JAMES FINLAY AND COMPANY LTD v. STASSEN EXPORTS LTD AND ANOTHER

047-SLLR-SLLR-2001-V-3-JAMES-FINLAY-AND-COMPANY-LTD-v.-STASSEN-EXPORTS-LTD-AND-ANOTHER.pdf


JAMES FINLAY AND COMPANY LTDv.
STASSEN EXPORTS LTD AND ANOTHER
COURT OF APPEALWIGNESWARAN. J.
JAYAWICKREMA. J.
A. 313/91(F)
C. COLOMBO 2899/SPLAUGUST 24, 1999
Code of Intellectual Property Act No. 52 of 1979 S.99(2). S.100 (l )(a)(e).S. 142(1) (2) 182(3) – Registration oj Marks – Unfair competition – Actscontrary to honest practices in commercial matters ■ Passing off -Common to the trade – applicability of English law.
The District Court refused to set aside an order made by the Registrar ofPatents and Trade Marks. The Registrar by his exparte order rejected theopposition filed by the Plaintiff Appellant and allowed the application ofthe 1st Defendant Respondent to register the impugned trade mark"Cleopatra".
While it was the contention of the Plaintiff Appellant that the propoundedmark was not registrable, the Defendant Respondent contended that, itwas after a careful comparison of the registered mark and the propoundedmark, the District Court had decided that there was no similaritywhatsoever between the two marks.
Held :
Despite correspondence showing willingness on the part of the laDefendant Respondent to withdraw the glass/Tumbler device, the laDefendant Respondent had nonchalantly continued to use thepropounded mark. The representation of the glass/tumbler device ofthe Plaintiff Appellant was no doubt the exclusive property of thePlaintiff Appellant.
Per Wigneswaran, J.
“Why would a person who undertook to withdraw a Mark whichadmittedly could cause unnecessary inconvenience and who filed anamended Mark for registration undertaking to withdraw thepropounded Mark on the new Mark getting registered, change hismind to retain the original propounded Mark and have it registeredunless he would obtain benefits thereby?"
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and another (Wigneswaran, J.)■
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It is to be noted that the criteria of what is right or wrong conduct Inindustrial or commercial matters is based on the social convictionsof a particular community at a given time.
What a Court must examine is whether the harm resulting from theDefendant's apparent transgressions of accepted norms of behaviourin trading could have transformed his competition from the lawful tothe unlawful.
In terms of S. 100( 1) of the Code of Intellectual property a Mark whichmight mislead the public or likely to mislead the public must not beregistered.
On an examination of the scheme of the Act there is no need to concludethat English Law principles were introduced to Sri Lanka throughthe Code of Intellectual Property Act. The Act itself had been basedon the model of the United International Bureau for protection ofIntellectual property, the Act must be viewed as it is and any attempt toread into its provisions, principles and traditions peculiar to EnglishLaw might do harm to the Act.
The Courts have to decide in each case brought before them underthe circumstances of each case, whether any of the acts complained ofis an act of competition which is contrary to honest practices inindustrial or commercial matters.
The question of the "tumbler device" being common to the trade "asper English law principles is not relevant, what is relevant is that the1st Defendant Respondent itself considered the appearance of the"tumbler device" in their "cleopatra" label as being capable of causing"unnecessary inconvenience" to third parties/ and or Plaintiff Appellant.
The Defendant Respondent has violated third party rights moreparticularly the Plaintiff Appellant's rights and has been involved inan act of unfair competition and an act contrary to honest practices incommercial matters.
APPEAL from the Judgment of the District Court of Colombo.
Cases referred to :
Heptullabhou and Company Ltd. u. Stassen Exports Limited 19891 SLLR, 191
Lipton Ltd., v. Stassen Exports Ltd., DL. Colombo 2756/Spl C.A.M.08.10.96
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Reckltt and Coleman Products Ltd. v. Borden Incorporated 1990R. R C. 341
Erven Wamlnk v. Tbwnend – (1980) RPC 31 93 (HL)
K. Kanag – Iswaran P.C.. with Basheer Ahamed and Ms. DilshaniWljeyawardene for Plaintiff Appellant.
Ben EUyathamby PC., with Gomin Dayasirl for 1st Defendant Respondent.
M.R. Ameen S. C. for 2nd Defendant Respondent.
Cur. adu. unit.
May 23, 2000.
C. V. WIGNESWARAN, J.This is an appeal under Section 182(3) of the Code ofIntellectual Property Act (No. 52 of 1979 read with itsamendments) against the Judgment of the District Judge,Colombo dated 01.07. 1991 which refused to set aside an ordermade by the Registrar of Patents and Trade Marks (2ndDefendant – Respondent). The 2nd Defendant – Respondent byhis ex-parte order dated 07. 01. 1988 rejected the Oppositionfiled by the Plaintiff – Appellant and allowed the applicationmade by the 1st Defendant – Respondent to register Trade MarkNo. 40846 "Cleopatra" advertised in the Government Gazettedated 08. 04. 1982.
