Wednesday 25 November 2015

Trinamool v. Trinamul: Name War for Political Parties

A recent dispute between two Indian political parties namely the All India Trinamool Congress and the Nationalist Trinamul Congress Party (NTCP) over use of phonetically similar name has sparked off a debatable issue relating to applicability of trademark laws while registering names of political parties.

Reportedly, the whole matter came up before the Election Commission (EC) after Trinamool Congress objected to NTCP’s use of a phonetically similar name “Trinamul”. Here it would be relevant to mention that an order (No. 56/2014/PPS-I) issued by the Election Commission on May 19, 2014 has directed that political parties seeking registration under the Representation of People Act, 1951 shall not have any religious connotation and the names should not be similar to the names of existing political parties that may lead to confusion.

There are other political parties existing as well which have similar names like Communist Party of India (Marxist) and Communist Party of India. Similarly there are other political parties like DMK (Dravida Munnetra Kazhagam) and AIADMK (All India Anna Dravida Munnetra Kazhagam) which have similar names of parties.

Names, logos, symbols and the recently evolved trend of slogans for promotions like Har Haath Shakti, Har Haath Tarraki (of Indian National Congress) and Ache Din Ane Wale Hai (of Bhartiya Janta Party) serve as a major identifier for political parties. Some political parties have registered or applied for registration of their parties’ names, like in the present case, NTCP had rebutted Trinamool Congress’s objection by stating that it had applied for trademark registration of the name “Trinamul” and the same could not be claimed as “personal property” by a political outfit (as reported by the Times of India on November 18, 2015).


*Abhishek Banerjee, proprietor of the trademark All India Trinamool Congress (Device) and Amitabha Majumdar, proprietor of the trademark Nationalist Trinamul Congress Party are candidates of the respective political parties.

As noted above, the applicability of trademark law which also prohibits the use of an identical mark or a deceptively similar mark is relevant in the instant case or not is yet to be seen.

Typically, a trademark serves meaning and function in relation to goods and services and its use in commerce or in the course of trade. Hence, the present case is an interesting one and whether the applicability of the Trade Marks Act, 1999 while registering names of political parties (which do not serve any practical commercial purpose) is relevant or not is a contentious issue in the present dispute.




Ministry of Commerce and Industry invites Comments on the Draft Trade Marks (Amendment) Rules, 2015
The Ministry of Commerce and Industry, Government of India, has published Draft Trade Marks (Amendment) Rules, 2015 to replace the Trade Marks Rules, 2002 which the Central Government proposes to do in exercise of the powers conferred by Section 157 of the Trade Marks Act, 1999 for the information of all persons likely to be affected by them.


Some of the highlights of the proposed amendment are as under:
  • The number of forms for filing various applications have been simplified and consolidated into fewer forms
  • Wide discretionary powers have been given to the Registrar of Trade Marks to determine whether or not a trade mark is “well-known” and include it in the list maintained at the Registrar’s office.
  • The application fee for inclusion of a trade mark to the list of well-known trademarks is INR 1,00,000/- (1 lakh) for e-filing and INR 1,10,000/- for physical filing.
  • For determining whether or not a trade mark can be registered as well-known, the Registrar may stipulate the criteria in this regard and also call for such documents as he thinks fit. The Registrar is also empowered to remove the trade mark if it was later found that the same was erroneously included in the list.
  • Applications for sound marks can now be accompanied by a sound file in MP3 format.
  • Steep rise in various fees, from filing of trade mark applications to its renewal. Almost all the fees have been increased by 100%. An extra 10% will be levied against the fees if the trade mark application and forms are not submitted in the electronic mode, but are filed physically.
*Proposed fees listed above are for e-filing only. An additional 10% charge will be levied for physical (paper) filing of applications.

The Draft Trade Marks (Amendment) Rules will be take into consideration after the expiry of a period of thirty days from November 19, 2015 i.e. within December 18, 2015.

The Ministry has invited objections/ suggestions from the public on the Draft Rules by December 18, 2015.

The objections/ suggestions can be addressed to the Additional Secretary to the Government of India, Ministry of Commerce and Industry sent by e-mail to sahni.palka@nic.in or mailed to the following address:

Additional Secretary to the Government of India,
Ministry of Commerce and Industry,
Department of Industrial Policy and Promotion,
Udyog Bhavan,
New Delhi – 110 011

Our firm is also taking steps to submit its comments on the said Draft Rules. We would, therefore, request all our readers to send us their comments/ objections/ suggestions to the said Draft (Amendment) Rules, 2015, if any, so that we may include them in our comments.

