PLJ 2000 Karachi 230
Present: M. shaiq usmani, J. DABUR INDIA LTD.--Plaintiff
versus
HILAL CONFECTIONERY (PVT.) LTD.-Defendant
C. Misce. A. No. 73 of 1995 in Suit No. 14 of 1995 and C. Misce. A. No. 1906 of 1998 in Suit No. 227 of 1998, decided on 21.5.1999.
(i) Copyright Ordinance, 1962 (XXXIV of 1962)--
—S. 54--Trade Marks Act (V of 1940), Ss. 20(2) & 73--Plaintiffs were legal owners of copyrights of "Hajmola" candy wrappers in India-Contention raised by plaintiffs was that as Pakistan was signatory to Berne Convention, therefore, plaintiffs were entitled to copyright protection in Pakistan--Validity—Copyright in Pakistan was Governed under provisions of Copyright Ordinance, 1962 and under S. 54 of Copyright Ordinance, 1962, plaintiffs were entitled to such protection. [P. 243] G & H
(ii) Trade Marks Act, 1940 (V of 1940)--
—Passing off in traditional sense is primarily concerned with unfair competition between traders-Question of deception of public which may be caused by passing off goods is not of that importance because passing off action is normally not an action which is brought by a member of public on ground that such person was deceived but it is brought by traders because such trader fears that his trade will suffer from deception that is being practised on public-Tassing off' is question of trade rivalry rather than of deception and a case of dishonesty inasmuch as another party tries to take advantage of the efforts and expenditure made and incurred in developing a product by another party. [P. 237] A
1987 SCMR 1090 ref.
(Hi) Trade marks Act, 1940 (V of 1940)-
—Concept of spill over advertisement is that it is not a direct advertisement but one finds its way amongst people in different lands through media.
[P. 239] B
(iv) Trade Marks Act, 1940 (V of 1940)--
—Terms "unfair trade" and "unfair competition" are treated interchangeably—Both relate to interference with business of another by
2000 dabur india ltd. v. hilal confectionery (Pvr.) ltd. Kar. 231
(M. Shaiq Usmani, J.)
wrongful acts, including gleaning trade secrets by subterfuge by which goodwill of a business is appropriated or an unfair advantage gained.
[P. 240] C
(v) Trade Marks Act, 1940 (V of 1940)--
—Ss. 20(2) & 73--"Passing off" actions-Essential ingredients (i) a misrepresentation; (2) made by a consumers of goods or services supplied by him; (4) which is calculated to injure business or-goodwill of another trade and (5) which causes actual damage to a business or goodwill of trader by whom action is brought or who will probably do so.
[Pp. 240 & 241] D
(vi) Trade Marks Act, 1940 (V of 1940)--
—S. 20(3)~"Trans passing off'--Where attempt of a trader is to initiate is dishonest and deliberate and is with a view to make unlawful gains, thenobviously it will fall in category of "trans passing off'-Where element of dishonestly and deliberate attempt to do is missing, then same may not be a "trans passing off. [P. 241] E
(vii) Trade Marks Act, 1940 (V of 1940)-
—Ss. 20(2) & 73-CivU Procedure Code, 1908 (V of 1908), O.XXXK, Rr. 1 & 2~Interim injunction-Trade mark of plaintiff was not registered in Pakistan but had a Trans Border Reputation in so far as Pakistan was concerned-Products of plaintiffs were very well known in Pakistan due to spill over advertising and introduction of satellite television-Trade mark in dispute was registered by someone else in Pakistan and same was acquired by defendants-Validity-Plaintiffs had made out their prima facie case for trans passing off and suffering of considerable loss by them, was also established-Balance of convenience was entirely in favour of plaintiffs and element of reciprocity also existed as the concept of Trans Border Reputation was recognised under law of the country of plaintiffs- Interim injunction was granted in circumstances. [P. 242] F
(viii) Trade Marks Act, 1940 (V of 1940)-
—Ss. 20(2) & 73~Civil Procedure Code, 1908 (V of 1908), O.XXXIX, Rr. 1 & 2~Interim injunction-Trans Border Reputation of a trade mark-Failure to point out element of dishonestly in use of such trade mark by defendants-Effect-Defendants had been using disputed mark since 1988 for a different product and same was being done openly and not surreptitously-Disputed trade mark was registered in name of defendants despite opposition of plaintiffs-Element of dishonesty was not at interlocutory stage-Where plaintiffs failed to show that concept of Trans Border Reputation was recognised in their country the element of reciprocity was missing-Plaintiffs having failed to make out a prima facie case of passing off as well as infringement, interim injunction was refused in circumstances-
[P. 243] I
Mr. Sharifuddin Pirzada with Hassan Irfan Khan, Advocates for Plaintiffs (in Suit No. 14 of 1995).
Mr. Khalil Qazilbash, Advocate for Defendants (in Suit No. 14 of 1995).
Mr. Hassan Irfan Khan, Advocate for Plaintiffs (in Suit No. 227 of 1998).
Mr. Khalil Qazilbash, Advocate for Defendants (in Suit No. 227 of 1998).
Date of hearing: 21.5.1999.
judgment
By a common order I propose to dispose of the applications in both the above suits since the point of law and to some extent the facts are also similar. However, the facts of these two cases have been narrated separately.
Suit No. 14 of 1995
Brief facts of the case are that in the year 1972 plaintiffs adopted the trade mark Hajmola in relation to ayurvedic digestive Churan tablets. It is contended by the plaintiffs that since then they have used this trade mark extensively and continuously. Thereafter, since February, 1989 the plaintiffs also started using the said trade mark Hajmola in relation to digestive candies. They also adopted artistic and distinctive wrappers in relations to Hajmola digestive candies, for different flavours. The plaintiffs claim to be the legal and equitable owners of copyright in the said artistic work and thereby claim an exclusive right to use of all features of the Hajmola candies wrappers. It is stated by the plaintiffs that by virtue of membership of India and Pakistan of the Berne Convention for the protection of Artistic and Literary Works 1884 and the Universal Copyright Convention, 1952 and Section 54 of Pakistan Copyright Ordinance, 1962 these wrappers etc. are also to be deemed to be published in Pakistan in a like manner as in India. The trade mark Hajmola had also been registered in U.K. in 18.4.1980 and in India on 2.8.1972. There are various other products of the plaintiffs under the Hajmola trade mark for which the applications for registration arepending in India. The application dated 21.11.1993 for its registration in Pakistan is also pending in Pakistan as well as In Bangladesh.
The plaintiffs contend that the goods with the mark of Hajmola as well as under the wrappers mentioned above are extensively sold in India, U.K. U.A.E. Kuwait, Omman etc. They say that these goods are freely available in Pakistan as they find their way into these countries through various channels. They also say that they have incurred considerable expenditure on advertisement of their products. Consequently, due to selling and continuous user extensive advertising and large sale the plaintiffs' trade mark Hajmola and Hajmola Candies Wrappers A and B have acquired good will and reputation and have become distinctive of the goods and business of the plaintiffs and the traders in Pakistan as in other countries mentioned above by now recognize and associate the trade mark Hajmola as well as the original Hajmola Candies wrappers A and B with the products originating from the plaintiffs only. They state that in addition to the reputation of their trade mark Hajmola and the Hajmola Candies Wrappers in Pakistan through the availability and sale of its goods the reputation goodwill of the mark has also spilled over to Pakistan through other circumstances such as extensive foreign travel by Pakistani populace throughout the Middle East and even in the Common Wealth countries.
