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Judgment
Prabha Sridevan, J
1 . This appeal is against the order granting registration to the mark ULTRAFILTER under application No. 803445 in class 7. The application was advertised in Trade Mark Journal dated 21.11.2003. The appellant filed Notice of Opposition. According to the appellant, the respondent had been the licensee of the appellant company and had acknowledged the proprietorship of the appellant with regard to the trade mark ULTRAFILTER, therefore the adoption is illegal. The appellant submitted that they have honestly adopted the composite mark consisting of parallel lines with a monogram containing intertwined letters ufi, and beneath the parallel lines the word India appears. According to them, they are using the mark since 01.11.1986. The learned Deputy Registrar disallowed the opposition filed by the appellant, therefore the present appeal has been filed. It must be stated at the outset that between the same parties there were earlier rectification applications for removal of the same trade mark and by order dated 12.09.2008 in ORA/1 & 2/2007/TM/CH, this Board directed the Registrar to expunge the marks.
2 . The learned counsel for the appellant submitted that, with regard to the same parties and in respect of identical marks when a decision has been given, the co-ordinate Bench cannot have a different view and must follow the view of the earlier Bench.
The learned counsel for the respondent on the other hand submitted that after the said decision several events have taken place which throw a light on the issue before us and crucially, there is a judgment of the Hon'ble Karnataka High Court where the Division Bench had passed an order confirming the order of the Company Law Board which would have a bearing on the present case.
4 . In 1972 Ultrafilter GmbH was incorporated in Germany. In 1981-82 they commenced the supply of goods under the trade mark ULTRAFILTER to several leading companies. In 1985, one Mr. Krishnanand Kini, approached Ultrafilter GmbH for technical collaboration and know how for a company to be setup in India for and filters. Thus the respondent No. 2 was incorporated in which Ultrafilter GmbH and the aforesaid Krishnanand Kini were Directors. On 31.12.1985, Ultrafilter (India) Private Limited, the respondent No. 2 filed applications in its name in classes 7, 10 & 11 for registration of the trade mark ULTRAFILTER. On 25.11.1986, Mr. Kini wrote a letter stating that the applications were withdrawn on 21.11.1986. On the same day, fresh registration was made for the trade mark ULTRAFILTER in the name of Ultrafilter GmbH in class 7, 9, 10, 11 & 16. On 20.10.1997 Ultrafilter GmbH issued a letter to Ultrafilter (India) that the agreement between the parties namely Distributor Agreement dated 16.12.1991, Technical Collaboration Agreement of the same date Trade Marks Registered User Agreement dated 01.12.1998 and Name Protection Agreement of the same date were terminated and that the respondent shall delete the word ULTRAFILTER from their company name. It is seen that some effort for resolution of dispute was made but to no avail.
5 . At the outset, the right of the appellant as a proprietor needs some explanation. Originally, one Ultrafilter International AG was incorporated under German Law at Mettmann Germany. The registration of the company was transferred from Mettmann to Wuppertal in 2003. On 21.1.2004, a company called Ultrafilter GmbH registered in Wuppertal got merged into Ultrafilter International AG. Ultrafilter GmbH entered into a shareholder partnership agreement with two persons referred to as shareholders and formed Ultrafilter (India) Private Limited. They agreed to enter into a Name Protection Agreement, Shareholders Partnership Agreement, Trade Marks Registered User Agreement and they had already concluded a Distributor Agreement. The Shareholders Partnership Agreement, Article 3, provides that the right to use of the name and trade mark ULTRAFILTER is subject to the continued validity of the Name Protection Agreement, the Distribution Agreement, the Technical Collaboration Agreement and the Trade Marks Registered User Agreement and that after the termination of Shareholders Partnership Agreement Ultrafilter GmbH may at any time demand that the name ULTRAFILTER should be deleted and replaced by a word not similar to ULTRAFILTER. The copy of this agreement enclosed in the paper book shows that this is signed by the parties. The Name Protection Agreement is signed only by the representative of Ultrafilter GmbH and though the first page is initialed by the aforesaid shareholders, it is not signed by them. According to the learned counsel for the respondent, this agreement is an inchoate agreement. Next we come to the Distribution Agreement, this is signed by the appellant and the respondent. As far as the Trade Marks Registered User Agreement is concerned, this is not signed by the shareholders and therefore according