Electronica India Ltd vs Electronica Hitech Machines Pvt Ltd

Decided on 15. 04. 24 by the Bombay High Court

Electronica India Ltd Vs. Electronica Hitech Machines Pvt Ltd & Ors

024 SCC OnLine SC 1190 | CMP No. 47 of 2022 and CMP No. 51 of 2022

Background

This case centres on two commercial miscellaneous petitions (CMP No. 47 of 2022 and CMP No. 51 of 2022) filed by Electronica India Ltd against the Trademark Registry in Mumbai. The petitions challenged the Registry’s decision to recognise Electronica Hitech Machines Pvt. Ltd. as the new owner of the trademark ELECTRONICA after the Respondent submitted Form 24.

Electronica Hitech Machines Pvt. Ltd. (the Respondent) filed two Form-24 applications to claim ownership of trademarks 1313395 and 1313396, which were initially registered to a partnership firm called M/s Electronica in 2004. In 2011, the partners converted the partnership into a company under the Companies Act, with all partners becoming directors of Electronica Hitech Machines Pvt Ltd. The Respondent argued that this transition entitled them to the trademarks.

Conversely, Electronica India Ltd. (the Petitioner) also sought registration of the ELECTRONICA trademark and contested the Respondent’s ownership in a separate case at the Pune District Court. During proceedings with the Trademark Registry, the Petitioner alleged that the Respondent submitted a misleading affidavit, neglecting to reveal the ongoing ownership dispute.

The Petitioner discovered that on January 25, 2018, the Trademark Registry had recognised the Respondent as the owner of the trademarks. However, the Petitioner later obtained a communication dated May 18, 2018, revealing two conflicting versions of this document, each with different signatures. This inconsistency raised concerns regarding the validity of the order, leading the Petitioner to file the current petitions in the High Court.

The Respondent’s counsel, Mr. Kamath, argued that upon transforming the partnership into a company, the trademarks and assets automatically transferred to Electronica Hitech Machines Pvt Ltd as the successor entity, a process recognized by the Companies Act without the need for a formal transfer document. He asserted that failing to record the Respondent’s name would create ambiguity since the original partnership no longer existed and would unfairly disadvantage the Respondent.

In contrast, the Petitioner maintained that the Respondent had failed to disclose the ongoing dispute when applying for trademark transfer. They argued that the Registrar ignored their communications, and the absence of a detailed examination or Speaking Order indicated that due process was not followed in the Respondent’s registration.

Judgement

The High Court carefully considered the arguments from both sides. The Court concluded that the trademark transfer could not be deemed automatic merely due to the conversion of the partnership into a company. The Respondent was obligated to disclose any existing disputes regarding the trademarks, which they did not do. The Court noted that the Registrar had requested an affidavit from the Respondent regarding potential disputes, but this had not been adequately addressed.

The Court emphasised that the Petitioner’s concerns were not properly considered by the Registrar and that the lack of a Speaking Order weakened the legitimacy of the registration process. As a result, the Court ordered the cancellation of the Respondent’s registration as the new owner of the trademarks. The Court directed the Registrar to re-evaluate the case thoroughly, considering the ongoing proceedings in the Pune District Court, which could influence the ownership determination. The Registrar was instructed to allow the Petitioner to present their objections and to issue a new Speaking Order with a documented rationale for any decisions made.

The Court concluded by dismissing both petitions without assigning costs to either party.

Conclusion

This case highlights the necessity of transparency and due process in trademark registrations, especially in the context of ownership disputes. It illustrates that claims of automatic transfer during corporate restructuring must be supported by proper documentation and disclosures. The Court’s directive for a thorough re-evaluation by the Registrar underscores the need for fair consideration of all parties’ rights in trademark matters. The outcome not only affects the involved parties but also sets a precedent for future cases concerning trademark ownership and registration processes.