subsequently registered, have been in use by Hardie or its predecessor in interest in respect of paints and lacquers and other surface coatings since that date.

2. It is the case of Hardie that it also wanted to commence business in India and to this end took steps to have the words "Spartan" and "Spartan Velox" registered in this country as far back as in 1940. The words were entered in the Register of Trade Marks at Calcutta in Hardie s name. The registration was valid for what was then undivided India and other South Asian countries.

3. On 6th November, 1946, a collaboration agreement was entered into between Hardie and the respondent (who will be described as Addisons) for a period of 20 years under which Addisons was to be Hardie s "Chief agent" in India and other named territories for selling surface coatings supplied by Hardie. The agreement also envisaged Addisons being the registered user of the trademarks during the period of the agreement and also the setting up of a factory by Addisons at Madras to manufacture the surface coatings according to Hardie s formulae. Addisons undertook that all formulae and technical information which may be supplied to it by Hardie would be treated as strictly confidential.

4. Pursuant to the collaboration agreement, between 1946 to 1949, Hardie s products were marketed in India through Addisons under Hardie s registered trademarks and device. By 1948 Addisons had set up its own factory at Chennai for manufacturing paints and lacquers and other surface coatings with the technical know-how supplied by Hardie to Addisons. The products were then sold by Addisons under the trade mark and device of Hardie for which Addisons paid Hardie royalty at agreed rates. The registered-user agreement between Hardie and Addisons was executed on 11th July 1963. Apart from the clauses which ensured Hardie s strict supervision over the quality of the surface coatings manufactured by Addisons, the agreement specified :

"The said trade marks shall not be used in conjunction with or in close juxtaposition to any other trade mark and shall at all times be so described as clearly to indicate that they are the trade marks of the Proprietors and that they are being used by the Users only by way of permitted use."

5. This agreement also contained a clause giving Addisons the option to acquire Hardie s rights in the trade marks for a consideration calculated on the basis of the royalties payable for three years as mentioned in the collaboration agreement. The registered user agreement was initially for a period of three years and was operative upto 31st August, 1968.

6. In 1967, Hardie had agreed to assign its rights in the trademarks to Addisons for a sum payable in pound sterling. The Reserve Bank of India allegedly refused permission to Addisons to remit the amount. Whatever the reason, it is not in dispute that the consideration was not paid. One of the disputes raised in these appeals relates to the effect of this agreement. To return to the narration of facts. In anticipation of the assignment the Registered User s agreement was cancelled on 31st August, 1968. However since the consideration was not paid and the assignment did not come through, Hardie requested Addisons to discontinue the use of Hardie s trademarks. Correspondence was exchanged between the parties. Addisons r

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2003 Supreme(SC) 891

IMPORTANT POINTIn the context of Section 46(1)(a) of the Trade Marks Act, an intention to use does not necessarily mean that the proprietor must show the marketing of the goods under the trademark.

Cases Referred (2)

IMPORTANT POINT
In the context of Section 46(1)(a) of the Trade Marks Act, an intention to use does not necessarily mean that the proprietor must show the marketing of the goods under the trademark.