Navaratna Trade Mark: When a Descriptive Word Acquires Distinctiveness Through Long Use — The Supreme Court's Landmark Ruling
Introduction
In the realm of trade mark law, one of the most contested questions has always been whether a word that is descriptive in nature — one that describes the character or quality of goods — can ever become the exclusive property of one trader. The answer, as settled by the Supreme Court of India in the case of Kaviraj Pandit Durga Dutt Sharma versus Navaratna Pharmaceutical Laboratories, is a nuanced and qualified yes. This landmark judgment, reported as (1965) 1 SCR 737 and AIR 1965 SC 980, addressed two fundamental questions of trade mark law: first, whether a descriptive word used for a very long time can acquire sufficient distinctiveness to be validly registered as a trade mark, and second, what is the correct legal test to determine infringement of a registered trade mark as distinguished from the tort of passing off. These questions remain equally relevant today and this decision continues to be cited as authoritative on both points.
Factual and Procedural Background
The respondent, Navaratna Pharmaceutical Laboratories, was a firm carrying on business at Ernakulam in the manufacture and sale of medicinal preparations. The firm was originally founded in 1926 by one Dr Sarvothama Rao under the name "Navaratna Pharmacy." In January 1945, the name was changed to its present form — Navaratna Pharmaceutical Laboratories. From the very founding of the business, the proprietors used the word "Navaratna" on the medicinal products they manufactured and sold. As far back as December 1928, the word "Navaratna" and the trading name "Navaratna Pharmacy" were registered by a declaration of ownership before the Registrar of Assurances in Calcutta. When legislation substantially similar to the Indian Trade Marks Act, 1940 was enacted in the State of Cochin under the Cochin Trade Marks Act 19 of 1119 (1944), the respondent firm registered the word "Navaratna" as a trade mark for its medicinal preparations on January 31, 1947, and also registered the composite mark "Navaratna Pharmaceutical Laboratories" on February 17, 1948. The business of the respondent had been expanding steadily and the mark had been in continuous use from 1926 onwards.
The appellant, Kaviraj Pandit Durga Dutt Sharma, was carrying on business in the preparation of Ayurvedic pharmaceutical products at Jullundur City in East Punjab under the name "Navaratna Kalpa Pharmacy." He had been selling his medicines under the name "Navaratna Kalpa." In October 1946, he applied for registration of the words "Navaratna Kalpa" as a trade mark for his medicinal preparations. This application was advertised in April 1950. The respondent firm opposed the application on the ground that the word "Navaratna" was descriptive in nature and, having no distinctiveness, could not be registered. This objection prevailed and the registration was refused, setting in motion the chain of proceedings that eventually culminated before the Supreme Court.
On the procedural side, the appellant moved the Registrar of Trade Marks for removing from the register the trade mark "Navaratna" as well as the word "Navaratna" forming part of the composite mark "Navaratna Pharmaceutical Laboratories" belonging to the respondent. Around the same time, the respondent filed Civil Suit No. 233 of 1951 before the District Judge, Anjikaimal, seeking a permanent injunction restraining the appellant from advertising, selling, or offering for sale any preparations under a trade mark combining the word "Navaratna" or any similar word. Since the validity of the respondent's registered mark was directly in question in those proceedings, the Registrar of Trade Marks declined to proceed with the appellant's rectification application and directed the appellant to approach the High Court for rectification. The appellant accordingly filed Original Petition No. 19 of 1952 before the High Court of Travancore-Cochin praying for removal of the respondent's marks from the register.
The learned District Judge, who heard the original suit, returned concurrent findings on three issues. He held that the appellant was not guilty of passing off, because the packaging, get-up, and other features of the appellant's goods were clearly differentiated from those of the respondent. He further held that the word "Navaratna" was a common word in Ayurvedic phraseology and that therefore the respondent could claim no exclusive title to that word alone. However, on the critical question of the composite mark "Navaratna Pharmaceutical Laboratories," the District Judge found that there was no evidence of any other person, firm, or concern using that trade name, and that uncontradicted evidence showed that this mark had been in use as a trade mark by the respondent for a very long time, exclusively denoting the goods of the respondent in the market. The District Judge held that since the mark had been used before February 25, 1937 and had acquired factual distinctiveness, it was registerable under the proviso to Section 6(3) of the Trade Marks Act, 1940. Accordingly, the respondent was granted a decree for an injunction confined to the composite trade mark "Navaratna Pharmaceutical Laboratories." The appellant appealed to the High Court, which heard the appeal together with the Original Petition filed for rectification. The High Court confirmed all findings of the District Judge and made a conforming order on the Original Petition. Both these orders were challenged before the Supreme Court by the appellant after obtaining special leave, giving rise to Civil Appeals Nos. 522 and 523 of 1962, which were decided on October 20, 1964.
