Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Petitioner: Muhammad Shah Kakar VS Respondent: Intellectual Property Tribunal at Sindh Et Balochistan & others
Court Name: Sindh High Court Judge(s): Muhammad Shafi Siddiqui Title:Muhammad Shah Kakar vs Intellectual Property Tribunal at Sindh Et
Balochistan & others Case No.: Miscellaneous Appeal No. 24 of 2020 Date of Judgment:2020-06-03 Reported As: 2021 CLD 48, 2021 P C T L R 402, 2020 SHC 398 Result: Application disposed off Judgment Muhammad Shafi Siddiqui, J.- Appellant Muhammad Shah Kakar through his son, being proprietor of Muhammad Shah Et Sons has filed this statutory Misc. Appeal under section 19 of the Intellectual Property Act, 2012, being aggrieved of an order passed by the Intellectual Property Tribunal of Sindh and Balochistan dated 01.04.2020. The cause triggered when for the safeguard of a trademark, Intellectual Property Rights, "IPR Enforcement" was issued by the officials of the customs as designated under the current enactment. The question originates through a legal notice dated 06.02.2020 claiming an action against the alleged infringer of trade mark "Tabiat". In pursuance of such complaint and/or legal notice for IPR Enforcement, 20 consignments of rice bearing trademark "Tabiat" (hereinafter called infringed goods) were seized, which were being exported by M/s Hassan Corporation/respondent No.4 to UAE for its ultimate destination Iran, as alleged. The consignments, at the time of lodging complaint, were in the course of clearance of MCC Exports, Customs House, Karachi. This complaint was also forwarded to Directorate for taking cognizance in the matter . The proceedings were initiated for the determination of rights by Directorate of IPR Enforcement (South) Customs House Karachi on the basis of the above complaint dated 06.02.2020. The hearing was conducted on 07.02.2020, which was attended by the appellant as well as by alleged owner of the goods carrying the disputed trademark on livery . The right holder/appellant placed on record of the officials, trademark certificate issued by trademark registry . The Customs examination officer confirmed that as per declaration filed by the owners of the goods, the bags of rice carried the infringed mark "Tabiat". At that point of time it is claimed that no explanation was offered by the owner of the goods as to why such mark was used in the course of export of the goods carrying infringed mark. The matter was posted to 12.02.2020, which was attended by the appellant, clearing agent of the owners of the infringed goods and Deputy Collector (Exports).
---
## Page 2
The Directorate examined the packing livery of the infringed trade mark, printed on the bag in English and Urdu on the two sides of the bags being a trade dress of the goods, within the frame of Customs Act and the subject SROs applicable. In pursuance of such examination, the Directorate held that trademark registration certificate held by the alleged holder issued by the Trademark Registry would be a prime evidence to consider the complaint and taking cognizance in the matter and further observe that prima facie the right holder appeared to have proved its status as registered proprietor of trademark. The owner of goods was given two opportunities who failed to establish right to use the above registered mark. It was thus held that the owner of the goods was involved in the export of the goods under the subject mark whose proprietor ship does not vest in it (owner of goods i.e. respondent No.4) nor any license or assignment was ever enjoyed. The officials thus held that it was an unauthorized use of registered trademark by the owner of the goods without consent of the right holder/appellant, on the rice bags in 20 shipments under reference, which renders the mark "Tabiat" printed thereon in English and Urdu as counterfeit trademark under Trademark Ordinance, 2001. The officials after taking the cognizance were pleased to seize the goods under section 168 of the Customs Act, 1969 being in contravention of Section 15(c) of the Customs Act as well as Para 16(d) of the Export Policy Order 2016 in exercise of powers conferred on Directorate under Para 2(1) of the notification No.SRO 768(I)/2014 dated 12.08.2014. While the action was completed, the appellant also filed a suit for declaration and protection of his rights before tribunal. Though at the initial stage when the injunctive orders were not passed, the intervention of this Court was sought when a Misc. Appeal No.10 of 2020 was filed, which was disposed of on 03.03.2020 when respondent therein were directed not to change the status of the property/subject consignments and the case was remanded to the Tribunal for deciding the interim application within short period of three days. Consequently the injunction application during pendency of the suit was heard and was dismissed hence this Misc. Appeal. Learned counsel for the appellant argued that the presiding officer erred that use of the mark by appellant for the