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NO CLAIM PERMISSIBLE ON RELINQUISHED/ASSIGNED TRADEMARK

December 6, 2021

By Ananyaa Banerjee and Isha Tiwari

Ampa Cycles Private Limited vs. Jagmohan Ratra

Introduction

Assignment of a trademark is a process, whereby a person, “the assignor” transfers rights in the trademark or benefits to another person “the assignee”. Indian trademark law permits assignment of registered as well as unregistered trademarks, with or without the goodwill of the business concerned[1]. The Hon’ble Delhi High Court delivered a noteworthy ruling in M/s Liberty Footwear Company vs. Liberty Innovative Outfits Limited[2], wherein it was held that non-registration of an assignment deed on account of delay on part of the Trade Marks Registry is not fatal to the assignment rights of an assignee.

The Division Bench of Hon’ble Delhi High Court in the recent case of Ampa Cycles Private Limited vs. Jagmohan Ratra[3] has held that once a trade mark is relinquished by a party then he cannot claim any right therein.

Relevant facts

  • The first use of subject trademark AMPA in respect of bicycles and tricycles dates back to the year 1991 by the partnership firm, M/s Four Diamonds which was initially formed in 1983 by Jagmohan Ratra (hereinafter as “the Respondent/Plaintiff”) and Hari Dutt as its partners]. On March 30, 1992, Ampa Bikes Private Limited (hereinafter as “ABPL”) was established with the Respondent/Plaintiff and the firm M/s Four Diamonds as its shareholders.
  • The first trademark application for AMPA in Class 12 was filed on June 21, 1995 with a user claim dating April 01, 1992 by ABPL. The said application was subsequently abandoned in 2002.
  • After a dispute arose, M/s Four Diamonds dissolved on August 01, 2003, with Hari Dutt Sharma exiting the firm vide dissolution deed dated August 01, 2003 and the Respondent/Plaintiff continued business as sole proprietor of Four Diamonds. The Respondent/Plaintiff transferred his shares in the company ABPL to Hari Dutt Sharma towards settling the dues of the retiring partner. The Respondent/Plaintiff was to continue to use the trade mark AMPA and all other assets and goodwill were to be transferred to Hari Dutt Sharma. Moreover, the use of the trademark AMPA was to be continued by the two parties in the following way:
Respondent/Plaintiff ABPL
Will use AMPA trademark in respect of cycles up to 14 inches in tyre radius. Will use AMPA trademark in respect of all cycle models more than 14 inches in tyre radius after 3 years from the date of the deed.

 

  • In 2013, the company ABPL was struck off from the Register of Companies, and ceased to exist. However, the trade mark AMPA was still being used by the Respondent/Plaintiff for cycles. The signatories ABPL viz. Hari Dutt, Nishtha Sharma and Ajay Kumar Bawa entered into an assignment deed for trademark AMPA in the name of Ajay Kumar Bawa for a consideration of INR 1,00,000 on January 03, 2013.
  • Ampa Cycles (P) Limited (hereinafter as “the Appellant/Defendant”) was incorporated on June 05, 2018 for manufacturing cycles, tricycles and bikes under the brand name AMPA by Ajay Kumar Bawa, Anmol Bawa and Pranav Sharma, as its directors. The Appellant/Defendant filed application for the trademarks AMPA, (opposed by the Respondent/Plaintiff ) and the logo  on November 15, 2018 a proposed to be used basis in Class 12 and subsequently filed an application for registration of trademark AMPA on September 07, 2020.
  • The Respondent/Plaintiff filed application for the trademark ampa, interestingly with a user claim of April 14, 2011, and subsequently this was opposed by the Appellant/Defendant .
  • The Learned Single Judge of Hon’ble Delhi High Court allowed the I.A. for a grant of interim injunction under Order 39 Rules 1 and 2 of CPC in favour of the Respondent/Plaintiff and dismissed the I.A. under Order 39 Rule 4 of the Appellant/Defendant vide order dated March 17, 2021[4].

Relevant Contentions of the Parties

The counsel for the Appellant/Defendant argued that the trademark AMPA is being used by the Appellant/Defendant by virtue of the dissolution deed dated August 01, 2003, whereas the Respondent/Plaintiff had relinquished his rights and cannot subsequently challenge the said use, after admitting to the same, merely on the grounds that trademark applications were filed on a ‘proposed to be used’ basis.

