EXIDE INDUSTRIES LIMITED Vs. EXIDE CORPORATION

JUDGEMENT

(1.) THE issue in the present case centers around the ownership of trademark ,,EXIDE. THE plaintiff claims ownership of the trademark on two grounds. THE first basis is that the plaintiff is the registered owner of the trademark. THE ownership earlier vested with a transferor -company and which ownership of the registered trademark was transferred to the plaintiff, and hence the suit for infringement. THE second basis of claiming ownership of the trademark is the claim that plaintiff, so far as India is concerned, is the prior user, and hence by such prior use it has become the owner of the trademark. THE defendant No.1 contests the suit claims. It is urged that the defendant No. 1 is the parent company of the erstwhile predecessor -in -interest company of the plaintiff and which owned the trademark ,,EXIDE. It is pleaded that the defendant No.1 is the worldwide owner of the trademark ,,EXIDE as it has consistently used the trademark since the beginning of the century, and which trade mark is registered in about 130 countries. What is strenuously pleaded/urged on behalf of the defendant No.1 is that being the prior user worldwide, and since there exists transnational/spillover reputation in India, it is the defendant No.1 who is the owner even in India of the trademark, and not the plaintiff. It is also urged that the registration which the plaintiff has in the trademark ,,EXIDE is not only void as it has been obtained by playing a fraud on the office of the Registrar of Trade Marks, but the same also has no effect in the eyes of law because the trademark ,,EXIDE by virtue of certain agreements which are relied upon by the plaintiff itself has necessarily to be retransferred and in fact stand retransferred to the predecessor -in -interest of the plaintiff M/s. Chloride Group Limited.

(2.) BEFORE giving the facts in detail, since the crux of the disputes have been reproduced, I would set out the issues which have been framed in this case. The following issues were framed in this case on 24.2.2006: -