The facts are briefly as follows:
The Plaintiff – Appellant and 1st Defendant – Respondentare both companies which inter alia export tea from SriLanka.
The Plaintiff – Appellant was the registered owner of TradeMark No. 31492 in respect of tea, which was a device of aglass tumbler resting on a tumbler rest.
The 1st Defendant – Respondent made application No.40846 dated 07. 12. 1979 to the 2nd Defendant -Respondent to register Trade Mark "Cleopatra" whichconsisted of the device of a glass tumbler with the bust of
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Cleopatra resting on a tumbler rest. The application wasadvertised in the Government Gazette as abovesaid.
The Plaintiff – Appellant's Lawyers wrote to the 1st Defendant- Respondent on 04. 06. 1982 that they would oppose thesaid application unless the 1st Defendant – Respondentagreed to delete the device of the tumbler.
On 26. 07. 1982 the 1st Defendant – Respondent's Lawyersreplied that the 1st Defendant – Respondent was preparedto delete the device of the tumbler and file a. freshapplication retaining only the bust of Cleopatra on thetumbler rest and even enclosed a copy of the new label(A6A). In fact A6A did not even retain the tumbler rest.
By letter dated 07. 09. 1982 the Lawyers for the 1stDefendant – Respondent confirmed that they had filed afresh application with the altered label.
But no steps were taken to withdraw application No. 40846though by letter dated 04. 03. 1983 it was confirmedby the Lawyers for the 1st Defendant – Respondent thatwithdrawal would take place when the new applicationwas ripe for registration.
On 04. 03. 1983 the Plaintiff – Appellant filed its Notice ofOpposition to Trade Mark Application No. 40846 beforethe 2nd Defendant – Respondent within the period ofextension granted to it.
Counter statement dated 08. 11. 1983 was filed by the l5'Defendant – Respondent to the Notice of Opposition.
Meanwhile the 1st Defendant – Respondent continued touse the tumbler device in their "Cleopatra Brand" packetsof tea. The Plaintiff – Appellant's Lawyers therefore wroteto the Is* Defendant – Respondent requesting a confirmationin writing that the 1st Defendant – Respondent will ceaseto use the device of the tumbler in any manner.
Strangely the Managing Director of the 1st Defendant -Respondent replied the Lawyers on 29. 12. 1983 asfollows:-
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"From the various communications we have been receivingfrom you recently it seems to us that some of your clientsare in a conspiracy to defame us. If you have been sentphotographs showing the "Cleopatra" brand packets of teacarrying the tumbler design, we suggest that you makeinquiries to ascertain whose packets they are”.
This dubious letter indirectly meant that the Is* Defendant- Respondent was not using the Cleopatra brand packetsof tea carrying the tumbler design.
Quite contrary to the earlier communications, on
04. 1986 the Managing Director of the lsl Defendant -Respondent filed an affidavit stating inter alia that the Is1Defendant – Respondent had extensively used thepropounded Mark (No. 40846) in respect of tea exportedby the 1st Defendant – Respondent and that the said markwas well known in the trade and that the said mark hadbecome distinctive of the Applicant’s (Is' Defendant -Respondent's) goods by reason of extensive user.
In other words having undertaken by writing on26. 07. 1982 to desist from using the device of the tumblerand having filed in fact a fresh application with an alteredlabel and having confirmed on 04. 03. 1983 by writingthat application No. 40846 would be withdrawn as soonas the altered label was ripe for registration and havingdenied indirectly that the mark was not being used by themand thereby trying to lull the Plaintiff – Appellant intocomplacency but meanwhile continuously using thepropounded Mark, on 03. 04. 1986 the Managing Directorof the 1st Defendant – Respondent had the temerity to filean affidavit stating that the propounded Mark had beenextensively used by them and had become well known inthe trade.
The Opposition inquiry was fixed before the Registrar for
07. 1986. On an application made by the Lawyers for
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and another (Wigneswaran, J.).
the Plaintiff – Appellant the 2nd Defendant – Respondentre-fixed inquiry for 02. 04. 1987.
Affidavit dated 30. 03. 1987 was filed by the ManagingDirector of the Plaintiff – Appellant with annexures, priorto the Inquiry date.
Thereafter the Opposition inquiry date was postponed bythe 2nd Defendant – Respondent for 23/ 12. 1987.
The date fixed by the 2nd Defendant – Respondent did notsuit the Counsel for the Plaintiff – Appellant. An applicationwas therefore made on 10. 08. 1987 requesting apostponement for any of the free dates given. Copy of thesaid application was alleged to have been hand deliveredto the Lawyers for the 1st Defendant – Respondent. Letterdated 19.01. 1988 sent by the Lawyers for the 1s* Defendant
Respondent to the 2nd Defendant – Respondent confirmsthat the application letter dated 10. 08. 1987 was in fact
..delivered to the office of M/s. Julius and Creasy, (thoughdue to some internal lapse the letter had not been enteredin their Inward Mail Register for which the Lawyers for thePlaintiff – Appellant nor the Plaintiff – Appellant could havebeen held responsible).
