' MUHAMMAD FARRUKH IRFAN KHAN, J.---This appeal is directed against the impugned order dated 18-2-2009, passed by the learned Additional District Judge, Lahore on an application under Order XXXIX, rules 1 and 2 of the C.P.C., which was filed by the respondent along with a suit for permanent injunction, whereby the appellant has been restrained from using the trademark "Unique" in any manner whatsoever till decision of the main suit.
2. Learned counsel for the appellant has argued that his client has established an educational system by the name of "Unique School System" since a long time and registered the said name under the Registration Act, 1908; that the said schooling system has been registered with the Education Department as well as the Board of Intermediate and Secondary Education and the trademark "Unique" has been registered in favour f the appellant under Trademark Registration No.290269 on 19-10-2010 for providing services of schools, computer institutes learning recourses center, language centers, education and training services, industrial and commercial training coaching in the files* (actually this word is "fields") f teaching, conducting classes, Education providing of training entertainment, sporting and cultural activities, being services, included in Class-41; that the appellant has also registered the trademark "Unique" with artistic work (logo)
"MASHAL/Unique" which is being used by it as copyright under registered No.20738-Copr. According to the learned counsel, the appellant has also got proprietary and vested rights in the trademark and service mark "Unique" by virtue of continuous long use and all these aspects have not been considered by the court below, while passing the impugned order. Learned counsel has further gone on to argue that educational year is in progress and the appellant has given admission to a large number of students, therefore, the impugned order will disrupt the academic year of the admitted pupils if the injunctive order remains in field.
3. On the other hand, the learned counsel for the respondent has defended the impugned order of the Court below, on the grounds, inter alia, that the respondent adopted the trademark and trade name "Unique" with the opening of schools and allied educational institutions in the year 1986 and within few years a number of branches under the said trade mark and trade name were opened in various vicinities of the city; that it was the respondent who first used the said trademark in the year 1986; that by virtue of such use since 1986 the trademark and trade name "Unique" is associated and attached with the respondent by the public at large and they prefer to get their children admitted in the institutions run and managed by the respondent; that the trademark and trade name "Unique" was registered by the respondent with the Education Department and Board of Intermediate and Secondary Education prior to that of the appellant's; that the respondent's trademark is duly registered under the Trade Marks Ordinance, 2001 ("hereinafter referred to as Ordinance of 2001") registration No.160892 dated 14-2-2000 in respect of "teaching materials, printed matters, books, cards, newspapers, magazines all kinds in class 16; that the appellant obtained its trademark fraudulently, in a record period f time; and that application in respect thereof was filed on 19-10-2010, which is subsequent to the filing of the suit for permanent injunction along with application under Order XXXIX, rules 1 and 2, C.P.C., as such the said registration was of no assistance to the appellant for consideration of their application for refusal or grant of injunction as the suit and application were instituted on 6-2-2009 and the impugned order was passed on 18-2-2009; that the appellant has not specifically denied at all the claim of the respondent that the trademark and trade name "Unique" was adopted in the year 1986 and is continuously being used by the respondent as such this is an admitted position, therefore, as the respondent is the original owner, adopter and user f the trademark and trade name "Unique", which it has also registered in class 16, all the ingredients for grant of interim injunction tilt in its favour, therefore, the learned ADJ rightly restrained the subsequent adopter and user of the trademark "Unique" in relation to the same goods and services till the decision of the main suit. Learned counsel has also placed reliance on section 39(2)(b) and (c) of the Trade Marks Ordinance to submit that the use f a trademark and trade name which is identical to a registered trademark in relation to services will contravene the provisions of the Act ibid.
4. Arguments heard. Record perused.
5. Before dilating upon the merits and demerits of the case of parties it is noted that the respondent instituted a suit for permanent injunction along with application under Order XXXIX, rules 1 and 2, C.P.C. Praying for restraining the appellant from using the trade mark and trade name "Unique" and passing off their services as the services f the respondent etc. Till the decision of the main suit. The learned trial Court had to consider the three ingredients necessary for grant or refusal of an interim injunctive order i.e. Prima facie case, balance of convenience and likelihood of irreparable loss to either party.
