Interplay between S. 29(4) and 29(5) of the TM Act : Smile at the Perils Past?

We have for our readers an insightful post by Jasneet Kaur on the interplay between Section 29(4) and Section 29(5) of the Trade Marks Act, 1999 in light of the diverenging views taken in the cases of Cipla Limited v. Cipla Industries Pvt. Ltd. & Anr. (2016) and Raymond Limited v. Raymond Pharmaceuticals Private Limited (2010), ultimately leading to a referral to a larger bench. Jasneet is an independent legal practitioner with extensive experience in trade mark law, having worked with the IPR divisions of two leading law firms in Delhi.

Interplay between S. 29(4) and 29(5) of the TM Act: Smile at the Perils Past?

by Jasneet Kaur

“Look Back, and Smile on Perils Past” – Walter Scott

Can we though; especially if applied to a situation relating to legal precedents? It is difficult to fathom the consequential impact / perils of legal precedents of the past when one does not anticipate the same, considering their binding nature. However, surely, our vast jurisprudence can spare a few examples where a well settled legal proposition is called in question at a subsequent stage and in fact, even overruled.

One such ‘potential’ instance (emphasis supplied) which has arisen in the recent past in context of trade mark law is the legal proposition surrounding the interplay between sub-clause (4) and (5) of Section 29. In a case argued by Dr. Veerendra Tulzapurkar for the Plaintiff and Mr. Ashish Kamat with Mr. Vaibhav Bhure for the Defendants, Justice Gautum Patel has, vide a recent judgment dated 26.04.2016 in Cipla Limited v. Cipla Industries Pvt. Ltd. & Anr., unearthed a long dead controversy surrounding Section 29 of the Trade Marks Act, 1999 dealing with infringement of trade marks by use as a trade name for dissimilar goods / services, by putting forth a divergent legal scenario, thereby requesting the matter to be referred to a larger bench.

FACTS:

For the sake of brevity, the facts, in a nutshell, are laid down as follows: –

A suit for infringement and passing off was brought in relation to the registered trade mark ‘CIPLA’. While the Plaintiff is the registered proprietor and admittedly, the prior user for the trade mark ‘CIPLA’ in Class 5, the Defendants have been using the same as a part of their trade name / corporate style in respect of goods falling under Class 21. Other than the obvious averments made on behalf of the Plaintiff company, ranging from claim of well-known mark to inconsistent use of the mark by the Defendant company, reliance was also placed upon the Division Bench judgement of the Hon’ble High Court of Bombay in Raymond Limited v. Raymond Pharmaceuticals Private Limited [2010 (7) Mh.L.J. 646], in relation to Section 29(4) and 29(5) of the Trade Marks Act, 1999. Bearing similar facts, Raymond v. Raymond essentially pertained to use of the corporate name Raymond by the Defendants therein for dissimilar goods; wherein the Division Bench, after hearing the matter in appeal, upheld the order of the Single Judge in refusing injunction to the Plaintiffs therein, while elaborately ruling on the interplay between Section 29(4) and 29(5).

RELEVANT PROVISIONS:

Hence, before proceeding further, it becomes relevant to throw light on the relevant provisions (the same being elaborately dealt with in the succeeding paragraphs):

29. Infringement of registered trade marks.—

* * * 

(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which—

(a) is identical with or similar to the registered 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; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

(5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.

* * * 

Since the chain of arguments adopted in both the cases were fundamentally the same, it would not be necessary to dig out the nuts and bolts of each independently and therefore, a crux of the arguments is briefly highlighted hereinbelow.

CONTENTIONS:

It was chiefly argued on behalf of the Plaintiffs in both the cases that in view of Section 29(4) of the Act, use of their registered trade mark by the Defendants as their trade name was detrimental to the reputation of Plaintiffs, since the Defendants were using the same without due cause, also resulting in dilution. It was also argued that the mention of the term ‘mark’ in Section 29(4) is inclusive of a ‘name’, by virtue of Section 2(1)(m) of the Act and hence, the use of a name identical or similar to the registered trade mark would amount to infringement within the meaning of Section 29(4). The Defendants, on the other hand, argued that cases such as the one under discussion herein, where the goods in question were totally dissimilar and the trade mark in question was only being used as a trade name, would not attract Section 29(4) and rather, it was Section 29(5) which would be invoked.

