Trademark Owner As Director Of Applicant Company Not Enough To Seek Rival's Name Change: Kerala High Court

The Kerala High court has quashed two MCA orders directing companies run by Kandamkulathy Francis Paul to change their names after K. P. Pathrose Vaidyan's Kandamkulathy Vaidyasala Pvt. Ltd. sought rectification of their names under Section 16(1)(b) of the Companies Act.

Justice Bechu Kurian Thomas held that the company seeking the name changes did not itself hold the registered “Kandamkulathy” trademark. It therefore could not maintain the applications under Section 16(1)(b) of the Companies Act, 2013.

“The terminology used in the aforenoted section is categorical and does not provide any leeway for including any person other than a registered proprietor of a trade mark,” the court observed.

The two petitions were filed by Francis Paul's companies challenging orders passed by the Regional Director, Southern Region, Ministry of Corporate Affairs. The orders directed both companies to change their names within six months.

The first company, Kandamkulathi Ayurveda Vaidyashala (P) Ltd., was registered on October 25, 2016. The second, Kandamkulathi Francis Vaidyan's Ayurveda Vaidyasala (P) Ltd., was registered on November 28, 2017. Francis Paul is the managing director of both companies.

K. P. Pathrose Vaidyan's Kandamkulathy Vaidyasala Pvt. Ltd., which had been in existence since 1995, filed separate applications before the Regional Director seeking rectification of the names of the two companies under Section 16(1)(b).

Section 16(1)(b) allows the Central Government to direct a company to change its name if it is identical with or too nearly resembles a registered trademark. The application, however, must be made by the registered proprietor of that trademark within three years of the company's incorporation, registration, or change of name.

Francis Paul's companies argued that the applicant did not hold the registered trademark and therefore could not maintain the applications.

Senior Counsel S. Sreekumar, appearing for the applicant company, argued that the applications were maintainable because Dr. Rosemary Wilson, the registered proprietor of the trademark, was a director of the company.

The court rejected this argument. It held that Section 16(1)(b) requires the application to be made by the registered proprietor and does not permit a company to invoke the provision merely because the trademark proprietor is one of its directors.

The court noted that Dr. Rosemary Wilson was the registered proprietor of the “Kandamkulathy” trademark, while the applications had been filed by the company.

“Merely because the registered proprietor is a Director of the applicant company, that by itself cannot be a justification for maintaining an application by such third parties. It is elementary that a company is distinct from its share holders and even the Directors constituting it,” the court observed.

The court held that Dr. Rosemary Wilson alone could have filed the applications under Section 16(1)(b). Since the company had filed them instead, the applications were not maintainable.

Senior Counsel also sought exclusion of the time spent in the writ proceedings under Section 14 of the Limitation Act, 1963, to enable the registered proprietor to file a proper application. The court declined the request, noting that the registered proprietor herself had not initiated any proceedings.

The court, however, clarified that the Central Government could itself initiate proceedings under Section 16(1)(a), if it considered it appropriate and in accordance with law.

Unlike Section 16(1)(b), this provision allows the Central Government to act on its own if it forms the opinion that a company's name is identical with or too nearly resembles the name of a company already registered. The court noted that no such proceedings had been initiated by the Central Government in this case.

The court accordingly quashed both orders of the Regional Director and allowed Francis Paul's two writ petitions.