Delhi High Court Upheld Single Bench Judgement directing the restoration and renewal of the Trademark "MBD" 29 years after due date of renewal

Divisional Bench of Delhi High Court in LPA no. 564 of 2012 titled Union of India & Ors. Vs. Malhotra Book Depot has upheld the judgment dated November 29, 2011 passed by single bench of Delhi High Court in W.P.(C) No.7882/2010 and has directing the restoration and renewal of the Trademark of the respondent "Malhotra Book Depot" for mark "MBD" in class 16 after satisfying that the respondent is the registered proprietor/successor of the registered proprietor of the registered trademark which has expired and that in the interregnum same or similar marks have not been registered.

Brief facts of the case:

(i)        The predecessors of the respondent (i.e. Shri Ashok Kumar Malhotra and late Shri Balbir Singh, trading as M/s. Malhotra Book Depot) stated to be a partnership firm of Ms. Satish Bala Malhotra, Ms. Monica Malhotra Kandhari and Ms. Sonica Malhotra Kandhari) had applied for and were granted registration of the Trademark “MBD” in Class 16 for the goods “publications (printed) and books” vide Trade Mark Registration dated 23rd November, 1970;

(ii)       Registration thereafter duly renewed from 23rd November, 1977 to 23rd November, 1984;

(iii)      On 1st April, 1992 the constitution of M/s Malhotra Book Depot was changed and a fresh Partnership Deed was executed between the new partners i.e. Shri Ashok Kumar Malhotra and Ms. Satish Bala Malhotra;

(iv)      On demise of Shri Ashok Kumar Malhotra the constitution of the respondent M/s Malhotra Book Depot was again changed and a fresh Partnership Deed was executed between Ms. Satish Bala Malhotra, Ms. Monika Malhotra Kandhari and Ms. Sonica Malhotra Kandhari on 30th December, 2009;

(v)       In April, 2010 the respondent filed a suit for permanent injunction restraining infringement of the Trademark MBD and in connection with the said suit applied for Certificate for Use in Legal Proceedings – however the application was returned by the appellant no.3 Registrar of Trade Marks as no records/details of the said Trademark could be traced in the database of the Registrar – in the consequent investigation by the respondent it was realized that the Trademark had not been renewed after 23rd November, 1984;

(vi)      Respondent on 7th October, 2010 applied for renewal and restoration of the said Trademark but which application was not accepted.

(vii)     Respondent sought a writ of mandamus for restoration and renewal of the Trademark on the basis that statutory Notice in Form O-3 under the Trade and Merchandise Marks Rules, 1959 (the Rules as were applicable at the relevant time) informing the petitioner that the registration of the mark was expiring and can be renewed was not sent by the Registrar to the respondent and the Registrar could not thus deny restoration/renewal of the Trademark.

The Appellants challenged the same on mainly the following grounds that renewal of the mark had become due on 23rd November, 1984 i.e. 26 years prior to the filing of the writ petition and the writ petition suffered from delay and laches; that the factum of removal of the Trademark was notified in the Trade Mark Journal No.997 dated 16th December, 1990 for non-payment of renewal fees;  that such removal could not be without following the due process as per the provisions of law and the respondent was taking advantage of the fact that the 26 years old records of dispatch of Notice in Form O-3 would not be available with the Registrar; that on receipt of complaints regarding non-receipt of Registration Certificates and non-issuance of the Form O-3 Notices, Public Notices dated 24th September, 2010 and 31st November, 2010 were issued advising the public at large to file the petitions in the prescribed manner; that the respondent was also advised to file a petition in this regard vide letter from the Trade Mark Registry issued on 24th January, 2011.

