Trademark

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


While Part I was concerned with the background to this dispute, this post concentrates on the reasoning of the Full Bench, as well as analyses its jurisprudential impact.

Holding of the Court

The Court held that the plain language used in sub-sections (4) and (5) answered the questions at hand. It was noted that 29(4) uses the words “in the course of trade” and “in relation to goods and services” which were absent in 29(5). Conversely, “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” was absent in 29(4). The Court used this difference in language to hold that 29(4) would clearly apply in a “trademark v. mark” situation while 29(5) would apply in a “trademark v. trade/corporate/business name” situation.

The Court dismissed the fact that the definition of a ‘mark’ includes ‘name’ to be of importance in the present matter. Further, the Court observed that if 29(4) was to apply to those cases where the second condition of 29(5) was not satisfied, then the requirement specially incorporated in 29(4) for a mark to be used “in relation to goods and services” would become redundant. To clarify, the first and second conditions of 29(5) are the use in trade/corporate name, and the use in respect to goods and services for which the trademark was registered, respectively.

To come to this conclusion, the Court relied on the 2009 Supreme Court decision of Vijay Narayan Thatte v. State of Maharashtra, and held that when the language of the statute is clear, the literal rule of interpretation has to be applied; one can depart from this rule only in the event of an ambiguity. The Court observed that since there was no ambiguity to be found, the use of a trademark as a trade/corporate name could not be read in to Section 29(4), as that would be contrary to its plain meaning. The Court further dismissed Justice Patel’s observations on Section 29(8), stating that this sub-section had no relevance in the interpretation of sub-sections (4) and (5).

The Court additionally referred to the Objects and Reasons on Section 29, along with the Eighth Report on the Trade Marks Bill, 1993 submitted by the Parliamentary Standing Committee on Industry as appointed by the Rajya Sabha, and found both to be in consonance with their stand.

  • Bloomberg Finance v. Prafull Saklecha

This 2013 Delhi High Court (‘DHC’) decision was relied on by the Plaintiffs in this case. A suit for infringement was filed to prevent the Defendants from using ‘Bloomberg’ in their real estate business in violation of the Plaintiffs trademark, which was registered for broadcasting services. The DHC observed that in situations where both conditions of Section 29(5) were met, it would function as a ‘no fault’ provision (or afford a higher degree of protection where both elements exist), and an injunction would necessarily follow. The DHC here, however digressed from the Raymond decision, and held that in a situation where the second requirement of Section 29(5) is not fulfilled, it could not be said that there would be no protection for a registered trademark.

The DHC observed that the legislature could not have intended not to provide a remedy where is registered trade mark is used as a corporate name but for dissimilar goods. Differentiating the Raymond order, the DHC stated that the Bombay High Court did not have an occasion to consider an important point of distinction between Sections 29(1) to (4) and 29(5): that Section 29(5) does not require the registered proprietor to show a likelihood of confusion. Therefore, the DHC held that it was possible to harmonize the provisions of 29(4) and 29(5) without rendering either section otiose. The DHC proposed that should such a situation arise; the Plaintiff would be allowed to seek protection under 29(4) should all the conditions mentioned therein be satisfied.

The Full Bench of the Bombay High Court disagreed with the above judgement, and reiterated that 29(4) would apply only when a mark is used in the course of trade in relation to goods or services which are not similar to those for which the trade mark is registered.

Questions Framed by Justice Patel

Justice Patel had framed four questions for determination in the April 2016 order. Based on the above enumerated observations, the Court answered them as follows: (1) There exists no cause of action for infringement when a registered trade mark is used as a corporate or trading name in respect of dissimilar goods. (2) That such use is excluded from the purview of Sections 29(1), 29(2) and 29(4), and these Sections are restricted to the use of a trade mark ‘as a trade mark’, i.e., in the ‘trade marky’ sense. (3) That Sections 29(4) and 29(5) operate in separate and mutually exclusive spheres. (4) With regards to the correctness of the Raymond decision, the Court stated that this question did not need to be answered separately. The Full Bench then remanded the suit to the Single Judge, having answered the questions referred to it.

Conclusion

This Full Bench order lays down seemingly dangerous precedent that could possibly act as a loophole for trademark infringement. As was highlighted by Justice Patel in the April 2016 order, this holding will compromise the rights of owners of well known trademarks, should their marks be used in trade/corporate names for dissimilar goods. The Delhi High Court’s Bloomberg order was very well written, and in my opinion, this Court did not give strong enough reasons to refute the DHC’s reasoning.

While it is unfortunate that this holding will now function as precedent, it is a very interesting debate to follow, should this question again come up for determination.

I’d love to hear from our readers on this conundrum. Please do leave a comment below!

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Inika Charles

Inika is a fifth year student at National Law University, Jodhpur, and is on the founding Board of Editors of the Journal of Intellectual Property Studies. She has a strong interest in Intellectual Property, and is fascinated with the intersection of IP with Technology and Media law. You can contact her at [email protected], or on Twitter: @inikacharles

2 comments.

  1. AvatarEashan Ghosh

    Thanks for writing about this. A few thoughts on the judgement:

    I think it’s a common misstep to trace the interpretive assistance available on Section 29 to merely its text and accompanying legislative material. There’s a compelling case to view the first half of Section 29 as an extension to infringement of the relative grounds for refusal under Section 11 – Sections 11(1)(a) and (b) map on exactly to Section 29(2), Section 11(2) correlates exactly with Section 29(4) and the relationship of Section 29(1) with Section 11 goes even further back to what used to be Section 12(1).