By an ex-parte order dated 07. 01. 1988 the 2nd Defendant
Respondent rejected the Opposition filed by the Plaintiff
Appellant with costs despite confirmation by the 2ndDefendant – Respondent himself that copy of letter applyingfor postponement dated 10. 08. 1987 was received at hisoffice.
There was therefore no doubt that a letter dated 10.08. 1987moving for a postponement of the Inquiry fixed for23. 12. 1987 with copy to the Attorneys – at – Law for the 1stDefendant – Respondent (sent on 12. 08. 1987) wasreceived by the 2nd Defendant – Respondent. Yet for all withoutinforming the Plaintiff – Appellant prior to 23. 12. 1987that a postponement could not be granted for whatever
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reasons that prompted the 2nd Defendant – Respondent todo so, an ex-parte order dated 07. 01. 1988 had beenmade rejecting the Opposition filed.
An application made by the Plaintiff – Appellant to re – openthe case, after establishing the fact of applying for apostponement well in time with notice to the Lawyers forthe Is* Defendant – Respondent, was rejected by the 2ndDefendant – Respondent by his letter dated 29. 03. 1988.
A further application made by the Plaintiff – Appellantpointing out that the order dated 07. 01. 1988 was a perincuriam order and also explaining the circumstanceswhich led to the absence of the Lawyers at the Registry on23. 12. 1987 was also rejected by the 2nd Defendant -Respondent by his letter dated 15. 07. 1988.
Consequent to this rejection appeal in terms of theprovisions of the Code of Intellectual Property Act No. 52of 1979 was filed on 11. 08. 1988.
After perusing documents and affidavits filed and hearingthe submissions of Counsel the District Judge of Colomboon 01. 07. 1991 dismissed the appeal without costs.
This is an appeal against the said judgment.
The learned President's Counsel appearing for the Plaintiff
– Appellant has submitted as follows:-
The Registrar failed to consider the affidavit of theManaging Director of the Plaintiff – Appellant anddocumentary evidence annexed to the affidavit markedRL1 to RL10 and 'X' and 'XI'.
The District Judge too had failed to consider the affidavitof the Managing Director of the Plaintiff – Appellantmarked A23 plus documentary evidence filed as A23(a)to A23(m) (same as RL1 to RL10 and 'X' and XI’).
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James Finlay and Company Ltd v. Stassen Exports Ltd
and another (Wtgneswaran, J.)
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If the said affidavit and documents annexed had beenconsidered they would have shown that the I8*Defendant – Respondent did deem that the Inclusion ofthe device of a glass tumbler would affect the rights ofthe Plaintiff – Appellant. Having so deemed, the 1stDefendant – Respondent should not have been allowedto proceed with its application No. 40846 to registerthe propounded Mark with the tumbler as part of itsTrade Mark.
The case falls within the ambit of Section 100(l)(e) ofAct No. 52 of 1979 read with its amendments.
The act of the 1st Defendant – Respondent was an actcontrary to honest practices in commercial matters.(Vide Section 142 of the above said Act).
The learned Counsel submitted that the propounded Markwas not registrable and moved to set aside the orders of the 2ndDefendant – Respondent and the District Judge of Colombo andurged that the application to register the Mark "Cleopatra" withthe device of the tumbler, be dismissed with costs.
The learned President's Counsel appearing for the 1stDefendant – Respondent pointed out that it was after a carefulcomparison of the registered Mark and the propounded Markthat the District Judge had categorically decided that there wasno similarity whatsoever between the two Marks. He submittedthat the two Marks were dissimilar both visually and phonetically.He further pointed out that the device of a tumbler was commonto the trade. He further pointed out that no evidence of the useof the earlier registered Mark No. 31492 was led by the Plaintiff- Appellant while substantial use of the propounded Mark bythe 1st Defendant – Appellant had been led in evidence.
Finally the learned President's Counsel pointed out in hiswritten submissions that the Plaintiff – Appellant becameregistered owner of Trade Mark 31492 only on 13. 11. 1984after the application for registration of the propounded Markwas made.
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All these submissions would presently be examined.
Section 99 of the Code of Intellectual Property Act No. 52 of1979 deals with Marks inadmissible on objective grounds. Forexample Section 99(f) states as follows:-
"99. (1) A mark shall not be registered –
which Is likely to mislead trade circles or the public as tothe nature, the source, the manufacturing process, thecharacteristics, or the suitability for their purpose, of thegoods or services concerned;"
Section 100 of the said Act No. 52 of 1979 deals with Marksinadmissible by reason of third party rights. The said Sectionreads as follows
"100. (1) A mark shall not be registered –
Which resembles, In such a way as to be likely to misleadthe public a mark already validly filed or registered by athird party, or subsequently Jlled by a person validlyclaiming priority In respect of the same goods or servicesor of other goods or services in connection with which useof such mark may be likely to mislead the public;
Which resembles. In such a way as to be likely to misleadthe public, an unregistered mark used earlier In Sri Lankaby a third party tn connection with Identical or similargoods or services, if the applicant is aware, or could nothave been unaware, of such use;
which resembles. In such a way as to be likely to misleadthe public, a trade name already used in Sri Lanka by athird party, if the applicant Is aware, or could not havebeen unaware, of such use;
which constitutes a reproduction tn whole or tn part, anImitation, translation or transcription, likely to mislead the
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public, of a mark or trade name which is well known inSri Lanka and belongs to a third party;
which infringes other third party rights or is contrary tothe provisions of Chapter XXLX relating to the preventionof unfair competition;
(J) which is filed by the agent or representative of a thirdparty who is the owner of such mark In another country,without the authorization of such owner, unless the agentor representative Justifies his action.
