The British American Tobacco Co., Ltd. v. Mahboob Buksh

Jenkins, C.J:— This suit is brought by the British American Tobacco Co., Ld., against Sheikh Mahboob Buksh and Mahomed Ismail for a declaration that the Plaintiff Company are the proprietors of the trade-mark, name and label described in the plaint; for an injunction against the Defendants restraining them from infringing the game; for an account of profits, and for incidental relief including a claim for damages.

The case made by the plaint is that Kasi Lal Kabasi was the proprietor of a trade-mark, name and label, known as Sri Durga, which was used by him upon packets of ??? sold by him and known as Sri Durga cigarettes: that by an Indenture of the 2nd of September 1908 Kabasi assigned to the Plaintiff Company “all that the trade-mark, name and label known as the Sri Durga trade-mark, name and label used upon packets of cigarettes, and the good-will of his said business so far as the same related thereto”: that since the 2nd of September 1908 the Plaintiff Company extensively used the trade-mark, name and label upon cigarettes manufactured and sold by them and also the words Sri Durga as a trade-mark upon the cigarettes sold by them; that by reason of such user the Plaintiff Company's cigarettes marked with the trade-mark, name and label and words Sri Durga have become known to purchasers or intending purchasers as Sri Durga cigarettes in the cigarette trade, and Sri Durga cigarettes in the cigarette trade mean the cigarettes made and sold by the Plaintiff Company: and that the Defendants have infringed the Plaintiff Company's trade-mark, and the employment of labels by the Defendants is an unlawful imitation of the get-up of Plaintiff Company's goods. The Defendants on the other hand claim to have invented the trade-name of Sri Durga as applied to cigarettes and to be the exclusive owners of it: that on the 29th of July they caused the Sri Durga brand with the name and label to be registered or notified: that they sold the Sri Durga brand of cigarettes in and from the month of August 1908 under the same design: that the user by Kabasi was an infringement of their trade-mark: that the Plaintiff Company acquired by the Indenture of 2nd September 1908 no title to the trade-mark and that the Defendants' cigarettes bearing the trade-mark and label were in the market before the Plaintiff Company's.

The case was heard by Fletcher, J., who dismissed the suit with costs, holding that the Plaintiff Company did not by the Indenture of the 2nd September 1908 acquire from Kabasi the exclusive right of using the trade-mark, and that since that date they had not acquired any new exclusive right to the user of the mark.

From this decree the present appeal is preferred.

It will be seen that the Plaintiff Company by their plaint allege two titles to the trade-mark; the first is a derivative title from Kabasi; the second is an independent title in themselves. I will first deal with the derivative title.

In India there is no system of registration, nor is there any provision for a statutory title to a trade-mark, so that the rights of the parties must be determined in accordance with the principles of the English Common Law.

Now a trade-mark is a mode of warranting the origin of goods to which it is attached, or their trade association, and it is of the essence of a trade-mark that its representation should be true.

In this, I think, is to be found the true test and measure of the assignability of a trade-mark. This is borne out by what was said by Lord Klngsdown in the Leather Cloth Company, Ld. v. The American Leather Cloth Company, Ld. in meeting an argument advanced by counsel for the Appellants who urged that the doctrines laid down in the judgment then under appeal, if pushed to their legitimate consequences, would prevent any assignment. Lord Kingsdown dealt with the argument as follows:—

“It was said that if this principle be pressed to its fullest extent it will prevent the use of the name of a firm by any but the original partners, and will of course prevent, on a transfer of the business, the right to use the name by any other persons. But the answer to this is, that by the usage of trade, the name of a firm is understood not to be confined to those who first adopted it, but to extend to and include persons who had afterwards been introduced as partners, or persons to whom the original partners have transferred their business. The name of the firm continues to be used in many cases long after all the original traders have died, or ceased to have any interest in the concern, as in the great banking houses of Child and Coutts, and many other mercantile houses.

“If a manufacturing house uses the name of a firm, and stamps the name of its firm upon its goods, though she name of the firm no longer represents the same persons as at first, it is no fraud upon the public, for the reasons I have already alluded to.

“For the same reason, the use of the old trade-mark of the firm by the new partners, or their successors (if the term ‘trade-mark’ be understood in what I have already said is its proper sense), is no fraud upon the public; it is only a statement that the goods are the goods of the firm whose trade-mark they bear.”

