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JURISPRUDENCE RELATING TO WELL-KNOWN TRADEMARKS

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Introduction

In today’s marketplace, where every single person/ juristic entity is striving to build a brand for themselves, a tag of a well-known trademark attached to its brand is considered to be a holy grail for trademark owners. Not only does well-known trademark bring a substantial commercial value for trademark owners but it also provides a sturdy protective shell for them to seek refuge in. Trademarks are signs which distinguish the goods and services of one enterprise from another. Trademarks provide a self-attraction feature, which contributes to the monetary arena of an enterprise. In extension to this well-known trademark, play a much more important role here. The limiting feature for a trademark protection is that it is confined to a prescribed territory where the protection is obtained. However, in times like these where consumers transcend the borders and social media blurs the distance between countries, well-known trademark offers a global recognition and protection to an enterprise. This article would dive into the various nuances of well-known trademarks and seek to understand the benefits and protection it offers in today’s constantly developing marketplace.

International framework for well-known trademark protection

The importance of well-known trademarks and the need to protect them was first addressed in the Paris convention in 1920s whereby the provision of Article 6bis was first incorporated. The content of the provision can be summarized as under:

  • Under this provision there is no requirement for registration with respect to well-known trademarks in the country where protection is given under Article 6bis, as long as a trademark is recognized as well-known in that particular country.
  • Protection shall be granted against those goods where a trademark used is identical or similar to a well-known trademark.
  • The protection has been provided to similar marks that derive their essential parts from a well-known trademark or are ‘an imitation liable to create confusion’. Any such trademark shall be refused, have its registration cancelled or its use by unauthorized third parties can be prohibited.
  • Under this provision, the concept of well known trademarks was related to trademark protection of products only and not services.

The limited scope of protection provided by the Paris convention was supplemented with Article 16(2) and 16(3) of the TRIPS agreement. The incorporation of Article 16 enhanced the scope of protection for well – known trademarks in three ways:

  • By extending the scope of well-known trademark protection to services.
  • Making the determination of well-known trademarks more flexible by taking the relevant sectors of the public and real-life market conditions into consideration.
  • Expanding the scope of protection by considering cases of dissimilar goods or services where the trademark has a connection between the product and the owner of the infringing trademark and use by the third party would cause damage to the owner of well-known trademark.           

Post the incorporation of Article 16, WIPO came under an obligation to protect all well-known trademarks. This led to joint recommendations from WIPO and Paris Convention Union. The guidelines provided in this join recommendations sets a non-exhaustive list of factors that an authority must take into consideration when deciding whether a mark is to be considered well-known or not. The joint recommendations enlarge the scope of protection of well-known trademarks by incorporating Article 2. Article 2 of the joint recommendation clearly states that a well-known mark in a Member State can be protected as a well-known mark if it is well-known in another Member State and the fact is known to the relevant Member State even if the relevant well-known mark has not been used or registered or an application for registration of the mark has not been filed in the Member State concerned.

Well-known trademarks in Indian jurisprudence

India has been protecting well-known trademarks for quite some time. The statutory provisions dealing with protection of trademarks date back to 1860s. During that time, trademarks were protected under the Indian Penal Code, 1860. Subsequently, the Indian Merchandise Marks Act, 1889 defined ‘trademarks’ with reference to the Indian Penal Code. It was in the Trademarks Act, 1940 where the term ‘trademark’ was specifically defined. Even when the 1940 Act does not specifically define well – known marks, it contained provisions which accord special protection to well-known marks if they satisfy the criteria laid down in Section 38 (1). Since India is a signatory to the Paris convention, TRIPS and GATT, it was in compliance with the agreement in TRIPS and the Paris convention that the Trademarks Act, 1999 and Trademarks Rules, 2002 were promulgated repealing the earlier laws on trademarks. It was in the 1999 Act that a statutory definition governing ‘well – known’ marks was laid down.

The Trademarks Act, 1999 defines well-known trademarks in Section 2(1) (zg) as “in relation to any goods or services, a mark which has become so to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first-mentioned goods or services”. The act also detail the factors in Sections 11(6), 11(7) and 11(9), which should be considered while deciding which trademark should be given the status of well-known trademark. The wording of the text suggest that the Registry has a final say on which trademark should fall within the ambit of well-known trademark, however, the Courts have also from time to time declared a trademark a well-known trademark when suit for passing off or infringement is presented before them. Section 11(6) lays down five factors that may be considered while determining a well-known mark. The section is reproduced as under:

(6) The Registrar shall, while determining whether a trade mark is a well-known trade mark, take into account any fact which he considers relevant for determining a trade mark as a well-known trade mark including—

 (i) the knowledge or recognition of that trade mark in the relevant section of the public including knowledge in India obtained as a result of promotion of the trade mark;

 (ii) the duration, extent and geographical area of any use of that trade mark;

 (iii) the duration, extent and geographical area of any promotion of the trade mark, including advertising or publicity and presentation, at fairs or exhibition of the goods or services to which the trade mark applies;

 (iv) the duration and geographical area of any registration of or any application for registration of that trade mark under this Act to the extent they reflect the use or recognition of the trade mark;

 (v) the record of successful enforcement of the rights in that trade mark; in particular, the extent to which the trade mark has been recognised as a well-known trade mark by any court or Registrar under that record.

Section 11(7) of the Act then further elaborates on the meaning behind ‘relevant section’ of the public by providing three factors. The section is reproduced for ready reference as under:

(7) The Registrar shall, while determining as to whether a trade mark is known or recognised in a relevant section of the public for the purposes of sub-section (6), take into account— 

(i) the number of actual or potential consumers of the goods or services;

(ii) the number of persons involved in the channels of distribution of the goods or services; 

(iii) the business circles dealing with the goods or services, to which that trade mark applies.