to the learned counsel for the respondent this too is an inchoate agreement. These are Exhibit 'C' collectively. Exhibit 'D' is the letter mentioned above calling upon the respondent to withdraw the trade mark registration and the respondent replied that they have been duly withdrawn. Exhibit 'G' is a letter written by the Ultrafilter International where inter alia Ultrafilter International have expressed their desire to acquire the majority shares in Ultrafilter (India) Private Limited. The response to this is that the Ultrafilter GmbH the predecessor in interest of the appellant is acting contrary to the interest of company namely the respondent No. 2. Exhibit -'I' is a letter sent by the Ultrafilter International that the termination letter is confirmed again. Exhibit-'K' is a very important document which is the order passed by the Company Law Board in the application filed by the respondent alleging act of oppression, etc. against the Ultrafilter GmbH, the predecessor in interest of appellant herein. Even before the Company Law Board, the respondent contended that since the shareholders agreement is not terminated the respondent can continue to use the trade mark ULTRAFILTER. The Company Law Board found that "As a matter of fact, even though the respondent holding only 26% shares is in the minority he has a veto powers in the Board Meetings... Therefore, we have no hesitation to hold that this is nothing but glorified partnership between the appellant and the respondent". The Company Law Board held that the Ultrafilter GmbH, the predecessor in interest of appellant being the minority shareholder, must go out of the company on receipt of fair consideration of this shares. Against this, the Ultrafilter GmbH filed an appeal before the Hon'ble Karnataka High Court. The final order was passed on 26.08.2011. This still shows only ultrafilter GmbH as the party and not the appellant herein. It must be mentioned that in all these proceedings only Ultrafilter GmbH is the party and not the appellant.
When we pointed out that the cause title in the above appeal shows only the name of Ultrafilter GmbH and not the present appellant, the learned counsel for the appellant submitted that an application had been filed before the Karnataka High Court for amending the cause title but it had not been disposed off. But it is relevant to point out that the appeal is numbered as COMPA 6/2005, whereas, according to the appellant, the Ultrafilter GmbH merged into Ultrafilter International on 21. 01.2004 and it was converted to appellant on 26.2.2004.
The Division Bench recorded that as follows:
Admittedly there are only two major shareholders and both have joint management in terms of the articles. Even though the appellant holds 26% of the shares, it has been conferred with a veto power in the board meetings. A veto power would therefore mean, that until and unless the appellant agrees, no decision could be taken by the respondent even though he is a majority. The appellant has a veto power in the board meeting enabling it to scuttle the probables of the respondent. The material place would show that there are a series of incidents attributable to the appellant. The acts complained of are not in isolation but continuous and are linked to one and another. The appellant proposed to gain absolute control over the company by demanding additional shares. On the refusal to grant them, the respondent has been threatened. The threat is "at whatever effort and cost it may take". Competitive business have been embarked upon, by the appellant which is adverse to the interest of the company. The appellant has ill advised the respondent and has even threatened. On these material it can thus be held, that the intention of the appellant is to gain a pecuniary advantage to the detriment of the respondent, for a wrongful usurpation of the authority and an intention to over throw the respondent. Hence it is a fit case that establishes oppression by the appellant. Such actions of the appellant is oppressive and is a continuing oppression. The conduct of the appellant is burdensome, harsh and wrongful, reflecting the lack of confidence between the two shareholders. The appellant by admittedly engaging himself with a competitive company has acted in breach of good faith and trust. He was expected to act only in the interest of the company and not against it. The appellant admits and justifies his actions by stating that the competitive business that it has undertaken, is not prohibited by law, since the agreements between them have been terminated. Thus the appellant seeks to justify his competitive business. He does not deny it. Under these circumstances and in view of the material on record, we have no hesitation to hold that sufficient grounds are made out by the respondent, for winding up of the company on just and equitable grounds. Consequently, it is necessary that the appellant being a minority be directed to sell its shares to the respondent.