It is contended by the plaintiffs that the defendants is also engaged in the business of manufacturing and sale of similar kind of candies and they seem to have adopted the trade mark Hajmola and Candies Wrappers for three flavours at least, as that of plaintiffs. The defendants also seem to have adopted the trade mark Hajmola in identical logo scripts and with the identical device as appearing on plaintiffs' Hajmola Candies Wrappers and has adopted copyright design get up devices as that of plaintiffs Hajmola. The plaintiffs contend that the use by the defendants of the Hajmola marks and the wrappers is bound to create confusion or deception amongst members of the purchasing public which will be induced to believe that the goods of the defendants originate from the plaintiffs. This according to the plaintiffs would amount to passing of the goods and or business of the defendants as that of the plaintiffs. According to the plaintiffs, the defendants by deliberately adopting Hajmola trade mark and by coying its distinctive wrapping are acting dishonesty with mala fide motive to encash the goodwill and reputation attached to the plaintiffs' Hajmola mark and Hajmola Candy Wrappers. The plaintiffs claim that due to this act of the defendants they are suffering great loss and hence seek injunction as prayed.
On the other hand the defendants in their verbose pleadings contend that it was in the year 1985 when Mr. Ali Muhammad the then soleproprietor of Hilal Confectionery, Hyderabad started manufacturing and selling sweets, candies, toffees, chocolates and other allied products falling in Classes 30 and 5. Then in the year 1985 in order to distinguish their products the said Hilal Confectionery started use of worel mark Hajmola on the distinctive wrappers sweets, candies. Thereafter, in 1988 the said sole proprietorship concern was converted into a private company named Hilal Confectionery (Private) Limited and it continued to business of producing sweets candies under the trade mark 'Hajmola' with the distinctive wrapping. The defendants contend that they have spent a great deals of money on advertising of their products and due to large scale use of Hajmola mark alongwith the device and the wrapping these have become distinctive for sweets candies or distinctive tablets produced by the said firm or the company and that others such as the plaintiffs are now trying to dishonestly partake of such reputation. They contend that if the other parties are allowed to use the mark and their distinctive wrapping it would create confusion in the mind of the public and would result in their being deceived. The defendants deny the contentions of the plaintiffs that their goods are distinctive of the mark and that they have been in Pakistani market for a long time. Towards the end of their written statement the defendants somewhat, as an afterthought have added that this mark was registered under No. 78160 on 4.11.1982 for Unani Medicines in Class 5 in the name of M/s. Khamisani Sons Agencies and Suppliers Karachi who have assigned the said mark by an assignment deed dated 6.8.1995 to the defendants. The defendants therefore now claim to be registered proprietor of this mark as well.
Suit No. 227 of 1998
The plaintiffs in this suit claim to be a multi-national company based in Japan and state that they are the owners of Trade Mark 'Hitachi' with a circular design which is a mark known all over the world. In Pakistan also they claim to have registered this mark as Registration No. 21541 in Class 7 dated 27.2.1954, No. 21542 in Class 9 dated 27.2.1954, No. 21543 Class 11 dated 27.2.1954 and No. 83716 in Class 14 dated 12.8.1984. However relevant registered trade mark for purpose of this suit is Trade M?rk No. 21541 in Class 7. The plaintiffs contend that they have spent million on advertising of their mark the world over and according to them it is by now a household word practically every where and also in Pakistan. They say that they have by now acquired a reputation and goodwill in respect of this mark.
In spite of the fact that the plaintiffs under the law are entitled to exclusive use of this mark, the defendants adopted the word 'Hitachi' alongwith some other features of the mark used by the plaintiffs and applied for its registration through Application No. 105531 in Class 7 dated 25.1.1990 in respect of all kinds of fitters. This application proceeded towards registration and when published in Trade Mark Journal the plaintiffs field a notice of opposition with a view to oppose the registration of the trade mark in the name of defendants. The plaintiffs, upon learning that the defendants had also registered the level of design under the Copyright Ordinance, 1962 they moved a rectification app ; cation against the said Copyright Registration No. 3286-COER before the Copyright Board. This Application was allowed and the Copyright Board ordered the expunging of the word Hitachi from the said Copyright Registration. The defendants then appealed from the order of the Copyright Bonrd which is pending before the Lahore High Court
In the opposition proceedings to the registration of the trade mark by the defendants the plaintiffs provided all the necessary proofs and evidence but even then the learned Assistant Registrar of Trade Marks rejected the opposition application and allowed the application of the defendants for registration of the mark 'Hitachi' to proceed to registration. The orders of the Assistant Registrar of Trade Marks where then appealed from by the plaintiffs in Miscellaneous Application No. 15 of 1996 in this Court which is still pending. The plaintiffs submit that the adoption of the Hitachi mark by the defendants is illegal and is in imitation of the plaintiffs' mark. The plaintiffs also submit that apart from infringement of the mark by the defendants they have also committed the tort of 'passing off inasmuch as they are trying to pass off their goods and business as if it was of the plaintiffs. The plaintiffs therefore pray for an injunction to restrain the defendants from continuing the use of the trade mark 'Hitachi'.
In so far as the Defendant No. 1 are concerned they have preliminary objections to the filing of this suit in that they say that suit is not maintainable under Sections 21 and 20(2) of Trade Marks Act, 1940 as the plaintiffs till recently had never used the word mark Hitachi or the circular device for brake oil fluid in Class 7 whereas the plaintiffs are by now the registered proprietor of the trade mark Hitachi for oil filters and for brake oil fluid. The defendants further contend that they have been using this mark since 1988 alongwith the oval device and have spent considerable large sums on publicity and their sale and turn over has been continuously increasing since 1988 and now the mark has become distinctive of their goods. They therefore, have acquired reputation and goodwill in this mark. They say that in order to protect their rights in the mark they applied for its registration and in spite of its opposition by the plaintiffs this mark has now been registered as Trade Mark No. 105531 on 25.1.1990 in Class 7. They submit that plaintiffs' mark Hitachi has only been used for electric or electronic goods or generators or its parts in Pakistan and there is no connection between the goods for which the mark is used by the plaintiffs and the goods for which the said mark is used by the defendants. They also submit that the plaintiffs are not the registered proprietors or user of the mark Hitachi in Pakistan for oil filters or in any other goods of this description in Class 7 and that their registration covers different goods such as generators or machinery or electronics goods. The defendants, therefore, claim exclusive use of the mark 'Hitachi' since they are the registered proprietors thereof. They, thus, submit that the plaintiffs are not entitled to the injunction restraining them from using the mark 'Hitachi' for oil filters and for brake oil fluid.
Having narrated the facts of both suits, I can now proceed to deal with the applications in the two suits being C.M.A. No. 73 of 1995 and C.M.A. No. 1906 of 1998. Through these applications the plaintiffs in both these suits seek to restrain the use of their respective marks by the defendants pending decision in the suits. Dealing with Suit No. 227 of 1998 first, I find that it is an admitted position that the Defendant No. 1 is the registered proprietor of the mark Hitachi for oil filters in Pakistan. It is also an admitted position, which is apparent from the description in the plaint of the specific goods, that the mark is registered in Class 7 and that it does not cover oil filters. As to what were the consideration of the Assistant Registrar for arriving at a conclusion that the plaintiffs were entitled to registration of the mark Hitachi for oil filters even though it is obviously a very well-known mark, it is not for me to decide at this stage in this application. This issue is subject-matter of Miscellaneous Appeal No. 15 of 1996. It seems to me that no injunction has been granted to the plaintiffs in this miscellaneous application restraining the registration of the mark in favour of the defendants and consequently, the registration in favour of the defendants was not stopped. Under the circumstances, I feel that deciding of this application would in effect mean deciding the main issue in the miscellaneous application itself, which I would not venture to do. Consequently, in my view, this application is not maintainable in so far as the ground of infringement is concerned. Once a mark has been registered its registered proprietor has exclusive right to its use because if it were otherwise then there would be no purpose in registration of a trade mark in the first instance. It is true that such registration does not constitute final appropriation of the mark by the applicant and it can be challenged either in appeal or under the provisions of Trade Marks Act. But till that happens the use of a mark by a registered proprietor cannot, by any stretch of imagination, be regarded aa infringement of the mark in question. Indeed it will be contradiction in terms. But the plaintiffs have yet another weapon in their arsenal, they have made an alternate plea of "passing off', which I shall proceed to discuss now.
It is here that there is a common ground between these two suits, since the claim in Suit No. 14 of 1995 is entirely based on passing off. But it is not the passing off of the ordinary variety that the plaintiffs in both suits have urged. They claim that their marks are what may be called a "well-known marks" giving rise to a different kind of passing off.
Now passing off in the traditional sense is primarily concerned with unfair competition between the traders. The question of deception of the public which may be caused by the defendants palming of the goods is not of that importance because passing off action is normally not an action which is brought by a member of the public on the grounds that he was deceived but it is brought by the traders because he fears that his trade would suffer from the deception that is being practised on the public. It is, therefore, a question of trade rivalry rather than of deception. It is also a case of dishonesty inasmuch as another party tries to take advantage of the efforts and the expenditure incurred in developing a product by another party. Industrial espionage is a fact of life so is a general practice of imitation in the world today. In this connection it may be appropriate to reproduce a passage from Salmond in his Jurisprudence as approvingly cited in 1987 SCMR 1090, whereby the right to the exclusive use of a mark that has been created by somebody is described:
"He who by his skill and labour establishes a business acquires thereby an interest in the goodwill of it, that is to say, in the established disposition of customers to resort to him. To this goodwill he has an exclusive right which is violated by anyone who seeks to make use of it for his own advantages, as by falsely representing to the public that he is himself carrying on the business in question. Special forms of this right of commercial goodwill are rights to trade names and trade marks. Eveiy man has an exclusive right to the name under which he carries on business or sells his goods~to this extent at-least that no one is at liberty to use that name for the purpose of deceiving the public and so injuring the owner of it He has a similar right to the exclusive use of the marks which he impresses upon his goods, and by which they are known and identified in the market as his."
Hitherto a party could claim exclusive use of a trade mark on two grounds. One because of being a registered proprietor of the mark and two, being a user for a long time. It is for his reason that there is a stamp of "territoriality" on the law of trade mark not only in Pakistan but elsewhere as well. The inherent parochialism that has led to the imprint of territoriality with which Trade Mark Law is imbued is based on protectionism, that is the desire to protect the local industries from inclusions by foreign entrepreneurs. From the Nationalist point of view this was a laudable feature of this Act in the times when the means of communication were not so wide-spread, when a common man was not exposed to goods used or manufactured in foreign lands. However, in the recent past particularly after the Second World War due to communication implosion it has now become possible for big multinational corporations to project their goods through television, satellite and now even through internet to the remotest corners of the world. They are, therefore, able to acquire a reputation and goodwill in their mark amongst people who probably have never even seen their goods and even before they begin to trade in those countries. This is the first crack in the edifice of "territoriality" that had been built round the law of trade marks. The world is trying to reconcile to this changed situation and through various conventions at the International levels, ideas have been floated to give recognition to what has come to be known as Veil-known marks'. One such convention is the Paris Convention which now recognizes doctrine of well-known marks. Here it may be appropriate to reproduce a paragraph from a book called 'Famous and Well-Known Marks and International Analysis" by Frederick W. Mosterfc
"The doctrine of well-known marks recognizes an important and growing exception to the doctrine of strict territoriality. Sometimes, the doctrine of well-known marks has been only grudgingly, reluctantly and inconsistently applied in some nations. But the pressures of global trade, as reflected in the 1994 Gatt trips Agreement, have made vigorous implementation of the well-known marks rule a high priority in almost every nation."
What has in fact happened is that there is yet another kind of reputation which has taken shape that is now commonly known as "Trans Border Reputation". This reputation has now come to be accepted in most countries of the world but not so in Pakistan so far. There have been cases in Pakistan where oblique references have been made to well-known trade marks and on occasions their importance has been recognized but there has not been so far any acceptance of Trans Border Reputation in Pakistan. It is, however, otherwise in India where initially view had always been that an action for passing off cannot succeed unless the plaintiff carries on a business relating to the trade mark in the relevant jurisdiction. The first attack on this principle was launched in the case of Scotch Whisky Association v. Mohan Meakin Ltd., 1993 IPLR (1863) in which the learned Judge observed as follows:
"I must express my reservation about the observations made by the Court of appeal (in the Budweiser case) that action of passing off cannot be maintained unless the plaintiffs establish that the business activities are carried out at the place of action. It is possible that the plaintiffs may suspend their business activities for short duration and ti^at fact would not destroy the right of plaintiffs to the action when there is invasion of the reputation of the goodwill acquired over years."
However, this decision did not Constitute an authority for the proposition that an action for passing off may lie even when no goods have been sold in India but this was not the end of the onslaught on the principle of territorialily'. The next case of importance in India was that of Katnal Trading Company v. Gillette U.K. Ltd. 1988 IPLR 135, where the Court came to the conclusion that famous and well-known marks could acquire a reputation in India even though they were not sold in the country. While deciding this case the Court relied on the fact that the mark "Yardley* was well-known in India, because of the advertisement in foreign newspapers and magazines that were circulated in India and that a large number of Indians travelled abroad and had the opportunity to use the goods, and thus, they carried the impression of those goods in their minds leading to development of a reputation for those goods in India. This was recognition of the concept of spill over advertisement that is to say, not direct advertisement but one that finds its way amongst people in different lands through media. In yet another case, that is of William .Grant & Sons v. McDowell & Co. Ltd., reported in 1994 FSR 690, the question of Trans Border Reputation was again considered and the learned Judge observed as under
"These cases recognise that the reputation of a trader, trading or carrying on business in another country, can travel to a country where he has had carried n» business. The trader's trans border reputation can be on the basis of extensive advertisements and publicity. Such a trader could obtain an injunction where he was not trading, so as to protect his reputation. The Indian Courts also recognize the existence of trans border reputation."
Considering that emergence of the concept of the Trans Border Reputation arises from spill over advertising and extensive travel, there is no reason why this concept should not be accepted in Pakistan as well. If anything, the Pakistanis are more avid travellers than the Indians. In any case in the modern day and age one cannot ignore the fact that worldwide advertising campaign has a tremendous impact on the minds of people. What has now happened is that whereas initially reputation in respect of a mark depended entirely on the actual physical sale of trading in those goods under that mark in the country in question but now it has begun to be accepted that reputation can take root even through impression that the individuals carry in their minds. It is true that reputation has always been an incorporeal object but the fact that now it is the impression in the minds of people that counts, it has become all the more incorporeal.
Having, thus, come to a conclusion that there is such a thing as Trans Border Reputation' which the trade mark law in Pakistan ought to recognize, if only to be in tune with the rest of the world, the question that arises is what are the characteristics of passing off in a situation where Trans Border Reputation exists. In the earlier days passing off merely entailed a person trying to sell of something as if it was of someone else. There was thus an actual competition in the market between the erring trader and the original trader to see their goods but in case of a mark that has a Trans Border Reputation there is usually no competition of all in fact more often than not what happen is that on one side there is a giant and on the other a puny little trader. The small traders, the world over, particularly in the third world countries and also amongst the emerging economic tigers try and use the well-known marks with Trans Border Reputation to launch themselves into business. What they in fact do is to use the well-known mark as a spring board for marketing their products. The question is, is it a wrong for them to do so or should it be condoned as merely an attempt to become known by attaching themselves to a well-known mark much as a young ambitious person would attach himself to a famous person to gain prominence? Does such a small trader in such an event commit tot of passing off? Does it Constitute unfair trading? Unfair trade is defined in Corpus Juris Secundum asunder:
"Unfair trade: The terms 'unfair trade' and 'unfair competition' are treated interchangeably. Both relate to interference with the business of another by wrongful acts, including gleaning trade secrets by subterfuge by which the goodwill of a business is appropriated or an unfair advantage gained."
