Court’s Decision
The Delhi High Court allowed the rectification petition seeking removal of the trademark ‘ONCQUEST’ (Registration No. 4004984 in Class 44) from the Register of Trade Marks. The Court held that the petitioner had established prior and bona fide adoption of the mark since 2007, while the respondent failed to use the impugned mark or file any defence. Citing precedents, the Court observed that non-user allegations, when not specifically denied, stand admitted. The mark was ordered to be removed under Sections 47 and 57 of the Trade Marks Act, 1999.
Facts
The petitioner company, incorporated by Dabur India Ltd.’s promoters, operates diagnostic and pathology centres across India and neighbouring countries. The mark ‘ONCQUEST’ was coined in 2001, used by Dabur from 2003, and by the petitioner from 2007. The petitioner has 30+ labs, 400+ collection centres, and 2500+ service associates. Annual turnover under the mark reached approximately ₹91 crores in 2022–23. The respondent obtained registration of the identical mark in 2019 on a “proposed to be used” basis but never used it.
Issues
- Whether the petitioner is the prior adopter and user of the mark ‘ONCQUEST’.
- Whether the respondent’s registration is liable to be cancelled for non-use under Section 47(1)(b) of the Trade Marks Act.
- Whether the adoption of the mark by the respondent was in bad faith, warranting removal under Sections 47, 57, and 11.
Petitioner’s Arguments
The petitioner argued it is the prior adopter and continuous user of the mark since 2007. The respondent’s registration was on a “proposed to be used” basis and has never been used in relation to Class 44 services. This registration blocks the petitioner’s own pending applications and was adopted in bad faith to trade on the petitioner’s goodwill. Removal was sought under Sections 11(3), 11(10), 47, and 57.
Respondent’s Arguments
The respondent did not appear, file a reply, or provide any evidence of use, invoices, or justification for adopting the mark.
Analysis of the Law
The Court reiterated that the burden to prove non-user lies initially on the applicant, but in absence of a specific denial, the allegation stands admitted (Shell Transource principle). Prior user rights prevail over subsequent registrations, and bad faith adoption coupled with non-use justifies removal under Sections 47 and 57.
Precedent Analysis
- DORCO Co. Ltd. v. Durga Enterprises (2023 SCC OnLine Del 1484) — The Court ordered removal of a mark on grounds of non-use, holding that non-user allegations, if not specifically denied, are deemed admitted.
- Shell Transource Ltd. v. Shell International Petroleum Co. Ltd. (2012 SCC IPAB 29) — Established that absence of denial to non-use allegations amounts to admission.
Court’s Reasoning
The petitioner’s evidence of prior and continuous use since 2007, supported by invoices and turnover records, proved its market goodwill. The respondent failed to rebut non-user allegations or justify adoption. Identical marks for identical services in the same class created likelihood of confusion. The respondent’s conduct reflected dishonesty intended to capitalise on petitioner’s reputation.
Conclusion
The impugned trademark registration was cancelled. The Trade Mark Registry was directed to remove the entry and comply with the order by email.
Implications
This judgment underscores the significance of actively using a registered trademark and defending it in rectification proceedings. Passive holding of a mark without genuine intent to use can lead to its removal, especially when a prior user with substantial market presence challenges it.
Referred Cases & Their Relevance
- DORCO Co. Ltd. v. Durga Enterprises (2023) — Applied to confirm that non-denial of non-use equals admission.
- Shell Transource Ltd. (2012) — Reinforced the evidentiary consequences of failing to deny non-use allegations.
FAQs
1. What happens if a trademark is not used for years?
Under Section 47(1)(b) of the Trade Marks Act, a trademark can be removed if it has not been used for a continuous period of five years.
2. Can prior use defeat an existing registration?
Yes, prior and bona fide use can override a later registration, especially when the later mark is unused or adopted in bad faith.
3. Is non-response in a rectification case risky?
Absolutely. Failure to file a reply can lead to deemed admission of allegations, resulting in cancellation.