Lord Cranworth lays down the law in similar terms. The same idea is also expressed by Lord Westbury in Hall v. Barrows, where he says: “If a name impressed on a vendible commodity passes current in the market as a statement or assurance that a commodity has been manufactured by a particular individual, it may be that the Court could not sell the right to use that name without addition; but if it sold the business or manufacture carried on by the owner of the name it might give to the purchaser the right to represent himself as the successor in business of the first maker and in that way entitled to use the name.” So again in Singer Manufacturing Co. v. Wilson, it was said by Mellisb, L.J: “The Court of Equity having taken that step, trademarks began to be considered as property and no doubt there is in a certain sense a property in the trade-mark and equally in a trade-name, because a trade-name may be used, and is very commonly used, as a trade-mark properly so-called, that is a trade-mark upon the goods themselves. Then both a trade-mark and a trade-name were allowed to be sold as part of the good-will of the business. When a new partner came into a mercantile firm amongst other rights which he purchased by coming into that firm was the right to use the trade-name or trade-marks belonging to that firm. Even when an entire business was sold to a new purchaser the right to use the tradename and trade-marks passed with it and in that sense they became property.” It is to be noticed that Lord Justice Mellish limits the passing of a trade-mark to the case where the entire business, of which it is a part, is sold. Similarly Lord Blackburn in Singer Manufacturing Co. v. Long says: “Both trade-marks and trade-names are in a sense property and the right to them passes with the goodwill of the business to the successors of the firm that originally established them though the name of that firm be changed so that they are no longer strictly correct.” The sense in which they are correct is explained in that passage from Lord Kingsdown's judgment which I have already cited. Then in Pinto v. Badman, Fry, L.J, lays down, as to the transfer of a trade-mark, that “It may be assigned if it is indicative of its origin when the origin is assigned with it. It cannot be assigned when it is divorced from its place of origin or when in the hands of the transferee it would indicate some thing different to what it indicated in the hands of the transferor.” And to the same effect the same Lord Justice says in Edwards v. Dennis. No trade-mark can be assigned except in connection with the good-will of the business in which it has been used which business must be co-extensive with the goods or classes of goods in respect of which the trade-mark is registered.” I have discussed this question at some length because it was argued before us with evident earnestness that all that was required to validate the assignment of a trade-mark was that some particles of good-will should also be transferred, and that there was such a transfer of good-will on the 2nd of September 1908 as to comply with the rule that a trademark cannot be transferred in gross.

The cases to which I have referred explain the meaning of the rule which is expressed in this formula, and what we are concerned with is, not whether there may have been a verbal compliance with the condition that an assignment of goodwill must accompany or follow the transfer of a trade-mark, but whether, if the assignment were valid, the trade-mark would still continue to be a representation of the truth, within the limits of deviation sanctioned by the usages of trade and commerce.

What then are the facts of this case? Kabasi, who purports to assign the trademark Sri Ourga, was at the time of the assignment a tobacco merchant carrying on business under the style of the Hiudusthan Cigarette Company and dealing in cigarettes of different brands. He also claimed to be entitled to four trade-marks in connection with these cigarettes consisting of picture representations of the Hindu gods, Gopal, Jugal, Jagadhatri and Ourga, and these four, he deposed, he had to use indiscriminately. It does not appear that there was in any sense a separate business in respect of each or of the ??? sold under ??? brands; only ??? and it does not even appear that separate accounts were opened. Nor has it been shown that the several marks indicated the use of a different tobacco, or any difference in manufacture. In fact Kabasi in reply to the Court said “a great reputation was created by the brand, it was especially made with a special flavour” not suggesting that one brand differed from another. And as to the marks Mr. Page, the Plaintiff Company's principal representative in Calcutta, says, “Between Sri Durga and Jagadhatri purchasers might mistake the two.”

The assignment however does not purport to extend to Kabasi's entire business or to include all his marks; it is expressed to be merely an assignment of “all that the trade-mark, name and label known as the Sri Durga trade-mark, name and label and used upon packets of cigarettes sold and known as Sri Durga cigarettes and the good-will of his said business so far as the same relates thereto.” The plaint in this case contains no precise statement of what the trade-mark Sri Durga denoted while Kabasi still was its “proprietor” but it may, as Counsel for Plaintiff Company contends, be read as meaning that the trade-mark represented that Kabasi was the seller of the goods (see paragraphs 2 and 3). Mr. Jackson in his argument on behalf of the Plaintiff Company has amplified this by alleging that it denoted that “the goods were manufac-lured and sold, or sold by Kabasi.” Have we then here such an assignment of the good-will of Kabasi's business or any part of it as by the usage of trade would sanction the view that the Plaintiff Company were the successor to the firm or business in a sense which would render the representation of the trade-mark ??? holp otherwise might lead to most embarrassing results. Without in any way suggesting that a man or a firm may not have distinct businesses capable of separate assignment, it appears to me that for the purpose in hand it is straining the argument beyond breaking point to urge that a cigarette seller may have as many businesses as the brands of cigarettes he sells. I have carefully considered the several cases that have been cited to us as to the divisibility of the good-will of a business but not one of them appears to me to bear out the proposition for which the Plaintiff Company are forced to contend in this case. And, after all, the question with which we have to deal is substantially one of fact: does the trade-mark Sri Durga when used in connection with the Plaintiff Company's cigarettes still continue to be a correct representation? Are the Plaintiff Company as the assignee under it able, in accordance with trade usage, to claim that they are the successors to Kabasi's business and as such entitled to represent by the trade-mark that the cigarettes are “manufactured and sold or sold” by Kabasi: for that is the representation that is ascribed by the Plaintiff Company to the trademark so far as their right to sue rests on the indenture of the assignment? In my opinion this must be answered in the negative and I therefore hold that for the purposes of this suit the Plaintiff Company did not acquire under that Indenture any title which would give them a right to a decree against the Defendants.

