Read Order: Ampa Cycles Private Limited vs. Jagmohan Ratra

LE Staff

New Delhi, July 8, 2021: The Delhi High Court has held that once a person expressly relinquishes the rights to a trademark, the same cannot be claimed again, directly or indirectly, unless the terms of the dissolution deed are revoked.

A Bench of Justice Rajiv Sahai Endlaw and Justice Amit Bansal observed that if rights are assigned to a third party, they cannot be restrained from exercising those rights by the relinquisher. 

In the instant case, the respondent Jagmohan Ratra and one Hari Dutt Sharma had started a partnership firm in the name of M/s. Four Diamonds in 1983, dealing with cycles, tricycles, and other related products. 

Later in 1992, a new company ABPL was incorporated, which had the respondent and the firm M/s Four Diamonds as shareholders. After some time, ABPL moved an application for registration of the trademark ‘AMPA’ but the same was not pursued and was treated as abandoned in 2002.

On disputes arising between Hari Dutt Sharma and the respondent, a dissolution deed was executed in August 2003, as per which Hari Dutt Sharma was given complete rights to run ABPL with the use of the trademark ‘AMPA’ and the respondent renounced all his claims in respect of movable as well as immovable properties of the said company.

The dissolution deed however provided that the respondent will use trademarks of ABPL for manufacturing all models up to 14 inches only. It was further provided that for a period up to three years, ABPL will not manufacture models up to 14 inches. This deed was admitted to be never amended or revoked at any point of time.

After some time in 2013, ABPL discontinued its business and thereafter, an assignment deed was executed between Hari Dutt Sharma, ABPL and Nishtha Sharma in favour of one Ajay Kumar Baswa, wherein son of Ajay Kumar Baswa and son of Hari Dutt Sharma began to use the trade mark ‘AMPA’. 

This led to the filing of the lawsuit by the respondent approaching the High Court for claiming trademark over ‘AMPA’. As a result, the Single Bench passed an order permanently injuncting the appellant from passing off the trademark. 

As per the counsel for the appellant, Kaadambri, the respondent had relinquished the use of the trademark by a dissolution deed and the same was being used by the appellant company for manufacture and sale of cycles. Therefore, the counsel pleaded that the respondent be estopped from using the trademark.

On the other hand, the counsel for the respondent, Diva Arora, argued that after the dissolution of the partnership firm, all assets were transferred to the respondent. 

The Division Bench, however, found that there was no merit in the respondent’s contention that ABPL stopped carrying out business in 2011, and thus ceased to be associated with the trademark and the respondent was the sole user of the trademark. 

The High Court, therefore, ruled that if the first respondent has expressly waived his right on the trade mark registered in the name of the appellant Company, he could not claim the said right indirectly. 

The High Court thus opined that even if Jagmohan Ratra or M/s Four Diamonds had any rights in the subject mark, the same were surrendered with respect to cycles above 14 inches on signing of the dissolution deed in 2003 since the deed vested these rights in Hari Dutt Sharma/ ABPL.

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