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Petitioner: SONERI TRAVEL AND TOURS LTD. through Chief Executive/Director/Secretary VS Respondent: SONERI BANK LIMITED
Court Name: Sindh High Court Judge(s): Munib Akhtar, Muhammad Ather Saeed Title:SONERI TRAVEL AND TOURS LTD. through Chief Executive/Director/Secretary
vs SONERI BANK LIMITED Case No.: H.C.A. No,141 of 2010 Date of Judgment:2010-10-28 Reported As: 2011 CLD 193 Result: Appeal accepted Judgment ORDER ' MUNIB AKHTAR, J.--- This appeal arises out of an interim order dated 26-6-2010 made by the learned single Judge in Suit 884 of 2010 pending on the original side of this Court. The suit was filed by the respondent, as plaintiff, against the appellant as defendant. The respondent, whose full name is Soneri Bank Ltd., is a banking company, while the appellant, whose full name is Soneri Travel and Tours (Pvt.) Ltd, is a travel agency, i.e., a company engaged in providing travel and travel related services. The respondent's claim in the suit is that the appellant has infringed its rights under the Trade Marks Ordinance, 2001 ("2001 Ordinance"). Along with the suit, the respondent had filed an application for interim injunctive relief, which was allowed by the learned single Judge by means of the impugned order. 2. The respondent's case was that it had a registered trade mark, being registered under No,113821 granted on 1-1-1992 in class 16 which comprised of the words "Soneri Bank" along with a logo of a yellow circle on a white background with a grey border. The trade mark was registered under the Trade Marks Act, 1940 ("1940 Act"). The respondent claimed that it had over the years set up a large network of branches all over the country and had spent, and continued to spend on a yearly basis, a large sum of money to advertise itself and the various services provided by it. Thus, according to the respondent it had acquired and established a name, reputation and goodwill associated with the aforesaid trade mark. The appellant, by registration and incorporation under its name as aforesaid, i.e., Soneri Travel and Tours (Pvt.) Ltd, was unlawfully attempting to cash in on the reputation and name established by the respondent which was associated, according to the latter, especially with the word "Soneri" which was an invented word. According to the respondent, the
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appellant had infringed the former's trade mark and therefore it was entitled to appropriate injunctive relief against the latter. 3. After hearing the parties on the application, the learned single Judge granted interim injunctive relief while observing as follows:-- "I have heard the arguments of learned counsel for the parties as well as meticulously gone through record made available before me. At the first place it is observed that under section 40(4) of the Trade Marks Ordinance, 2001 it is explicitly clear that a person shall infringe a registered trade mark if he uses in course of trade a mark in relation to goods or services which are not similar to those for which the trade mark is registered where deceptively similar to trade mark use of which lead confusion or deception. It is the case of the plaintiff that the defendant is using their trade mark illegally as the same has already been registered in the name of the plaintiff. However, the defendant has stated that defendant chose the logo from the list of IATA and registered with the Registrar of Firms under the Companies Ordinance, 1984. However, when he was confronted to the fact that whether the said trade mark is registered with the Registrar of the Trade Mark, to which he replied that application for registration of the said trade mark has been submitted to the Government of Pakistan Intellectual Property Organization Trade Marks Registry in the current year. However, in reply the learned counsel for the Plaintiff has submitted that in order to give cover themselves, the Defendant filed trade marks application for registration of Soneri after being duly served with legal notice on 24th December 2009, hence this exercise carried out by the Defendant is an afterthought. Nevertheless, choosing of logo from the list of IATA does not authorize the Defendant to infringe the right of the Plaintiff guaranteed under the provisions of the registered Trade Mark Ordinance, 2001. In any event once a trade mark/trade is registered under the provision of Trade Mark Ordinance, 2001 then it restricts the other party from using such trade mark." ' Being aggrieved by the aforesaid decision, the appellant preferred the instant appeal. On 13-8- 2010, learned counsel appearing for the parties were put on notice that the appeal would be heard and disposed of finally at Katcha Peshi stage. It was subsequently heard on the dates aforementioned. 