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Petitioner: THE MONARCH COMPANY, INC. VS Respondent: THE SEVENUP COMPANY and another
Court Name: Supreme Court of Pakistan Judge(s): Muhammad Afzal Lone, Abdul Qadeer Chaudhry, Shafi-ur-Rehman Title: THE MONARCH COMPANY, INC. vs THE SEVENUP COMPANY and another Case No.: Civil Appeals Nos.91 and 92 of 1989 Date of Judgment:1993-01-21 Reported As: 1993 SCMR 758 Result: Appeals allowed
JUDGMENT
JUDGMENT ' SHAFIUR RAHMAN, J.--- Leave to appeal was granted to examine, inter alia, whether the appellant "had not previously used the trade mark in question and or that they had no bona fide intention to use it in future; whether, the High Court did not commit an error discoverable on the face of record when assuming that the agreement between the Pakistani Company and the petitioner was of 1966 - according to learned counsel it was of a date prior to the authorised user, of the trade mark by the Pakistani Company". 2. The factual background of the two appeals is that the appellant filed two applications on 3-11- 1966 in duplicate on "Form TM 1/2" for registration of the Trade Mark "Bubble Up" (Non-alcoholic beverage) in class 32. It claimed to be its manufacturer, trading as Bubble Up International Limited with business address as "Suite 217 La Arcada, Santa Barbara, California". It claimed that this trade mark was being used since 9-4-1965 in Pakistan by the appellant who claimed to be proprietor thereof. In the supporting affidavit Mr.Richard Ryan, President and a Director of Bubble Up International Limited made the following material disclosures in clauses 3 to 9, 13 and 14:- (3) My company was organized under the laws of the State of Illinois (U.SA.) on December 13, 1957; (4) My company is engaged in the business of manufacturing soft drink concentrates and the franchising of bottlers finished soft drinks for sale under its trade marks since its inception; (5) My company's predecessors adopted in or about October 17, 1917 the arbitrary and fanciful term "BUBBLE UP" as their trade mark for non-alcoholic beverages and has been continuously using since that date up to the present time; (6) The trade mark "BUBBLE UP" was the first to have been registered in the United States Patent Office;
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(7) The trade mark "BUBBLE UP" is registered in many countries of the world; (8) My company has signed Franchise Agreements with Messrs Pakistan Beverages Ltd., whose registered office is Momin Man7il, Jodia Bazar, Karachi (Pakistan); (9) The licensee has started the sale in Pakistan of non-alcoholic Beverages under my company's trade mark "BUBBLE UP" since April, 1964 and the sales are very large; (10) .......... (11) .......... (12) .......... (13) After registration in Pakistan of the said trade mark "BUBBLE UP" the licensee Messrs Pakistan Beverages Ltd. Will be registered as-Registered User by my company; (14) In my opinion the said trade mark identifies and distinguishes the nonalcoholic beverages sold under "BUBBLE UP" from similar goods sold under different trade marks and the said mark "BUBBLE UP" is entitled to registration." 3.- The contesting respondent instituted notice of opposition in both the matters. A large number of objections were taken to the registration including-- (i) non-compliance with provisions of section 14(1) of the Trade Marks Act; (ii) untrue statement with regard to user; (iii) applicant cannot claim to be proprietor of the words "BUBBLE UP" in Urdu; (iv) the mark is not adapted to distinguish either inherently or by reason of any alleged use of the same made prior to the date of the opposed application; (v) the mark is not a distinctive trade mark either separately or in combination and is not registrable under provisions of section 6; (vi) the mark is a colourable invitation of that used in respect of the opponent 7-Up drinks; (vii) its registration would amount to an infringement of the opponent company's registered trade mark and would be disentitled to protection in a Court of justice under section 8(a). 4. The affidavits in support of their respective cases were filed by the parties, and voluminous case- law was cited. The matter remained pending from 1966 to 1977 and was decided by the Deputy Registrar of Trade Marks by a consolidated judgment on 4-4-1978. The following fmdings need reproduction:-- "(i) Objection taken on the basis of subsection (1) of section 14 to the maintainability of the application for registration is not sustainable. ' Due to long, continuous and extensive use and publicity of the mark `Bubble Up' in Pakistan the mark, it become associated in the minds of the public in Pakistan and 'Bubble Up' has now acquired a secondary meaning. This mark by long usage in connection with applicant's goods, indicates that the goods in connection with which it is used are the goods of the applicant as distinguished from similar goods of other manufacturers and thus the mark has acquired a secondary signification or meaning indicative of origin. To be on more safe side, disclaimer of word 'Bubble' apart and away from 'Up' can be imposed, if at all necessary, I, therefore, hold that in view of the above discussion, the mark 'Bubble Up' is not hit by section 6(1) (d) of the Trade Marks Act, 1940. ' So the applicants are also entitled to registration of their "Bubble Up" under section 10(2) on the basis of their long, honest and concurrent user in Pakistan. ' The net result is that both the opposition failed under sections 6(1) (d), 8(a), 10(1) and objection 14(1) also failed and the same are dismissed in exercise of the discretionary power vested in me under section 14(1) of the Act." 5. Against this consolidation order two separate appeals were filed in the High Court which were disposed of by the common impugned judgment. The learned Judge recorded the following findings on a reappraisal of.The material on record:--