As regards passing off, the classical ingredients of passing off were laid down by Lord Diplock in the House of Lords case of Erven Warnink B.V. and another v. J. Townend & Sons (Hulf) Ltd., reported in 1980 RDC page 31. The relevant passage is as under:
"My Lords. Spadding v. Gamage and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of grade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business of goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business orgoodwill of the trader by whom the action is brought of (in a quia time action) will probably do so."
Looking at these two authoritative definitions of passing off and unfair trade and juxtaposing it with the feeble attempt of a small trader to launch his products by hanging to the coat-tails of a giant, one would find that the attempt of such trader does not fall within these two definitions at all because what these two definitions collectively emphasize on is loss suffered by one person due to act of deception by another in attempting to sell his goods as that of the said person with a view to gain unfair advantage. But in this confrontation between an elephant and a mouse as it were, deception is not the issue at all, which has hitherto always been regarded as the corner-stone of a passing off action. When a small trader copies the mark of a giant trader he is not doing it to deceive the public, he is only doing it to become known. Nor is the public deceived either. People these days relish the idea of buying clothes and other goods with take designer labels knowing that these are fake. They do it only to keep up with the Joneses, as it were. The moment one sees a counterfeit mark of label of a famous or well-known mark one knows instantly that it is counterfeit because of difference in quality and the appearance, but one still buys it because today we live in a culture where appearances count. Nor for that the matter the giant trader suffers any particular loss because of this imitation as the market for his goods is different and that remains unaffacted by counterfeiting at a lower level.
The issue in case of Trans Border Reputation is not deception but the frayed corporate ego of the giant trader. It is his desire to maintain the exclusively of his goods being sold under his mark that impetes him to prevent its use by the ordinary traders. Would then such use by a small trader in a different countiy, of a mark with a trans border reputation constitute passing off in the traditional sense? I think not passing off in such a situation has to be re-defined and may even be given a new name to distinguish it. For lack of any better word I will term it "Trans Passing-off'.
But this is not to say that small traders should be given a free rein imitate well-known marks with impunity. One has, thus, to distinguish between various traders who indulge in such act and this is where the element of 'dishonesty' assumes importance. If the attempt of the trader to imitate is dishonest and deliberate and is with a view to making unlawful gains then obviously it will fall in the categoiy of 'Trans Passing-off but if the element of dishonesty and deliberate attempt to do this is missing then it may not. Incidents of dishonesty could be (this list is by no means exhaustive) adoption of well-known mark surreptitiously as opposed to openly or adopting by one who is neither a manufacturer nor a user and does it only for onward sale. What is, therefore, important to see is the intention of the offending party in indulging in such an act. Needless to say that this will always be a question of fact. There is yet another aspect that needs to be considered when 'Trans Passing-off is the issue, that is of 'reciprocity'. Now it is not unusual in the history of the world trade that imitation has been restored to by traders, offend with the backing of Governments of their countries, to launch themselves in the world market. Indeed Japan, which today is a leading industrial country, in the earlier years after the Second World War was well known for imitating the western famous marks/products. The so-called Asian tigers, who rose to prominence recently also indulged in imitation often with Government backing. The question is whether the industrial/corporate giants of this world should be permitted to steam roll over every small time trader in smaller countries if they, ever attempt to hang on to their coat-tails. The answer would be yes; if they do so dishonestly. But I would add that the small trader should be restrained only if the country of the giant trader recognizes the concept of 'Trans Border Reputation'. What in effect it means is that there ought to be reciprocity. It will be travesty of justice if one was to bind oneself hand and foot before the onslaught of the industrial giants and not expect their countries to reciprocate in the same manner. I would, therefore, hold that if the entrepreneur/manufacture relies on Trans Border Reputation to prevent the offending party from using its mark then such party must show that the concept of Trans Border Reputation is also recognized under that country's laws. This may be done inter alia, by citing of reported judgments from the Courts of these countries.
Dealing with Suit No. 14 of 1995 in this perspective, I find that the plaintiffs have brought sufficient evidence on record to show that the word Hajmola has a Trans Border Reputation in so far as Pakistan is concerned. The products with Hajmola mark are veiy well-known in this country due to spill over advertising and the introduction of the satellite television which beams Indian programmes in practically every home in Pakistan. The plaintiffs have been able to show that they have been user of this mark for a longtime and that the defendants have only acquired trade mark 'Hajmola' through assignment only recently i.e. 6.8.1995 and that too, after the filing of this suit. Clearly the trade mark was acquired by the defendants only to lend themselves some credibility. But the very fact that they have acquired the trade mark recently and that it was registered by some one else in Pakistan in 1982 is an indication of the fact that the defendants were not the users of this mark for as long as they claim. I find that the attempt of the defendants to take advantage of the Trans Border Reputation of the plaintiffs mark is clearly dishonest which is manifested in the manner in which they have sought to acquire the trade mark after filing of this suit and surreptitiously using it so longprima facie, therefore, I find that the plaintiffs have made out a case for 'trans passing-off particularly because it has been shown by the plaintiffs that the element of reciprocity also exists inasmuch as the concept of 'Trans Border Reputation' is recognized under the Indian law, which is borne out by the case-law cited above. I also find that the plaintiffs stand to suffer considerable losses because of the attempt by the defendants to pass off their goods as that of the plaintiffs. The balance of inconvenience is, therefore entirely in favour of the plaintiffs. In so far as plaintiffs' copyright in respect of Hajmola Candy Wrappers A and B, as shown in the plaint, is concerned, plaintiffs claim that by virtue of their being legal owner of this copyright in India, under Berne Convention, to which Pakistan is a signatory, they are entitled to protection of the said copyright even in Pakistan. In Pakistan copyrights are Governed under Copyright Ordinance, 1962, relevant portion of Section 54 whereof reads as under:
54. Power to extend copyright to foreign works.-d) The Central Government may, by order published in the official Gazette, direct that all or any of the provisions of this Ordinance shall apply-- (a) to works first published in a foreign countiy to which the order relates in like manner as if they were first published within Pakistan.
Considering that the Central Government has through International Copyright Order, 1968 extended the application of Copyright Ordinance, 1962 to "any work first published in a countiy mentioned in the Schedule (which includes India) in like manner as if it was first published within Pakistan". I find that there is sufficient force in the argument of learned counsel for plaintiffs, Mr. Pirzada's and I, therefore, hold that the said copyright of plaintiffs is entitled to protection under the law of Pakistan. The result of the above discussion is that I would allow C.M.A. No. 73 of 1995 in Suit No. 14 of 1995 as prayed.
In so far as the Suit No. 227 of 1998 is concerned, again examining it in the same perspective I am convinced that the plaintiffs have brought sufficient evidence on record to show that their mark as Trans Border Reputation but what they have not been able to show is that there is an element of dishonesty in so far as the defendants' use of his mark for oil filters is concerned. The fact remains that the defendants have been using this mark for oil filters since 1988 and that he has been doing it openly not surreptitiously inasmuch as he applied for and obtained registration of the mark after having been subjected to opposition by plaintiffs. While it is possible that the defendant has used the mark as a spring board to attract attention, but whether there is an element of dishonesty in it or not is something that is not possible for me to determine finally at this interlocutory stage. This will obviously require further evidence. Moreover, the plaintiffs have not shown that the concept of Trans Border Reputation is recognized by the Japanese Law, hence the element of reciprocity is missing. It is, therefore, apparent to me that a prima facie case of trans passing-off has not been made out by the plaintiffs as against the defendants. I have already held that the plaintiffs have not been able to make out a case for infringement. I would, therefore, dismiss C.M.A. No. 1906 of 1998 in Suit No. 227 of 1998.
(T.A.F.) Order accordingly.