The Draft Trade Marks (Amendment) Rules, 2015 can be accessed here.
Fahimuddin talks with the Cricket Ball !!


We feel proud to share that our employee, Mr. Fahimuddin, who is hearing and speech impaired, completed an inspirational bowling spell to dismiss the Pakistan Team at 49 runs only during the ongoing Deaf Cricket World Cup on November 22, 2015 at the Bharat Nagar Cricket Grounds in New Delhi, India. Mr. Fahimuddin went on rampage from the very first over where he scalped 2 dismissals and finished with a magical spell claiming 7 wickets in 4 overs and giving away only 5 runs.

The ongoing Deaf Cricket World Cup is being organized by Deaf Cricket Society, where teams from India, Sri Lanka, Pakistan, Bangladesh and Nepal are participating in the World Cup.

S.S. Rana & Co. in committed to its Equal Opportunity Policy and to provide work environment free of discrimination base religion, belief, social, age, physical or sensory disability.

Mr. Fahimuddin has been working with the firm for almost 2 years now and has been part of firm's cricket team in corporate cricket matches. He has also been part of previous edition of Deaf Cricket World Cup as well as Deaf Asia Cup.

Friday 20 November 2015

According to The Economic Times, an Indian daily, Swedish fashion brand Hennes & Mauritz AB (H&M) has recently served Mumbai-based retailer, HM Mega Brands, with a legal notice for trademark infringement, thus becoming the latest multinational company to take this step in India.

Brief Facts about Parties involved
  • H&M had the grand opening of its first store in India (in New Delhi) last month on October 02, 2015.
  • The Swedish fashion brand is stated to be the second largest fashion retailer in the world after ZARA, and is the registered proprietor of the trade mark “H&M”.
  • HM Mega Brands Pvt. Ltd. is a company registered in 2012 with the Registrar of Companies, Mumbai and is stated to have three outlets in Mumbai and Jalandhar and also sells its products through ecommerce platforms.
  • HM Mega Brands claims to have applied for registration of the trade mark “HM Mega Brands”.
Grounds of Legal Notice by H&M
  • Use of acronym ‘HM’ amounts to infringement of the registered trademark H&M and the Indian retailer’s logo (in red colour) is deceptively similar to its own hence likely to cause confusion in the minds of the purchasing public.
Defense Grounds being taken by HM Mega Brands

HM Mega Brands has filed a Caveat Petition in the Hon’ble High Court of Judicature at Bombay urging it to direct H&M to give them notice of seven days before initiating any suit against it, and inter alia, stated the following:
  • The Company ‘HM Mega Brands’ has been named after the initials of the names of its founders – Hashim Merchant and Hamza Merchant.
  • The Company has been using the trademark since its incorporation in 2012, and also claims to have applied for registration of the same.
  • Its trade mark is entirely different and distinct from that of the Swedish company. While both companies use red colour for their logos, the Swedish company uses an ampersand (&) to separate the two letters and it is “unnecessarily asserting monopoly over the colour”.
  • H&M is thus issuing unjustifiable and groundless threats within the meaning of Section 142 of the Trademarks Act, 1999. 
*The rectification against Registration no. 1393619 for the trade mark has been filed by HM MEGABRANDS PRIVATE LIMITED.

Analysis and Concluding Remarks

This is not the first time that a dispute has a
risen regarding infringement of a trade mark by use of an acronym. In the case of Mahindra & Mahindra Ltd & Anr. Vs. MNM Marketing Pvt. Ltd. & Anr., the Supreme Court of India has answered this question in the affirmative and held that use of acronym can lead to infringement, and interim injunction was granted by the Court restraining the Defendants from using the mark M&M and MNM

With respect to claiming monopoly over colour, Section 2 (zb) of the Trade Marks Act, 1999 includes “combination of colours” in the definition of a trademark, therefore the contention that H&M cannot claim monopoly over the red colour of its logo is debatable.  Moreover, H&M has filed an application for registration of its logo in black and white colour , and as per Section 10 of the Trade Marks Act, 1999, a trade mark registered without limitation of colour shall be deemed to be registered for all colours. 