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"(i) In the affidavit dated 9-6-1967 filed before the Deputy Registrar, the -President and Director of the respondent company clearly stated that the Pakistani Company is producing the beverage under the Trade Mark 'Bubble Up' since April, 1964 while the Franchise Agreement between the Pakistani Company and respondent produced before the Deputy Registrar is dated 13-9-1966 and it makes no reference to any earlier agreement or arrangement between the parties. (ii) In another English decision in a trade mark case which is of a more recent origin reported as Pussy Glovre's case (1967 R.P.C. 265) the Court while interpreting the expression "by him" used in section 17(1) of the U.K. Trade Marks Act, 1938, observed that the words proposed to be used by him would ordinarily be taken to mean proposed to be used by the proprietor himself or by his servant or agent whose action would in law be regarded as his own, and not a proposed use by some one else merely under the control of proprietor. ' In view of the above discussion I am of the view that in the circumstances of present case the use and adoption of mark 'Bubble Up' by M/s. Pakistan Beverage Company (a. Pakistani Company) could not be considered as use of the said mark by respondent so as to entitle them to apply for registration of the mark 'Bubble Up' as the proprietor of the mark." 6. As regards the claim of the appellant that he proposed marketing it through prospective registered user the learned Judge heavily relied on Indian decision in Mac. Laboratories Private Ltd. v. American Home Products Corporation and another (AIR 1969 Cal. 342) holding that "in my humble view no such distinction in fact exists between the present case and the Mac Laboratories case. The provisions relating to registration of trade marks, their removal and the provisions for proposed use of trade mark by company to be formed are almost identical in both the Indian trade marks and Merchandise Act as well as Trade Marks Act, 1940. It may also be mentioned here that the concept of trafficking in the trade marks is also not foreign to the Act 1940 as section 41(3) of the Act enjoins on the Registrar to refuse an application for registration as registered user if it appears to him that such registration would facilitate trafficking in a trade mark. I am, therefore, of the view that the ratio laid down in Mac Laboratories' case is fully applicable to the case before me. In Mac Laboratories' case facts were that Trade Mark "Dristan" which was registered in favour of an American Company for Pharmaceutical Products was sought to be removed on the ground that the mark was registered without any bona fide intention on the part of American Company to use it in relation to goods in respect of which it was registered". 7. This case of registration of trade mark had a long pendency; about 12 years before the Registrar Trade Marks, about nine years in the High Court and about four years in this Court. It was earlier heard and the hearing concluded on 22-8-1991 but then the Bench hearing the appeal concluded as hereunder;-- "At this stage we feel that the point involved in this appeal is of great importance to international trade, and we should have heard this appeal at some length, as was done by the learned Single Judge and in other jurisdiction, but we heard it only for two half days. The learned Single Judge had heard the appeal, out of which this appeal has arisen, for six days, while a similar case was heard by the Supreme Court of India, as would appear from the Report, on seven dates. In order to save time, we had allowed the learned counsel to submit written arguments on .23-9-1991 but there is no endorsement on the written arguments that the learned counsel for the appellants has supplied copy of the same to the learned counsel for respondent No,1. Further, absence of any reply to the written arguments by the learned counsel for respondent No, 1 makes us believe that the learned counsel might not have received a copy of the same. ' Accordingly, if we take these into consideration, we will be condemning respondent No, 1 unheard on some of the cases and one law book, namely, "Naryanan on" Trade Marks and Passing Off' which is mentioned in the written arguments submitted by the learned counsel for the appellants and which was not cited at the time of hearing the appeal.