(2) The Registrar shall, in applying the provisions ofparagraphs (a) to (e) of subsection (1), have regard to thefact that the third parties referred to therein haveconsented to the registration of such mark.
Section 107(10) states as follows:-
"107. (10) Where any person considers that the mark isinadmissible on one or more of the grounds referred to insection 99 or 100 he may, within a period of three monthsfrom the date of publication of the application, give to theRegistrar in the prescribed from, and together with theprescribedfee, notice of opposition to such registration statinghis grounds of opposition."
It was in terms of Section 107( 10) that Notice of Oppositionto the registration of Trade Mark Application No. 40846 wasmade.
Grounds given were that the Plaintiff – Appellant –
was the registered proprietor ofTrade Mark No. 31492.
that the said Trade Mark consists of the device of atumbler.
(ill) that application No. 40846 in addition to the placementof the Bust of "Cleopatra" statue on a stand carries atumbler.
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(iv) that the use of the tumbler would subtly seek to use theMark of the Plaintiff – Appellant.
The reply by the Lawyers for the 1st Defendant – Respondenton 26. 07. 1982 if it merely said that there was no resemblancebetween the two Marks then the matter would have receivedthe attention of the 2nd Defendant – Respondent in the normalcourse. But the 1st Defendant – Respondent had specificallyadmitted that the device of the tumbler appearing in theCleopatra label could cause unnecessary inconvenience to thePlaintiff – Appellant and therefore had voluntarily and in agentlemanly fashion agreed to (i) delete the device of die tumblerand (ii) file a fresh application retaining only the Bust ofCleopatra. A copy of the new label was also sent with the replydated 26. 07. 1982.
Later, the 1st Defendant – Respondent did not carry throughits undertaking. It is significant to note that since June 1982 asper the certified statement setting out the quantity and value ofshipments effected under the propounded Mark from 1979 to1985 {vide page 101 of the Brief) there had been a steadyincrease in quantity exported. From 2688 kilograms in June1982 there had been significant increase in shipments.The decision not to withdraw application No. 40846, despitethe letter sent by 1st Defendant – Respondent's Lawyers on
03. 1983 consenting to withdraw as soon as the newapplication was ripe for registration, mav have had somethingto do with the trade benefits the 1st Defendant – Respondenthad probably been obtaining by the use of the new. label.Otherwise it is difficult to understand the conduct of theManaging Director of the 1st Defendant – Respondent.
Further, it is to be noted that the corollary of the provisionsof Section 100(2) of Act No. 52 of 1979 would imply that theRegistrar must also take into consideration the fact that apropounder of a Mark had consented to the withdrawal of suchMark sent for registration.
It is in this background that the Registrar and the DistrictJudge should have viewed this case. It is difficult for any forum
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to come to a conclusion as to whether a particular Mark waslikely to mislead trade circles or the public as to the nature,source, manufacturing process, characteristics or suitability ofa particular product except by probing into the circumstancesand background in which the Mark is used. There is no doubtthat the 1st Defendant – Respondent felt initially that the use ofthe tumbler with the "Cleopatra" statue could cause unnecessaryinconvenience to the Plaintiff – Appellant. It was prepared todelete the tumbler from its Mark. Why the sudden change ofheart? It can be presumed under the circumstances of this casethat the 1st Defendant – Respondent was bent on obtaining atrade benefit, an unfair competitive benefit, by retaining thetumbler. Thus when the learned District Judge took great painsto compare the two labels he should have not looked merely atthe two labels individually and objectively but gone further andprobed into the background. It is significant to note that thereply dated 29. 12. 1983 unlike the earlier replies was sent bythe Managing Director of the 1st Defendant – Respondentcompany instead of its long – standing Lawyer firm. The previouscorrespondence on 26. 07. 1982, 07. 09. 1982 and 04. 03. 1983had all been addressed by the Lawyer Firm. Letter dated
12. 1983 sent by the Managing Director of the 1st Defendant- Respondent company savours evasive and dubious. Havingcontinued to use the tumbler with the Cleopatra mark andapparently and presumably getting trade benefits thereby, thisgentleman by his letter dated 29. 12. 1983 indirectly suggestedthat the Cleopatra brand carrying the tumbler design was notused by the 1st Defendant – Respondent.