6. The plaintiff/respondent has alleged infringement of a registered trademark as well as passing off. Therefore, before dealing with the allegations of trademark infringement and passing ff, it is useful to consider that under section 39(2) of the Ordinance of 2001 a proprietor of a registered trademark has exclusive rights in the trade mark which are infringed by the use of a same or similar trademark in Pakistan without his consent.
7. Under section 40(1) of the Ordinance f 2001, a person infringes a registered trademark if such person uses a trademark which is identical to the trademark in relation to goods or services, which are identical with those for which it is registered whereas under section 40(2) f the Ordinance of 2001 it is an infringement of a registered trademark if a person uses an identical mark in relation to goods or services "similar" to the goods or services for which the trademark is registered, or the mark is deceptively similar to the registered trademark and is used in relation to goods or services for which the trademark is registered and there exists a likelihood of confusion on the part of the public which includes the likelihood of association with the registered trademark. [underlining is supplied for emphasis]
8. The law, by virtue f section 40(3), also provides that it is an infringement of a trademark if a person uses a mark which is identical with or deceptively similar to the trademark in relation to (a) the goods of same description as that of the goods in respect f which the trademark is registered or (b) the services that are closely related, to the goods in respect of which the trademark is registered or (c) the services of the same description as that f the services in respect f which the trademark is registered or (d) the goods that are closely related to services in respect f which the trademark is registered. [underlining is supplied for emphasis]
9. It is a significant feature of the case that both parties are claiming to have obtained trademark registrations for the mark in dispute "UNIQUE" from the Registrar f Trademarks under the Ordinance, 2001.
10. The plaintiff's/respondent's claim is to have obtained registration for the mark UNIQUE and logo under Registration No. 160892 in Class 16 in respect f teaching materials, printed matters, books, cards, newspapers, magazines of all kind in class 16 dated 14th February, 2000 actually registered on 26th May, 2007. Perusal of Certificate of Registration available on record shows that registration has been issued subject to the following plaintiff/respondent do not appear to have opposed the grant of Registration No.290269 to appellant/defendant when it was published in the Pakistan Trade Marks Journal, for public objections prior to grant of registration. This at least, prima facie, shows that the plaintiff/respondent has not been vigilant in protecting its alleged exclusive rights in the trademark UNIQUE. Also, it has not been argued before me nor any document available on record which shows that after becoming aware f the Registration No. 290269 of the appellant/defendant, the plaintiff/respondent has filed any cancellation/revocation for the cancellation of the said registration of the appellant/defendant.
14. Both the sides have also claimed to have registered the names of their respective schools with the Education Department and Board of Intermediate and Secondary Education. I may observe here that registration of the name of school with Education Department or Board of Intermediate and Secondary Education cannot be pleaded as a basis or a defense to an action for infringement of a right in a trademark or a passing off action, which has to be decided under the Trade Marks Law and principles developed relating to the tort of passing off, as such affiliation/registration with the Education Department and the said Board only shows that the entity seeking the affiliation/registration was in compliance f the requirements laid down by the Board/Authority to carry on with its business/activity, at a certain given date.
15. Therefore in the aforesaid backdrop in deciding whether the plaintiff/respondent is entitled to an interlocutory injunction pending full trial, as directed in the order impugned in this appeal, firstly, it is necessary to examine the effect of a disclaimer on the rights granted by the Trade Mark registration under the Ordinance of 2001. This aspect is dealt with by section 21, which is reproduced below: "Section 21: Registration subject to disclaimer.---If a trademark contains:-
(a) any part not separately registered as a trade mark in the name f the proprietor;
(b) any part for the separate registration of which no application has been made; or
(c) any matter common to the trade, or otherwise of a nondistinctive character,the Tribunal, in deciding whether the trade mark shall be entered or shall remain on the register, may require, as a condition of its being on the Register, that the proprietors shall either disclaim any right to the exclusive use of such part or f all or any portion of such matter, as the case may be, to the exclusive use f which the Tribunal holds him not to be entitled, or make such other disclaimer as the Tribunal may consider necessary for the purpose f defining the rights f the proprietor under the registration.
