Bombay HC Full Bench Rules on the Interplay Between Sections 29(4) and 29(5) of the TM Act – Part I

A Full Bench of the Bombay High Court, consisting of Justices A.S. Oka, A.A. Sayed and A.S. Gadkari pronounced their decision in the matter of Cipla Limited v. M/s Cipla Indsutries Pvt. Ltd. on March 1, 2017 (read the order here). This decision is of extreme importance as the Honourable Chief Justice directed that the matter be placed before a Full Bench, following Justice Patel’s recommendation that the 2010 Division Bench (‘DB’) Decision in Raymond Limited v. Raymond Pharmaceuticals (‘Raymond’) needed reconsideration. It will now function as precedent on this issue.

This case discusses the important issue of trademark infringement by use of the registered mark in a corporate or trade name, with respect to dissimilar goods/services. This decision centres around the interplay between Sections 29(4) and 29(5) of the Trade Marks Act, 1999 (‘Act’). (Read our previous posts on this issue here, here, and here.) Warning: Long post(s) ahead!

Factual Background

Cipla (‘Plaintiffs’) owns the trademark ‘CIPLA’ as registered under Class 5. Cipla Industries (‘Defendants’), on the other hand, have registered the trademark ‘CIPLA PLAST’ under Class 21. While the Plaintiffs manufacture pharmaceutical products, the Defendants are involved in the business of household articles, such as soap dishes, photo frames, ladders, etc. The Plaintiffs filed this suit for trademark infringement and passing off in 2012, claiming that the Defendants violated the rights of the Plaintiff by using ‘CIPLA’ as part of their corporate or trade name.

Relevant Provisions

The two relevant facts for this discussion are (1) the goods are not similar, and (2) the Defendants used the Plaintiffs registered mark as part of their corporate/trade name. Fact 1 attracts Section 29(4), while Fact 2 brings in Section 29(5). The provisions are reproduced below:

29. Infringement of registered trade marks:

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(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.

* * * 

Raymond Decision

Raymond had a very similar factual scenario to our present case: infringement proceedings for the use of ‘Raymond’ as part of a corporate name for dissimilar goods. The DB upheld the order of the Single Judge, and refused an injunction to the Plaintiffs. The Court differentiated between infringement suits that were in relation to goods or services which were identical/similar/dissimilar to those in question, and those that were in relation to a corporate or trade name. The Court held that sub-sections (1), (2) and (4) of Section 29 would apply to the first scenario, and sub-section (5) to the second; therefore drawing a clear line of demarcation between the sub-sections.

The DB applied the principle of generalia specialibus non derogant to the facts of the case, holding that Section 29(5) would take precedence over 29(4), as it was a special provision inserted to deal with this very situation. Further, the Court observed that Section 29(5) applied squarely to ‘goods or services in respect of which the trade mark is registered’. Therefore, applying 29(5), since the Defendants were using ‘Raymond’ as part of their corporate name for dissimilar goods and services, the DB found no case of infringement.

Holding of the Single Judge

Justice Patel, the Single Judge hearing the matter, passed an order in this case on April 24, 2016. He noted that he was bound by the Raymond DB order, but recommended that it be reconsidered for a number of reasons:

• When the observations of the Court in Raymond are read together, the holding implies that 29(4) and 29(5) are disjunctive, and operate in mutually exclusive fields. Justice Patel saw this as an incorrect observation, more so since the Court’s reliance on generalia specialibus non derogant was based on the provisions being mutually exclusive.
• He then brought up the concept of a ‘well known mark’, stating that it would be entirely possible for there to be infringement by use of a mark as a trade name but for dissimilar goods, and questioned why the DB did not envisage such a situation. Justice Patel observed that on application of the Raymond ratio, a well known trademark used as a corporate name for dissimilar goods would receive no protection, and therefore could not said to be correct, or to be the likely statutory intent.
• Justice Patel bolstered his view with the definition of ‘mark’ and by Section 29(8), which deals with infringement through advertising, which were not referred to in Drawing the crux of the debate to the similarity/dissimilarity of goods, Justice Patel observed that Section 29(8) only dealt with the mark being advertised, and was unrelated to the similarity/dissimilarity of goods. He held that should the Raymond ratio be applied, the clear-cut distinction between the use of a mark as a mark, and the use of a mark as a name would render Section 29(8) meaningless. It was also observed that the definition of ‘mark’ in Section 2(1)(m) makes no distinction between a mark as a trade mark and a mark as a trade name, as the definition includes ‘name’ within its ambit.

Therefore, Justice Patel read down the DB order to mean that a proprietor may use his mark either as a mark, or as a corporate name, but may succeed in an infringement suit if the defendant (a) uses the mark as a mark for similar/dissimilar goods, or (b) uses the mark as a corporate name for similar goods. The crux of the problem is therefore that the Plaintiff will not be entitled to an injunction if Defendant uses the mark as a corporate name for dissimilar goods.

In the next part of this post, I delve into the Full Bench decision. Please click here for Part II.

Image from here.