It is strange that the conduct of the Managing Director ofthe 1st Defendant – Respondent company did not find a place inthe deliberations of the Registrar nor the District Judge. To ourmind his conduct was significant. Why would a person whoundertook to withdraw a Mark which admittedly could "causeunnecessary inconvenience" and who filed an amended Markfor registration undertaking to withdraw the propounded Markon the new Mark getting registered, change his mind to retainthe original propounded Mark and have it registered, unless he
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would obtain benefits thereby? Due to the delay in legalproceedings endemic in Sri Lanka the 1* Defendant – Respondenthad been able to continue using the propounded Mark visiblyto its benefit as pointed out earlier.
If the affidavit dated 30. 03. 1987 of the Managing Directorof the Plaintiff – Appellant had been examined by the Registrarthe following paragraphs in his affidavit would have given himfood for thought –
The "GLASS" Brand under No. 31492 has been used bymy said Company for several years and an applicationwas made for Its registration on 1st July 1969. With theEgyptian Government permitting the private trade toImport – tea once more, my Company commenced shippingtea under the said "GLASS" Brand/ Tumbler device Brandto Egypt In March 1976 in which market It became verywell known as a high quality pack.
The CLEOPATRA Brand Trade Mark to which ownershiphad been claimed by the applicant has been used byseveral shippers In Colombo who effected shipments oftea under the CLEOPATRA Brand to Egypt to the buyerMohammed Khalil Badawa & Brothers.
In or about the year 1982 my said Company was Informedby the Company's Buyer In Egypt that the CLEOPATRABrand pack began appearing In Egypt with theCLEOPATRA BUST device superimposed on a Glass/Tumbler. This was done designedly to take advantage ofthe goodwill built round our said Glass Brand/Tumblerdevice Trade Mark and Interfered with our rights inrespect of that Mark.
Immediately we began making Inquiries as to who theexporters were who were using the said CLEOPATRA Brandwith the Glass/Tumbler device and there appeared In theSri Lanka Government Gazette on 8th April 1982 anapplication for the registration of the Trade MarkNo. 40846 by the Applicant.”
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and another (Wlgneswaran, J.)
The foregoing paragraphs show that the Cleopatra BrandPack started appearing in Egypt with the Cleopatra Bustsuperimposed on Glass/Tumbler around the time thepropounded Mark was sent for registration in Sri Lanka. Thesales as pointed out earlier also started seemingly increasingaround the same time. (Vide page 101 of the Brief) Apparentlyand in terms of the affidavit filed by the Managing Director ofthe Plaintiff – Appellant Company the plain Cleopatra Brandhad been in existence even prior to June 1982, also as perdocument filed at page 101 of the Brief. It was superimposedon a Glass/Tumbler around June 1982. Paragraph 5 of theaffidavit dated 30. 03. 1987 attributed such a suddensuperimposition to designed conduct on the part of the 1®'Defendant – Respondent to take advantage of the goodwill builtaround the Glass Brand/Tumbler device Trade Mark of thePlaintiff – Appellant.
Despite correspondence showing willingness on the part ofthe 1st defendant – Respondent to withdraw the Glass/Tumblerdevice the 1st Defendant – Respondent had nonchalantlycontinued to use the propounded Mark. The representation ofthe Glass/Ttimbler device of the Plaintiff – Appellant was nodoubt the exclusive properly of the Plaintiff – Appellant and itspredecessors in law. If the contention of the 1st Defendant -Respondent was that the main feature of its trade Mark werethe words "Cleopatra SEL" and the device of Cleopatra, and ifthe 1st Defendant – Respondent had by correspondenceundertaken to withdraw the tumbler device, then there couldnot have been any rhyme or reason (as pointed out in paragraph19 of the affidavit dated 30. 03. 1987 filed by the Director ofthe Plaintiff – Appellant Company) for the 1st Defendant -Respondent to suddenly introduce into its trade mark andcontinue to use the Glass/Ttimbler device. It therefore appearsthat the Cleopatra Bust device being superimposed on a Glass/Ttimbler had ulterior motives.
Section 142(1) & (2) of the Code of Intellectual PropertyAct reads as follows:
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" 142. (1) Any act of competition contrary to honest practicesin industrial or commercial matters shall constitute an act ofunfair competition.
Acts of unfair competition shall Include the following:-
all acts of such a nature as to create confusion by anymeans whatsoever with the establishment, the goods,servtces or the industrial or commercial activities of acompetitor;
a false allegation in the course of trade of such anature as to discredit the establishment, the goods,services or the industrial or commercial activities of acompetitor;
any indication of source or appellation of origin theuse of which in the course of trade is liable to misleadthe public as to the nature, manufacturing process,characteristics, suitability for their purpose or thequantity of goods;
making direct or indirect use of a false or deceptiveindication of the source of goods or services or of theIdentity of their producer, manufacturer or supplier;
making direct or indirect use of a false or deceptiveappellation or origin or Imitating an appellation oforigin even if the true origin of the product is indicated,or using the appellation in translated form oraccompanied by terms such as "kind", "type”, "mark","imitation" or the like."
It is to be noted that the criteria of what is right or wrongconduct in industrial or commercial matters is based on thesocial convictions of a particular community at a given time.The provisions of Section 142 had been so designed tounderscore the requirement that competition betweenenterprises should be fair and exercised in accordance withpublic interest. What should have been examined by the
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and another (Wlgneswaran, J.)
