SC-National Sewing Thread Co. Ltd. Vs James Chadwick and Bros. Ltd.

Eagle, Vulture, or Deception? Trade Mark Registration, Confusion and Appellate Procedure

An Analytical Study of National Sewing Thread Co. Ltd. v. James Chadwick & Bros. Ltd. — AIR 1953 SC 357

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

 

Introduction

The judgment of the Supreme Court of India in National Sewing Thread Co. Ltd. versus James Chadwick and Bros. Ltd. (with J. & P. Coats Ltd. as Assignee), decided on 7th May 1953, is one of the early and foundational pronouncements of the Supreme Court on the law of trade marks in independent India. Reported as AIR 1953 SC 357 and bearing the neutral citation MANU/SC/0063/1953, this decision addressed two distinct but equally important questions: one relating to court procedure and the right of appeal within the High Court system, and another touching upon the very heart of trade mark law, namely the standard to be applied when deciding whether a trade mark ought to be refused registration on the ground that it is likely to deceive purchasers or cause confusion in the market.

The case arose out of a dispute between two companies that manufactured and sold sewing thread — one an Indian company operating from South Arcot in the then Province of Madras, and the other a British company that had been exporting its products to India since 1896 under a well-known eagle device mark. The Indian company applied for registration of a bird device mark which had initially been described as an Eagle Brand but was later renamed Vulture Brand after objection. The Registrar of Trade Marks refused registration, a Single Judge of the Bombay High Court reversed that refusal, and a Division Bench of the Bombay High Court in turn restored the Registrar's order. The Supreme Court was then called upon to decide whether the Division Bench had the power to entertain that second appeal at all under clause 15 of the Letters Patent of the Bombay High Court, and if so, whether the Division Bench was correct in reversing the Single Judge and restoring the Registrar's refusal.

The importance of this case goes beyond the facts of the parties before the court. It settled the law on how appellate jurisdiction conferred by a special statute such as the Trade Marks Act, 1940, is to be treated within the framework of the established High Court system, overruling a contrary view of the Calcutta High Court in Indian Electric Works versus Registrar of Trade Marks, reported as MANU/WB/0016/1946 and AIR 1947 Cal 49. It also laid down a clear and enduring standard for assessing likelihood of confusion in trade mark registration disputes — the standard of the average man of ordinary intelligence — which continues to influence Indian trade mark law to this day.

 

Factual and Procedural Background

National Sewing Thread Co. Ltd., the appellant before the Supreme Court, was a limited liability company incorporated under the Indian Companies Act, 1913. Its registered office was at Chidambaram in the South Arcot District in the Province of Madras. The company was engaged in the business of manufacturing cotton sewing thread, which it sold in the Indian market.

James Chadwick and Bros. Ltd., the respondent, was a limited liability company registered under the English Companies Act, with its registered office at Eagley Mills, Bolton, in England. The company also manufactured sewing thread. One of its most prominent trade marks was a device consisting of an Eagle with outspread wings, popularly known as the Eagle Mark. This mark had been in use since at least 1896, when it was first advertised in the Calcutta Exchange Gazette of 5th June 1896. From that time onwards, sewing thread bearing the Eagle Mark was regularly imported into India and sold here on an extensive scale, acquiring considerable recognition among Indian consumers.

Around the year 1940, the appellant company began selling cotton sewing thread under a mark that featured the device of a bird with wings fully spread out, perched on a cylinder of cotton sewing thread. This mark also carried the words Eagle Brand and the name of the appellant company. The resemblance to the respondents' established Eagle Mark was apparent, and the respondents promptly objected. In response to the objection, the appellant substituted the words Vulture Brand in place of Eagle Brand. Apart from this change in the descriptive name, however, every other aspect of the mark remained identical. The bird device was unchanged; it was the same bird with the same posture, merely given a different label.

