2014 (2) TMI 165 - HC - Companies Law

Abandonment of trademark application - Failure to respond to objection raised over trademark registration application - Opportunity of hearing before abandoning application - Held that - though the Act does not provide for treating the application to be abandoned on account of the applicant not responding to the objections or proposal of the Registrar in terms of sub-rule (1) of Rule 39, there is no inconsistency between the Act and the Rule since, the Act does not contain a prohibition against treating the application to be abandoned on such a ground and the Rules can always be used to supplement the provisions of the Act though they certainly cannot be in derogation of the specific provisions of the Act. Rule 39 (2) of the said Rules in my view serves a salutary purpose by requiring the applicant to respond promptly to the communication received from the Registrar in terms of sub-rule (1). Provisions of Section 101 of the Act read with Rule 106 of the Rules do enable the Registrar to extend the time prescribed in sub-rule (2), in appropriate cases. Since the Registrar may is competent to extend the time in appropriate cases, it would be difficult to say that the provisions of sub-rule (2) are mandatory. The basic principles of natural justice require that before the Registrar treats an application to be abandoned on account of failure of the applicant to respond to his objection or proposal sent under sub-rule (1) of Rule 39 he must necessarily give a show cause notice/opportunity of hearing to the applicant before treating the application to have been abandoned. In the cases where the Registry has treated the application as abandoned on account of failure of the applicant to produce evidence, the Registrar shall give a notice to the applicant requiring him to produce his evidence in support of the application for registration and in case no evidence is produced, he shall decide the application for registration on its merits, instead of treating the same to have been abandoned . If evidence is produced by the applicant in support of his application the Registrar shall proceed to adjudicate upon the application in accordance with law - Decided in favour of Petitioner.

Issues Involved:
1. Abandonment of Trademark Applications
2. Compliance with Rule 39(2) of the Trade & Merchandise Marks Rules, 1959
3. Requirement of Show Cause Notice or Hearing Before Abandonment
4. Extension of Time Under Section 101 of the Trade & Merchandise Marks Act, 1958
5. Treatment of Applications for Failure to Produce Evidence

Issue-Wise Detailed Analysis:

1. Abandonment of Trademark Applications:
The petitioner applied for the registration of the trademarks "PARAS PREMIUM" and "PARAS LABEL" but faced objections from the Trade Marks Registry. Despite responding to these objections, their applications were treated as "abandoned" due to alleged non-compliance with office requirements. The petitioner sought correction of the status of their applications from "abandoned" to "pending" and an early hearing for adjudication.

2. Compliance with Rule 39(2) of the Trade & Merchandise Marks Rules, 1959:
Rule 39(2) stipulates that if an applicant does not amend their application, submit observations, or apply for a hearing within three months of receiving objections from the Registrar, the application shall be deemed abandoned. The petitioner argued that the Act does not envisage treating an application as abandoned for failing to respond to objections, and thus, the Rule should be discarded. However, the court held that there is no inconsistency between the Act and the Rule as the Act does not prohibit treating an application as abandoned on such grounds. The Rule serves a salutary purpose by ensuring timely responses from applicants.

3. Requirement of Show Cause Notice or Hearing Before Abandonment:
The court emphasized that before treating an application as abandoned, the Registrar must give a show cause notice or an opportunity of hearing to the applicant. This is in line with Section 98 of the Act, which mandates giving an opportunity of hearing before exercising any discretionary power adversely. The court noted that this procedure is necessary to allow the applicant to seek an extension of time under Section 101 read with Rule 106.

4. Extension of Time Under Section 101 of the Trade & Merchandise Marks Act, 1958:
Section 101 allows the Registrar to extend the time for doing any act (not expressly provided in the Act) if there is sufficient cause. Rule 106 supports this by providing a mechanism for applying for an extension of time. The court held that the provisions of Rule 39(2) are not mandatory but directory, as the Registrar can extend the time in appropriate cases. The Registrar must consider applications for extension of time and pass a speaking order based on the merits of the case.

5. Treatment of Applications for Failure to Produce Evidence:
The court clarified that the Registrar does not have the power to treat an application as abandoned due to the applicant's failure to produce evidence. Instead, the Registrar should decide the application on its merits. If the applicant fails to produce evidence, the Registrar must still adjudicate the application rather than deem it abandoned.

Conclusion:
The court quashed the impugned orders treating the applications as abandoned and directed the Registrar to issue show cause notices or provide hearings to the applicants before deeming their applications abandoned. The Registrar must consider any applications for extension of time and pass appropriate orders. If the applications are ultimately deemed abandoned, the applicants may seek legal remedies against such decisions. The Registrar is also required to decide applications on their merits if the applicant fails to produce evidence, rather than treating them as abandoned. The writ petitions were disposed of with no order as to costs.

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