As mentioned above, market places now a days transcend the borders and trademarks spill over into the markets of other countries. This is known as doctrine of transborder reputation. The Trademark Act, 1999 recognizes this via Section 11(9).  Section 11 (9) of the Act, in line with Article 2 (3) (a) of the Joint Recommendations, provide for certain instances which need not be considered as pre – requisites while determining a well-known mark, which have been reproduced as under:

(9) The Registrar shall not require as a condition, for determining whether a trade mark is a well-known trade mark, any of the following, namely:— 

(i) that the trade mark has been used in India;

(ii) that the trade mark has been registered;

 (iii) that the application for registration of the trade mark has been filed in India;

 (iv) that the trade mark—

(a) is well known in; or

(b) has been registered in; or

(c) in respect of which an application for registration has been filed in, any jurisdiction other than India; or

(v) that the trade mark is well-known to the public at large in India.

New Trademark Rules, 2017 and the registration process of well-known trademarks in India.

Before the new trademark rules came into place, the Registry made a list of well-known trademarks and uploaded it on the website. However, with the new rules, a trademark owner can directly file an application for a well-known trademark to the registrar. The steps to be followed for filing for an application for a well-known trademark are as under:

Form TM – M- : For getting mark registered as well- known trademark one needs to file an application on the form TM-M. The prescribed fee as per the first schedule of the rules in Form TM- M is Rs. 1,00,000/-. The Application need to be filed online through the e-filing services of the trademark made available at official website i.e. www.ipindia.nic.in.

There are certain documents which need to be filed along with the form. The documents are listed below:

  • Statement of case describing the applicant’s rights in the trademark and describing the applicant’s claim that the trademark is a well-known trademark,
  • Evidence in support of the applicant’srights and claim viz. evidence as to use of trademark, any application for registration made or registration obtained, annual sales turnover of the applicant’s business based on the subject trademark duly corroborated, evidence as to the number of actual or potential customers of goods or services under the said trademark, evidence regarding publicity and advertisement of the said trademark and the expenses incurred therefore, evidence as to knowledge or recognition of the trademark in the relevant section of the public in India and abroad.
  • Details of successful enforcement of rights, if any, relating to the said trademark in particular extent to which trademark is recognized as well-known trademark by any Court in India or Registrar of Trademarks,
  • Copy of the Judgment of any court in India or Registrar of Trademarks, if any, wherein the trademark is determined as well-known trademark.

The size of the document submitted along with statement of case as evidence / supporting document should be in PDF format with resolution of 200 X 100 dpi on A4 size papers and total file size shall not exceed the limit of 10 MB.

After the submission of the form, the office will consider whether to grant the status of well-known trademark or not on the basis of the documents submitted. It may or may not be considered by the Registry. If accepted, then the said mark will be added in the list of Well- Known Trademarks.

If one objects for inclusion of a particular Trademark in the list of Well- Known Trademarks then the applicant can file objection to the Registry of Trademark by stating its reasons for objection.

Copy of such objection will be given to the Applicant and they can file counter statement for such objections within stipulated time. After seeing both the side of the parties the final decisions will be given. If the Applicant’s mark is included in the list of well- known trademark the same shall be informed to the Applicant. This fact shall also be informed to the Trade mark Journal and the mark shall be included in the list of well- known Trademark which would also be available on the website.

Judicial trends of Well-known trademarks in India

The protection and safeguards regarding well-known trademark instilled in the Indian statute i.e. the Trademarks Act, 1999 can be seen via various pronouncements by the Indian Courts. Some of the important judicial pronouncements have been mentioned henceforth. First and foremost is the famous case of Rolex SA v. Alex Jewellery Pvt. Ltd. Ors, 2009 (6) Raj 489 (Del.), where the Plaintiff had approached the Hon’ble Delhi High Court seeking interim relief to restrain the Defendants from dealing in artificial jewellery or in any other product bearing the trademark/ tradename ROLEX or any deception variation thereof. The Hon’ble Court was of the view that bearing in mind the factors laid out in Section 11(6) of the Trademarks Act, 1999, the duration, extent and geographical area of trademark was in the favour of the Plaintiff. The Court further observed that

“The test of a well-known trademark in Section 2(zg) is qua the segment of the public which uses such goods. In my view any one in India, into buying expensive watches, knows of ROLEX watches and ROLEX has a reputation in India. Not only so, to satisfy the needs/demands of consumers in different countries, the well-known international brands which were earlier available at prices equivalent to prices in country of origin and which owing to the exchange rate conversion were very high, have adapted to the Indian situation and lowered prices. A large number have set up manufacturing facilities here and taken out several variants. Thus, merely because today the price of a ROLEX watch may be much higher than the price of items of jewellery of the defendants as argued, cannot come in the way of the consumer still believing that the jewellery is from the house of the plaintiff.”

In the matter of Kamal Trading Co. v. Gillette UK Limited, 1998 IPLR 135, the Plaintiff sought an injunction against the Defendant for the use of the mark ‘7’O Clock’ on their tooth brushes. The Court was of the opinion that the use of the mark ‘7 O’CLOCK’ by the Defendants would clearly result in deceiving the customers with the impression that the toothbrushes come from the house of Gillette, who use the mark on their razors and shaving cream across the world.

In the celebrated case of Whirlpool co. & Anr. V. NR Dongre, (1996) 5 SCC 714, the Plaintiff’s trademark ‘WHIRLPOOL’ expired in 1977 on account of failure to apply for renewal. Later in the year 1988, the Defendant no. 5, Usha International Ltd ,who was trying to ride on the goodwill of WHIRLPOOL, applied with the Registrar of Trademarks for registration of the trademark ‘WHIRLPOOL’ for certain goods including washing machines. Subsequently, the Plaintiff filed an objection which was dismissed by the Registrar on the basis of lack of reputation and non-usage of the trademark ‘WHIRLPOOL’ in India. It was further said that the usage of the trademark ‘WHIRLPOOL’ by N.R Dongre for selling his goods via Usha International Ltd would not create any confusion in the market. Thereafter, the Plaintiff herein filed an action for passing off and grant of an interlocutory injunction. While granting an injunction to Whirlpool corporation the Hon’ble Court observed that Whirlpool Corporation was the prior user of the trademark since 1937 and is registered in 65 countries where they have continuously been in business. Their brand is frequently advertised in international magazines and therefore has acquired transborder reputation and goodwill throughout the world. People across the world associate washing machines and other electronic goods with the brand. Therefore, if the Defendant is allowed to use this brand to sell their products, the customers might get deceived or confused as to the origin of the goods. This would lead to the Plaintiff to suffer an irreparable injury as the products of the Defendant and the Plaintiff differed in their make and quality of performance.

