The Hindu Business Line : `Transfer of ownership of disputed trademark invalid'

A PERSON, who is not a bona fide user of a registered but disputed trademark "openly and continuously" for a considerable period is not entitled for registration of the said trade mark, the Intellectual Property Appellate Board, Chennai, has ruled.

Disposing of an application filed by a Gujarat-based firm, New Nandi Seeds Corporation, praying for setting aside an order dated April 27, 1998 of the Registrar of Trade Marks holding that an Andhra Pradesh-based organisation, Nandi Seeds, was the subsequent proprietor of the trade mark, the board held that there was absolutely no bona fide on the part of the Andhra Pradesh organisation in filing the application for registration of the disputed trademark.

The board noted that only after the applicant (New Nandi Seeds Corporation, Ahmedabad) had served a notice claiming to be the registered proprietor of the trade mark, the 1st respondent (Nandi Seeds, Mahaboob Nagar) filed the application for registration of the disputed trademark. When once it was brought to the notice of the 1st respondent that the applicant was the registered owner, it was for the 1st respondent to establish as to his bona fides in filing the application for registration.

The 1st respondent, neither in his affidavit before the Registrar of Trade Marks, nor in his counter before this Board, had come out with any particulars with regard to the steps taken by him to find out as to whether any trademark of the same type had been registered or not. In the absence of any steps taken by the 1st respondent, the Board would conclude that there was absolutely no bona fides on the part of the 1st respondent in filing the application itself for registration of the disputed trade mark.

According to the applicant, they were the registered proprietors of the trade mark `Nandi.' The 1st respondent was trading under the name and style of M/s Nandi Seeds claiming to be the registered proprietor of the trademark in respect of seeds. The applicant issued a notice to the 1st respondent calling upon them to refrain from using the disputed trade mark as well as the device and logo in respect of seeds. The 1st respondent refuted the charge and contended that he was not aware about the adoption of the trademark himself in the trade by using the disputed trade mark.

Sometime later, the 1st respondent transferred and assigned all his rights in the said trademark in favour of 2nd respondent (Nandi Seeds), who in turn transferred the same in favour of 3rd respondent (Nandi Seeds Pvt Ltd), who became the subsequent proprietor and owner of the registered trade mark.

The applicant contended that when different procedures had been prescribed for assignment of the trademark, registered without goodwill and with goodwill, the entire procedure adopted by the respondents for transfer of the registered trademark was illegal. According to the applicant, there was absolutely no record to establish the use of the disputed trademark by the 1st respondent for some considerable time prior to the filing of the application for registration. As such, it was not open to the 1st respondent to claim to be the bona fide user entitled for the concurrent registration.

The 1st respondent submitted that he was a concurrent user of the disputed trademark, and as such was entitled for the registration of the trademark under Section 12(3) of the Trade and Merchandise Act. Since the Registrar granted the registration in favour of the respondents after considering the documentary evidence, it was not open to the applicant to seek for rectification belatedly.

The petition, filed by the applicant in the Madras High Court, was transferred to the Appellate Board.

The Board, comprising Mr Justice S. Jagadeesan, Chairman, and Dr Raghbir Singh, Vice-Chairman, said that it was for the 1st respondent to make a search in the manual or at least make an enquiry before the Registry of Trademark to find out as to the availability of the registered trademark. In the absence of any steps taken by him to find out the availability of the trademark, the Board concluded that there was absolutely no bona fides on the part of the 1st respondent in filing the application itself for registration of the disputed trade mark. "We hold that the 1st respondent is not a bona fide user openly and continuously for considerable period of the disputed trade mark. Consequently he is not entitled for registration of the disputed trade mark."

The orders of the Registrar registering the disputed trade mark in the names of the respondents 1 to 3 were liable to be set aside. Accordingly, the application was allowed. "We direct the removal of the trade mark from the registry and further hold that the transfer by the 1st respondent in favour of the 2nd respondent and the consequent transfer in favour of the 3rd respondent cannot also be sustained in law," the Board held.