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Official Citation: 1987 SCMR 1090
Court / Jurisdiction: Supreme Court of Pakistan
Year of Decision: 1986
Decision Date: 1986-12-31
This judicial decision was delivered by the Supreme Court of Pakistan on 1986-12-31. The matter involves proceedings between Petitioner and Respondent, officially reported as 1987 SCMR 1090. The court reviewed applicable Pakistani statutes, procedural requirements, and governing case-law authorities. The full text below contains the complete facts, arguments, and legal reasoning rendered by the honorable bench.
Case cited as 1987 SCMR 1090
Court Name: Supreme Court of Pakistan Judge(s):Nasim Hasan Shah, Ali Hussain Qazilbash, Dr. Javed Iqbal, Muhammad
JUDGMENT
Reported As: 1987 SCMR 1090 Result: Order accordingly Judgment JUDGMENT SHAFIUR RAHMAN, J. -- Three connected civil appeals, involving the questions of Registration of Trade Mark and the grant of an interim injunction have, by leave of the Court, come up for disposal. Two of these (C.A. 293/86 and C.A. 294/86) are directed against the judgment of the Sind High Court dated 24-12-1985 in two separate appeals under section 76 of the Trade Marks Act, 1940 (hereinafter referred to as the Act) whereby it held that these appeals "should have been filed before the High Court of Lahore which will have jurisdiction in the matter". The memo. Of appeals were returned for presentation before the proper Court. The third appeal (C.A. 63/87) is directed against the order of the Lahore High Court, Rawalpindi Bench dated 28-1-1987 whereby it finally modified the interim injunction order passed by the District Judge, Rawalpindi, on 2-12-1986. The parties involved in the litigation are Messrs TABAQ Restaurant, Lahore (hereinafter referred to as TABAQ Lahore) and Messrs TABAQ Restaurant, Rawalpindi (hereinafter referred to as TABAQ, Rawalpindi). On 26-6-1982 TABAQ, Lahore filed an application before Registrar of Trade Marks, Karachi, for the registration of its Trade Mark in class 30 (Fourth Schedule of Revised 1963 Rules) in respect of "Food Products, Churgha, Steam Roast, Mutton Legs, Quail, Partridge, Seikh Kabab, Full Bukra (Goat) Roast, Tikka, Ice Cream, all cooked Pakistani dishes, Saltish and sweet, Karahi Tikkas and Roasted Chicken". The Trade Mark applied for registration consisted of as its most essential and dominating feature the word TABAQ and the device of a COCK. The claim to the use of this trade mark as from
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July 1976 was made. On 9-8-1982 an application was moved before the Registrar of Trade Marks seeking change of class from No. 30 to No. 29 which was allowed on deleting the items of Ice Cream and Sweet. The applicant next applied for on 12-8-1982 and obtained on 30-11-1982 certified copy of the pending application for filing a suit against the person who was copying the mark. The applicant claimed a sale of Rs.1.84 million (Approx.) in 1981-82 and to have paid excise duty of Rs.0.27 million (Approx.) on it and to have spent Rs.25,000 over the publicity in respect of the trade mark. This application for registration of the Trade Mark by TABAQ Lahore was advertised under section 15 (1) of the Act. TABAQ, Rawalpindi, filed an objection to it on 25-9-1983 on the ground that it has been carrying on its business in the name of TABAQ since 1982 and had also applied in January 1983 for the registration of its trade mark for the territories of Rawalpindi and Islamabad Divisions. The request made in the objection petition was expressed somewhat confusingly as follows:- "In the circumstances mentioned above and others and in the exercise of the discretionary powers vested with the Registrar of Trade Marks, is requested to refuse to register the trade mark of Application No.77309 of Class-29 for territory extending Lahore Division and its neighbourhood, wherein TABAQ of Lahore carry on their business. In no case, this mark should be allowed registration covering territorial limits of Rawalpindi and Islamabad divisions where opponents carry on their well-established business." The application of TABAQ, Rawalpindi, for registration of the Trade Mark was opposed by TABAQ, Lahore. In this manner, the two applications for registration of the Trade Mark and an objection to each came up and were disposed of by the Deputy Registrar of Trade Marks Karachi on 3-6-1985. The application filed by TABAQ, Lahore for registration of the Trade Mark (No.77309 in Class 29) and its objection (No.143/83) to registration of Trade Mark filed by TABAQ, Rawalpindi were allowed. The application of TABAQ Rawalpindi for registration of its Trade Make (No. 78615 in Class 29) and its objection (No. 22/84) to the registration of the Trade Mark of TABAQ Lahore were dismissed. TABAQ, Rawalpindi, filed two appeals, one against the rejection of its application for registration of Trade Mark, and the other against the dismissal of its objection to registration of Trade Mark of TABAQ Lahore. While these proceedings for registration of the trade marks were pending before