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' We would, therefore, fix this case for further hearing and we would humbly suggest that a larger Bench, at least of three Judges, may hear this case due to international importance of the point of law involved." ' It is in these circumstances that this appeal has been heard over again. 8. We do not propose to introduce the case of the respective parties by reproducing their asrguments and the case-law cited in support of it because this has been done both by the Registrar of the Trade Marks as well as by the High Court in the impugned judgment. What we propose doing is to formulate the points for determination in these appeals, to note the law on the subject and then discuss the principles, precedents, and the law governing these. The question for determination in these appeals are as follows:-- (i) Whether the use of the Trade Mark "BUBBLE UP" by Messrs Pakistan Beverages Ltd., during the period April, 1965 to November, 1966 can in law be said to be its use by the appellant? (ii) Whether the proposed use of the mark after registration through registered user disentitled the appellant to get the trade mark registered? 9. There are four feartures of the impugned judgment of the High Court which must be noted' because it has a very material bearing on its correctness and validity. The first of these is that there is a patent misreading of the record in so far as it was noted in the judgment that the licence/agreement was dated 13-9-1966 and that the Pakistani Company started using that trade mark for marketing its product from April, 1964. From this the Court concluded that the use of 'Bubble UP' by Pakistani Company was independent of this agreement/licence, was in its . Own right, disentitling the appellant to get it registered on the basis of its own past use. The actual fact is that agreement/licence is dated 13th day of April, 1964 and the use/exploitation thereunder was started by the Pakistani Company in April, 1965. But for this misreading of the record the conclusion drawn could not have been drawn. The second feature of the impugned judgment is that though the licence was the foundational document in the case and was mentioned time and again its various clauses did not receive that pointed attention of the Court which they deseved. We are reproducing hereunder some of the material clauses of it:-- "FRANCHISE AGREEMENT ' This agreement entered into at Peoria Illinois this 13th day of April, 1964, between Bubble Up International, Ltd., a corporation of the State of Illinois, United States of America, hereinafter called "Company" and Pakistan Beverage Company D/113, S.I.T.E. Manghopir Road, Karachi-16, whose principal place of business and office is at Karachi, Pakistan hereinafter called "Bottler". ' WITNESSETH: ' Whereas, the Bottler recoginzes that the Company has the sole and exclusive right to the use and assignment of such use of the valid Trade Mark "Bubble Up" in the hereinafter described Bottler's delivery territory, and is engaged in the business of selling and franchising "Bubble Up" concentrates, extracts, flavors, syrups, and beverages, sometimes hereinafter-called "flavoring merchandise"; and ' Whereas, further, the Bottler desires to obtain the exclusive rights, licence and franchise and be permiitted under the terms of this agreement to bottle and sell "Bubble Up" beverages in the territory hereinafter defined: 3. The Bottler will not add any ingredients, preservatives, or substitutes whatsoever to the Company's flavoring merchandise, or any completed syrup resulting therefrom. The Bottler will so bottle "Bubble Up" beverage that it confroms to the written standards and directions established by the Company and which is attached hereto and made a part hereof, and shall, upon request of the Company, send or provide it such samples as the Company may at any time request. The Company shall be the judge as to whether or not "Bubble Up" beverages bottled by the Bottler
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conform to the Company's standards, but in exercising such judgment, the Company will act in good faith and not capriciously. 4. The Bottler will not bottle, sell, manufacture or deliver, directly or indirectly, any other syrup or beverage which is similar to "Bubble UP" in name, taste or flavor. 5. The Bottler agrees to purchase only from the Company, or from manufacturers authorised by the Company to manufacture and sell the same, "Bubble Up" flavoring merchandise, concetrate, or any other article bearing the Trade Mark "Bubble Up." 6. ...... All "Bubble Up" labels shall be purchased by the Bottler from the Company or its authorized representatives and all "Bubble Up" bottles, crowns, labels and advertising materials shall in all respects be subejct to the approval of the Company and shall not be used for or in connection with the bottling of any other beverage whatsoever, either prior or subsequent to the termination hereof. 