Acquiescence as a defense:
Section 33 (1) of the
Trademarks Act, 1999 provides that if the earlier Registered Proprietor has
acquiesced for a continuous period of 5 years in the use of a registered
trademark, being aware of that use, he is not entitled to either seek
invalidation of such later mark or oppose its use in relation to goods or
services in relation to which it has been so used, unless registration of such
mark was applied in bad faith.
The essential for defense of
acquiescence shall be:
(a)
The mark should be registered
(b)
The earlier registered
proprietor should be aware of use of such registered mark for a period of 5
years or more
(c)
The subsequent Applicant/
registered proprietor has used such registered trademark for a continuous
period of 5 years
(d)
The subsequent mark if
registered cannot be cancelled unless registration was applied in bad faith
(e)
The subsequent mark cannot be
opposed for usage in respect of goods or services in respect of which it has
been so used, unless application was made in bad faith
This section clearly
establishes that if there is acquiescence for a continuous period of 5 years,
the usage of such mark cannot be stopped by earlier registered proprietor.
Though any application or registration of such mark can be challenged either in
rectification or opposition proceedings if such application was made in bad
faith.
Where such doctrine applies,
the proprietor of later trademark is not entitled to oppose use of the earlier
registered mark or exploitation of the earlier right. Burden of proof is on the
defendant.
Acquiescence vs. Consent
Acquiescence is implied
consent by remaining silent spectator. Section 30 (2) (c) of the Trademarks Act
provides that express or implied consent by the registered proprietor or
registered as to use of the mark is a defense to infringement. But as the
infringement is a continuous process this consent may be withdrawn subsequently
and such acts would amount to infringement unless a defense of acquiescence is
available. In other words implied
consent of 5 years can be termed as acquiescence.
Laches:
Failure to assert
one’s rights in a timely manner can result in a claim being barred by laches. Laches is an equitable defense or
doctrine asserted in litigation. It is defined as an "unreasonable delay
pursuing a right or claim by one party in a way that prejudices the opposite
party". The person invoking laches is asserting that an opposing party has
"slept on its rights," and that, as a result of this delay,
circumstances have changed such that it is no longer just to grant the
equitable relief sought for such as an interim or temporary injunction. Laches
is a form of estoppel for delay. A successful defense of laches will find the court denying
the request for equitable relief. However, even if equitable relief is not
available, the party may still have an action at law if the statute of
limitations has not run out.
The Hon’ble Supreme
court of India in Khoday Distilleries Limited vs. The scotch whisky association
and others, bared challenge to “peter scot” on principles of acquiescence and/
or waiver.
Appellant i.e.
Khoday Distilleries Limited hereinafter “Khoday” was a company incorporated
under the Companies Act, 1956 and manufactured whisky under the mark “Peter
Scot” since May, 1968. Its application
for registration of its mark was accepted and allowed to proceed with the
advertisement, subject to the condition that the mark would be treated as
associated with Reg. T.M. No.249226-B. The said trade mark was subsequently
registered. Respondents came to know of the appellants mark on or about 20th
September, 1974. They filed an application for rectification of the said trade
mark on 21st April, 1986. Appellant by
way of affidavit explained coining of the mark “Peter Scot” where “Peter” was
his father’s name and “Scot” was his nationality. Another factor behind the
coining of this brand name was the internationally known British explorer,
Captain Scott, and his son Peter Scott, who is widely known as an artist,
naturalist and Chairman of the World Wildlife Fund.
However, the
application for rectification was allowed. The appellant then preferred an
appeal before the High Court. One of the main ground of appeal was that in one
of the affidavit filed on behalf of the respondents affirmed by Ian Barclay it
was stated that the respondents were aware of infringement of mark as far back
in 1974 but as no action was taken in relation thereto till 1986, therefore the
application for rectification was barred under the principles of waiver and
acquiescence.
A learned Single
Judge of the High Court dismissed the said appeal and as regards the plea of
acquiescence held that the acquiescence if it is to be made a ground for declining
to rectify, must be of such a character as to establish gross-negligence on the
part of the applicant or deliberate inaction which had regulated in the
appellant incurring substantial expenditure or being misled into the belief
that the respondents though entitled to, had deliberately refrained from taking
any action and were unmindful of the use of the mark by the person in whose
name it was registered and held that the facts of this case are not such as to
warrant the conclusion that there has been acquiescence.
