UNILAC SANOWARA (BD) LTD. Vs. BONLAC FOODS LIMITED

JUDGEMENT

(1.) This appeal arises out of. leave granted by this Court on 3-7-2005 in Civil Petition for Leave to Appeal No. 326 of 2005 preferred by the opposite party No.1 appellant herein against the judgment and order dated 5-3-2005 passed by the High Court Division allowing the Trade Mark Application No. 9 of 2002 filed under section 46 of the Trade Marks Act, 1940 for rectification of the Registrar of Trade Marks by removing the appellant's trade mark registration No. 33243 in Class-29,

(2.) The facts, in short, are that the respondent No.1 filed the Trade Mark Application No. 9 of 2002 before the High Court Division under section 46 Of the Trade Marks Act, 1940 stating, inter alia, that the petitioner Bonlac Foods Limited has been engaged in the business of manufacturing and marketing of dairy products including powdered milk, butter, cheese, ghee, edible oils and fats and blends of edible oils and fats With dairy products in Class 29 throughout the world with reputation for its unrivalled quality for about three decades. With a view to giving a distinct identity and nomenclature to the products manufactured and marketed by the respondent they adopted a trade mark consisting of the word 'Diploma'. Due to superior quality of goods offered under the trade mark 'Diploma' and due to various promotional measures undertaken the trade mark 'Diploma has become very popular throughout the world as a product of quality bearing confidence and the trade mark has attained distinctiveness and has become distinctive of the products manufactured and marketed by the respondent No.1 under the aforesaid trade mark 'Diploma'. The trade mark connotes and denotes the property of the respondent alone and none else, hi fact, the trade mark 'Diploma' has become integrated with the business of the respondent. It was stated that Unilac Australia Pty Ltd formed a joint venture company with Sanowara Corporation on 21st June 1990 under the name and style 'Unilac Sanowara (Bangladesh) Limited' 4 Sanowara Corporation holds major shares in the appellant's company. The respondent No.1 Bonlac Foods Ltd. with a view to sell its dairy products under the trade mark 'Diploma' came to Bangladesh in the year of 1991 and entered into an User Agreement of 1st July, 1991 with the appellant. As per the terms and conditions of the said User Agreement, the respondent is only entitled to use the impugned trade mark for the purpose of marketing dairy products with the trade mark 'Diploma'. In the said Users Agreement, Bonlac Foods Ltd. was clearly mentioned as the 'Owner of the trade mark 'Diploma' and the appellant was clearly mentioned as the 'User' of the said mark. Therefore, it is crystal clear that in the eye of law the appellant Unilac Sanowara (Bangladesh) Limited was not the owner of the trade mark 'Diploma'. Rather Bonlac Foods Limited is the owner of the impugned trade mark. It was stated that Mr. Nurul Islam, Proprietor of Sanowara Corporation, executed the said User Agreement dated 1st July, 1991 as a representative of the 'User' i.e. appellant. With a view to seeking legal protection of the mark adopted by the respondent, for the first time in Bangladesh, they applied to the Trade Marks Registry under No. 33342 in Class 29 on 25th August, 1991. The Registrar of Trade Marks being satisfied about the right of property involved in the trade mark ordered the same to be advertised in the journal and accordingly, the trade mark was so advertised. As there was none who had any right, title and interest over the trade mark in question, there was no opposition to the advertisement of the aforesaid application and the application proceeded with registration unhindered. The trade mark so registered was renewed for a period of 15 years from 25-8-1998. After entering into the User Agreement dated 1st July, 1991, the appellant in a most unscrupulous manner and with malafide intention fully knowing that they were mere user of the said trade mark 'Diploma" most illegally and in gross violation of the stipulation contained in the said User Agreement dated 1st July, 1991, secretly applied for registration of a trade mark consisting of the word 'Diploma' and accordingly, the same was registered in favour, of the appellant under Application No. 33243 of 11th August, 1991 for Powdered Milk in complete derogation of the provisions laid down in Sections 10(1) and 8(a) of the Trade Marks Rules, 1963 where there is prohibition for registration of identical or similar trade mark and therefore, the application filed by the appellant ought to have been refused. But with utter surprise the Registrar of Trade Marks without adhering to the specific provision of law as laid down in sections 10(1) and 8(a) of the Trade Marks Act, 1940 and Rule 24 of the revised Trade Marks Rules, 1963 granted registration in favour of the appellant. The grant of registration has been quite illegal creating confusion amongst the traders and the buyers about the true origin of the goods as the people of Bangladesh are used to purchasing 'Diploma' products for a long time with confidence. The result is that the said respondent has been suffering in terms of decreasing turnover of their