the Registrar, Trade Marks, TABAQ Lahore, filed a civil suit on 16-12-1982 before District Judge, Lahore, claiming a permanent injunction and rendition of accounts, against TABAQ Rawalpindi. TABAQ Lahore made the following averments/claims in the plaint- "(i) The plaintiffs' products are supplied by them under their own trade mark 'Tabaq' which enjoys distinctive identity, recognition and reputation all over the country." "(ii) The plaintiffs submitted requisite application to the Trade Mark registry, Government of Pakistan in the month of June 1982 for the registration of their trade mark referred to above in respect of which a certificate for legal purposes dated 30-11-1982 has been issued to the plaintiffs." "(iii) The plaintiffs have started planning for setting up branches in the principal towns of the country, first choice being of Rawalpindi where the plaintiffs have already selected the area for the purpose and the arrangements are in progress for starting a branch of 'Tabaq in the very near future." "(iv)'Tabaq' is an invented word of the plaintiffs which is quite distinctive - and relatable exclusively to the products of the plaintiffs and its use by the defendants for similar business and products is highly mala fide, deceitful, dishonest and illegal and is the worst example of passing off." "(v) That the infringement of the trade mark and damage to the business and goodwill of the plaintiffs has been caused by the defendants at Lahore where the limited products have been brought and consumed under the deception that the same were the products of the plaintiffs and the same were found to be of low quality and where the publicity of the limited trade mark and
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products made by the defendants through the Press and other media, was read and witnessed by the people." Before the District Judge, Lahore the contest remained confined to the territorial Jurisdiction of that Court raised as a preliminary objection. The issue framed was "whether that Court has the jurisdiction to adjudicate the matter in dispute". The District Judge, Lahore, on 20-1-1983 recorded the finding that it had no jurisdiction in the matter and returned the plaint under Order VII, Rule 10, C.P.C. For presentation before the appropriate Court in Rawalpindi. TABAQ, Lahore preferred an appeal against this order in the High Court but later withdrew the same with a view to re-institute the matter at Rawalpindi. It was in fact instituted before the District Judge, Rawalpindi, on 17-6- 1984. There was also an application made for a temporary injunction restraining TABAQ, Rawalpindi from carrying on its business in that name and description. This application was, however not pressed and was withdrawn on 13-12-1984 and thereafter the proceedings were got adjourned on the request of both the parties that the applications for registration of their Trade Mark were pending before the concerned authority and the matter was expected to be decided in a few weeks' time. A fresh application for grant of temporary injunction was made on 1-12-1985 which was granted by the District Judge, Rawalpindi, on 2-12-1986. The operative part of the order was as follows- "Keeping in view the above discussion, the application is accepted and temporary stay order issued to restrain the respondents from passing off their products and to use the name of Tabaq till the final disposal of the suit." An appeal was filed and on 10-1-1987 the High Court suspended that order and finally on 28-1-1987 modified it as hereunder--- "Accordingly, stay order issued on 10-1-1987 whereby the operation of the impugned order was suspended, is hereby confirmed. Defendant-appellant shall furnish security in the sum of Rs. One lac to the satisfaction of the trial Judge undertaking that in case of plaintiff's success they shall compensate them for the loss they may have suffered meanwhile. Security shall be filed within one month. In default, stay order shall be deemed to have been vacated." While the proceedings were pending before the District Judge, Rawalpindi, a fresh application was filed under- Order VII, Rule 10, C.P. C. On 3-11-1985 by the TABAQ Rawalpindi requesting the Court to return the plaint for presentation in the proper Court as according to it, under section 20 (2) of the Act the case of alleged passing off was to be filed before the Court subordinate to that of the District Judge. It must be pointed out in order to make the history complete that TABAQ Lahore filed a similar civil suit before the District Judge, Islamabad, on 19-8-1984. In that suit also, TABAQ Lahore sought a temporary injunction restraining TABAQ Rawalpindi from opening its business in that name in Islamabad but it was refused on 27-8-1984 and no further remedy was sought against it by TABAQ Lahore. When the two appeals filed by TABAQ Rawalpindi in the High Court of Sind against the registration of the trade mark and the dismissal of its objection came up for hearing, an objection was taken with regard to the forum of appeal in view of section 76 of the Act on the ground that District Court at Rawalpindi was already seized of the suit concerning the trade mark in question before the High Court. This objection was upheld by the High Court as will appear from the following operative order passed in the two appeals on 26-12-1985- "In these circumstances, it is clear that the suit filed at Rawalpindi concerns the trade mark claimed by the respondent No.1 and in respect of which the dispute before the Registrar Trade Mark for registration was pending. Now during the pendency of this suit the appellant has filed these appeals in this Court. In view of section 76 the appeal should have been filed before the High Court