7. ...... 8. ...... 9. ...... 10. This contract shall in no respect constitute the Bottler the agent of the Company nor is the Bottler authorized to make any representations whatever either as to "Bubble Up" flavoring merchandise or as to the Company, which have not previously been authorized by the Company in writing. 11. 12. 13. 14. 15. 16. 17. ..... 18. The licence and franchise hereby granted is uncoupled with any interest. The relation of the parties hereto shall be solely that of vendor and vendee and under no circumstances shall the Bottler be deemed to be a partner with the Company or vice versa. 19. ... ' This Agreement shall be null and void and of no effect in the event Bottler fails to commence. Active and effective bottling and distribution of "Bubble Up" within six months from the date hereof." ' If these conditions had been kept in view, the Court may not have concluded that Pakistani Company had no connection with the appellant and that it was independently and in its own right using the mark. The third feature is that the definition of expression "trade mark" was not kept in view in appreciating the contents of the various advertisements sponsored by the appellant. In clause (1) of section 2 of the Trade. Marks Act, 1940, "trade mark" has been defined as "a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indication' of the identity of that person". The identity of the person was not necessary to be indicated and the absence of such indication could not lead to an inference as was drawn by the learned Judge in the following words:- "The distinguishing feature in Bostitcha's case was that the British concern was a distributing agent for the American concern. In the case. Before me the advertisements placed on record do not even obliquely refer the Pakistani Company as agent or distributer of any American Company." ' The fourth feature of the impugned judgment is that on the second point for determination the Court was substantially guided by Calcutta High Court decision in Mac. Laboratories' case. The
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learned counsel for the parties, it appears, failed to point out that this decision of the Calcutta High Court was overruled on all material points and the Supreme Court decision was reported in Dristan Trade Mark case (1986) 9 R.P.C. 161. 10. So far as the law governing the subject and the precedents are concerned notwithstanding massive amendments in the Trade Marks Act made in India in 1958, the provision with regard to the registering of trade marks, its use by a registered user and use by a prospective company remained the same in material particulars. So far as the British law is concerned, there was a material departure in so far as the provision with regard to "registered user" was concerned. This difference in law distinguishes the precedents on the subject cited from the British Courts. 11. The provisions which need reproduction are the following:- "Mark" has been defined in clause (f) of section 2 of the Trade Marks Act, 1940 as hereunder:- "'mark' includes a device, brand, heading, label, ticket, name, signature, word, letter or numeral or any combination thereof' "'Permitted use' has been defined in clause (g) ibid, as hereunder:-- "'Permitted use' means the use of a trade mark by a registered user thereof in relation to goods with which he is connected in the course of trade and in respect of which for the time being the trade mark remains registered and he is registered as a registered user, being use such as to comply with any conditions or restrictions to which his registration is subject ." "'Registered' has been defined in clause (i) ibid, as hereunder:- "'registered' (with its grammatical variations) means registered under this Act." "'Registered trade mark' has been defined in clause (j) ibid, as hereunder:- "'registered trade mark' means a trade mark which is, actually on the register". 'Registered user' has been defined in clause (k) ibid, as hereunder:- "registered user' means a person who is for the time being registered as such under section 41." "Trade mark" has been defined in clause (i) ibid, as hereunder:- "'trade mark' means a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indication of the identity of that person." Section 6 of the Trade Marks Act, 1940 under which the Opposition was filed provided as hereunder-, "6.Distinctiveness requisite for registration.