Present: M. shaiq usmani, J. DABUR INDIA LTD.--Plaintiff
versus
HILAL CONFECTIONERY (PVT.) LTD.-Defendant
C. Misce. A. No. 73 of 1995 in Suit No. 14 of 1995 and C. Misce. A. No. 1906 of 1998 in Suit No. 227 of 1998, decided on 21.5.1999.
(i) Copyright Ordinance, 1962 (XXXIV of 1962)--
—S. 54--Trade Marks Act (V of 1940), Ss. 20(2) & 73--Plaintiffs were legal owners of copyrights of "Hajmola" candy wrappers in India-Contention raised by plaintiffs was that as Pakistan was signatory to Berne Convention, therefore, plaintiffs were entitled to copyright protection in Pakistan--Validity—Copyright in Pakistan was Governed under provisions of Copyright Ordinance, 1962 and under S. 54 of Copyright Ordinance, 1962, plaintiffs were entitled to such protection. [P. 243] G & H
(ii) Trade Marks Act, 1940 (V of 1940)--
—Passing off in traditional sense is primarily concerned with unfair competition between traders-Question of deception of public which may be caused by passing off goods is not of that importance because passing off action is normally not an action which is brought by a member of public on ground that such person was deceived but it is brought by traders because such trader fears that his trade will suffer from deception that is being practised on public-Tassing off' is question of trade rivalry rather than of deception and a case of dishonesty inasmuch as another party tries to take advantage of the efforts and expenditure made and incurred in developing a product by another party. [P. 237] A
1987 SCMR 1090 ref.
(Hi) Trade marks Act, 1940 (V of 1940)-
—Concept of spill over advertisement is that it is not a direct advertisement but one finds its way amongst people in different lands through media.
[P. 239] B
(iv) Trade Marks Act, 1940 (V of 1940)--
—Terms "unfair trade" and "unfair competition" are treated interchangeably—Both relate to interference with business of another by
2000 dabur india ltd. v. hilal confectionery (Pvr.) ltd. Kar. 231
(M. Shaiq Usmani, J.)
wrongful acts, including gleaning trade secrets by subterfuge by which goodwill of a business is appropriated or an unfair advantage gained.
[P. 240] C
(v) Trade Marks Act, 1940 (V of 1940)--
—Ss. 20(2) & 73--"Passing off" actions-Essential ingredients (i) a misrepresentation; (2) made by a consumers of goods or services supplied by him; (4) which is calculated to injure business or-goodwill of another trade and (5) which causes actual damage to a business or goodwill of trader by whom action is brought or who will probably do so.
[Pp. 240 & 241] D
(vi) Trade Marks Act, 1940 (V of 1940)--
—S. 20(3)~"Trans passing off'--Where attempt of a trader is to initiate is dishonest and deliberate and is with a view to make unlawful gains, thenobviously it will fall in category of "trans passing off'-Where element of dishonestly and deliberate attempt to do is missing, then same may not be a "trans passing off. [P. 241] E
(vii) Trade Marks Act, 1940 (V of 1940)-
—Ss. 20(2) & 73-CivU Procedure Code, 1908 (V of 1908), O.XXXK, Rr. 1 & 2~Interim injunction-Trade mark of plaintiff was not registered in Pakistan but had a Trans Border Reputation in so far as Pakistan was concerned-Products of plaintiffs were very well known in Pakistan due to spill over advertising and introduction of satellite television-Trade mark in dispute was registered by someone else in Pakistan and same was acquired by defendants-Validity-Plaintiffs had made out their prima facie case for trans passing off and suffering of considerable loss by them, was also established-Balance of convenience was entirely in favour of plaintiffs and element of reciprocity also existed as the concept of Trans Border Reputation was recognised under law of the country of plaintiffs- Interim injunction was granted in circumstances. [P. 242] F
(viii) Trade Marks Act, 1940 (V of 1940)-
—Ss. 20(2) & 73~Civil Procedure Code, 1908 (V of 1908), O.XXXIX, Rr. 1 & 2~Interim injunction-Trans Border Reputation of a trade mark-Failure to point out element of dishonestly in use of such trade mark by defendants-Effect-Defendants had been using disputed mark since 1988 for a different product and same was being done openly and not surreptitously-Disputed trade mark was registered in name of defendants despite opposition of plaintiffs-Element of dishonesty was not at interlocutory stage-Where plaintiffs failed to show that concept of Trans Border Reputation was recognised in their country the element of reciprocity was missing-Plaintiffs having failed to make out a prima facie case of passing off as well as infringement, interim injunction was refused in circumstances-
[P. 243] I
Mr. Sharifuddin Pirzada with Hassan Irfan Khan, Advocates for Plaintiffs (in Suit No. 14 of 1995).
Mr. Khalil Qazilbash, Advocate for Defendants (in Suit No. 14 of 1995).
Mr. Hassan Irfan Khan, Advocate for Plaintiffs (in Suit No. 227 of 1998).
Mr. Khalil Qazilbash, Advocate for Defendants (in Suit No. 227 of 1998).
Date of hearing: 21.5.1999.
judgment
By a common order I propose to dispose of the applications in both the above suits since the point of law and to some extent the facts are also similar. However, the facts of these two cases have been narrated separately.
Suit No. 14 of 1995
Brief facts of the case are that in the year 1972 plaintiffs adopted the trade mark Hajmola in relation to ayurvedic digestive Churan tablets. It is contended by the plaintiffs that since then they have used this trade mark extensively and continuously. Thereafter, since February, 1989 the plaintiffs also started using the said trade mark Hajmola in relation to digestive candies. They also adopted artistic and distinctive wrappers in relations to Hajmola digestive candies, for different flavours. The plaintiffs claim to be the legal and equitable owners of copyright in the said artistic work and thereby claim an exclusive right to use of all features of the Hajmola candies wrappers. It is stated by the plaintiffs that by virtue of membership of India and Pakistan of the Berne Convention for the protection of Artistic and Literary Works 1884 and the Universal Copyright Convention, 1952 and Section 54 of Pakistan Copyright Ordinance, 1962 these wrappers etc. are also to be deemed to be published in Pakistan in a like manner as in India. The trade mark Hajmola had also been registered in U.K. in 18.4.1980 and in India on 2.8.1972. There are various other products of the plaintiffs under the Hajmola trade mark for which the applications for registration arepending in India. The application dated 21.11.1993 for its registration in Pakistan is also pending in Pakistan as well as In Bangladesh.
The plaintiffs contend that the goods with the mark of Hajmola as well as under the wrappers mentioned above are extensively sold in India, U.K. U.A.E. Kuwait, Omman etc. They say that these goods are freely available in Pakistan as they find their way into these countries through various channels. They also say that they have incurred considerable expenditure on advertisement of their products. Consequently, due to selling and continuous user extensive advertising and large sale the plaintiffs' trade mark Hajmola and Hajmola Candies Wrappers A and B have acquired good will and reputation and have become distinctive of the goods and business of the plaintiffs and the traders in Pakistan as in other countries mentioned above by now recognize and associate the trade mark Hajmola as well as the original Hajmola Candies wrappers A and B with the products originating from the plaintiffs only. They state that in addition to the reputation of their trade mark Hajmola and the Hajmola Candies Wrappers in Pakistan through the availability and sale of its goods the reputation goodwill of the mark has also spilled over to Pakistan through other circumstances such as extensive foreign travel by Pakistani populace throughout the Middle East and even in the Common Wealth countries.
