Skip to content


imperial Tobacco Company Ltd. Vs. Albert Bonnan and anr. - Court Judgment

LegalCrystal Citation
SubjectCivils
CourtKolkata
Decided On
Reported inAIR1924Cal216
Appellantimperial Tobacco Company Ltd.
RespondentAlbert Bonnan and anr.
Cases Referred(Newfoundland) v. Duffy
Excerpt:
- sanderson, c.j.1. this is an appeal from the judgment of my learned brother mr. justice pearson which was delivered on the 18th of july 1922, whereby he dismissed the plaintiff's suit.2. this suit was brought for a declaration that the plaintiff company was the sole owner in india, burma and aden of a certain brand, trade mark, trade name, covering, wrapper or label and the name w.d. and h.o. wills, and that the plaintiff company was solely entitled within the said limits to the exclusive right of user thereof and that it was solely entitled to import into and sell in india, burma and aden tobacco and cigarettes bearing, or contained in tins, boxes, packets, coverings, wrappers or labels or other receptacles bearing the said brand, trade mark, trade name, covering, wrapper or label or the.....
Judgment:

Sanderson, C.J.

1. This is an appeal from the judgment of my learned brother Mr. Justice Pearson which was delivered on the 18th of July 1922, whereby he dismissed the plaintiff's suit.

2. This suit was brought for a declaration that the plaintiff company was the sole owner in India, Burma and Aden of a certain brand, trade mark, trade name, covering, wrapper or label and the name W.D. and H.O. Wills, and that the plaintiff company was solely entitled within the said limits to the exclusive right of user thereof and that it was solely entitled to import into and sell in India, Burma and Aden tobacco and cigarettes bearing, or contained in tins, boxes, packets, coverings, wrappers or labels or other receptacles bearing the said brand, trade mark, trade name, covering, wrapper or label or the said name. The plaintiffs' company also asked for an injunction and damages against the defendants.

3. The trade mark, brand and names are described in paragraph 6 of the plaint, and a specimen of the wrapper or covering used by the plaintiff company is Exhibit A which is to be found at page 243-A of the paper-book. A specimen of the wrapper or covering on the cigarettes imported by the defendant is to be found at page 245-A of the paper-book and is marked Exhibit C.

4. There is no dispute as to the main facts of the case, and they may be taken from my learned brother's judgment at pages 251 and 252, as follows:

The cigarettes manufactured by W.D. and H.0. Wills of Bristol and London were very well-known in the English market and were known in India long before 1902 by which time they had acquired a very high reputation in the Indian market also. One of |heir brands was the 'Gold Flake' brand used on cigarettes manufactured by them from Virginian tobacco.

In 1902 there was a fight between the large American and English tobacco concerns or combines, the upshot of which was that they came to an arrangement among themselves : - The Imperial Tobacco Company of Great Britain and Ireland was thenceforward to confine its trade to the British Isles, and the American Tobacco Company to America while the British American Tobacco Company, Limited; was formed to carry on the trade throughout the rest of the world, using the same marks and manufacturing in England or America. The importation and sale in India was in the first instance left in the hands of a company called the British American Tobacco Company (India); Limited.

In 1910 the Imperial Tobacco Company of India Limited, the present plaintiff was formed to take over the Indian business from the last-named company and has since been importing and selling 'Gold Flake' cigarettes, as well as others of W.D. and H.O. Wills brands. Ninety per cent, of its shares are held by the British American Tobacco Company.

These 'Gold Flake' cigarettes were at first, about 1907, imported to India in tins of 50, since 1911 they have been imported also in paper packets of 10, the cigarettes being invariably manufactured in England. The plaintiff company has also factories of its own in India, at one of which, at Bangalore in Southern India, it manufactures from Virginia tobacco, imported for the purpose, a cigarette which is placed on the market in tins of 50 and packets of 10 as 'Gold Flake' Magnums, the 'Gold Flake' label and get-up being used with the addition that they are made in India.

Between 1910 and 1922 the imports of 'Gold Flake' cigarettes into India by the plaintiff company amounted to 128,000,000, in the tins of 50 and to 8,770,000, in the packets of 10. Of these last, however, some 7,043,000 were imported in a single year 1919, and were largely exported again to Mesopotamia and other places for Army use.

So that with allowance made for that, the proportion of imports and sales of the packets is extremely small as compared with the tins.

5. On the 1st September 1910, an agreement was made between the British American Tobacco Company, Limited, therein called the British American Company, the British American Tobacco Company, (India).Limited therein called the 'Indian Company,' and the plaintiff company called the 'Imperial Company', The recitals were as follows:

Whereas the British American Tobacco Company have for some time past carried on the business of manufacturers of tobacco and its products for India, Burma and elsewhere and are the owners of the good-will and trade marks in various parts of the world including India, Burma and Aden and whereas the British American Company have agreed to sell and the Imperial Company have agreed to purchase the business good-will and trademarks now owned by British American Company in India, Burma and Aden for the sum of one million five hundred thousand (Rs. 1,500,000) rupees, and whereas the Indian Company have for some time past carried on business in India, Burma and Aden as sellers and distributors of the products of British American Company and others and whereas Indian Company have agreed to sell and the Imperial Company have agreed to purchase the business and good-will and trade marks now owned or used by the Indian company together with the furniture in the various offices or depots.

