S. Syed Mohideen Vs P. Sulochana Bai: The Primacy of Prior User Rights in Trade Mark Law
Case Title:S. Syed Mohideen Vs P. Sulochana Bai
Date of Order:17 March 2015
Case No.:Civil Appeal No. 2758 of 2015 (Arising out of SLP (C) No. 12671 of 2014)
Citation:2015 (61) PTC 1 (SC)
Court:Supreme Court of India
Coram:Hon'ble Chief Justice H.L. Dattu and Hon'ble Justice A.K. Sikri
Introduction:The case of S. Syed Mohideen vs. P. Sulochana Bai is a landmark judgment on the doctrine of prior use and the interplay between statutory rights under the Trade Marks Act, 1999, and common law rights. The Supreme Court examined whether a later registered proprietor could claim exclusive rights over a trademark despite the existence of a prior user with an established reputation. The ruling reinforced the principle that statutory rights conferred by registration do not override common law rights acquired through continuous and extensive use. The decision also emphasized that a registered proprietor cannot claim exclusivity against a prior user, even if both parties hold valid trademark registrations.
Factual Background:The respondent, P. Sulochana Bai, was the registered proprietor of the trademark "Iruttukadai Halwa." However, the business of selling halwa under this name was allegedly started by her father-in-law in the year 1900 in Tirunelveli, Tamil Nadu. Over the decades, the shop became synonymous with high-quality halwa and gained widespread recognition. The unique feature of the shop was that it operated only during specific hours in the evening, and its traditional method of preparation made it well-known across India and even internationally. Due to its reputation, the name "Iruttukadai Halwa" became closely associated with the plaintiff’s shop.
The appellant, S. Syed Mohideen, operated a halwa business under the name "Tirunelveli Iruttukadai Halwa." His father had earlier started a shop called "Raja Sweets" near Tirunelveli Railway Station, selling halwa and other sweets. Subsequently, the appellant opened another shop five kilometers from the respondent's store under the name "Nellai Raja Sweets." Eventually, he started using "Tirunelveli Iruttukadai Halwa" for his business, leading to confusion among consumers who believed the appellant's shop was connected to the respondent’s renowned establishment. The respondent sent a legal notice on 20 July 2007, demanding that the appellant cease using the name. The appellant refused, prompting the respondent to file a suit for declaration, permanent injunction, and rendition of accounts.
Procedural Background:The trial court ruled in favor of the respondent on 20 April 2011, holding that she was the prior user of the mark "Iruttukadai Halwa." The court granted a permanent injunction restraining the appellant from using the name. However, it denied the claim for rendition of accounts. The appellant challenged this decision before the Madras High Court, which upheld the trial court’s findings on 7 June 2013. The High Court reaffirmed that the respondent’s use of the mark dated back to 1900, making her the prior user with superior rights over the appellant. The appellant then approached the Supreme Court.
Issues Involved in the Case:The primary issue before the Supreme Court was whether the appellant, despite having obtained registration of the mark "Tirunelveli Iruttukadai Halwa" in 2008, could claim exclusive rights over the trademark against the respondent, who had been using the mark since 1900 but obtained formal registration in 2007. The Court also had to determine whether a prior user of a mark could claim rights superior to those of a registered proprietor under the Trade Marks Act, 1999.
Submission of the Parties:The respondent contended that she and her family had been using the mark "Iruttukadai Halwa" since 1900, long before the appellant began using "Tirunelveli Iruttukadai Halwa." She argued that her mark had gained distinctive character and widespread recognition, making it a household name. She asserted that the appellant’s use of a similar name created confusion and amounted to passing off. The respondent also relied on Section 34 of the Trade Marks Act, 1999, which protects the rights of a prior user.
The appellant countered that he had been in the halwa business for 40 years under the name "Raja Sweets" and had lawfully registered "Tirunelveli Iruttukadai Halwa" in 2008. He contended that since both parties had registered trademarks, the respondent could not claim infringement. He also argued that his shop was located five kilometers away from the respondent’s, and there was no likelihood of confusion. The appellant relied on his registration certificate under Section 25(2) of the Trade Marks Act, claiming that registration conferred exclusive rights to use the trademark.
Discussion on Judgments Cited and Their Context in This Case:The Supreme Court referred to several precedents while analyzing the legal principles involved.
In N.R. Dongre & Ors. v. Whirlpool Corporation & Anr., (1996) 5 SCC 714, the Supreme Court held that prior use of a trademark grants superior rights over subsequent registrations. The Court reiterated that even if a trademark is registered, it does not override the rights of a prior user.
In Reckitt & Colman Products Ltd. v. Borden Inc., (1990) 1 All ER 873, the House of Lords laid down the "classical trinity" for passing-off actions, which includes goodwill, misrepresentation, and damage. The Supreme Court applied this principle, holding that the respondent’s goodwill in "Iruttukadai Halwa" was well-established, and the appellant’s use of "Tirunelveli Iruttukadai Halwa" amounted to misrepresentation, potentially causing damage.
The Court also relied on Laxmikant V. Patel v. Chetanbhat Shah & Anr., (2002) 3 SCC 65, which reaffirmed that common law rights of passing off are independent of statutory rights under the Trade Marks Act.
Reasoning and Analysis of the Judge:The Supreme Court held that the doctrine of prior use is well-established in trademark law and is codified under Section 34 of the Trade Marks Act, 1999. The Court reasoned that while both parties held valid registrations, the appellant could not claim exclusive rights against the respondent, who had been using the mark for over a century. The Court clarified that the rights conferred by registration under Section 28(3) of the Act are not absolute and are subject to common law rights of passing off. The Court observed that trademark registration merely recognizes pre-existing rights and does not create new rights.
The Court rejected the appellant’s contention that registration granted him exclusivity, emphasizing that statutory rights under the Trade Marks Act are subject to the rights of prior users. The Court concluded that allowing the appellant to use "Tirunelveli Iruttukadai Halwa" would deceive the public and unfairly encroach upon the respondent’s goodwill and reputation.
Final Decision:The Supreme Court dismissed the appeal and upheld the decisions of the trial court and the High Court. It granted a permanent injunction restraining the appellant from using "Tirunelveli Iruttukadai Halwa" and ordered him to pay Rs. 50,000 in costs to the respondent.
Law Settled in This Case:The doctrine of prior use prevails over trademark registration, granting superior rights to the first user. The statutory rights conferred by trademark registration under Section 28 of the Trade Marks Act, 1999, are subject to common law rights under Section 27(2). Registration does not create new rights but merely recognizes pre-existing rights acquired through use. Even if two parties hold trademark registrations, one cannot claim exclusivity over the other if the latter is a prior user. A passing-off action can succeed even if the defendant has a registered trademark, as goodwill and reputation take precedence over formal registration.
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Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi
