An individual can own various forms of properties which makes that particular individual “rich” and “prosperous”. Movable property like cash, gold, fixed deposit, shares, mutual funds etc. Immovable property like house, commercial office, residential land, industrial land etc. In addition to the above-mentioned conventional sources of “wealth”, an individual can also own “goodwill” or “reputation” in the brand / logo in which the concerned individual has put his/her heart and soul over a long period of time. For a long time now, “goodwill” has been capitalized in the balance sheet by the accountants as an “asset”.
Any valuable asset needs to be protected. Your gold needs to be kept in a safe locker to ensure that the same is not stolen. While buying a house, you need to ensure that the registered sale deed of your house has been duly executed with the actual seller of the house. Similarly, in order to preserve and protect your “goodwill”, it is important for you to also ensure that your brand / logo is duly protected from any theft. The modern-day phrase for these intangible assets which an individual owns are called “intellectual property rights”.
Unlike the other European and North American countries, India has had a relatively weak intellectual property regime of law. India still being a developing nation ranks 40th on the International Intellectual Property Index. But, in the last 15 – 20 years, the jurisprudence which has developed around intellectual property law in India has indeed reaffirmed the common citizen in our country that his / her intellectual property cannot be stolen in a casual manner by a potential infringer (any other individual/entity which intends to use/copy/steal the brand name of a prior user of a particular brand).
The question which this article wants to address is whether registration of a trademark is mandatory under law in order to protect your brand/logo from acts of infringement where the potential infringer may try to piggyback on the reputation that you have built for your product over a period of time. This is an important decision because getting your trademark registered is not a simple or straightforward task. Usually, business organizations/individuals hire the services of a chartered account/lawyer/trademark agent to file trademark registration applications.
One needs to remember that the process of registration of a trademark is fairly complicated and takes time as the same entails multiple stages of processing of the application for registration of a trademark. The following stages will have to be cleared by you or your appointed trademark professional (CA/ lawyer/ trademark agent) before you are able to secure a registered trademark:
STAGE 1 – You will have to search for identical or similar marks on the official website of the trademark registry. If the brand/logo that you are trying to search for has already been registered by some other party then in that case you will either have to choose some other brand/logo or you will have to seek cancellation of the registration of the existing registered trademark by filing an appropriate cancellation petition before the Trademark Registry.
STAGE 2 – Once you are satisfied that there does not exist any registered brand/logo which may be the same/similar as your brand/logo then you can fill in the application for registration along with documents and submit the same to the trademark registry. Once again it is repeated that you can do this yourself or through your representative like a chartered account/lawyer/trademark agent.
STAGE 3 – Your trademark application shall then be examined by the trademark registry and based on the evaluation of your application, the trademark registry may do one out of the two things:
- Accept your application and straightaway issue the advertisement of your proposed brand/logo in the trademarks journal; or
- Issue objections on your applications and ask you to reply to those objections. These objections would usually be either absolute or relative in nature.
Absolute objections mostly pertain to the fact that your proposed brand/logo is generic, not distinct, or capable of distinguishing goods or services, etc. Please remember that brand/logo which have a generic/non-distinct flavor would not be registered. For eg., if you are selling kitchenware steel utensils then you will not succeed in getting a trademark registration in the name of your brand as “bartan” or “utensils” as the same is descriptive and non-distinctive.
Relative objections raised by the trademark registry relate to similar & conflicting registered marks which have already been registered and exist on the file of the trademark registry. These objections may relate to the fact that the proposed brand/logo as applied by you for registration is the same/similar to the already existing registered trademark/logo.
It will be your responsibility under law to reply to the above-mentioned objections and demonstrate to the trademark registry that your product is distinct (in case of absolute objections) or not similar to an existing registered trademark (in case of relative objections). It may be noted that a hearing may also be conducted by the Registrar of Trademarks in case objections are raised by the Registry (or third party) and the reply submitted by the Applicant is not found to be satisfactory. In such a case, a Show Cause Notice is issued requiring the Applicant to appear before the Registrar and convince him about the registrability of the trademark that has been applied for. If you are unable to reply to the objections within a particular time or fail to appear before the Registrar on the notified date, it will be assumed by the trademark registry that you have abandoned your application.
STAGE 4 – If you are able to convince the trademark registry through your reply then the trademark registry may issue the advertisement of your proposed brand/logo in the trademarks journal.
STAGE 5 – Once advertised, the trademark is open for opposition purposes by the public at large for a period of four (4) months. In case no opposition is filed within this stipulated time period, the mark proceeds for registration. Any business owner/company can object to your proposed brand/logo stating that he/she is a prior user of the same brand/logo. You will be expected to draft a comprehensive reply to such objections and you will have to convince the trademark registry that your proposed brand/logo which you seek to get registered is distinct from that who has objected to your proposed brand/logo.
STAGE 6 – The final step is the issuance of the trademark registration certificate by the trademark registry or dismissing of your application for trademark registration depending on the facts and circumstances of each case.
Therefore, before granting a registration certificate, your proposed brand/logo will have to go through a process where objections may be raised at 2 levels i.e. at the level of the trademark registry and then at the level of the general public wherein any interested business organization/individual who has the same/similar brand logo may object to your application for registration of the trademark.