With regard to whether or not there can be a likelihood of confusion in the instant circumstances, it is pertinent to note that H&M has recently opened its outlet in India and is stated to be the second largest fashion retailer after Zara. As H&M has entered the Indian market recently whereas HM Mega Brands claims use of its trademark ‘HM’ since 2012, the Swedish company may have to prove transborder reputation to succeed. However, whether or not H&M and HM Mega Brands take their dispute to Court, and whether H&M is able to establish a case of infringement and passing off for itself are yet to be seen.
Shri Om Prakash Gupta, B.E. (Mechanical) and an Indian Administrative Service (IAS) Officer-1992 Batch, has been appointed as the new Controller General of Patents, Designs and Trade Marks (CGPDTM) of India with effect from November 16, 2015. Earlier, Sh. O.P. Gupta was working as the Chairman and Managing Director of the Maharashtra State Electricity Distribution Co. Ltd.

Sh. O.P. Gupta has also served as the Inspector General of Registration & Controller of Stamps – Maharashtra, General Manager of Brihanmumbai Electricity Supply and Transport, (BEST), Vice Chairman and Managing Director of the Maharashtra State Road Transport Corporation (MSRTC), Collector of Amravati & Satara, and as the Chief Executive Officer of Akola Zilla Parishad during his 23 years in administrative service.

The notification of the aforesaid new appointment can be found here.
The Hindu festival of lights ‘Diwali’ was celebrated all over India last week on November 11, 2015, marked by four days of celebration. ‘Diwali’ or ‘Deepavali” literally means festival of lights in Hindi (deep = light and avali = a row i.e., a row of lights). Each of the four days in the festival of Diwali denotes a different tradition, but the underlying essence is the celebration of life.

Historically, the origin of Diwali can be traced back to ancient India, though there are various legends pointing to its origin. The most popular belief is that the festival of Diwali commemorates the return of Lord Rama alongwith his wife, Sita and brother Lakshmana from his fourteen year long exile after vanquishing the demon-king of Lanka, Ravana. The people of Ayodhya (Capital of Rama’s kingdom) illuminated the kingdom with earthen oil lamps and burst crackers in joyous celebration of the return of their king.

Interestingly, U.S. President Barrack Obama, alongwith U.S. First Lady Michelle Obama, celebrated Diwali at the White House by lighting Diwali lamps (diyaas) signifying the triumph of good over evil and light over darkness. In 2009, President Obama was the first U.S. President to light the Diya, or oil lamp. This year, the White House honored the holiday on Diwali for the fifth year.


Bringing together people from different religions and castes under one room to celebrate the fundamental thought of unity and integrity, S.S. Rana & Co. also celebrated Diwali on November 10, 2015, by offering obeisance to goddess Lakshmi, the goddess of wealth and fortune, followed by various employee-engagement programs where all employees of the firm participated with full vigour and enthusiasm.

Friday 13 November 2015

Labels Excluded from the Definition of "DESIGNS" : Delhi High Court 
The High Court of Delhi, vide its judgment dated November 09, 2015 in Midas Hygiene Industries Pvt. Ltd. v. Sudhir Bhatia (Regular First Appeal Nos. 239, 240 & 241 of 2011), held that labels on packages of goods are clearly excluded from the definition of “designs” under the Designs Act, 2000.

Brief Facts of the Case
  • The Appellant (Midas Hygiene Industries) claims to be pioneers in insecticides and pesticide production in the form of chalks in India. The Appellant obtained registration of the trademarks “Krazy Lines” and “Laxman Rekha” dating back to approximately 1989, and also copyright registration of the packaging of the products.
  • The present appeals under Section 72 of the Copyright Act, 1957 are against the order dated April 4, 2011 of the Learned Copyright Board (“the Board”) which expunged the registered copyrights of the Appellant upon a petition filed by the Respondent (Sudhir Bhatia).
The Hon’ble High Court of Delhi restricted itself mainly to the issue of the design registration capability of the artistic work / labels used by the Appellant to market its products i.e. whether the Appellant’s labels will be hit by Section 15(2) of the Copyright Act, 1957 and hence the copyrights vested therein will become invalid on account of their reproduction more than 50 times?

Contentions of the Appellant
The Appellant, inter alia, made the following submissions:-
  • The Appellant’s artistic work cannot be registered as a “Design” as it is excluded from its definition under the Designs Act.
  • Even otherwise, the reproduction of the artistic work on a package as a label does not automatically compel the registration of the article namely the package or container as a design.
Contentions of the Respondent
  • The Appellant’s labels / artistic work are capable of registration and compulsorily registrable under the Designs Act, 2000 and hence hit by Section 15(2) of the Copyright Act, 1957, thus, the copyrights vested therein have ceased to subsist due to their reproduction more than 50 times.
  • Design in packaging is not excluded from registration. The design capability of such articles extends to packages. Particularly, the cartons for commercial use and industrially produced and therefore fall within class 19 of the Third Schedule to the Designs Rules, 2001.
  • There cannot be any question about the Respondent being entitled to maintain the proceeding before the Board since he is a rival trader and unquestionably has an interest in ensuring that copyrights disentitled to protection are not conferred monopoly rights and are struck off the Register.

Section 15 of the Copyright Act, 1957 – Special provision regarding copyright in designs registered or capable of being registered under the Designs Act.

(1) Copyright shall not subsist under this Act in any design which is registered under the Designs Act;
(2) Copyright in any design, which is capable of being registered under the Designs Act, but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright, or, with his licence, by any other person.

Order of the Court and its Rationale
Clarifying the seeming overlap between three intellectual property rights viz. copyright, trademark and design, the Hon’ble High Court of Delhi stated that

  • Copyright protection is to the original expression of an idea. Trademarks protect the distinctiveness of a mark, logo, symbol, and their association with a product or service i.e. an identifier as to the source of goods. Design rights protect novelty of the design elements (shape, presentation, etc.) of an article i.e. significantly based on the visual appeal of the product.
  • "Design” means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article… and does not include any trade mark under the Trade Marks Act or any artistic work under the Copyright Act. The Board thus erroneously ignored the definition of “design” which excludes, inter alia, artistic works under the Copyright Act and labels as defined under the Trade Marks Act.
  • From the language of Section 15 of the Copyright Act, copyright does not subsist in a registered design. The rationale for this is that someone’s choice of design registration is a conscious decision to use the underlying work, for mass production. The design then reaches, through the medium of the product or the article, a wider audience; it has a commercial element. This is possible in cases of designs of products and articles, which are sold widely or have a market. However, that is not always so for an artistic work – typically a painting, a drawing or even a sculpture for instance (which are closest species of copyrights that overlap with designs).
  • Following the judgment of the Hon’ble Supreme Court of India in Bharat Glass Tube v. Gopal Glass Works Ltd. AIR 2008 SC 2520, cited the following example – for instance, a famous painting will enjoy copyright protection as an artistic work under the Copyright Act, and a design created from the painting for the purpose of industrial application on an article so that it appeals to the eye would also be entitled design protection under the Designs Act. Therefore, if the design is registered under the Designs Act, the Design would lose its copyright protection under the Copyright Act but not the original painting.
  • A perusal of the Copyright Act and the Designs Act and the Preamble and Statement of Objects and Reasons of the Designs Act makes it clear that the legislative intent was to grant a higher protection to pure original artistic works such as paintings, sculptures etc. and lesser protection to design activity which is commercial in nature.
  • Therefore, a work of art may be capable of both design and copyright protection. However, copyright in such a work of art can only subsist if it has (i) not been registered as a design or (ii) while answering to the description of a registerable design, it has not been registered as such and not been applied to an article which has been reproduced more than 50 times by an industrial process by the owner, licensee, or any other person. In other words, the copyright in the work can continue to survive independent of the work’s mere fitness for design protection.
  • In the present case, the subject work is a label. There is no express indication in the Design Rules that a label fixed or printed on a container or package becomes capable of design registration. In any case, the statutory definition of designs excludes “artistic work” and “labels used as trademarks”. The label is clearly both a trademark (indicating the source of goods) as well as a copyright (containing a combination of colours, stylized lettering and image of cockroach) and clearly excluded from the definition of “designs”.
  • If every object based upon some drawing were afforded design registration, soon, objects of common utility – vessels, containers, furniture items, etc. could not be replicated.
  • A package design is essentially a promotion of the “trade dress” of the package, and may become a significant asset for market entrenchment and product valuation. Instances of some such product packaging synonymous with the article itself are TOBLERONE chocolate packaging, certain liquor bottle containers and packages; chocolate and cheese wrappers etc.
  • Thus, the finding of the Board that the Appellant’s copyright registrations have to be cancelled or cannot stand, because they are capable of design registration and consequently covered by Section 15(2) of the Copyright Act, are set aside. With regard to whether the work could qualify for protection as an artistic work, matter remitted to the Board for fresh hearing of parties, and findings.
Concluding Remarks

This case concerns the seeming overlap between three intellectual property rights, viz. copyright, trademark and design. The judgment of the Hon’ble Delhi High Court provides much needed clarity on the purpose and legislative intention behind Section 15(2) of the Copyright Act, 1957. One hopes that this will reduce the misuse of the Section and provide relief to honest and legitimate traders.