6. And the material clauses were:

1. British American Company hereby sells and the Imperial Company hereby purchases for the sum of one million five hundred thousand rupees (Rs. 1,500,000).

(a) All those the good-will, business rights and other assets in connection with or appertaining to the business of British American Company in India, Burma and Aden and the brand or brands, trade marks or trade names in connection therewith formulae the recipes of preparation, treatment and manufacture and in particular the sole right and title to use in India Burma and Aden the name of British American Company, and the names of firms and companies acquired by British American Company heretofore and used by them in connection with their business in and for India, Burma and Aden. The Imperial Company shall further be entitled to the redemption fund set up by British American Company against the liability to redeem coupons and the Imperial Company shall assumer and take over the liability to redeem such coupons as and when they become due or redeemable.

2. The India Company hereby sells and the Imperial Company hereby purchases:

(a) The good-will business rights and or other assets in connection with or appertaining to the business of the India Company in India, Burma and Aden and the brand or brands trade marks or trade names in connection therewith, formulae and recipes of preparation, treatment and manufacture and in particular the sole right and title to use in India, Burma and Aden the name of the India, Company and the leases and tenancies of the buildings acquired by the India Company and all rights and interests therein.

3. The Imperial Company undertake and agree with the British American Company as follows:

That they will while they or any company or firm in which they may have a controlling interest are carrying on the business of manufacturing goods of the class required they or either of them will supply British American Company (on terms to be agreed upon) with such of the manufactured goods as British American Company shall require for consumption outside India, Burma and Aden.

That they will not at any time either solely or jointly or as a manager or agent of any other person or persons, company or firm or as a shareholder in any other company or otherwise be engaged or concerned in the business of a manufacturer of or in any dealing or trading in tobacco or its products or tobacconists' goods beyond the limits of India, Burma and Aden unless at the request or with the consent of British American Company.

The Imperial Company will not nor will any firm or firms over which they shall have controlling interest without the consent in writing of the British American Company use any of the trade marks brands or other rights or, licenses dealt with under this agreement upon or in connection with any goods except such goods be as nearly as circumstances permit of similar nature whereon or in connection wherewith the same are now or may from time to time be used by British American Company outside India, Burma and Aden.

4. The British American Company undertakes and agrees with the Imperial Company as follows:

That they will from time to time supply the orders of the Imperial Company and any Company or firm in which Imperial Company shall have a controlling interest, all goods for the time being manufactured by British American Tobacco Company outside India, Burma and Aden reasonably required by Imperial Company for consumption in India, Burma and Aden, and to charge therefor such a price as shall be agreed upon between them from time to time.

That they will not, save as herein excepted and save as share-holders in Imperial Company or their successors or any company or firm in which they shall have a controlling interest, carry on business in India or Burma or Aden either solely or jointly with or as manager or agent for any other company or person or persons or directly or indirectly carry on or be engaged or concerned or interested in the business of manufacture or in any dealing or trading in tobacco or its products or tobacconists' goods within India, Burma and Aden (except as shareholders in Peninsular Tobacco Company Limited, or their successors or assigns or except as may be permitted by the Imperial Company) and except that nothing herein shall prevent British American Company from being share-holders in any Company exporting goods to India, Burma or Aden provided that (subject to any existing obligation] British American Company shall use their best endeavours to procure the Imperial Company as agents in India, Burma and Aden for the sale of any such goods there.

6. The India Company hereby undertakes and agrees with the Imperial Company that they will not save as herein excepted, carry on business in India or Burma or Aden either solely or jointly with or managers or agents for any other company or person or persons or directly or indirectly carry on or be engaged or concerned or interested in the business of manufacture or in any dealing or trading in tobacco or its products or tobacconists' goods within India or Burma or Aden.

13. Each of the parties hereto shall enter into, execute and do any further assurances or anything necessary for the carrying out of this agreement.

On the 11th of April 1922, there was an Indenture executed. The parties to that Indenture were the British American Tobacco Company, Limited (called the 'vendors') of the one part and the Imperial Tobacco Company of India Limited (called the purchasers) of the other part : and, it was recited that 'Whereas the vendors some time since agreed to sell and the purchasers agreed to purchase the said business carried on by the vendors in India and Burma together with the trade marks used therein, but no specific assignment of the good-will of the said business and the said trade marks has been executed and whereas the consideration for the said sale was the sum of one million five hundred thousand rupees the receipt of which the vendors hereby acknowledge and whereas the purchasers have requested the vendors to execute this assignment for the purpose of effectually vesting in the purchasers the said good-will and trade marks: now this Indenture witnesseth that in pursuance of the said agreement and for the consideration aforesaid the vendors hereby assign unto the purchasers all that the good-will of the business of the vendors so as aforesaid carried on by them in India and Burma together with all trade marks used in the said business and more particularly those registered by the vendors at Calcutta and Rangoon and referred to in the schedule hereto to hold the same unto the purchasers and their assigns absolutely.' This deed was put in evidence though it was not pleaded : and, it may be noted that the 'Indian Company' was not a party to it.