- --(1) A trade mark shall not be registered unless it contains or consists of at least one of the following essential particulars, namely:-- (a) The name of the company, individual, or firm, represented in a special or particular manner; (b) the signature of the applicant for registration or some predecessor in his business; (c) one or more invented words; (d) one or more words having no direct reference to the character or quality of the goods, and not being according to its ordinary signification, a geographical name or surname or the name of a sect, caste or tribe in Pakistan; (e) any other distinctive mark, provided that a name, signature, or any word, other than such as fall within the descriptions in the above clauses, shall not be registrable except upon evidence of its distinctiveness. (2) For the purposes of this section, the expression "distinctive' means adapted, in relation to the goods in respect of which a trade mark is proposed to be registered, to distinguish goods with which the proprietor of the trade mark is or may be connected in the course of trade from goods in the case of which no such connection subsists, either generally or, where the trade mark is
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proposed to be registered subject to limitations, in relation to use within the extent of the registration. (3) In determining whether a trade mark is adapted to distinguish as aforesaid, the Tribunal may have regard to the extent which-- (a) the trade mark is inherently so adapted to distinguish, and (b) by reason of the use of the trade mark or of any other circumstances, the trade mark is in fact so adapted to distinguish: ' Provided that in the case of a trade mark which has been continuously used (either by the applicant for registration or by some predecessor in his business, and either in its original form or with additions or alterations not substantially affecting its identity) in relation to the same goods as those in relation to which registration is applied for, during a period from a date prior to the 25th day of February, 1937, to the date of application for registration, the Registrar shall not :fuse registration by reason only of the fact that the trade mark is not adapted to distinguish as aforesaid, and may accept evidence of acquired distinctiveness as entitling the trade mark to registration." ' The proviso was omitted by Ordinance No, XXVII of 1981 enforced on 8-7-1981 while the appeal was pending in the High Court. ' Section 14 ibid is in the following Words:- "14. Application for registration.---(1) Any person claiming to be the proprietor of a trade mark used or proposed to be used by him who is desirous of registering it shall apply in writing to the Registrar in the prescribed manner, and subject to the provisions of this Act, the Registrar may refuse the application or may accept it absolutely or subject to such amendments, modifications, conditions or limitations, if any, as he may think fit. (2) In the case of a refusal or conditional acceptance the Registrar shall, if required by the applicant, state in writing the grounds of his decision and the material used by him in arriving thereat. (3) The tribunal may at any time, whether before or after acceptance, correct any error in or in connection with the application, or may permit the applicant to amend his application upon such terms as it may think fit." Section 36 ibid is in the following words:- "36. Proposed use of trade mark by company to be formed. ---(1) No application for the registration of a trade mark in respect of any goods shall be refused, nor shall permission for such registration be withheld, on the ground only that it appears that the applicant does not use or propose to use the trade mark, if the Registrar is satisfied that a company is about to be formed and registered under the Companies Act, 1913 and that the applicant intends to assign the trade mark to that company with a view to the use thereof in relation to those goods by the company. (2) The tribunal may, in a case to which subsection (1) applies, require the applicant to give security for the costs of any proceedings relative to any opposition or appeal, and in default of such security being duly given may treat the application as abandoned. (3) Where in a case to which subsection (1) applies, a trade mark in respect of any goods is registered in the name of an applicant who relies on intention to assign to a company, then, unless within such period as may be prescribed, or within such further period not exceeding six months as the Registrar may, on application being made to him in the prescribed manner, allow, the company has been registered as the proprietor of the trade mark in respect of those goods, the registration shall cease to have effect in respect thereof at the expiration of that period, and the Registrar shall amend the register accordingly." ' Section 39 ibid is in the following words.--
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"39. Registered users,---(1) A person other than the proprietor of a trade…
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