Registrar and the District Judge was whether the Is* Defendant- Respondent did take advantage of the reputation of the Glass/Tumbler device used by the Plaintiff – Appellant and of thegoodwill built by it by giving the product of the 1st Defendant -Respondent an appearance similar to that of the Mark used bythe Plaintiff – Appellant to cause confusion in the market so asto mislead the public to buy the 1st Defendant – Respondent'sproduct to be that of the Plaintiff – Appellant. In forming aconclusion in this matter mere objective examination of the twoMarks alone would not have been enough. After all the"Cleopatra" Mark had been earlier used by the 1st Defendant -Respondent. It is the necessity for joining or superimposing theGlass/Tumbler device to the existing Cleopatra Mark that shouldhave been examined. Justice Palakidnar said in M. S.Heptullabhoy and Company Ltd. v. Stassen Exports Limited"'at 191 "When a defendant selects from this practically unlimitedfield, a trademark confusingly similar to the mark publiclyassociated with the Plaintiffs product, then it would appear thatthe Defendant made the particular choice in order to trade uponthe Plaintiffs established reputation".
In the present case under consideration the Registrar andthe District Judge should have examined whether the couplingof the Glass/Tumbler Mark admittedly used in the market bythe Plaintiff – Appellant and its predecessors in law was donewith an ulterior selfish motive or not. One might say that "in thebusiness world where the criteria of success depends on acutecompetition one cannot say with certainly that he (the ManagingDirector of the 1st Defendant – Respondent in this instance) hadresorted to unfair competition" to quote Justice H. W. Senanayakeat page 14 in Lipton Ltd u. Stassen Exports Ltd12' ' Freedom totrade competitively might imply that it cannot be prima faciewrong to harm another simply by competing with the other. Butwhat a Court to our mind must examine is whether the harmresulting from the Defendant's apparent transgressions ofaccepted norms of behaviour in trading could have transformedhis competition from the lawful to the unlawful. Not to examine
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this aspect could mean that our Courts in Sri Lanka do notexpect standards of proper conduct in competition inCommercial matters. Not to examine this aspect might also meanthat local entrepreneurs could become adept at trading on thereputation of other traders. It must not be forgotten that acts ofcleverness with selfish or ulterior motives lacking moral andethical foundation has been the bane not only of politics andpolitical institutions in this country but other institutions aswell."
Lord Oliver in Reckltt and Coleman Products Ltd. u. BordenIncorporated131 said "No man may pass off his goods as thoseof another". P Q. R. Boberg in the "Law of Delicts" Volume (page149) expressing the Roman Dutch Law concept in this contextsaid that our Courts should retain "the flexibility to deal withwhatever new schemes for the downfall of others the untiringimagination of the dishonest may devise". He felt that a personaffected by unwarranted trade practices was entitled to invokethe broad and ample basis of the lex Aquilia "in support of hisclaim". He further said that "it is neither fair nor honest to filchthe fruits of another's industry or expertise".
The fact that the 1st Defendant – Respondent thought initiallythat the Glass/Tumbler device in its trademark could "causeunnecessary inconvenience" to the Plaintiff – Appellant shouldhave been considered as a recognition by the 1st Defendant -Respondent that such a trademark including the Glass/Tumblerdevice might give the impression that they were palming off theirgoods as those of the Plaintiff – Appellant. The 1st DefendantRespondent did not stop at merely mouthing sympathetic words.It undertook to withdraw the Glass/Thmbler device and in factfiled an amended Mark for registration undertaking to withdrawthe propounded Mark on the amended Mark getting registered.
Under these circumstances, the desire on the part of theManaging Director of the 1s* Defendant – Respondent to writehis letter dated 29. 12. 1983 while continuing to market theproducts of the 1st Defendant – Respondent under the impugned
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and another (Wigneswaran, J.)
Mark coupled with the apparent benefits the 1st Defendant -Respondent received in its sales must mean that the 1stDefendant-Respondent was interested (1) in creating confusionwithin the commercial activities of the competing Plaintiff -Appellant, (2) in misleading the public with regard to the sourceof its products and the identity of the producer, manufactureror supplier of such products. Clearly the use of the Glass/TUmbler device was an act of unfair competition under thecircumstances of this case.
In terms of Sec. 100 (1) (a) of the Code of IntellectualProperty Act a Mark which might mislead the public or likely tomislead the pubic must not be registered. If the affidavit dated
03. 1987 filed by the Director of the Opponent Companytogether with its annexures had been perused and given dueconsideration by the 2nd Defendant – Respondent (Registrar) hemay not have made his order dated 07. 01. 1988. It was not aquestion of the Cleopatra Mark being tumbled by tumblers asstated in the order dated 07. 01. 1988. It was a case of theCleopatra Mark tumbling the TUmbler Mark like how the Queenof Egypt tumbled Julius Caesar and Mark Anthony. If the affidavitdated 20.04. 1990 filed by the Director of the Plaintiff – AppellantCompany together with its annexures had been perused andgiven due consideration by the District Judge of Colombo hemay not have given his judgment dated 01. 07. 1991. He mayhave noticed an act of unfair competition when viewed in context[Section 100(1 )(e)J and he may have noticed an act contrary tohonest practices in commercial matters (Section 142). He wouldthen have set aside the order dated 07. 01. 1988 made by the2nd Defendant – Respondent and refused registration ofApplication No. 40846.