In 1942, the appellant applied to the Registrar of Trade Marks at Bombay for registration of this amended mark as a trade mark in Class 23, which covers cotton sewing thread. The appellant claimed that the mark had been in use by them since the year 1939. The respondents filed a notice of opposition to this application under Section 15(2) read with Rule 30 of the Trade Marks Act, 1940. Separate from the registration proceedings, the respondents also initiated a passing off action in the District Court of South Arcot against the appellant, seeking to restrain the appellant from using a mark so similar to their Eagle Mark. However, this passing off action failed. The District Court found that the evidence placed on record by the respondents was meagre and that they had not proved that there was any real probability of purchasers exercising ordinary caution being deceived into buying the defendants' goods under the impression that they were the plaintiffs' goods. The respondents' civil remedy through the courts had thus not succeeded.

Turning back to the registration proceedings, the Registrar of Trade Marks passed his order on 2nd September 1949, allowing the respondents' opposition and rejecting the appellant's application for registration. The Registrar concluded that the appellant's mark so nearly resembled the mark of the respondents as to be likely to deceive or cause confusion. He also held that calling the bird in the mark a Vulture when the device was actually that of an Eagle was in itself misleading and liable to cause confusion.

Aggrieved by the Registrar's order, the appellant preferred an appeal to the Bombay High Court under Section 76 of the Trade Marks Act, 1940. The appeal was heard by Mr. Justice S. C. Shah sitting as a Single Judge. Justice Shah allowed the appeal, set aside the order of the Registrar, and directed the Registrar to register the appellant's mark as a trade mark. The respondents were not willing to accept this outcome and preferred a further appeal against the judgment of Justice Shah under Clause 15 of the Letters Patent of the Bombay High Court, which provided for appeals from the judgment of a single judge to a Division Bench of the High Court. The Division Bench allowed this appeal, reversed the judgment of Justice Shah, and restored the original order of the Registrar refusing registration. It was against this judgment of the Division Bench that the appellant filed the present appeal before the Supreme Court of India on a certificate under Section 109(c) of the Code of Civil Procedure, 1908.

 

The Dispute

The dispute before the Supreme Court had two dimensions, each distinct and important in its own right.

The first and more procedural question was whether the Division Bench of the Bombay High Court had the jurisdiction and the authority to entertain an appeal from the judgment of Mr. Justice Shah. The appellant's case was that the appeal before the High Court had been filed under Section 76 of the Trade Marks Act, 1940, which simply conferred a right of appeal to the High Court from any decision of the Registrar without saying anything further about how that appeal should proceed within the High Court. The argument was that since the Trade Marks Act was a special statute that had created its own regime for trade mark registration, Clause 15 of the Letters Patent of the Bombay High Court — which provided for appeals from single judge decisions to a Division Bench — could not be applied to judgments delivered in the exercise of appellate jurisdiction conferred by this special statute. The appellants also argued that Clause 15 of the Letters Patent required the single judge's decision to have been delivered pursuant to Section 108 of the Government of India Act, 1915, which dealt with the High Court's power to make rules for the exercise of its jurisdiction. They contended that a judgment in a trade mark appeal under Section 76 of the Trade Marks Act could not be said to have been delivered pursuant to Section 108 of the Government of India Act. In support of these arguments the appellant relied on the Calcutta High Court's decision in Indian Electric Works versus Registrar of Trade Marks, MANU/WB/0016/1946, which had taken the view that a Letters Patent appeal did not lie from a single judge decision in a Trade Marks Act appeal.

The second dispute was about the merits — whether the Registrar was right in refusing to register the appellant's Vulture Brand mark on the ground that it was likely to deceive purchasers or cause confusion, and whether the Division Bench was right in restoring the Registrar's order. The appellant argued that the Madras High Court's finding in the earlier passing off action — namely, that the respondents had failed to prove that buyers would be deceived — should be treated as a conclusive finding on the question of confusion that would bind the Registrar's proceedings as well. The respondents contended that the two proceedings were legally distinct, that the standards applied in a passing off action and in a registration opposition are different, and that the Registrar's independent conclusion of likely confusion was fully justified.