4. Learned counsel for the appellant assailed the impugned order on a number of grounds. He submitted that although the appellant had been incorporated in 2005, it had in fact simply continued a business which had been carrying on since 1995 under the name and style of "Soneri Travels". He submitted that the trade mark on which the respondent placed reliance was registered only in class 16 (which related only to a specific category of goods and not to services), and that too only in respect of traveller cheques and credit cards. According to him, the trade mark did not relate to the services which were being relied upon by the respondent, i.e., the services provided by it as a banking company. It was an admitted position that the services provided by the appellant related to travels and tours which were completely unrelated both to the goods in respect of which the trade mark was registered and the services provided by the respondent, and thus, even on the basis of the case put forward by the respondent, there had been no infringement of the registered trade mark. He submitted that being cognizant of this fundamental flaw in the claim being put forward by it, the respondent had filed applications for registration of its trade mark under all the other classes, including those relating to services, under the 2001 Ordinance, which applications were still pending consideration by the Registrar. Learned counsel further submitted that the word "Soneri", or various variations thereof, were being used by other business entities some of which had registered the same under the 1940 Act, and others which had filed applications for registration. He also pointed out that the respondent was a banking company and could not in any case, by virtue of the provisions of the Banking Companies Ordinance, 1962, carry on any business of any nature that was the same as or even similar to the business of the appellant. Without prejudice to the foregoing submissions, he submitted that the appellant's usage of the word
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"Soneri" was entirely different from the manner in which this word was used in the trade mark registered by the respondent and there could not therefore be any confusion or similarity between the two as proscribed by law. He placed reliance on Master Enterprises (Pvt.) Ltd. v. Registrar of Trade marks and another 2010 CLD 692, Tri Star Industries (Pvt.) Ltd. v. Sayyed Engineers (Pvt.) Ltd. 2007 CLD 802, Lipha Industrielle Pharmaceutique v Registrar of Trade marks and another 2009 CLD 1289, Philip Morris Products, Inc. v. Deputy Registrar of Trade Marks PLD 1996 Kar. 122, Montres Rolex v. Assistant Registrar Trade Marks PLD 1993 Kar. 442, Grinnell Corporation v. Deputy Registrar of Trade Marks 1993 CLC 2201 (Kar.), Ferring A.B. v. Deputy Registrar of Trade Marks 1993 CLC 2203 (Kar), Nippon Paint Co. Ltd. v. Registrar of Trade Marks 1993 M LD 1094 (Kar.), American Cynamide Co. v. Aero Trading Co. PLD 1992 Kar. 395, Seven Up Company v. Assistant Registrar of Trade Marks 1992 CLC 694 (Kar.), Premier Tobacco Industries Ltd. v. Assistant Registrar of Trade Marks 1992 M LD 1001 (Kar), The Seven Up Co. USA v. Abdul Aziz Nook Muhammad PLD 1976 Kar. 895 and Kraft General Foods Inc. v. Abid Anjum 1994 M LD 607 (Lah.). 5. Learned counsel for the respondent defended and supported the impugned order. He submitted that there had been a' clear violation of the rights to which the respondent was entitled under the 2001 Ordinance. He referred to the various provisions of the said Ordinance, placing reliance in particular on subsections (4) and (5) of section 40 and on section 92. His case was that the respondent's trade mark had acquired and developed a reputation in Pakistan within the meaning of section 40(4), which was being unlawfully exploited and taken advantage of by the appellant by the use of its name, Soneri Travels & Tours Ltd. Thus, even if the services provided by the appellant on the one hand and the respondent on the other were dissimilar, the latter was nonetheless entitled to relief under the foregoing provision. He referred to Ellora Industries v. Banarasi Dass Goelal AIR 1980 Delhi 254 and Hamdard National Foundation v. Abdul Jalil (1999) 19 PTC. 294 (also a decision of the Delhi High Court) to explain the meaning of "reputation", and to a decision of the European Court of Justice in the case of General Motors Corporation v Yplon SA [19991 ETMR 950 (Case C-375/97) to show how "reputation" is to be regarded as having been established if the trade mark being infringed is known over all or a substantial part of the territory concerned. In this regard, he emphasized the number of branches operated by