' MUNIB AKHTAR, J.--- This appeal arises out of an interim order dated 26-6-2010 made by the learned single Judge in Suit 884 of 2010 pending on the original side of this Court. The suit was filed by the respondent, as plaintiff, against the appellant as defendant. The respondent, whose full name is Soneri Bank Ltd., is a banking company, while the appellant, whose full name is Soneri Travel and Tours (Pvt.) Ltd, is a travel agency, i.e., a company engaged in providing travel and travel related services. The respondent's claim in the suit is that the appellant has infringed its rights under the Trade Marks Ordinance, 2001 ("2001 Ordinance"). Along with the suit, the respondent had filed an application for interim injunctive relief, which was allowed by the learned single Judge by means of the impugned order.
2. The respondent's case was that it had a registered trade mark, being registered under No,113821 granted on 1-1-1992 in class 16 which comprised of the words "Soneri Bank" along with a logo of a yellow circle on a white background with a grey border. The trade mark was registered under the Trade Marks Act, 1940 ("1940 Act"). The respondent claimed that it had over the years set up a large network of branches all over the country and had spent, and continued to spend on a yearly basis, a large sum of money to advertise itself and the various services provided by it. Thus, according to the respondent it had acquired and established a name, reputation and goodwill associated with the aforesaid trade mark. The appellant, by registration and incorporation under its name as aforesaid, i.e., Soneri Travel and Tours (Pvt.) Ltd, was unlawfully attempting to cash in on the reputation and name established by the respondent which was associated, according to the latter, especially with the word "Soneri" which was an invented word. According to the respondent, the appellant had infringed the former's trade mark and therefore it was entitled to appropriate injunctive relief against the latter.
3. After hearing the parties on the application, the learned single Judge granted interim injunctive relief while observing as follows:-- "I have heard the arguments of learned counsel for the parties as well as meticulously gone through record made available before me. At the first place it is observed that under section 40(4) of the Trade Marks Ordinance, 2001 it is explicitly clear that a person shall infringe a registered trade mark if he uses in course of trade a mark in relation to goods or services which are not similar to those for which the trade mark is registered where deceptively similar to trade mark use of which lead confusion or deception. It is the case of the plaintiff that the defendant is using their trade mark illegally as the same has already been registered in the name of the plaintiff. However, the defendant has stated that defendant chose the logo from the list of IATA and registered with the Registrar of Firms under the Companies Ordinance, 1984. However, when he was confronted to the fact that whether the said trade mark is registered with the Registrar of the Trade Mark, to which he replied that application for registration of the said trade mark has been submitted to the Government of Pakistan Intellectual Property Organization Trade Marks Registry in the current year.
However, in reply the learned counsel for the Plaintiff has submitted that in order to give cover themselves, the Defendant filed trade marks application for registration of Soneri after being duly served with legal notice on 24th December 2009, hence this exercise carried out by the Defendant is an afterthought. Nevertheless, choosing of logo from the list of IATA does not authorize the Defendant to infringe the right of the Plaintiff guaranteed under the provisions of the registered Trade Mark Ordinance, 2001. In any event once a trade mark/trade is registered under the provision of Trade Mark Ordinance, 2001 then it restricts the other party from using such trade mark."
' Being aggrieved by the aforesaid decision, the appellant preferred the instant appeal. On 13-8- 2010, learned counsel appearing for the parties were put on notice that the appeal would be heard and disposed of finally at Katcha Peshi stage. It was subsequently heard on the dates aforementioned.
4. Learned counsel for the appellant assailed the impugned order on a number of grounds. He submitted that although the appellant had been incorporated in 2005, it had in fact simply continued a business which had been carrying on since 1995 under the name and style of "Soneri Travels". He submitted that the trade mark on which the respondent placed reliance was registered only in class 16 (which related only to a specific category of goods and not to services), and that too only in respect of traveller cheques and credit cards. According to him, the trade mark did not relate to the services which were being relied upon by the respondent, i.e., the services provided by it as a banking company. It was an admitted position that the services provided by the appellant related to travels and tours which were completely unrelated both to the goods in respect of which the trade mark was registered and the services provided by the respondent, and thus, even on the basis of the case put forward by the respondent, there had been no infringement of the registered trade mark. He submitted that being cognizant of this fundamental flaw in the claim being put forward by it, the respondent had filed applications for registration of its trade mark under all the other classes, including those relating to services, under the 2001 Ordinance, which applications were still pending consideration by the Registrar. Learned counsel further submitted that the word "Soneri", or various variations thereof, were being used by other business entities some of which had registered the same under the 1940 Act, and others which had filed applications for registration. He also pointed out that the respondent was a banking company and could not in any case, by virtue of the provisions of the Banking Companies Ordinance, 1962, carry on any business of any nature that was the same as or even similar to the business of the appellant. Without prejudice to the foregoing submissions, he submitted that the appellant's usage of the word "Soneri" was entirely different from the manner in which this word was used in the trade mark registered by the respondent and there could not therefore be any confusion or similarity between the two as proscribed by law. He placed reliance on Master Enterprises (Pvt.) Ltd. v. Registrar of Trade marks and another 2010 CLD 692, Tri Star Industries (Pvt.) Ltd. v. Sayyed Engineers (Pvt.) Ltd.
2007 CLD 802, Lipha Industrielle Pharmaceutique v Registrar of Trade marks and another 2009 CLD 1289, Philip Morris Products, Inc. v. Deputy Registrar of Trade Marks PLD 1996 Kar. 122, Montres Rolex v.
Assistant Registrar Trade Marks PLD 1993 Kar. 442, Grinnell Corporation v. Deputy Registrar of Trade Marks 1993 CLC 2201 (Kar.), Ferring A.B. v. Deputy Registrar of Trade Marks 1993 CLC 2203 (Kar), Nippon Paint Co. Ltd. v. Registrar of Trade Marks 1993 M LD 1094 (Kar.), American Cynamide Co. v.