 

Reasoning and Analysis of the Court

The Supreme Court, speaking through Justice Mehr Chand Mahajan with Justices Vivian Bose and B. Jagannadhadas concurring, addressed the two questions in turn, providing elaborate and carefully reasoned answers to each.

On the Procedural Question: Was the Division Bench Appeal Competent?

The Court began with the jurisdictional question. It referred to the well-settled rule of law, articulated by Viscount Haldane L.C. in National Telephone Co. Ltd. versus Postmaster-General, reported in [1913] AC 546, that when a statute directs that an appeal shall lie to a court already established, that appeal must be regulated by the practice and procedure of that court, and any general right of appeal from the decisions of that court likewise attaches. This principle was further affirmed by the Privy Council in R.M.A.R.A. Adaikappa Chettiar versus Ra. Chandrasekhara Thevar, reported in (1947) 74 Indian Appeals 264, and in Secretary of State for India versus Chellikani Rama Rao, reported in ILR (1916) Mad 617. The combined effect of these decisions was that when a special statute confers appellate jurisdiction on an established High Court without more, the High Court exercises that jurisdiction in the same manner as it exercises its ordinary appellate jurisdiction, with all the attendant procedural incidents including the right of appeal from a single judge to a Division Bench.

Applying this principle, the Supreme Court held that Section 76 of the Trade Marks Act, 1940, having conferred a right of appeal to the High Court without prescribing any special procedure, the High Court was seized of that appellate jurisdiction in its ordinary capacity. Once the High Court exercised that jurisdiction through a single judge, the judgment of that single judge became subject to appeal to the Division Bench under Clause 15 of the Letters Patent of the Bombay High Court, just as any other single judge decision would be. There was nothing in the Trade Marks Act that expressly or by necessary implication excluded the operation of Clause 15 of the Letters Patent.

On the argument about Section 108 of the Government of India Act, 1915, the Court held that Section 108 was an enabling enactment that conferred on the High Courts the power to make rules for the exercise of their jurisdiction by single judges or by Division Courts. This power was not frozen or limited to the jurisdiction that the High Court possessed when the Government of India Act, 1915, came into force. The words of Section 108 — 'original and appellate jurisdiction vested in the Court' — could not be read as meaning only the jurisdiction then vested. The power was dynamic and covered all jurisdiction that the High Court might exercise from time to time, including jurisdiction conferred by subsequent legislation such as the Trade Marks Act, 1940. The Court further held that when Article 225 of the Constitution of India replaced Section 108 of the Government of India Act, 1915, the same power continued and was reaffirmed. The reference to Section 108 in Clause 15 of the Letters Patent had to be read as a reference to the corresponding provisions in the later statutes, following the canon of construction recognised in Section 38 of the Interpretation Act and Section 8 of the General Clauses Act.

Having analysed the Calcutta High Court's judgment in Indian Electric Works versus Registrar of Trade Marks, MANU/WB/0016/1946, the Supreme Court expressed its disagreement with that decision in clear and direct terms. The Calcutta High Court had held that the appellate jurisdiction of the Calcutta High Court under Clause 16 of its Letters Patent was limited and fixed, covering only those appeals that related to jurisdiction existing at the time of the Letters Patent or under Acts passed until 1865, and that jurisdiction conferred by a later statute such as the Trade Marks Act created a separate new jurisdiction not governed by the ordinary Letters Patent appeal provisions. The Supreme Court found this reasoning to be based on a two-fold error. First, it failed to give effect to Clause 44 of the Calcutta Letters Patent, which expressly preserved the power of the Indian legislature to modify the appellate jurisdiction of the High Court. Second, it read Section 108 of the Government of India Act, 1915, too narrowly, treating it as limited to jurisdiction existing at the commencement of that Act. The Supreme Court overruled Indian Electric Works versus Registrar of Trade Marks, MANU/WB/0016/1946, holding that the Calcutta High Court's decision was wrong and had given too narrow and restricted a construction to the relevant provisions.