The aforesaid Order dated November 04, 2015 can be accessed 
here.
Who Owns The Internet ?
The Division Bench of the Hon’ble High Court of Delhi, vide its judgment dated November 02, 2015, dismissed the appeal in the case Stephen Koeing v. Arbitrator NIXI and Anr.(Case details FAO (OS) 42/2012)
Brief facts of the Case
The Respondent in the Appeal (Mr. Purohit) is the registered proprietor of the trade mark INTERNET in class 34 in respect of tobacco, raw or manufactured, smoker’s articles, matches, since the year 2003. The Appellant (Mr. Stephen Koeing) registered the domain name  <internet.in> with the .IN registry on February 16, 2005.
Thereafter, the Respondent had filed a complaint with the National Internet Exchange of India (NIXI) seeking cancellation and transfer of the domain name <internet.in>  to him as it was confusingly similar to his trade mark.
Contentions of the Appellant
  1. The Respondent’s trade mark is not capable of registration as ‘internet’ is a highly descriptive or generic word and the same cannot be monopolized by the Respondent.
  2. The domain name was registered in good faith and intended to be used legitimately as identifier for internet related goods and services on website.
  3. The .IN Domain Name Dispute Resolution Policy (INDRP) did not mandate the Appellant to conduct a trade mark search in all classes before registering the domain name. Since the Respondent did not register any domain name containing the word ‘internet’, the Appellant could not have any indication of his rights in the domain name <internet.in>.
  4. The Learned Single Judge failed to appreciate that INDRP itself states that it is modelled in line with the Uniform Domain Name Dispute Resolution Policy (UDRP) and there is no distinction between their provisions. Thus, all three requirements stated in paragraph 4 of INDRP must be proved.
  5. Mere registration in one of the prevailing classes of trade mark will not ipso facto entitle a trade mark owner from preventing others from using the trade mark in its generic sense.
  6. Since the Respondent did not show any internet usage in respect of his mark by offering goods and services in relation to it, there is no legitimacy in his claim.
Contentions of the Respondent
  1. The trade mark INTERNET is being used by the Respondent for over three years and the domain name <internet.in>  is confusingly similar to his trade mark.
  2. The Appellant has also registered several other domain names with the .IN Registry in which he had no right or trade mark such as <air.in>,<usa.in>,<computer.in> etc.
  3. The Appellant intended to sell the impugned domain name either to the Respondent or to any other entity/organization for profit.
  4. The Appellant was making money by luring customers to the website and tricking them into clicking on ads.
Order of the Court and its Rationale 
The Learned Arbitrator in its award had held that the domain name <internet.in> is identical and confusingly similar to trade mark INTERNET and therefore, the Registrant (Mr. Stephen Koeing) does not have any right or legitimate interest in the said domain name. Further, such registration of the domain name <internet.in> is as such in bad faith, and is to be struck off from the Registry.

However, the Learned Arbitrator did not accept the prayer of the Complainant (Purohit) to transfer the domain name to him as he did not establish his bonafide rights in the trade mark INTERNET, which is a generic word. Therefore, the domain name was ordered to be confiscated by the .IN Registry by the Learned Arbitrator.

Concurring with the Arbitrator's award, the learned Single Judge had analyzed the differences between the relevant provisions i.e. para 4 of INDRP and UDRP and observed that the last line in para 4 of UDRP “the complainant must prove that each of these three elements are present’ is missing from para 4 of INDRP. Thus, the domain name is likely to cause confusion in the minds of consumers with ‘imperfect recollection’. The learned Single Judge also held that the fact that the goods for which Mr. Purohit held registration were different from internet related services which Mr. Stephen Koeing proposed to offer, does not mitigate the possibility of such confusion, given the nature of e-commerce and range of products that can be purchased on the internet. However, the Learned Single Judge differing from the Learned Arbitrator, held that Mr. Purohit had legitimate rights over the trade mark INTERNET.

The Division of the Hon’ble Court in the present appeal held that the three elements in para 4 of INDRP need not be cumulatively established. The contention that URDP provisions are to be read into INDRP provisions is unpersuasive as URDP is not an umbrella legislation to which INDRP is subordinated to a hierarchy.

Further it was also observed that the use of a mark which bears such close resemblance to a registered trade mark as to amount to deceptive similarity results in presumption of infringement of the mark by virtue of Section 29 (3) of the Trade Marks Act, 1999. Therefore, the contention of the Appellant that registration does not confer per se legitimate interest is not acceptable.

