Non-Use of Registered Trademarks

In the case of Wella Aktineesellschaft v. Shamim Akhtar & Others (2015 SCMR 1274), the Supreme Court of Pakistan examined crucial issues relating to the non-use of registered trademarks and the subsequent removal of such trademarks from the register. This judgment provides significant insights into the interpretation of the Trade Marks Act, 1940, particularly concerning the penal provisions for non-use and the obligations of trademark proprietors.

Background:

Wella Aktineesellschaft, a German company engaged in the manufacture and export of cosmetic products, had registered several trademarks in Pakistan, including "WELLAFORM," "WELLAFLEX," and "WELLA with Device" under Class 3. These trademarks were registered in 1949 and 1971 and were renewed up to 1993 and 2001, respectively. However, due to a ban on the import of certain cosmetic products into Pakistan from 1979 to 1985, Wella could not freely sell its products in the country.

In 1986, Shamim Akhtar, the respondent, who claimed to have started using the trademark "WELLA" in 1984, applied for its registration. When this application met with objections due to the conflict with Wella's previously registered trademarks, Shamim Akhtar filed rectification petitions seeking the removal of Wella's trademarks on the grounds of non-use for over five years, as prescribed under Section 37 of the Trade Marks Act, 1940. The Registrar of Trademarks upheld these petitions, leading to the cancellation of Wella's trademarks. Wella's subsequent appeals to the Sindh High Court were dismissed, prompting the company to appeal to the Supreme Court.

Key Issues:

Non-Use of Registered Trademarks: The core issue was whether Wella's trademarks could be removed from the register under Section 37(1)(b) of the Trade Marks Act, 1940, due to non-use for a continuous period of five years. The respondent argued that Wella had failed to use the trademarks in Pakistan for the required period, justifying their removal.

Special Circumstances Justifying Non-Use: Wella contended that the non-use of their trademarks was due to special circumstances, namely, the government-imposed ban on the import of their products, which constituted a valid excuse under Section 37(3) of the Act. The company argued that this ban, beyond their control, prevented them from using the trademarks, and hence, the penal consequences of non-use should not apply.

Court’s Analysis and Conclusion: The Supreme Court ruled in favor of Wella, overturning the decisions of both the Registrar of Trademarks and the Sindh High Court. The Court's analysis centered on the following points:

Interpretation of Section 37 of the Trade Marks Act, 1940: The Court emphasized that Section 37(1)(b) is a penal provision intended to deter the registration of trademarks without the intention of use. However, the application of this provision requires a continuous non-use of the trademark for five years, which must be calculated from one month before the application for removal is filed. The Court found that Wella had presented sufficient evidence to demonstrate their efforts to use the trademarks once the import ban was lifted in 1984, thus breaking the continuous period of non-use.

Special Circumstances and Bonafide Non-Use: The Court recognized that the import ban constituted "special circumstances" under Section 37(3), which justified Wella's non-use of the trademarks during the ban period. The Court underscored that these circumstances were beyond Wella's control and did not indicate an intention to abandon the trademarks.

Misapplication of the Law by the Lower Courts: The Court criticized the Registrar and the High Court for not adequately considering the evidence and the legal implications of the import ban. The Court pointed out that the lower courts had incorrectly applied the five-year non-use rule, failing to account for the legitimate reasons behind Wella's inability to use its trademarks.

Burden of Proof: The Court placed the burden of proof on the respondent to demonstrate that Wella had no bonafide intention to use the trademarks and had failed to do so for a continuous five-year period. The respondent's failure to provide convincing evidence led to the Court's decision to reinstate Wella's trademarks.

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