(3.) FOR the purpose of discussion, therefore, the connected issues will be taken up together, however, first let me set out the necessary facts. A company M/s. Electric Storage Battery Company (ESBC) was incorporated in USA on 5.6.1888. The U.S. company incorporated a subsidiary company in U.K. on 10.12.1891 namely M/s. Chloride Electric Storage Co. Ltd. (CESCO). ESBC, the parent company was granted registration of the trademark ,,EXIDE in U.S.A. Since the CESCO was a group company of ESBC, CESCO was permitted to use the trademark. CESCO also came to be granted registration in U.K. for the trademark ,,EXIDE on 23.12.1902 numbered as 250920 (Ex.DW1/34). Pursuant to an order of a U.S. District Court dated 24.11.1947 (Ex.DW1/35), between the U.S. company and the U.K. company, an agreement was entered into whereby the connection between the parent company ESBC and the U.K. company CESCO was snapped, however, under that agreement CESCO continued to have the right to use the trademark ,,EXIDE. This is an undisputed position on record that CESCO so far as U.K was concerned was an independent owner of the trademark ,,EXIDE. It is the case of the plaintiff that CESCO started selling batteries in India under the name ,,EXIDE from U.K. however, subsequently CESCO applied for and was granted registration of the trademark ,,EXIDE even in India on 8.6.1942 (Ex.PW2/1 to Ex.PW2/3). CESCO is said to have set up its factory in India in around the year 1946 at Shyamnagar in West Bengal for manufacturing batteries. In the year 1947, the U.K. company got incorporated its group company in India M/s. Associated Battery Markers (Eastern) Ltd. (ABMEL). Thereafter, another company M/s. Chloride and Exide Batteries (Eastern) Private Ltd. (CEBEL) was incorporated in India on 31.1.1947 for marketing ,,EXIDE batteries, and which company became the subsidiary of ABMEL. CESCOs business was acquired by M/s. Chloride Group Ltd. in 1947 and hence CESCO therefore became group company of Chloride Group Limited. Chloride Group Limited also applied for and was granted on 23.4.1973 registration of the trademark ,,EXIDE under Clauses 9 and 11 in India bearing Nos.287588 and 287589 (Ex.PW2/3 and Ex.PW2/4). The earlier trademark registration which was granted to CESCO on 8.6.1942 in India, had already come to be owned by Chloride Group Limited which had become parent company of the group company CESCO. On 7.2.1978, a deed of assignment was executed whereby the trademarks ,,EXIDE and ,,IRONCLAD - EXIDE were assigned to the present plaintiff company. The present plaintiff company applied for transfer of the registrations of the trademarks, and such assignment of the trademarks ,,EXIDE and ,,IRONCLAD - EXIDE was recorded in the name of the plaintiff company on account of the same having been assigned to the present plaintiff company by M/s. Chloride Group Limited. The recordal of the plaintiff as the owner of the registered trademarks took place on 14.2.1980 with respect to the trademarks ,,EXIDE and ,,IRONCLAD -EXIDE (Ex.PW2/1 and Ex.PW2/2). There are, of course, two other documents, one of 7.2.1978 dealing with the aspect of giving up by the plaintiff -company of rights in the trademark ,,EXIDE in certain eventualities; as also a subsequent re -assignment deed dated 2.6.1980 between the plaintiff and its predecessor - in -interest M/s. Chloride Group Limited; however, as my following discussion will show, these are aspects which would be immaterial so far as the infringement suit is concerned, and so far as the issue of passing off is concerned the only issue which has to be looked at and will be looked at from the point of view of the prior user of the trademark ,,EXIDE. Plaintiff also was granted registration of the trademark ,,EXIDE under Class 9 on 22.9.1980 (Ex.P -117). I may at this stage itself state that as on date in the records of the Registrar of Trademark the plaintiff is the registered owner of the trademark ,,EXIDE. The defendant No.1 has however applied to the High Court of Calcutta under Section 56 of the Trade and Merchandise Marks Act, 1958 for cancellation of the registrations standing in the name of the plaintiff company, and which proceedings are pending. At this stage, I put on record that since this suit was filed in the year 1997 i.e. before the Trade Marks Act, 1999 came into force, the common case of both the parties before me is that the suit has to be decided in terms of the 1958 Act. Plaintiff in the plaint claims that though it went into manufacture of batteries under the trademark ,,EXIDE from the year 1978 onwards, however, plaintiff is entitled to tag the user of the earlier owners of the trademark firstly of M/s. CESCO and thereafter of M/s. Chloride Group Ltd. i.e the plaintiff claims in effect the user of the trademark ,,EXIDE at least since 8.6.1942 when registration was granted of the trademark ,,EXIDE and ,,IRON -CLAD EXIDE to M/s. CESCO in India. The plaintiff also relies upon admission made by the defendant No.1 in the preliminary objection No.5 in the written statement that at least the predecessor of the plaintiff since about 1960 started manufacturing of batteries in India, though that paragraph also states that the predecessor of the plaintiff was only using the trademark ,,EXIDE as a registered user/licencee. In terms of the aforesaid para in the written statement, so far as sale of batteries in the trademark ,,EXIDE since about the year 1960 by the plaintiff is not disputed, however, the issue will be whether the use of ,,EXIDE by the plaintiff/its predecessors is as registered users/licencees or by the plaintiff/ its predecessors -in -interest in their own rights. The sum and substance of the case of the plaintiff is therefore the suit for infringement based on the registered trademark and the relief claimed for passing off on the basis of prior user. The defendant No.1 in defence pleads that registrations in favour of the plaintiff are of no legal effect because they have been obtained by fraud on the Registrar of Trademarks and with respect to which issue No.1 is framed. It is also the case of the defendant No.1 that plaintiff destroys its own case by referring to a second agreement dated 7.2.1978 (there being two agreements of this date 7.2.1978) which talks of the plaintiff losing ownership of the trademark if the controlling interest of M/s. Chloride Group Limited falls below a limit in the plaintiff company. It is also similarly urged in view of a Deed of Reassignment dated 2.6.1980. I may state that these documents are very much admitted documents because the plaintiff itself relies upon two agreements dated 7.2.1978 and reassignment deed dated 2.6.1980. The two agreements dated 7.2.1978 have been exhibited as Ex.P114 (colly) and the Reassignment Deed dated 2.6.1980 has been exhibited as Ex.P115. Defendant no.1 also pleads ownership on account of being the prior user. In sum and substance therefore, the defendant No.1 pleads ownership of the trademark by prior user and seeks to destroy the case of the plaintiff claiming infringement of the trademark on account of the plaintiff having illegally/fraudulently obtained registration of the trademark. Issue Nos.1,2 and 6