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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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In Criminal Procedure

THE DISCRETION TO ARREST WITH POLICE – A PERSPECTIVE FROM THE EXPERIENCES OF A PRACTISING LAWYER

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The discretion to arrest and put an accused behind bars in an offence which is cognizable and non – bailable, is possibly the most powerful right which the Code of Criminal Procedure, 1973 gives to police officers. The rationale behind giving such power to a police officer is that during the course of investigation, the accused should not interfere with the process of a fair and independent investigation. The custody of the accused with the police also aids the police in reconstructing the crime scene and make recoveries of the material which may have been involved in committing the offence. Furthermore, by way of arrest, the accused is incapacitated from committing any other offence during the period of investigation. However, the question remains as to whether “arrest” is the only way in which the above-mentioned objectives can be attained during the pendency of an investigation, or, should the police trust the alleged accused persons that they shall themselves co – operate in aiding the investigation and not disturb the investigation process by influencing potential witnesses etc.

The reporting of a crime can be done by any person who may or may not be a victim of that crime. If the local police station finds prima facie truth in the allegations of the complainant, an FIR (First Information Report) is lodged. The SHO (Station House Officer) deputes an IO (Investigating Officer) to every FIR who then goes on to investigate the alleged offence under the said FIR. It is this IO who has the power and discretion to arrest the accused who has been alleged of committing the crime. The jurisprudence on the powers and discretion of the IO to arrest the accused has evolved over a period of time.

The experience of the courts, more particularly the Hon`ble Supreme Court has not been very pleasant in so far as the use of this power to arrest by the IOs is concerned. The Hon`ble Supreme Court has time and again deprecated the practice adopted by the police where they make arrests in cases where the offence is either not very heinous or prima facie not made out from the allegations made in the criminal complaint. It cannot be denied that the enormous discretion given to the police officers has also led to massive corruption and abuse of this discretion by the police officers. It is common knowledge that a lot of investigating officers demand bribe / other favors from the accused to not arrest them post the lodging of the FIR. Interestingly, it is again known to everyone that many investigating officers also demand bribe/other favors from the complainant to make an arrest of the alleged accused. This is especially common in white collar crimes like cheating, forgery, criminal breach of trust etc. wherein the complainant is confident that an arrest of the accused will lead to a settlement of the matter between the parties thereby providing the complainant with the money/articles/goods which has been alleged to have been cheated or siphoned off by the accused.

COGNIZABLE OFFENCES CARRYING SEVEN OR LESS THAN SEVEN YEARS OF IMPRISONMENT

Section 41 of the Code of Criminal Procedure, 1973 is the principal section which governs the powers of the police officer to make an arrest of an accused person wherein the allegation is that a cognizable has been committed by the accused person. Section 41(1)(a) as amended in 2009 provides that any police officer may make an arrest without a warrant if the accused has committed a cognizable offence in the presence of a police officer. Whether or not an offence is cognizable or non – cognizable can be easily discerned by any person from Schedule I annexed to the Code of Criminal Procedure, 1973. Section 41(1)(b) is bifurcated into two parts i.e. arrests made in cases where the alleged cognizable offence carries seven or less than seven years of imprisonment and arrests made in cases where the alleged cognizable offence carries more than seven years of imprisonment. Through the 2009 amendment, the legislature has circumscribed the discretion of the investigating officers to make arrests in cases where the alleged cognizable offence carries seven or less than seven years of imprisonment. Section 41(1)(b) clearly provides that in such cases where the cognizable offence carries seven or less than seven years of imprisonment, a police officer can make an arrest without warrant only if the following conditions are satisfied:

(i) the police officer has “reason to believe” on the basis of such complaint/information that such person has committed the said offence

(ii) the police officer is satisfied that such arrest is necessary—

(a) to prevent such person from committing any further offence; or

(b) for proper investigation of the offence; or

(c) to prevent such person from causing the evidence of the offence to disappear or tampering with such evidence in any manner; or

(d) to prevent such person from making any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to the police officer; or

(e) as unless such person is arrested, his presence in the Court whenever required cannot be ensured.

The police officer is also mandated under law to write his reasons in the case diary as to why he/she feels that the above-mentioned criterions are being fulfilled in the case and hence arrest is being effected. Furthermore, Section 41A provides that in all cases where the police officer has after applying the criterions prescribed under Section 41(1)(b) decided that the arrest is not required, he/ she shall issue notice of appearance under Section 41A to the accused so that the accused can join the investigation and provide answers to the questions raised by the police officer.