The Court also dismissed the argument that the Calcutta High Court's appellate jurisdiction was narrower than that of other High Courts such as the Patna, Lahore, Rangoon and Nagpur High Courts, whose Letters Patent expressly included future legislation within their appellate scope. The Supreme Court found it inconceivable that the oldest and most prominent High Court would have been given lesser powers than the newer ones, and held that Clause 44 of the Letters Patent of the Calcutta High Court served precisely the same purpose as the express provisions in the newer charters.

On the Merits: Was the Mark Likely to Deceive or Cause Confusion?

Turning to the substantive merits, the Supreme Court examined Section 8 of the Trade Marks Act, 1940. The relevant part of that section read: 'No trade mark nor part of a trade mark shall be registered which consists of, or contains, any scandalous design, or any matter the use of which would by reason of its being likely to deceive or to cause confusion or otherwise, be disentitled to protection in a court of justice.' The Court noted that under this section, the Registrar has to refuse registration of a mark that is likely to deceive or cause confusion entirely independently of whether the mark is identical or closely similar to any other registered trade mark. The assessment is not merely a comparison of two marks side by side; it requires the Registrar to look at all the circumstances of the case and arrive at a conclusion about the likely reaction of purchasers to the mark in question.

The Court laid down clearly that the burden of proving that a mark is not likely to deceive or cause confusion lies on the applicant for registration. It is the applicant who must satisfy the Registrar that his mark does not fall within the prohibition of Section 8. The test to be applied in deciding likelihood of deception or confusion is not the reaction of a particularly careful, sophisticated or expert buyer. Rather, the Court held that the relevant standard is how a purchaser who must be looked upon as an average man of ordinary intelligence would react to the particular trade mark — what association he would form by looking at it, and in what respect he would connect the mark with the goods he is purchasing. This formulation became one of the standard articulations of the consumer test in Indian trade mark law.

Applying this test to the facts, the Court noted that the goods sold under the respondents' Eagle Mark were well known in the Indian market and were commonly asked for by customers using the words 'Eagley' or 'Eagle'. The particular and distinctive feature of the respondents' mark that had become associated in the mind of the purchasing public with the respondents' goods was the representation of an eagle. The critical question was therefore whether the bird device in the appellant's Vulture Brand mark was likely to be mistaken by an average man of ordinary intelligence for an eagle. The Court's answer was unequivocal: yes. An average buyer of ordinary intelligence looking at the appellant's bird device would most naturally and readily mistake it for an eagle. And if such a buyer had asked for Eagle goods and received goods bearing the appellant's bird device mark, it was not likely that he would reject them on the ground that the bird on the packaging was not an eagle.

The Court then turned to what it clearly regarded as the most telling fact in the case. Two years before the application for registration was filed, the appellant company itself had described the very same bird as an Eagle and had called the brand Eagle Brand. It was only after the respondents' objection that the appellant renamed the bird a Vulture. The Supreme Court found this explanation — that the original use of Eagle Brand was an honest mistake — impossible to accept. A company does not spontaneously and innocently call a bird an Eagle, only to later discover it was actually a Vulture. The Court observed with some sharpness that the appellant had simply camouflaged an Eagle into a Vulture by the act of calling it such, while leaving the device itself entirely unchanged. Looking at the bird in the appellant's mark, the Court found that it did not in any way represent a vulture or look like a vulture of any form or shape. The bird was, in substance and in visual impression, an eagle seated in a different posture. This deliberate renaming while retaining the identical device could only have one purpose — to continue to trade on the association of the eagle device with the respondents' goods while escaping a direct objection on identity of name.

