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23 February 2015
The High Court of Sindh has issued a significant decision(1) addressing company trademark applications that are filed in all classes of the Nice International Classification of Goods and Services (as specified in the fourth schedule of the Trademarks Rules 2004). The case concerned goods and services in Classes 16, 36 and 37 and focused on two points of law:
The plaintiff company was part of the well-known Rupali Group and claimed to be engaged in manufacturing, exporting, indenting, banking and trade financing. It sought injunctive relief for the defendants' alleged infringement of its RUPALI trademark.
The defendants were engaged in the construction business as developers and builders – services which fall within Classes 36 and 37. The names of their projects incorporated the word 'Rupali' in various forms, including 'Rupali Twin Towers', 'Rupali Shehar' and 'Rupali Twinkle Tower'.
The plaintiff had applied for registration of its RUPALI trademark in all classes of goods and services, but had particularly claimed registrations in Classes 36 and 37.
The plaintiff claimed that the defendants had infringed its RUPALI trademark, leading to confusion among and deception of the general public, since the RUPALI mark was indelibly associated with the plaintiff. The plaintiff accordingly applied for interim injunctive relief pending resolution of the case.
The defendants contended that they:
The plaintiff's business was unrelated to the defendants' construction business and, as such, the defendants held that the plaintiff had no right to register the trademark in all Nice classes. Further, there could be no confusion between the plaintiff's and the defendants' respective businesses due to the differences between the two. The defendants had therefore not infringed the RUPALI trademark as alleged by the plaintiff.
The defendants applied under Section 80 of the Trademarks Ordinance 2001 to contend not only that the plaintiff was not entitled to an interim injunction, but also that the plaintiff's trademark registrations in Classes 16, 36 and 37 should be invalidated.
The court held that there was insufficient evidence to establish that the plaintiff's mark was in fact registered in Classes 36 and 37 as of the commencement date of the suit.
Moreover, on account of their lack of evidence, the defendants were unable to support their contention of prior or concurrent honest use of the RUPALI mark.
Section 22(3) of the Trademarks Ordinance provides that applicants must have a bona fide intention to use the trademark for goods or services in the applied-for class. Rules 12 to 14 of the Trademarks Rules expressly provide that each application must be confined to one class, and that if the trademark is to be registered in different classes, separate applications must be filed for each.
Section 22(3) of the Trademarks Ordinance must be considered on two planes – one legal and the other factual. In this regard, the judgment of Lord Justice Browne-Wilkinson in Rolled Steel Products (Holdings) Ltd v British Steel Corporation(2) was put forward:
"On the legal plane the class (or classes) of goods and services in respect of which registration as applied for must be such as relate to some object to be found in the objects clause of the memorandum of association… such intention being unlawful and beyond the legal capacity of the company."
As for the factual plane, he held:
"Even if the class (or all classes if there be more than one) do relate to one or more of the objects to be found in the memorandum of association, it is still a matter of fact whether the applicant company does bona fide intend to use the mark in respect of all classes."
The court thus held that a company has the legal capacity to engage only in the businesses and ventures stipulated in its memorandum of association; anything beyond this is ultra vires and thus void in Pakistan. In such circumstances, it follows that the applicant cannot, as a matter of law, have a bona fide intention to use the applied-for mark.
Even if the class designated in the application does relate to at least one of the businesses or ventures listed in the objects clause of the company's memorandum of association, it is still a matter of fact as to whether the applicant has a bona fide intention to use the mark for all listed businesses and ventures. Although declaration of bona fide intention to use the mark can be accepted at face value, the registrar should take care when applications are filed in many classes, especially where they are filed simultaneously or in short order. In such cases, in order to ensure compliance with Section 22(3) of the Trademarks Ordinance, the registrar can legitimately inquire into the veracity of the applicant's declarations (ie, its legal status, whether registered in Pakistan or elsewhere).
No matter how broadly the objects clause in the applicant's memorandum of association is construed, it cannot possibly relate to all classes of goods and services listed in the fourth schedule of the Trademarks Rules.
According to its own description, the plaintiff was essentially engaged in various types of textile business and had undertaken no business related to Class 16, 36 or 37. On the face of it, the plaintiff may well have not been legally entitled to engage in any business relating to Class 16, 36 or 37. However, it was an open question as to whether – as a matter of fact – the plaintiff had intended to engage in business related to Class 16, 36 or 37. Thus, the plaintiff's bona fide intention to use the mark was in doubt.
The defendants were unable to establish the plaintiff's bad faith in applying for registration of the RUPALI mark in Classes 16, 36 and 37 under Section 80 of the Trademarks Ordinance. Nonetheless, the plaintiff's good faith was lacking, since applications were made in all classes – giving the impression of stockpiling the marks for future use and in apparent disregard for whether they related to any of its existing businesses or any related businesses within its legal capacity (in terms of its memorandum of association).
The plaintiff was unable to make a prima facie case and the court accordingly denied interim injunctive relief. The court clarified that its decision was based in relation to Classes 16, 36 and 37.
The court also dismissed the defendants' application under Section 80 of the Trademarks Ordinance.
The court instructed the Office of the Registrar of Trademarks to ensure that it applies this decision to all pending and future trademark applications, especially where the applicant is an established legal entity (in Pakistan or elsewhere). The registrar was further directed to publish the decision in the Trade Marks Journal.
Although the main case is pending, the court's refusal to grant the plaintiff's application for injunctive relief constitutes an important development with respect to trademark applications filed in all classes and which cover goods and services beyond the scope of the applicant's business in Pakistan.
For further information on this topic please contact Seema Mansoor at Vellani & Vellani by telephone (+92 21 3580 1000), fax (+92 21 3580 2120) or email (email@example.com). The Vellani & Vellani website can be accessed at www.vellani.com.
(1) Suit 712/2009, published in Trade Marks Journal 759 (April 1 2014).
(2)  3 ALL ER 52.
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