Similar observation were also made in the case of Aktiebolaget Volvo v. Volvo Steels Limited, 1998 (18) PTC 47 (Bom) where the Court ruled in the favour of the Plaintiff and held that the brand VOLVO has an established reputation in India and thus observed that:

“The Defendants…are hereby restrained from using the Plaintiffs’ name/trademark ‘VOLVO and/or any name/mark confusingly or deceptively similar thereto, in relation to online booking of bus tickets, live tracking of buses, telephonic booking of bus tickets or in relation to any other goods or services, in any manner, including…domain name…meta- tags associated with the impugned domain name, as a part of the email id…third party listings, references in social media and/or any representation made by the Defendants…amounting to infringement…and passing off…”

Dilution of Trademarks

Before the provision regarding well-known trademark was incorporated in the Trademarks Act, 1999, there was  no concept of dilution of trademarks. With the incorporation of these provisions, a well-known trademark holder can restrict others from using his mark in a way that would harm the reputation of its brand by reducing his individuality. A trademark is diluted when the use of similar or identical trademarks in other non-competing markets blurs the distinction between the two trademarks. Protection against such dilution essentially means to protect the well-known trademark from losing its singular association in the public mind with a particular product. For instance, the word PEPSI is associated with a globally recognized soda beverage. Hence, any product which is then sold under the name PEPSI would deceive or confuse the customers as they would assume that the said product is by the company PEPSI itself, which might harm the reputation of the brand. To avoid such dilution to take place, the Trademarks Act, 1999 incorporated Section 29(4) which is reproduced as under:

“29 (4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which— 

(a) is identical with or similar to the registered trade mark; and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.”

So effectively, this means that a well known trademark will transcend the classes of goods/services as provided in Schedule Four appended to the Trademarks Act, 1999. Eg. X`s logo and wordmark brand is registered under class 10 has become a well-known trademark. Y brand after getting itself registered under class 21 uses an identical logo and wordmark as that of X but for products under class 10. In this case, the courts will pass orders in favour of X and injunct Y from infringing the brand of X even though both X and Y operate in complete different spheres of business.

The dilution of trademarks principle was applied in the landmark case of Daimler Benz Aktiegesellschaft v. Hybo Hindustans, AIR 96 Del 239 where the use of the Plaintiff brand name BENZ was being used by the Defendant on undergarments. Applying the rationale of doctrine of dilution of trademark the Court in deciding the case acknowledged the logo of the Plaintiff as a well-known trademark and hence restrained the Defendant from using the impugned mark by stating that there was no valid reason as to why the Defendant would adopt the name “BENZ”, which is associated with one of the finest engineered cars in the world and has a trans-border reputation and goodwill for sale of undergarments.

To strike a balance between genuine claims and frivolous litigations, the Courts have laid down exceptions to the dilution of trademark principle , which are as follows.

  • Any Rightful use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famed mark by another individual other than as a designation of course for the person’s own goods and services.
  • Promotion or advertisement that allows consumers to compare goods and services.
  • All forms of news reporting and news commentary.
  • Any mark which includes parodies, criticism or comments.

The parodies principle was used in the case of Louis Vuitton Malletier S.A. v. Haute Diggity Dog LLC, where the Defendant, who was the manufacturer of apparels for dogs, sold his product under the mark ‘Chewy Vuitton’. The Courts in the case held that this mark was clearly a parody of the famous brand ‘Louis Vuitton’ and did not dilute the trademark in any way. The consumers would not be deceived or confused between the two brand names.

Conclusion

At present there are 81 registered well-known trademarks in India. With the amendment in Trademark Rules, 2017, and the increased awareness in the marketplace regarding the benefits of well-known trademarks, this article sought to shed light on the nuances of the well-known trademarks. Dipping into the waters of well-known trademarks, one enters into a very niche arena of trademark litigation, therefore understanding the various provisions laid down by the legislature is of utmost necessity. In today’s evolving and developing marketplace it will be a boon to the trademark owners in India to follow the detailed procedure laid down in Trademark Rules, 2017 and get their marks registered as well-known trademarks. This would undoubtably provide security from being infringed or passed off by any unauthorized person. That being said, the Registry would have a heavier burden and would have to be cautious in granting the status of well-known trademark as frivolously granting such status might lead to monopoly in the marketplace and might preclude other parties from using even a similar trademark in respect of other goods and services.

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TRADEMARK SQUATTING – A LEGAL OVERVIEW OF THE RECENT JUDGMENTS

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Imagine that you own a trademark in India that you have diligently registered with the Indian Patent and Trademark Office. As your domestic sales increase, you recognize that international markets offer unique prospects that your brand is eager to pursue. You take the first step towards an international presence after a thorough study and investigation. However, to your utter shock, you discover that someone else has already registered your trademark in the international market.

How is it possible? Isn’t your registered trademark supposed to protect you against these “trademark squatters”? Unfortunately, trademark registrations only provide territorial protection, meaning that they only apply to the nation in which the brand was registered. Your Indian brand trademark is only protected in India, giving trademark squatters plenty of opportunities to utilise your mark elsewhere.

Through this article, we’ll be delving into the issue of trademark squatting, its consequences, and the safeguards available to the brand owners against the squatters.

Meaning of Trademark Squatting:

The World Intellectual Property Organisation (“WIPO”) defines Trademark Piracy (Squatting) as “the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use.” [See World Intellectual Property Organization, WIPO Intellectual Property Handbook, 90 (2008)]. It occurs when a person (squatter) in a foreign country registers a trademark that has already been registered by its true owner in its original country.