It is contended by the plaintiffs that the defendants is also engaged in the business of manufacturing and sale of similar kind of candies and they seem to have adopted the trade mark Hajmola and Candies Wrappers for three flavours at least, as that of plaintiffs. The defendants also seem to have adopted the trade mark Hajmola in identical logo scripts and with the identical device as appearing on plaintiffs' Hajmola Candies Wrappers and has adopted copyright design get up devices as that of plaintiffs Hajmola. The plaintiffs contend that the use by the defendants of the Hajmola marks and the wrappers is bound to create confusion or deception amongst members of the purchasing public which will be induced to believe that the goods of the defendants originate from the plaintiffs. This according to the plaintiffs would amount to passing of the goods and or business of the defendants as that of the plaintiffs. According to the plaintiffs, the defendants by deliberately adopting Hajmola trade mark and by coying its distinctive wrapping are acting dishonesty with mala fide motive to encash the goodwill and reputation attached to the plaintiffs' Hajmola mark and Hajmola Candy Wrappers. The plaintiffs claim that due to this act of the defendants they are suffering great loss and hence seek injunction as prayed.
On the other hand the defendants in their verbose pleadings contend that it was in the year 1985 when Mr. Ali Muhammad the then soleproprietor of Hilal Confectionery, Hyderabad started manufacturing and selling sweets, candies, toffees, chocolates and other allied products falling in Classes 30 and 5. Then in the year 1985 in order to distinguish their products the said Hilal Confectionery started use of worel mark Hajmola on the distinctive wrappers sweets, candies. Thereafter, in 1988 the said sole proprietorship concern was converted into a private company named Hilal Confectionery (Private) Limited and it continued to business of producing sweets candies under the trade mark 'Hajmola' with the distinctive wrapping. The defendants contend that they have spent a great deals of money on advertising of their products and due to large scale use of Hajmola mark alongwith the device and the wrapping these have become distinctive for sweets candies or distinctive tablets produced by the said firm or the company and that others such as the plaintiffs are now trying to dishonestly partake of such reputation. They contend that if the other parties are allowed to use the mark and their distinctive wrapping it would create confusion in the mind of the public and would result in their being deceived. The defendants deny the contentions of the plaintiffs that their goods are distinctive of the mark and that they have been in Pakistani market for a long time. Towards the end of their written statement the defendants somewhat, as an afterthought have added that this mark was registered under No. 78160 on 4.11.1982 for Unani Medicines in Class 5 in the name of M/s. Khamisani Sons Agencies and Suppliers Karachi who have assigned the said mark by an assignment deed dated 6.8.1995 to the defendants. The defendants therefore now claim to be registered proprietor of this mark as well.
Suit No. 227 of 1998
The plaintiffs in this suit claim to be a multi-national company based in Japan and state that they are the owners of Trade Mark 'Hitachi' with a circular design which is a mark known all over the world. In Pakistan also they claim to have registered this mark as Registration No. 21541 in Class 7 dated 27.2.1954, No. 21542 in Class 9 dated 27.2.1954, No. 21543 Class 11 dated 27.2.1954 and No. 83716 in Class 14 dated 12.8.1984. However relevant registered trade mark for purpose of this suit is Trade M?rk No. 21541 in Class 7. The plaintiffs contend that they have spent million on advertising of their mark the world over and according to them it is by now a household word practically every where and also in Pakistan. They say that they have by now acquired a reputation and goodwill in respect of this mark.
In spite of the fact that the plaintiffs under the law are entitled to exclusive use of this mark, the defendants adopted the word 'Hitachi' alongwith some other features of the mark used by the plaintiffs and applied for its registration through Application No. 105531 in Class 7 dated 25.1.1990 in respect of all kinds of fitters. This application proceeded towards registration and when published in Trade Mark Journal the plaintiffs field a notice of opposition with a view to oppose the registration of the trade mark in the name of defendants. The plaintiffs, upon learning that the defendants had also registered the level of design under the Copyright Ordinance, 1962 they moved a rectification app ; cation against the said Copyright Registration No. 3286-COER before the Copyright Board. This Application was allowed and the Copyright Board ordered the expunging of the word Hitachi from the said Copyright Registration. The defendants then appealed from the order of the Copyright Bonrd which is pending before the Lahore High Court
In the opposition proceedings to the registration of the trade mark by the defendants the plaintiffs provided all the necessary proofs and evidence but even then the learned Assistant Registrar of Trade Marks rejected the opposition application and allowed the application of the defendants for registration of the mark 'Hitachi' to proceed to registration. The orders of the Assistant Registrar of Trade Marks where then appealed from by the plaintiffs in Miscellaneous Application No. 15 of 1996 in this Court which is still pending. The plaintiffs submit that the adoption of the Hitachi mark by the defendants is illegal and is in imitation of the plaintiffs' mark. The plaintiffs also submit that apart from infringement of the mark by the defendants they have also committed the tort of 'passing off inasmuch as they are trying to pass off their goods and business as if it was of the plaintiffs. The plaintiffs therefore pray for an injunction to restrain the defendants from continuing the use of the trade mark 'Hitachi'.
In so far as the Defendant No. 1 are concerned they have preliminary objections to the filing of this suit in that they say that suit is not maintainable under Sections 21 and 20(2) of Trade Marks Act, 1940 as the plaintiffs till recently had never used the word mark Hitachi or the circular device for brake oil fluid in Class 7 whereas the plaintiffs are by now the registered proprietor of the trade mark Hitachi for oil filters and for brake oil fluid. The defendants further contend that they have been using this mark since 1988 alongwith the oval device and have spent considerable large sums on publicity and their sale and turn over has been continuously increasing since 1988 and now the mark has become distinctive of their goods. They therefore, have acquired reputation and goodwill in this mark. They say that in order to protect their rights in the mark they applied for its registration and in spite of its opposition by the plaintiffs this mark has now been registered as Trade Mark No. 105531 on 25.1.1990 in Class 7. They submit that plaintiffs' mark Hitachi has only been used for electric or electronic goods or generators or its parts in Pakistan and there is no connection between the goods for which the mark is used by the plaintiffs and the goods for which the said mark is used by the defendants. They also submit that the plaintiffs are not the registered proprietors or user of the mark Hitachi in Pakistan for oil filters or in any other goods of this description in Class 7 and that their registration covers different goods such as generators or machinery or electronics goods. The defendants, therefore, claim exclusive use of the mark 'Hitachi' since they are the registered proprietors thereof. They, thus, submit that the plaintiffs are not entitled to the injunction restraining them from using the mark 'Hitachi' for oil filters and for brake oil fluid.
Having narrated the facts of both suits, I can now proceed to deal with the applications in the two suits being C.M.A. No. 73 of 1995 and C.M.A. No. 1906 of 1998. Through these applications the plaintiffs in both these suits seek to restrain the use of their respective marks by the defendants pending decision in the suits. Dealing with Suit No. 227 of 1998 first, I find that it is an admitted position that the Defendant No. 1 is the registered proprietor of the mark Hitachi for oil filters in Pakistan. It is also an admitted position, which is apparent from the description in the plaint of the specific goods, that the mark is registered in Class 7 and that it does not cover oil filters. As to what were the consideration of the Assistant Registrar for arriving at a conclusion that the plaintiffs were entitled to registration of the mark Hitachi for oil filters even though it is obviously a very well-known mark, it is not for me to decide at this stage in this application. This issue is subject-matter of Miscellaneous Appeal No. 15 of 1996. It seems to me that no injunction has been granted to the plaintiffs in this miscellaneous application restraining the registration of the mark in favour of the defendants and consequently, the registration in favour of the defendants was not stopped. Under the circumstances, I feel that deciding of this application would in effect mean deciding the main issue in the miscellaneous application itself, which I would not venture to do. Consequently, in my view, this application is not maintainable in so far as the ground of infringement is concerned. Once a mark has been registered its registered proprietor has exclusive right to its use because if it were otherwise then there would be no purpose in registration of a trade mark in the first instance. It is true that such registration does not constitute final appropriation of the mark by the applicant and it can be challenged either in appeal or under the provisions of Trade Marks Act. But till that happens the use of a mark by a registered proprietor cannot, by any stretch of imagination, be regarded aa infringement of the mark in question. Indeed it will be contradiction in terms. But the plaintiffs have yet another weapon in their arsenal, they have made an alternate plea of "passing off', which I shall proceed to discuss now.
