In a recent dismissal (5th Aug) of an application for Special Leave to Appeal, the Supreme Court has made it clear that the mere filing of an application for registration of a Trade Mark does not constitute cause of action in a suit for passing off.
The appeal [K. Narayanan and Anr. v. S Murali, Civil Appeal Nos. 4480-4481 of 2002] was filed against the decision of the High Court of Madras on the 18th of April, 2002. The facts in brief are as mentioned below.
The appellants, the sellers and manufacturers of Banana Chips, applied for the registration of a trade mark A-ONE in late 1999 which still remains pending. In early 2000, the respondents brought a suit in the District Court of Coimbatore seeking an injunction restraining the appellants from passing off. This was dismissed by the District Judge. In the mean time however, the respondents had also filed three trade mark applications claiming to be users since 1995 all over India. In retaliation, the appellants then decided approach the High Court (Madras) seeking an injunction restraining the respondent from passing off. In the earlier action, the High Court had granted leave to sue to the appellant, however this was revoked along with the dismissal of the application this time.
Before dismissing the appeal, the learned judges, looked into S.18(1) and S.28 of the Trade Marks Act, 1958 as well as reproduced the findings of the Division Bench of the High Court which are as under:-
"The point raised in the appeals is one which was already decided against the appellant by our considered judgment in the case of Premier Distilleries Pvt. Ltd. Vs. Sushi Distilleries 2001(3) CTC 652. Learned counsel sought to contend that there is an earlier view of this Court which conflicts the view which we have taken. Having perused that order, we find that it was merely a summary order which does not address itself pointedly to the question. Mere filing of the application for registration of the trade mark in the Registry situated at Madras would not suffice to confine the jurisdiction of this Court. That question was specifically addressed, and dealt with in our reasoned order in the case of Premier Distilleries Pvt. Ltd. (supra). In that order, we have pointed out that the very term "cause of action" would clearly imply that the action viz., the institution of the suit must follow the cause, and not precede it. Even before the registration is granted for the trade mark, there is no right in the person to assert that the mark has been infringed. A proposed registration which may, or may not be granted will not confer a cause of action to the plaintiff, whether the application for registration is filed by the plaintiff, or the defendant."
In the course of their arguments, the appellants also contended that the Division Bench of the High Court in its impugned judgment had taken a contrary view from the judgment in M/s. Jawahar Engineering Company and others, Ghaziabad Vs. M/s. Jawahar Engineers Pvt. Ltd. Sri Rampur, Distt. Ahmednagar, Maharashtra [1983 PTC 207]. They interpreted the judgment to mean that when there is a threat, actual or expected, an injunction can in fact be granted regardless of the actual materialization of the threat at that point in time. They also argued that as the respondents had applied as users throughout the country, Madras would be included and hence would entitle them (appellants) to file a suit in the High Court of Madras.
In reply, the respondents dismissed the relevance of the earlier cited case stating that the circumstances were different in that case, as there the plaintiff was a registered owner of the trademark and the action was in relation to registered trade marks. Regarding the jurisdictional issues, the respondents pointed out that the mere filing of an application did not confer territorial jurisdiction to the HC of Madras, as both parties resided and carried on their business in Coimbatore.
After due consideration, the SC came to the conclusion that an application for an injunction based only on the claims made in the application of the respondent in trade mark application was not sufficient as the necessary requirements to bring about an action of passing off were absent.