Squatters try to register trademarks with the goal of extorting rents from brand owners or other companies that rely on the brand, such as importers in the case of international brands. A typical scenario is for a squatter to register the trademark of a foreign brand and wait until the foreign brand owner enters the local market.

A case in point is the U.S. coffee shop chain Starbucks. When entering the Russian market in 2005, Starbucks faced the fact that its trademark was owned in Russia by an individual, Sergei Zuykov, who offered to reassign the trademark for US$ 600,000. Instead, Starbucks opted to invalidate Zuykov’s trademark before court, which resulted in a protracted legal dispute substantially delaying Starbucks’s entry into the Russian market. In China, Apple ended up paying 60 million dollars to the local owner of the mark “iPad.”

A textbook case of trademark squatting in India was the PS5 conflict. Sony’s launch of its latest edition of gaming console Playstation 5 or PS5 in India was halted when it discovered that a trademark squatter named Hitesh Aswani had surreptitiously filed a trademark application for “PS5”, for the identical specification of goods that were covered under Sony’s PS4 trademark registration. Sony then filed an opposition against the said trademark, and the Applicant withdrew his application.

Safeguards against Trademark Squatting:

A.   Application for cancellation of the trademark by proving Abandonment and Non-Use.

An important aspect that must be kept in mind is that there are two kinds of systems where a trademark can be obtained, namely, “first to file” and “first to use”. In the former system, the individual or business that first files for the protection of mark shall be granted the protection, whereas in the latter the individual or business that first uses the mark shall be granted protection for use of such mark. India follows the ‘first to use’ system.

Chapter VI of the Trademarks Act, 1999 deals with the use of trademark and registered users and Section 47 permits the removal of the trademark upon non-use. Section 47 lays down two situations in which a registered trademark is liable to be removed:

  1. When it is proved that the trademark was registered in the absence of a bona fide intention by the applicant. This bona fide intention is in the context of the use of the trademark. For example, when a trademark is registered in 40 classes but is used only in 2 classes, it is a defensive registration. This rule applies to Companies and registered users where no bona fide use is observed in relation to the goods and services for a period of 3 months before the date of application.
  2. When it is proved that there has been no bona fide use of the trademark for a continuous period of 5 years or more from the date of registration of the mark and three months prior to the filing of the application for removal of trademark from the register. This means that when the trademark has not been used with a bona fide intention for a continuous period of at least 5 years and 3 months, it is liable to be removed.

However, the registered trademark may not be removed if the case fulfills the requirements mentioned under clause 3 of Section 47, which are:

  1. A company is about to be registered under the Companies Act and the registered proprietor intends to assign the trademark to the company in the near future.
  2. The Registered proprietor intends the trademark to be used by a registered user upon its registration.
  3. The alleged non-use of the trademark is under special circumstances, such as restricted use by law, which does not relate to the intention of the proprietor.
  • Judicial Interpretation of what constitutes abandonment/non-use of the trademark:

With regard to Section 47 of the Act, a non-use of a registered trademark occurs when it is not used for more than a period of 5 years and 3 months, which will make him lose the trademark in rectification proceedings. ‘Use’ of a trademark means that when there is a bona fide intention for the use of the mark in the ordinary course of trade and not only to reserve the right to use the mark. In J. N. Nicholas Ltd. v. Rose and Thistle [1990 SCC OnLine Cal 157], it was held that use of a trademark does not necessarily mean a physical sale. Even if the mark has been used for the purpose of advertisement in the said period of 5 years and 3 months, without existing on the goods, such use is valid in the eyes of law.

In National Bell Co. v. Gupta Goods Manufacturing Co. (P) Ltd. [AIR 1971 SC 898], the Supreme Court held that “if a registered proprietor of a mark ignores repeated infringements of its mark, then it can even be considered as an abandonment of its mark.”

Further the Delhi High Court in Radico Khaitan Limited v. Brima Sagar Maharashtra Distilleries Ltd. [(2014) 60 PTC 405], held that “mere introduction/mention of additional material would not lead to the conclusion that the registered mark has not been used and consequently must not be deemed to have been abandoned by the proprietor thereof. So long as the registered mark is used in substantially the same manner in which it is registered it must be deemed/considered to constitute the use of the registered mark itself. Where the use of a mark, registered or unregistered is apparent, the mere addition of material on the label or other material on which it appears would not lead to the conclusion that the mark has not thereby been used.”

The Supreme Court in Meghraj Biscuits Industries Ltd. v. Commissioner of Central Excise, U.P. [(2007) 3 SCC 780], held that “Discontinuation of business in respect of a product does not necessarily amount to abandonment.”

In Parker Hannifin France Sas v. Kanwar Sachdeva [2020 SCC OnLine IPAB 163 (IPAB Chennai)], it was held that if a wordmark or logo mark has been in use by a prior user and the same has been extensively used by that entity – but some third party (squatter) or blackmailer gets the trademark registered in his or her name then the prior user can very well move a petition for cancellation under section 47 and 57 before the IPAB stating petition for removal on the grounds of non-use and cancellation of the trademark.

In the case of Vishnudas Trading as Vishnadas Kishendas v. Vazir Sultan Tobacco Co. Limited [JT 1996 (6)], the applicant filed for limiting the use of the trademark of ‘Charminar’ used for the manufacture of cigarettes. This trademark was also registered in other classes of zarda and quiwam, which were intended to be used by the proprietor, but was never actually used. The Court applied the provision of non-use and held that if a person is trading or manufacturing only one or some goods and have no bona fide intention to actually trade or manufacture some of the goods, but have it registered as a trademark which covers several goods, then such registration is liable to be rectified or removed and only those classes that are actually used by the proprietor shall be valid.

