Name of the case-American Home Products Corporation v/s Private Limited and Another
Civil Appeal No. 2159 of 1970
Decided On,
30 September 1985
At,
Supreme Court of India
By, HON’BLE JUSTICE A. N. SEN AND HON’BLE JUSTICE D. P.MADON

Published In
1985 (2) Scale 933, 1985 (S3) SCR 264, 1986 (1) CCC 665, 1986 (1) SCC465, 1986 AIR (SC) 137

ISSUE –

The main problem before the Supreme Court was whether the American Home Products Corporation (appellant) registration of the trade mark “Dristan” was to be erased from the Register under Section 46(1)(a) or under the Trade and Merchandise Marks Act, 1958. The challenge was based on  that the Dignified appellant had no genuine intention or Motive to use the trademark in India during the time of registration and that the mark had not been used for since five years continuously from the date of registration and making it liable for rectification.

RULE-

Under Section 46(1)(a) of the 1958 Act, a registered trademark is likely to be struck off the register if it can be established that the trademark was registered without bona fide intention to use it and there has been no bona fide use of the mark during five years from registration. The two requirements, absence of intention to use when registering and non-use for five years  are cumulative and both need to be met to warrant rectification. Additionally, Section 48(2) offers a statutory fiction that the use of the mark by the registered user is construed to be the use by the registered proprietor.

ANALYSIS-

Following these principles, the Court held that the appellant did possess a genuine intention to use the mark “Dristan” via its Indian associate company, and that intention was present upon registration. Proof indicated that the appellant had signed a technical collaboration agreement with the Indian company, owned 40% of its shares, and had strict control over the quality, production, advertising, and formula of the product. These considerations pointed towards a real commercial agreement and not simple trafficking in the mark. The Court dismissed the argument that mere non-use by the appellant itself, absent registered user status of the Indian company, was fatal to the registration. Notably, the Court held that the intended registered user must be in the mind of the applicant when registering so that their claim can qualify as bona fide under Section 48(2). The Court further clarified that a future intention to register a user was adequate provided there was no mala fide or sham scheme. Charges that the appellant provided false information in the form of registration were rejected since the form prescribed by statute did not require disclosure of intended use by way of a registered user. Other objections brought about similarity by deception with another mark “Bistan” and ingredients being prohibited were found to be beyond the scope of the appeal and lacked merit.

CONCLUSION-

The registration of the trade mark “Dristan” by the appellant was affirmed by the Supreme Court, reversing the conclusion of the Division Bench of the Calcutta High Court and re-establishing the order of the Registrar rejecting rectification.The Court ruled that no trafficking existed, intention to use was bona fide, and the appellant was proceeding in compliance with the scheme of the law. Thus, the appeal was allowed, and the respondent’s (Mac Laboratories) application for rectification was denied.I concur in this ruling since it appropriately balances trademark right protection against realities of global business enterprises. 1.The Court correctly identified true commercial cooperation and declined a rigid reading that would disourage foreign investment and relations of licensing.