Elofic Industries India v. Steel Bird Industries

M.K. Chawla, J:

1. Under the provisions of Section 111 of the Trade and Merchandise Marks Act, 1958 the court has the power and the duty to stay the plaintiffs suit where the validity of the registration of the trade mark is questioned by the defendants. Relevant clauses of Section 11 read as under:-

Section 111(1) Where in any suit for the infringement of a trade mark,-

(a) the defendant pleads that the registration of the plaintiffs trade mark is invalid; or

(b) the defendants raises a defence under clause (d) of sub-section (1) of Section 30 and the plaintiff pleads the invalidity of the registration of defendants trade mark;

(c) the court trying the suit (hereinafter referred to as the court), shall,

(d) if any proceedings for rectification of the register in relation to the plaintiffs or defendants trade mark are pending before the Registrar of the High Court stay the suit pending the final disposal of such proceedings.

(f) if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiffs or defendants trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to the High Court for rectification of the register.

2. This provision requires interpretation in the application of the defendant (I.A. 79 of 1985 filed during the pendency of the plaintiffs suit seeking the decree of perpetual injunction restraining the defendants from using the Trade Mark Steel Bird in relation to oil, air and fuel filters and other motor parts, which is an infringement of plaintiffs registered trade marks. The defendant has alleged that in para No. 3(d) of the plaint the plaintiff has specifically relied upon the registered trade mark No. 252967B in class 7 as of 21-10-1968, in respect of oil and fuel filters being elements in the lubrication system of the internal combustion engines; that the said registration is the main basis of their suit; that the defendant has filed the written statement and has challanged the validity of the said registered trade mark ; that the defendant honestly and bona fide adopted the trade mark Steel Bird in the year 1964 and has been using the same continuously and extensively; that the defendant is the registered proprietor of the said trade mark under No. 274111 in class (11) and No. 278745 in class 12 under the provisions of Trade and Merchandise Marks Act; that the defendant is also the registered owner of copyright in the Cart on entitled Stell Bird under No. A 3976/69 under the Provisions of the Copyright Act, 1957; that the said carton entitled Steel Bird with the picture of dots thereon was honestly adopted by the defendant and has been used continuously and extensively; that the picture of dots on the carton has a purely descriptive significance, as the article packed in the carton is filter which possesses dots; that the trade mark Steel Bird of the defendant is absolutely different and distinct from the alleged trade mark Elofic of the plaintiff; that the plaintiff however, by virtue of the registration referred to above in clause 7 on the carton entitled Elofic with picture of dots thereon, claims to be entitled to the exclusive use of the picture of dots on the carton, to which he is not entitled under the law; that the said picture of dots being descriptive and amounting to a bona fide description of the articles packed therein, cannot become the exclusive property of the plaintiff, that it belongs to all and is open to all traders to denote their article packed in their carton, that in the circumstances, the said registration obtained by the plaintiff is absolutely illegal, unlawful and invalid and is liable to be removed / rectified; that the defendant has already filed a cancellation petition being C.O.No. 17/1993 pending before this court which is based on strong, valid and appealing grounds and has every possibility to succeed; that the decision of the said cancellation petition is bound to affect he decision of the present suit and in case the said trade mark of the plaintiff is removed, the whole suit of the plaintiff will become infructous. Hence the present application.

3. The plaintiff has not cared to file the reply to this application and has argued the matter on the basis of the pleading and the documents already on record.

4. According to the learned counsel for the plaintiff, the plaintiff in engaged in the business of manufactured and the sale of oil, air and fuel filters for automobiles and are the registered proprietors of as many as 5 trade mark Elofic in respect of the motor parts, oil and fuel filters being elements in the lubrication system of he internal combustion engins. It is also alleged that the plaintiff are the registered proprietors of cartons having black background with red sport and white and black writings on them, under the Copyright Act. They have been using the cartons continuously for the last over 24 years for the sale of their filters under the trade mark Elofic and on account of the long, continuous and extensive use the public has come to denote and connote the goods as that of the plaintiff and of no one else. It is also aleged that the defendants applied for registration of Steel Bird under No. 282375 in class 12 in respect of filters for the use in automobile engines and on the opposition of the plaintiff the defendants trade mark was disallowed by the order of the Registrar of trade mark dated 16-6-1982. On the basis of these averments the plaintiff filed the suit praying for the issuance of a perpetual injunction restraining the defendants, their servants, agents stockists and all other persons on their behalf from using the trade mark Steel Bird in relation to oil, air and fuel filters and other motor parts which is an infringement of the plaintiffs registered trade mark referred to in para No. 3 of the plaint. A restraint order from using the offending cartons in which the goods of the defendants can be passed off was also sought for.

