Amritdhara Pharmacy vs Satyadeo Gupta

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 22 of 1960

Decision Date: 27 April 1962

Coram: S.K. Das, M. Hidayatullah, J.C. Shah

In this case the Supreme Court of India heard an appeal filed by Amritdhara Pharmacy against Satya Deo Gupta. The judgment was delivered on 27 April 1962 and was authored by Justice S K Das, who was joined by Justices M Hidayatullah and J C Shah. The matter concerned a dispute under the Trade Marks Act, 1940, specifically sections 8 and 10. The respondent, Satya Deo Gupta, had applied to register the trade name “Lakshmandhara” for a medicinal preparation that he had been manufacturing at Kanpur since 1923. It was admitted that the respondent’s product was principally marketed in the State of Uttar Pradesh. The appellant, Amritdhara Pharmacy, opposed the registration on the ground that it possessed an exclusive proprietary interest in the trade mark “Amritdhara” for a similar medicinal preparation, a mark that had acquired considerable reputation since 1903. The appellant further argued that the respondent’s proposed trade name “Lakshmandhara” was likely to deceive the public and cause confusion, thereby falling within the prohibition of section 8 of the Trade Marks Act. The Registrar of Trade Marks examined the matter and concluded that there was sufficient similarity between “Amritdhara” and “Lakshmandhara” to create a likelihood of confusion and deception among consumers. However, the Registrar also observed that the appellant had, over a long period, acquiesced to the respondent’s use of the name “Lakshmandhara” with full knowledge of such use. This acquiescence, according to the Registrar, constituted a special circumstance under section 10(2), which entitled the respondent to have his name registered alongside the appellant’s trade name. Nonetheless, the Registrar limited the registration to sales within Uttar Pradesh only. Both parties appealed this decision to the Allahabad High Court. The High Court allowed the respondent’s appeal, holding that the words “Amrit” and “dhara” were common in the Hindi language, as were “Lakshman” and “dhara”, and therefore no Indian consumer was likely to confuse the two ideas. The High Court also found that the respondent was an honest concurrent user of the name. On the specific question of acquiescence, the High Court ruled against the respondent. The matter was then taken on special leave to the Supreme Court for further determination.

The Supreme Court, after granting special leave, clarified that the question of whether a trade name is likely to deceive or cause confusion because of its resemblance to an already registered name is a matter of first impression that must be decided on a case‑by‑case basis, taking an overall view of all the surrounding circumstances. The Court emphasized that the appropriate standard for comparison is that of a man of average intelligence with imperfect recollection. In arriving at its conclusion, the Court referred to several authorities, including Pianist Co.’s Application (1906) 23 R P C 774, Corn Products Refining Co. v. Shangrila Food Products Ltd. [1960] 1 S C R 968, and William Bailey (Birmingham) Ltd. application (1935) 52 R P C 137. The Court further held that the two trade names must be compared as whole entities and not merely by dissecting their component words separately. Accordingly, the Court affirmed that the Registrar’s decision to limit the registration of “Lakshmandhara” to the State of Uttar Pradesh was appropriate, given the established facts of acquiescence and the overall assessment of potential confusion under the pertinent provisions of the Trade Marks Act, 1940.

In this case the Court observed that the two trade names were similar and that both described the same class of goods, which made it likely that the public could be deceived or confused. Nevertheless, the Registrar had discovered evidence showing that the respondent had acquiesced to the use of the name, and this fact brought the matter within subsection (2) of section 10. Accordingly, the Court held that the Registrar was correct in applying the limitation that he did.

The judgment concerned Civil Appeal No 22 of 1960, which was filed by special leave against the order dated 19 March 1958 of the Allahabad High Court in First Appeal No 62 of 1954. The appeal was argued for the appellant by counsel and for the respondent by another team of counsel. The judgment dated 27 April 1962 was pronounced by Justice S K Das. The appeal arose from a special leave granted on 8 December 1958.