Aero Trading Co. PLD 1992 Kar. 395, Seven Up Company v. Assistant Registrar of Trade Marks 1992 CLC 694 (Kar.), Premier Tobacco Industries Ltd. v. Assistant Registrar of Trade Marks 1992 M LD 1001 (Kar), The Seven Up Co. USA v. Abdul Aziz Nook Muhammad PLD 1976 Kar. 895 and Kraft General Foods Inc. v. Abid Anjum 1994 M LD 607 (Lah.).
5. Learned counsel for the respondent defended and supported the impugned order. He submitted that there had been a' clear violation of the rights to which the respondent was entitled under the 2001 Ordinance. He referred to the various provisions of the said Ordinance, placing reliance in particular on subsections (4) and (5) of section 40 and on section 92. His case was that the respondent's trade mark had acquired and developed a reputation in Pakistan within the meaning of section 40(4), which was being unlawfully exploited and taken advantage of by the appellant by the use of its name, Soneri Travels & Tours Ltd. Thus, even if the services provided by the appellant on the one hand and the respondent on the other were dissimilar, the latter was nonetheless entitled to relief under the foregoing provision. He referred to Ellora Industries v. Banarasi Dass Goelal AIR 1980 Delhi 254 and Hamdard National Foundation v. Abdul Jalil (1999) 19 PTC. 294 (also a decision of the Delhi High Court) to explain the meaning of "reputation", and to a decision of the European Court of Justice in the case of General Motors Corporation v Yplon SA [19991 ETMR 950 (Case C-375/97) to show how "reputation" is to be regarded as having been established if the trade mark being infringed is known over all or a substantial part of the territory concerned. In this regard, he emphasized the number of branches operated by the respondent and the huge advertising expenditure incurred by it on an annual basis. He submitted further that section 40(5) also made it an infringement of a registered trade mark if such registered trade mark was used by the defendant (herein the appellant) as part of its trade name and referred to Raymond Ltd. v.
Raymond Pharmaceuticals (Pvt.) Ltd. (2010) 112 Born. LR 2945. He submitted that even on this basis, the respondent was entitled to injunctive relief. Quite independently of section 40, learned counsel also placed reliance on section 92 of the 2001 Ordinance and submitted that even in terms of this section, which provides protection to trade names, the respondent was entitled to interim injunctive relief. He submitted that the appeal was entirely without merit and ought to be dismissed.
6. Exercising his right of reply, learned counsel for the appellant drew attention to section 42(1)(a)(i) to contend that the use by the appellant of its own name, duly granted to it when it was incorporated as a company, did not in any manner infringe the respondent's trade mark. He also submitted that section 92 did not have any application to the facts and circumstances of the present case.
7. We have heard learned counsel for the parties, examined the relevant record with their assistance and carefully considered the case law and statutory provisions referred to and relied upon by them. Before considering the rival contentions of learned counsel, it will be appropriate to understand why the 1940 Act was repealed and replaced by the 2001 Ordinance. As is well-known, the multilateral trade negotiations round known as the Uruguay round culminated in the establishment of the World Trade Organization (known as the WTO) by means of the Marrakesh Agreement, which came into effect on 1-1-1995. Along with the Marrakesh Agreement, the states party to the same (known as member states, and including Pakistan) also entered into a number of other agreements, one of the most important of which (and of particular relevance for present purposes) was the Agreement on Trade-related Aspects of Intellectual Property Rights (commonly known as TRIPS). As its name suggests, TRIPS relates to intellectual property rights including patents, trade marks and designs. Developed countries had to bring their national legislation in conformity with the WTO and other related agreements, including TRIPS, more or less immediately, but developing countries like Pakistan were given certain grace periods in this regard, which in the case of TRIPS extended up to 5 yeaRs, Part I of TRIPS lays down certain general provisions and basic principles, while section 2 of Part-II specifically deals with trade marks and related rights. Article 2 (which is to be found in Part I) provides that in respect of Part II, member states have to comply with Articles 1 through 12, and 19, of another agreement, the Paris Convention for the Protection of Industrial Property, as amended (commonly known as the Paris Convention). Thus, in order to comply with their obligations under TRIPS, the member States also had to be in compliance of the Paris Convention. Pakistan became a signatory to the Paris Convention on 22-7-2004.
8. It was in order to comply with its obligations under TRIPS that Pakistan repealed its then existing intellectual property laws, being the Patents and Designs Act, 1911 and the 1940 Act, and replaced them with the Patents Ordinance, 2000, the Registered Designs Ordinance, 2000 and the 2001 Ordinance respectively. This is therefore the backdrop to the 2001 Ordinance, and in order to understand and apply its provisions properly, it is necessary to keep in mind the relevant provisions of TRIPS and the Paris Convention. If the 1940 Act and the 2001 Ordinance are compared, it will be seen that the latter statute introduces many new legal concepts (based of course, on TRIPS and the Paris Convention) which were not to be found in the 1940 Act. Even in respect of those legal concepts which may appear to be the same as, or similar to, those found in the 1940 Act, the 2001 Ordinance in many cases uses new, and different, statutory language. Thus, even in respect of facts and circumstances which may be the same as, or similar to, those as arose under the 1940 Act, the application of the 2001 Ordinance may yet yield different results. Cases decided under, or in relation or with reference to, the 1940 Act must therefore be reread and reappraised carefully before they are applied to the provisions of the 2001 Ordinance, even if those provisions may appear at first sight to be equivalent to those under the former enactment. (It appears that there are, as yet, only a handful of reported cases decided under the 2001 Ordinance.).