7. In 1919 the British American Tobacco Company, Limited, made cigarettes in packets in large numbers for the British Army Canteen authorities. They were called 'Gold Flake' cigarettes and bore a label with Wills' mark similar to the label used by the plaintiffs except for a notice at the end of the packet. The difference between the two labels was as follows : In the case of the goods imported and sold by the plaintiff company there was at the end of the packet in small print : 'This label is issued by the Imperial Tobacco Company of India Limited' 'Here is the Star trade mark) 'successor in India to W.D. and H.O. Wills, Cigarettes made in England'. On the cigarettes which were manufactured by the British American Tobacco Company and which were afterwards imported into India by the defendant were these words in small print, 'Established by W.D. & H.O. Wills, Bristol and London, British American Tobacco Company Limited' (Here is the Star trade mark), 'Bristol, London, Liverpool, Virginia successor made temporarily in U.S.A.'

8. Sometime in 1921, some of these cigarettes were sold in England by the Army Canteen authorities and the defendant purchased a large quantity in packets. The only restrictions placed upon the defendant at the time of his purchase from the Army Canteen authorities was that he was not to sell them in Great Britain. He alleged that he was to be at liberty to export them wherever he liked.

9. The cigarettes were genuine 'Gold Flake' cigarettes made by British American Tobacco Company, i.e., the Company which made cigarettes for the plaintiffs, they bore the Gold Flake label and Gold Flake get-up, and were manufactured of the same quality pf tobacco as those made by the British American Tobacco Company for the plaintiffs.

10. The defendant offered to sell the cigarettes, which he had purchased, to the British American Tobacco Company. They, however, declined to buy them and the defendant in February 1922 imported a large quantity of the cigarettes into India.

11. The defendant had purchased the cigarettes at a bargian price, and this enabled him to place them on the market in India at a price which was considerably lower than the price at which the plaintiff company sold similar Gold Flake cigarettes.

12. The plaintiffs discovered that Gold Flake cigarettes were being placed on the market in India, and that the defendant had imported them; and, in May 1922, the plaintiffs filed this suit claiming the reliefs to which I have already referred.

13. The plaintiffs alleged two titles: the first a proprietary title to the exclusive use in India, Burma and Aden of the trade-mark and name of W.D. and H.O. Wills derived from British American Tobacco Company and the British American Tobacco Company (India), and the second an independent title in the plaintiffs themselves, alleging that the trade-mark and name referred to the origin of the cigarettes and the importation thereof by the plaintiffs.

14. Both of these titles were disputed by the defendant.

15. The learned Judge in his judgment dealt in the first place with the second contention of plaintiffs, viz., 'the allegation that the get-up of the Gold Flake label used in connection with the sale of cigarettes in India indicates to the purchasers and consumers that the goods sold under the label are goods imported by the plaintiff company, that the defendant's goods if placed on the market are calculated to deceive purchasers and consumers into the belief that in buying the goods of the defendant, they are buying goods imported by the plaintiff company.' No criticism upon this statement of the plaintiff's case has been made, and it is in accordance with the description of such a claim given by Buckley, L.J. in Dental Manufacturing Co. Limited, v. G. De Trey & Co. [1912] 3 K.B. 76, 'A passing-off action is one in which the plaintiff alleges that the defendant is injuring him in his property by wrongfully intercepting trade which, but for the defendant's wrongful acts, would come to the plaintiff in his business. It is an action in which the plaintiff alleges that the defendant so gets up his goods as that the public, intending to buy the plaintiff's goods, are induced to buy the defendant's goods, in the belief that they are buying the plaintiff's goods. The plaintiff's goods need not be goods manufactured by the plaintiff. They may be goods which he purchases, or which he imports, or otherwise acquires and which he sells under some get-up which conveys that they are goods which, whether made, imported, or sold by him, carry with them the advantage of the reputation that the plaintiff's well-known firm are responsible for their quality or their character.'

16. The learned Judge's finding on this part of the case was as follows : 'I find therefore upon this part of the case that the reputation of the brand of Gold Flake cigarettes in India is the reputation of the maker and not of the plaintiff-company as importers. The reputation originated in the days of Messrs. W.D. & H.0. Wills, the original manufacturers, and the efforts of the plaintiff company have been directed not to creating or acquiring (if such a thing is possible) an importer's reputation of themselves in the brand, but in maintaining and developing the reputation of the brand as a manufacturer's brand. The issues therefore dependent upon this finding are answered in favour of the defendant.'

17. The learned Judge therefore decided the two issues which related to this part of the case in the negative. The first issue was 'Does the get-up of the cigarettes described in paragraph 7 of the plaint denote to purchasers in India that such cigarettes are imported by the plaintiff company?' The second issue was : will the sale by the defendant company of cigarettes in such get-up deceive the purchasers in the belief that the cigarettes have been imported by the plaintiff company? As I have said, the answer to both these issues was in the negative.

18. The learned Counsel for the plaintiffs drew our attention to the whole of the evidence on this part of the case though his argument was mainly directed to an attack upon the learned Judge's finding on the other part of the case.

19. There is no necessity for me to refer to the evidence in detail, for I agree with the learned Judge's finding of fact. In my judgment the sole representation made by the plaintiffs' user of the covering of the cigarettes was a representation that the cigarettes were the Gold Flake cigarettes manufactured -by the successors of the well known firm of W.D. & H.O. Wills. There is no evidence to justify the alleged representation (on which the plaintiffs relied) that cigarettes, bearing the said wrapper or covering, had come through a particular channel, or had been imported by the plaintiffs. In the same way, the defendant by using the wrapper or covering was merely representing the cigarettes as Gold Flake cigarettes manufactured by the successors of the well known firm of W.D. & H.0. Wills, viz., the British American Tobacco Company. This was a perfectly true representation and the defendant was in no way passing-off or attempting to pass-off the cigarettes sold by him, as the plaintiffs' goods.