Finally, the Court addressed the appellant's argument that the Madras High Court's decision in the passing off action — finding that the respondents had not proved likelihood of deception — should operate as a conclusive determination of the question of confusion in the registration proceedings. The Court rejected this argument firmly. It held that the considerations relevant in a passing off action are somewhat different from those applicable in registration proceedings under the Trade Marks Act. In a passing off action, the burden is on the plaintiff to prove on the evidence placed before the court that the defendant's goods are likely to be passed off as the plaintiff's goods. The Madras High Court had found the evidence placed by the respondents in that action to be meagre and insufficient for that purpose. The registration proceedings, on the other hand, require the Registrar to form an independent judgment under Section 8 of the Trade Marks Act on whether the mark applied for is likely to deceive or cause confusion, assessed from the perspective of the average purchaser and in light of all the circumstances. The failure of a passing off action for want of evidence cannot conclude this statutory inquiry against the opponent. The two proceedings are legally and evidentially independent.

 

Final Decision of the Court

The Supreme Court, by its judgment delivered on 7th May 1953, dismissed the appeal filed by National Sewing Thread Co. Ltd. with costs. The Court upheld both the procedural and substantive rulings of the Division Bench of the Bombay High Court. On the procedural question, it held that the Division Bench was fully competent to entertain the Letters Patent appeal from the judgment of Mr. Justice Shah, since Section 76 of the Trade Marks Act having conferred appellate jurisdiction on the Bombay High Court without more, all the procedural incidents of that Court including Clause 15 of its Letters Patent applied to judgments delivered in exercise of that jurisdiction. On the merits, the Court affirmed the restoration of the Registrar's order refusing registration of the appellant's Vulture Brand mark, holding that the appellant had failed to discharge the burden of showing that its mark was not likely to deceive or cause confusion in the minds of average purchasers. The Calcutta High Court's judgment in Indian Electric Works versus Registrar of Trade Marks, MANU/WB/0016/1946, was expressly overruled.

 

Points of Law Settled in the Case

This judgment settled several important principles of law that have endured in Indian jurisprudence for over seven decades. The first and perhaps procedurally most significant principle concerns the relationship between special statutory appellate jurisdiction conferred on a High Court and the ordinary procedural framework of that Court. The Supreme Court settled that when a special statute confers a right of appeal to a High Court without specifying any special procedure, that appeal is governed by the ordinary rules and procedure of the High Court including all rights of further appeal available under the Court's charter such as the Letters Patent. A special statute does not, merely by conferring jurisdiction, create a self-contained procedural regime isolated from the court's general appellate structure.

The second principle concerns the scope of Section 108 of the Government of India Act, 1915, and its successors including Article 225 of the Constitution of India. The Court held that the power of the High Court to make rules for the exercise of jurisdiction by single judges or Division Benches is not frozen to the jurisdiction existing at the time of a particular statute's enactment. It is a continuing and flexible power that applies to all jurisdiction vested in the High Court from time to time, whether existing or subsequently conferred.

Third, the Court overruled the Calcutta High Court's decision in Indian Electric Works versus Registrar of Trade Marks, MANU/WB/0016/1946, which had held that a Letters Patent appeal did not lie from a single judge decision in a trade mark registration appeal. This clarification brought uniformity in the understanding of appellate procedure in trade mark matters across the High Courts of India.

Fourth, on trade mark law, the Court settled the standard for assessing likelihood of deception or confusion under Section 8 of the Trade Marks Act, 1940. The relevant test is the reaction of the average man of ordinary intelligence — neither an expert nor a particularly careless person — to the mark in question. The Registrar must assess what mental association the average consumer would form when he sees the mark and how he would connect it with the goods he intends to purchase.

Fifth, the Court made clear that the burden of proving that a mark is not likely to deceive or cause confusion rests on the applicant for registration, not on the opponent. It is for the applicant to satisfy the Registrar that his mark does not fall within the statutory prohibition.

Sixth, the Court confirmed that the assessment of likelihood of confusion or deception in registration proceedings under the Trade Marks Act is independent of and not concluded by findings made in a passing off action between the same parties. The two proceedings operate under different standards, with different burdens of proof, and a result in one does not govern the outcome in the other.

Seventh, the Court laid down that a person who deliberately changes only the name of a device while retaining the identical visual impression in order to escape an objection cannot claim that the resulting mark is free of confusion. If the device itself conveys the same idea as the mark objected to, calling it by a different name is merely a cosmetic exercise and does not address the likelihood of confusion.

