Court affirms family trademark cannot be exclusively transferred by a single co-proprietor; insolvency renders agreements void.
In a significant ruling, the Madras High Court has upheld the decision of the Deputy Registrar of Trademarks, rejecting the transfer of rights over the "Dasaprakash" trademark to Dasaprakash Restaurant and Ice Cream Parlour Pvt. Ltd. The court found that the transfer was invalid due to the co-proprietorship nature of the trademark and the insolvency status of one of its proprietors.
The case revolves around the trademark "Dasaprakash," a family mark jointly owned by the legal heirs of the late K. Seetharama Rao, founder of the Dasaprakash Group of Hotels and Restaurants. The dispute arose when Balakrishna Rao, one of the heirs, entered into a Memorandum of Understanding (MOU) with the appellant company to transfer rights over the trademark. The MOU was contested, and the subsequent insolvency declaration of Balakrishna Rao further complicated matters.
The court, presided over by Justice N. Anand Venkatesh, emphasized the importance of adhering to the family arrangement, which stipulates that the trademark can only be used by family members or in business associations where a family member is a participant. The judgment clarified that no single co-proprietor could exclusively transfer rights over a jointly owned trademark.
Additionally, the court ruled that any agreements entered into by Balakrishna Rao post-insolvency were void ab initio, as all his rights and properties were vested in the Official Assignee. The appellant's attempt to record their rights over the trademark was deemed invalid, as the MOU dated before the company's incorporation was merely an agreement to enter into a future agreement and did not confer any legal rights.
The court cited the Trade Marks Act, 1999, particularly Section 24, which governs the rights of joint proprietors, reinforcing that any use by a co-proprietor is deemed for the benefit of all joint proprietors. The decision underscores the legal principle that family arrangements and statutory provisions cannot be bypassed by individual agreements.
Bottom Line:
Trade Marks - Co-proprietorship of a family trademark - One co-proprietor cannot transfer exclusive rights to a third party without adhering to family arrangement or legal provisions.
Statutory provision(s): Trade Marks Act, 1999 Section 19(1), Section 24