This brings me to the second point urged on behalf of the Plaintiff Company which is formulated in these terms in the memorandum of appeal: “The learned Judge should have held that the Plaintiff Company had acquired and enjoyed the ??? mark by prior use irrespective of the said assignment.”

Now what are the facts as to this? It is the Plaintiff Company's case that, at the time of the assignment, and at the date of the alleged infringement, the trademark denoted a connection of the cigarettes with Kabasi to the benefit of which the Plaintiff Company are entitled by virtue of the assignment. On this the learned Judge has held in their favour as to the denotation of the trade-mark, and has even gone the length of saying that “If Kabasi had remained the owner of this mark and continued his business I should on the evidence have held that he was entitled to restrain the Defendants from using it.” The Plaintiff Company have adopted the conclusion before us, and indeed their first and principal contention has been here, as it obviously was before Fletcher, J., that by Assignment they became entitled to this trade-mark and the benefit-of its denotation.

We have not been asked by the Plaintiff Company to distrub the learned Judge's view on this point and therefore I think we should for the purposes of this appeal assume its correctness as against the Plaintiff Company who rely on it.

But if this be so, how can the Plaintiff Company be heard to say that if the assignment is ineffective the trade-mark has a different denotation: this is not the presentation of an alternative contention, but is to approbate and reprobate, for the representation of the trade-mark is in no way dependent on the validity of the assignment. The matter is discussed by Fletcher, J., in his judgment where he remarks that this is not the case set up in the pleadings. It is contended that ??? the point made by the learned Judge, for though he does not elaborate his reasons, he doubtless meant that para 6 could only have application if it were held that the mark had not acquired a reputation before the 2nd of September 1906. And this becomes the more apparent from his comment that “the Plaintiffs claim that they are the assigns of Kabasi and this is the basis of their suit.” The learned Judge continues “nor is it easy to see how the Plaintiffs can claim that their goods have got a fresh and independent reputation under the mark when the first lot of the Plaintiff's cigarettes were sold in packets bearing the name ‘Hindusthan Cigarette Company’ which business was not theirs, and since they have abandoned the use of that name they have sold the cigarettes without any name on the packets.

The conclusion at which the learned Judge came was that since the date of the attempted assignment the Plaintiff Company had not acquired any new exclusive right to the user of the mark. The whole of the evidence called on behalf of the Plaintiff Company has been placed before us, and I agree with the conclusion of the learned Judge. In seeking to rely on their own user, irrespective of the assignment, they in effect are endeavouring to overthrow the reputation in Kabasi which they have not only alleged but succeeded in establishing, for a trade-mark cannot make conflicting representations. This contention involvas the theory that there had been an abandonment of the trademark as denoting a connection with Kabasi, and it would be obviously unfair to the Defendants to allow the Plaintiff Company to start a case of abandonment at the close of the trial when no such ???.

And even now abandonment has not been made a ground of appeal.

But apart from this, the record supports no such case: the evidence shows that the cigarettes were sold by the Plaintiff Company in boxes on which the names Hindusthan Cigarette Company appeared in conjunction with the picture of Sri Durga on the 19th of September 1908, nor does the evidence show when that name was discontinued. This however is clear that on the box which is made, Ex. A, to the plaint and in relation to which the declaration of title and relief is sought, the name still appears.

The significance of this is that it was under this name that Kabasi traded and indeed continued to trade after the execution of the Indenture of Assignment. Moreover I can see no reason to suppose that it was a part of the Plaintiff Company's policy to have the name of their Company directly associated with the Sri Durga mark, for the evidence led by them tends to show that this association would not promote the sale of cigarettes. Thus Nando Lal Ghose says, “This picture would be liked by all Hindus. People would understand these cigarettes were made by the Hindus and this would be a reason for its rapid sale. We sell those cigarettes as Swadeshi. I don't like to tell my customers that pictures had been put on by a Christian firm, that is a firm owned by the British and Americans. It would affect the sale if customers knew the cigarettes were made by unbelievers.” So again Surendra Nath Dass, another of the Plaintiff Company's witnesses, says, “Durga cigarettes sell very largely on account of the Swadeshi trend of the people,” and Rai Churn Ghose also, one ??? witnesses, deposes “I said ??? came back and asked ??? Sri Durga cigarettes because they were Swadeshi cigarettes” while Kali Charan Mitter, one of the principal dealers, says, “pictures of Gods and Goddesses indicate they are Swadeshi articles.” It is difficult to believe that the Plaintiff Company were unaware of this and it affords an additional reason for thinking that there was no such abandonment and fresh acquisition of reputation as this second branch of the Plaintiff Company's argument implies. The result then is that the Plaintiff Company has, in my opinion, failed to establish either of their contentions, and I therefore hold that the decree of Fletcher, J., should be confirmed and this appeal be dismissed with costs.

Woodroffe, J.— I agree.

Appeal dismissed.