9. As noted above, the respondent's claim that its rights under the 2001 Ordinance have been violated is based on subsections (4) and (5) of section 40, and on section 92. It is important to keep in mind that these sections relate to two entirely different and distinct rights, which can exist independently of each other. Section 40, and subsections (4) and (5) thereof relate to the infringement of a trade mark, whereas section 92 relates to trade names. The respondent's case under each provision will therefore have to be considered separately. It is also to be noted that the legal concepts embodied in the aforesaid provisions are not to be found as such in the 1940 Act.
These are new concepts, which are based on, and emanate from TRIPS and the Paris Convention.
10. Section 39 of the 2001 Ordinance states that a registered trade mark is personal property, conferring exclusive rights in the trade mark on its proprietor, which are infringed by the use of the trade mark without his permission. Subsection (6) provides as follows: "The rights conferred by registration of trade marks under this Ordinance shall extend to trade marks registered under the Trade Marks Act, 1940 (V 'of 1940)".
11. Section 40 deals with what constitutes infringement of a trade mark. Subsections (1) to (3) were, quite correctly, not pressed by learned counsel for the respondent, since they are applicable only where the infringing mark is used in relation to goods and services which are identical with, or similar to, or of the same description as, those in respect of which the trade mark is registered. In the present case, the field of activity of the appellant and the respondent, and the goods and services in which they deal, are neither identical nor similar nor of the same description. Learned counsel based his case on subsections (4) and (5), which provide as follows:--- "(4) A person shall infringe a registered trade mark if the person uses in the course of trade a mark which--
(a) is identical with or deceptively similar to the trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; where the trade mark is a well-known trade mark, or has a reputation in Pakistan, and the use of the mark, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. (emphasis supplied)
(5) A person shall infringe a registered trade mark if the person uses such registered trade mark as his trade name or part of his trade name."
' Since the foregoing provisions embody legal concepts not to be found as such in the 1940 Act, cases decided under that law may not provide the necessary guidance as to how these subsections are to apply. Furthermore, these subsections relate to different situations of infringement, and therefore each will have to be analyzed separately to see whether and if so how, and to what extent, the respondent's case thereunder is made out. We turn therefore to first examine the provisions of subsection (4).
12. As is clear, this subsection. Applies when the infringing mark is used in relation to goods or services dissimilar to those E for which the trade mark being infringed was registered. In our view, subsection (4) (insofar as is presently relevant) applies if all of the following conditions are fulfilled:-
(a) the defendant must "use" a "mark" "in the course of trade";
(b) the mark so used must be either (i) identical with, or (ii) deceptively similar to the registered trade mark;
(c) the mark must be used in relation to goods and services not similar to those for which the trade mark is registered;
(d) the trade mark must have a reputation in Pakistan;
(e) the use of the mark must be without cause; and
(f) such use must either (i) take unfair advantage of, or (ii) be detrimental to the distinctive character or the repute of the registered trade mark.
Section 2(xxiv) defines a "mark" broadly, as including "a device, brand, heading, label, ticket, name including person name, signature, word, letter, numeral, figurative elements, colour, sound or and combination thereof. Since it is the proprietor of the trade mark (i.e., the plaintiff) who is seeking relief on the basis of an alleged infringement, it is for him to satisfy the court that all of the conditions are fulfilled, except possibly condition (e), the onus of which may lie on the defendant.
We now examine those conditions which are of particular relevance for present purposes.
13. The first question arises out of condition (a), namely, in what sense must the "mark" be "used" "in the course of trade" to come within the meaning of subsection (4)? In other words, is any and every use of a mark in the course of trade proscribed, or is the scope of subsection (4) limited to a certain or particular type or manner of use? We may note that subsections (1) to (3) of section 40 also use the same words (i.e., the "use" of a "mark" "in the course of trade") and this question is therefore of general relevance to section 40 as a whole. To put the matter in concrete terms, would the use by the appellant of the word "Soneri" as part of its company name in and of itself constitute the "use" of a "mark" "in the course of trade"? To answer this question reference will have to be made to certain decisions of the European Court of Justice ("ECJ") and a decision of the House of Lords, but in order to place those decisions in their proper context, the relevant provisions of EU trade mark law and British legislation will have to be briefly referred to.
14. The relevant EU legislation is contained in Council Directive 89/104/EEC (hereinfter referred to as the "EU Directive"). Article 5 of the EU Directive deals with the rights conferred by a trade mark, and paragraphs 1 and 2 of this Article provide as follows:-- "(1) The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered;
(b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.
(2) Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."
' It will be seen that both of the foregoing paragraphs speak of a "sign" being "used" "in the course of trade". The word "sign" is perhaps of even wider import than the word "mark" as used in the 2001 Ordinance. Paragraph 2 is clearly in pari materia subsection (4) of section 40. The relevant British legislation is the Trade Marks Act, 1994 ("UK Act", which was enacted, in part, to bring UK legislation in line with the EU Directive). Section 10(3) of the UK Act provides as follows:-- "A person infringes a registered trade mark if he uses in the course of trade in relation to goods or services a sign which --- (a) is identical with or similar to the trade mark, ... Where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."
' It will be seen that the UK legislation also uses the same language as the EU Directive, and section 10(3) is in pad materia section 40(4) of the 2001 Ordinance. In the light of these provisions, we now turn to consider how the ECJ and the House of Lords have dealt with the question posed in the last preceding para in relation to condition (a).
15. The first ECJ case that requires consideration is Arsenal Football Club v Matthew Reed 20031 RPC 9 (Case C-206/01). In para 48, the ECJ explained the essential function of a trade mark in the following terms: "...The essential function of a trade mark is to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin. For the trade mark to, be able to fulfil its essential role in the system of undistorted competition which the Treaty seeks to establish and maintain, it must offer a guarantee that all the goods or services bearing it have been manufactured or supplied under the control of a single undertaking which is responsible for their quality...."