Further, the Respondent had discharged his onus of proving that the Appellant had no legitimate interest in the domain name <internet.in>. The Appellant had registered 1747 domain names  for the purpose of selling them. Even though he was experienced in registering domain names, he did not make any effort to check that the domain name is already registered as a trade mark by another party.

The Learned Division Bench the Delhi High Court thus held that there is no ground made out for interference with the findings of the Learned Arbitrator and the Learned Single Judge and dismissed the appeal.

Concluding Remarks 

It is observed that courts would interfere with an Arbitrator's Award only if the findings are based on patent legal errors which was not so in the present case.

Additionally, it is surprising how both the parties in the present case are disputing over a generic name i.e., INTERNET by not only asserting trade mark right on it, but also claiming a domain registration to the exclusion of others. 


Corporate Football Revolution is on its Way!!
S.S. Rana & Co. recently participated in the Legends Cup, a corporate football tournament, which kicked off with forty two corporate teams at one of the best football fields in Delhi – Plaza Farm. The Tournament was organized over 2 days – November 7 and 8, 2015. The Legends Cup was originally started in New Delhi in the year 2011 and has now become the face of corporate football in India. This platform brings out the corporates ranging from VPs to Interns to the same ground.

This year, the crowd came in large numbers to support their respective teams. S.S. Rana & Co. FC, giving a tough competition to the other teams, made it to the quarter finals.

Wednesday 4 November 2015

No Trademark Rights on Names of Holy Books : Supreme Court of India

The Supreme Court of India, vide its judgment dated October 27, 2015 in Lal Babu Priyadarshi v. Amrit Pal Singh (Civil Appeal No. 2138 of 2006), held that no person can claim exclusive rights over the name of a holy or religious book as a trade mark for his goods or services marketed by him.

Brief Facts of the Case

  • The Appellant, Lal Babu Priyadarshi trading as M/s. Om Perfumery, made an application to the Registrar of Trade Marks to register the trademark “RAMAYAN” with the device of crown in class 3 in respect of incense sticks (agarbattis, dhoops) and perfumeries etc.
  • The Respondent, Amritpal Singh trading as M/s. Badshah Industries, filed a Notice of Opposition against the aforesaid trademark under Sections 9, 11(a), 11(b), 11(e), 12(1), 12(3) and 18 (1) of the Trade and Merchandise Marks Act, 1958 (repealed by the Trade Marks Act, 1999) claiming that the impugned mark, being the name of a religious book, cannot become the subject of monopoly for an individual.
  • The Asst. Registrar of Trade Marks dismissed the Opposition of the Respondent vide order dated March 31, 2004 and held that, the impugned trademark consists of device of crown and the word “RAMAYAN” is capable of distinguishing the goods and is not included in the list of marks not registrable under the aforesaid Act.
  • Aggrieved, the Respondent preferred an appeal before the Intellectual Property Appellate Board (IPAB), which, vide its order dated January 10, 2005, set aside the order dated March 31, 2004 of the Asst. Registrar of Trade Marks.
  • Aggrieved by the aforesaid order of the IPAB, the Appellant filed the present Appeal by way of special leave.

The Hon’ble Apex Court framed the following issue for deciding the present Appeal:
Whether the registration of the word “RAMAYAN” as a trade mark, being the name of a Holy Book of Hindus, is prohibited under Section 9(2) of the Trade Marks Act, 1999? 

Contentions of the Appellant

The Appellant, inter alia, made the following submissions:-
  • The Appellant is in the business of manufacturing, trading and marketing of incense sticks since 1981. Through extensive use, wide advertisement and the excellent quality of the products, the trademark “RAMAYAN” and the carton in which the products are sold have become distinctive in such a manner that use of the same or similar trademark or carton by any other person will cause confusion and deception in the trade and amongst the public.
  • The mere fact that the trademark is the name of a religious book cannot be a sufficient ground for refusal of registration under Section 9(2) of the Act and is not based on evidence on record that the feelings of any section of the Hindus have been hurt by its use in relation to incense sticks.
  • The Asst. Registrar of Trade Marks rightly held that the impugned trademark is capable of distinguishing the Appellant’s goods and the trademark is not included in the list of marks not registrable under the Act.
  • The IPAB totally misconstrued the observations of the standing committee in the Eighth Report on the Trade Marks Bill, 1993. In Clause 13.3 of the said report, even though the Committee had observed that “any symbol relating to religious gods, goddesses, places of worship should not ordinarily be registered as a trade mark”, it specifically refrained from prohibiting registration of such marks.
  • The IPAB ought to have seen that there are several cases which indicate that use of names of Hindu deities as a trademark is a common practice and no one has complained about the same being sensitive to Hindu religious sentiments.
Contentions of the Respondent
  • The impugned mark, being name of a religious book, cannot be the subject matter of monopoly for an individual.
  • The mark “RAMAYAN” is not a distinctive mark and is devoid of any distinctive character. The mark is not capable of distinguishing the goods of one person from those of another.
  • The mark “RAMAYAN” is not registrable since it is the name of a well-known religious book.
  • More than 20 traders in Patna (principal place of business of the Appellant and Respondent) and many more are using the trademark “RAMAYAN”, thus, it has become public juris.
  • The impugned mark is identical with the Respondent’s mark “BADSHAH RAMAYAN” which is pending registration and the impugned registration will cause harassment to other traders and purchasing public would be bound to be confused and deceived.