the respondent and the huge advertising expenditure incurred by it on an annual basis. He submitted further that section 40(5) also made it an infringement of a registered trade mark if such registered trade mark was used by the defendant (herein the appellant) as part of its trade name and referred to Raymond Ltd. v. Raymond Pharmaceuticals (Pvt.) Ltd. (2010) 112 Born. LR 2945. He submitted that even on this basis, the respondent was entitled to injunctive relief. Quite independently of section 40, learned counsel also placed reliance on section 92 of the 2001 Ordinance and submitted that even in terms of this section, which provides protection to trade names, the respondent was entitled to interim injunctive relief. He submitted that the appeal was entirely without merit and ought to be dismissed. 6. Exercising his right of reply, learned counsel for the appellant drew attention to section 42(1)(a)(i) to contend that the use by the appellant of its own name, duly granted to it when it was incorporated as a company, did not in any manner infringe the respondent's trade mark. He also submitted that section 92 did not have any application to the facts and circumstances of the present case. 7. We have heard learned counsel for the parties, examined the relevant record with their assistance and carefully considered the case law and statutory provisions referred to and relied upon by them. Before considering the rival contentions of learned counsel, it will be appropriate to understand why the 1940 Act was repealed and replaced by the 2001 Ordinance. As is well-known, the multilateral trade negotiations round known as the Uruguay round culminated in the establishment of the World Trade Organization (known as the WTO) by means of the Marrakesh
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Agreement, which came into effect on 1-1-1995. Along with the Marrakesh Agreement, the states party to the same (known as member states, and including Pakistan) also entered into a number of other agreements, one of the most important of which (and of particular relevance for present purposes) was the Agreement on Trade-related Aspects of Intellectual Property Rights (commonly known as TRIPS). As its name suggests, TRIPS relates to intellectual property rights including patents, trade marks and designs. Developed countries had to bring their national legislation in conformity with the WTO and other related agreements, including TRIPS, more or less immediately, but developing countries like Pakistan were given certain grace periods in this regard, which in the case of TRIPS extended up to 5 yeaRs, Part I of TRIPS lays down certain general provisions and basic principles, while section 2 of Part-II specifically deals with trade marks and related rights. Article 2 (which is to be found in Part I) provides that in respect of Part II, member states have to comply with Articles 1 through 12, and 19, of another agreement, the Paris Convention for the Protection of Industrial Property, as amended (commonly known as the Paris Convention). Thus, in order to comply with their obligations under TRIPS, the member States also had to be in compliance of the Paris Convention. Pakistan became a signatory to the Paris Convention on 22-7-2004. 8. It was in order to comply with its obligations under TRIPS that Pakistan repealed its then existing intellectual property laws, being the Patents and Designs Act, 1911 and the 1940 Act, and replaced them with the Patents Ordinance, 2000, the Registered Designs Ordinance, 2000 and the 2001 Ordinance respectively. This is therefore the backdrop to the 2001 Ordinance, and in order to understand and apply its provisions properly, it is necessary to keep in mind the relevant provisions of TRIPS and the Paris Convention. If the 1940 Act and the 2001 Ordinance are compared, it will be seen that the latter statute introduces many new legal concepts (based of course, on TRIPS and the Paris Convention) which were not to be found in the 1940 Act. Even in respect of those legal concepts which may appear to be the same as, or similar to, those found in the 1940 Act, the 2001 Ordinance in many cases uses new, and different, statutory language. Thus, even in respect of facts and circumstances which may be the same as, or similar to, those as arose under the 1940 Act, the application of the 2001 Ordinance may yet yield different results. Cases decided under, or in relation or with reference to, the 1940 Act must therefore be reread and reappraised carefully before they are applied to the provisions of the 2001 Ordinance, even if those provisions may appear at first sight to be equivalent to those under the former enactment. (It appears that there are, as yet, only a handful of reported cases decided under the 2001 Ordinance.). 