The Hon’ble Supreme Court in the Kabushiki Kaisha Toshiba v. TOSIBA Appliances [(2008) 10 SCC 766] held that “The intention to use a trade mark sought to be registered must be genuine and real.” The division bench further explained that “when a trade mark is registered, it confers a valuable right. It seeks to distinguish the goods made by one person from those made by another. The person, therefore, who does not have any bona fide intention to use the trade mark, is not expected to get his product registered so as to prevent any other person from using the same.”

In Cluett Peabody & Co. Inc. v. Arrow Apparals [1997 SCC OnLine Bom 574] the court propounded that “A trade mark has no meaning even if it is registered unless it is used in relation to goods. Otherwise, its non-use may lead to its death. A trademark which drops out of use dies. Where there are no goods offered for sale, there is no use of trademark.”

  • Who can file for Removal of Trademark on the Basis of Non-Use:

Any person who is aggrieved within the meaning of Section 47 can file an application for removal of the trademark from the register on the grounds that the trademark has not been put to use.

In Infosys Technologies Ltd v. Jupiter Infosys Ltd. [(2011) 1 SCC 125], the Hon’ble Supreme Court observed that to be an aggrieved person under Section 46 (of the Trade and Merchandise Marks Act, 1958 – corresponding to Section 47 of the Trade Marks Act. 1999), he must be one whose interest is affected in some possible way.

In Kerly’s Law of Trade Marks and Trade Names (11th edition) at page 166, the legal position with regard to ‘person aggrieved’ has been summarized thus:

“The persons who are aggrieved are all persons who are in some way or the other substantially interested in having the mark removed – where it is a question of removal – from the register; including all persons who would be substantially damaged if the mark remained, and all trade rivals over whom an advantage was gained by a trader who was getting the benefit of a registered trade mark to which he was not entitled. (emphasis added).”

Further, in Aktiebolaget Jonkoping Vulcan v. V.S.V. Palanichamy Nadar [AIR 1969 Cal 43], the Court held that an applicant whose trade mark registration has been refused by reason of prior registration by the respondent of the same or similar or identical mark for the same goods or description of the goods or whose application for registration is opposed on the basis of prior registration of the same or similar mark by the respondent, can be regarded as a ‘person aggrieved’.

  • Burden of proof of non-use/abandonment:

According to Section 47, the burden of proof of non-use lies on the applicants for rectification of the register, and they have to show that there was no bona fide intention to use the mark or any bona fide use of the trademark.

In the case of American Home Products v. Mac Laboratories Private Limited [1986 AIR 137], also known as the Dristan case, the court held that the burden of proof under Section 47 exists on the person who seeks to have the trade mark removed from the Register. Thus, where there has been a non-use of the trade mark for a continuous period of five years and the application for taking off the trade mark from the Register has been filed one month after the expiry of such period, the person seeking to have the trade mark removed from the Register has only to prove such continuous non-use and has not to prove the lack of a bona fide intention on the part of the registered proprietor to use the trade mark on the date of the application for registration. Where, however, the non-use is for a period of less than five years, the person seeking to remove the trade mark from the Register has not only to prove non-use for the requisite period but has also to prove that the applicant having prior registration of the trade mark (or the “squatter”) had no bona fide intention to use the trade mark when the application for registration was made. The object underlying section 47 is to prevent trafficking in trade marks.

The above cases illustrate that a prima facie case of abandonment is easily established upon showing that a mark was not in use in commerce for at least five years. If such evidence of consecutive non-use is unavailable, it becomes much more difficult to prove abandonment. To carry its burden, a challenger must show not only that the trademark owner discontinued use of the mark, but also that the respondent intends not to resume use of the mark.

  1. Application for Rectification of the trademark

Section 57 of the Indian Trademarks Act,1999 provides for the removal/rectification of a registered Trade mark or rectification of the Register of Trademarks on an application made by ‘any aggrieved person’ on the following grounds:

  1. Any contravention or failure to observe a condition of the Trade mark entered in the Register.
  2. Any absence or omission of an entry in the Register, e.g., a disclaimer, a condition or a limitation on the registered Trademark.
  3. Any entry made without any sufficient cause in the Register, e.g., registration was obtained by fraud or misrepresentation of facts or the Trade mark registered was similar to an already registered Trade mark.
  4. Any error or defect in any entry in the Register.
  5. Any entry wrongly remaining in the Register, e.g., it is contrary to some of the provisions of the Act or is likely to cause confusion amongst the public and trade

Thus, an aggrieved person can also file an application under Section 57 for the removal or rectification of a registered trademark on the abovementioned grounds.

  1. “Well-Known Brands” and the doctrine of “Trans-border Reputation”

One of the most relevant legal barriers to squatting is the protection of well-known trademarks established by Article 6bis of the Paris Convention and Article 16.2 of TRIPS, incorporated under Section 11 of the Trademarks Act.

The doctrine of trans-border reputation is a phenomenon evolved through precedents. The doctrine holds that digitalization and the internet have blurred the international geographical borders and the trademarks, with their incredibly high reputation and extensive advertising have transcended these geographical barriers and spilled over into the markets of other countries, though they do not hold any actual business there.

The Trademark Act, 1999 also recognizes this doctrine through Section 11 (9) which maintains that the trademark being used in India or registered in India is not a pre-requisite for being recognized as a well-known mark.

  • The following judicial precedents established the protection that is extended to well-known brands:

In Daimler Benz v. Hybo Hindustan [1993 SCC OnLine Del 605] before the Delhi High Court, the plaintiff had filed a case against the defendant seeking an injunction for the usage of the plaintiff’s logo as well as the word “Benz”. The court here acknowledged the reputation of the plaintiff’s logo, as a well-known mark on the grounds of its international reputation, as well as goodwill generated and granted the plea of injunction.

Another case in which the Court granted relief of injunction is the case of Whirlpool Co v. N R Dongre [(1996) 5 SCC 714]. In this case the Plaintiff i.e., Whirlpool had not subsequently registered their trademark in India. However, the Plaintiff by virtue of use and advertisements in international magazines had a worldwide reputation and used to sell their machines in the US embassy in India. Meanwhile, the Defendant started using the impugned mark on its washing machines. Thereafter the Plaintiff brought an action against the Defendant and the Court held that the plaintiff had an established ‘transborder reputation’ in India and hence the Defendants were injuncted from using the same for their products.