On 19 July 1950 the respondent, Satya Deo Gupta, filed an application under section 14 of the Trade Marks Act 1940 (Act V of 1940) seeking registration of the trade name of a biochemical medicinal preparation commonly known as “Lakshmandhara.” The application was made in Class 5 of the Fourth Schedule to the Trade Marks Rules 1942, and the respondent acted as the sole proprietor of Rup Bilas Company, located at Dhankutti in Kanpur. In the application the respondent claimed that the preparation had been marketed under the name “Lakshmandhara” since 1923, that it was sold throughout India and in some foreign markets, that the name was distinctive of the article, and that the approximate annual turnover was Rs 40,000.

The Registrar of Trade Marks, Bombay, gave notice of the application. The appellant, Amritdhara Pharmacy, a limited‑liability company, filed an opposition. In its opposition the appellant contended that “Amritdhara” was already a registered trade name for its medicinal preparation, which had been introduced in 1901. The appellant argued that, because of the long‑standing popularity of “Amritdhara,” many competitors used slightly altered names in an attempt to pass off their goods as “Amritdhara.” It was further alleged that the composite word “Lakshmandhara” denoted the same medicine as “Amritdhara,” and that the word “dhara,” when used alone, had first been employed in connection with “Amritdhara” to indicate the appellant’s product. Consequently, the appellant submitted that the similarity of the names could cause the public to be misled and that registration of “Lakshmandhara” should be refused.

The respondent filed a counter‑affidavit asserting that “Amritdhara” and “Lakshmandhara” were distinctly different names and that no one could pass off one for the other. The respondent also emphasized that during the long period since 1923 no objection had been raised against the use of “Lakshmandhara,” and that the term “dhara” did not have any special significance in relation to the medicine. Moreover, the respondent pointed out that the packaging, label and design of “Lakshmandhara” were unique and unlike those of “Amritdhara,” reducing any likelihood of confusion.

The Registrar examined these submissions and, relying on the evidence of acquiescence, applied the limitation provided in subsection (2) of section 10. The Court affirmed that the Registrar’s decision to impose the limitation was proper, given the established acquiescence, and therefore upheld the Registrar’s order.

The respondent contended that the two trade‑names were clearly distinct and that no person could reasonably confuse one for the other. It further asserted that, since the name “Lakshmandhara” had been introduced into the market in 1923 and had been used continuously thereafter, no objection had ever been raised by the appellant or by any other party against the use of that name. Accordingly, the respondent denied any likelihood that the composite term “Lakshmandhara” would deceive the public or, even by a stretch of imagination, be taken for or mistaken as “Amritdhara”. In addition, the respondent argued that the solitary word “dhara” did not possess any special significance in relation to the medicinal product; the term did not convey any exclusive meaning, effect or association that could tie it uniquely to the appellant’s medicine.

Beyond the issue of nomenclature, the respondent pointed out that the vial, label and packaging of “Lakshmandhara” bore designs that were exclusive to that product and were not likely to be confused with those of any other medicine of a similar nature, let alone with “Amritdhara”. The packaging of “Amritdhara” was described as being markedly different in colour, design and layout, thereby reducing any chance of confusion. The Registrar of Trade Marks addressed the opposition to the registration application in an order dated 10 September 1953. Apart from the sworn affidavits filed by the parties, no further evidence was produced by either side. However, the appellant attached certified copies of several earlier judicial decisions—cases in which the appellant was not a party—purporting to support its claim of infringement of the registered trade mark “Amritdhara”. These decisions were listed as annexure “A”. The cited cases demonstrated that, since 1947, a number of medicines containing the word “Amrit” or “dhara” had entered the market, and that the appellant had successfully taken legal action against those entrants for trademark infringement. Moreover, the appellant had also succeeded in opposing, before the Trade Marks Registry, the introduction of other trade‑names that incorporated the word “dhara”. A question was subsequently raised before this Court as to whether the Registrar was justified in relying on those earlier decisions, a point that will be addressed later.