9. As noted above, the respondent's claim that its rights under the 2001 Ordinance have been violated is based on subsections (4) and (5) of section 40, and on section 92. It is important to keep in mind that these sections relate to two entirely different and distinct rights, which can exist independently of each other. Section 40, and subsections (4) and (5) thereof relate to the infringement of a trade mark, whereas section 92 relates to trade names. The respondent's case under each provision will therefore have to be considered separately. It is also to be noted that the legal concepts embodied in the aforesaid provisions are not to be found as such in the 1940 Act. These are new concepts, which are based on, and emanate from TRIPS and the Paris Convention. 10. Section 39 of the 2001 Ordinance states that a registered trade mark is personal property, conferring exclusive rights in the trade mark on its proprietor, which are infringed by the use of the trade mark without his permission. Subsection (6) provides as follows: "The rights conferred by registration of trade marks under this Ordinance shall extend to trade marks registered under the Trade Marks Act, 1940 (V 'of 1940)". 11. Section 40 deals with what constitutes infringement of a trade mark. Subsections (1) to (3) were, quite correctly, not pressed by learned counsel for the respondent, since they are applicable only where the infringing mark is used in relation to goods and services which are identical with, or similar to, or of the same description as, those in respect of which the trade mark is registered. In
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the present case, the field of activity of the appellant and the respondent, and the goods and services in which they deal, are neither identical nor similar nor of the same description. Learned counsel based his case on subsections (4) and (5), which provide as follows:--- "(4) A person shall infringe a registered trade mark if the person uses in the course of trade a mark which-- (a) is identical with or deceptively similar to the trade mark; and (b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; where the trade mark is a well-known trade mark, or has a reputation in Pakistan, and the use of the mark, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. (emphasis supplied) (5) A person shall infringe a registered trade mark if the person uses such registered trade mark as his trade name or part of his trade name." ' Since the foregoing provisions embody legal concepts not to be found as such in the 1940 Act, cases decided under that law may not provide the necessary guidance as to how these subsections are to apply. Furthermore, these subsections relate to different situations of infringement, and therefore each will have to be analyzed separately to see whether and if so how, and to what extent, the respondent's case thereunder is made out. We turn therefore to first examine the provisions of subsection (4). 12. As is clear, this subsection. Applies when the infringing mark is used in relation to goods or services dissimilar to those E for which the trade mark being infringed was registered. In our view, subsection (4) (insofar as is presently relevant) applies if all of the following conditions are fulfilled:- (a) the defendant must "use" a "mark" "in the course of trade"; (b) the mark so used must be either (i) identical with, or (ii) deceptively similar to the registered trade mark; (c) the mark must be used in relation to goods and services not similar to those for which the trade mark is registered; (d) the trade mark must have a reputation in Pakistan; (e) the use of the mark must be without cause; and (f) such use must either (i) take unfair advantage of, or (ii) be detrimental to the distinctive character or the repute of the registered trade mark. Section 2(xxiv) defines a "mark" broadly, as including "a device, brand, heading, label, ticket, name including person name, signature, word, letter, numeral, figurative elements, colour, sound or and combination thereof. Since it is the proprietor of the trade mark (i.e., the plaintiff) who is seeking relief on the basis of an alleged infringement, it is for him to satisfy the court that all of the conditions are fulfilled, except possibly condition (e), the onus of which may lie on the defendant. We now examine those conditions which are of particular relevance for present purposes. 13. The first question arises out of condition (a), namely, in what sense must the "mark" be "used" "in the course of trade" to come within the meaning of subsection (4)? In other words, is any and every use of a mark in the course of trade proscribed, or is the scope of subsection (4) limited to a certain or particular type or manner of use? We may note that subsections (1) to (3) of section 40 also use the same words (i.e., the "use" of a "mark" "in the course of trade") and this question is therefore of general relevance to section 40 as a whole. To put the matter in concrete terms, would the use by the appellant of the word "Soneri" as part of its company name in and of itself constitute the "use" of a "mark" "in the course of trade"? To answer this question reference will have to be made to certain decisions of the European Court of Justice ("ECJ") and a decision of the House of