20. False representation is the foundation of a suit such as this : and there was, in my judgment, no false representation by the defendant. Though the importation by the defendant may have been calculated to injure the plaintiffs' business, they had no cause of action on the ground now under consideration.

21. The concise statement of Fletcher Moulton L. J., in Dental Manufacturing Co. Limited v. C. De Trey and Co. (1912) 3 K.B. 76 may usefully be referred to on this part of the case. It is as follows:

To my mind it would be an injurious and ridiculous extension of the doctrine of passing-off to say that where the sole representation is that the goods are the goods of a particular manufacturer, it should be held that that carries with it a representation that they have, have come through any particular channel; or, putting it conversely, that any one who is injured by the passing-off of goods as the goods of the third party can bring an action.

22. In this case the defendant was passing-off the cigarettes as the goods of the third party, viz., as cigarettes manufactured by the British American Tobacco Company, the successor of W.D. and H.O. Wills and there was no representation that they were goods of the plaintiffs or that the goods were imported by the plaintiffs.

23. In my judgment, therefore, the learned Judge was right in deciding the first two issues in favour of the defendant and in holding that this part of the plaintiffs' case failed.

24. The plaintiffs raised an issue as to the condition of the cigarettes imported by the defendant. The learned Judge came to the conclusion that these cigarettes were not bad or unsaleable, and I see no reason to differ from the learned Judge's conclusion on this point.

25. The other part of the plaintiff's case is dependent upon their alleged derivative title, and is based upon the agreement dated the 1st September 1910 and the Indenture of the 11th April, 1922.

26. This part of the plaintiffs' case is really inconsistent with the other part which has already been considered, and if the plaintiffs have a good cause of action under this heading the evidence, which was produced at the trial in the attempt to support the plaintiffs' alleged right as importers of the cigarettes, would have been unnecessary.

27. As pointed out by Sir Lawrence Jenkins in British American Tobacco Co. Limited v. Mahoob Baksh (1910) 38 Cal. 110, in India there is no system of registration nor is there any provision for a statutory title to a trade mark, 8o that the rights of the parties must be determined in accordance with the principle of the English Common Law; and, further, a trade mark is a mode of warranting the origin of the goods to which it is attached, or their trade association, and it is of the essence of a trade mark that its representation should be true. In this is to be found the true test of the assignability of a trade mark. In that judgment the learned Chief Justice drew attention to passages from the judgment of Lord Kingsdown, Lord Cranworth, Lord Westbury and Mellish, L.J., which I do not think it necessary to repeat, but which I regard as being material to the present case.

28. There is no doubt that the title to a trade mark cannot be assigned or devolve in gross, but unless, the mark connotes a personal connection between its original owner and the goods in connection with which it is used, it may be assigned and transmitted with the good-will of the business in such goods.

29. In this case the plaintiffs' learned Counsel argued that the goodwill of the business in India carried on by the British American Tobacco Company and by the British American Tobacco Company (India) was assigned to the plaintiffs along with the sole right to use the trade mark in question and the names of the two companies in India.

30. It was argued that the business of the British American Tobacco Company was carried on in several countries, that the British American Tobacco Company had a business in India and a good-will attached to it and that inasmuch as the good-will of the business in India was assigned, or agreed to be assigned to the plaintiffs, the property in the trade mark used in such business passed to the plaintiffs.

31. The difficulty on this part of the plaintiffs' case is that the trade mark is one which denotes the origin of the cigarettes and it has been and is still used in connection with cigarettes manufactured by the British American Tobacco Company for sale in other parts of the world besides India.

32. Before the assignment, relied on by the plaintiffs, the trade mark was not confined to cigarettes used by the British American Tobacco Company in connection with their business in India, and after the assignment it is still used by the British American Tobacco Company in connection with their business in parts of the world other than India. In other words the trade mark in question was a mode of warranting the origin of the goods to which it was attached, viz., the manufacture of W.D. and H.0. Wills or their successors; and the goods imported by the defendant were genuine goods made by the British American Tobacco Company, properly bearing the trade mark in question as denoting the origin of the goods to which it was attached.

33. The difficulty on this part of the plaintiffs' case was illustrated by the argument of the learned Counsel for the plaintiffs. He was constrained to admit that if the trade mark means goods made by Messrs W.D. and H.O. Wills or their successors' the plaintiffs have no case.

34. He contended, however, that the mark really, means 'goods of W.D. and H.O. Wills or their successors in India.' In other words, he argued that outside India the mark denoted that the cigarettes were made by the successors of W.D. and H.O. Wills, but that in India the mark denoted that the cigarettes were made by or for the successors of W.D. and H.O. Wills in India. But in each case, put by the learned Counsel, the trade mark was attached to cigarettes of the same quality, viz., W.D. and H.O. Wills Gold Make Cigarettes, and in each case the cigarettes were made by the same company, viz., the British American Tobacco Company.