products and also loss of their goodwill and business reputation. Many traders and customers have been complaining of low quality products manufactured and marketed by the appellant thinking the same as the products emanating from the respondent. This has caused an embarrassing and alarming situation for the respondent as the continuation of the present position might lead to the closure of the business for which they have invested huge sums of money. The public interest thus suffers in the hands of the unscrupulous traders. The respondent not being aware of legal provisions of law relating to registration of trade marks failed to oppose registration of the trade mark No. 33243 in Class-29 of the appellant in time and the mark was registered quite secretly. The respondent being a foreign company, totally relied upon the appellant herein who was the agent and by taking advantage of that the appellant registered the trade mark in question in its favour. Moreover, Sanowara Corporation who is the major share holder of the appellant company, very cleverly and secretly got the impugned trade mark registered in the name of appellant without the knowledge of the Unilac Australia Pty Limited as well as the respondent Bonlac Foods Limited. Only recently when the respondent terminated the User Agreement on 7th March, 2002 with the appellant respondent came to know that the trade mark 'Diploma' was also illegally registered in the name of the appellant under registered trade mark No.33243 in Class-29. In accordance with clause 14 of the said User Agreement dated 1st July, 1991; the Bonlac Foods Limited issued a notice of termination dated 7th March 2002 upon the appellant herein terminating the said User Agreement dated 1st July, 1991. It was stated that New Zealand Milk Brands Limited was subsequently appointed as the user of the said trade mark 'Diploma'. The registration of the trade mark No.33243 in Class-29 consisting of the word 'Diploma' was obtained by the appellant by practicing fraud upon the Trade Marks Registry as the appellant was never the owner of the impugned trade mark and the trade mark was obtained by the appellant by gross violation of the stipulation as contained in the User Agreement. The respondent is a party aggrieved within the meaning of section 46 of the Act, The respondent has got strong prima facie case and the balance of convenience and inconvenience is in favour of the respondent and against the appellant.

(3.) The appellant contested the said application by filing affidavit-in-opposition contending, inter alia, that his trade mark was registered on 11-8-1991 whereas the trade mark of the respondent was registered on 25-8-1991, The appellant was registered as Joint Venture Company with Unilac Australia (Pty) Limited, a sister concern of the appellant. So, the trade mark of the respondent was registered before the respondent got their trade mark registered. There was no contravention of or failure to observe any condition under the Trade Marks Act, 1940 and the Trade Marks Rules, 190 in entering the trade mark of the petitioner in the register of the Registry office of Trade Marks. The application is an abuse of the process of the Court. The Trade Mark of the appellant has been entered in the register legally on sufficient cause and the same is remaining in the Register legally. There is no error or defect in such entry in the Register. The respondent filed the application on the contention that they obtained registration of the Trade Mark prior to the respondent. This is a false statement/In fact, the respondent obtained the registration of the Trade Mark through fraud because they knew about earlier registration made by the appellant. That a joint venture agreement was executed between Unilac Australia Limited and Messrs Sanowara Corporation for incorporation of appellant for repackaging milk powder and other dairy products. The appellant was incorporated on 21-6-1990 and set up a most modern industry in the year 1990 and got the trade mark registered on 11-8-1991, under the name and style 'Diploma' with a distinct device whereas the respondent got the trade mark registered on 25-8-1991 under the name and style 'Diploma' without any device. So, in fact, their registration was obtained through fraud. The appellant has been using the trade mark since 1991 whereas respondent never used its trade mark in Bangladesh, The International Business Distribution Officer of the respondent company made survey of the products of the appellant in Bangladesh and prepared a report on the basis of such survey where he acknowledged that trade mark has been obtained by appellant. So the respondent has no cause of action to file the present petition. In fact, this is a frivolous gambling in litigation. The aforesaid trade mark application was filed by Bonlac Foods Limited but the affidavit therein has admittedly been sworn by one Mr. Syed Sanaul Hoque, Advocate in his capacity as attorney of New Zealand Milk Brands Limited. It is apparent that the affidavit in the said trade mark application filed by Bonlac Foods Limited has been sworn by unauthorised persons and, as such, the trade mark application is liable to be rejected. The present trade mark application having