The Dispute
At its heart, the dispute before the Supreme Court was about three interconnected questions. The first was whether the composite mark "Navaratna Pharmaceutical Laboratories" could at all be validly registered as a trade mark under the Trade Marks Act, 1940, given that the word "Navaratna" was allegedly a Sanskrit descriptive word for Ayurvedic preparations and "Pharmaceutical" and "Laboratories" were ordinary descriptive English words. The second was whether, even assuming the mark could not qualify for registration under the main provisions of Section 6(1) of the Act, it could still obtain registration by virtue of the proviso to Section 6(3) of the Act on the basis of long use before February 25, 1937, and acquired factual distinctiveness. The third was whether the appellant's mark "Navaratna Kalpa" or "Navaratna Kalpa Pharmacy" so nearly resembled the respondent's registered mark as to be likely to deceive or cause confusion in the course of trade, and if so whether infringement was made out.
Reasoning and Analysis of the Court
The judgment was delivered by Justice N. Rajagopala Ayyangar on behalf of a three-judge bench comprising Chief Justice P.B. Gajendragadkar and Justices J.C. Shah and N. Rajagopala Ayyangar.
On the Question of Registrability and Section 6 of the Trade Marks Act, 1940
The appellant's senior counsel Mr C.B. Agarwala vigorously argued before the Court that the composite mark "Navaratna Pharmaceutical Laboratories" could not be validly registered as a trade mark. He relied principally on Section 6 of the Trade Marks Act, 1940, which prescribed the essential qualifications for a registerable trade mark. Section 6(1) required that a trade mark must contain or consist of at least one of several listed essential particulars: the name of a company, individual, or firm represented in a special or particular manner; the signature of the applicant; one or more invented words; one or more words having no direct reference to the character or quality of the goods and not being a geographical name, surname, or name of a caste in India; or any other distinctive mark. Section 6(2) defined the expression "distinctive" as meaning adapted to distinguish goods with which the proprietor of the trade mark is connected in trade from goods with which no such connection subsists. Section 6(3) provided that in determining whether a trade mark was adapted to distinguish, the tribunal may have regard both to the inherent adaptability of the mark to distinguish and to whether, by reason of actual use, the mark had become so adapted.
The counsel placed special emphasis on clause (d) of Section 6(1), which excluded from registrability words "having a direct reference to the character or quality of the goods." He contended that "Navaratna" being a Sanskrit word describing Ayurvedic preparations of a particular composition was not capable of being treated as distinctive and therefore could not qualify for registration. He further argued that the addition of the words "Pharmaceutical" and "Laboratories," being common descriptive English words indicating a place where medicines are prepared, could not confer distinctiveness upon the composite mark either individually or in combination with "Navaratna."
The Court found great force in this submission when considered against the main provisions of Section 6(1) alone. The Court referred approvingly to the observation of Fry LJ in In re Dunn (6 RPC 379 at 386), where the learned judge spoke of the courts setting their faces against what he described as attempts to appropriate as private property certain little strips of the great open common of the English language. The Court also noted the observation of Lloyd-Jacob J in the matter of American Screw Coy's application (1959 RPC 344 at 346) that "direct reference corresponds in effect to aptness for normal description." On this analysis, the words "Pharmaceutical Laboratories" used in relation to medicinal preparations clearly had a direct reference to the character of the goods. The Court also drew support from the House of Lords decision in Yorkshire Copper Works Limited's Application for a Trade Mark — Yorkshire Copper Works Ltd. v. Registrar of Trade Marks (1954) 71 RPC 150, where Lord Simon, even while accepting that a geographical name had acquired 100 percent distinctiveness through use, refused registration, observing that the more apt a word is to describe the goods of a manufacturer, the less apt it is to distinguish them, since a word apt to describe the goods of A is likely also to describe similar goods of B. The Court accepted that if the matter rested solely on the terms of Section 6(1), the appellant's submissions would have great force and the respondent's mark may well not have qualified for registration.
