SHAHNAWAZ SULTAN ALI Versus SONY KABUSHIKI KAISHA

ORDER

1. During hearing of application under Order XXXIX, Rules 1 and 2, C.P.C., filed by the plaintiff in Suit No.722/1994, Mr. Khuwaja Mansoor, raised two preliminary legal objections, first: that the rectification application (J. Misc. 2/1995) be heard and secondly that till his rectification application for expunging the mark 'SONY' and 'SUNNY' from the Register of the Trade Mark is finally adjudicated, proceedings of the Suit No. 722/1994 be stayed.

2. The case of the plaintiff in Suit No.722/1994 is that the Trade Mark SONY is one of the world's most famous and well known trademark and is being consistently used in over 160 countries. That the said trade mark was also got registered in several countries by the plaintiff. That the abovesaid trade mark was also registered in class‑9 in Pakistan. That under section 21 of the Trade Marks Act, 1940, the plaintiff has the exclusive right to use the above marks SONY as well as SUNNY.

3. The plaintiff in Suit No.722/1994 has attempted to establish a claim that the mark SONY, command a valuable reputation and expectancy of the best quality of products and has become synonymous with the best quality and good services. That it is equally popular and stands for good quality all over .the world. That mark SUNNY is identical to the registered trade mark SONY and is visually and phonetically deceptively similar to the mark SONY. That the goods and business of the defendants are the same and that illegally and unauthorisedly the defendants have started manufacturing and supplying TV sets under the mark SUNNY and, therefore, defendant be permanently restrained from manufacturing, assembling, packing, selling .in any manner TV sets under the trade mark SONY or SUNNY. Rs.25,000,000 are also claimed by the plaintiffs as compensation/damages.

4. Applicant Shah Nawaz Ali, who is defendant No. 1, in the above suit, has filed application for the rectification under section 46 of the Trade Marks Act, 1940 (bearing J. Misc. Appln. No.2/1995). Facts of the applications are that the applicant since beginning of the year 1992 is carrying on the business of manufacturing TV sets under the trade mark SUNNY. In support of his contention, he has filed several documents ?o show that he is manufacturing TN,' sets and has also marketed the same throughout Pakistan, under the mark SUNNY. That the respondent (plaintiff in suit) has also obtained registration of the mark SUNNY in class‑9 on 13‑12‑1969 without having any bona fide intentions to use the said trade mark. That since this mark was never used by the respondents, therefore, it has no validity and is liable to be removed from the Register of Trade Marks, That the respondent has dishonestly filed a suit bearing S. No. 722/1994 for infringing and passing off. In view of these alleged facts the applicant has prayed for removal of the mark SUNNY from the Register of the Trade Mark No.52788 in Class‑3 and to award the same in favour of the applicant.

5. It is contended by Mr. Khuwaja Mansoor, Advocate, that since the rectification application (J. Misc. 2/1995) is ripe for hearing it must be heard first. He has further argued that in a proceedings filed for rectification of a mark under section 37 of the Trade Marks Act, 1940, the proceedings are concluded once a counter‑affidavit and rejoinder affidavit to the rectification application is filed. He has referred to sections 70 and 72 of the Trade Marks Act, 1940 (hereinafter referred to as the Act, 1940).

6. Section 70 of.the Act, 1940 provides that the Registrar shall have all powers of a Civil Court for the purposes of receiving evidence, administering oaths and forcing attendance of witnesses, compelling discovery and production of documents and issuing commission for examination of witnesses and that the evidence shall be given by affidavits. The Registrar is further authorised to take oral evidence in lieu of affidavit or in addition to such evidence by further affidavit. Neither any provision as to the conduct of a hearing is prescribed in the Revised Trade Mark Rules, 1963, nor any procedure which is to be adopted either by the Registrar or by the Tribunal for hearing of rectification application as in the instant case. However, section 70 (b) of Act, 1940, provides that the evidence shall be given by affidavits. In the instant case such stage has not reached. Filing of counter‑affidavit by the respondent, at the most can be treated as par with the written statement. Unless and until the Tribunal, or as the case may be the Registrar directs the parties for filing their evidence through affidavit, any affidavit, counter‑affidavit or rejoinder cannot be treated as evidence. Before treating any affidavit as a piece of evidence, it is the requirement of law that a party should be made aware that such affidavit is their full and final evidence. Similarly, the other‑side is also entitled to cross‑examine such deponent who has filed affidavit against his interest. In the present case, the learned counsel appearing for the respondent, Mr. HasanIrfan, has denied that his counter‑affidavit be treated as evidence. I am fortified in my view by the case of Hon'ble Supreme Court, namely, Ata Ullah Malik v. The Custodian, Evacuee Property, West Pakistan and Karachi and 5 others (PLD 1964 SC 236 at 258), where it was held:

" ----------It may be observed that every person against whom an affidavit is produced is entitled in the absence of special circumstances to have the deponent put in the witness‑box and to cross‑examine him ----------"

7. I may also refer to section 141 of C.P.C., which provides that the procedures in the Code of Civil Procedure in regard to suit shall be followed as far as it can be made applicable in all proceedings in any Court of civil jurisdiction. In this regard section 71 of Act, 1940 is very important which provides that in all proceedings under the Act, 1940 pending before the Federal Government, the evidence shall be given by the affidavit and if the Federal Government thinks fit it may take oral evidence or such evidence by affidavit in addition and shall have all the powers of a Civil Court, as referred in section 70 of the Act, Article 1(2) of Qanun‑e‑Shahadat, 1984, makes the said order applicable to all judicial proceedings before any Court including Court Martial. Tribunal or other authority, exercising judicial or quasi judicial powers or jurisdiction. A close scrutiny of Trade Marks Act, 1940 indicates that the proceedings for rectification of registered mark, either before the Registrar or High Court, are judicial proceedings and, therefore, Qanun‑e‑Shahadat, 1984 is fully applicable. The cumulative effect of all above‑quoted provisions of law made it clear that even in the proceedings for the rectification of a mark as of the present case (J. Misc. No.2/1995) it may sometime involve detailed investigation into the claims and counter‑claims of the parties in the same manner as of a full‑fledge trial of a suit. Section 37 of the Act, 1940 calls upon the person who has moved rectification application to show that the mark already registered was without any bona fide intention. In my humble view the requirement of subsections (a) and (b) of section 37(1) of Act, 1940 requires recording of evidence in order to ascertain due bona fides and mala fides of the parties. As a result of this discussion, I am of the considered view that the plea of Mr. Khuwaja Mansoor, Advocate, that the proceedings of the rectification application stand concluded and it is ripe for hearing, is untenable.

8. Mr. Khuwaja Mansoor, Advocate, has also referred to several reported cases and has strenuously contended that pending proceedings of rectification application the suit for perpetual injunction be stayed. In this connection he has referred to the cases of Pepsi Co. Inc. v. Express Bottler Services and another 1987 IPLR Volume 12 No. 2 page 71), General Electro Company, Trade Mark (1968 RPC 75), Gala of London Limited v. Chandler Limited and others (1991 FSR 2941), R.J. Renylod Tobacco Company Limited v. ITC Limited (1987, IPLR Volume 11 No. 4 page 180). The Indian judgments, referred by Mr. Khuwaja Mansoor, Advocate, are based on the provisions of section 111 of the Trade and Merchandise Marks Act, 1958, which provides for stay of suit till hearing of rectification application. There is no parallel or corresponding provisions in our Trade Marks Act, 1940. Therefore, the rule laid down by the Indian Courts are of no help to Mr. Khuwaja Mansoor, Advocate. Mr. Hasan Irfan, has referred to section 10 of the C.P.C. which provides for stay of the subsequent suit, instituted between the same parties before the Courts having like jurisdiction provided the matter in issue is directly and substantially an issue in the previously instituted suit. I am afraid that the rule of res subjudice is not attracted in the present circumstances as the cause of action for moving a rectification application is quite different from filing a suit for perpetual injunction.

9. On the other hand, Mr. Hasan Irfan, Advocate, while opposing arguments of the learned counsel for the applicant has referred to sections 21, 23 and 24 of the Act 1940. Section 21 gives exclusive right to the use of trade mark to its owner and that it shall be deemed to be infringed if any person, who not being the proprietor of such mark, uses thereof, a mark identical with it or so nearly resembling it or to be likely to justify or cause confusion. Section 23 provides that in all proceedings relating to a trade mark the registration of a mark shall be prima facie evidence of the validity of the original registration.