Order of the Apex Court and its Rationale
  • The Apex Court observed that in Clause 13.3 of the Eighth Report on the Trade Marks Bill, 1993, the Parliamentary Standing Committee expressed its opinion that any symbol relating to Gods, Goddesses, places of worship should not ordinarily be registered as a trademark. However, the Committee did not want to disturb the existing trade marks by prohibiting their registration as it will result in chaos in the market. At the same time, the Committee trusted that the Government will initiate appropriate action if someone complains that a particular trademark is hurting his religious susceptibilities. When this report was presented on April 21, 1994, the Appellant’s trademark had not been registered and the application filed by the Respondent opposing its registration was dismissed only on March 31, 2004 by the Asst. Registrar of Trade Marks.
  • The word “RAMAYAN” represents the title of a book written by Maharishi Valmiki and is considered to be a religious book of Hindus in India. Thus, using exclusive name of the book “RAMAYAN” for getting it registered as a trademark for any commodity could not be permissible under the Act. If any other word is added as suffix or prefix to the word “RAMAYAN” and the alphabets/ design/ length of the words is same as of the word “RAMAYAN”, then the word “RAMAYAN” may lose its significance as a religious book and it may be considered for registration as a trademark.
  • The word “RAMAYAN” is being used as a mark for similar products by more than 20 traders in Patna and in different parts of the country, therefore, it has become public juris and common to the trade.
  • There are many holy and religious books like the Quran, Bible, Guru Granth Sahib, Ramayan etc. to name a few. The answer to the question as to whether any person can claim the name of a holy or religious book as a trade mark for his goods or services marketed by him is clearly ‘NO’.
In view of the above, the Apex Court upheld the decision of the learned IPAB and dismissed the Appeal.

Concluding Remarks

In a religiously diversified country like India, several traders choose to name their businesses after names of holy books and religious texts etc. The judgment of the Supreme Court is important as it authoritatively held that the name of a holy book or religious texts like The Quran, The Bible, The Guru Granth Sahib, The Ramayan etc. cannot be monopolized by a person as a trademark for his goods or services marketed by him.

Incidentally, the aforesaid judgment was pronounced on Valmiki Jayanti, birth anniversary of Maharishi Valmiki, who is known to have composed the great Sanskrit epic and Hindu religious text, the Ramayan in the 4th or 5th Century B.C.


The aforesaid Order dated October 27, 2015 can be accessed 
here.

Disclosure: Our firm was the instructing counsel on behalf the Respondent in this case.


 
The Supreme Court of India on October 15, 2015 in a dispute between M/s Mangalore Ganesh Beedi Works (the Appellant/ Assessee) and Commissioner of Income Tax (CIT), Mysore (the Respondent) has ruled in favour of the Assessee and observed that a firm can claim deduction or depreciation in income tax on expenses incurred for acquisition of intellectual property, such as patent and trademarks rights, copyrights and know-how, as they are capital in nature.

In the present case, the M/s Mangalore Ganesh Beedi Works (MGBW), a partnership firm was dissolved and a new company comprising of association of persons (three erstwhile partners) was constituted to continue the business.

The Assessee claimed a deduction as revenue expenditure permissible under Section 37 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) towards the legal expenses incurred. The Assessee also further claimed depreciation under Section 35 A and 35 AB of the Act towards acquisition of Intellectual Property Rights. In the alternative, the Assessee claimed depreciation on capitalizing the value of the Intellectual Property Rights (IPR) by treating them as ‘plant’.

