Introduction
The Supreme Court’s decision in K. Narayanan and Another v. S. Murali is an important judgment in Indian trademark and passing off jurisprudence concerning the concept of territorial jurisdiction and the circumstances in which a cause of action arises in a passing off suit. The case addressed a recurring question faced by businesses and intellectual property practitioners: whether the mere filing of an application for registration of a trademark before the Trade Marks Registry can itself constitute a cause of action enabling a party to institute a passing off action in a particular court.
The judgment assumes considerable significance because trademark disputes frequently involve parties operating in multiple jurisdictions and filing trademark applications in different trademark registries across India. The Supreme Court clarified the distinction between the filing of a trademark application and actual commercial use of a mark in the marketplace. In doing so, the Court reaffirmed the essential ingredients of a passing off action and explained that trademark registration proceedings and passing off remedies operate in different spheres.
The ruling remains relevant for trademark proprietors, businesses, intellectual property lawyers, brand owners, and courts dealing with questions of jurisdiction, passing off, and trademark registration. It underscores that passing off is fundamentally based on misrepresentation and commercial activity, not merely on administrative acts such as filing trademark applications.
Factual and Procedural Background
The appellants were engaged in the business of manufacturing and selling banana chips under the trademark “A-ONE.” According to them, they had adopted and used the mark since 1986 in relation to Banana chips. On 6 December 1999, the appellants filed an application before the Trade Marks Registry at Chennai seeking registration of the trademark “A-ONE” in respect of banana chips. At the time of the litigation, the application remained pending and registration had not been granted.
Subsequently, on 24 January 2000, the respondent filed three trademark applications bearing Nos. 899359, 899360, and 899361 before the Trade Marks Registry at Chennai for registration of the mark “A-ONE.” In those applications, the respondent claimed user rights throughout India since 1995.
Meanwhile, on 7 February 2000, the respondent instituted a suit before the District Judge, Coimbatore, seeking an injunction against the appellants from passing off their goods under the mark “A-ONE.” That suit was ultimately dismissed on 23 December 2001.
Thereafter, on 22 May 2001, the appellants instituted Civil Suit No. 482 of 2001 before the Madras High Court seeking an injunction restraining the respondent from passing off his goods under the trademark “A-ONE.” The appellants obtained leave to institute the suit from the High Court on 11 June 2001.
However, on 6 March 2002, the learned Single Judge dismissed the injunction application and revoked the leave earlier granted for instituting the suit. The appellants challenged that order before a Division Bench of the Madras High Court. The Division Bench dismissed the appeals on 18 April 2002, relying upon its earlier decision in Premier Distilleries Pvt. Ltd. v. Sushi Distilleries.Aggrieved by the dismissal of their appeals, the appellants approached the Supreme Court by way of Civil Appeals Nos. 4480-4481 of 2002.
Dispute Before the Court
The principal issue before the Supreme Court was whether the mere filing of a trademark application before the Trade Marks Registry at Chennai constituted a part of the cause of action for a passing off suit and thereby conferred territorial jurisdiction upon the Madras High Court.
The appellants argued that the respondent’s trademark applications claiming user rights throughout India, including Chennai, amounted to a threat affecting their business interests. According to them, such claims created a cause of action within the jurisdiction of the Madras High Court. They relied upon earlier decisions, including Jawahar Engineering Company v. Jawahar Engineers Pvt. Ltd., 1983 PTC 207, to contend that a threatened invasion of rights could justify the grant of injunctive relief even before actual damage occurred.
The respondent, on the other hand, contended that both parties were carrying on business in Coimbatore and that the goods were sold there. It was argued that mere filing of a trademark application at Chennai did not amount to misrepresentation in the course of trade and therefore could not give rise to a passing off action. The respondent further maintained that passing off requires actual commercial conduct causing deception or confusion, which was entirely absent in the present case.
The Court therefore had to determine whether the filing of a trademark application, without more, could form part of the cause of action for a passing off suit.
Reasoning and Analysis of the Court
The Supreme Court commenced its analysis by examining the relevant provisions of the Trade and Merchandise Marks Act, 1958, particularly Sections 18(1) and 28. Section 18(1) permits any person claiming to be the proprietor of a trademark used or proposed to be used by him to apply for registration. Section 28 confers exclusive rights upon a registered proprietor and provides the statutory basis for an infringement action.
The Court observed that registration and application for registration are fundamentally different concepts. An application merely initiates the administrative process of registration and does not by itself confer proprietary rights capable of enforcement through infringement proceedings. The Court emphasized that until registration is granted, no right arises to assert infringement of a trademark.
A central aspect of the Court’s reasoning was the nature of a passing off action. The Court relied upon its earlier decision in Wander Ltd. and Another v. Antox India P. Ltd., 1990 Supp SCC 727, where passing off was described as a species of unfair trade competition involving deception, misrepresentation, and damage to another trader’s goodwill. The Court reiterated that passing off is essentially a tort founded upon misrepresentation made in the course of trade.