The reason why I have spent a considerable length of this piece on the process of registration of a trademark is because it is important for me to demonstrate that registering a trademark is a tedious and a time taking process and should be only pursued in case you will feel that the common law remedy of “passing-off” shall not be sufficient for you to protect and preserve your brand/logo. This brings to me the common law remedy of “passing-off” and its comparison with the remedy of infringement of a registered trademark. This will be best explained through an illustration.
Let us assume that you have been running a business of manufacturing steel bars under the brand “Monins Steel” in the city of Ludhiana (Punjab). You started your business in 2011 and you have been able to manufacture and sell material worth Rs. 10,00,00,000/- (10 crores) per annum from 2011 – 2016. From 2016 – 2020, your sales have increased to Rs. 20,00,00,000/- (20 crores) per annum owing to the good quality of steel being manufactured and supplied by you. You have not taken any steps to register your brand “Monins Steel” under trademark law till date, but, you have adopted this brand name and you have been selling under this brand name since 2011. In 2020, another company sets up a manufacturing plant of steel bars in the city of Ludhiana (Punjab) and starts selling steel under the brand “Monins Steel”. Now, clearly, this new company is looking to reap good sales on the basis of your brand on which you have incurred substantial time and investments over the last 9 – 10 years. But, you never bothered to go through the trademark registration process and hence you never registered your brand i.e. “Monins Steel”. Don’t worry, you will still have a remedy under the law.
The Delhi High Court and other courts of our country have consistently held that passing–off remedy is available to all those business owners who do not have a registered trademark. But, even in such cases where a business owner is not a registered trademark holder, it is important for such an entity to show that he/she was the prior user of that brand and a new business has been set up by any other person to sell goods under the same/similar brand name with the intention to usurp the brand value of the prior user. Registration of a trademark is most definitely useful as the same gives a higher level of protection to your trademark under Section 29 of the Trademarks Act, 1999. But, even without the registration of a trademark, you can very well injunct (restrain/prevent) the alleged infringer who is copying your brand from selling under a name that is the same/similar to your brand.
The following are the criteria that a non – registered brand owner will have to fulfill in order to be able to succeed in restraining any third party from selling under the same/similar brand/logo:
- First, the brand owner must be able to establish that it has the necessary goodwill and reputation in the goods sold or services offered to the consumers at large which in turn should be interlinked with the get up in which they are offered.
- Second, the brand owner must be able to demonstrate that the defendant’s misrepresentation qua the goods or services offered by him has led consumers to believe that they originate from the plaintiff.
- Third, that the action of the brand owner has resulted in damage or is likely to result in damage on account of the misrepresentation of the defendant with regard to the origin of the goods and services.
[See RB Health (US) LLC & Ors v. Dabur India Limited, CS (COMM) No. 319/2020 (Delhi High Court)]
Trademark law since time immemorial has given more importance and credibility to prior – use than registration of the brand/logo itself. Registration of a trademark is only for the purposes of proof of the fact that a particular individual/company has indeed been using a particular brand/logo to sell its products or services from a particular date. The most important thing under trademark law is not the registration of the same but prior – use of the same through a legal route which involves proper invoicing of your sales and paying appropriate direct and indirect taxes on such sales [See KBM Foods Private Limited v. Sachin Gupta, MANU/DE/0635/2021 (Delhi High Court)]. Therefore, don’t worry if you were not able to secure a registration of your trademark or if you don’t intend to secure a registration of your trademark due to the complications involved. To buttress my argument, it will be important for me to point out that a non-registered brand/logo owner can even injunct/stay the commercial sale of a registered trademark owner if the non – registered brand/logo owner is able to show that he/she had started selling his / her goods under the same brand name before the sale was commenced by the registered trademark owner [See Audioplus v Manoj Nagar, MANU/DE/0519/2021 (Delhi High Court)]. These would obviously be cases of exception, but, these cases of exception show that under trademark law, prior use / prior sale of the product under a particular brand is the most important consideration and not the registration of the brand while deciding who can use a particular brand/logo.
Having said all of the above, it will be important for me to point out that registration of a trademark does definitely help in being able to stop the alleged misuse of your brand/logo in a more speedy and swift manner. There is no doubt that such trademark registration definitely helps you in protecting and preserving your brand/logo. But, depending on your scale of operations and affordability of expenses related to trademark registration, you can decide whether or not you would want to get your brand/logo registered with the trademark registry under the trademark law or not.
Continuing with the above-mentioned example, if you would have gotten your brand “Monins Steel” registered through the trademark registry, then it would have been easier for you to stop the newly incorporated manufacturing company from manufacturing and selling under the same brand “Monins Steel”. Under the law, if you have got your brand/logo registered then the burden on you is lower in proving that the brand/logo of yours is in fact being wrongfully used by any other individual/company. However, if you are a non-registered brand/logo owner then it will be important for you to prove certain other elements as well before a court law before you can restrain the other individual/company from selling goods/services having the same/similar brand/logo as that of yours [See FDC Limited v. Faraway Foods Private Limited, CS (COMM) 720/2019 (Delhi High Court)].
The idea and object behind this piece is to throw some light on the concerned subject so that the business owners/companies are in a good position to be able to decide whether or not they should get their brand/logo registered through the trademark registry depending on their unique and facts based circumstances.