' The Court then explained the nature of the right conferred by Article 5(1)(a) of the EU Directive:-- "It follows that the exclusive right under Article 5(1)(a) of the Directive was conferred in order to enable the trade mark proprietor to protect his specific interests as proprietor, that is, to ensure that the trade mark can fulfil its functions. The exercise of that right must therefore be reserved to cases in which a third party's use of the sign affects or is liable to affect the functions of the trade mark,' in particular its essential function of guaranteeing to consumers the origin of the goods." para 511.
'The exclusive nature of the right conferred by a registered trade mark on its proprietor under Article 5(1)(a) of the Directive can be justified only within the limits of the application of that Article."
[para 521 "The proprietor may not prohibit the use of a sign identical to the trade mark for goods identical to those for which the mark is registered if that use cannot affect his own interests as proprietor of the mark, having regard to its functions." [para 54].
' As is clear from the foregoing, it is not any and every use of a "sign" (or "mark") in the course of trade that is proscribed. It is only that use which "affects or is liable to affect the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods".
16. The ECJ decision in Arsenal Football Club was considered and expressly applied by the House of Lords in R v. Johnstone 2003 UKHL 28. It was held that non-trade mark use was not within the meaning of section 10(3). The reasons for which this conclusion was arrived at are worth considering in some detail:-- .. The essence of a trade mark has always been that it is a badge of origin. It indicates trade source: a connection in the course of trade between the goods and the proprietor of the mark. That is its function. Hence the exclusive rights granted to the proprietor of a registered trade mark are limited to use of a mark likely to be taken as an indication of trade origin. Use of this character is an essential prerequisite to infringement. Use of a mark in a manner not indicative of trade origin of goods or services does not encroach upon the proprietor's monopoly rights....
' This fundamental principle, limiting the scope of the rights of the proprietor of a registered trade mark, was well established under the early trade marks legislation....
' Against this background I turn to the 1994 Act. Section 10(1) to (3) specifies the acts which constitute infringement, but there is no express statement that the offending use must be use as a trade mark. I would not regard this as sufficient reason to suppose that Parliament intended to depart from such a basic principle. But on this, as so much else in the law of trade marks, it is necessary to look for guidance beyond the confines of the 1994 Act. One of the main purposes of this statute was to implement EEC Council Directive 89/104 of 21 December, 1988. This directive, which I shall call 'the trade mark directive', was concerned with harmonising the trade mark laws of Member States. Articles 5 and 6 of the directive made provision regarding the rights conferred by a trade mark and the limits of those rights. Sections 10 and 11 of the 1994 Act give effect to these two Articles. So authoritative guidance on the interpretation of section 10 now comes from the European Court of Justice.
' For some time questions were raised on whether, given its derivation from Article 5 of the trade mark directive, non-trade mark use could be caught by sections 10(1) to (3).... These doubts must now be regarded as laid to rest by the decision of the European Court in the 'football souvenirs' case of Arsenal Football Club plc v Reed. The court, at p 171, para 48, reaffirmed its characterisation of the purpose of a trade mark in terms which accord with the approach of English law...
' Plainly, section 10 of the 1994 Act is capable of being so construed [i.e., in the same sense as the ECJ decision].... It should therefore be so construed. Non-trade mark use is not within section 10(1) to (3)." (paras 13-17, per Lord Nicholls of Birkenhead; emphasis supplied)
17. In Anheuser-Busch Inc. v. Budejovicky Budvar NP [2005] ETMR 27 (Case C-245/02), the ECJ reaffirmed its decision in Arsenal Football Club and held as follows in para 64:-- "However, where the examinations to be carried out by the national court, referred to in paragraph 60 of this judgment, show that the sign in question in the main case is used for purposes other than to distinguish the goods concerned --- for example, as a trade or company name --- reference must, pursuant to Article 5(5) of Directive 89/104, be made to the legal order of the Member State concerned to determine the extent and nature, if any, of the protection afforded to the trade mark proprietor who claims to be suffering damage as a result of use of that sign as a trade name or company name." (emphasis supplied)
18. The upshot of the foregoing case-law, with which we agree, is that it is not any and every "use" of a "mark", even if it may be in the course of trade" that is proscribed by subsection (4)- of section 40 (or, for that matter, the first throe subsections thereof as well, since they use the same language).
Non-trade mark use of a mark is not within the prohibition of the foregoing provisions. In particular, the use of a company or firm name is not, in and of itself, proscribed. In our view, the use of the word "Soneri" by the appellant is only in relation to its name (Soneri Travels and Tours (Pvt.) Ltd.) and this is a non-trade mark use of the word. The respondent has not identified any particular services or products being offered to the public by the appellant to which (or in respect of which) the word "Soneri" has been used in the trade mark sense, i.e., as a "badge of origin" which is the essential and fundamental function of a trade mark. It follows that in our view, the first of the conditions necessary for subsection (4) to be applicable (see para 12 supra) is missing.
19. The next condition that requires consideration is condition (d): the trade mark must have a reputation in Pakistan. Learned counsel for the respondent relied on the decision of the ECJ in the General Motors Corporation case (supra) to show that this condition is met if the reputation extends over a substantial part of the territory, i.e., a substantial part of Pakistan. His contention was that since the respondent had its branches all over the country, and its advertising was also on a country wide basis, this requirement was fulfilled. We may note that in para 26 of the decision relied upon, the ECJ observed as follows:-- "The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark." (emphasis supplied)
' As noted above, the trade mark relied upon by the respondent is registered only under classification 16 in respect of certain particular types of goods (traveller cheques and credit cards).
Strictly speaking therefore, any "reputation" that the respondent may have acquired in respect of its banking services or business in general is not relevant. In the context of what is meant by "reputation", learned counsel also referred to two decisions of the Delhi High Court. We would however like to refer to a more recent decision of that court, reported as ITC Ltd. v. Philip Morris Products SA and others (2010) 42 PTC 572. This is an important decision because the court considered in detail the meaning, scope and effect of section 29(4) of the (Indian) Trade Marks Act, 1999 ("Indian Act". Which was enacted, in part, to bring Indian law in conformity with TRIPS). Section 29(4) provides as follows:-- "A registered trade mark is infringed by a person who, not being a registered proprietor or a person.