35. In my opinion, it is not possible, on the facts of this case, to hold that the mark bore the dual meaning alleged by the plaintiffs and their contention in this respect cannot be accepted. Further, it should be noted that it is contrary to the evidence in the case and the findings of fact of the learned Judge.

36. In the case to which I have already referred. Sir Lawrence Jenkins drew attention to the fact that Mellish, L.J. in Singer Manufacturing Co. v. Wilson [1875] L.R. 2 Ch. D. 434, limited the passing of a trade mark to the case where the, en-tire business, of which it is a part, is sold : And in Pinto v. Badman [1891] 8 Pat. Cas. 181, Fry, L.J. in dealing with the transfer of a trade mark said. - 'It follows, therefore, that it has been laid down by the clearest authority that a trade mark can be transferred with, to use Lord Cranworth's language, the manufactory of the goods in which the mark has been used to be affixed. Beyond that, as far as my knowledge goes and so far as any case that has been cited to us at the bar is concerned, no authority can be produced.

Therefore, I conceive, that is the limit of the assignability of the trade mark. It can be assigned if it is indicative of origin, when the origin is assigned with it.

It cannot be assigned when it is divorced from its place of origin, or when in the hands of a transferee it would indicate something different to what it indicated in the hands of a transferor.

37. In my judgment, the trade mark in this case is indicative of origin, and the origin has not been assigned with the trade mark.

38. It was conceded that if there had been no agreement to assign or assignment by the British American Tobacco Company to the plaintiffs, and if this suit had been brought by the British American Tobacco Company the Company could not have succeeded in the absence of a covenant by the defendant with the British American Tobacco Company not to import the cigarettes, purchased by him, into India.

39. It seems to me that the plaintiff company (in which the British American Tobacco Company held 90 percent, of the shares) as assignees from the British American Tobacco Company cannot be in a better position than the British American Tobacco Company, unless it can be proved that the plaintiff company have established some right of their own, independent of the British American Tobacco Company, such as might be established if they could have proved that the wrapper and covering upon and the get-up of the cigarettes denoted that they were imported by the plaintiff company. This the plaintiff company attempted to prove, but, as already stated, they failed.

40. In this case we have nothing to do with any statutory provision, such as is to be found in Section 22 of the English Trade Marks Act of 1905; and, the case is to be decided on the principles of the English Common Law. According to such principles, the property; if any, of the owner is in its nature transitory and only exists so long as the mark is distinctive in the eyes of the public or a class of the public see per Lord Parker in Spalding v. Gamage (1915) 32 R.P.C. 273. In this case the mark is distinctive, as already stated, in the eyes of the public as the mark of the manufacturer, W.D. and H.O. Wills or their successors the British American Tobacco Company. It was not distinctive of the business of the British America Tobacco Company or the British American Tobacco Company (India) in India and it has not become distinctive of the plaintiff Company's cigarettes.

41. It is clear, therefore, that the manufactory of the cigarettes in which the mark has been used to be affixed, has not been assigned to the plaintiffs, nor has the property in the business or the good-will of the business, in connection with which the trade mark has been used for a long period, been assigned to the plaintiffs.

42. In my judgment, the plaintiffs did not purchase the origin of the cigarettes, or the exclusive right to manufacture. They must have known at the time of the agreement of 1st September 1910 that W.D. and H.O. Wills' Gold Flake cigarettes could and would be manufactured by the British American Tobacco Company and sold in different parts of the world, and that there was a risk of persons buying such cigarettes outside India and importing them into India.

43. The British American Tobacco Company, while reserving the right to manufacture and sell W.D. and H.O. Wills' Gold Flake cigarettes with the well-established mark upon them, could not assign the sole right to sell such Gold Flake cigarettes in India to the plaintiffs so as to enable the plaintiffs to restrain members of the public from selling in India genuine Gold Flake cigarettes of W.D. & H.O. Wills which the British American Tobacco Company had themselves manufactured and sold in the market, without any restriction upon importation into India.

44. For the above mentioned reasons I am of opinion that the plaintiffs have failed in both respects to establish their alleged right to the declaration, injunction and other reliefs claimed, and in my judgment the learned Judge was right in dismissing the suit.

Richardson, J.

45. It will be convenient, in what I have to say, to use the name of Wills & Co. as a comprehensive term including the original firm of W.D. & H.O. Wills and their successors in England. The plaintiff company will be referred to as 'the company'. I will assume then that the good-will of the Indian business of Wills & Co. and the trade marks and trade labels, used in that business, were validly transferred and assigned to the company by the agreement of 1st September 1910, and the Indenture of the 11th April 1922, and the company have thus acquired all the rights which Wills & Co. had in India in respect of their cigarettes and the trade marks and labels associated with them. This litigation is particularly concerned with the brand of cigarettes called Gold Flake and the label on the tins or boxes in which they are packed for sale is well known. The trade mark on this label is a Double Star.

46. I will assume further that the rights which the company possess include the right to manufacture these Gold Flake cigarettes in India and to sell them in tins or boxes to which Wills & Co.'s label is affixed.

47. This right of manufacture, however has not been exercised and for the present purpose the company are not manufacturers. They are only importers of Gold Flake cigarettes manufactured in England. In paragraph 9 of the plaint it is stated that since the 1st October 1910, Gold Flake cigarettes for sale in India, Burma and Aden have been manufactured by Wills & Co. solely for the company and have been imported into and sold in these countries solely by the company, the number sold amounting to about one hundred and twenty-five million.