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of Lahore which will have jurisdiction in the matter. The appeals are, therefore, returned for presentation before the proper Court." Leave to appeal was granted to examine the correctness of the view taken by the High Court of Sind as it was contended that the suit pending in the District Court at Rawalpindi was in fact a suit relating to right protected under section 20 (2) of the Act and a suit on that subject had to be instituted in the civil Court of the lowest grade and not the District Court. On that view, it was contended that the proviso to subsection (1) of section 76 was not attracted to the appeals filed in the High Court of Sind. Leave to appeal was also granted by converting the petition into an appeal to examine as to whether the interim order of the District Judge passed in suit was modified by the High Court on 28-1-1987 on correct principles. Mr. Abid Hasan Minto, Advocate, the learned counsel for TABAQ, Rawalpindi, in the two appeals relating to trade marks, contended that no right existed in trade mark and none was recognised by the law earlier to the Act enacted in 1940. The statutory protection given to the trade mark and matters incidental or ancillary thereto were codified and the act takes care of every situation. Under section 20 subsection (1) of the Act proceedings could be instituted in respect of trade mark only if it was a registered trade mark or, being unregistered trade mark had been in use continuously since before the 25th day of February, 1937 and application for its registration had been refused and a certificate to that effect was possessed. According to the learned counsel, Chapter 4 of the Act deals with the effect of registration and the very opening words of section 20, namely, 'No action for infringement of unregistered trade mark' are indicative of the extent and the nature of the right claimable in trade mark particularly the unregistered trade mark. Further, according to the learned counsel, subsection (2) saves right of action against any person for passing off goods and the remedies in respect thereof. The learned counsel heavily relics on the decision in Ram Krishna Bhagat v. Firm Haji Jonabally AIR (35) 1948 Cal. 321 to contend that civil Courts of the lowest grade will be competent to try such suit and there is no provision or requirement that such a suit for passing off under section 20(2) should be filed in the District Court. According to the learned counsel for the appellant, section 73 of the Act is of no avail because the cases of infringement of a trade mark are confined to cases of registered trade mark and the expression 'otherwise relating to any right in a trade mark' may refer to unregistered trade mark but in view of the preceding provision in subsection (1) of section 20 it must be held confined to a particular category of unregistered trade mark continuously in use since 1937 and refused registration for which a certificate is held. As the claim made by the respondent did not fall in either of the categories, he could not resort to the exclusive jurisdiction possessed by the District Court under section 73 for redressing his grievance. Section 76 of the Act, according to the learned counsel for the appellant and proviso to subsection (1) could be available to a party only if proceedings were competently filed before the District Court or the High Court and concerned the 'trade mark in question'. As the respondent's case was not concerning a trade mark which was the subject-matter of registration but relating to passing off referred to in subsection (2) of section 20, such a suit even if pending, could not alter the forum of the appeal on the strength of proviso to subsection (1) of section 76. Mr. S. M. Zafar, Advocate, the learned counsel for the respondent, in these two appeals has seriously disputed the very first ground taken up by the learned counsel for the appellant, namely, that in Common Law and prior to the Act there existed no right of trade mark. He has referred to section 54 of the Specific Relief Act which clearly mentions that for the purposes of section 54 a trade mark is property. Illustration (w) to section 54 of the Specific Relief Act gives the following example:- "(w) A improperly uses the trade mark of B. B may obtain an injunction to restrain the user, provided that B's use of the trade mark is honest."