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Lords, but in order to place those decisions in their proper context, the relevant provisions of EU trade mark law and British legislation will have to be briefly referred to. 14. The relevant EU legislation is contained in Council Directive 89/104/EEC (hereinfter referred to as the "EU Directive"). Article 5 of the EU Directive deals with the rights conferred by a trade mark, and paragraphs 1 and 2 of this Article provide as follows:-- "(1) The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: (a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; (b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark. (2) Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark." ' It will be seen that both of the foregoing paragraphs speak of a "sign" being "used" "in the course of trade". The word "sign" is perhaps of even wider import than the word "mark" as used in the 2001 Ordinance. Paragraph 2 is clearly in pari materia subsection (4) of section 40. The relevant British legislation is the Trade Marks Act, 1994 ("UK Act", which was enacted, in part, to bring UK legislation in line with the EU Directive). Section 10(3) of the UK Act provides as follows:-- "A person infringes a registered trade mark if he uses in the course of trade in relation to goods or services a sign which --- (a) is identical with or similar to the trade mark, ... Where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark." ' It will be seen that the UK legislation also uses the same language as the EU Directive, and section 10(3) is in pad materia section 40(4) of the 2001 Ordinance. In the light of these provisions, we now turn to consider how the ECJ and the House of Lords have dealt with the question posed in the last preceding para in relation to condition (a). 15. The first ECJ case that requires consideration is Arsenal Football Club v Matthew Reed 20031 RPC 9 (Case C-206/01). In para 48, the ECJ explained the essential function of a trade mark in the following terms: "...The essential function of a trade mark is to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin. For the trade mark to, be able to fulfil its essential role in the system of undistorted competition which the Treaty seeks to establish and maintain, it must offer a guarantee that all the goods or services bearing it have been manufactured or supplied under the control of a single undertaking which is responsible for their quality...." ' The Court then explained the nature of the right conferred by Article 5(1)(a) of the EU Directive:-- "It follows that the exclusive right under Article 5(1)(a) of the Directive was conferred in order to enable the trade mark proprietor to protect his specific interests as proprietor, that is, to ensure that the trade mark can fulfil its functions. The exercise of that right must therefore be reserved to cases in which a third party's use of the sign affects or is liable to affect the functions of the trade
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mark,' in particular its essential function of guaranteeing to consumers the origin of the goods." para 511. 'The exclusive nature of the right conferred by a registered trade mark on its proprietor under Article 5(1)(a) of the Directive can be justified only within the limits of the application of that Article." [para 521 "The proprietor may not prohibit the use of a sign identical to the trade mark for goods identical to those for which the mark is registered if that use cannot affect his own interests as proprietor of the mark, having regard to its functions." [para 54]. ' As is clear from the foregoing, it is not any and every use of a "sign" (or "mark") in the course of trade that is proscribed. It is only that use which "affects or is liable to affect the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods". 16. The ECJ decision in Arsenal Football Club was considered and expressly applied by the House of Lords in R v. Johnstone 2003 UKHL 28. It was held that non-trade mark use was not within the meaning of section 10(3). The reasons for which this conclusion was arrived…
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