Background

Trademark Law in India is passing through a remarkable and progressive phase. Recently Samsung has raised the issue of International Exhaustion of a trademark under Indian trademark law. Similarly, trademark registrations in India have also increased as India is becoming a preferred destination for commercial activities world over. Trademark registration in India is regulated by the Trademarks Act 1999 of India. A registered trademark is valid for a period of 10 years which can be renewed for another 10 years at a time. There may be cases where a trademark holder fails to renew its trademark on time. Renewal of an expired trademark is only option left in such cases. In India even if the mark has been expired, one can apply for its re-registration. If someone else applies for registration for expired trademark as per the prescribed procedure, owner of expired trademark can file objections at the registry, tribunal or appropriate forum.

In the recently decided matter of Union of India v. Malhotra Book Depot1 by the Delhi High Court on the restoration of the trademark of Malhotra Book Depot after 26 (twenty six) years of expiry; it was directed by the Hon’ble Court that the mark of the Respondents should be renewed. The brief of the case is as below:

Union of India & Ors. v. Malhotra Book Depot2

Facts of the case

The predecessors of the respondent, (which is stated to be a partnership firm of Mr. Satish Bala Malhotra, Ms. Monica Malhotra Khandari and Ms. Sonica Malhotra Kandhari) namely Shri Ashok Kumar Malhotra and late Shri Balbir Singh trading as M/s Malhotra Book Depot had applied for and were granted registration of the trademark ‘MBD’ in Class 16 for the goods “publications (printed) and books” vide Trademark Registration dated 23rd November, 1970. The said trademark was thereafter duly renewed from 23rd November 1977 to 23rd November, 1984. On the 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. On the 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 30 th December, 2009. That 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 certification for use in Legal Proceedings. However the application was returned by the Appellant No. 3 Registrar of Trademark 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.

Contention of the Registrar of Trademark (Appellants)

  1. That the 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 latches.
  2. That the factum of removal of the Trademark was notified in the Trademark Journal No. 997 dated 16th November, 1990 for non-payment of the renewal fee.
  3. 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 facts that 26 years old records of dispatch of Notice in form O-3 would not be available with the Registrar.
  4. On receipt of complaint regarding non-receipt of Registration Certificate 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 petition in the prescribed manner.
  5. That the Respondent was also advised to file a petition in this regards vide letter from the Trademark Registry issued on 24th January, 2011.

The Counsel for the Appellant argued that removal of a trademark is an administrative act akin to removal of deadwood and any deficiency in such removal does not give any right for restoration of the trademark beyond the time prescribed thereof. Further it was said that the issuance of Notice in Form O-3 is not mandatory and cannot extend the duration for indefinite period.

Reply of the Respondent

  • The Respondent did not receive any Notice in Form O-3 and sue to which the removal of the registered trademark without notification cannot be done by the Resgitry.
  • If removal of the mark is wrong, its restoration cannot be denied; while providing for removal of the mark on non-payment of renewal fees at the expiry of the last registration uses the word ‘may’ and not ‘shall’, that it is for this reason only that the Registrar, inspite of the validity of the mark having expired in the year 1984 did not remove it till the year 1990, that if the mark not removed, its renewal can be applied for at any time. If the removal of the mark is wrongful, the limitation prescribed in section 25(4) of one year for applying for renewal thereof does not apply.
  • On a plain reading of section 25, the inescapable conclusion is that though the period of registration was prescribed as seven years, renewable from time to time on application in the prescribed manner within the prescribed time but the removal of the mark from the register has been made subject to sending of a notice in the prescribed manner calling upon the registered proprietor to review the mark and permitted only upon the failure of the registered proprietor to do so and not merely on the failure of the registered proprietor to apply within the prescribed time.
  • Rules for renewal and expiration of registration has been prescribed, according to which renewal of registration can be anytime within six months before expiration of the last registration. However the non-renewal has not been made automatic. If the renewal application is not made two months prior to expiration, the registrar is required to notify the same to the registered proprietor. The removal of the mark from the register can be done only after such notification.

The Judgment

The Division Bench in this matter was of the view that:

  • A mark cannot be removed without following the due process as per the provisions of law and had been done without following the due process and had made presumptive statements and also in the Respondent’s case the Form O-3 had not been issued as provided for in Rule 67. 
  • Under section 25 of the Trade and Merchandise Mark Act, 1958, the application for renewal of the registration could be made upon receipt of the Notice in the Form O-3.
  • 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 has been issued.
  • That the said removal of registered trademark cannot be done without prior notice to the registered proprietor in the prescribed form.
  • Mere expiration of the registration by lapse of time and 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 Trademark without complying with the mandatory procedure prescribed in Section 25(3) of the Act read with Rule 67 of the Rules. Such removal without due procedure will itself be laconic and illegal.
  • That the plea for 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) read with Rule 67 & 68.
  • 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.

It was also held by the Supreme Court in Sarla Goel v. Kishan Chand,3 emphasized importance of following the statutory procedure step by step and held an earlier step to be a precondition for the next step and it being impermissible to straightway jump to the last step. It was further held that the last step can come only after earlier step has been taken. When the act itself has prescribed the procedure for removal, it is not justified in holding the said procedure to be not mandatory or not binding on the Registrar to uphold the removal even if such procedure is not followed.4 It is also a well settled principal of law, which states that rules framed under a statute cannot override the statute. Similarly the Constitutional Principles applicable to tangible property would apply to intangible intellectual property also and which bar a person from being deprived of his property save in the manner prescribed by law.

Neither the Act nor the rules prescribe any limitation for applying for restoration and renewal in a situation where the removal of the mark from the register is without issuing the notice in Form O-3. The Registrar would be entitled to take into consideration the relevant factors such as whether the same or a similar mark has in the interregnum being registered by any other person etc. Once it is held that for the Registrar to invoke the bar of limitation of one year for applying for renewal, the notice under Form O-3 is mandatory, the Registrar cannot be permitted to invoke the presumption of the removal having been done in the manner prescribed in law.

Similarly, the period of one year in Section 25(4) is also 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 Section 26 providing for deeming the mark on the register for the purposes of any application for registered proprietor of the same or similar mark. The registered proprietor has the right to seek restoration and renewal during the period of one year. The intention of the legislature was to vest the right of renewal only for period of one year from the date of expiration of last registration; the operations 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. It was also held that it would be redundant if the right of the registered proprietor to restoration and renewal of the mark extinguish on an 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. In all the removal without following the mandatory procedure prescribed thereof is bad in law. It was finally directed that the Registrar should restore/renew the mark after satisfying that the Respondent is the registered proprietor/successor of the registered proprietor of the trademark which has expired and that in the interregnum same/similar marks are not registered.