On the contrary, the counsel for the Respondent/Plaintiff argued that under the dissolution deed ABPL is free to use the trademark AMPA for all cycle models of more than 14 inches after a period of 3 years. The company ABPL was struck off from the Register of the Companies in 2013, all association with the trademark AMPA ceased as well.

Court’s Observations and Ruling

The Division Bench of Hon’ble Delhi High Court was presided over by Justice Rajiv Sahai Endlaw and Justice Amit Bansal, relied on the precedent set up by the Hon’ble Apex Court in Ramdev Food Products Pvt. Ltd. vs. Arvindbhai Rambhai Patel & Ors.[5]. The Hon’ble Court reiterated that a party cannot be permitted to claim rights in a trademark once has expressly waived its rights in the said mark, shining light on the legal principle what cannot be done directly cannot be done indirectly. As per the dissolution deed, the Respondent/Plaintiff had renounced his right to use the trademark AMPA in respect of cycles with more than 14 inch radius in favour of Hari Dutt. The Court’s main emphasis was not on determining the validity of the assignment rights, but rather the unequivocal consent to the terms of dissolution deed, which neither were disputed nor were ever modified, revoked or amended at any point in time by either of the parties. Even non-use of a trademark till its assignment has been ruled out as a ground for the party that has voluntarily relinquished its rights in the said trademark, to claim any rights therein. The Hon’ble Court observed that the Respondent/Plaintiff has given a complete waiver in favour of Hari Dutt Sharma for using the trademark AMPA, he is estopped from preventing the usage of the said mark by Hari Dutt Sharma or his successor or assignees.

Another interesting observation to connote, particularly procedural, is that when claiming statutory rights by way of trademark application, it is irrelevant that the subject applications are filed on ‘proposed to be used’ basis without any mention of assigned rights.

Due credence was also given to the substantial goodwill and reputation collated by way of sales by the Appellant/Defendant since its use in 2018, which tilted the balance of convenience in its favour against an order of injunction.

Analysis and Conclusion

Definition of ‘waiver’ as per the Black’s Law Dictionary, has been defined as the voluntary relinquishment or abandonment of a legal right or advantage[6]. In Ramdev Food Products supra, waiver was defined as the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted, and is either express or implied from conduct.

In view of assignment, the Court in M/s Liberty Footwear Company supra had termed voluntary non-registration of assignment deed as a waiver. Keeping in view the aforesaid definitions, it is abundantly clear that the Respondent/Plaintiff voluntarily agreed to use the trade mark AMPA jointly with Hari Dutt and there was no condition precedent to such assignment in the dissolution deed. Once the Respondent/Plaintiff has given a complete waiver in favour of Hari Dutt Sharma from using the trade mark AMPA, he is estopped from preventing the usage of the said mark by Hari Dutt Sharma or by his successors/assignees.

Whereas, the Appellant/Defendant in the present case had simply filed applications for AMPA formative trademarks on a ‘proposed to be used’ basis, post its company’s incorporation in 2018, rather than claiming an earlier adoption by way of assignment. In fact, the Appellant/Defendant’s pro-activeness can also be evidenced from its decision to oppose the Respondent/Plaintiff ’s application for the trademark ampa (which was interestingly filed with a questionable user claim itself). Therefore, the Division Bench of the Hon’ble Court has rightly opined that the Respondent/Plaintiff’s claim itself is weak when it comes to claiming singular proprietary rights over AMPA, and though there is underlying importance to filing trademark applications with correct details, an applicant’s bonafide rights needn’t suffer for procedural objections. In these circumstances, the appeal of the Appellant/Defendant was allowed and order of the Learned Single Judge was set aside and interim order was vacated.

[1] Section 39 of the Trade Marks Act, 1999; https://legislative.gov.in/sites/default/files/A1999-47_0.pdf

[2] CS (COMM) 637/2019; https://ssrana.in/articles/non-registration-of-assignment-deed-india/

[3] FAO(OS) (COMM) 75/2021

[4] I.A. No.12625/2020 and I.A. and I.A. No. 1394/2020 in CS(COMM) No.569/2020

[5] (2006) 8 SCC 726

[6] Bryan A. Garner, Black’s Law Dictionary (8th Edn., Thomson Reuters 2009)

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