The learned Single Judge allowed the writ petition observing/finding/holding:-

(a)        that the Registrar in its counter affidavit, in response to the unequivocal plea in the writ petition, that the Notice in Form O-3 was not received by the respondent, had merely stated that removal of the mark could not have been done without following the due process as per the provisions of law and had thus made only a presumptive statement; further, the Registrar in para 7 of the counter affidavit had admitted that in various cases O-3 Notices had not been issued; the learned Single Judge thus concluded that in the respondent’s case O-3 Notice had not been issued as provided for in Rule 67;

(b)       that under Section 25 of The Trade and Merchandise Marks Act, 1958 (the Act) (which was applicable in the year 1984 when the Registration of the mark of the respondent expired), the application for renewal of the registration could be made upon receipt of the Notice in Form O-3;

(c)        that the Registrar could remove the Trademark from the Register and advertise the factum of removal in the Journal only after a Notice in Form O-3 had been issued;

(d)       that the removal of the registered Trademark from the Register entails civil consequences for the registered proprietor of the mark;

(e)        the said removal of the registered Trademark cannot be done without prior notice to the registered proprietor in the prescribed form;

(f)        mere expiration of the registration by lapse of time and the failure of the registered proprietor of the Trademark to get the same renewed, by itself, does not lead to the conclusion that the same can be removed from the Register by the Registrar of Trade Marks without complying with the mandatory procedure prescribed in Section 25(3) of the Act r/w Rule 67 of the Rules;

(g)       removal of the registered Trademark from the Register without complying with the mandatory requirements of Section 25(3) would itself be laconic and illegal;

(f)        mere expiration of the registration by lapse of time and the failure of the registered proprietor of the Trademark to get the same renewed, by itself, does not lead to the conclusion that the same can be removed from the Register by the Registrar of Trade Marks without complying with the mandatory procedure prescribed in Section 25(3) of the Act r/w Rule 67 of the Rules;

(g)       removal of the registered Trademark from the Register without complying with the mandatory requirements of Section 25(3) would itself be laconic and illegal;

(h)       that the plea of the Registrar that the application for restoration and renewal of the mark was beyond the time prescribed in Section 25(4) and Rule 69 could not be accepted because the removal of the mark from the Register was not in terms of Section 25(3) r/w Rules 67 & 68;

(i)        that under the Act and the Rules, mere lapse of the time does not result in its removal and for which Notice in Form O-3 is required to be given; (j). that in the facts of the present case, since the mandatory Notice in Form O-3 had not been given prior to the removal of the mark, the application seeking its restoration and renewal could not be said to be barred by time.

In Letter Patent Appeal before the Divisional Bench, the Appellant also relied on order dated 16th April, 2012 of the Intellectual Property Appellate Board (IPAB) in OA No.59&60/2011/TM/KOL titled Pernod Ricard India Private Ltd. Vs. The Controller General of Patents, Designs and Trade Marks holding that the Act does not make the renewal of the trademark dependent upon the service of Notice in Form O-3 and does not make the factum of removal of the mark dependent on the issuance of such notice.

The Respondent relied on Tetragon Chemie (P) Ltd. Vs. Government of India (2007) where a Single Judge of the Karnataka High Court held that in the absence of Notice in Form O-3, the order of removal of the mark on the ground of non-payment of renewal fees within the prescribed time is bad and directed renewal.

The divisional bench considered the importance of the issue raised and the difference in the opinion of the learned Single Judge of Delhi High Court and the IPAB and after due consideration of the provisions of the Act, found reasoning of IPAB contrary to the legislative intent. The Court observed that legislature and its delegatee, not only in the Act but also in the Rules, have clubbed “Duration, renewal and restoration of registration” and “Renewal of Registration and Restoration”.

The relevant provision dealing with renewal, removal and restoration are as follows:

25. Duration, renewal, removal and restoration of registration.-

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(4) Where a trade mark has been removed from the register for non- payment of the prescribed fee, the Registrar shall, after six months and within one year from the expiration of the last registration of the trade mark, on receipt of an application in the prescribed form and on payment of the prescribed fee, if satisfied that it is just so to do, restore the trade mark to the register and renew the registration of the trade mark either generally or subject to such conditions or limitations as he thinks fit to impose, for a period of ten years from the expiration of the last registration.