last 20 years was disputed on the count that it was registered on 02.02.2012, therefore, it was not conceivable that the mark was in use since last 20 years. It is pointed out by appellant's counsel that trademark is not mandatorily required under any law to be registered and even unregistered trademarks are given protection under equitable relief of passing off which point was not taken into consideration. Thus there was a confusion in the mind of presiding of ficer that the date of use of the mark and that of the registration are not coinciding. It is further contended that the presiding officer has erred in law that the suit before him pertained to merely infringement of packaging material by second party instead of trademark infringement. Appellant's counsel has pointed out that perusal of written statement and counter-af fidavit available before the tribunal reveal that answering respondent has not filed any such document depicting the exterior of covers/package livery nor such documents were confronted either by counsel or the presiding of ficer at any stage. It is further urged that the presiding officer has failed to peruse the contents of registration certificate of the registered trademark annexed with the plaint of Suit No.2 of 2020, which expressly states that a disclaimer is made to the effect that registration of the registered trademark shall not give the appellant the right to enforce claim over use of the word Anwar Shah along with other words in Farsi (Persian) language as well as other descriptive features appearing on the label. Learned counsel further contended that the presiding officer has failed to apply his mind when it was held that the appellant slept over his rights when they did not pursue their claim as the goods were being exported since last so many years. Appellant's counsel pointed out that as soon as he (appellant) became aware of the goods being exported under the infringed mark he wrote an immediate letter/complaint to initiate proceedings though earlier also a complaint was filed in the year 2014 when no consignments were discovered by customs officials. Learned counsel further argued that the presiding officer erred in law and fact by holding that the appellant has failed to comply with Rule 680 framed under SRO 170(I)/2017; on the contrary , it is argued that the presiding officer has failed to appreciate that Rule 678 onward of SRO 170(I)/2017 provides that it is applicable to imported goods only.
---
## Page 3
It is claimed that the goods are being manufactured, packaged and are being exported from Pakistan and it is not the case of import. Learned counsel for appellant further argued that the jurisdiction of the Tribunal is not confined to embark upon the exercise being conducted by the officials within the frame of judicial review against the respondent rather, the Tribunal is required to adjudicate upon infringement of trade mark based on trademark laws and infringement on the violation of substantive law and hence reasoning assigned were contrary to law and requirement of tribunal's domain. The officials of customs were held to have acted beyond the powers available to them under the law instead of adjudicating the infringement of the trademark independently. The process initiated by the customs officials via complain was never challenged by the respondent in any independent forum and action has reached finality. The Tribunal seriously erred in holding that SRO 170(I)/2017 and the rules framed thereunder were not adhered to by the officials of the Directorate of I.P. and hence goods were liable to be released. The Tribunal has erred in not responding to the contentions that it is SRO 768(I)/2014, which is applicable along with Section 15 to 17 of the Customs Act, 1969. On the other hand Mr. M. Nadeem Qureshi, learned counsel appearing for respondent No.4, has seriously opposed the appellant's counsel contentions. It is contended that the goods of the appellant are not being marketed within the jurisdiction where mark is registered and so also the goods of respondent No.4 are meant for an ultimate destination of Iran and are not meant for local market where mark is claimed. Thus there is no question of infringement of the mark within the territory and jurisdiction, either of Directorate IPR or of Tribunal or this Court. It is urged that Tabiat Sabz Mihan are the registered proprietor of a mark "Tabiat" in Iran and since its registration they have authorized respondent No.4 and issued a No-Objection Certificate for the registration of their brand in Pakistan. Counsel submitted that primarily it is the violation of the rules framed under SRO 170(I)/2017 that the seizure order was seriously questioned by the Tribunal and hence the goods were ordered to be released in view of violation of the ibid rules. Learned counsel in support of such contention has relied upon the case of Fazl-e-Rabbi v. Federation of Pakistan reported in 2020 PTD 281, which provides that the rights of importer are protected subject to