It is on the very aspect of the nexus between Section 29(4) and 29(5) that the CIPLA judgement locks horns with the Division Bench judgement in RAYMOND’s case.

RAYMOND’S CASE – LEGAL OBSERVATIONS QUA SECTIONS 29(4) & 29(5):

The Division Bench, upon an elaborate scrutiny of the relevant provisions of the Act, laid down the following ratio:

1. Sub-sections (1), (2) and (4) of Section 29 of the Act deal with infringement of a registered trade mark by use of an identical or similar or deceptively similar trade mark by the defendant in relation to the goods or services which are identical or similar or dissimilar to those of the registered proprietor;
2. The above sub-sections do not deal with a situation where the defendant is using the trade mark in relation to his trade name or corporate name, rather than in relation to goods or services.
3. The above situation regarding infringement of a registered trade mark where the defendant uses the same as a trade name is covered under sub-section (5) of Section 29, which is subject to the condition that the defendant must be ‘dealing in goods or services in respect of which the trade mark is registered’.

A conjunctive reading of the forgoing would be that an infringement claim relating to use of the registered trade mark as a trade name would only fall under Section 29(5) and not under Section 29(4), subject to the condition that goods / services in question must be identical or similar to the ones for which the trade mark is registered. Therefore, by necessary implication, the Division Bench, held that if, in a case, the defendant adopts plaintiff’s trade mark as his trade name, but is not dealing in goods or services in respect of which the plaintiff has registered its trade marks, then it would not tantamount to infringement.

This conclusion was arrived at by holding that while sub-section (4) refers to use of the trade mark in relation to goods / services, sub-section (5) on the other hand, refers to use of the trade mark in relation to a trade name. In its support, the Division Bench, while going into legislative intent, held that as a matter of legislative policy it was decided to treat cases of use of registered trade mark as a trade name to be a ‘distinct’ subject for the purpose of infringement, for which a specific provision was included in the statutory framework.

To amplify the same and in reply to the Plaintiffs’ contention that use of the registered trade mark as a name even for dissimilar goods / services would otherwise be deemed to be an infringing use, being within the ambit of the definition of a ‘mark’ and thereby, covered under sub-section (4), the Division Bench gave a two-fold finding. First, the Division Bench was of the view that such an interpretation would ultimately render sub-section (5) of Section 29 otiose and contrary to the legislative scheme of Section 29 wherein every sub-clause had been patterned with a specific intent, none being ‘surplus’. Second, treating sub-section (5) as a special provision, the Division Bench applied the well-known legal maxim qua interpretation of statutes, that is, Generalia Specialibus Non Derogant; meaning thereby, that a general provision must always yield to a special provision. In the instant context, the Division Bench observed sub-clause (5) to be a special provision dealing with cases relating to infringement of a registered trade mark as a trade name, thereby excluding application of sub-clause (4) which was deemed to be a general provision relating to infringement a trade mark, where goods or services were dissimilar.

On the basis of the foregoing, the Division Bench dismissed the appeal filed by the Plaintiffs therein against the order of the Single Judge rejecting interim injunction.

CIPLA’S CASE : LEGAL OBSERVATIONS QUA SECTIONS 29(4) & 29(5):

The Cipla judgment discusses in detail the findings and ratio laid down by the Division Bench in Raymond’s case and the following extract from the judgement articulately, yet, powerfully sums up the former’s stance on the ratio laid down by the latter:

“12. The question considered was not only in relation to whether a mark is used as a mark (in the ‘trade marky’ sense) or as a trade name but also about the similarity or dissimilarity of goods. In paragraph 12, the Division Bench came to the conclusion that Sections 29(4) and 29(5) operate in mutually exclusive fields. Consequently, a defendant could legitimately use a plaintiff’s mark as the defendant’s trade name without running a risk of infringement, provided the defendant dealt in dissimilar goods.”

Unlike the Raymond’s case, the Single Judge in Cipla’s case was of the view that similarity or dissimilarity of goods ought not to be a primary point of distinction in such cases, since it is not uncommon that a registered trade mark is often used both as a trade mark as well as a trade name.