At this juncture the submissions of the learned President'sCounsel for the 1st Defendant – Respondent would be examined.
His contention that the propounded Mark was dissimilarto the already registered Glass/TUmbler Mark failed to considerthe necessity that arose for the Is* Defendant – Respondent to
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couple the Tumbler to the Egyption Sizzler and the admissionby the Lawyers for the 1a Defendant – Respondent that such anunholy alliance could "cause unnecessary inconvenience" andthe subsequent amended mark sent for registration divorcingthe Tumbler from the said Sizzler. He failed to consider theinexplicable apparent increase in sales subsequent to thesudden appearance of the Glass coupled Cleopatra Mark.
It was the contention of Mr. Ben Eliathamby, President'sCounsel, that the tumbler device was common to the trade. Hepointed out that the cumulative effect of the provisions of Section107(2), 99(k) and 100( 1 )(a) of the Code of Intellectual PropertyAct was that the Registrar was under a duty to scrutinise andscrupulously search the entire Trade Marks' Register andtherefore it was possible for the Registrar to conclude that certaindevices such as the tumbler were common to the trade and/ orof common usage.
The Preamble to the Code of Intellectual Property Act No.52 of 1979 states as follows:-
"An act to revise, consolidate, amend and embody In theform of a Code the Law relating to Copyright, IndustrialDesigns, Patents. Marks, Trade Names and unfairCompetition and provide for the better Registration,Control and Administration thereof and for mattersconnected therewith or incidental thereto."
It would seem on an examination of the scheme of the Actin the light of the abovesaid preamble, that there is no need forus to conclude that English Law principles were introduced toSri Lanka through the Code of Intellectual Property Act. TheAct itself had been based on the model of the United InternationalBureaus for the Protection of Intellectual Property (BIRP1). TheAct must be viewed as it is and any attempt to read into itsprovisions, principles and traditions peculiar to English Lawmight do harm to the Act. Moreover in England "passing off' isa tort and in order to create a valid cause of action for passing
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off; five characteristics have been identified by Lord Diplock inthe Advocate Case, Erven Warnlnk v. Townend141 It is notnecessary to examine those characteristics here except to saythat English Law has not been quite willing to admit theexistence of a separate tort of unfair competition. The latter termis more than a synonym for the doctrine of passing off.
Unfair competition under our Act seems to contain isolatedand specified instances. They are briefly, as per Section 142(2),
Any act which creates confusion by any means whatsoeverwith the commercial activities of a competitor.
A false allegation in the course of trade which could discreditthe commercial activities of a competitor.
Any indication of source or appellation of origin used in thecourse of trade which is liable to mislead the public.
Direct or indirect use of a false or deceptive indication ofthe source of goods or of services or the identity of theirproducer, manufacturer or supplier.
Direct or indirect use of a false or deceptive appellation oforigin or imitating an appellation of origin.
The abovesaid acts are not exhaustive. The sectionspecifically states that acts of unfair competition "shall includethe following." Therefore Courts have to decide in each casebrought before them, under the circumstances of each suchcase, whether any of the acts complained, of is an act ofcompetition which is contrary to honest practices in industrialor commercial matters [Vide Section 142(1)].
It might be relevant to note that even under English Law a"get up" can only be said to be "common to the trade" if it is notin fact distinctive of the Plaintiff of some other trader (VideReckitt & Coleman Products Ltd. v. Borden Incorporated(supra). Thus the question of the tumbler device being "commonto the trade" as per English Law principles is not relevant.
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Whether the cumulative effect of the provisions of Section 107(2),99(k) & 100( 1 )(a) of the Code of Intellectual Property Act ineffect approves of the English Law concept of "common to thetrade" is also irrelevant. What is relevant to the present case isthat the Is* Defendant – Respondent itself considered theappearance of the Ttimbler device in their Cleopatra label asbeing capable of causing "unnecessary inconvenience" tothird parties and/ or the Plaintiff – Appellant (vide letter dated26. 07. 1982) and it was prepared to file a fresh applicationretaining only the bust of Cleopatra on the tumbler rest and infact prepared a new label or registration and tendered theapplication relating to it for registration. (Vide letter dated
09. 1982). If the Tumbler device was "common to the trade"and was not capable of causing any "unnecessary inconvenience"to third parties the 1st Defendant – Respondent need not havedragged on such correspondence as on 26. 07. 1982 and
09. 1982, while using the propounded Mark meanwhile inthe market. There has been no direct denial of the use of thepropounded Mark except for the dubious letter of 29. 12. 1983over one year later.