 

Case Details

Title: National Sewing Thread Co. Ltd. Vs James Chadwick and Bros. Ltd.

Date of Order: 7th May 1953

Case Number: Appeal under Section 109(c) of the Code of Civil Procedure, 1908 (Civil Appeal before the Supreme Court of India)

Neutral Citation: MANU/SC/0063/1953

Equivalent Citations: AIR 1953 SC 357; 1954 (56) BomLR 21; (1953) II MLJ 215 (SC); [1953] 4 SCR 1028

Court: Supreme Court of India

Hon'ble Judges: Hon'ble Mr. Justice Mehr Chand Mahajan, Hon'ble Mr. Justice Vivian Bose, and Hon'ble Mr. Justice B. Jagannadhadas

Acts and Provisions Discussed: Trade Marks Act, 1940 — Sections 8 and 76; Constitution of India — Article 225; Government of India Act, 1915 — Section 108; Code of Civil Procedure, 1908 — Section 109; Clause 15 of the Letters Patent of the Bombay High Court

Cases Referred: National Telephone Co. Ltd. versus Postmaster-General [1913] AC 546; R.M.A.R.A. Adaikappa Chettiar versus Ra. Chandrasekhara Thevar (1947) 74 IA 264; Secretary of State for India versus Chellikani Rama Rao ILR (1916) Mad 617; Secretary of State versus Mask and Co. 67 IA 222 (Gurdwara Case: 63 IA 180)

Case Overruled: Indian Electric Works versus Registrar of Trade Marks [MANU/WB/0016/1946; AIR 1947 Cal 49]

 

Disclaimer: Readers are advised not to treat this as substitute for legal advise 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

 

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Headnote

The Supreme Court of India, by its judgment dated 7th May 1953 in National Sewing Thread Co. Ltd. versus James Chadwick and Bros. Ltd. and Another, reported as AIR 1953 SC 357 and MANU/SC/0063/1953, dismissed an appeal challenging the refusal of the Registrar of Trade Marks to register the appellant's Vulture Brand mark for cotton sewing thread, and settled two important questions of law. On the procedural question, the Court held that when Section 76 of the Trade Marks Act, 1940, conferred a right of appeal to the High Court without prescribing any special procedure, the appeal to the High Court was governed by the ordinary practice and procedure of that Court and all procedural incidents including the right of a further appeal from a single judge to a Division Bench under Clause 15 of the Letters Patent of the Bombay High Court applied. Section 108 of the Government of India Act, 1915, and its successor Article 225 of the Constitution of India, conferred a continuing and flexible power on the High Court to make rules for the exercise of all its jurisdiction whether existing or subsequently conferred, and this power was not frozen at the date of the relevant statute. The Calcutta High Court's contrary decision in Indian Electric Works versus Registrar of Trade Marks, MANU/WB/0016/1946, was expressly overruled. On the merits, the Court held that under Section 8 of the Trade Marks Act, 1940, the Registrar must refuse registration of a mark likely to deceive or cause confusion, and the test to be applied is how an average man of ordinary intelligence would react to the mark — what association he would form and how he would connect the mark with the goods he is purchasing. The burden of proving the mark is not likely to deceive or cause confusion rests on the applicant. The Court found that the appellant's bird device, though renamed a Vulture, was in visual impression indistinguishable from an Eagle and was likely to deceive average purchasers familiar with the respondents' long-established Eagle Mark. The fact that the appellant's own company had originally described the identical bird as an Eagle and sold it under the name Eagle Brand before renaming it Vulture Brand on objection was treated as demonstrating an intent to trade on the respondents' goodwill. The Court further held that a finding in favour of the applicant in a passing off action on the ground of insufficient evidence does not conclude the question of likelihood of confusion in trade mark registration proceedings, as the two proceedings operate under different standards and burdens of proof. The appeal was dismissed with costs.