48. Moreover the learned Judge, Pearson, J., before whom the case came in the first instance, has found, and in my opinion, on the evidence, rightly, and conclusively found, that up to the data of the suit, the company had acquired no independent reputation as importers. Nor do they use any distinctive importer's mark. Apart from the legend in small letters round the double star, the label which they use as importers is identical with Wills & Co.'s label. The legend is : - 'This label is issued by the Imperial Tobacco Co. of India Ltd., successor in India to W.D. & H.O. Wills - Cigarettes made in England.' The mention of the company's name is formal and insignificant while the name of the original firm 'W.D. & H.O. Wills' appears conspicuously in three places.

49. As to the position of the defendants, it appears that the first defendant, Albert Bonnan, who describes himself as a Frenchman, purchased in 1921 a large quantity of Wills & Co.'s. Gold Flake cigarettes - about twenty-one and a-half million' - 'from the Board of the Army and Canteen Stores in England, the cigarettes being packed in tins or boxes bearing Wills & Co.'s label. The small letter legend round the double star on that label is 'established by W.D. & H.O. Wills, Bristol and London; British American Tobacco Company, Ltd., Bristol, London; Liverpool and Virginia - successor, made temporarily in U.S.A.' Doubtless, the Board had obtained their supplies direct from Wills & Co. and were getting rid of their surplus stock. At any rate, it is not disputed that Bonnan's cigarettes are genuine Gold Flake cigarettes. In the argument nothing turned on the fact that they happen to have been made in America and not in England. It would seem that during the War, Wills & Co. made temporary arrangements for the manufacture of their cigarettes in America.

50. Bonnan's purchase was subject to the contractual restriction that the cigarettes were not to be disposed of in Great Britain. Otherwise, so far as the vendors were concerned he was free to do with the cigarettes what he liked. He brought them into India and formed a company, the second defendant, Bonnan & Co., to sell the cigarettes there. As the interests of Bonnan and Bonnan & Co. appears to be the same, I will follow Pearson, J., in treating Bonnan as the sole defendant. Having bought his cigarettes cheap, Bonnan was able to undersell the plaintiff company in the Indian market and thus came into conflict with them. I repeat that for all material purposes Bonnan's cigarettes must be regarded as of the same quality and manufacture with those sold by the company.

51. It was in these circumstances that the company instituted their suit on the 11th May, 1922, and obtained a temporary injunction prohibiting the further sale of Bonnan's cigarettes pending the issue. They ask for a declaration that within the limits of India, Burma and Aden they have the exclusive right as owners to the user of the trade mark and label denoting Wills & Co.'s Gold Flake cigarettes, and that they are solely entitled to import into and sell in those countries cigarettes bearing or contained in tins or other receptacles bearing such mark or label. They further ask for a perpetual injunction in aid of the rights which they assert and by amendments of the plaint made in June 1922, for damages.

52. The suit was dismissed by Pearson, J. and the appeal is from the learned Judge's judgment, dated 18th July 1922.

53. In brief, the company claim to be the only persons at liberty to import Wills & Co.'s Gold Flake cigarettes into India for purposes of sale. In paragraph 15 of the plaint the claim is put on the grounds (1) that the importation and sale by Bonnan of his cigarettes is 'an infringement of the rights and property of the plaintiff company to and in Wills & Co.'s trade mark' and (2) that the use of the Wills & Co.'s trade mark and label by Bonnan ' will deceive purchasers of the said cigarettes into the belief that the said cigarettes have been imported by the plaintiff company.' In paragraph 16 A of the plaint added in June, it is further stated that the importation by Bonnan of his cigarettes will diminish the sale of the plaintiff company's cigarettes and 'has impaired and will further impair the reputation of the plaintiff company' and their cigarettes.

54. It was conceded by Mr. Pugh, appearing for the company, that the claim is novel and not covered by any direct authority. The learned counsel, however, added that the law of trades marks was of comparatively recent origin and had not yet reached, the limits of its growth. But whether that be so or not, I confess myself unable to appreciate the reasoning by which the present claim is sought to be supported.

55. The misconception, which, as it seems to me, underlies the company's case, consists in the exaggerated stress laid on the notion that the right to a trade mark is a right of property. The ground which I have numbered (1) in paragraph 15 of the plaint, is treated as if it were an independent ground of action. But given their right to the trade mark, the company cannot succeed without proof of some such averment as that contained in the second ground. To meet the objection that no right to an importer's mark has been established, an attempt has been made in argument to give the averment a somewhat wider form and to say that In selling his cigarettes, Bonnan represents them to be the goods of the company. The averment in that form, however, can only be supported in the circumstances by returning to the notion of property. The right to the trade mark is treated as conferring a monopoly entitling the company to protection under any and all conditions and against any and all kinds of injury, including injury by mere commercial competition. In my opinion the short answer to the case is that in selling his cigarettes Bonnan does nothing which misleads or is calculated to mislead the public as to what they are buying.

56. The questions whether a right to a trade mark is a right of property and in what sense it can be so regarded, have been the subject of discussion, for instance, by Lord Parker in Spalding v. Gamage (1915) 32 R.P.C. 273. But for the present purpose, the question of substance is what is the extent of this right? What constitutes infringement of a trade mark?