Additionally, in Rolex Sa v. Alex Jewellery Pvt. Ltd [2014 SCC OnLine Del 807], a suit was filed against the defendants for selling jewellery using the trade name “Rolex” which was associated with the plaintiff. The Delhi High Court held that the trademark of the plaintiff was well-known and that the portion of the public that used watches under the trade name “Rolex,” may associate the defendant’s jewellery with that of the plaintiff. This may end up creating confusion among the public. Therefore, an injunction was granted by the court against the use of the trade name “Rolex” by the defendants.

Conclusion:

The purpose and intention behind this piece is to throw some light on the issue of trademark squatting and as to how brand owners can avoid themselves from falling prey to any such tactics of trademark squatting. It is advisable that after the brands initial success, it is ideal for the brands to get their mark registered in other territorial jurisdictions where they plan on expanding their business. Further, brands can internally make an analysis/report as to their new and upcoming projects and get the same registered beforehand in order to avoid a situation like the Sony PS5 debacle. As trademark squatting has become a niche area in trademark disputes, it is important to take proactive measures to ensure that your mark is adequately protected from trademark squatters and discourage bad-faith or malicious registration.

[Law Research Credits: Lehar Chamaria]

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OFFENCES UNDER THE IP LAW WHOSE PUNISHMENT MAY EXTEND TO THREE YEARS: BAILABLE OR NON-BAILABLE?

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This article discusses various judgments on the issue whether an offence whose punishment “may extend to three years” is a bailable / non-cognizable offence or a non-bailable / cognizable offence, with special emphasis on such offence(s) provided under the Copyright Act, 1957 [“Copyright Act”] and the Trade Marks Act, 1999 [“Trade Marks Act”]. Although the discussion herein largely focuses on the judgments delivered in the context of Section 63 of the Copyright Act, the same is (needless to clarify) extendable to other such offences provided under the Copyright Act, the Trade Marks Act, and other statutes.

Bailable & Cognizable: A conceptual understanding

The Code of Criminal Procedure, 1973 [“Code”] is the primary statute which helps us determine if a particular offence is bailable or not and cognizable or not; unless a statute stipulating an offence specifically provides for its cognizable and bailable nature. Essentially, a cognizable offence is the one for which a police officer “may arrest without warrant” [Section 2 (c) of the Code]; and a non-cognizable offence is the one for which “a police officer has no authority to arrest without warrant” [Section 2 (l) of the Code]. The definition of “bailable offence” and “non-bailable offence” as provided in Section 2 (a) of the Code does not give us much guidance as to the meaning thereof. For that, one has to inter alia refer to Chapter XXXIII of the Code, a perusal whereof suggests that: a bailable offence is the one for which the accused can seek bail as a matter of right [Section 436 of the Code]; while in case of a non-bailable offence, the discretion to grant bail lies with the Court [Sections 437-439 of the Code].

Given the grave restriction of personal liberty (or at least a reasonable apprehension whereof) that ensues as a result of characterizing a particular offence as cognizable and non-bailable, the issue which is discussed herein becomes significant, and perhaps for that reason has been re-agitated several times. The sole guide in this regard is the First Schedule to the Code [“Schedule”] which inter alia classifies offences as cognizable / non-cognizable & bailable / non-bailable.

The Issue

The Copyright Act and the Trade Marks Act (and various other statutes for that matter) provide for certain offences but fail to classify those offences specifically as cognizable / non-cognizable & bailable / non-bailable. Therefore, to determine the appropriate classification, one has to make reference to Part II of the Schedule, which provides for “classification of offences against other laws”. The classification provided therein is to the following effect [“concerned classification table”]:

Offence Cognizable or Non-cognizable Bailable or Non-bailable
If punishable with death, imprisonment for life, or imprisonment for more than 7 years. Cognizable Non-bailable
If punishable with imprisonment for 3 years and upwards but not more than 7 years, Cognizable Non-bailable
If punishable with imprisonment for less than 3 years or with fine only. Non-cognizable Bailable

In the Copyright Act, there are various provisions [being Sections 63 (Offence of infringement of copyright or other rights conferred by the Copyright Act), 63A (Enhanced penalty on second and subsequent convictions), 63B (Knowing use of infringing copy of computer programme to be an offence) & 68A (Penalty for contravention of section 52A)] which provide for offences whose punishment is imprisonment which “may extend to three years”. Even the Trade Marks Act contains provisions [being Sections 103 (Penalty for applying false trade marks, trade descriptions, etc.), 104 (Penalty for selling goods or providing services to which false trade mark or false trade description is applied), 105 (Enhanced penalty on second or subsequent conviction) & 107 (Penalty for falsely representing a trade mark as registered)] which provide for offences with the aforementioned punishment. To determine if the aforementioned offences are cognizable and non-bailable or non-cognizable and bailable, one needs to analyze the entries of the concerned classification table and see under which entry the aforementioned offences fall – the second entry or the third entry.

Case Law

Now, let us turn to the case law on the issue; an analysis whereof reveals that there are various conflicting judgments of the High Courts. Although there is an order of the Supreme Court viz. Avinash Bhosale v. Union of India [(2007) 14 SCC 325] which has been considered by some High Courts to be a conclusive dictum on the issue, however, it can be argued that this order does not amount to declaration of law under Article 141 of the Constitution by invoking the doctrine of sub silentio. In Avinash Bhosale, the issue pertained to Section 135 (1) (ii) of the Customs Act, 1962, which provides for an offence for “evasion of duty or prohibitions” and makes it punishable with imprisonment “which may extend to three years” in certain cases. Avinash Bhosale is a one-page order wherein all the Supreme Court had to say was, “it appears to us that the offence which is alleged to have been committed is a bailable offence”. There was no analysis of the concerned offence or the entries in the concerned classification table. There was no justification (whatsoever) as to why the concerned offence fell under the third entry of the concerned classification table. In fact, there was no reference to the third entry of the concerned classification table. There was no reasoning or justification as is highly warranted on this issue. It can only be termed as a purely ‘silent’ and ‘non-reasoned’ order.