fulfillment of the requirement before an action was taken. It is further contended that the Director General of IPR does not have any independent jurisdiction of its own under Rule 680 of the Customs Rules, 2001 to initiate enforcement of proceedings. It is contended that when consignment was out of charge from the customs department, the subject rules should not have been applied. Learned counsel for respondent No.4 while having another stance further submitted that there is serious vacuum in law for the seizure of the goods being exported, under the alleged complaint as the goods were not meant for local market and the subject rules being applied were devoid of any merit. He further submitted that there are no specific rules for goods likely to be exported hence the same rules i.e 680 under SRO 170- should have been applied. Learned counsel submitted that it was correctly held by the Tribunal that the customs authorities did not pay heed to comply with Rule 680 of SRO 170(i) of 2017. Learned counsel further submitted that the appellant neither had a prima facie case nor balance of inconvenience or irreparable loss lay in their favour and hence injunction application was rightly dismissed while the main lis is still pending and it is still open for the appellant to establish its case after recording evidence. Mr. Khalil Dogar has supported the impugned order and submitted that the order was passed in view of SRO 170(I)/2017 and rules which were framed thereunder and violated, whereas learned Assistant Attorney General has adopted arguments of Mr . Dogar . I have heard the learned counsel appearing for parties and perused the material available on record. Let us first examine the impugned order/judgment passed by the Tribunal. The first short point, as noted by the tribunal to reach to the impugned conclusion, is an alleged contradiction between use of the mark and its registration at typed page 12 and 13. The tribunal has not appreciated the fact that initial date and period of use of the mark could be different and distinct from the date of registration of mark and this reasoning cannot be applied while determining the right of the parties, either under the use of the mark or after its registration. I, therefore, straightaway disagree with this reasoning assigned by the Tribunal to reach to the conclusion, impugned in this appeal.
---
## Page 4
The second point as taken into consideration by the Tribunal in the impugned order was the alleged distinction in the mark itself at page 15, 16 and 17 respectively. The Tribunal compared the two alleged marks and reached to an irresistible conclusion that the marks of the defendant/ respondent is neither deceptive nor confusingly similar for the unworry buyers of the goods. The Tribunal reached to the conclusion that the word "Tabiat", which is being claimed as registered mark by appellant/ plaintiff is visually different which cannot deceive the buyers nor the colour scheme and artistic work having birds and cottage around (and other having peasants working in field), (though not claimed by respondent as copy right), could deceive the public at large and hence the trademark along with its livery is distinguishable. The two marks for convenience are reproduced along with their livery . {{IMAGE}} The registered "trade mark " for identifying the good is only one i.e. "Tabiat" which may have been written in different fonts, whereas the dress code or color pattern is different and is a disclaimer as far as trade mark certificate goes. It is not always that the color scheme may inspire a buyer to buy the product, rather it is the reputable name/brand name which is a claim under dispute, which may attract the attention of a buyer . Color and color scheme also at time claimed to be an inventive one but that is not the case here as no one has claimed livery or color scheme or get up to be a mark of distinction under any intellectual property rights. Both partie s are contesting over one mark i.e Tabiat and no one has claimed any exclusive right over livery or dress up of mark. So everything is a disclaimer except "Tabiat". In fact if there are deceptive liveries of one product like rice, with one trade mark "Tabiat" in the absence of a right claimed under the liveries, the buyer would definitely get confuse and jump to some other brand as a natural course. Dress up of brand is of course an eye catcher but under the circumstances of the case in hand, conclusive test for buyer is trademark/trade name, which is literally ident ical here and its font under the circumstances is immaterial nor a copy right is claimed for a different font and color scheme. Even otherwise on such count, the mark with livery has failed to achieve even minor degree of distinctiveness and falls far short of universal acceptance from its color scheme point of view when it is not even claimed. The Tribunal has also attempted to highlight a distinction between the two marks by the name of the proprietor of the mark, as mentioned in the getup