Upholding Due Process in Trademark Transmission – Electronica India v. Electronica Hitech
Author: Adv. Kavita Srivastav Sharan
Adv. Mittal Nor Patel
In a recent appeal under the Trademarks Act, 1999 filed before the Hon’ble Bombay High Court, a significant legal challenge has been raised against the Trade Mark Registry’s purported orders for allowing applications for recordal of assignment/ transmission (i.e. application to record the subsequent proprietor of a trademark) without following the due process of law.
Electronica India Pvt. Ltd. v. Electronica Hitech Machine Tools Pvt. Ltd[1].
Brief Background:
Electronica India objected to the application made by Electronica Hitech for recording their name as the subsequent proprietor of the trademark under Section 45 of the Trademarks Act, 1999. The Trademark Registry, Mumbai approved the recordal of transmission by way of communication instead of a formal speaking Order. This approval was challenged by Electronica India in an Appeal under section 91 of the Trademarks Act, 1999 stating that they are “person aggrieved” by the impugned order.
Contentions Raised By Electronica India
Electronica India through its Counsel highlighted several discrepancies. It was argued that despite online status page of the Registry’s website indicated an Order dated 25.01.2018, however no such order was made available. Additionally, an RTI request yielded only a Communication dated 18.05.2018, rather than the order dated 25.01.2018. This communication was later uploaded as an order in the online database, bearing two different signatures. Electronica India questioned and pointed out to the Court that there is no justification orexplanation as to how multiple orders could have been passed by the Registry for the very same application for recordal of transmission.
Electronica India contended that they are not an interloper and any supposed order, assuming one exists, failed to address the objections to the recordal raised by them by their letter dated 19.01.2018. Electronica India asserted that their rights were disregarded and that Electronica Hitech had filed a false Affidavit, failing to disclose pending disputes over the trademark “Electronica. It was pointed out that Electronica India has challenged the exclusive claim to the subject mark by Electronica Hitech in the Pune District Court Suit pending between the parties. Had these disputes been disclosed, the Registrar would be required to stay proceedings under Section 45(3) until the Courts resolved the matter.
Electronica India argued that if the Registry considered them as an interloper or thought that they did not have any locus to object the recordal of transmission, the Registry could have recorded the same in the impugned order.
Arguments of Electronica Hitech
Electronica Hitech strongly contended that the trademark “Electronica” was registered in the name of their Erstwhile firm and the subject mark was thereafter automatically vested in them upon the firm’s conversion to a Company under the Companies Act, which constitutes transmission. It was asserted that upon conversion of a Partnership firm to a Company under Part IX of the Companies Act, all assets of the firm automatically gets transferred to and vest in the Company without requiring any additional documentation.
They relied upon decisions of the Andhra Pradesh High Court in Vali Pattabhirama Rao V/s. Sri Ramanuja Ginning and Rice Factory[2] and Hon’ble Bombay High Court in HEM Corporation Pvt.Ltd. & Ors. Vs. ITC Limited[3] to support their contention that no document is required for conversion of a partnership into a Company under part IX of the Companies Act and that the said conversion would amount to transmission by operation of law. Thus, the trademark “Electronica” registered in the name of their Erstwhile firm will automatically be vested and deemed to continue as the property of Electronica Hictech. In such circumstances, the Registrar is only required to replace the name of the erstwhile firm with the name of the Electronica Hitech on an application under Section 45 of Trademarks Act.
Electronica Hitech further argued that remanding the matter back to the Registrar of Trademarks could either confirm the transmission or mislead the Registrar into considering an unwarranted challenge to the trademark. It was stressed that the principles of natural justice do not mandate a rehearing, if no real prejudice has been caused, referencing to the Hon’ble Supreme Court judgement in the case of State of UP v. Sudhirkumar Singh[4] which held that procedural lapses do not automatically nullify administrative actions unless they result in significant prejudice.
Court’s Verdict
The Hon’ble Bombay High Court found no merit in Hitech’s submission that the trademark had automatically vested in them upon the firm’s conversion to a company. The Hon’ble Court held that Section 45 of the Trademarks Act, 1999 required the Registrar of Trademarks to follow the due process of law and require the Applicant to furnish evidence in proof of the title. Only upon such satisfaction of evidence, the Registrar may register the recordal of transmission and cause particulars of such assignment or transmission to be entered on the Register.
The Court held that the proceedings under Section 45 of the Trademarks Act is not merely an administrative function since Section 45 (2) r/w Rule 77 of the Trademark Rules provides that the “Registrar may require the applicant to furnish such proof of title over the concerned trademark”. The Court observed that the Registrar should have been mindful of the objections raised by Electronica India and the pending litigation between the parties on the title of the subject trademark before the Pune District Court.
The Hon’ble Court thus remanded the matter and directed the Registry to consider the applications made for recordal in Form TM -24 de-novo after granting Electronica India an opportunity to be heard and then to pass a speaking order in conformity with Section 45 of the Trademarks Act, 1999.
Appeal before the Supreme Court of India
Electronica Hitech subsequently filed an appeal before the Hon’ble Supreme Court challenging the High Court’s decision. However, the Hon’ble Supreme Court refused to interfere in the order passed by the Bombay High Court, thereby upholding the High Court’s decision to remand the matter for reconsideration and emphasizing the necessity of due process in trademark registration.
This proceeding underscores the importance of adherence to legal procedures and due process in trademark registration and the necessity for transparent and reasoned administrative decisions.
[1] 2024 SCC OnLine Bom 1144
[2] 1983 SCC OnLine AP 207
[3] 2012 SCC OnLine Bom 551
[4] 2020 SCC OnLine SC 847