On the Critical Question of the Proviso to Section 6(3) — Old Marks and Acquired Distinctiveness
The decisive battleground in the case was the interpretation of the proviso to Section 6(3) of the Trade Marks Act, 1940. This proviso stated that where a trade mark had been continuously used — either by the applicant for registration or by some predecessor in business, either in its original form or with additions or alterations not substantially affecting its identity — in relation to the goods for which registration was being sought, during a period from a date prior to February 25, 1937, to the date of application for registration, then the Registrar shall not refuse registration merely on the ground that the trade mark is not adapted to distinguish, and may accept evidence of acquired distinctiveness as entitling the mark to registration.
The appellant's counsel argued that this proviso really added nothing new to the law and did not create any different or lower standard of distinctiveness for old marks. The argument was that the word "distinctiveness" used in the proviso had to be understood in the same sense as defined in Section 6(2), namely as "adapted to distinguish," and that to determine whether a mark was "adapted to distinguish" one was thrown back to sub-sections (2) and (3), which included the provision in Section 6(1)(d) excluding descriptive words. In other words, the counsel argued that a mark which was prohibited from registration under Section 6(1)(d) because it had a direct reference to the character of the goods could not escape that prohibition merely by virtue of long use predating February 25, 1937.
The Court rejected this argument with considerable analytical clarity. It held that this construction would render the proviso entirely otiose — a mere redundancy adding nothing to the main section. The Court pointed out that it would not be a reasonable construction of any statute to say that a proviso, which in terms purports to create an exception and seeks to confer certain special rights on a particular class of cases included within it, should be held to be otiose and to have achieved nothing merely because the word "distinctiveness" used in it had been defined elsewhere. A construction leading old marks and new marks to be placed on exactly the same footing and subjected to identical tests for registrability could not be accepted. The Court further pointed out that the words "shall not refuse registration by reason only of the fact that the trade mark is not adapted to distinguish as aforesaid" in the proviso would become entirely meaningless if the learned counsel's argument were to prevail. The use of the words "as aforesaid" in the proviso takes one back to sub-section (3) and then to sub-section (2) and necessarily also to Section 6(1)(d), and the conclusion was inescapable that a mark not "adapted to distinguish" even by application of the tests in Section 6(1) could still qualify for registration if acquired distinctiveness through long use was established.
The Court also considered and declined to follow the view expressed by Mr S. Venkateswaran in his comments in Section 6(3) at pages 152-154 of his Treatise on Trade Marks Act, 1940 and the decision of the Calcutta High Court in the matter of India Electric Works Ltd. (49 Calcutta Weekly Notes page 425), which had been referred to in support of the appellant's construction. The Court found that the Calcutta decision was really concerned with whether the applicant had established factual acquired distinctiveness, and that the Registrar's finding that the applicant had failed to do so was simply affirmed. Proof of user alone was held in that case not to be ipso jure proof of acquired distinctiveness. The Court noted that the Allahabad High Court in Ram Rekhpal v. Amrit Dhara Pharmacy (AIR 1987 All 683) had without elaboration expressed the view that an old mark would qualify for registration under the proviso if there was evidence of acquired factual distinctiveness, which view was consistent with the conclusion the Supreme Court now reached. However, since the Allahabad decision contained no reasons, the Court omitted it from detailed consideration.
On the factual question, the Court found that both the District Judge and the High Court had concurrently recorded a finding of fact that the mark "Navaratna Pharmaceutical Laboratories" had, through long and continuous user from 1926 onwards, become exclusively associated in the market with the pharmaceutical products manufactured by the respondent. This finding of acquired factual distinctiveness was not capable of being challenged before the Supreme Court and was indeed not seriously attempted to be challenged. The Court accordingly held that the respondent's mark was rightly registered and that the respondent was entitled to protect that registration by seeking a perpetual injunction.
