The tussle over brand CORONIL between Patanjali Ayurveda (“Patanjali”) and Arudra Engineers (“Arudra”) from 2020 questioned Patanjali’s rights, interest, as well as intentions with respect to the brand CORONIL[1]. Patanjali’s brand had been devised and used on an ayurvedic composition and heavily promoted as a COVID-19 preventive formulation. Arudra’s brands ‘CORONIL 92 B’ and ‘CORONIL 213 SPL’ were used since 1993 and registered for a chemical product used to prevent corrosion on industrial machines (different products and domain than Patanjali’s).
In the case, Arudra had sued Patanjali contending infringement of their alleged well-known trademarks under Section 29(4)[2] of the Trade Marks Act, 1999 (the “Act of 1999”). Post the analysis of the dispute at multiple levels, the Hon’ble High Court of Madras, in an appeal before them, concluded the case in favour of Patanjali, as the Court found that no prima facie case was made by Arudra at the initial interim injunction stage of the suit. For arriving at this conclusion, the Court heard views of both sides in the suit on relevant legal and regulatory points and delved into various principles of the law. One such point that was discussed and deliberated upon at length by the counsels of both sides in the case was regarding disclaimers that are imposed on parts of composite trademarks.
It is noteworthy to highlight here that the registrations of CORONIL 92 B and CORONIL 213 SPL in favour of Arudra under the old Trade and Merchandise Marks Act, 1958 (the “old Act”) were with disclaimers on the non-literal components 92 B and 213 SPL respectively, as per the older scheme (under Section 17(b) of the old Act) for the imposition of statutory disclaimers. Since the two registrations of Arudra were particularly for composite marks containing (among other features) CORONIL as a prominent feature thereof, the Court observed that even though a case for passing off in relation to the wordmark CORONIL could have been established (subject to the essential ingredients, namely goodwill in the brand CORONIL for anti-corrosive chemical and damage to such goodwill were satisfied), the case for infringement under Section 29(4) of the Act of 1999 was not possible, as Arudra never took steps to register their brand CORONIL per se as a word mark for their relevant products. The Madras High Court in the present case relied upon the landmark ruling of Ashok Chandra Rakhit[3], in order to explain the scope of disclaimers and the differences between the Old Act and the New Act.
This article discusses legal principles surrounding disclaimers under the Indian law and the key pronouncements by various courts in this regard, in order to understand the functions as well as implications of having disclaimers in composite trademarks.
Position under the law
Statutory position
At this juncture, it is pertinent to take a look at the legal regime around the questions addressed in the case. Under the trademark law in India, while registering a composite mark which has generic or descriptive or common qualifying elements, one can either offer to disclaim his exclusive rights over the non-registrable element/elements of the mark or the Trade Marks Office by themselves impose such disclaimers as a condition to the registration of the composite mark. While the old Act provided for imposition of disclaimers in the statute itself, currently the process and practice of imposing disclaimers flows from the Trade Marks Office’s practice and procedures. Instead of the statutory disclaimers, the Act of 1999 provides a right to the proprietors of composite marks by emphasizing on the anti-dissection rule. Separately, the Manual of Trade Marks issued by the Trade Marks Office authorizes the imposition of disclaimers on certain components under certain conditions.[4]
One can certainly not negate the importance this scheme has in the context of protecting and registering marks with non-registrable components (whereby brand owners disclaim exclusive rights over such non-registrable elements). By putting out a disclaimer in relation to non-registrable elements present in a trademark, the brand owner essentially undertakes to not object to any third party’s use of the disclaimed word as a part of their own mark. It is important to highlight the fact that disclaiming an element or word does not hamper the overall right of the proprietor over his registration or his right to use of the composite mark. Disclaimers are used in order to prevent a false impression that might be created in the minds of public with respect to the exclusive right of the trademark owner over such non-distinctive elements in the mark.
For instance, if we were to apply for the mark ‘MEDESTLE CANDY’ to cover the range of chocolates and candy bar, a disclaimer of the term ‘CANDY’ would be done. Interestingly, for the registration of the famous chocolate ‘CADBURY GEMS’, the word ‘GEMS’ was required to be disclaimed since it was a generic term and cannot be independently registered without using some distinctive character such as the term ‘CADBURY’ in the above case. In the same way, the term PERFECT was disclaimed in another famous case, where the plaintiff had used the mark ‘SWASTIC PERFECT’.
Caselaw
The courts in India, time and again, have been deciding over the question of granting exclusive rights over the usage of certain words/elements as a part of a proprietor’s trademark. Some significant pronouncements have been discussed as follows:
1. Ashok Chandra case
In one of the first cases, The Registrar of Trade Marks v. Ashok Chandra Rakhit Ltd. (1955) (“Ashok Chandra case”), the Hon’ble Supreme Court of India also laid special emphasis on the purposes of disclaimers, while explaining their scope. One of the key purposes of imposing disclaimers under the law is not to confer any direct benefit to the rival traders or the general public, but to define the rights of the proprietor under the registration. In the words of the Apex Court, “The disclaimer is only for the purposes of the Act. It does not affect the rights of the proprietor except such as arise out of registration” The Court also clarified,“The disclaimed parts or matters are not within the protection of the statute. That circumstance, however, does not mean that the proprietor’s rights, if any, with respect to those parts or matters would not be protected otherwise than under the Act.”