been filed 11 years after the registration of the impugned trade mark on 11th August 1991 the present trade mark application is barred under the provision of section 25 of the Trade Marks Act, 1940. It is now too late to file this application under section 46 of the Act. The present trade mark application is barred by the principle of waiver, estoppel and acquiescence. The present application is barred under section 24 of the said Act also. The respondent has no cause of action to file the present trade mark application under section 46 of the Trade Marks Act, 1940 and, as such, the same is liable to be rejected. The respondent company being admittedly a company registered outside Bangladesh and having no assets whatsoever in Bangladesh is liable to furnish security for cost under Order XXV, rule 2 of the Code of Civil Procedure before the respondent could proceed further with the said trade mark application. An application has already been filed for furnishing security for cost which may be disposed of before proceeding further with the application. The respondent is not an aggrieved person within the meaning of section 46 of the Trade Marks Act, 1940 and, as such, is not entitled in law to maintain the application for rectification under section 46 of the Trade Marks Act, 1940 and consequently, the same is liable to be rejected with cost. The respondent never used the said trade mark in Bangladesh. The appellant has been using the trade mark within the full knowledge of the respondent since 1991. The respondent has also taken full advantage from the trade mark of the appellant who got the same registered in its own name with the knowledge of the respondent. It was stated that appellant is a joint venture company formed between Unilac Australia (Pty) Limited (UNILAQ and Sanowara Corporation under a joint venture agreement dated 20-6-1989. Unilac Australia Limited is a sister concern of the respondent company which holds 49% shares in the appellant company The Company Secretary of the respondent company and Unilac Australia Pty Limited is the same person who since 1991 knows that the appellant has been using the trade mark in question. They never lodged any objection as to the trade mark registered in the name of the appellant. It was stated that UNILAC used to supply raw materials to the appellant from Australia. The so-called user agreement dated 1st July 1991 has no binding effect on the appellant because it was never signed by any person on behalf of the company, Nurul Islam nor Sanowara Corporation was a party to so-called user agreement which was signed by Nurul Islam as user. So-called user agreement was never executed by the appellant company. It had no binding effect on the appellant company who never authorised Nurul Islam, Proprietor of Sanowara Corporation to execute the so-called user agreement for the company. It was stated that Nurul Islam signed not as the proprietor of Sanowara Corporation but as user. Further, as on 1st July 1991 respondent has no registered trade mark under name 'Diploma' and, as such, has no authority to execute any such user agreement. The said user agreement is void ab initio. The respondent never used its trade mark in Bangladesh. The trade mark of the respondent is quite different from that of the appellant. The application is a vexatious litigation and is nothing but an abuse of the process of the Court. It is liable to be rejected in limine. The said user agreement does not show that the respondent is the registered or unregistered owner or user of the mark 'Diploma' in any country including Bangladesh. It was further stated that it is an admitted fact that prior to and/or at the date of execution of the said user agreement on 1-7-1991 the respondent did not have any adoption, use or registration of their alleged mark 'Diploma' in Bangladesh or any other country. It was further stated that the said user agreement does not contain any provision prohibiting the appellant from registering the mark 'Diploma' as its own trade mark. In fact, now when the appellant has well established its business in Bangladesh with its own registered trade mark, the respondent has been tempted to file this vexatious and frivolous application as an attempt to make some illegal gain. The appellant got its trade mark registered on 11 -8-1991. The trade mark of the respondent is latter in point of time who by practicing fraud obtained the said trade mark registration No. 33342 dated 25th August 1991. It is an admitted fact that the respondent never marketed any goods under the trade mark 'Diploma' in Bangladesh nor has ever exported any goods under the trade mark 'Diploma' in Bangladesh nor any goods of the respondent under their trade mark 'Diploma' were available in the market of Bangladesh at any time prior to and/or at the date of filing of the said trade mark application No.33342 dated 25th August, 1991 and, as such, it is apparent that the respondent has obtained the registration of the said trade mark 'Diploma' under No. 33342 dated 25th August 1991 by practicing fraud on the Trade Mark Registry. The certificate of trade mark registration of the appellant is already in the record of the Court. As stated above the so-called user agreement is not binding on the appellant as the same is admittedly not executed by them. So-called user agreement having been executed prior to obtaining of trade mark by the respondent the same has no legal effect. The said user agreement is void ab initio. It was further stated that the appellant having obtained registration of the trade mark in question prior to the respondent, sections 8(a) and 10 of the said Act and Rule 24 of the said Rules have no manner of application in the present case; on the contrary, the registration of trade mark fraudulently obtained by the respondent is liable to be rectified under section 46 of the said Act. The respondent never used its trade mark and thus there is no scope to deceive or confuse the consumer and, as such, section 8(a) and 10 have no manner of application in this regard. It was stated that the appellant has been adopting and using the trade mark consisting of the word 'Diploma' along with a device represented by a picture of a glass containing milk and fastened outside with a red coloured ribbon since 1991. The appellant with a view to protect their said trade mark adopted and used by them filed trade mark application No.33243 dated 11th August 1991 for powdered milk before the Registrar of Trade Marks, Dhaka, Bangladesh. The said trade mark application No. 33243 dated 11th August 1991 was duly advertised in the trade mark journal published on 31-10-2000 under the direction of the Registrar of Trade Marks, Dhaka. As there was no opposition filed against the advertisement of the said Trade Mark application the same was registered under No. 33243 dated 11th August 1991 by the Registrar of the Trade Marks Registry in the name of the appellant. It was stated that the appellant was never the agent of the respondent as alleged. It is not correct that the appellant got the trade mark registered in its name surreptitiously. The journal published by Trade Marks Registry is a notice to public at large and the respondent had sufficient knowledge of the trade mark of the appellant. Further, UNILAC, a shareholder of appellant, is the sister concern of the respondent No. 1 who always knew about such trade mark. The Company Secretary of both the companies is same persons and had knowledge of the trade mark. Moreover, the appellant having obtained the registration of the trade mark prior in time, the allegation made by respondent has no basis. The packets of the products containing the trade mark of the appellant was supplied by the respondent and, as such, had sufficient knowledge of the trade mark in question and that they were not aware of legal provision of law has no legal basis. Ignorance of law is no defence. It was stated that UNILAC had knowledge about the trade mark of appellant and its registration No.33243 in Class-29 on 11-8-1991 since the date of its registration and both of them are the beneficiaries of the registration of the said trade mark in the name of the appellant. It was stated that the Bonlac Foods Limited in the year 1991 in its quarterly News bulletin 'BONELINK' published a news item as to the commencement of operation of the milk powder packs in Diploma in sachets in Bangladesh along with a photograph of the Diploma sachet which clearly shows that the impugned 'Diploma' trade mark with device belonged to the appellant. Since 1991 on the instruction of the appellant both the respondent and its sister concern UNILAC supplied printed Sachet Flexo Pack and printed Rewinding Film with the print thereon of the impugned 'Diploma' trade mark belonging to die appellant which were used for packing the milk powder in the factory of the appellant. A perusal of the minutes of the meeting of the Board of Directors of the appellant held on 30-7-1995 in Melbourne, Australia, evidence that a decision therein was taken to the effect that the respondent would continue to supply the said Rewind material from Australia. A perusal of the Bangladesh market report compiled by Mr. David Weber on behalf of the respondent Bonlac Foods Limited on the basis of his market visit in April 2001 would show that it contains news and photographs of advertisement and billboards in Bangladesh of the impugned Diploma trade mark belonging to the appellant. It was stated that the respondent having never used or adopted the trade mark 'Diploma' illegally obtained by them has no cause of action to maintain the application. The said so-called user agreement had/has no effect on the appellant. The termination of the same marks no difference so far appellant is concerned. The so-called user agreement is void ab initio. It is no agreement in the eye of law. It is further stated that it is absolutely false and incorrect that the New Zealand Milk Brands Limited was subsequently appointed by the respondent as the user of the said trade mark 'Diploma'. The appellant having obtained the registration of the trade mark prior in time and the respondent having obtained the registration of the same trade mark by resorting to fraudulent means, the registration of trade mark of the respondent is liable to be rectified. It was stated that the respondent is required to produce the originals of all the annexures to the application and prove the same in accordance with law.