On the Distinction Between Infringement and Passing Off
One of the most important and enduring contributions of this judgment is the Court's analysis in paragraphs 28 and 29 of the nature of an action for infringement of a registered trade mark and how it differs from an action for passing off. The Court drew a sharp and clear distinction between the two causes of action.
The Court explained that an action for passing off is essentially a Common Law remedy and is in substance an action for deceit — a person passing off his own goods as the goods of another. In a passing off action, the physical differences in the get-up, packaging, label, and other features of the defendant's goods are highly material and may be sufficient to establish that there was no likelihood of confusion. Accordingly, the finding by the District Judge in this case that the appellant's goods were not likely to be confused with those of the respondent on account of differences in packaging and get-up was correct and relevant to the passing off claim.
However, the Court held, infringement of a registered trade mark is a statutory remedy conferred on the registered proprietor for the vindication of the exclusive right to use the trade mark in relation to the registered goods. The action for infringement is grounded in Section 21 of the Trade Marks Act, 1940. In such an action, where the marks of the plaintiff and defendant are so closely similar visually, phonetically or in the basic idea represented by the mark that the Court reaches a conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated. Crucially, if the essential features of the plaintiff's trade mark have been adopted by the defendant, the fact that the get-up, packing, and other matter on the goods or packets show marked differences, or clearly indicate a trade origin different from that of the registered proprietor, would be entirely immaterial in an infringement action. The defendant in an infringement action cannot escape liability simply by showing that the added matter on his packets is sufficient to distinguish his goods from those of the plaintiff.
In determining whether infringement was made out, the Court formulated the test of deceptive similarity at some length. The Court explained that where two marks are not identical, the plaintiff must establish that the defendant's mark so nearly resembles the registered trade mark as to be likely to deceive or cause confusion in relation to the goods for which it is registered. The resemblance may be phonetic, visual, or in the basic idea represented by the mark. The purpose of the comparison is to determine whether the essential features of the plaintiff's trade mark are found in the mark used by the defendant. The identification of the essential features of a mark is essentially a question of fact and depends on the judgment of the court based on evidence led before it regarding the usage of the trade. Importantly, the enquiry in ultimate analysis is whether the defendant's mark as a whole is deceptively similar to the registered mark of the plaintiff, and where common elements are included in the marks being compared, the proper course is to look at the marks as wholes and not to disregard the parts which are common — a principle drawn from Kerly on Trade Marks, 8th Edition at page 407.
Applying this test, the Court rejected the appellant's argument that since the courts below had found "Navaratna" to be a common descriptive word in the trade and the respondent could claim no exclusive rights to it, that word should be disregarded in comparing the two marks, leaving insufficient material to find infringement. The Court held that the appellant was not entitled to insist upon a disclaimer in regard to the word "Navaratna" in the respondent's composite mark, particularly since no such prayer was made before the courts below or before the Supreme Court. The trade mark to be compared was the entire registered mark "Navaratna Pharmaceutical Laboratories" including the word "Navaratna." The Court then affirmed the concurrent findings of both courts below that the appellant's mark "Navaratna Pharmacy" or "Navaratna Kalpa Pharmacy" was deceptively similar to the respondent's registered mark. The Court also noted this question of deceptive similarity is a question of fact unless the test employed for determining it suffers from error, and found no error in the principles applied by the courts below, citing Lord Watson's observation in Attorney-General for the Dominion of Canada v. Attorney-General for Ontario etc. (1897 AC 199).
On the question of whether the appellant was an honest concurrent user under Section 10(2) of the Act, the Court declined to entertain this argument as it had never been raised before any of the courts below and was being raised for the first time before the Supreme Court.
Final Decision
The Supreme Court dismissed both appeals with costs, awarding one set of hearing fees. The respondent's registered composite trade mark "Navaratna Pharmaceutical Laboratories" was upheld as validly registered on the basis of the proviso to Section 6(3) of the Trade Marks Act, 1940, having acquired factual distinctiveness through long and continuous use from 1926 onwards. The decree of permanent injunction granted by the District Judge and confirmed by the High Court restraining the appellant from using the mark was upheld.