Using by way of permitted use, uses in the course of trade, a mark which---
(a) is identical with or similar to the registered trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and
(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark."
' It will be seen that this provision is in pari materia section 40(4) of the 2001 Ordinance. The case before the Delhi High Court was for the grant of an interim injunction on the ground that the mark being used by the defendant (Philip Morris) was identical with or similar to the registered trade mark of the plaintiff (ITC Ltd.). It was contended that the registered trade mark had a reputation in India, and although the mark being used by the defendant was in relation to goods and services dissimilar to those for which the plaintiffs trade mark was registered, section 29(4) applied and there was an infringement. The Delhi High Court, after a detailed and careful consideration of section 29(4) and the jurisprudence of other jurisdictions (including the ECJ and English courts) came to the conclusion that no such case had been made out, and refused to grant interim injunctive relief. On the question of "reputation", the court referred (in para 38) with approval to para 26 of the ECJ decision in the General Motors Corporation case (supra). In our view, condition
(d) is also not made out in the present case, since the concept of "reputation" is linked to the goods or services for which the trade mark is registered. Along with the plaint, the respondent has annexed a voluminous record, running over hundreds of pages. Purporting to show the advertisement and promotional activities which, according to the respondent, have helped to secure its "reputation" in the country. However, it would appear that none of this material relates to traveller cheques. A few of the advertisements relate to a Visa debit card. A debit card is of course, different from a credit card (since a debit card must be linked to a bank account which must be in credit for the requisite amount), and it is clear from the material brought on record that this service is merely an adjunct to the banking business, and not something being offered in its own right.
Even if the material placed on record by the respondent establishes that it had a "reputation" for its banking business, it is not this reputation that is relevant for purposes of section 40(4). Since infringement of a trade mark is alleged, it must be shown that there is a direct and substantial nexus between the "reputation" and the goods or services covered by the trade mark. In other words, the respondent would have to show that its registered trade mark has acquired a reputation in relation to traveller cheques and/or credit cards being offered by the respondent in their own right. In our view, this element is missing in the present case and therefore the requirements of condition (d) are not fulfilled.
20. The next conditions that require consideration are (f) and (g) (see para 12 supra), and since they are interlinked, can conveniently be taken up together. These are important conditions, and relate, inter alia, to the concept of the "dilution" of a trade mark. As condition (1) makes clear, the use of the infringing mark must take unfair advantage of or be detrimental to the registered trade mark. English courts have held that such unfair advantage or detriment cannot be assumed but must be established on evidence. As a leading treatise on the subject, Kerly's Law of Trade Marks and Trade Names (14th ed., 2005) puts it:-- "It is not enough that the earlier mark is simply called to mind. The existence of such unfair advantage or detriment cannot be assumed and must be established on the evidence. Proof is required of real future unfair advantage or detriment; it must be shown to be a real as opposed to a theoretical possibility." (para 14-089)
' The Delhi High Court in the ITC Ltd. Case (supra) cited with approval the cases relied upon in Kerly, and in particular, quoted (in para 36) the following passage from Daimler Chrysler AG v. Alavi [2001] RPC 42 (para 88): "In my view, the best approach is just to follow the section, remembering Jacobs A.G.'s warning that it is concerned with actual effects, not risks or likelihoods. The enquiry is as follows. (1) Does the proprietor's mark have a reputation? If so, (2) is the defendant's sign sufficiently similar to it that the public are either deceived into the belief that the goods are associated with the proprietor so that the use of the sign takes unfair advantage of the mark, or alternatively causes detriment in their minds to either (a) the repute or (b) the distinctive character of the mark, or (3) even if they are not confused, does the use of the sign nonetheless have this effect, and (4) is the use complained of nonetheless with due cause. Detriment can take the form either of making the mark less attractive (tarnishing ...) or less distinctive (blurring)." (emphasis supplied)
' The Delhi High Court also observed and held in para 41 as follows (emphasis in original):- "The need to establish "linkage" or mental association of the offending mark, with that of the plaintiffs is one of the vital essentials for securing relief in any claim for dilution. This was emphasized as follows, by Professor McCarthy (McCarthy, J. Thomas. McCarthy on Trade Marks and Unfair Competition, Vol. IV, 4th ed. 1996 (loose-leaf updated December, 2005, release 36): ... if a reasonable buyer is not at all likely to think of the senior user's trade mark in his or her own mind, even subtly or subliminally, then there can be no dilution. That is, how can there be any "whittling away" if the buyer, upon seeing defendant's mark, would never, even unconsciously, think of the plaintiffs mark? So the dilution theory presumes some kind of mental association in the reasonable buyer's mind between the two parties and the mark. [Footnote omitted; emphasis in original; --- 24:70, at p. 24-1431.
' On the one hand, well-known mark owners say that people should not reap where they have not sown, that bad faith should be punished, that people who sidle up to their well-known marks are guilty of dishonest commercial practice. These vituperations lead nowhere. One might as well say that the well-known mark owner is reaping where it has not sown when it stops a trader in a geographic or market field remote from the owner's fields from using the same or a similar mark uncompetitively. (D. Vaver, Unconventional and well-known Trade Marks., [20051 Sing. J.L.S. 1 at p.
16)"
21. In its consideration of the issue of "dilution" (i.e., the detriment suffered by the plaintiff), the Delhi High Court also referred to a decision of the ECJ reported as Intel Corporation v CPM United Kingdom Ltd. [20091 ETMR 13 (Case C-252/07), and in para 44 cited at length from that decision.