of entire jacket carrying the goods, which again is immaterial. There is no dispute that the mark is one i.e. "Tabiat". All that was debated by the Tribunal was that it is to be seen as entire dress rather than mere word "Tabiat". The goods are identical i.e. rice and being exported to a common destination i.e. UAE/Iran. It is inconceivable to agree with the reasoning assigned by the Tribunal that visually and under colour scheme having different artistic work, it does not make it a case of infringement of mark of the appellant. The effective part of the mark in the entire livery and colour scheme is "Tabiat" and that is of prime importance. It is only the highlighted mark "Tabiat" that plays a pivotal role in identifying and recognizing the goods. Grocery items are normally purchased by buyers alongwith other items mostly in bulk and they tend to select items by not going through color pattern or artistic work when such color scheme or livery has not even reached to a level of public acceptance. When brand name is visually and distinctly available; they (buyers) only go with the permanent name and trademark, which in the instant case is "Tabiat" and has gained popularity in the region and hence I, very conveniently and without any hesitation would say that the reasoning assigned by the Tribunal that the two marks are not deceptively similar is incorrect. The mark is identical, the other disclaimers which form part of livery may be different but that would not turn the table. The above analysis is also supported by following case laws which are discussed in the later part of the Judgment. (i) British Sugar PLC v. James Robertson Et Sons Ltd , (ii) Philips Electronics NV v. Remington Consumer Products Ltd and (iii) Aktiebolaget V olvo v . Heritage (Leicester) Limited. The last reasoning assigned to reach to the conclusion is the action and process involved in seizure of the goods by the Directorate of IP of the customs authorities. It is highlighted by the tribunal that the plaintiff/ appellant slept over the rights as the defendant/respondent have been allegedly exporting goods for last 6 to 8 years and the appellant/ plaintiff has not been able to explain this delay satisfactory. In the last paragraph of page 19 of the impugned order the Tribunal has attempted to highlight the absence of the magnitude of the harm being faced by the appellant/plaintiff. The Tribunal further reached to the conclusion that while an alternate remedy was availed before the Director of IP Right Enforcement South Customs House and the goods were seized, it was nonetheless without
---
## Page 5
complying Rules of SRO 170(I)/2017 and the customs authorities failed to apply Rule 680 as framed and made applicable. The tribunal has applied the law developed in the case of Fazl-e-Rabbi v. Federation of Pakistan reported in 2020 PTD 281. The Tribunal while relying on the aforesaid judgment observed that the Directorate IPR for Enforcement of rights should have refused to entertain incomplete application issued in the shape of legal notice. The Tribunal also observed that though alleged action initiated on the basis of an application/legal notice having reference No.NIL dated 06.02.2020 but the authorities also considered the complaints of 08.12.2 014 and 11.12.2014. Thus the Tribunal is of the view that Rule 680, as framed, was not applied in strict sense and the seizure of the goods was in violation of subject rules applicable. The application on the basis of which the action was triggered was not completed in terms of Rule 680. To resolve this query, let us first place the chronological facts of the case, which are not in dispute. A legal notice/application was issued by the appellant with respondent No.3 i.e. Director of the Directorate of IPR Enforcement sought to initiate proceedings in respect of the goods lying with them for its onward journey from Karachi Pakistan to UAE/Iran. Notices were issued to respondent No.4 in respect of alleged allegations raised in the legal notice and after hearing a seizure order was passed by the directorate apparently on 12.02.2020. The seizure order disclosed that respondent No.3 took cognizance on 07.02.2020 in exercise of powers conferred upon the Directorate under Para 2(1) of Notification No.SRO 768(I)/2014 and 12.08.2014 read with section 15 of the Customs Act, 1969. The first hearing then took place on 07.02.2020, which was attended by appellant as well as owner of the goods, in addition to the customs examination officer. The trademark certificate was produced by the claimant issued by the Trademark Registry vide No.313716 showing the trademark "Tabiat". On the second date of hearing i.e. 12.12.2020 the claimant, clearing agent of owner of the goods and the Deputy Collector Exports Karachi appeared and no further documents were placed on record. The directorate examined the infringing goods, particularly the mark printed thereon in English and Urdu on the two sides of the bag, which is a trade dress/livery with the corresponding