It is here that there is a common ground between these two suits, since the claim in Suit No. 14 of 1995 is entirely based on passing off. But it is not the passing off of the ordinary variety that the plaintiffs in both suits have urged. They claim that their marks are what may be called a "well-known marks" giving rise to a different kind of passing off.
Now passing off in the traditional sense is primarily concerned with unfair competition between the traders. The question of deception of the public which may be caused by the defendants palming of the goods is not of that importance because passing off action is normally not an action which is brought by a member of the public on the grounds that he was deceived but it is brought by the traders because he fears that his trade would suffer from the deception that is being practised on the public. It is, therefore, a question of trade rivalry rather than of deception. It is also a case of dishonesty inasmuch as another party tries to take advantage of the efforts and the expenditure incurred in developing a product by another party. Industrial espionage is a fact of life so is a general practice of imitation in the world today. In this connection it may be appropriate to reproduce a passage from Salmond in his Jurisprudence as approvingly cited in 1987 SCMR 1090, whereby the right to the exclusive use of a mark that has been created by somebody is described:
"He who by his skill and labour establishes a business acquires thereby an interest in the goodwill of it, that is to say, in the established disposition of customers to resort to him. To this goodwill he has an exclusive right which is violated by anyone who seeks to make use of it for his own advantages, as by falsely representing to the public that he is himself carrying on the business in question. Special forms of this right of commercial goodwill are rights to trade names and trade marks. Eveiy man has an exclusive right to the name under which he carries on business or sells his goods~to this extent at-least that no one is at liberty to use that name for the purpose of deceiving the public and so injuring the owner of it He has a similar right to the exclusive use of the marks which he impresses upon his goods, and by which they are known and identified in the market as his."
Hitherto a party could claim exclusive use of a trade mark on two grounds. One because of being a registered proprietor of the mark and two, being a user for a long time. It is for his reason that there is a stamp of "territoriality" on the law of trade mark not only in Pakistan but elsewhere as well. The inherent parochialism that has led to the imprint of territoriality with which Trade Mark Law is imbued is based on protectionism, that is the desire to protect the local industries from inclusions by foreign entrepreneurs. From the Nationalist point of view this was a laudable feature of this Act in the times when the means of communication were not so wide-spread, when a common man was not exposed to goods used or manufactured in foreign lands. However, in the recent past particularly after the Second World War due to communication implosion it has now become possible for big multinational corporations to project their goods through television, satellite and now even through internet to the remotest corners of the world. They are, therefore, able to acquire a reputation and goodwill in their mark amongst people who probably have never even seen their goods and even before they begin to trade in those countries. This is the first crack in the edifice of "territoriality" that had been built round the law of trade marks. The world is trying to reconcile to this changed situation and through various conventions at the International levels, ideas have been floated to give recognition to what has come to be known as Veil-known marks'. One such convention is the Paris Convention which now recognizes doctrine of well-known marks. Here it may be appropriate to reproduce a paragraph from a book called 'Famous and Well-Known Marks and International Analysis" by Frederick W. Mosterfc
"The doctrine of well-known marks recognizes an important and growing exception to the doctrine of strict territoriality. Sometimes, the doctrine of well-known marks has been only grudgingly, reluctantly and inconsistently applied in some nations. But the pressures of global trade, as reflected in the 1994 Gatt trips Agreement, have made vigorous implementation of the well-known marks rule a high priority in almost every nation."
What has in fact happened is that there is yet another kind of reputation which has taken shape that is now commonly known as "Trans Border Reputation". This reputation has now come to be accepted in most countries of the world but not so in Pakistan so far. There have been cases in Pakistan where oblique references have been made to well-known trade marks and on occasions their importance has been recognized but there has not been so far any acceptance of Trans Border Reputation in Pakistan. It is, however, otherwise in India where initially view had always been that an action for passing off cannot succeed unless the plaintiff carries on a business relating to the trade mark in the relevant jurisdiction. The first attack on this principle was launched in the case of Scotch Whisky Association v. Mohan Meakin Ltd., 1993 IPLR (1863) in which the learned Judge observed as follows:
"I must express my reservation about the observations made by the Court of appeal (in the Budweiser case) that action of passing off cannot be maintained unless the plaintiffs establish that the business activities are carried out at the place of action. It is possible that the plaintiffs may suspend their business activities for short duration and ti^at fact would not destroy the right of plaintiffs to the action when there is invasion of the reputation of the goodwill acquired over years."
However, this decision did not Constitute an authority for the proposition that an action for passing off may lie even when no goods have been sold in India but this was not the end of the onslaught on the principle of territorialily'. The next case of importance in India was that of Katnal Trading Company v. Gillette U.K. Ltd. 1988 IPLR 135, where the Court came to the conclusion that famous and well-known marks could acquire a reputation in India even though they were not sold in the country. While deciding this case the Court relied on the fact that the mark "Yardley* was well-known in India, because of the advertisement in foreign newspapers and magazines that were circulated in India and that a large number of Indians travelled abroad and had the opportunity to use the goods, and thus, they carried the impression of those goods in their minds leading to development of a reputation for those goods in India. This was recognition of the concept of spill over advertisement that is to say, not direct advertisement but one that finds its way amongst people in different lands through media. In yet another case, that is of William .Grant & Sons v. McDowell & Co. Ltd., reported in 1994 FSR 690, the question of Trans Border Reputation was again considered and the learned Judge observed as under
"These cases recognise that the reputation of a trader, trading or carrying on business in another country, can travel to a country where he has had carried n» business. The trader's trans border reputation can be on the basis of extensive advertisements and publicity. Such a trader could obtain an injunction where he was not trading, so as to protect his reputation. The Indian Courts also recognize the existence of trans border reputation."
Considering that emergence of the concept of the Trans Border Reputation arises from spill over advertising and extensive travel, there is no reason why this concept should not be accepted in Pakistan as well. If anything, the Pakistanis are more avid travellers than the Indians. In any case in the modern day and age one cannot ignore the fact that worldwide advertising campaign has a tremendous impact on the minds of people. What has now happened is that whereas initially reputation in respect of a mark depended entirely on the actual physical sale of trading in those goods under that mark in the country in question but now it has begun to be accepted that reputation can take root even through impression that the individuals carry in their minds. It is true that reputation has always been an incorporeal object but the fact that now it is the impression in the minds of people that counts, it has become all the more incorporeal.
Having, thus, come to a conclusion that there is such a thing as Trans Border Reputation' which the trade mark law in Pakistan ought to recognize, if only to be in tune with the rest of the world, the question that arises is what are the characteristics of passing off in a situation where Trans Border Reputation exists. In the earlier days passing off merely entailed a person trying to sell of something as if it was of someone else. There was thus an actual competition in the market between the erring trader and the original trader to see their goods but in case of a mark that has a Trans Border Reputation there is usually no competition of all in fact more often than not what happen is that on one side there is a giant and on the other a puny little trader. The small traders, the world over, particularly in the third world countries and also amongst the emerging economic tigers try and use the well-known marks with Trans Border Reputation to launch themselves into business. What they in fact do is to use the well-known mark as a spring board for marketing their products. The question is, is it a wrong for them to do so or should it be condoned as merely an attempt to become known by attaching themselves to a well-known mark much as a young ambitious person would attach himself to a famous person to gain prominence? Does such a small trader in such an event commit tot of passing off? Does it Constitute unfair trading? Unfair trade is defined in Corpus Juris Secundum asunder:
"Unfair trade: The terms 'unfair trade' and 'unfair competition' are treated interchangeably. Both relate to interference with the business of another by wrongful acts, including gleaning trade secrets by subterfuge by which the goodwill of a business is appropriated or an unfair advantage gained."