In addition to the foregoing, following is a brief summation of the observations made by the Single Judge in Cipla’s case:

1. At the outset, a strong reference was made to Section 2(1)(m) of the Act, dealing with definition of ‘mark’, thereby ruling that there is no such inherent distinction in the said definition clause between a ‘mark’ as a trade mark or as a trade name, since the same, very apparently, includes a ‘name’ also within its ambit. However, as per the Single Judge, the interpretation taken by the Division Bench in drawing a distinction between sub-sections (1), (2) and (4) with sub-section (5) clearly denudes application of the above interpretation of the term ‘mark’ since a totally reverse view was taken therein by holding that use of a ‘mark’ is limited to use as a mark in the ‘trade marky’ sense of being a mere brand, thereby excluding within its realm the use of a mark as a trade name.

In other words, according to the Single Judge in Cipla’s case, the Division Bench did not take into consideration the use of a mark as a trade name in relation to Section 29(4), despite there being no such exclusion in the statutory definition of the term ‘mark’, which very well includes a ‘name’; therefore, adopting a narrower approach for construing the term ‘mark’ to heed to a mere conventional ‘trade marky’ reference.

1. Unlike the Division Bench, the Single Judge herein was of the view that sub-sections (4) and (5) of Section 29 operate in different fields and dimensions altogether and are not mutually exclusive. While in sub-section (5), there is no requirement of establishing deceptive similarity or likelihood of confusion since it applies in cases relating to similar or same goods, sub-section (4), on the other hand, dealing with cases pertaining to dissimilar goods, warrants fulfilment of certain additional factors such as reputation, unfair advantage and detrimental use of registered trade mark leading to dilution. Hence, the Single Judge accordingly observed the application of the above described legal maxim of a general provision yielding to a specific provision by the Division Bench in Raymond’s Case as misplaced, since it was incorrectly based on the premise that the two provisions are mutually exclusive.

1. The Single Judge also pointed out that the Raymond’s Case failed to duly comprehend a scenario where a ‘well-known trade mark’ (the statutory definition of which also refers to a ‘mark’ which is further inclusive of a ‘name’, as discussed hereinabove) is used by the defendant as a trade name in relation to dissimilar goods / services; thereby, disentitling the registered proprietor of an injunction; a scenario much likely to be contrary to the statutory intent.

SCENARIOS TO BE CONSIDERED: 

In view of the above highlighted differing interpretation of Sections 29(4) and 29(5) in Raymond’s Case and Cipla’s Case, following are the two scenarios which emerge as a result of the said interplay between the two provisions:

1. Registered trade mark being used as a trade name by the defendant dealing in goods / services similar to those of the plaintiff:

This scenario admittedly and outrightly meets the requirements of Section 29(5) which the registered proprietor can invoke against the use of its registered trade mark as a trade name by the defendant which must deal with same or similar goods or services for which the said trade mark has been registered.

2. Trade mark being used as a trade name by the defendant dealing in goods /services dissimilar to those of the plaintiff: 

This second scenario is the one which has been the centre of controversy in both Raymond’s case well as Cipla’s case and has resulted in differing legal positions surrounding the interplay of the two above provisions. This is the scenario pertaining to use of the trade mark as a trade name by the defendant, however, dealing with dissimilar goods / services. Hence, while the first element of Section 29(5) regarding use of trade mark as a trade name is met, the second and the controversial element regarding similarity of goods / services is not; thereby drawing it out of the purview of the said provision.

The question which therefore, arises is whether in the second scenario, the owner or registered proprietor of the registered trade mark is precluded from bringing about a claim for infringement under Section 29(4) which deals with infringement qua dissimilar goods / services? 

Now, as per the Raymond’s case, the first scenario is exhaustive of a possible claim for infringement in relation to use of a trade mark as a trade name. In fact, the Division Bench has explicitly stated that use of a trade mark as a trade name in relation to dissimilar goods / services would not tantamount to infringement, since the legislature only intended to cater to the scenario of similar goods / services by inserting a specific provision of Section 29(5) to this effect and invocation of the other provisions dealing with infringement would render it otiose; therefore, answering the above question in negative.