[emphasis supplied] ' Provided that no disclaimer shall affect any rights of the proprietor of a trade mark except such as arise out of the registration of the trade mark in respect of which the disclaimer is made."
[underlining is supplied for emphasis] ' A plain reading of the provisions f section 21 of the Ordinance of 2001 shows that disclaimers are imposed by the Registrar of Trade Marks basically to define the rights (and their parameters) that a person enjoys upon obtaining a trademark registration. Section 21(c) of the Ordinance of 2001 shows that if a trademark contains any matter common to trade or of a non-distinctive character the Registrar may require that the proprietor disclaim any right to the exclusive use of a part f the mark the exclusive use of which the Registrar holds him not to be entitled for the purposes f defining the rights of the proprietor, under the registration. Therefore, basically, the Registrar would impose a disclaimer on a trademark registration if the Registrar thinks that the proprietor is not entitled to the exclusive use f the feature contained in the trademark which may be common to trade or of non-distinctive nature. Thus a 'disclaimer' can be said to define the length and breadth and/or pith and substance of a registration.
16. I may add that disclaimers are imposed by the Registrar when the trademark sought to be registered, or one of its essential features, lacks prima facie distinctiveness and the applicant is unable to satisfy the Registrar that on the date of filing of the trademark application, the trademark was either prima facie distinctive or by virtue of its use and advertisement, has acquired a secondary meaning and distinctiveness and the ordinary public considers the word, not in the descriptive or indistinctive connotation but, as a trademark originating from the applicant and, in other words, the mark has become distinctive of the goods and the services of the applicant. Under the scheme of the law, a trademark may not form to be distinctive at the time of filing of the trademark application, for example, because it has not been used or promoted for a reasonable period f time, may, however, become distinctive and registerable at a later date when, through use and advertisement it becomes distinctive and/or acquires distinctiveness. This means that a trademark which may not be distinctive when the first application was filed, and was registered with a disclaimer, can be registered without a disclaimer upon a second application, at a later stage, if the applicant satisfies the Registrar that by virtue of the subsequent continuous use and advertisement of the said trademark it has lost its original indistinctive/descriptive meaning and has acquired a secondary meaning, namely to be a trademark indicating that certain goods or services originate from a particular person. Having said the above, however, it is clarified that some words f purely descriptive nature or some words which describe the nature or character or quality of the goods may never acquire a secondary meaning, however, longtime use or extensive their advertisement may be, for example, the word "fresh" for fruit juices and "apparel" for clothing, readymade garments, "sweet" for confectionary, "quality" for water etc. As every manufacturer or trader has an inherent right to use such words in the normal course of their business and it would be inappropriate for the Registrar of Trade Marks to grant exclusive rights to one particular person for words, as trademarks, which are used in the normal course of trade to describe the character and quality f the goods.
17. In the present case the rights which are granted to the plaintiff/respondent as well as to the appellant/defendant by virtue of their respective registrations do not extend to the exclusive use of UNIQUE. Thus, it seems that in the presence of a disclaimer on the exclusive rights on UNIQUE the plaintiff/respondent was not entitled to be given the benefit of having the presence of the word "UNIQUE" on its registration as the statutory rights acquired through registration did not grant him the exclusive rights on the use of UNIQUE.
18. The above aspect becomes further clear by plain reading of provisions of subsection (3) of section 42 of the Ordinance of 2001 reproduced below:
42. When a trademark is not infringed:- (1)......................
(2)......................
(3) Where registration Of a trade mark is subject to a disclaimer, a person shall not infringe the trade mark by using disclaimed part of the trade mark.
(4) Thus it is clear that on the basis of its trademark registration No, 160892 the plaintiff/respondent cannot allege that the defendant/appellant has infringed its trademark UNIQUE by using the trademark UNIQUE as this feature has been disclaimed by the plaintiff/respondent itself while obtaining trademark registration.