It is now apposite to understand the doctrine of sub silentio, in brief. In MCD v. Gurnam Kaur [(1989) 1 SCC 101], the Supreme Court explained the doctrine in the following words:

“Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn. explains the concept of sub silentio at p. 153 in these words:

A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio.

…in Lancaster Motor Co. (London) Ltd. v. Bremith, Ltd. [1941] 1 KB 675, the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. We went on to say that the point had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided “without argument, without reference to the crucial words of the rule, and without any citation of authority”, it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed.”

Gurnam Kaur was followed in State of U.P. v. Synthetics and Chemicals Ltd. [(1991) 4 SCC 139] wherein the Supreme Court held as follows:

“But the problem has arisen due to the conclusion in the case of Synthetic and Chemicals (supra). The question was if the State legislature could levy vend fee or excise duty on industrial alcohol. The Bench answered the question in the negative as industrial alcohol being unfit for human consumption the State legislation was incompetent to levy any duty of excise either under Entry 51 or Entry 8 of List II of the VIIth Schedule. While doing so the Bench recorded the conclusion extracted earlier. It was not preceded by any discussion. No reason or rationale could be found in the order. This gives rise to an important question if the conclusion is law declared under Article 141 of the Constitution or it is per in curium and is liable to be ignored… In Lancaster Motor Company (London) Ltd. v. Bremith Ltd. 1941 1KB 675, the Court did not feel bound by earlier decision as it was rendered ‘without any argument, without reference to the crucial words of the rule and without any citation of the authority’. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur AIR 1989 SC 38. The Bench held that, ‘precedents sub-silentio and without argument are of no moment’. The Courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141 Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In Shama Rao v. State of Pondicherry AIR 1967 SC 1680 it was observed, ‘it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down there-in’. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent.”

Gurnam Kaur and Synthetics and Chemicals Ltd. were followed in A-One Granites v. State of U.P. [(2001) 3 SCC 537]. In light of the aforementioned judgments on the doctrine of sub silentio, it cannot be said that Avinash Bhosale amounts to declaration of law under Article 141, and hence, has a binding effect. Now, as we have dodged Avinash Bhosale, we must refer to the judgments of the High Courts.

i. Gauhati High Court

In Jitendra Prasad Singh v. State of Assam [(2004) 2 GLR 271], the High Court was considering if the offence stipulated in Section 63 of the Copyright Act is a bailable one or not. On a plain reading of the text of Section 63 and that of the third entry in the concerned classification table, it was held that the offence was a non-bailable one. The reasoning was: the expression “punishable with imprisonment which may extend to three years” cannot be equated with the expression “punishable with imprisonment for less than 3 years” since the accused can be punished with imprisonment for three years, and hence, the third entry will not apply. Therefore, the offence cannot be considered as a bailable one. In essence, the test laid down was that one has to look at the maximum punishment provided for an offence, and then determine which entry of the concerned classification table it falls under.

ii. Andhra Pradesh High Court

In Amarnath Vyas v. State of A.P. [MANU/AP/1214/2006], the High Court did not agree with Jitendra Prasad Singh and held that the offence stipulated in Section 63 was a bailable one. However, the reasoning provided therein was completely convoluted. It was unequivocally held that the third entry of the concerned classification table did not apply since the maximum punishment provided in Section 63 was imprisonment for three years. However, it was (strangely) held that even the second entry did not apply:

“Whether the second category of the classification will attract or not is the only point germane for consideration in the instant case. A close scrutiny of the excerpt extracted hereinabove would clearly show that the punishment prescribed under the provisions of the Act is for a term which may extend upto three years. If the punishment prescribed under any special Act is for a term of three years and upwards, it would become ‘non-bailable’. The language used in both the provisions, if read keeping them in juxtaposition, would help us in comparing them so as to have a clear idea… The expression “punishment for a term which may extend to three years” is certainly not similar to the expression “punishment for three years and upwards”… True there may be certain other class of offences which may fall in between classification II and classification III of Second Part of Schedule-I. Merely because they are not coming squarely within the domain of classification-III, they, cannot automatically be treated as included in the classification-II. By default, they cannot be considered as coming within the purview of the classification-II… Therefore, the expression ‘imprisonment for a term which may extend upto three years’, in my considered view, would not come squarely within the expression ‘imprisonment for three years and upwards’. Therefore, the offence punishable under Section 63 of the Act cannot be considered as ‘non-bailable’ one.”

The aforementioned observation shows that the Court was apparently of the view that there are certain crevices and interstices in the concerned classification table within which one could fit the offences like the ones we are concerned with. However, there was no guidance as to how one should locate those crevices and interstices in the concerned classification table or the scheme of the Code. In any case, even if it is assumed that the interpretational analysis in the aforementioned judgment is correct, there is no justification as to how the Court came to the conclusion that the concerned offence was a non-bailable one. Because, even if one accepts that not a single entry of the concerned classification table is applicable in such a case, how does one, then, determine if the offence is a bailable one or not?