Applying these principles, the Court held that the mere filing of a trademark application does not amount to a misrepresentation in the marketplace. It does not involve any attempt to deceive consumers, injure another trader’s goodwill, or divert business. Therefore, filing an application for registration cannot by itself provide a cause of action for passing off.
The Court also relied heavily on its earlier decision in Dhodha House v. S.K. Maingi, (2006) 9 SCC 41. In that case, the Court had held that a cause of action arises when a registered trademark is used and not merely when an application for registration is filed. It further observed that publication of a trademark application in the Trade Marks Journal does not by itself confer territorial jurisdiction for a suit.
The Court noted that the reasoning in Dhodha House directly supported the respondent’s case. A person opposing registration has remedies available before the Registrar under the trademark registration framework. However, such registration proceedings do not automatically generate a cause of action for civil litigation.
The Court also approved the reasoning adopted by the Madras High Court in Premier Distilleries Pvt. Ltd. v. Sushi Distilleries, 2001 (3) CTC 652, where it was held that the cause of action in a passing off suit has nothing to do with the location of the Registrar’s office or the fact of filing a trademark application. The High Court had correctly observed that filing an application for registration is wholly unrelated to the essential elements of passing off and therefore cannot constitute part of the cause of action.
The appellants relied upon Jawahar Engineering Company v. Jawahar Engineers Pvt. Ltd., 1983 PTC 207, arguing that a threatened invasion of rights could justify legal action. The Supreme Court found the reliance misplaced. It accepted the respondent’s submission that the Jawahar Engineering case concerned a registered trademark and a threatened infringement action, whereas the present dispute involved an unregistered mark and a passing off claim. The legal principles governing the two situations were materially different.
The Court concluded that the filing of a trademark application neither constitutes use of the trademark in commerce nor amounts to deceptive conduct capable of supporting a passing off claim. Consequently, the Madras High Court lacked jurisdiction merely because the trademark applications had been filed before the Chennai Trade Marks Registry.
Final Decision of the Court
The Supreme Court dismissed the appeals and affirmed the judgment of the Division Bench of the Madras High Court.
The Court held that the filing of an application for registration of a trademark does not constitute a part of the cause of action in a passing off suit. It further ruled that the appellants could not maintain a passing off action before the Madras High Court solely on the basis of the respondent’s trademark applications filed at the Chennai Trade Marks Registry. Since the essential ingredients of a passing off action were absent, no territorial jurisdiction could be founded upon the filing of those applications.
Accordingly, the appeals were dismissed and the impugned judgment was upheld without any order as to costs.
Point of Law Settled
The judgment firmly establishes that the mere filing of a trademark application before the Trade Marks Registry does not constitute a part of the cause of action in a passing off suit.
The Supreme Court clarified that passing off is based upon commercial misrepresentation, deception, and injury to goodwill. Unless there is actual use or threatened use of a mark in trade resulting in confusion or deception, a passing off action cannot be sustained merely on the basis of trademark registration proceedings.
The decision also settles that territorial jurisdiction in passing off actions cannot be founded solely upon the location of the Trade Marks Registry where an application has been filed. Jurisdiction must arise from acts constituting passing off, such as sale, marketing, or commercial use of goods within the territorial limits of the court concerned.
The ruling continues to be an important precedent on trademark jurisdiction, passing off actions, and the distinction between registration proceedings and civil enforcement remedies.
Title of the Case: K. Narayanan and Another Vs. S. Murali
Date of Judgment/Order: 05 August 2008
Case Number: Civil Appeal Nos. 4480-4481 of 2002
Citations: AIR 2008 SC 3216; (2008) 10 SCC 479
Name of Court: Supreme Court of India
Name of Hon'ble Judge: Justice Tarun Chatterjee and Justice H.S. Bedi
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
Disclaimer: Images used herein do not reflect actual images used in Judgement and that the same are for illustrative purpose only. Readers are advised not to treat this as substitute for legal advice as it may contain errors in perception, interpretation, and presentation.
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Headnote of the Judgment
K. Narayanan and Another v. S. Murali, Supreme Court of India, Civil Appeal Nos. 4480-4481 of 2002, decided on 05.08.2008. The appellants sought to maintain a passing off action before the Madras High Court on the basis that the respondent had filed trademark applications for the mark “A-ONE” before the Chennai Trade Marks Registry. The High Court revoked leave to sue and dismissed the proceedings. Affirming the High Court’s decision, the Supreme Court held that the mere filing of a trademark application does not constitute a part of the cause of action in a passing off suit. Passing off requires misrepresentation and commercial use capable of causing deception or injury to goodwill. Since the respondent’s trademark applications did not satisfy these requirements, no territorial jurisdiction could be founded on such filings. The appeals were accordingly dismissed.
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