19. Notwithstanding the above aspect that plaintiff/respondent though may not be able to invoke infringement of its rights allegedly acquired through registration, the plaintiff/respondent can, however, still maintain its action to the extent of allegation of passing off and/or rights that it may have acquired through use of the trademark UNIQUE, outside the scope of trademark registration i,e, prior user rights, which rights are well recognized under the law as well as by a number of judicial pronouncements, principally in Tabaq v. Tabaq (1987 SCMR 1090). [underlining is supplied for emphasis] 20, The above notion is also clear from the proviso to section 21 which provides that "no disclaimer shall affect any rights of the proprietor of a trademark except such as "arise out of the registration of the trademark in respect of which the disclaimer is made." This proviso has another meaning which is that while the entry of a disclaimer on any feature within a registration would not entitle the registered proprietor to initiate action for infringement of a registered trademark, the disclaimer would not, however, prevent nor affect any rights of the proprietor which arise otherwise than by virtue of a trademark registration, for example, a right to invoke the tort of passing off and/or prior user rights. [underlining is supplied for emphasis] ' In other words, a proprietor of a mark who institutes a suit for infringement of a registered trademark also alleging prior user rights and goodwill acquired through use, thus alleging passing off, may fail on the basis of statutory rights because such rights may not grant exclusivity of the disclaimed feature, which is imitated by another, but may still succeed on prior user or passing off grounds if the proprietor is able to prove prior user and/or acquired distinctiveness by virtue of long and continuous use, reputation and goodwill and may show the commission of the presence of the tort of passing off. Therefore, at the grant of interlocutory injunction stage it has to show such acquisition of distinctiveness on a prima facie basis.
' The learned trial Court although has made correct interpretation of section 40(3)(b), however, has failed to notice that there was a disclaimer on the exclusive right of word UNIQUE and overlooked to examine this important aspect and it seems that the appellant's/defendant's counsel did not point out the provisions of sections 21 and 42, as also he failed to do so during the course of arguments in this Court.
21: I shall now examine the claim for passing off. In the case of National Disinfectant Company v.
National Detergents Ltd. (PLD 1983 Karachi 402) it was observed that "A plaintiff sues for infringement when his title by registration has been affected; he sues for passing off when the reputation of his goods has been affected. If a registered trademark is imitated an action for infringement lies. If a false or deceitful representation is made expressly or impliedly an action for "passing off lies". In one cause of action is founded on property in goods which has been infringed, in the other the plaintiff has to prove that reputation of his goods and further prove that reputation has been assailed."
' In the case of Riaz Ahmed Mansuri v. Abid Ali Qazi and 2 others (1990 MLD 1786) [Karachi] it was stated that provisions of section 20(2) of the Trade Marks Act, 1940, which are pari materia with section 39 of Ordinance of 2001, preserves the right of action of the holder of an unregistered trademark for passing off the goods bearing his trademark as goods of such person. In case of an action for infringement of a registered trademark the plaintiff need only to assert his registration and allege infringement. While bringing a claim for passing off, whether alone or together with a claim for infringement of trademark, plaintiff must prove that his mark was distinctive and had been continuously in use and the defendant had copied the same in order to deceive the customer.
' In the Indian case of B.K. Engineering Co. v. U.B.H.I. Enterprises (AIR 1985 Delhi 210 at page 215) it was stated as follows: "The true basis of the action is that the Passing Off injures the right of property in the plaintiff, that right of property being his right to the goodwill of his business (Cadbury (1981-1 All ER 213) (supra) at pg.
221. The plaintiff is entitled to protect the goodwill of ,his business. Equity will intervene to protect the goodwill. Injunction is an equitable remedy. This doctrine now has the blessing of the House of Lords in Erwen Warninck v. Townsend (1979-2 All ER 927) (supra) and of the Privy Council in Cadbury Schweppes v. Pub. Squash Co. (supra) and Star Industrial Co., Ltd., v. Yap Kwee Kor (1976) FSR ,256.
The right the invasion of which is the subject of Passing Off actions is said to be the property of business or goodwill likely to be injured by misrepresentation."
' In paragraph 25.40 at pg. 526 of the Law of Trademarks and Passing Off by P. Narayanan 4th edition, it is stated as follows:- "It is essential for, success in a Passing Off action based on the use of a mark or get-up that the plaintiff should show that the disputed mark or get-up has become by user distinctive of the plaintiff's goods so that the use, in relation to any goods of the kind dealt in by the plaintiff of that mark or get-up will be understood by the trade and the public as indicating the plaintiff's goods."
' In Erven Warnick v. Townsend 1980 RPC 31 (HL) at pg. 92 with regard to the "concept of goodwill"
Lord Diplock stated as follows: "The concept of goodwill is in law a broad one which is perhaps expressed in words used by Lord MacNaughten in C.I.R. v. Muller (1901) AC 217 at 223: It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom."
22. Now prior user and goodwill and reputation acquired through use can be shown at prima facie stage by submitting sale figures, copies of invoices and sale documents, advertisements in newspapers, magazines, documents showing promotion through electronic media etc., as held by superior courts in deciding cases involving trade mark rights and Passing Off, guidance from a few of which can be taken as discussed below: ' In the case of Mehtab Rehman v. Saeed Ahmed (1986 CLC Karachi 348 at page 353) it was observed that "Prima facie I am of the view that the defendant No,1 has not been able to establish prior user of his mark Al-Zeb" and that "Defendant No,1 has claimed that he has been using the mark "Al-Zeb" since 1974. No documentary evidence has been filed in support of the averment that defendant No,1 has been using his mark since 1974. It is reasonable to expect that from 1974 upto 1983....There would be some documentary evidence about the user of the mark "Al-Zeb" by defendant No,1 but no such document has been filed on behalf of defendant No, 1." ' and that "At this stage, on the basis of the record, I am prima facie of the view that defendant No,1 has not established prior user of the mark "Al-Zeb". I may observe here that this prima facie finding has been reached on the basis of the record at the interim stage when no evidence has been recorded."
' In the case of Syed Muhammad Maqsood v. Naeem Ali Muhammad reported in 1985 CLC Karachi 3015, the Hon'ble High Court of Sindh has observed and held as follows:- "Mr. Amanullah Khan, however, contends that in the application for registration, the respondent has shown the period of user from January, 1982 whereas the appellant has shown the period of user since last six years from the date of making the application. This plea would have, prima facie, prevailed to refuse interim injunction on the ground of the alleged prior user of the appellant but I find that the appellant has not placed any material on record along with his counter-affidavit filed in the lower Court and the affidavit and rejoinder filed in this court. He has only submitted two small calendars for the years 1978 'and 1979 which bear the trade mark "Rasily". The genuineness of these two calendars are also disputed by the respondent's counsel. I am afraid, that a trader who is trading under a certain trade mark for six or seven years, as alleged, should be armed with sufficient evidence at least to support his averment that he has been using the said trade mark for the last so many years. Merely the production of two calendars does not create confidence in my mind as to prima facie establish the user of the trademark "Rasily" by the appellant since 1977."
23. The plaintiff/respondent does not appear to have filed independent documentary evidence, as none is available on record, to prima facie show that it is using the trademark UNIQUE since 1986 or that it has been advertised and promoted as a result of which it has acquired goodwill and reputation and thus for the purposes of Passing Off claim also the plaintiff/respondent has failed to make out a prima facie case. The appellant/respondent claims to be using the trademark UNIQUE for about 10 years and therefore at this stage when plaintiff/respondent has no statutory rights, nor has filed any documents to prima facie show prior use it will be inappropriate to injunct the appellant/defendant.
24. In view of the above discussion, the respondent/plaintiff was not entitled to an injunction as it failed to make out a prima facie case, nor showed that balance of inconvenience or likelihood of irreparable loss were in its favour. Resultantly this appeal is allowed, and the impugned order is set aside. As the case is pending since 2009 the learned trial Court is directed to decide the main suit within 6 months from the date hereof.