In Cipla’s case, it was opined that absence of the second element, meaning thereby, similarity of goods or services, will not render the registered proprietor remediless, as it would be open to him to seek relief under Section 29(4), provided, however, the necessary conditions laid down therein relating to inter alia proof of reputation, unfair advantage and detrimental usage are fulfilled; since, Section 29(5) cannot be deemed exhaustive of all scenarios pertaining to infringement by use of trade mark as a trade name and it merely accords a higher degree of protection rather than extinguishing application of Section 29(4), which requires discharge of a stronger onus on the part of the claimant. Hence, Cipla’s case answered the above question in affirmative.

Interestingly, however, a Single Bench decision dated 11.10.2013 in the case of Bloomberg Finance LP v. Prafull Saklecha & Ors. [(2014) 207 DLT 35] by the High Court of Delhi is concurring to the findings of the Single Judge in Cipla’s Case. In fact, differentiating with the findings in Raymond’s Case on the premise that there was no occasion to consider the vital point of distinction between sub-sections (1), (2) and (4) with sub-section (5) of Section 29, that is, the requirements of establishing likelihood of confusion, distinctive character of trade mark and reputation, the Single Judge in Bloomberg’s Case held that such a strong distinction evidences the legislative intent behind insertion of Section 29(5) as a provision according better protection, without shutting the door to Section 29(4) to a registered proprietor who may satisfy the conditions therein. In this way, Bloomberg’s case harmonises applicability of the two provisions without rendering any otiose. This legal position was served in a nourishing manner by the Single Judge in Bloomberg’s case with the following concluding words:

“51.* * * 

1.   * * * 
2.   This is in the nature of a per se or a ‘no-fault’ provision which offers a higher degree of protection where both the above elements are shown to exist… For the purpose of Section 29(5) of the TM Act 1999 there is no requirement to show that the mark has a distinctive character or that any confusion is likely to result from the use by the infringer of the registered mark as part of its trade name or name of the business concern.
3.   * * * 
4.   Given the object and purpose of Section 29(1) to (4), Section 29(5) cannot be intended to be exhaustive of all situations of uses of the registered mark as part of the corporate name. Section 29(5) cannot be said to render Section 29(4) otiose. The purpose of Section 29(5) was to offer a better protection and not to shut the door of Section 29(4) to a registered proprietor who is able to show that the registered mark enjoying a reputation in India has been used by the infringer as part of his corporate name but his business is in goods and services other than that for which the mark has been registered.”

QUESTIONS FRAMED FOR RE-CONSIDERATION :

Acting under Rule 28 of the Bombay High Court (Original Side) Rules which provide for reference to two or more judges, Justice Gautum Patel has framed the following questions for determination by a larger bench, thereby seeking reconsideration of the decision in Raymond’s Case qua interplay of Sections 29(4) and 29(5):

1. Where a party is found to be using a registered trade mark as a ‘name’, viz., as a corporate or trading name or style, though in respect of goods dissimilar to the ones for which the trade mark is registered, is the proprietor of the registered trade mark entitled to an injunction on a cause of action in infringement under Section 29(5) of the Trade Marks Act, 1999?
2. Whether the use of a registered trade mark as corporate name or trading name or style is excluded from the purview of Sections 29(1), 29(2) and 29(4) of the Trade Marks Act, 1999, and whether those Sections are restricted to the use of a trade mark ‘as a trade mark’, i.e., in the ‘trade marky’ sense?
3. Whether Sections 29(4) and 29(5) operate in separate and mutually exclusive spheres, i.e., whether, if the defendant uses the registered trade mark only as a corporate name or trading name or style in respect of dissimilar goods, a plaintiff can have no remedy and is not entitled to an injunction?
4. Whether the view taken by the Division Bench in Raymond Ltd. v. Raymond Pharmaceuticals Pvt. Ltd. (2010 (44) PTC 25 (Bom) (DB)) is a correct view?

While a referral to the larger bench on the above framed questions remains almost certain, considering the much debatable legal scenarios raised therein, the final decision in this regard would be a matter of grave significance for all, particularly the ones dreading the perils of the past and it remains to be seen how the larger bench decides on the interplay of the two provisions involved.