The Registrar’s factual findings traced the origin of the appellant’s mark to the year 1901, when Pandit Thakur Datta Sharma began manufacturing an Ayurvedic preparation in Lahore intended to relieve headaches, diarrhoea, constipation and other ailments. This preparation was initially marketed under the name “Amrit Ki Dhara”. In 1903 the name was shortened to “Amritdhara”. In 1942 Pandit Thakur Datta Sharma incorporated a limited liability company, and the name “Amritdhara” subsequently acquired widespread recognition as a popular label for the medicine. The annual turnover of the product was reported to be approximately Rs 4 lakhs. Although the business operated in Lahore, the partition of 1947 compelled the appellant to relocate its operations to Dehradun. The Registrar expressed the view that, had the dispute been determined solely on the basis of sections 8 and 10(1) of the Trade Marks Act, he would have had no hesitation in permitting the opposition and in dismissing the appellant’s application for registration.

The Registrar had expressed the view that the mark “Lakshmandhara” was so closely similar to the registered trade mark “Amritdhara” that it was likely to deceive the public or cause confusion in the marketplace. The High Court observed, however, that the Registrar had not set out his own opinion on whether the name “Lakshmandhara” would indeed deceive the public or create confusion with the trade of the appellant. The respondent, on the other hand, relied upon two additional circumstances. First, the respondent claimed to have been an honest concurrent user of the name “Lakshmandhara” since 1923. Second, the respondent asserted that the appellant had acquiesced to the respondent’s use of the name. The respondent contended that these two circumstances brought the dispute within the ambit of the “special circumstances” mentioned in section 10(2) of the Trade Marks Act, which permits registration of identical or nearly identical marks by more than one proprietor, provided that the Registrar imposes such conditions and limitations as he thinks fit. On the question of honest concurrent use, the Registrar found in favour of the appellant. Regarding acquiescence, however, the Registrar ruled in favour of the respondent and articulated his reasoning as follows: it was not disputed that the applicant had commenced use of the mark in a modest manner in 1923 and that the applicant’s use remained insignificant up to about 1942. In paragraph 12 of the applicant’s affidavit dated 30 March 1953, the applicant detailed advertisements placed in directories, pamphlets, newspapers and other media in which both the applicant’s and the opponent’s marks were advertised. The facts in the affidavit demonstrated that from 1938 up to the date of the applicant’s applications, the applicant had been advertising through the same channels that were also used by the opponents. In this case Pandit Thakur Datta Sharma stated that he had received no notice of the applicant’s mark, yet he admitted that about twelve persons in his factory, comprising the clerical staff, were responsible for advertising the opponent’s mark. It appeared that the opponents and their agents were fully aware of the applicant’s advertisements and did not raise any protest until the applicant’s mark was published in the Trade Mark Journal. Consequently, the opponents effectively stood by and permitted the applicant to develop his business; from a small beginning, the applicant had sold medicines amounting to roughly rupees 43,000 in 1949. In the Registrar’s opinion, this conduct constituted acquiescence, which fell within the phrase “or other special circumstances” in section 10(2) of the Trade Marks Act, and that finding was fatal to the opponents’ case. Moreover, before the Registrar it was admitted on behalf of the respondent that his goods were sold principally in Uttar Pradesh, with at most only sporadic sales in other states.

Because the respondent’s sales outside Uttar Pradesh were only occasional, the Registrar considered this fact and issued an order permitting the registration of the mark “Lakshmandhara” solely for trade within Uttar Pradesh. Following the Registrar’s decision, two separate appeals were filed under section 76 of the Trade Marks Act before the Allahabad High Court. One appeal was lodged by the respondent, disputing the limitation of registration to Uttar Pradesh, while the other was filed by the appellant, who argued that the mark should have been rejected altogether. The High Court judges examined the linguistic nature of the marks involved. They observed that the Hindi words “Amrit” and “dhara” are ordinary words, and when combined they denote “the current of nectar” or “the flow of nectar.” Similarly, the words “Lakshman” and “dhara” are common and together signify “the current or flow of Lakshman.” The judges concluded that no Indian consumer would be likely to confuse the two concepts, noting that the phonetic differences between the marks were sufficiently wide. They regarded the claim that the components “Amrit” and “dhara” had become so closely associated with the applicant’s goods as untenable, emphasizing that the monopoly granted to the registered mark “Amritdhara” must be confined to the use of the whole word and cannot extend to each common component individually. Accordingly, the Court found no reason to refuse registration of the trade mark “Lakshmandhara.”