    These provisions also speak to different objectives – Section 29(2) builds up to a likelihood of association with the Plaintiff’s business, Section 29(4) is rooted in well-known mark protection, while Section 29(5) has no add-on. Using this yardstick alone, Section 29(2) is already a more likely home for dissimilar product/service protection but this isn’t really within the Cipla bench’s contemplation and it’s difficult to see why.

    On firmer ground, however, there are at least three problems with Cipla’s reading of Section 29(5) protection from my standpoint:

    First, the trade or business name must be identical in whole or part to the Plaintiff’s trademark. Reading this strictly, a deceptively similar trademark [or indeed one with minimal variation designed specifically to escape the clutches of Section 29(5)] used as a trade or business name doesn’t set up a pure Section 29(5) infringement action. I could call my company Cpila and Cipla wouldn’t be able to touch me with Section 29(5). Section 29(4) covers these cases if the Plaintiff can leverage distinctiveness in its favour.

    Second, para 32’s reference to legislative history tags Section 29(5) with the Companies Act rectification procedure. This procedure addresses company names that run into conflict trouble with registered trademarks and are ‘identical with or too nearly resemble’ them. Not only is this broader than Section 29(5) in terms of how close the trade or business name needs to be but the comparator is all companies, whether or not they’re involved in trading the same goods or services. Again, it makes zero sense to not simply permit this under Section 29(4) to enable the same outcome under trademark law, unless the intention is to exclusively shepherd such causes of action to company name rectification petitions.

    Third, even if this is the intention, it doesn’t cover trade or business names that aren’t company names (I’m thinking partnerships, proprietorships, family arrangements, unincorporated unions, I’m sure there are others) that still fall to be determined exclusively under Section 29(5), per Cipla. Assuming further still that this sort of split based on the manner of formal arrangement of potential Defendants is meaningful, there’s no reason why this shouldn’t also apply, for instance, to domain names to the extent that they serve the same purpose. [I use domain name infringement here to allude to consistency issues alone, and in the sense that it is considered open and shut Section 29 infringement that has nothing to do with Section 29(5).]

    From here on out, I can see two further lines in support of the Cipla view.

    First, purely on legislative intent, the original version of Section 29(5) didn’t cover ‘dealing in goods or services in respect of which the trademark is registered’, that this was added later at the suggestion of the Committee and since, without these words, Section 29(5) protection would extend to dissimilar goods and services, their incorporation indicates a desire to exclude such goods and services. I’m ambivalent on this because a pure leg-int argument of this nature doesn’t hold up on the back of the lack of material stitching together the Companies Act rectification provisions and Section 29(5).

    Second, that since Section 29(5) is a contextless, no-fault provision, it shouldn’t be interpreted broadly because that would entrap potential Defendants who otherwise have a good shot at putting up an honest concurrent user or Section 34 defence (however much the latter has been neutered by the Varun Gems Supreme Court judgement). Cipla doesn’t join these dots but it does take the first half and tack it onto the back of its rejection of Bloomberg. Bloomberg itself, to the extent that it is relevant here, basically asks whether Section 29(4) can be read to cover cases which fall through the cracks of Section 29(5) but would otherwise generate infringementy outcomes. (Once again, this makes a lot more sense if you think of Section 29 as an expression of Section 11.)

    It concludes that it can. This is fine, except that its relevance is slightly inflated by Cipla’s reluctance to engage with older precedent on this point (the one that immediately comes to mind is Montari Overseas but I’m sure there are dozens more that returned pro-Plaintiff verdicts if someone wants to find them). Bloomberg also insists that you can separate Section 29(5) from (1) to (4) because there is no requirement for an ex post consequence (like confusion, association, unfair advantage) to result from identity/similarity. This is difficult to accept after the leg-int backstory that Cipla has laboured so much on, and I think it makes Bloomberg less persuasive, if not failing to move the needle entirely.

    Looking ahead, I think what Cipla is most likely to do is place immense pressure on the extremely brittle characterization of ‘use in the trademarky sense’ that Justice Patel resurrected in Gufic last year (though, iirc, it runs at least as far back as Justice Arnold’s 2008 opinion in Cipriani). I actually think there’s plenty of room to suggest both possibilities from this point forward – that ‘use in the trademarky sense’ means ‘trademark versus mark’ cases or that it means ‘use in the course of trade’.

    Given that one involves shutting out Section 29(4) from applying to cases where it certainly could extend and the other doesn’t, I don’t think it’s hard to read use as a trade or business name into ‘use in the course of trade’ especially since Section 29(6)(d) as near as damn it says so. However, Cipla creates the impression that it’s absolutely essential for Plaintiffs to win this characterization when, in fact, it really needn’t be so complicated. [I’ve hinted at it accidentally here but the bigger barrier in claiming cover under Section 29(4) really ought to be the difficulty in securing distinctive character/well-known mark status – an area where the law on trade or business names as trademarks, which really has been running non-stop since Simatul, has consistently and conspicuously run dry.]

    To return a finding which can invite disagreement is understandable but to return just this finding when there was an opportunity to clarify so much more really, really rankles here.

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  2. AvatarPratik chaudhari

    I agree with your view about the Full bench judgment. It is quite draconian to interpret the provision in such a manner, which gives mileage to the infringers. In fact the bench must have weighed out the aggravating circumstances while rigidly sticking to the literal interpretation of the statutes. A constructive and equitable interpretation of the statute could have upheld Bloombergs decision and Justice Patel’s view.

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