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Besides, according to the learned counsel sections 478 to 480 of the Pakistan Penal Code further recognise and give effect to this right. Section 478 defines the trade mark and includes within its ambit a trade mark registered under the Act. Section 480, P.P.C. Makes it an offence to use false trade mark and section 482 makes that offence punishable with a term of imprisonment which may extend to one year or with fine or with both. According to the learned counsel for the respondent, historically and even after the Act, the proceedings concerning trade mark could be of four types. The first and second categories comprise trade marks registered under the Act and infringement thereof and the second of unregistered trade marks continuously in use, registration refused and certificate given and infringement thereof. The third category relate to cases of infringement of a trade mark coupled with passing off the goods and fourthly the mere passing off the goods referred to in subsection (2) of section 20. The learned counsel supported his contention by reference to the property rights recognized in trade mark before the Act, the provisions of the Act and to the categorisation made under section 105 of the Trade and Merchandise Marks Act, 1958 of India. He also referred to two editions of Venkateswaran---s Book on Trade Marks one printed before the Act and a later edition after the Act, to support the view that Act of 1940 created no new rights and obligations but recognised those already existing giving them statutory form and formalising the remedies and proofs thereof. He also referred copiously to the plaint, recitals whereof have already been reproduced in this judgment to demonstrate that the claim inextricably related to trade mark while allegation of passing off was made against the appellant. As a suit had been instituted after application for registration had been filed and as the trade mark of the respondent had been subsequently registered, a right had come to vest by the making of the application and subsequent registration of the trade mark in terms of the law of trade marks as contained in Kerly's Law of Trade Marks and Trade Name. Finally, it was contended by the learned counsel for the respondent that throughout the Act, the Legislature has deliberately used are words 'registered trade mark' wherever it wanted to distinguish it from an unregistered trade mark, as is in section 73 of the Act the words used the 'infringement of a trade mark or otherwise relating to any right in a trade mark'. The Legislative intent cannot be defeated by restricting the meaning of a trade mark herein to a registered trade mark alone and it is impermissible on any principle known to interpretation of statutes to so limit the meaning. Similarly, the expression 'any suit or other proceeding concerning the trade mark in question' cannot be restricted to only the registered trade mark. It can as well relate to an unregistered trade mark. "(1) '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." The expression 'registered trade mark' has been separately defined in clause (j) (ibid) as follows:-- "(j) 'registered trade mark' means a trade mark which is actually on the register." Section 20 dealing with the effects of registration of a trade mark makes provisions as hereunder: - -- "20-(1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark unless such trade mark has been continuously in use since before the 25th day of February, 1937, by such person or by a predecessor-in-title of his and unless an application for its registration, made within five years from the commencement of this Act, has been refused; and the Registrar shall, on application in the prescribed manner, grant a certificate that such application has been refused. (2) Nothing in this Act shall be deemed to effect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof."
