American Home Products Corporation Vs Mac Laboratories Private Limited:Permitted use by a registered user and Trademark Trafficking
Case Title:American Home Products Corporation Vs Mac Laboratories Private Limited & Anr.
Date of Order:30 September 1985
Case No.:Civil Appeal No. 2159 of 1969
Citation:1986 AIR 137, 1986 (1) SCC 465
Name of Court:Supreme Court of India
Name of Judge(s):Justice D.P. Madon and Justice Amarendra Nath Sen, H. J.
Introduction:The case of American Home Products Corporation vs Mac Laboratories Private Limited & Anr. is a landmark judgment in Indian Trademark law, addressing critical questions regarding the registration and usage of trademarks by foreign proprietors through registered users. It deals with whether a foreign proprietor of a trademark can register a mark with the sole intent of using it through a registered user, a crucial issue affecting multinational corporations operating in India.
The case also explores the doctrine of "trafficking in trademarks", analyzing whether permitting a trademark to be used by a registered user without the proprietor's own use constitutes trafficking, which is against the policy of the Indian trademark system.
Factual Background:American Home Products Corporation (AHP), a US-based company, was engaged in the manufacture and marketing of pharmaceutical products through its division Whitehall Laboratories.
AHP had a subsidiary relationship with an Indian company, Geoffrey Manners & Co. Ltd., in which it held 40% shareholding.
In 1956, AHP introduced an anti-histamine drug named ‘Dristan’ in the US and later obtained trademark registrations for ‘Dristan’ in various countries.
In 1957, AHP entered into a technical collaboration agreement with Geoffrey Manners, providing manufacturing formulae, technology, and exclusive licensing rights to produce and sell its pharmaceutical products, including ‘Dristan,’ in India.
On August 18, 1958, AHP filed an application to register ‘Dristan’ in India under the Trade Marks Act, 1940.
The trademark was registered on June 8, 1959.
On October 22, 1961, Geoffrey Manners launched ‘Dristan’ in India.
Meanwhile, Mac Laboratories applied for registration of the trademark ‘Tristine’ in 1960. AHP opposed this application on the grounds that ‘Tristine’ was deceptively similar to ‘Dristan.’ However, the Assistant Registrar ruled in favor of Mac Laboratories.
Procedural Background:
1. Mac Laboratories filed an application for rectification of the trade mark ‘Dristan,’ seeking its removal from the register.
2. The Registrar of Trade Marks dismissed the application.
3. Mac Laboratories appealed to the Calcutta High Court, which ruled in its favor, holding that AHP had no bona fide intention to use ‘Dristan’ itself and had not actually used it.
4. The Division Bench of the High Court affirmed the decision, leading AHP to file an appeal before the Supreme Court.
Issues Involved in the Case:
1. Can a proprietor of a trademark register it with the sole intent of using it through a registered user?
2. Whether the words "proposed to be used by him" under Section 18(1) of the Trade and Merchandise Marks Act, 1958, include a proposed use by a registered user?
3. Whether such a trademark registration amounts to "trafficking in trademarks"?
4. Whether there was a bona fide intention on the part of AHP to use the trademark ‘Dristan’?
5. Whether ‘Dristan’ was deceptively similar to ‘Bistan’ and ‘Tristine’?
Submission of the Parties:
Arguments by American Home Products Corporation (Appellant):
1. Legal Fiction Under Section 48(2) – The company argued that permitted use of a trademark by a registered user should be considered use by the proprietor.
2. Intention to Use – It contended that an intention to use through a registered user is a legitimate intention.
3. No Trafficking in Trademarks – AHP asserted that its agreement with Geoffrey Manners was genuine and not a case of selling trademark rights for profit.
4. Foreign Investment Restrictions – Given India's foreign investment policies, direct manufacturing by AHP was impossible, and collaboration with an Indian entity was the only viable way to use the trademark.
Arguments by Mac Laboratories (Respondent):
1. Proposed Use Must Be by Proprietor – It argued that Section 18(1) only allows registration when the applicant intends to use the mark itself or through agents and servants but not through a registered user.
2. Trafficking in Trademarks – Mac Laboratories claimed that AHP’s registration amounted to trademark trafficking because AHP had no real intention of using the mark itself.
3. Deceptive Similarity – It also contended that ‘Dristan’ was deceptively similar to ‘Bistan’ and ‘Tristine’, causing confusion in the market.
Discussion on Judgments Cited:
1. Pussy Galore Trademark Case (1967) RPC 265 – This English case held that registration of a trademark without an intent to use it constitutes trafficking, but the Supreme Court ruled that the Indian law was different.
2. Re American Greetings Corp.'s Application (1983) 2 All ER 609 – This case defined the requirement for a real trade connection between the registered proprietor and the registered user.
3. Batt’s Case (1898) 2 Ch. D 432 – The Supreme Court relied on this case to conclude that a bona fide intention to use the trademark through a registered user suffices.
Reasoning and Analysis of the Court:
1. Legal Fiction Applies – The Supreme Court held that Section 48(2) creates a legal fiction whereby use by a registered user is deemed to be use by the proprietor.
2. Intention to Use Through Registered User is Valid – The court ruled that the applicant need not personally use the trademark but can use it through a registered user.
3. No Trafficking in Trademarks – Since AHP had a real trade connection with Geoffrey Manners, there was no trafficking in the ‘Dristan’ trademark.
4. No Deceptive Similarity – The court held that ‘Dristan’ was not deceptively similar to ‘Bistan’ or ‘Tristine’.
5. Errors in High Court’s Judgment – The Supreme Court found that the Calcutta High Court misinterpreted Indian law by relying too much on English precedents.
Final Decision:
The Supreme Court reversed the High Court’s decision.
The trademark ‘Dristan’ was upheld, and Mac Laboratories’ rectification application was dismissed.
AHP’s right to use ‘Dristan’ through a registered user was validated.
Key Legal Principles Settled:
Permitted use by a registered user constitutes use by the proprietor under Indian law.
A proprietor can register a trademark with the intent to use it through a registered user.
"Trafficking in trademarks" applies only when there is no genuine trade connection between the proprietor and the registered user.
A trademark need not be personally used by the proprietor to remain valid.
A registered trademark cannot be removed solely due to non-use for a short duration.
This case remains a landmark ruling in Indian Trademark Law, shaping the legal framework for multinational companies seeking to register and protect trademarks in India.
Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi
