Understanding of Relinquishing the Trademarks

By

Sakshi Shairwal

Iesha Sharma

Introduction

The Trademark is the sign that is capable of distinguishing the goods and services of one enterprise from another. The trademark is protected under Intellectual property rights. The registration of a Trademark provides legal certainty and reinforces the position of the right holder. The Trademark is initially registered for a period of 10 years that is calculated from the day of filing of the application to the date of the priority.

The judgment of AMPA Cycle Private Limited V. Jagmohan Ratra pronounced by the High Court Delhi has given deep insights regarding the Trademark relinquishment and given a new interpretation to the existing law. This Article seeks to examine the judgment and observation given by the High Court of Delhi.

Brief Facts

The Appeal under Section 13(1A) of Commercial Court Act,2015 read with Order XLIII Rule 1(r) of CCP,1908. The appeal was for restarting the Respondent/Plaintiff for passing off of trademark and for ancillary relief for the previous order of 23rd December 2020. The Appeal was filed on 18th May 2021.

The Respondent/ Plaintiff & Hari Dutt Sharma (Partner) were the sole proprietor owner of M/s Four diamonds for manufacturing and selling bicycles, tricycles, bay rider bicycles, and other related products. The Trademark was ‘AMPA’ and adopted by the partnership firm in 1991. The ABPL merged with the respondent/ Plaintiff as the shareholder. After the dissolution of the firm with Hari Dutt Sharma, the trade name was used by respondents/ Plaintiff for 14-inch tyre radius and company ABPL for cycle mode more than 14 inch. The respondent/ Plaintiff transferred his dues to Hari Dutt towards settling the dues of the existing partner.

In 2013, ABPL was struck off from the Register of companies; however, the trademark ‘AMPA’ was still being used by the respondent/Plaintiff for cycles. On 22nd March 2019, Respondent/ Plaintiff filed the Trademark Application for claiming the use from 1st April 2011 to 10th November 2020, in November 2020 the respondent/Plaintiff was made aware that appellant/ Defendant was using the trademark ‘AMPA’. The Appellant/ Defendant company was fully aware that trademark ‘AMPA’ was used by Respondent/ Plaintiff because Ajay Kumar Bawa the concerned owner of M/S Bawa Cycle Store was having the buyer/Client of ABPL of which the Respondent/Plaintiff was the director.

The Dissolution Deed made it clear that the respondent/ plaintiff could only use the trademark ‘AMPA’ for cycles of kids up to 14 inch and the owner Hari Dutt Sharma the owner of ‘AMPA’ can use the could be manufacturing the cycle with the model size up to 14 inch for three years. After the dissolution of the partnership firm M/S Four Diamonds, Hari Dutt Sharma continue to use the mark ‘AMPA’ with the new company name “Concept Bikes & the main signatories that is Hari Dutt Sharma, Nishtha Sharma, and Ajay Kumar Bawa signed the assigning deed to transfer the trademark ‘AMPA’ to Ajay Kumar Bawa.

The Appellant / Defendant Company was incorporated on 05th June 2018 for cycle, tricycle, and other names by Ajay Kumar Baws user of Trademark ‘AMPA’ along with others. The Trademark Application no’s were filled by the appellant/defendant company for class12 on a “proposed to be used basis.” The court granted an Interim Injunction in favor of the respondent/ Plaintiff to stop the appellant/ defendant form using the Trademark ‘AMPA’. The Appeal was filed on 18th May 2021.

Issues Raised

The main issue that came before the High Court was:

1. Whether the first respondent has expressly waived his right on the trademark registered in the name of the company could be claimed the said right indirectly?

2. Whether the appellant company has any right to the trademark when the title to be investigated was of the respondent and not of the appellant company?

Arguments by Parties

Appellant

1. The Trademark ‘AMPA’ was being used by the appellant/ defendant company for selling cycles with tyre radius 14 inch. Whereas the respondent/ plaintiff via dissolution deed has stopped/barred from using the trademark ‘AMPA’ for its cycle above 14 inch and the products of M/S Four diamond bearing the mark of ‘AMPA’ prior to 1991 cannot be claimed to be held true.

2. The respondent/ Plaintiff has fabricated the invoices to show the sale of tricycle under the name ‘AMPA’ & respondent/ Plaintiff even though they have used the trademark for tricycle has not earned any goodwill for the same.

3. Since, the respondent/ Plaintiff has accepted that use of trademark ‘AMPA’ by appellant/ respondent company it cannot be denied that the use of the said mark in the category of cycle with tyre radius of 14 inch is on appellant and merely cannot be questioned that registration of trademark was filled on a “proposed to be used basis.”