The Assessing Officer rejected the claim of the Assessee under all the above three sections. Hence, an appeal was preferred by the Assessee before the Commissioner of Income Tax / CIT (Appeals) who allowed the appeal in part and held that the Assessee was entitled to a deduction towards legal expenses. However, the claim of the Assessee regarding deduction or depreciation on the IPR was rejected. Thus, aggrieved by the order of the CIT (Appeals), a further appeal was preferred by the parties before the Tribunal, where the Tribunal allowed the appeal of the Assessee in respect of the claim of IPR.

An appeal was preferred in the Hon’ble High Court of Karnataka which considered the following three substantial questions of law:
  1. Whether the revenue expenditure claimed by the Association of persons which was constituted by the three partners of the erstwhile firm, MGBW, can be allowed as permissible deduction in the hands of the said association of persons under Section 37 of the Act, as being laid out or expended wholly or exclusively for the purpose of business of the said Association of persons.
  2. Whether the Assessee was entitled to claim any deduction on the alleged expenditure for acquisition of patents, trademark rights, copyrights and know-how, in terms of Section 35 A and 35 AB of the Act?
  3. Whether the Tribunal had erred in directing the Assessing Officer to capitalize the value of trademarks, copyright and technical know-how by treating the same as plant and machinery and grant depreciation therein?

The High Court of Karnataka answered the first two questions in the negative and the third question in the affirmative in favour of the Revenue Officer and against the Assessee. Thus the High Court restored the order of the Assessing Officer by setting aside the findings of the Income Tax Appellate Tribunal.

The Apex Court, while considering the impugned order passed by the High Court in an appeal preferred by the Assessee, observed in respect of the first question that the High Court was not justified in upsetting a finding of fact arrived by the Tribunal, as there existed no reason to reverse its finding as nothing has been shown to conclude that the finding was perverse in any manner whatsoever. Therefore, the question was answered in favour of the Assessee and against the Revenue Officer and the conclusion arrived by the High Court on the first question was set aside and the view of the Tribunal was upheld.

The Apex Court, while considering the second and third questions, accepted and acknowledged that intellectual property has a value and stated that the trademarks of the Assessee were given value since in the beedi industry, trademarks and brand names have a value and the Assessee’s product under trademark ‘501’ had a national and international value. As far as copyright valuation is concerned, the Assessee had a copyright on the content of the labels, wrappers and the colour combination on them. Similarly, the know-how had a value since aroma of beedis differ from one manufacturer to another, depending on the secret formula for mixing and blending tobacco.

The Apex Court left open the question of applicability of Sections 35A and 35AB of the Act for an appropriate case and laid focus on the applicability of Section 32 of the Act read with the inclusive definition of ‘plant’ under Section 43 (3) of the Act. The Apex Court held that Section 32 of the Act, as it stood at the relevant time, did not make any distinction between tangible and intangible assets for the purposes of depreciation. The distinction came in by way of an amendment after the assessment year discussed in the present case, and that being the position, the Assessee is entitled to the benefit of depreciation on plant (i.e. on trademarks, copyrights and know-how) in terms of Section 32 of the Act as it was at the relevant time.

The Apex Court, in the instant case, further observed that when a firm acquires the plant of another, the intellectual property would fall within the definition of 'plant' as “there can be no doubt that for the purposes of a large business, control over IPR such as brand name, trademark etc. are absolutely necessary.” The Apex Court also stated that “the acquisition of such rights and know-how is acquisition of a capital nature. Therefore, it cannot be doubted that so far as the firm is concerned, the trademarks, copyrights and know-how acquired by it would come within the definition of 'plant' being commercially necessary and essential as understood by those dealing with direct taxes”.

The Apex Court further observed that the case at hand states that though the definition of ‘plant’ in the Act mentions “vehicles, books, scientific apparatus and surgical equipment purchased for the purposes of the business, profession or vocation”, it must be given an expanded meaning including Intellectual Property Rights within its ambit.

Conclusion

The present case is more academic in nature as it deals with the assessment year 1994- 95, a pre-amendment scenario which did not demarcate between the tangible and intangible assets. Therefore post the amendment to Section 32 of the Act, which clearly demarcated between tangible and intangible assets the situation of commercial rights being akin to know- how, patents and other intellectual property rights being eligible for depreciation has been amply clarified for future purposes.

Thus, it is clarified that the instant case holds significance for such cases where the assessment year in question was before 1999 i.e. prior to the amendment and where there existed a situation of ambiguity in respect to depreciation of tangible and intangible assets.