The ECJ gave its decision on a reference made to it by the (English) Court of Appeal. The decision of the Court of Appeal is reported as Intel Corporation Inc. v CPM United Kingdom Ltd. [20071 EWCA Civ 431, where it was held as follows (in paras 36-37): "...What is required to satisfy the condition of detriment to distinctive character depends on a realistic global appreciation of the position. Mere general speculation about harm will not be enough. In making the global appreciation, there are at least the following factors which should be considered:
(i) whether the "pulling power" of the earlier mark for its specific goods or services is really likely to be affected by the use of the later mark for its specific goods or services,
(ii) whether the user of the later mark is likely to get a real commercial advantage from its use for its specific goods or services by reason of the repute of the earlier mark for its specific goods or services,
(iii) whether, if the earlier mark is unique, it really matters that it is used for the dissimilar goods or services of the later mark,
(iv) where the later mark is not the same as the earlier mark what difference that will make on the average consumer and in particular whether there is merely a calling to mind of the earlier mark,
(v) whether the economic behaviour of the average consumer in relation to the earlier mark when used for its goods or services is likely to be affected,
(vi) how inherently distinctive the earlier mark is, and
(vii) how strong the reputation of the earlier mark for its goods or services is.
' I would not attempt to produce a comprehensive list of factors --- others may occur in the overall global appreciation. In the end it must be a question of degree. I would emphasis in my answer that it is very important that the harm or prospect of harm must be real and tangible. A mere possibility or assertion of damage is just too remote and would leave trade mark owners in too monopolistic a position. Trade mark law is there to protect a proper system of competition, not to provide trade mark owners with overreaching rights which may obstruct trade." (per Jacob, emphasis supplied)
22. In our view, the foregoing decisions correctly lay down the principles to be applied while considering whether conditions (f) and (g) of section 40(4) are fulfilled. The plaintiff (here the respondent) must show that the defendant has actually taken unfair advantage of its registered trade mark by using the infringing mark and/or that the plaintiff has suffered actual detriment (i.e., dilution) of the registered trade mark. We would in particular draw attention to the test proposed by the Court of Appeal in the Intel Corporation case, and the views of Professor McCarthy (with regard to the issue of linkage) cited with approval by the Dehli High Court in the ITC Ltd. Case.
When these are taken into consideration, in our view, the respondent has been unable to establish that it has suffered actual detriment, or that the appellant has actually taken unfair advantage by using the word "Soneri" as part of its company name. For example, nothing has been placed on record that would show, even on a prima fade basis, that factors (i), (ii), (iv) and (v) listed by Jacob, LJ., are applicable in or to the facts and circumstances of the present case. We are aware that when the court is considering the question of interim relief, it has to go by the material placed on the record, and the matter is in the realm of a prima fade case (and the other ingredients required for such relief). The probative value of the material so placed and considered, and the use to which it is put by the court, is obviously different from the stage when evidence is eventually produced at the trial. Nonetheless, there must be something specific and concrete placed on the record to which the foregoing tests and factors can be applied. Bare assertions and mere allegations (the "general speculation about harm" referred to by the Court of Appeal) will not be sufficient. In the present case, we do not find any such material on the record as would enable the respondent to show, on a prima facie basis, that the appellant actually took unfair advantage and/or that the respondent suffered actual detriment to (i.e. Dilution of) its registered trade mark.
Conditions (f) and (g) also therefore, have not been fulfilled in the facts and circumstances of the present case.
23. For all of the foregoing reasons, we are satisfied that no case of infringement under subsection
(4) of section 40 was made out and, with respect, the learned single Judge (who specifically cited this provision) erred materially in coming to a contrary conclusion.
4. We now turn to consider the position under subsection (5). Although this is set forth in para 11 supra, we again reproduce it below for convenience: "A person shall infringe a registered trade mark if the person uses such registered trade mark as his trade name or part of his trade name."
' Learned counsel for the respondent referred to an Indian decision, Raymond Ltd. v. Raymond Pharmaceuticals (Pvt.) Ltd. (2010) 112 Born LR 2945, in support of his case that subsection (5) had been infringed by the use of the word "Soneri" by the appellant as part of its company name. In that case, the Bombay High Court was concerned with section 29(5) of the Indian Act, which provides as follows: "A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name of his business concern dealing in goods or services in respect of which the trade mark is registered."
(emphasis supplied)
' It will be seen that the Indian provision is in pari materia subsection (5), with one important difference: the portion, highlighted in the Indian provision is missing in subsection (5). The Bombay High Court refused to grant injunctive relief to the plaintiff- appellant (Raymond Ltd.) on the ground that the defendant-respondent (Raymond Pharmaceuticals) did not deal in the same goods and services for which the trade mark was registered. The trade mark was registered in respect of textile products and the defendant-respondent dealt in pharmaceutical products.
25. Arguably, the position of the proprietor of a trade mark is stronger under section 40(5) since it does not expressly use any limiting condition or words of the nature as found in section 29(5) of the Indian Act. Whether or not, on a proper interpretation of the subsection, any limiting condition or words are implied in it is an important question, but one which need not detain us here, since in our view, the present matter stands resolved by section 42. This provision, which was referred to by learned counsel for the appellant in reply, provides in material part as follows:-- "42. When a trade mark is not infringed.-- (1) A person shall not infringe a registered trade mark when--
(a) the person uses in good faith-
(i) the person's name or the name of the person's place of business, so long as such use does not result in a likelihood of confusion or otherwise interfere with an existing trade mark or other property right; "
Obviously, insofar as a company is concerned, its name is the name with which it is registered and incorporated under the Companies Ordinance, 1984. The defence under section 42 is therefore available if the following conditions are fulfilled:--
(a) the person must use his name (or the name of his place of business) in good faith; and
(b) such use must not result in either a likelihood of confusion, or otherwise interfere, with (i) an existing trade mark, or (ii) other property right.
' When considering a company and its name, certain provisions of the Companies Ordinance must be kept in mind. Firstly, section 37(2) provides in material part as follows:-- "A company shall not be registered by a name identical with that by which a company in existence is already registered, or so nearly resembling that name as to be calculated to deceive...."
