201907.11
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Prior use prevails over registration

The siblings, Gopal Sabu and Rajkumar Sabu (Raj) both working together, at one stage, as Directors of Sabu Trade Private Limited (STPL) are now at loggerheads to assert their rights over the mark SACHA MOTI (Pure Pearl) being used in relation to Sabudana (sago) for human consumption. The battle ground is Madras High Court where they have come in Appeal from a decision of District Court, Salem

Background

The elder sibling, Gopal Sabu, Managing Director of STPL filed suit before the District Court, Salem, for declaration that they are the proprietor of the mark SACHA MOTI and restrain the Defendant, Raj from using the mark in relation to his business. In the suit STPL claimed prior use of the SACHA MOTI mark and alleged that Raj had clandestinely obtained registration for the same while functioning as a Director. Raj defended the suit on the basis of the statutory protection obtained for the SACHA MOTI mark. Another twist came when Raj moved Delhi High Court and obtained injunction against STPL from using the trademark SACHA MOTI.

The District Court Salem after considering the pleadings, documents and arguments refused injunction to STPL holding that they failed to show a prima facie case. The injunction order passed by the Delhi High Court also swayed the District Court in refusing injunction to STPL. Aggrieved by the order of the District Court, Salem, rejecting the injunction, STPL filed appeal before the Madras High Court.

In the appeal STPL argued:

  1. Raj was an erstwhile Director of STPL and a distributor of their products for the State of Madhya Pradesh as borne out by the documents. Thus, had knowledge of use and reputation of the mark.
  2. Documents evidence that statutory authorities had recognised STPL as the owner of the mark SACHA MOTI.
  3. Raj has not filed any documentary evidence in support of his case, whereas, STPL has filed sufficient documents to substantiate prior use of the SACHA MOTI mark.

Raj reiterated the contentions made before the District Court with regard to his rights in the SACHA MOTI (Pure Pearl) mark. Further, argued that as the findings of the District court are correct no interference is required.

The High Court Ruled:

  • STPL has filed voluminous documents evidencing long prior user of the trademark SACHA MOTI. Irrespective of the registration in favour of Raj the person who is the prior user of the trademark can enforce his rights.
  • Pleadings and documents show that Raj was earlier a Director of STPL and subsequent to his resignation started his business by obtaining registration of the SACHA MOTI mark. It is also evident that STPL was using the mark even when Raj was functioning as its Director.
  • It is a settled principle that registration of trademark is prima facie evidence in favour of the holder of such mark, however, Section 34 of the Trademarks Act is an exception to the said Section. Thus, a prior user is not bound by such registration. STPL has also satisfied the burden of proving its prior and continuous use of the SACHA MOTI mark.
  • Raj has not filed any document to show that Delhi High Court has extended the ex-parte injunction granted earlier. Records evidence that STPL has filed petition to set aside the injunction order granted by the Delhi High Court.
  • Section 34 of the Act makes it clear that the proprietor of a registered trade mark cannot interfere or restrain the use of an identical trade mark by any person in relation to goods for which that person has continuously used the trade mark from a date prior to the use of the registered proprietor.
  • Thus, considering STPL’s prior use, the interim order of Delhi High Court will not preclude Madras High Court from deciding this appeal on merits. Moreover, nothing has been produced to show that Delhi High Court passed the order after hearing the respective parties. The District Court seems to have taken it upon itself to treat the Delhi High Court order as a hurdle in granting an injunction to STPL. It is also evident that Raj had not disclosed before the Delhi High Court, material facts subsequent to the filing of the suit by STPL before the District Court, Salem.

In view of the above the High Court allowed the appeal, set aside the order of the Salem District Court and granted an injunction in favour of STPL.