8 . It is the consistent case of the learned counsel for the respondent that the appellant has no locus standi to file the appeal. The manner of devolution of the rights and interests are slightly complicated, therefore we extract the written submissions made by the appellant before the Registrar of Trade Marks "The opponent is proprietor of the trademark ULTRAFILTER which is pending registration in different classes in India. The applications for registrations have been filed in the name of Ultrafilter GmbH. It has been stated that Ultrafilter GmbH was changed from GmbH (limited liability company) to "AG" (joint stock company) and the name was changed to Ultrafilter International AG. By the legal form change and the renaming there was no new entity established. On 13 January 1999 "Ultrafilter International AG" established a new subsidiary "Ultrafilter GmbH" merged into Ultrafilter International AG". As the remaining entity "Ultrafilter International AG" took over all the rights and obligations of the new "Ultrafilter GmbH" on 21 January 2004 the legal form of "Ultrafilter International AG" was changed from AG (joint stock company) to "GmbH" (limited liability company), which thus became Ultrafilter International GmbH". By the legal form change and the renaming there was no new entity established. All rights and obligations of "Ultrafilter International GmbH" stayed with "Donaldson Filtration Deutschland GmbH.
Infact, in the earlier order passed by the Intellectual Property Appellate Board on 12th September, 2008 it is recorded that "Whether Donaldson Filtration Deutschland is the successor or not the respondent who has obtained registration malafidely on misstatement and misrepresentation during the currency of the agreement cannot be allowed to remain on the register which will be against the object and spirit of the Act." So the Board had not decided the question whether the appellant is the successor in interest to the Ultrafilter GmbH.
As regards the mark, the user claimed is from 1986. The agreement between the parties is in 1986. Whether, we call the entity Ultrafilter (India) Private Limited, a glorified partnership or a company, it is clear from the Company Law Board's order and the order of the Hon'ble Division Bench of Karnataka High Court that it is the Ultrafilter GmbH who though a minority shareholder had veto power. As on date the appellant has not brought itself on record in the proceedings under the Companies Act. However, it cannot be disputed that Ultrafilter GmbH was the Director of the company which was using the trade mark Ultrafilter (India) Private Limited. As per the observations of the company Law Board, which were confirmed by the Hon'ble Karnataka High Court, the 2nd respondent is only a glorified partnership of which the predecessor in interest of the appellant was a partner. The allocation of shares / purchase of share is not decided. When Ultrafilter GmbH itself has the veto-power on the Board of the respondent, it is difficult to accept its opposition to the application of the respondent.
The judgment of Hon'ble Karnataka High Court is a subsequent event, and this appeal being of continuation of proceedings we have to take note of the findings of the Hon'ble High Court which we have extracted earlier. Therefore the use by the respondent No. 2 of the mark from 1986 is use by the minority-veto-power-holding shareholder i.e. Ultrafilter GmbH from whom the appellant claims they derive their interest.
The earlier Bench of IPAB could not have taken note of this, since this judgment was a subsequent event. So though there is the decision of the co-ordinate Bench, we are constrained to differ in view of the decision given by the High Court.. It is only when dispute arose between the company and the shareholders between Ultrafilter GmbH and the shareholder who formed the respondent No. 2 that these proceedings came to be filed. The property in the trade mark vests with the respondent No. 2. The Karnataka High Court had directed that the minority shareholder should sell their shares to the majority shareholders. We do not know what would be the out come of this. If the shares had already been purchased by the majority the legal effect may be different. But as on date the appellant's predecessor continues to be on the Board of the respondent company which has adopted the mark. As and when the shares are transferred and the right to the property in the trade mark will follow. But we do think that as long as Ultrafilter GmbH is a Director of the respondent No. 2, the appellant who claims to be the successor in interest of the Ultrafilter GmbH cannot oppose the mark standing in the name of respondent No. 2. In view of the above, we are of the opinion that the appeal deserves to be dismissed and it is dismissed. No order as to costs.