' The power to ensure that the provisions of section 37 are complied with vests in the Securities and Exchange Commission of Pakistan (SECP) and its subordinate officeRs, In the present case, it appears that the respondent was registered first, and thus, its name was already on the register of names when the appellant came up for registration. It is important to keep in mind that the respondent's name, "Soneri Bank" is exactly the same as the words used in the respondent's registered trade mark. The fact that the appellant was allowed to be registered with its present name is thus at least prima facie indication that its name was not regarded as identical with any other name or so nearly resembling any other name (including that of the respondent) that it could be regarded as calculated to deceive. Furthermore, section 143 of the Companies Ordinance makes it mandatory for every company to use and publicize its name as follows:-- "143. Publication of name by a limited company.--- Every limited company---
(a) shall paint or affix, and keep painted or affixed, its name on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible and in English or Urdu characteRs,..; .
(b) shall have its name engraven in legible English or Urdu characters on its seal;
(c) shall have its name mentioned in legible English or Urdu characters, in all bill- heads and letter papers and in all documents, notices and other official publications of the company, and in all bills of exchange, hundis, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and in all bills of parcels, invoices, receipts and letters of credit of the company."
' Given these statutory provisions, in our view, unless something specific is shown to indicate a lack of good faith, it must at least prima fade be assumed for the purposes of section 42(1)(a) that a company is using its name in good faith. We may note that the 2001 Ordinance does not define "good faith", but section 3(20) of the General Clauses Act, 1897 provides as follows: "a thing shall be deemed to be done in 'good faith' where it is in fact done honestly, whether it is done negligently or not". Nothing has been placed on record as would show that the appellant has acted dishonestly in adopting or using its name, and the bare averments made in this regard are not sufficient.
26. The other requirement of section 42(1)(a)(f) is that the use by a person of his name should not result in either a likelihood of confusion, or otherwise interfere with (i) an existing trade mark, or (ii) other property right. This condition appears to be somewhat inartistically drafted. The reason is that the phrase "existing trade mark" used therein is not defined in the 2001 Ordinance, and indeed, appears only to have been used in section 42 and nowhere else. After having given some thought to the matter, we are of the view that the only sensible meaning that can be given to this phrase in the context in which it is used is that it in fact refers back to the "registered trade mark". In other words, section 42(1)(a)(i) allows a person the good faith use of his name as long as there is no likelihood of any confusion or interference with the registered trade mark. In our view, there is, at least prima fade, no such likelihood. In order to determine whether there is or could be any likelihood of confusion between the registered trade mark and the offending mark, both have to be looked at as a whole, and (to quote from Kerly (supra)) the factors that need to be taken into consideration include "the degree of similarity between the relevant marks, the degree of similarity between the relevant goods or services, the likely perception of the marks in the minds of the average consumer of the goods or services in question and the degree of distinctiveness of the earlier mark" (para 14-968). It is important to remember that the respondent's registered trade mark is not simply the word "Soneri", but the trade mark in its entirety (i.e., the words and the logo), whereas in the appellant's case, it is only the word "Soneri" that is being used as part of its company name. When so considered, there does not appear to be any likelihood of confusion or any other interference with the respondent's registered trade mark. We are therefore satisfied that section 42(1)(a)(i) provides a good and valid defence to the appellant in the facts and circumstances of the present case, and therefore there has been no infringement of the respondent's registered trade mark in terms of section 40(5).
27. We now turn to consider the other ground taken by the respondent, namely that its rights under section 92 of the 2001 Ordinance have been violated. As noted above, the right that is being asserted under this section is in relation to a trade name, and is entirely separate and distinct from the rights conferred by a registered trade mark. Section 92 provides as follows:-- "92. Trade name.--- A trade name shall be protected without the obligation -of filing or registration under this Ordinance whether if forms part of a trade mark or not."
' It will be recalled from para 7 supra that one of the obligations imposed by TRIPS is that Articles 1 through 12, and 19 of the Paris Convention are to be given effect by the member States. Article 8 of the Paris Convention provides (in its entirety) as follows:-- "A trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trade mark."
' As is obvious, section 92 has been enacted to give effect to Article 8. (Interestingly, Article 8 has not been given any effect in either the UK Act or the Indian Act.) Now section 2(xlix) defines "trade name" as follows:-- ' 'trade names' means names used by a person to denote his trade or calling and includes firms' and companies' names."
' Finally, section 2(xvi) defines "name" as including "any abbreviation of name".
28. Clearly, the key concept in section 92 is "trade name" and in order therefore to properly understand the scope of the protection thereby granted, the meaning ascribed to this term in section 2(xlix) will have to be carefully considered. Definition clauses usually use either the word "means" or the word "includes". When the former is used, the definition is exhaustive and is confined to what is stated in the statute. When the latter is used, the definition is expansive; the word bears not merely its ordinary, dictionary meaning but also carries the extended meaning given in the statute. If the definition clause uses both "means" and "includes", the definition is exhaustive as to what follows -the word "means", but this exhaustive definition also incorporates what follows the word "includes". When these principles are applied to section 2(xliv), it is clear that the term "trade name" is exhaustive: it means the name "used" by a person to "denote" his "trade or calling".
However, this exhaustive definition also incorporates, in the case of companies and firms, the names thereof. The intent behind including company and firm names is not difficult to discern. The (exhaustive) definition requires that the person "use" the name for the stated purpose (i.e., to denote his trade or calling). But the name of a company or firm is simply part of its identity. In the case of a company, it is required to be stated in its memorandum of association (Ss. 16-18 of the Companies Ordinance) and in the case of a firm, it is designated as the "firm name" (S.4 of the Partnership Act, 1932). To this extent, the name is not "used" in any sense. However, a company or firm name is many times (though of course, not always) descriptive of what the 'company or firm does, i.e., it may denote the entity's trade or calling. If it does so, then (but only then) it is included in the definition of a "trade name" within the meaning of section 2(xliv).