Points of Law Settled in the Case
This judgment settled several significant points of trade mark law. First, it definitively established that a mark which is descriptive in nature and would ordinarily not qualify for registration under Section 6(1) of the Trade Marks Act, 1940, can nonetheless be validly registered if it has been in continuous use before February 25, 1937, and has acquired factual distinctiveness through such long use. The proviso to Section 6(3) creates a genuine and separate pathway for registration of old marks and is not rendered otiose by the general provisions of Section 6(1). Second, the Court laid down that proof of long user alone is not sufficient — what must be established is actual acquired factual distinctiveness, meaning that the mark has come to be exclusively identified in the market with the goods of the applicant for registration. Third, and perhaps most importantly for practical trade mark litigation, the Court drew a clear and lasting distinction between a suit for passing off and a suit for infringement of a registered trade mark, clarifying that in an infringement action differences in packaging, get-up, and other external features of the defendant's goods are largely irrelevant once the essential features of the plaintiff's registered mark are found in the defendant's mark, whereas such differences are highly material and may be decisive in a passing off action. Fourth, the Court held that when comparing marks for deceptive similarity, the marks must be compared as wholes and parts common to both marks cannot be disregarded in the comparison exercise.
Case Details
Title: Kaviraj Pandit Durga Dutt Sharma Vs. Navaratna Pharmaceutical Laboratories
Date of Order: October 20, 1964
Case Numbers: Civil Appeals Nos. 522 and 523 of 1962
Neutral Citation / Reported As: (1965) 1 SCR 737 ; AIR 1965 SC 980
Court: Supreme Court of India
Coram: The Hon'ble The Chief Justice P.B. Gajendragadkar; The Hon'ble Justice J.C. Shah; The Hon'ble Justice N. Rajagopala Ayyangar
Judgment delivered by: Justice N. Rajagopala Ayyangar
Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
Suggested SEO Titles
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- Can a Descriptive Trade Mark Be Registered? The Navaratna Pharmaceutical Case and the Law of Acquired Distinctiveness
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Headnote
Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories — (1965) 1 SCR 737 : AIR 1965 SC 980 — Supreme Court of India — Decided: October 20, 1964
Trade Marks — Registrability — Descriptive Mark — Acquired Distinctiveness — Old Mark — Proviso to Section 6(3) of the Trade Marks Act, 1940 — Infringement — Distinction from Passing Off — Deceptive Similarity
The respondent, a pharmaceutical firm operating since 1926, held registered trade marks for the word "Navaratna" and the composite mark "Navaratna Pharmaceutical Laboratories" under the Cochin Trade Marks Act and the Trade Marks Act, 1940. The appellant, using the mark "Navaratna Kalpa," challenged the validity of the respondent's registrations on the ground that "Navaratna" was a Sanskrit descriptive word for Ayurvedic preparations and "Pharmaceutical Laboratories" were ordinary English descriptive words, making the composite mark incapable of registration under Section 6(1) of the Act. Both courts below upheld the registrations and granted a permanent injunction.
Held, dismissing the appeals: (i) Although the composite mark "Navaratna Pharmaceutical Laboratories" would prima facie not qualify for registration under the main provisions of Section 6(1) of the Trade Marks Act, 1940 — since the constituent words had direct reference to the character and quality of the goods — the mark was validly registered by virtue of the proviso to Section 6(3) of the Act, which creates a distinct and operative pathway to registration for old marks in continuous use before February 25, 1937, on proof of acquired factual distinctiveness. (ii) The proviso to Section 6(3) is not rendered otiose by the general provisions of Section 6(1) and (2). A construction treating old marks and new marks on the same footing cannot be accepted. (iii) Concurrent findings of fact established that the mark had, through long user from 1926 onwards, become exclusively associated in the market with the goods of the respondent, thereby satisfying the requirement of acquired factual distinctiveness. Proof of user alone is not ipso jure proof of acquired distinctiveness; what must be established is actual market association. (iv) In an action for infringement of a registered trade mark, if the essential features of the plaintiff's registered mark have been adopted by the defendant, differences in the packaging, get-up, or other external matter of the defendant's goods are immaterial, unlike in a passing off action where such differences may negate the claim of deception. (v) In assessing deceptive similarity, marks must be compared as wholes; common elements cannot be disregarded. Whether infringement is made out is primarily a question of fact unless the test for comparison is erroneous.