57. The extent of the right of, I will say the owner of a trade mark, is doubtless to be measured by the correlative duty or obligation imposed on others. That obligation is expressed in the principle underlying all the cases, that 'nobody has any right to represent his goods as the goods of somebody else.' Lord Westbury certainly regarded the right to a trade mark as a right of property; but his way of putting the matter leads to the same result. He says in Hall v. Barrows (1863) 32 L.J.Ch. 548 'Imposition on the public is indeed necessary for the plaintiffs' title, but in this way only, that it is the test of the invasion by the defendant of the plaintiff's right of property, for there is no injury done to the plaintiff if the mark used by the defendant be not such as may be mistaken by the public for the mark of the plaintiff.' I agree that no imputation of fraudulent intent is necessary; but over and above his right to the trade mark, the plaintiff must prove that the defendant is really imposing on the public. Trade marks are in the present respect on the same footing as trade names, and in Singer Manufacturing Co. v. Loog (1882) A.C. 15, Lord Watson said this : - 'There is no authority, and in my opinion, no principle, for giving the trader any higher right. If he cannot allege and prove that the public are deceived, or that there is a reasonable probability of deception, he has no right to interfere with the use of the name by others.' In Spalding's case Lord Parker said : 'The property, if any, of the so called owner is in its nature, transitory, and only exists so long as the mark is distinctive of his goods in the eyes of the public or a class of the public.'

58. Take as a concrete instance the case of Reddaway v. Banham (1896) 8 A.C. 199. No doubt the defendant's description of his belting as 'camel hair belting' was in a sense true, but the finding was that the defendant was guilty of a false representation and of passing off his goods as the plaintiffs', because the description was likely to mislead purchasers into the belief that his belting was the plaintiffs' belting, the fact being that the two beatings were of different manufacture and came from different factories. The words I have already quoted come from Lord Halsbury's judgment, 'For myself,' he said 'I believe the principle of law may be very plainly stated, and that is that nobody has any right to represent his goods as the goods of somebody else.' Lord Herschell cited the language of other Judges to the same effect and in the coarse of his judgment he observed; 'I cannot help saying that if the defendants are entitled to lead purchasers to believe that they are getting the plaintiffs' manufacture when they are not, and thus to cheat the plaintiffs of some of their legitimate trade, I should regret to find that the law was powerless to enforce the most elementary principles of commercial morality.' Lord Macnaghten referred to the defendant as an 'interloper who hoped to find more profit and less trouble in trading on another man's reputation than on his own merits.' He said that the plaintiffs' belting had come to be known as 'camel hair belting' all over the world and that it was almost an abuse of language to say that this description as applied to the defendant's belting was merely the simple truth. For the defendant's purposes, he added, the whole merit of the description lay in its duplicity.

59. Comparison with Reddaway v. Banham (1896) A.C. 199 shows how empty the present case is of substance or even of plausibility. The company represent that the cigarettes which they import and sell are those of Wills & Go. Not having any distinctive reputation as importers, and not having used any distinctive importer's mark, the company trade on the reputation of Wills & Co. Bonnan makes the same representation as regards his cigarettes, that they are the goods of Wills & Co. and he also trades on the reputation of Wills and Co. His representation is the simple truth and the whole truth. There is no duplicity or equivocation. No purchaser, not the most unwary, has been or is likely to be deceived. The company may regard Bonnan as an interloper, but I cannot see that he is in any way trading on their merits or their reputation. He is not a pirate. He is not passing off his cigarettes as theirs or doing anything which is commercially immoral. He is not violating the goodwill which the company have no doubt acquired in India or infringing any of their trade marks. The mere fact, if it be a fact, that the company have popularised Gold Flake cigarettes in India, does not prevent others, armed with the same cigarettes, from following them into the same market and competing with them there.

60. The case was put in argument whether if a traveller coming to India filled his portmanteau with Gold Flake cigarettes, he could dispose of them there to his friends. Learned Counsel could only say that he might give them to his friends but could not sell them, an answer which, I think, did not give complete satisfaction either to the learned Counsel himself or to the Court.

61. There may be another way of dealing with the claim equally fatal to the company. Mr. Langford James contended on Bonnan's behalf, mainly, I think, on the authority of Pinto v. Badman [1891] 8 Pat. Cas. 181, that the assignment by Wills & Co. in favour of the company was invalid, because the trade mark was not assigned together with any manufactory in India, and could not be assigned independently of the manufacture of the goods to which it related. If I do not adopt that contention in toto it is because I am not sure as to the precise effect of Section 22 of the British Trade Marks Act of 1905. But that is not to say that the contention has no force. I have assumed that Wills & Co. were in a position in 1910 to make and did make, a valid assignment of the goodwill of their Indian business and that such an assignment would convey to the assignees the right to set up a manufactory in India turning out cigarettes with the same get-up as those of Wills & Co., and I have also said that as the company have not exercised that right, they are not manufacturers. In the circumstances, it may be that they are in no better case than if they had taken merely an assignment in gross of Wills & Co.'s, trade mark. It may be that they cannot rely on the assignment of the Indian goodwill because they have not acted upon it, and that they can only rely on such undertakings as those given by Wills & Co. in para. 4 of the agreement of 1910. In that case, their rights as assignees of the Indian business and the trade mark would be of no avail to them and they would be driven back to rights which are merely contractual. If this be the true view, clearly the cases of Richards v. Butcher [1890] 7 Pat. Cases 288 and Dental Manufacturing Company v. De Trey [1912] 3 K.B. 76, would be direct authorities against the company, even if Bonnan were passing off as the manufacture of Wills & Co.'s Cigarettes, which were not the manufacture of Wills & Co. This result seems reasonable enough because, otherwise, the prohibition against the assignment of a trade mark in gross might easily be evaded as regards, say, a British possession by adding a merely colourable assignment of the goodwill in that possession of the business to which the trade mark relates.