The High Court also addressed the issue of an honest concurrent user. It acknowledged that the respondent had been using the mark “Lakshmandhara” honestly from 1923 to 1942 and ruled in the respondent’s favor on that point. However, on the question of acquiescence, the Court held against the respondent and in favor of the appellant, stating that the mere fact that both medicines were advertised in the same journals did not necessarily draw the appellant’s attention to the respondent’s use of “Lakshmandhara.” Despite this, the judges found that the two marks were unlikely to cause confusion and that the respondent’s long‑standing honest use justified granting registration of “Lakshmandhara” throughout India. Consequently, the High Court allowed the respondent’s appeal and dismissed the appellant’s appeal in its judgment dated 19 March 1958. The appellant subsequently obtained special leave to appeal to this Court, and the present appeal was filed under that leave. Two questions were raised before this Court: first, whether the name “Lakshmandhara” was likely to deceive the public or cause confusion under sections 8 and 10(1) of the Trade Marks Act; and second, whether the appellant had acquiesced to the respondent’s use of the name “Lakshmandhara” in Uttar Pradesh, thereby bringing the matter within the “special circumstances” referred to in subsection 10(2) of the Act.

The Court first examined whether the present situation could be characterised as falling within the expression “special circumstances” referred to in sub‑section ten of the Trade Marks Act. It stated that the two questions that had been raised would be addressed in the order in which they had been presented. The Court then read the relevant statutory provisions, namely sections eight and ten, to clarify the legal framework governing the registration of trademarks.

Section eight, titled “Prohibition of registration of certain matter,” provides that no trademark, or part of a trademark, may be registered if it consists of or contains any scandalous design or any matter whose use would, by reason of its being likely to deceive or to cause confusion, be denied protection by a court of law; or if the matter is likely to offend the religious sensitivities of any class of citizens of India; or if it is contrary to any law then in force or to accepted morality. Section ten, dealing with the “Prohibition of registration of identical or similar trade mark,” states in sub‑section (1) that, except as provided in sub‑section (2), a trademark shall not be registered for any goods or description of goods when it is identical to a trademark already entered in the register for the same goods or description, or when it so nearly resembles such a registered trademark as to be likely to deceive or cause confusion. Sub‑section (2) creates an exception whereby, in cases of honest concurrent use or other special circumstances that the Registrar deems appropriate, the Registrar may permit registration by more than one proprietor of identical or nearly‑identical marks for the same goods, subject to any conditions or limitations he may impose.

The Court observed that the pivotal language in both sections is the phrase “likely to deceive or cause confusion.” It noted that the Act does not prescribe a specific test for determining what constitutes likelihood of deception or confusion. Consequently, each case must be decided on its own facts, and the significance of prior authorities lies not in the outcomes they reached but in the analytical tests they applied to ascertain likelihood. When an application for registration is made, either the Registrar or an opposing party may object on the ground that the mark is not registrable under clause (a) of section eight or sub‑section (1) of section ten, as occurred in the present matter. In such circumstances, the burden rests on the applicant to convince the Registrar that the proposed mark is not likely to deceive or cause confusion. The Court further held that where the adjudicating tribunal harbours any doubt as to the likelihood of deception, the appropriate result is to refuse registration. A trademark is deemed likely to deceive or cause confusion when its similarity to an existing mark on the register is such that, in the normal course of legitimate market use, the two marks could be mistaken for one another.