The second argument of Mr. Eliathamby referred to the lackof evidence with regard to the use of the Trade Mark 31492and the furnishing of proper evidence with regard to thepropounded Trade Mark (40846). This argument itself makesthe contents of the letter of 29. 12. 1983 sent by the ManagingDirector of the 1st Defendant – Respondent (referred to in theearlier paragraph herein) questionable. The learned President'sCounsel admits that the 1st Defendant – Respondent did usethe propounded Mark upto 1983 when the abovesaid dubiousletter was sent and even there after. Thus the attempt by theManaging Director of the 1st Defendant – Respondent Companyto indirectly deny user of the propounded Mark appears patheticand pitiable. The letter itself lacked honesty and credibility. Thesubstantial user alleged of the propounded Mark even beforethe Mark was tendered for Registration in June 1982 by the 1stDefendant – Respondent only speaks ill of the trade practices ofthe 1st Defendant – Respondent. In fact it was wrong for the Is*
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and another (Wlgneswaran■ J.)
Defendant – Respondent to have used the propounded Markprior to June 1982 and questionable to have used it afterundertaking to tender an amended Mark withdrawing thetumbler device. The substantial user referred to by the learnedPresident's Counsel was clearly an act of competition contraryto honest practices in commercial matters. [Vide section 142( 1)of the Act.]
The third argument related to the alleged false claims madeby the Plaintiff – Appellant with regard to the right to use TradeMark No. 31492 since the Plaintiff – Appellant became registeredowner of the said Trade Mark only on 13. 11. 1984.
According to the Plaintiff – Appellant the Plaintiff Companybecame the owner of the registered Trade Mark 31492 (GLASSBRAND) from 01.01. 1975. The main feature of this Mark wasthe device of a glass tumbler resting on a tumbler rest.
The Glass Brand 31492 was earlier registered under thename of the predecessor in Law of the Plaintiff – AppellantCompany on 01. 06. 1969. On 13. 11. 1984 the 2nd Defendant- Respondent had informed the Plaintiff – Appellant Companyin writing that the name of the Plaintiff – Appellant Companywas entered as the subsequent proprietor of Trade Mark No.31492.
The 1st Defendant – Respondent had not taken up theposition before the 2nd Defendant – Respondent at any time thatthe Plaintiff – Appellant was not the registered owner of TradeMark 31492 and therefore had no status to file the Notice ofOpposition even though according to paragraph 13 of theaffidavit filed in the District Court later, dated 13. 01. 1989, theManaging Director of the 1st Defendant – Respondent haddeclared that he filed his affidavit after checking the Registrationat the Registry of Trade Marks.
There is nothing in the Act which precludes a subsequentowner from asserting rights to a Trade Mark used by such ownerpresently but existing from the previous owner's times. In any
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event Section 107(10), as pointed out by the learned DistrictJudge gives rights to any one who considers that a Trade Markis inadmissible on any of the grounds referred to in Section 99or 100 to file Notice of Opposition to the registration of apropounded Trade Mark.
It should be noted that Section 99(2) states as follows:-
"99. (2) The Registrar shall in applying the provisions ofparagraphs (b). (c), (d). (f). (g) and (h). of subsection (1),have regard to all the factual circumstances and. inparticular, the length of time the mark has been in use inSri Lanka or in other countries and thefact that the markis held to be distinctive in other countries or in tradecircles.”
The reference is to the length of time the mark has been inuse. The inadmissibility for registration arises from the use of aMark which resembles an earlier existing Mark and which couldtherefore mislead third parties. If the fact of such a state of affairsexisting objectively is brought to the notice of the Registrar he isdebarred from registering such a Mark.
Then we are unable to agree with the learned President'sCounsel appearing for the 1st Defendant – Respondent that thePlaintiff – Appellant had made any false claim because whatwas relevant in this instance was the continuity of usage of TradeMark 31492 and not the date of registration in favour of thePlaintiff – Appellant. Law did not preclude the Plaintiff -Appellant in any event filing the Notice of Opposition in thisinstance.
We are satisfied that the 1st Defendant – Respondent hadviolated third party rights more particularly the Plaintiff -Appellant's rights and has been involved in an act of unfaircompetition [Section 100(1 )(e)] and an act contrary to honestpractices in commercial matters (Section 142). The Registrar(2nd Defendant – Respondent) should therefore have refusedregistration of the propounded Trade Mark No. 40846. The
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and another (Wlgneswaran, J.)
Registrar had acted very unreasonably having been informedwell in time of an application for postponement due to inabilityof Counsel to appear on a particular date, without making anyorder on such an application, to have made a per incuriam ex-parte order. We find that neither the Registrar nor the learnedDistrict Judge had considered and assessed the affidavit andannexures filed by the Managing Director of the Plaintiff -Appellant Company.
We therefore set aside the judgment of the learned DistrictJudge of Colombo Dated 01. 07. 1991 and the order of the 2ndDefendant – Respondent dated 07. 01. 1988 and make orderthat the application No. 40846 to register the Cleopotra Markwith the device of the tumbler be dismissed with incurred costspayable to the Plaintiff – Appellant in all three forums.
JAYAWICKRAMA, J. – I agree.
Appeal allowed.