Section 24 provides that seven years after expiry of the registration of trade mark it shall be taken to be valid in all respect unless such registration was obtained by fraud. Mr. Hasan Irfan, has also referred to the cases of Jamshed Aslam Khan v. Azra Jawed and 2 others (1995 CLC 436), J.N. Nicholas and another v. Mehran Bottler (Pvt.) Limited (unreported case bearing Suit No. 120 of 1992), Standard Finis Oil Company and others v. National Detergents Ltd. and 2 others (1984 CLC 781) and National Disinfectant Company v. National Detergents Ltd. (PLD 1983 Karachi 402).

10. In the case of National Disinfectant Company, a learned Single Judge of this Court, Mr. K.A. Ghani, J. (as he then was), while hearing stay application in a petition for rectification of mark stayed the suit on the grounds that the petitioners have made out a prima facie case for challenging the validity of the entry of trade mark. In the reported case the suit was pending before the District Court while the rectification application was filed in this Court. However, rule 6 of the High Court Rules also came into question and it was held that the discretion must be exercised judicially and on the petitioner's making out a prima facie case. Following is the relevant paragraph of the reported case:‑‑

"4. As to the jurisdiction of this Court to stay the suit pending before the learned District judge, until the disposal of the petitions for rectification, the learned counsel for the petitioners placed reliance upon rule 6 of the Rules framed by the High Court under section 77 of the Trade Marks Act, 1940. The said rule expressly provides that if any application or appeal is made to the High Court under the aforesaid Act and any suit or other proceeding concerning the trade mark in question, is pending before the High Court or any District Court, the High Court may stay the suit or proceeding until the disposal of the said application or appeal.

Thus the power to stay the suit filed by the respondents concerning the trade mark in question and pending in the District Court cannot be disputed, the fact still remains that the discretion thus conferred must be exercised judicially on the petitioners making out a prima facie case in their favour for rectification of the entry in the Register of Trade Marks."

11. In the case of Standard Finis Oil Company, two suits were filed in respect of trade marks ' Finis' and ' Brite' . Two rectification applications were also filed in this case. A learned Single Judge of this Court, Mr. Ibadat Yar Khan, J. (as he then was) stayed the rectification proceedings pending before the Registrar on the following grounds, inter alia:

"This is an interlocutory stage and there are substantial points of law involved to be considered and determined. The evidence has yet to come. The parties at the trial may contribute towards a better appreciation of the statutory provision involved. But for the present it cannot be denied, that there is a prima facie arguable case in favour of the plaintiff. Moreover, it is also to be noted that the plaintiff is enjoying and exploiting these marks since 1949, for over thirty years and has high stakes in the outcome. The defendant No.l has not been able to show what prejudice would be caused to him if the proceedings are stayed and status quo is maintained. In my opinion still all the implications are examined in the case the two other factors of balance of convenience and irreparable injury also heavily weigh in favour of the plaintiff."

12. The rule laid down by this Court in the unreported case of J.M. Nichols is not relevant for the present controversy.

13. In the case of Jamshed Khan, a suit for infringement of trade mark, passing off, accounts of profits and damages, was filed by the plaintiff against which the defendants filed a rectification proceedings under section 46 of the Act, 1940. The request of the defendants to stay the proceedings of this suit was disallowed on the grounds that neither it would be just nor proper to stay proceedings, which was instituted earlier in point of time with reference to Judicial Miscellaneous Application, filed by the defendants. The application for interim injunction, filed by the, plaintiff, was granted.

14. It cannot be denied that this Court has no power to stay the suit once a rectification application is filed but such powers available to this Court is discretionary in nature and should be used sparingly under special circumstances and not as a matter of routine. In the instant case the marks Sony and Sunny were registered as far back as in the year 1968. It was held by a learned Judge of this Court, Mr. Sajjad Ali Shah, J. (as his lordship then was) in the case of Pakistan International Airlines Corporation v. ‑ The Registrar of Trade Marks, Karachi (PLD 1980 Kar. 472) that seven years after the lapse of registered trade marks, their validity cannot be called in question unless it is shown that the registration was obtained by fraud or trade mark offends against provisions of section 8 or such mark is liable for cancellation or variation as provided under section 46 of the Act, 1940.

15. In view of the above law and circumstances of the case, I am not inclined to stay the proceedings of this suit. Accordingly, I overrule the, objections of Mr. Khuwaja Mansoor, Advocate.

A.A./S.39/K ??????????????????????????????????????????????????????????????? Order accordingly.