In this matter, the Court explained that the question of whether a trade mark is likely to deceive or cause confusion must be examined by looking at every circumstance that surrounds the use of the marks by traders operating in the relevant market. The Court referred to the observations of Parker, J. in the case of Pianotist Co. s Application, which dealt with the comparison of two words. Parker, J. stated that “you must take the two words. You must judge them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact you must consider all the surrounding circumstances and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks” (1906) 23 R.P.C. 774, 777. He further warned that it is incorrect to compare only a part of one word with a part of the other; instead, “one word must be considered as a whole and compared with the other word as a whole.” He called it a dangerous method to divide the words and try to distinguish a portion of one from a portion of the other. The Court added that it did not agree with the High Court’s suggestion that the appellant was asserting a monopoly over the common Hindi word ‘dhara’. Rather, the appellant’s claim was identified as a claim for the exclusive right conferred by section 21 of the Trade Marks Act, namely the exclusive right to use its own trade mark and to oppose the registration of a trade mark that closely resembles its own mark and is likely to deceive or cause confusion.

The Court noted that the High Court had cited a large number of decisions involving composite words such as Night Cap and RedCap, Limit and Summit, Rito and Lito, Notrate and Filtrate, among others. Additional authorities had been cited before the Court, and these cases, which illustrate deceptive resemblances arising from contrasted words, were summarised on pages 429 to 434 of the eighth edition of Karly on Trade Marks. The Court held that referring to every one of those decisions would serve no useful purpose, because each case must be decided on its own facts. The Court observed that the degree of resemblance necessary to constitute deception or confusion cannot be defined in advance; it depends on the particular circumstances of each case. Regarding the decisions listed in annexure ‘A’, it was argued that they were inadmissible under sections 40 to 43 of the Indian Evidence Act, 1872. The appellant contended that the decisions could be admitted under section 13 of the Evidence Act to show specific instances where it claimed its right under section 21 of the Trade Marks Act. The Court considered it unnecessary to resolve the admissibility issue for the purpose of the present case.

Because those earlier decisions, even if they could be admitted under section 13 of the Evidence Act, did not illuminate the issue of whether the marks “Amritdhara” and “Lakshmandhara” were so closely similar as to cause deception or confusion, the Court treated the matter as a case of first impression and decided it independently of the prior authorities. After examining all the surrounding circumstances, the Court concluded that the overall similarity of the two names, taken together with the fact that they described the same kind of goods, was likely to deceive or confuse the public within the meaning of section 10(1) of the Trade Marks Act. Accordingly, the Court held that the Registrar had been correct in his view, and that the High Court had erred in reaching the opposite conclusion.

The Court then turned to the second issue, namely the defence of acquiescence. In this respect, the Court concurred with the Registrar of Trade Marks, who had, in a paragraph of his order quoted earlier in the judgment, set out the facts and circumstances on which the plea of acquiescence was based. The same principles were summarised in Halsbury’s Laws of England, volume 32 (second edition), pages 659‑657, paragraph 966, which states: “If a trader allows another person who is acting in good faith to build up a reputation under a trade name or mark to which he has rights, he may lose his right to complain, and may even be debarred from himself using such name or work. But even a long user by another, if fraudulent, does not affect the plaintiff’s right to a final injunction; on the other hand, a prompt warning or action before the defendant has built up any goodwill may materially assist the plaintiff’s case.” The Court found no evidence that the respondent had used the trade name “Lakshmandhara” fraudulently. The name had first been used in 1923 on a modest scale in Uttar Pradesh and later expanded; both marks had been advertised in the same journals. The Registrar’s findings showed that the appellant and its agent were fully aware of the respondent’s advertisements and permitted the respondent to continue developing his business, which grew from the small start in 1923 to an annual turnover of Rs 43,000 in 1946. These facts established the defence of acquiescence and placed the matter within subsection (2) of section 10. Moreover, the respondent admitted that his goods were sold mainly in Uttar Pradesh, justifying the limitation imposed by the Registrar. For these reasons, the Court allowed the appeal, set aside the judgment and order of the High Court, and restored the Registrar of Trade Marks, Bombay’s order dated 10 September 1953. No costs were awarded, and the appeal was thereby allowed.