Cipla Limited vs. Cipla Industries Private. Limited: Was the Court’s interpretation too Literal?

On March 01, 2017, the Full Bench of the Honorable Bombay High Court in the case of Cipla Limited vs. M/s Cipla Industries Pvt. Ltd., passed a dictum on the inter play between Sections 29 (4) and (5) of the Trade Marks Act, 1999, and discussed at length the nexus between the two.  

Background of the Case.

Cipla Limited (hereinafter referred to as ‘the Plaintiff’) is the registered trade mark holder of the mark CIPLA in Class 5, whereas M/s Cipla Industries Pvt. Ltd. (hereinafter referred to as ‘the Defendants’) have registration for the mark CIPLA PLAST in Class 21. 

In 2012, the Plaintiff filed a suit for infringement and passing-off against the Defendants. The Plaintiff claimed that the Defendants have infringed upon their marks by incorporating the Plaintiffs’ registered trade mark into their trade name/corporate name. Justice Gautam Patel vide his order dated April 26, 2016, expressed that he is not in consonance with the findings of the Division Bench in Raymond vs. Raymond Pharmaceuticals Pvt. Ltd.[1] and that Division Bench’s view required reconsideration.

The Plaintiff submitted that Sections 29(4) and (5) are inclusive and that the statute must be read as a whole to give a consistent and harmonious interpretation. Additionally, the Plaintiff submitted that the Division Bench overlooked Section 29 (8), and that sub-section (8) will apply irrespective of the goods or the nature of business of the Defendants.

The Defendant submitted that sub-section (4) can only be invoked when it is a “Trade Mark versus Mark” situation and NOT in the case of a “Trade Name versus Name” situation and asserted that a literal interpretation of the subsections (4) and (5) will have to be made.

The Plaintiff, in its rejoinder, further submitted that it has the right to a remedy under Section 29 (4) of the Act as the Defendants were using the registered trade mark ‘Cipla’ only as a trade name in respect of dissimilar goods.

Relevant Sections of the Act

Section 29(4) - A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which-

1.   is identical with or similar to the registered trade mark;
2. used in relation to goods or services which are not similar to those for which the trade mark is registered;
3. the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark. 

Section 29(5) - A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.

Held  

The Full Bench while interpreting Section 29 (5) of the Act laid down the following requirements for invoking Sub-Section (5). Firstly, the infringer should use a registered trade mark as his trade name or as part of his trade name. Secondly, the infringer should be using the trade mark in respect of similar goods and services. The question before the Court was, whether Section 29 (4) of the Act can be invoked in a case where the second requirement of Sub-Section (5) is not met. The Honorable Court was of the view that the phraseology makes it clear that Sub-Section (4) applies in a ‘trade mark versus mark’ situation and hence cannot be applied as both the Sub-Sections are mutually exclusive.

As the language of both the Sub-Sections are plain and clear, a literal rule of interpretation has to be applied. The words "in the course of trade" and "in relation to goods or services" used in Sections 29 (4) of the Act are not used in Section 29 (5) of the Act and the words "if he uses such registered trademark, as his trade name, or the name of his business concern or part of the name, of name of his business concern" used in Section 29 (5) are absent in Sections 29 (4) of the Act. This difference in evident of the legislative intent to avoid over lapping of the two subsections.

Thus, the questions referred put forth by the Learned Single Judge were answered as follows: 

1.     Where a party is found to be using a registered trade mark as a 'name', viz., as a corporate or trading name or style, though in respect of goods dissimilar to the ones for which the trade mark is registered, is the proprietor of the registered trade mark entitled to an injunction on a cause of action in infringement under Section 29 (5) of the Trade Marks Act, 1999?

The Bench answered this in the negative.

2.     Whether the use of a registered trade mark as corporate name or trading name or style is excluded from the purview of Sections 29 (1), 29 (2) and 29 (4) of the Trade Marks Act, 1999 and whether these sections are restricted to the use of a trade mark 'as a trade mark', [i.e., in the 'trade marky' sense]?

              The Bench answered this in the affirmative.

3.     Whether Sections 29 (4) and 29 (5) operate in separate and mutually exclusive spheres, i.e., whether, if the Defendant uses the registered trade mark only as a corporate name or trading name or style in respect of dissimilar goods, a Plaintiff can have no remedy and is not entitled to an injunction?

            The Full Bench answered this in the affirmative. 

Conclusion

The Full Bench has interpreted the relevant provisions of the Act, by engaging in a literal interpretation of Sub-Sections (4) and (5) of Section 29, and have consequently made it quite difficult for a well-known mark or an ordinary trade mark to receive protection if it is used as a trade name in case of dissimilar goods.

The reference as decided by the Full Bench of Bombay High Court has far reaching consequences. As per strict interpretation of Sub-Section (5) of Section 29 of Act, the Plaintiff can invoke the said Section only if it is the registered proprietor of the trademark and the Defendant uses such registered trademark as his trade name or part of his trade name or name of his business concern dealing in goods or services in respect of which the trademark is registered. For dissimilar goods or services, Plaintiff cannot avail reliefs under Sub-Section 5 of Section 29 of the Act.

It would be interesting to see if the Apex Court upholds the decision of the Full Bench of the Bombay High Court should Cipla Limited decides to appeal.

[1] 2010(44)PTC(Bom)