On an appeal a
Division Bench of the High Court, dismissed the said appeal and appellant
approached the Supreme Court against said order.
Supreme Court relied on ratio
laid down by Oliver, L.J., in Taylor Fashions Ltd. v. Liverpool Victoria
Trustees Co. Ltd. [ (Note) [1981] 2 W.L.R.] 576
“Of course, estoppel by conduct has been a field of the law in which
there has been considerable expansion over the years and it appears to me that
it is essentially the application of a rule by which justice is done where the
circumstances of the conduct and behaviour of the party to an action are such
that it would be wholly inequitable that he should be entitled to succeed in the
proceeding.”
Supreme Court observed that “Thus, in cases involving equity or justice also,
conduct of the parties has also been considered to be a ground for attracting
the doctrine of estoppel by acquiescence or waiver for infringement.”
The ratio laid down in M/s.
Power Control Appliances and others v. Sumeet Research and Holdings, [(1994) 2
SCC 448 ] was relied, where Supreme Court held :-
26. Acquiescence is sitting by, when another is invading the rights and
spending money on it. It is a course of conduct inconsistent with the claim for
exclusive rights in a trade mark, trade name etc. It implies positive acts; not
merely silence or inaction such as is involved in laches. In Harcourt v. White
Sr. John Romilly said: It is important to distinguish mere negligence and
acquiescence. Therefore, acquiescence is one facet of delay. If the plaintiff
stood by knowingly and let the defendants build up an important trade until it
had become necessary to crush it, then the plaintiffs would be stopped by their
acquiescence. If the acquiescence in the infringement amounts to consent, it
will be a complete defence as was laid down in Mouson (J.G.) & Co. v.
Boehm. The acquiescence must be such as to lead to the inference of a licence
sufficient to create a new right in the defendant as was laid down in Rodgers
v. Nowill.
Supreme Court observed that the
question again came up for consideration in Ramdev Food Products (P) Ltd. v.
Arvindbhai Rambhai Patel and others, [(2006) 8 SCC 726] wherein it was held :-
103. Acquiescence is a facet of delay. The principle of acquiescence
would apply where: (i) sitting by or allowing another to invade the rights and
spending money on it; (ii) it is a course of conduct inconsistent with the
claim for exclusive rights for trade mark, trade name, etc.
The delay by itself, however, may not be necessarily a ground for
refusing to issue injunction.
It was opined:-
106. The defence of acquiescence, thus, would be satisfied when the
plaintiff assents to or lays by in relation to the acts of another person and in
view of that assent or laying by and consequent acts it would be unjust in all
the circumstances to grant the specific relief.
It was furthermore observed:-
108. Specific knowledge on the part of the plaintiff and prejudice
suffered by the defendant is also a relevant factor. (See Spry on Equitable
Remedies, 4th Edn., p. 433.)
Taking into
considerations all peculiar facts of the case as well as precedents laid down
by Supreme Court it was observed that stand of respondents to object to the
evidence that was produced before the learned Single Judge with regard to the
increase in the volume of sale of Peter Scot, on the other hand urging that if
a comparison is made of the Indian whisky and Scotch Whisky it would appear
that some Indian whiskies are costlier than some of the Scottish brands. The stand taken by the respondents is self-contradictory
and is not fair and Supreme Court was of opinion that action of the respondents
is barred under the principles of acquiescence and/ or waiver.
As regards the
question as to consideration is as to whether the use of the term Scot would
itself be a sufficient ground to form an opinion that the mark Peter Scot is
deceptive or confusing. The Supreme Court relied upon precedents operating in
Australia and United States of America.
The Supreme
Court observed that they are concerned with the class of buyer who supposed to
know the value of money, the quality and content of Scotch Whisky. Who are
supposed to be aware of the difference of the process of manufacture, the place
of manufacture and their origin. Trademark
Registry, the learned Single Judge as also the Division Bench of the High
Court, therefore, failed to notice the distinction, which is real and otherwise
borne out from the precedents operating in the field. The SC further observed
that had these tests been applied the matter might have been different. In a given case probably SC would not have
interfered but intend to do so only because wrong tests applied led to a wrong
result.
The Supreme
Court allowed the appeal and dismissed the impugned judgement of High Court,
thereby cancelling the rectification proceedings in respect of “Peter Scot’
mark abs reinstating the Registration in favour of Appellant.