Image source- Indiancaselaws
The landmark case of Ashok Chandra dates back to 1950s, when the Trade Marks Act, 1940 (the “Act of 1940”) was in effect. The mark that was in question has a device mark along with the word “SHREE” and was originally registered initially without any disclaimers as per the Act of 1940. When the office practice of imposing disclaimers was established (post registration of said device mark), the Registrar moved on his own to have the Register rectified by inserting a disclaimer of the word “SHREE” (auspicious word for Hindus and frequently used for all trades), in the matter of the registration. The registered proprietors in an appeal before the High Court against the Registrar’s suo moto action, contended that they had never claimed the right to the word “SHREE” per se andhad claimed a right to the distinctive mark as a whole of which the word “SHREE” formed only a part. This High Court appeal was allowed. On further appeal, the Registrar’s order was restored by the Supreme Court validating the approach adopted by the Registrar.
With regard to the observation made by the High Court in the first appeal, the Court noted that “the attention of the High Court was not drawn to an important consideration, namely, the strong possibility of the company claiming a statutory right to the word ‘SHREE’ by virtue of the registration of its trade mark and subjecting others to infringement actions only on the strength of the registration and without proof of facts which it would have otherwise to establish in order to succeed in a passing off action or a prosecution under the Indian Penal Code” and therefore, as per the Supreme Court, the High Court could not be said to have properly exercised its discretion. Additionally, the Apex Court held that the plaintiff could still pray for an injunction of passing off despite a disclaimer.
2. Uttam Chemical Udyog case
In another famous case of Uttam Chemical Udyog, Ballabhgarh v. Rishi Lal Gupta, trading as Rishi Soap works, Ballabhgarh & Ors. (1981) it was held that even though the number 5 was disclaimed in the trade mark “5-BHAI”, the term ‘BHAI’ also needs to be disclaimed as it had become publici juris. The High Court, on appeal also upheld the same, stating that the trade mark owner had an exclusive right to use the unique combination of “5-BHAI” in relation to the goods and services mentioned, but that does not imply that they could restrain others from using either number 5 or the term BHAI independently or in different combination with other elements.
3. Godfrey Phillips case
The Apex Court in the case of Godfrey Phillips India Ltd. v. Girnar Food & Beverages Pvt. Ltd. (1998), further discussed the scope of the disclaimer and the rights attached to it. While discussing the effects of infringement and passing off with respect to disclaimers, the court upheld the ruling of Ashok Chandra case, and essentially emphasized that the imposition of a disclaimer in a registration does not take away the rights of the owner to initiate an action of passing off against an infringer/ violator and secure a remedy under the common law, if the essential ingredients of passing off are actually being established.
4. Ramdev Food Products case
In the case of Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel and Ors. (2006), it was observed that if defendant’s mark is similar to plaintiff’s mark by way of font styles or colors, etc. only, then the case of passing off is maintainable; and while upholding the Ashok Chandra case, it was clarified that a disclaimer of non-exclusivity does not bar an action of passing off.
5. Parak Vanijya case
In another recent judgement of Parakh Vanijya Private Ltd. v. Baroma Agro Product and Ors. (2018), the suit of infringement and passing off was dismissed because the Court observed that the mark of the Petitioner had a disclaimer of non-exclusive use. Since the issue of passing off was not pressed in this case, the plaintiffs were not given any relief against the conflicting usage.
Concluding Remarks
Important takeaways from the above analysis are as follows:
(1) the disclaimers are essentially an undertaking from the proprietor that they renounce all claims to enforce trademark rights with respect to the disclaimed (generic, non-registrable) components;
(2) whilst the regulations around disclaimers have not been made part of the statutory provisions, but ‘imposing disclaimers’ is a significant practice of the authorities;
(3) a composite mark with or without disclaimed features will be taken as a whole while compared with other marks and the presence of a disclaimer should not be construed to mean that the proprietor has exclusive rights on the other non-disclaimed components; and
(4) it is well-settled through common law that a disclaimer in a trademark cannot prevent the owner from seeking remedies from courts against the actions of passing off.
These prepositions were also emphasized and upheld by the Madras High Court in the Patanjali Ayurveda case.
Contributed by Pankhuri Narula. Guidance by Aditi Verma Thakur.
[1] M/s Pathanjali Ayurved Limited v. Arudra Engineers Private Limited, O.S.A. No. 169 of 2020.
[2] This provision deals with the infringement of registered and well-known marks by their misuse specifically in relation to different products and services.
[3]The Registrar of Trade Marks v. Ashok Chandra Rakhit Ltd, AIR 1955 SC 558.
[4] The provision regarding ‘disclaimers’ as found in the Manual of Trade Marks is replicated as: Where the Examiner deems fit, he may impose a restriction on the proprietor with respect to his rights over certain words, and/or impose a condition stating “Registration of the trademark shall give no right to the exclusive use of the word………… appearing in the mark”.