Furthermore, the Court made reference to a Supreme Court judgment viz. Rajeev Chaudhary v. State (N.C.T.) of Delhi [MANU/SC/0330/2001] to bolster its justification. Rajeev Chaudhary provided clarity on the interpretation of Proviso (a) to Section 167 (2) of the Code, which is as follows:

“the Magistrate may authorise the detention of the accused person, otherwise than in custody of the police, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this paragraph for a total period exceeding—

(i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years;

(ii) sixty days, where the investigation relates to any other offence,

and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail…”

In Rajeev Chaudhary, the Supreme Court was enjoined to decide if the offence stipulated in Section 386 of the Indian Penal Code, 1860, wherein the maximum punishment is imprisonment “which may extend to ten years”, fell under clause (i) or (ii) of the aforementioned Proviso. In the context of the aforementioned Proviso, the Court held that imprisonment “which may extend to ten years” cannot be equated with “imprisonment for a term of not less than ten years”. However, this ruling has no relevance to the issue which the Amarnath Vyas Court was deciding. One needs to understand that given the text of the aforementioned Proviso, one has to undergo a process of elimination since clause (i) deals with certain kinds of offences while clause (ii) is the residuary clause. So, one just needs to see if the concerned offence falls under clause (i), otherwise, clause (ii) applies. But, that is not the case with the concerned classification table. It provides a continuum, and every offence has to be classified under either of the three entries. Rajeev Chaudhary provided no guidance with respect to that. Therefore, it is not relevant.

iii. Kerala High Court

In Abdul Sathar v. Nodal Officer, Anti-Privacy Cell [AIR 2007 Ker 212], the Court held that the offence stipulated in Section 63 of the Copyright Act falls under the second entry of the concerned classification table, and hence, is a non-bailable and cognizable one. The logic of Jitendra Prasad Singh was followed (although no reference was made) – that one should look at the maximum punishment provided, and since maximum punishment provided in Section 63 is three years, it falls under the second entry. Pertinently, it distinguished Rajeev Chaudhary reasoning that the language used in Proviso (a) to Section 167 (2) of the Code is different from that used in the concerned classification table.

iv. Delhi High Court

In State v. Naresh Kumar Garg [2013 (56) PTC 282 (Del)], the Court held that the ruling in Avinash Bhosale would apply, and therefore, Section 63 of the Copyright Act was held to be bailable and non-cognizable. Thereafter, in Anuragh Sanghi v. State [2019 SCC OnLine Del 11382], the Court manifested a volte-face. The Court mad certain pertinent (and correct) observations in relation to interpretation of the concerned classification table, which are as follows:

“It is, at once, clear that there is no hiatus between the three categories. The spectrum of punishment by imprisonment from nil to life, is divided into three categories in the descending order. Therefore, this Court is of the view that the said three categories are exhaustive. Obviously, it follows that if an offence is punishable by a term of imprisonment which is not specifically mentioned in Part II of the First Schedule of the Cr.P.C., the same would be covered within the spectrum of the three categories… Almost all enactments stipulate a range of punishment that can be imposed in respect of any offence. Most of the enactments provide for a maximum punishment that can be imposed and some of the enactments also provide for a minimum sentence that can be awarded for an offence. It is not necessary that the range of punishment, as provided for any offence under any enactment, be in identical terms with the language of any of the categories under Part II of the First Schedule of the Cr.P.C. However, that does not mean that the punishment provided for the said offence falls outside the scope of Part II of the First Schedule of the Cr.P.C. As stated above, the three categories of Part II of the First Schedule of the Cr.P.C. cover the entire spectrum of offences that are punishable by imprisonment – from a term of nil (only with a fine) to a term of life.”

It is in the aforementioned manner that the Court refuted the logic of Amarnath Vyas. In pursuance of the aforementioned analysis and going by the logic of ‘maximum punishment’, the Court was convinced that Section 63 of the Copyright Act provides for a non-bailable and cognizable offence. However, the Court considered itself bound by the rulings in Avinash Bhosale and Naresh Kumar Garg. This is where, I feel, the Court could have done more. As already argued hereinbefore, Avinash Bhosale cannot be considered as binding. In so far as Naresh Kumar Garg is concerned, it was a judgment delivered by Single Judge and could have been referred to a Division Bench.

v. Gujarat High Court

In Gurukrupa Mech Tech v. State of Gujarat [(2018) 4 GLR 3324], the Court merely relied on Naresh Kumar Garg and held that Section 63 of the Copyright Act provided for a bailable and non-cognizable offence.

vi. Rajasthan High Court

In Pintu Dey v. State [MANU/RH/873/2015], the Court (Single Judge) relied on Amarnath Vyas and Rajeev Chaudhary and held that Sections 63 & 68A of the Copyright Act provided for bailable and non-cognizable offences. Thereafter, in Deshraj v. State of Rajasthan, the Court (Single Judge) gave a similar ruling without referring to Pintu Dey but by relying on Amarnath Vyas and Rajeev Chaudhary, and held that Section 63 & 63B of the Copyright Act provided for bailable and non-cognizable offences. However, in Nathu Ram v. State of Rajasthan [MANU/RH/39/2021], the Court (Division Bench) overruled Pintu Dey by distinguishing Rajeev Chaudhary and disagreeing with Amarnath Vyas. Deshraj was not referred to but the same stands impliedly overruled. Nathu Ram followed the logic of ‘maximum punishment’ as discussed hereinbefore.

vii. Bombay High Court

The last in our analysis comes the judgment in Piyush Subhashbhai Ranipa v. State of Mahrashtra [2021 (86) PTC 72 (Bom)], wherein the Court held that Section 63 of the Copyright Act and Section 103 of the Trade Marks Act provide for non-bailable and cognizable offences since the maximum punishment provided therein is imprisonment for three years, and hence, the second entry of the concerned classification table becomes applicable.

Conclusion

As is evident in my discussion of the judgments herein, I support the logic of ‘maximum punishment’. It might lead to harsh consequences, but that is the only way one can read the text employed in the concerned classification table. It is a continuum which is exhaustive and does not leave scope for crevices and interstices as was envisaged in Amarnath Vyas. Undoubtedly, Avinash Bhosale needs to be reconsidered. In any case, as I have argued, the same is not binding. In my opinion, all the aforementioned judgments, which hold that Section 63 of the Copyright Act and the like provisions provide for bailable and non-cognizable offences, do not lay down the correct position of law.

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IS IT WORTH THE TIME, ENERGY AND MONEY TO REGISTER YOUR BRAND AS A TRADEMARK? A LEGAL ANALYSIS

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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:

  1. Accept your application and straightaway issue the advertisement of your proposed brand/logo in the trademarks journal; or
  2. 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:

  1. 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.
  2. 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.
  3. 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.

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