5. The defendants in their written statement not only raised the objection forming part of their application under Section 111 of the Trade and Merchandise Marks Act, 1985 but also alleged that the plaintiffs suit is liable to be dismissed in limine as the same suffers from unreasonable and undue delay an laches on their part, in as much as, to their knowledge the business activities of the defendants under the impugned trade mark carton Steel Bird extend from the year 1961; that the suit also suffers from acquiescence on the part of the plaintiff in as much as to their knowledge the advertisement of the impugned trade mark appeared in magazine entitled Motors Tractors where the plaintiffs advertisement also appeared and they never took any action; that the defendant also adopted the use o the trade mark Steel Bird prior to the use of the trade mark Elofic by the plaintiff; that the plaintiff has deliberately concealed the fact relating to the opposition field by the defendants to the application in class 7 of the plaintiff, before the Deputy Registrar, Trade Marks, at New Delhi, wherein the judgement it was observed that the essential features of the competing marks are dissimilar. Almost similar grounds were taken in the written statement on merits.

6. On the basis of these fact, the contention of the learned counsel for the plaintiff is that provision of section 111 of the Trade & Merchandise Marks Act have not been complied within as much as the proceedings for rectification were neither pending before this Court at the time of the filing of the suit, nor the defendant ought the permission of this Court for filling the same. According to him the filing of the C.O.17/1983 by itself is not enough.

7. Prima facie I do not find any substance in the contention of the learned counsel. It is not deputed that after the service of the summons in the present, suit, the defendants filed their written statement on 14-9-1983 and simultaneously filed C.O. No. 17/1983 a petition under sections 107, 46 and 56 the Trade and Merchandise Marks Act for the rectification of the plaintiffs trade mark No. 252967-B in class 7, dated 7-11-1968. Section 111 seeks to prevent paralled enquiries in the same matter. The intention of the Legislature is that the Court trying the suit must wait for the result of rectification proceedings before it passes any final order or decree involving the validity of the registration. Instead of requiring the Court to raise an issue regarding the invalidity of the plaintiffs registration of the trade mark, the defendant filed the rectification proceedings. In my opinion this is a substantial compliance with the provisions of clause B(ii) of sub-section (1) of Section 111 of the Trade & Merchandise Marks Act. Even otherwise under Section 151 of the Code of Civil Procedure this Court under its inherent powers can grant the stay of the action of the plaintiff , as no useful purpose would be served by proceeding with the case while the plaintiffs trade mark is in jeopardy and the outcome of the rectification proceedings is awaited.

8. Now it has only to be seen if the grounds incorporated in the rectification proceedings are prima facie tenable or not. The statutory provision have taken a good care to see that the claim for rectification which necessitates stay of the suit must be prima-facie tenable, and it is not the object of the law that in every action for infringement of trade mark, stay should be granted, as soon as the defendant raises a, howsoever false plea of the invalidity of the trade mark and rectification of the register. In this case the defendant has raised as many as 26 grounds for the rectification of the plaintiffs trade mark. Prima facie these objection are good, valid and tenable. It is not a case where these grounds have been urged for the sake of opposition to the plaintiffs suit. As at present advised I do not propose to express any opinion on any of the ground taken in the rectification proceedings but the fact remins that this court cannot lose sight of the fact that the picture of dots as depicted on the label registered in the name of the plaintiff is a pure, exact and direct description of the character of the goods as to what it contains. Furthermore the defendants, to the knowledge of the plaintiff have honestly adopted the impugned picture of dots in their carton entitled Steel Bird Since 1964.

9. The last contention of the learned counsel for the plaintiff is that by virtue of the order of the Registrar, Trade Marks dated 16-6-1982, the defendants objections having been dismissed, and their appeal having met with the same fate, they cannot be allowed to raise the same objections for the stay of the suit. Even this contention has no merit.

10. The order of the Registrar of trade mark dated 16-6-1982 prima facie will have no bearing on the maintainability of the defendants application. The registration of a trade mark or its cancellation prima facie is quite a different and distinct aspect then that of the user of trade mark. It may be that learned Registrar did not agree with the objection of the defendant against the registration of the plaintiffs trade mark `Elofic in respect of oil air and fuel filters being elements in the lubricating system of internal combustion engines on the various grounds, but the learned Registrar in no circumstances can deprive the defendants of their right to use carton of Steel Bird trade mark which they are continuously using since 1964. Unfortunately this aspect has not been gone into by the Registrar. On the other hand learned counsel for the defendants has rightly placed reliance on the observation of the learned Deputy Registrar of Trade marks holding that the essential features of the competing marks are the words Steel Birds and Elofic which obviously are dissimilar. It is settled law that the order of the Registrar refusing an application for registration of the off ending mark may not affect the issue in an infringement action. All these facts taken together leave no doubt in my mind that the defendant has been able to make out a case for the stay of the present suit.

In the result, the defendants application is allowed. The suit of the plaintiff is hereby stayed till the disposal of C.O. No. 17 of 1983 pending in this Court.