As regards passing off, the classical ingredients of passing off were laid down by Lord Diplock in the House of Lords case of Erven Warnink B.V. and another v. J. Townend & Sons (Hulf) Ltd., reported in 1980 RDC page 31. The relevant passage is as under:
"My Lords. Spadding v. Gamage and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of grade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business of goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business orgoodwill of the trader by whom the action is brought of (in a quia time action) will probably do so."
Looking at these two authoritative definitions of passing off and unfair trade and juxtaposing it with the feeble attempt of a small trader to launch his products by hanging to the coat-tails of a giant, one would find that the attempt of such trader does not fall within these two definitions at all because what these two definitions collectively emphasize on is loss suffered by one person due to act of deception by another in attempting to sell his goods as that of the said person with a view to gain unfair advantage. But in this confrontation between an elephant and a mouse as it were, deception is not the issue at all, which has hitherto always been regarded as the corner-stone of a passing off action. When a small trader copies the mark of a giant trader he is not doing it to deceive the public, he is only doing it to become known. Nor is the public deceived either. People these days relish the idea of buying clothes and other goods with take designer labels knowing that these are fake. They do it only to keep up with the Joneses, as it were. The moment one sees a counterfeit mark of label of a famous or well-known mark one knows instantly that it is counterfeit because of difference in quality and the appearance, but one still buys it because today we live in a culture where appearances count. Nor for that the matter the giant trader suffers any particular loss because of this imitation as the market for his goods is different and that remains unaffacted by counterfeiting at a lower level.
The issue in case of Trans Border Reputation is not deception but the frayed corporate ego of the giant trader. It is his desire to maintain the exclusively of his goods being sold under his mark that impetes him to prevent its use by the ordinary traders. Would then such use by a small trader in a different countiy, of a mark with a trans border reputation constitute passing off in the traditional sense? I think not passing off in such a situation has to be re-defined and may even be given a new name to distinguish it. For lack of any better word I will term it "Trans Passing-off'.
But this is not to say that small traders should be given a free rein imitate well-known marks with impunity. One has, thus, to distinguish between various traders who indulge in such act and this is where the element of 'dishonesty' assumes importance. If the attempt of the trader to imitate is dishonest and deliberate and is with a view to making unlawful gains then obviously it will fall in the categoiy of 'Trans Passing-off but if the element of dishonesty and deliberate attempt to do this is missing then it may not. Incidents of dishonesty could be (this list is by no means exhaustive) adoption of well-known mark surreptitiously as opposed to openly or adopting by one who is neither a manufacturer nor a user and does it only for onward sale. What is, therefore, important to see is the intention of the offending party in indulging in such an act. Needless to say that this will always be a question of fact. There is yet another aspect that needs to be considered when 'Trans Passing-off is the issue, that is of 'reciprocity'. Now it is not unusual in the history of the world trade that imitation has been restored to by traders, offend with the backing of Governments of their countries, to launch themselves in the world market. Indeed Japan, which today is a leading industrial country, in the earlier years after the Second World War was well known for imitating the western famous marks/products. The so-called Asian tigers, who rose to prominence recently also indulged in imitation often with Government backing. The question is whether the industrial/corporate giants of this world should be permitted to steam roll over every small time trader in smaller countries if they, ever attempt to hang on to their coat-tails. The answer would be yes; if they do so dishonestly. But I would add that the small trader should be restrained only if the country of the giant trader recognizes the concept of 'Trans Border Reputation'. What in effect it means is that there ought to be reciprocity. It will be travesty of justice if one was to bind oneself hand and foot before the onslaught of the industrial giants and not expect their countries to reciprocate in the same manner. I would, therefore, hold that if the entrepreneur/manufacture relies on Trans Border Reputation to prevent the offending party from using its mark then such party must show that the concept of Trans Border Reputation is also recognized under that country's laws. This may be done inter alia, by citing of reported judgments from the Courts of these countries.
Dealing with Suit No. 14 of 1995 in this perspective, I find that the plaintiffs have brought sufficient evidence on record to show that the word Hajmola has a Trans Border Reputation in so far as Pakistan is concerned. The products with Hajmola mark are veiy well-known in this country due to spill over advertising and the introduction of the satellite television which beams Indian programmes in practically every home in Pakistan. The plaintiffs have been able to show that they have been user of this mark for a longtime and that the defendants have only acquired trade mark 'Hajmola' through assignment only recently i.e. 6.8.1995 and that too, after the filing of this suit. Clearly the trade mark was acquired by the defendants only to lend themselves some credibility. But the very fact that they have acquired the trade mark recently and that it was registered by some one else in Pakistan in 1982 is an indication of the fact that the defendants were not the users of this mark for as long as they claim. I find that the attempt of the defendants to take advantage of the Trans Border Reputation of the plaintiffs mark is clearly dishonest which is manifested in the manner in which they have sought to acquire the trade mark after filing of this suit and surreptitiously using it so longprima facie, therefore, I find that the plaintiffs have made out a case for 'trans passing-off particularly because it has been shown by the plaintiffs that the element of reciprocity also exists inasmuch as the concept of 'Trans Border Reputation' is recognized under the Indian law, which is borne out by the case-law cited above. I also find that the plaintiffs stand to suffer considerable losses because of the attempt by the defendants to pass off their goods as that of the plaintiffs. The balance of inconvenience is, therefore entirely in favour of the plaintiffs. In so far as plaintiffs' copyright in respect of Hajmola Candy Wrappers A and B, as shown in the plaint, is concerned, plaintiffs claim that by virtue of their being legal owner of this copyright in India, under Berne Convention, to which Pakistan is a signatory, they are entitled to protection of the said copyright even in Pakistan. In Pakistan copyrights are Governed under Copyright Ordinance, 1962, relevant portion of Section 54 whereof reads as under:
54. Power to extend copyright to foreign works.-d) The Central Government may, by order published in the official Gazette, direct that all or any of the provisions of this Ordinance shall apply-- (a) to works first published in a foreign countiy to which the order relates in like manner as if they were first published within Pakistan.
Considering that the Central Government has through International Copyright Order, 1968 extended the application of Copyright Ordinance, 1962 to "any work first published in a countiy mentioned in the Schedule (which includes India) in like manner as if it was first published within Pakistan". I find that there is sufficient force in the argument of learned counsel for plaintiffs, Mr. Pirzada's and I, therefore, hold that the said copyright of plaintiffs is entitled to protection under the law of Pakistan. The result of the above discussion is that I would allow C.M.A. No. 73 of 1995 in Suit No. 14 of 1995 as prayed.
In so far as the Suit No. 227 of 1998 is concerned, again examining it in the same perspective I am convinced that the plaintiffs have brought sufficient evidence on record to show that their mark as Trans Border Reputation but what they have not been able to show is that there is an element of dishonesty in so far as the defendants' use of his mark for oil filters is concerned. The fact remains that the defendants have been using this mark for oil filters since 1988 and that he has been doing it openly not surreptitiously inasmuch as he applied for and obtained registration of the mark after having been subjected to opposition by plaintiffs. While it is possible that the defendant has used the mark as a spring board to attract attention, but whether there is an element of dishonesty in it or not is something that is not possible for me to determine finally at this interlocutory stage. This will obviously require further evidence. Moreover, the plaintiffs have not shown that the concept of Trans Border Reputation is recognized by the Japanese Law, hence the element of reciprocity is missing. It is, therefore, apparent to me that a prima facie case of trans passing-off has not been made out by the plaintiffs as against the defendants. I have already held that the plaintiffs have not been able to make out a case for infringement. I would, therefore, dismiss C.M.A. No. 1906 of 1998 in Suit No. 227 of 1998.
(T.A.F.) Order accordingly.
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