29. A few examples will perhaps help illustrate the point. Suppose a company is registered with the name of "ABC Textile Mills Ltd." This is of course, its name, part of its identity. But it also tells us something about the company's business, i.e., it denotes its trade. It is therefore, a "trade name" within the meaning of section 2(xliv). But suppose the company's name were only "ABC Ltd." This is just a name. It tells us nothing about the company's business. It could be in the textile trade, the sugar business, part of the cement industry, or engaged in some altogether different field of activity. The name does not denote the company's trade. It is therefore not a "trade name" within the meaning of section 2(xliv). The same rules would of course, apply in the case of firm names.
One point should however be kept in mind. It may be that a company (say "ABC Ltd.") builds up its business over time so that its name comes to be associated with its trade. This does not make the name a "trade name" within the meaning of section 2(xliv). That definition is exhaustive. It requires that the name itself be used to. Denote (i.e., to indicate or to signify) the entity's trade or calling. If the name does not so denote, then any association that may develop with it or its use over time does not convert it into a "trade name".
30. Now that the meaning of "trade name" is clear, the extent of the protection granted to it by section 92 can be examined. In our view, this question has two aspects. Firstly, the trade name enjoys the protection expressly granted to it by the 2001 Ordinance. For example, section 68 protects a trade name against misleading and comparative advertisement. Y Secondly, the section also, in our view, confers protection in its own terms. This protection is to the extent to which the name denotes the person's trade or calling. If any other entity wishes to use the trade name or material part thereof, it can do so if and to the extent that its use does not denote the prior user's trade or calling. To take the actual case at hand: the respondent's name is "Soneri Bank Ltd." This is its company name. It is also its trade name since it denotes the respondent's trade, which is the business of banking. It is therefore protected under section 92. What is the extent of this protection?
In our z view, the protection is to the extent that another person cannot use the respondent's trade name or material part thereof to denote the same trade as that of the respondent. For example, suppose a company is registered under the name "Soneri House Mortgages Co. Ltd." or under the name "Soneri Financial Services Ltd." or under the name "Soneri Forex Ltd." In each of these cases, it may be that the subsequent user has encroached upon the prior user's (i.e., the respondent's) protected field. The reason is that granting mortgages, providing financial services A or engaging in foreign exchange trade is what banks do; it is A part of their trade or business. We would emphasize that each case would have to be examined on its own merits and in the context of its own facts and circumstances. There could, for example, be situations of overlap. Every trade or business can be regarded as having a core area or areas of activity surrounded by a penumbra of ancillary or adjunctive activities. It may be that the core activity of the subsequent user's trade (as denoted by its trade name) is merely an ancillary or adjunctive activity of the prior user's trade (again, as denoted by its trade name). In such a situation, the court may well conclude that the prior user's rights under section 92 have not been infringed. In other words, the extent to which a trade is denoted (or should be regarded as being denoted) by a trade name is a matter of degree.
There may well be a gradient of activities and not necessarily sharply defined boundaries.
Furthermore, no trade or business is static. Real life business is a dynamic activity. What is a core business activity today may become an ancillary function tomorrow and vice versa. These sorts of issues would have to be resolved on a case-by-case basis. If however, the subsequent user's name denotes some other trade or calling, then it does not encroach on the protected field, and such use is not within the scope of section 92. That is precisely the situation here. The appellant's name is "Soneri Travel & Tours (Pvt) Ltd." This is also a trade name, since it denotes the appellant's trade, which is essentially that of a travel agency. But this business is far removed from that of the respondent. Providing travel or travel related services in not something that banks do (at least not in the sense of B being a travel agency). This use therefore falls outside the B protected field, and the appellant's use of the word "Soneri" does not infringe the protection granted to the respondent's trade name under section 92. In our view therefore, the respondent has failed to make out a case under this provision as well.
31. Insofar as the case law cited by learned counsel for the appellant is concerned, those cases were decided under or in relation to the 1940 Act and do not, for the reasons stated above, provide any material guidance in respect of the statutory provisions of the 2001 Ordinance under consideration. It is not therefore necessary to examine those cases in detail. Finally, before concluding, we would like to make one observation with regard to companies registered under the Companies Ordinance. As is clear from the foregoing, a company's name may infringe a proprietor's rights in respect of his registered trade mark under section 40(5), or may be violative of the protection granted to a trade name under section 92. The manner in which a company is required to use and publicize its name under the Companies Ordinance under section 143 thereof has already been noted. This is a mandatory provision, and a company is liable to penal consequences if it fails to comply with its terms. In our view, even if a plaintiff is able to make out a case (especially at the interim stage) against a company name, either under section 40(5) or section 92, the court must carefully consider whether an injunction ought to be granted and if so, on what terms. The reason is that to prohibit a company from using its name is essentially to shut down the company. In our view therefore, interim injunctive relief in such cases should be granted with great care and caution and only where a clear case of infringement of the plaintiffs rights is made out. Even if the suit is being finally decreed in favour of the plaintiff, care should be taken to give the company a reasonable opportunity to change its name in accordance with the provisions of the Companies Ordinance.
32. For all of the foregoing reasons, we are of the view the learned single Judge erred materially in concluding that the respondent was entitled to interim injunctive relief under the 2001 Ordinance.
Accordingly, this appeal is allowed' and the impugned order is set aside, with the result that C.M.A.
5703 of 2010 in Suit 884 of 2010 stands dismissed. Needless to say, the observations made herein above in relation to the pending suit are tentative in nature and made in the context of an application for interim relief. Nothing herein shall affect the decision of the suit on the merits and on the basis of the evidence that may be led at the trial by the parties.
33. The appeal and listed application stand disposed of in the above terms. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.