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Section 25 also requires examination as it protects vested rights of which care has been taken in subsection (2) of section 20. It reads as follows:- "25. Nothing in this Act, shall entitle the proprietor or a registered user of a registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods in relation to which that person or a predecessor-in-title of his has continuously used that trade mark from a date prior- (a) to the use of the first-mentioned trade mark in relation to those goods by the proprietor or a predecessor-in-title of his, or (b) to the registration of the first-mentioned trade mark in respect of those goods in the name of the proprietor or a predecessor-in---title of his, whichever is the earlier, or to object (on such use being proved) to registration of that identical or nearly resembling trade mark in respect of those goods under subsection (2) of section 10." Section 73 the language of which has been the subject-matter of long debate is enacted in the following words:- "73. No suit for the infringement of a trade mark or otherwise relating to any right in a trade mark shall be instituted in any Court inferior to a District Court having jurisdiction to try the suit." Finally, proviso to section 76 subsection (1) and the material portion read as hereunder:- "76.-(1) Save as otherwise expressly provided in this Act, an appeal shall lie, within the period prescribed by the Central Government, from any decision of the Registrar under this Act Dr the rules made thereunder to the High Court having jurisdiction; Provided that if any suit or other proceeding concerning the trade mark in question is pending before a High Court or a District Court, the appeal shall be made to that High Court or, as the case may be, to the High Court within whose jurisdiction that District Court is situated." The right in the trade mark existed even prior to the Act and that it was property and the rights in it remained protected admits of no serious doubt. Salmond in his Jurisprudence treats the trade mark has been treated as property and right in it as ownership, the property being incorporeal. This will appear from the following statement respecting such a right:-- "He who by his skill and labour establishes a business acquires thereby an interest in the goodwill of it, that is to say, in the established disposition of customers to resort to him. To this goodwill he has an exclusive right which is violated by any one who seeks to make use of it for his own advantages, as by falsely representing to the public that he is himself carrying on the business in question. Special forms of this right of commercial goodwill are rights to trade names and trade marks. Every man has an exclusive right to the name under which he carries on business or sells his goods--to this extent at least that no one is at liberty to use that name for the purpose of deceiving the public and so injuring the owner of it. He has a similar right to the exclusive use of the marks which he impresses upon his goods, and by which they are known and identified in the market as his." Similarly, section 54 of the Specific Relief Act enacted in the year 1877 contains an express provision that a trade mark is a property and invasion of the right therein may call for a perpetual injunction. The Penal Code as pointed out by the learned counsel for the respondent makes provisions in sections 478 to 486 with regard to protection of such a property right and punishing deliberate violations of it. "1243. Unregistered marks can only be directly protected by an action for infringement when they were used before the 13th August, 1875, and have been refused registration. The owner of such mark may still bring an action for passing off." "1326. The only right the English law recognises in any name or mark other than a registered trade mark is the right of a person who uses such name or mark to prevent others using the same so as to deceive the public into thinking that the business carried on by such persons and the goods sold by them are his. In certain cases, however, this may amount to a practical prohibition of others
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using the name or mark. 1327. The cases of this class may be divided into those involving (1) the misuse of the trading name of a person or firm; (2) the misuse of the trade name of goods; and (3) the passing off of goods by means of get-up. In all these cases there is really but one question, namely whether the defendant has knowingly done that which would pass off other goods or another business as and for the goods or business of the plaintiff. In many cases the evidence can be conveniently divided into two separate heads namely, the plaintiff's title to a name or get-up and the defendant's infringement of that title; but these are not really separate issues, but classes of facts bearing on the one issue given above. The absence of any hard and fast line between the two branches of the plaintiff's case renders most of the so-called rules referred to hereafter-either as to what is adistinctive name or mark, or as to what constitutes infringement--merely secondary criteria for the guidance of the Courts, of use doubtless in the majority of cases, but liable to modification in view of special circumstances, the plaintiff's cause of action depending on the combined effect of the distinctiveness of the indicia on which he, relies and the nature of the defendant's acts. There is, therefore, an important distinction between these cases and those relating to trade marks, although of course both sprang from the same source, since in the case of trademarksthe question of the plaintiff's title to the mark has been stereotyped by legislation, and has, therefore, to be treated separately. Further, in the case of trade marks, the question of the defendant's knowledge does not arise except on the question, of what relief should be granted. Withregard to passing off, the following…
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