registered mark available in the IPO Pakistan Recordation Data base in comparison to the infringed goods within the frame of Section 15 of the Customs Act, 1969 read with Para 2(1) of the Notification No.SRO 768(I)/2014 dated 12.08.2014 and the directorate reached to conclusion that the mark was a counterfeit trademark in all 20 export shipments and were accordingly seized under section 168 of Customs Act, 1969 being in contravention of Section 15(c) of Customs Act as well as 16(d) of Export Policy Order 2016 in exercise of powers conferred upon Directorate under Para 2(1) of the Notification No.SRO 768(I)/2014 dated 12.08.2014. In order to reach to a conclusion as to whether Rule 680 and 682 of Chapter XXVIII of Enforcement of IPR, ought to have been applied in pursuance of SRO 170(I)/2017 dated 17.03.2017, perusal of the same is inevitable. The said SRO issued in exercise of power conferred by Section 219 of the Customs Act, 1969 provides that the Federal Board of Revenue was pleased to direct certain amendments to be made in Customs Rules 2001. The first amendment in Chapter XXVIII in respect of enforcement of Intellectual Property Rights was inserted as Rule 678, which provides that this chapter shall apply to "imported goods only" and was not applied to parallel or grey market imports and de-minimis imports. Prima facie one should not be reading above amended rule any further for the purpose of this case as it is (subject rule) meant for goods imported into the territory of Pakistan, however, Rule 680, which is followed by Rule 678 and which has already limited its applicability to imported goods only, provides for an action on behalf of a right holder, when there is valid ground for suspicion that the imported goods (or goods as per respondent's version), are infringing the Intellectual Property Rights of the right holder which are protected under the Copyright Ordinance, 1962, Trademark Ordinance 2001 etc. may, at the time of arriving of suspected goods at the notified customs station, make an application on the format set out in the Annexure-A to these Rules to the Director , IPR (Enforcement) having jurisdiction, requesting for initiating enforcement action against such goods. Each and every information sought through formatted Annexures to these rules were otherwise available through notice of 06.02.2020 and when subsequent hearing took place. All material information required through formatted annexures, were given to the Directorate and action was anticipated and is the answer to respondent's query , yet in my view why should an action be taken in pursuance of such rules when the alleged goods were not imported goods,
---
## Page 6
in fact the goods were likely to be exported out of the jurisdiction. The reason I explained above is that in view of tribunal's opinion certain information was lacking which is incorrect analysis as all material information was provided to take cognizance. The referred judgment of this Court i.e. 2020 PTD 281 also emphasizes on the applicability of the rules on the imported goods. The referred judgment did not embark upon its applicability even to those goods which are likely to be exported. All such formatted applicatio ns such as Annexure-A, B and C etc. are thus not applicable to the case in hand. Perusal of SRO 768(I)/2014 issued on 12.08.2014 provides that in exercise of powers conferred by sections 3CC and 3E of Customs Act, 1969 and sections 30 and 30E of Sales Tax Act, 1990, the Federal Board of Revenue was pleased to notify the formation of the Directorate General of Intellectual Property Rights Enforcement and to specify its functions, jurisdiction and powers as incorporated therein. Thus, it is the formation of the directorate which was set as a tool to initiate action in respect of exported goods also by virtue of this SRO. i.e 768(I)/2014. Since I have discarded the applicability of SRO 170(I)/2017 and rules thereunder, let us now peruse as to how custom officials are empowered to take action in respect of counterfeit trademark on goods/ services (export) to initiate action in pursuance of SRO 768(I)/2014. It is not the rules that stimulate the officials. The substantive law is section 15,16 and 17 of Customs Act,1969 for the purpose of present controversy and rules were framed under SRO 170(i)/2017 for imported goods only and no rules were framed as for as goods likely to be exported are concerned. The customs officials have already been empowered in terms of Chapter IV of the Customs Act, 1969 when in terms of Section 15, 16 and 17 intended action was legislated. Section 15 of the Customs Act provides that no goods specified in the following clauses therein shall be brought into or taken out of Pakistan,: -- 15. Prohibitions .- No goods specified in the following clauses shall be brought into or taken out of Pakistan, namely:- (a) Counterfeit coins, forged or counterfeit currency notes, and any other counterfeit product; (b) any obscene…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.