The relevant provision dealing with renewal, removal and restoration of the Trademark is as follows:

25. Duration, renewal, removal and restoration of registration.-

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(3) At the prescribed time before the expiration of the last registration of a trade mark the Registrar shall send notice in the prescribed manner to the registered proprietor of the date of which a renewal of registration may be obtained, and, if at the expiration of the time prescribed in that behalf those conditions have not been duly complied with the Registrar may remove the trade mark from the register: expiration and the conditions as to payment of fees and otherwise upon Provided that the Registrar shall not remove the trade mark from the register if an application is made in the prescribed form and the prescribed fee and surcharge is paid within six months from the expiration of the last registration of the trade mark a d shall renew the registration of the trade mark for a period of ten years under sub- section (2).

Therefore as per provisions of Section 25(3) issuance of a notice on Form O3 is must intimating the registered proprietor about the deadline of renewal and consequence thereof.

The Court also considered the provision of Section 26:

26. Effect of removal from register for failure to pay fee for renewal.—Where a trade mark has been removed from the register for failure to pay the fee for renewal, it shall nevertheless, for the purpose of any application for the registration of another trade mark during one year next after the date of the removal, be deemed to be a trade mark already on the register, unless the tribunal is satisfied either—

a) that there has been no bona fide trade use of the trade mark which has been removed during the two years immediately preceding its removal; or

(b) that no deception or confusion would be likely to arise from the use of the trade mark which is the subject of the application for registration by reason of any previous use of the trade mark which has been removed.

The Court observed that though they have held that Section 25(4) prescribes the time of one year from the expiration of the last registration for restoration and is applicable only where removal is in compliance of Section 25(3) and Rule 67 but Section 26 appears to suggest that the said period of one year in Section 25(4) is also to be read as commencing from the date of removal and not from the date of expiration of the last registration, where removal is not immediately after the expiration of the last registration. Else, there would be no logic/sense in in Section 26 providing for deeming the mark on the register for the purposes of any application for registration of the same or similar mark. The only answer, according to us, can be that the registered proprietor of the trademark which has been removed, during the said one year has a right of seeking restoration and renewal thereof. If the legislative intent was to vest a right of renewal only for a period of one year from the expiration of the last registration, the operation of Section 26 would also have been for one year from the date of expiration of the last registration of the trademark and not one year from the date of removal.

The Court also relied upon Section 2(r) and Section 29 of the 1958 Act. The Section 2(r) of the 1958 Act defines the “registered trademark” as a trademark which is actually on the register and not as a trademark, registration of which is valid/has been renewed. Similarly Section 29 provides that a registered trademark is infringed when a person not being the registered proprietor uses in the course of the trade, a mark which is identical with or deceptively similar to the trademark which is registered. Since as per Section 2(r) a registered trademark is a trademark which is actually on the register, under Section 29, registered trademark would be infringed even though its registration may have expired, so long as it has not been removed from the register.

The Court observed that Section 26 would become otiose/redundant if it were to be held that the rights of a registered proprietor to restoration and renewal of mark extinguish on the expiry of one year from the expiration of the last registration and irrespective of whether the trademark is actually removed from the register immediately on such expiration or after considerable time. If the registered proprietor whose trademark has expired, irrespective of whether the same had been removed or not from the register were to be left with no right therein, there would not have been any need in Section 26 to preserve such rights for a period of one year from the removal.

The Court held that in the light of the view taken, that removal without following the mandatory procedure prescribed therefor is bad.

However while dismissing the appeal the Court modified the direction given in the impugned judgment to the Registrar to restore and renew the mark with "a direction to the Registrar to restore/renew the mark after satisfying that the respondent is the registered proprietor/successor of the registered proprietor of the registered trademark which has expired and that in the interregnum same or similar marks have not been registered."

It would be interesting to note what if similar marks have been registered in the interregnum period of approx. 29 years, as it was not case where the Respondent stopped using the mark and the mark had been used continuously and openly and is associated and identified with them.