4. The respondent/ Plaintiff has copied the mark after was appellant/ defendant posted it on the Facebook page on 6th March 2018 and filed an application on 22nd March 2019.

5. The Respondent/ Plaintiff has filled the fabricated retail invoice of cash memo/bill dated 16th February 2015 showing that Ajay Kumar Bawa has purchased the tricycle brand name ‘AMPA’ from the M/S Four Diamonds.

Respondent

1. The learned counsel contended that one mark, one source, and one proprietor and a mark cannot have two origins being in competition with each other. The Trademark ‘AMPA’ was coined by the respondent/ Plaintiff under Class 12 products and on the dissolution of the partnership M/S Four Diamonds all the assets and the goodwill were transferred to the respondent/ Plaintiff.

2. The Dissolution Deed gave ABPL the right and not Hari Dutt Sharma the right to use all models of more than 14 inches for 3 Years. The Respondent/ Plaintiff Is the sole owner of Trademark as ‘AMPA’, Hari Dutt Sharma used subject Trademark individually with the appellant/ defendant company without taking the consent of respondent/ plaintiff so the Appellant / Defendants company is liable to be restrained from using the set Trademark as joint owner of a Trademark cannot act in a manner that diminishes the right of the co-owner without consent of the co-owner.

3. The question of fabrication of documents is still pending in the court under section 340 code of criminal procedure 1973. As ABPL abdomen the trademark it consequently cannot claim the rights on the basis of forged and fabricated assignment deed.

4. It is evident from the terms of the dissolution deed that Hari Dutt Sharma was given the full right to run a business and the respondent/plaintiff renowned all is a claim in respect of movable as well as immovable properties of the said business in favor of and Hari Dutt Sharma so he was free to carry on business and name of ABPL and Trademark in ‘AMPA’. M/S four diamonds being a sole proprietor managed the respondents/ plaintiff and Hari Dutt Sharma renounced all his claims in the respect to the property of the said business.

High Court Observation

The legality of the assignment deed and affidavit filed on behalf of Hari Dutt Sharma the same can only be tested at the stage of the trial at this stage a prima facie view has been taken and clear that an ABPL / Hari Dutt Sharma has been given the right to use the trademark a in the of dissolution date and the respondents/ plaintiff cannot be retained from the usage of trademark ‘AMPA’.

The Appellant/ Plaintiff company is the successor of Hari Dutt Sharma/ABPL especially when the respondent plaintiff had himself given up the right in favor of ABPL/Hari Dutt Sharma.

The High Court observed that once the party has exercised their right for a particular option and obtained their entry on the basis of the election, they cannot be allowed to turn around. The respondent has expressly waived his right on the Trademark in the favor of the appellant company that he cannot restrain the appellant from exercising his aforesaid right. The court interfered with the order by the commercial division for an error while deciding on interim relief, which is the ingredient of a “prima facie” case for the plaintiff or not. There is no explanation of how the said trademark after 2003, came to be vested back in Jagmohan Ratra to the exclusion of the appellant company.

When the ABPL acting through appellant and Hari Dutt Sharma and with the partnership firm M/S Four diamonds as its shareholders applied for the partnership Firm as its shareholder applied for the registration of the trademark to be proprietor, so it stands admitted that partnership firm M/S Four Diamonds did not have intention in claiming rights therein. The court view the matter that it was irrelevant that the appellant company whole claiming for registration did not claim on the basis of assignment not pleaded from Hari Dutt Sharma but filled on “proposed to be used basis”, therefore, even if Hari Dutt Sharma / ABPL were not in the use of the subject trademark then also the respondent having the consideration for the disclaimed right in the mark in favor of Hari Dutt Sharma /ABPL and he did not claim for the same.

Conclusion

The judgment set aside the commercial Division court order for the Interim order passed on the 23rd December 2020 and made it evident that even though the appellant company had started using the trademark ‘AMPA’ only in 2018 the substantial sale and customer base and goodwill has been in the said mark. There will be no injunction passed against the appellant company from using the mark ‘APMA’.

Cases Referred

The cases referred by the parties during the arguments:

i. Wander Ltd & Anr V. Antox India P. Ltd

ii. Indu Shekhar Singh V. State of U.P.

iii. Hardev Singh Akoi V. Jasdev Singh Akoi & Ors.

iv. Power Sumeet Appliances & Ors. V. Sumeet Machines Pvt. Ltd. & Ors.

v. Variety Dry Fruit Stores V. Variety Agencies

vi. Li Tse Shi V. Pong Tsoi Ching

vii. Ramdev Food Products Pvt. Ltd. V. Arvindbhai Rambhai Patel

viii. Thayyullathil Kunhikannan & Ors. V. Thayyullathil Kalliani & Ors.

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