My experience in handling criminal investigations on behalf of the accused in the past nine years tells me that rarely are the above-mentioned criterions prescribed under Section 41(1)(b) are followed in cases where the alleged offence carries a punishment of less than seven years. It is important to be noted that Section 41(1)(b) merely circumscribes the discretion of the police officer in arresting the accused for alleged cognizable offences which carry a punishment of seven or less than seven years. The discretion while circumscribed and guided through this provision does not completely take away the powers of the police officer to arrest an accused under this category of cases. The Supreme Court and other High Courts of our country have time and again reminded the investigating officers and police force of our country to apply their mind before making arrests in offences which carry a sentence of seven or less than seven years [See Arnesh Kumar v. State of Bihar, Criminal Appeal No. 1277 of 2014 (Supreme Court); Rajesh Sharma v. State of UP, AIR 2007 SC 3869]. But, from a more practical perspective, any practicing criminal lawyer of our country would confirm that the investigating officer rarely follows the mandate of Section 41(1)(b) in a meticulous manner.

The power/discretion to arrest or not to arrest as provided by the Code of Criminal Procedure, 1973 has often resulted in its abuse by the police officer. Arrest in India or for that matter any society across the world carries with it extremely strong prejudice and stigma. Even a single day of arrest can potentially demoralize and stigmatize a respectable individual of our society for his / her entire life. Hence, this power which lies with the investigating officers is expected to be used with utmost caution and by following the mandate of the law in the strictest sense. The criminal justice system in India is far from being ideal today in the present situation as it exists in 2021. Time and again it is seen by the stakeholders of the criminal justice system that the police officers abuse this discretion by taking bribe/favors from the complainant or the accused. The higher the stakes involved under the lodged FIR, the higher would be the involved corruption. The alleged accused also wants to indulge in the act of corruption because he / she feels that if they get arrested then they will be going through the ordeal of being in prison and also would have to eventually pay up to the defence lawyers for securing a bail for them. Hence, simply bribing the police officer and preventing any possible arrest may end up being a more feasible option. It will be important for me to caveat here that while abuse of arrest powers by police officers is common, there are independent and honest police officers who conduct absolutely neutral and impartial investigation on the basis of the merits of the case.

COGNIZABLE OFFENCES CARRYING MORE THAN SEVEN YEARS OF IMPRISONMENT

Section 41(ba) of the Code of Criminal Procedure, 1973 applies to all cases where the alleged offence carries more than seven years of imprisonment. This provision is much less complicated and fairly straightforward as it provides relatively less discretion to the investigating officer while making arrests in cognizable offences which carry more than seven years of imprisonment. The provision does not provide too many yardsticks on the basis of which an investigating officer can evaluate whether or not to make an arrest.

This provision simply says that any police officer may make an arrest where the police officer has received credible information that the accused has committed a cognizable offence punishable with imprisonment for a term which may extend to more than seven years and the police officer has reason to believe on the basis of that information that such person has committed the said offence. Hence, a bare perusal of the provision shall highlight that once the police officer is convinced on a prima facie basis that the accused has committed the offence, the police officer will be well within his/her rights to make an arrest of the accused. Having said this, it is most definitely not a matter of practice that in

all cases where the alleged cognizable offence carries more than seven years of sentence would the police officer arrest the accused. The police officer in a lot of cases refuses to exercise its power to arrest (and rightfully so) when he / she feels that the criminal complaint on the basis of which the FIR is lodged is false and devoid of merits. Furthermore, in cases like recovery of money, alleged forgery, alleged cheating etc. where the dispute has a civil flavor, the police officers are careful before making any arrests even while the offences may carry a sentence of more than seven years. Needless to mention, that since this provision also provides discretion to the police officers, it has been time and again misused for securing illegal favors / bribe by the police officers.

The law regulating arrests is still in developing stages in India. There is a lot more that needs to be done in order to ensure that no wrongful arrests may take place or no alleged accused may go without being arrested simply because of the whims and fancies of the police officers. The situation can improve in 2 ways. Firstly, the police officers should start applying the mandate of law in a stricter manner wherein they actually adhere to the check list provided under Section 41(1)(b) before making an arrest in all cases where the offence carries a sentence of seven or less than seven years. Secondly, the legislature or the Hon`ble Supreme Court may prescribe certain cases (of less heinous nature) where the discretion is completely removed thereby giving certainty to citizens of our country and reducing the powers of police officers. Any change made in the law would have to examined while keeping in mind the delicate balance between providing right of personal liberty to individuals and right of life in a peaceful and crime free society of the public at large.

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