62. If the company can only depend on their contractual rights, those rights as Fletcher Moulten, L.J., points out in De Trey's case 'are not exclusive in any sense which affects the public', and the observations which he quotes from the judgment of Kay, J. in the other case would be in point. Kay, J. was dealing with the exclusive right claimed by Richards as sole agent for the sale of Messrs. Heidsieck's wine in England. 'What does that mean?' he asked, 'it only means that Messrs. Heidsieck have contracted that they will not sell any of their wine to any other persons in England except Mr. Richard's; but if by any means whatever, another person gets Heidsieck's wine, if he buys it in France, or buys it in Germany, or in England or buys it of the plaintiffs or buys it of anybody else, he has a right to sell it. The plaintiffs cannot prevent him - nobody can, He has a perfect right to sell it; it is an article of commerce in which he has a perfect right to deal.'

63. But quite apart from the view of the case suggested by the learned Counsel for Bonnan, much of what was said in De Trey's case has a close application to the present case and reinforces the ground on which I prefer to rest my decision. Granted that the company have all the rights they claim in Wills & Co.'s trade mark, the mere possession of those rights does not, in the circumstances, justify them in asserting that Bonnan is representing his goods to be their goods. The assertion is not true in fact or substance.

64. No doubt the present case differs from De Trey's case in two respects. In the first place, De Trey claimed no right, as the company here claim, to any trade mark and no right higher than that of sale agent for sale. In the second place, the alleged infringing articles were not, as they are here the genuine goods of the same manufacturer, but imitations. The second distinction is in Bonnan's favour. He is in no sense representing his goods to be other than what they are. Wills & Co. themselves could make no case against him for passing off. The first distinction is not, in my opinion, vital. In Lord Parker's words, already cited, the company's right to the trade mark or their right to protection 'only exists so long as the mark is distinctive of their goods in the eyes of the public.' As used, however, by the company, the mark is distinctive not of their goods but of the goods of Wills & Co.

65. I might, therefore, follow Vaughan Williams, L.J. and say that there is nothing in the get-up of Bonnan's cigarettes which identifies them with the company, and there is a passage in the judgment of Fletcher Moulton, L.J., which is capable of easy adaptation to this effect : - 'There is a right in a plaintiff to come to the Court to prevent any goods being passed off as his, which are not his goods; and when I say that, I include goods which he has manufactured, goods which he had purchased and sold - any goods that can fairly be called his goods. In respect of these he can restrain an attempt to pass off goods that are not his, as though they were his. But in this case it is clear that in no proper sense of the word were these goods ever regarded by the public as, nor were they in truth (the company's) goods, and there never was any representation on the part of (Bonnan) that the alleged infringing articles were (the company's) goods'. Or, again, I might conclude like Buckley, L.J., by saying, on the facts with even more force than he did that 'there was no representation whatever affording any ground for a passing-off action.'

66. It is not necessary to consider what the position would have been if the company had manufactured their own cigarettes and Bonnan had then brought into the market Wills & Co.'s cigarettes with the same or a similar get-up, but made and purchased else-where. Like Pearson, J. I doubt whether the issue would have been different. Bonnan's representation to purchasers would still have been true in simple fact and, the formulas and recipes for preparation, treatment and manufacture being the same, the cigarettes made in India would presumably have been identical in quality with those made elsewhere. The parties would have been selling goods of practically identical manufacture under practically identical marks. I doubt whether in such case it could have been said that Bonnan was passing off his cigarettes as those of the company, and, apart from any question of passing off, he would still have been free to import Wills & Co.'s cigarettes, obtained elsewhere, into India.

67. In must be borne in mind that in India there are no statutory means of obtaining by registration an exclusive right to a particular trade mark. The company have no statutory rights on which they can rely. They depend on the rights which the Common Law or the Commercial Law gives them Somerville v. Schembri [1887] L.R. 12 A.C. 453, British American Tobacco Co. v. Mahboob (1910) 38 Cal. 110. The case to which the learned Counsel referred, to the Imperial Tobacco Co., (Newfoundland) v. Duffy [1918] A.C. 180 was decided under the Newfoundland Trade Marks Act under which the trade mark there in question had been registered.

68. I have endeavoured to deal with some of the arguments presented to us, but in my view the only difficulty in the case lies in the enterprising length to which the right to a trade mark has been pushed by the company. In my opinion, apart from legislation, no such barrier as the company desire can, in the circumstances, be imposed on the importation of genuine Wills & Co.'s Gold Flake cigarettes into India.

69. I agree that the suit was rightly dismissed and that this appeal fails.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //