On 10th September, 2012 Delhi High Court gave an order while adjudicating a trademark dispute between Exide Industries Limited, the biggest storage battery producing company in India and Exide Corporation, a USA based company on the use of the ‘Exide’ name. In the decision court restrained Exide Corporation USA from using the trademark ‘Exide’ in India. The order was delivered by Justice Valmiki J. Mehta. This court order was for the suit filed by Exide Industries against Exide Corporation USA contesting its exclusive right to use ‘Exide’ trademark in India. The use of the trademark by the Indian company was however disputed by the USA based company.
This whole case lies around the ownership of trademark “Exide”. Exide Industries Ltd. (plaintiff in this case) claims ownership on two bases:
The plaintiff was the registered owner of the trademark.
In India the plaintiff was the prior user, and hence by such prior use plaintiff has become the owner of the trademark.
Exide Corporations (defendant) contests the suit claims. It was urged that the defendant was the parent company and owns the trademark “Exide”. It was pleaded by the defendant that it was the worldwide owner of the trademark “EXIDE”as it has consistently used the trademark since the beginning of the century, and the same trade mark was already registered in about 130 countries.
Thus, defendant urged on this basis that they are prior user of the trademark worldwide so, they are the owner of the trademark even in India. It was also urged that the registration of the trademark “EXIDE” isnot valid as it has been obtained by playing a fraud on the office of the Registrar of Trade Marks.
How two different companies have same trademark?
Let’s now understand how two companies are the owner of same trademark.
A company M/s. Electric Storage Battery Company (ESBC) was incorporated in USA on 5th June, 1888. The U.S. Company incorporated a subsidiary company in U.K. on 10th December, 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 23rd December, 1902 numbered as 250920.
Pursuant to an order of a U.S. District Court dated 24th November, 1947, 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.Kwas concerned was an independent owner of the trademark “EXIDE”.
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 8th June, 1942. CESCO 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 31st January, 1947 for marketing “EXIDE” batteries, and this company became the subsidiary of ABMEL. CESCO’s 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 trademark “Exide” on 23rd April, 1973 under Clauses 9 and 11 in India bearing Nos.287588 and 287589.
The earlier trademark registration which was granted to CESCO on 8th June, 1942 in India, had already come to be owned by Chloride Group Limited which had become parent company of the group company CESCO. On 7th February, 1978, a deed of assignment was executed whereby the trademarks “EXIDE”and “IRONCLAD- EXIDE” were assigned to the plaintiff’s company. The 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 plaintiff was recorded as the owner of the registered trademarks on 14th February, 1980. Plaintiff was also granted registration of the trademark “EXIDE”under Class 9 on 22ndSeptember, 1980.
Note: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 was that the suit should be decided in terms of the 1958 Act.
Following issues were to be determined after 24th February, 2006:
1. Whether the plaintiff has played a fraud on the Registrar of Trade Mark in getting itself registered as a registered proprietor and if so, to that effect?
2. Whether the plaintiff is the registered proprietor of the trade mark “EXIDE” in respect of batteries and other goods as per details mentioned in para-13 of the amended plaint?
3. Whether the defendant No.1 is a prior user of the Trade Mark “Exide” in India and consequently the proprietor?
4. Whether the plaintiff has suppressed any material and relevant facts and the suit deserves to be dismissed?
5. Whether the plaintiff is guilty of acquiescence and if so, to what effect?
6. Whether the defendant has infringed the trade mark EXIDE of the plaintiff in relation to the same goods?
7. Whether the defendant is passing off their goods as the goods of the plaintiff?
8. Whether the use by the plaintiff of the mark “EXIDE” amounts to infringement/passing off?
Issue No.1 was decided in favor of the plaintiff and against the defendant by holding that Civil Court had no jurisdiction to go into the aspect of the alleged fraud played on the Registrar and declare invalid the registration of the trademark and record of the assignment in favor of the plaintiff. Court said that these are the aspects that have to be examined and decided upon only by the concerned authority (IPAB) under Section 56 of the Trade Marks Act, 1958.
Issue No.2 was also in the favor of the plaintiff in view of Ex.PW2/1 to Ex.PW2/3 which are the trademark certificates showing registration of the trademark “EXIDE” in favor of the plaintiff.
In respect to issue no. 3 the court said that examining whether the defendant company gave a “common law license” to the plaintiff or whether the plaintiff’s rights were relatable to the defendant, the Court refreshingly considered these scenarios which were:
(a) The defendant did not have any controlling stake over the plaintiff or its predecessors after the split between the UK and US companies.
(b) The defendant never received any consideration from the plaintiff as royalty.
The court said that U.S. Company would not have allowed the use of their trademark by the plaintiff without any control thus, there can be no common law license inferred. This shows that trademarks are very important for an organization and if they are serious about them than they should be vigilant in maintaining their rights.
Issue No. 4 with regard to whether the plaintiff had suppressed any material facts and the suit deserves to be dismissed. According to court, issues of suppression were ordinarily/normally only issues with respect to grant/denial of interim relief. Once plaintiff, at the final stage is held to be the owner of the trademark, even assuming there is some suppression, it cannot be said that the plaintiff will be disentitled to the final relief of injunction.
Issue No. 5 is with respect to acquiescence of the plaintiff. The court said that the defendant failed to show any sale of goods under the trademark “EXIDE” from 1950 to 1997, it has also failed to show any special circumstances, and hence, there does not arise any issue of acquiescence inasmuch as issue of acquiescence can be urged only if the defendant had been selling goods in India under the trademark “EXIDE”or there were special circumstances for not selling the goods under the trademark “EXIDE”. Issue No. 5 was therefore, decided in favor of the plaintiff and against the defendant.
Issue No.6was also decided in favor of the plaintiff in as much as if the plaintiff is the owner of registered trademark “EXIDE”the defendant by using or proposing to use the trademark has caused or will cause infringement of the registered trademark of the plaintiff.
For issue no. 7 court said that customers and traders would associate “EXIDE” batteries only with the plaintiff and its predecessors, and it is therefore entitled to injunction the defendants from selling “EXIDE” batteries in India.
According to court issue no. 8 was wrongly framed as the word infringement therein should not have been used and the issue should have been whether use by the plaintiff of the mark “EXIDE” amounts to passing off the trademark/trade name of the defendant. This issue was framed as the defendant had filed a counter-claim against the plaintiff. According to court the selling of goods by the defendant under the trademark “EXIDE”and also the proposed sale thereof by use of the trademark “EXIDE” is illegal, and therefore, defendant were injuncted from selling their goods or having their trade name similar with the trademark “EXIDE” of the plaintiff or any other name/mark deceptively similar thereto.