Trademark

TRADEMARK

1. What is a trademark 

Trade Marks are significant corporate assets, and while registration is not required by law, it is recommended since unregistered trademarks receive little protection. If another firm tries to use the same or a similar mark after registration, there will be a suitable legal procedure to block it. A trademarked name distinguishes all of the proprietor’s products and services from those of others, and it also protects the proprietor’s reputation from damage due to counterfeit items. A trademark is valid for ten years and can be renewed indefinitely if further payments are paid from time to time in the manner prescribed by the country’s laws. Trade Mark rights are private property rights that are enforced by judicial orders. Because India is a party to the Paris Convention and the TRIPS agreement, the Act complies with its principles.

To comprehend the legal definition of a trademark in India, we must first comprehend ‘The Trade Mark Act, of 1999’. (Hereinafter the Act). A Trade Mark must be a ‘mark’ in addition to possessing other basic features and being free of prohibited characteristics. As a result, the legal definition of the mark as provided in Section 2(1)(m) of the Act is critical, which states that a mark comprises a device, brand, heading, label, ticket, name, signature, word, letter, numerical, form of products, packaging, or combinations of colours or any combination thereof. As a result, the definition is inclusive rather than exhaustive. So, everything that can be represented graphically in single-dimensional, two-dimensional, or three-dimensional space may be regarded as a mark. A company’s emblem is a mark, as is a graphical depiction of a certain combination of characters, style, or combination of multiple colours on a product or in the company’s name.

Similarly, the definition of the term “trade mark” is defined under Section 2(1)(zb) of the Act. It can be stated as follows:

The trade mark must be a mark. That is, nothing else than a mark as defined in Section 2 (1)(m) of the Act is capable of being designated as a trade mark if additional conditions are met. That such a mark is capable of being represented graphically. That is to say, if a mark cannot be represented visually, it cannot be accorded trade mark registration. Such a mark must be capable of identifying one person’s goods or services from those of others. It implies that the mark must have certain distinguishing qualities, either phonetically, structurally, or aesthetically, to allow consumers to associate a product bearing that mark with a certain proprietor or authorized user without much misunderstanding. Such differentiation can be innate, as in coined and created terms, or learned. To sum up, a trade mark must be a mark that can be graphically represented and has specific distinguishing qualities that allow a customer of ordinary intelligence and faulty recall to associate it with the proprietor or user without generating confusion.

A growing number of nations also permit the registration of non-traditional trade marks such as single colours, three-dimensional signs like product packaging shapes, audio signals or sounds, or olfactory indicators like smell, etc. A trade mark is always a brand, but a brand is not necessarily a trade mark. This is mentioned because there is sometimes confusion between trade marks and brands; a brand is just a name, logo, or symbol, but a trade mark is a unique sign or signal of some type in a commercial organisation; as a result, trade marks have a broader connotation than brands.

A trade mark may also serve to represent or ensure the quality of the items bearing the brand. People are frequently persuaded to purchase a certain product because of its distinguishing trade mark, which symbolises quality. Trade Marks  represent the value or goodwill connected with the goods, which may be measured by the extent to which the public perceives their quality and specific source. In general, trade marks are placed in any fashion on the items, their containers, and displays, as well as on tags or labels linked to the goods or services. The great economic value of a successful trade mark is the key reason for legal protection. Trade mark owners generate brand loyalty and product uniqueness through compelling advertising campaigns in conjunction with licensees. This results in the establishment of enviable goodwill and market strength, thus preventing new enterprises from entering that specific sphere of operation.

2. Legal history of Trade Marks Law in India

Until 1940, there was no statute law governing trade marks in India, and the relevant law was based on common law, which was essentially the same as that in England prior to the passage of the first Registration Act in 1908. The Trade Marks Act of 1940 (repealed) established for the first time in India the machinery for the registration and legislative protection of trade marks. This Act was repealed in 1958 by the Trade and Merchandise Act of 1958. This Act was likewise abolished by the Trade Marks Act of 1999, which took effect in 2003. The law governing trade marks has undergone significant revisions since the Trade Marks Act of 1999. Some legal principles relating to unregistered trade marks are codified, while others are still dependent on common law, necessitating the use of court rulings. In addition to safeguarding the purchasing public from imposition and fraud by infringers of genuine trade marks, it has been determined that the statutory rights granted by the registration of a trade mark are so broad and complex that it is necessary to protect the legitimate interests of other traders from litigation and harassment by registered owners of trade marks. As a result, the Act has evolved into a complex body of legislation with long Sections, numerous cross-references, and several provisions and exclusions. 

The more essential elements have been clarified through judicial interpretation, while several portions have yet to be subjected to judicial inspection and study. Apart from streamlining the legislation, the current Act of 1999 has added several additional rules that benefit both trade mark owners and consumers of goods. For historical reasons, both Indian common law and statutory trade mark law have largely followed the pattern of English law. Apart from significant changes to the previous law, this Act unified the Merchandise Marks Act, of 1889, and various regulations about trade marks found in the India Penal Code,1860  the Criminal Procedure Code,1973 and the Sea Customs Act,1878 into a single piece of legislation. 

3. Need for trade marks 

A trade mark safeguards your brand and gives you the means to stop someone from profiting off of your brand. The shape of the items, their packaging, and a colour combination are all examples of trade marks that may set one person’s goods or services apart from those of another. They enable clients to pinpoint a company as the provider of a good or service. Let us know more reasons for the need for Trade Mark Registration in India.

• Important assets

For your business, a registered trade mark might prove to be a significant asset. These assets continue to increase in value over time. Over time, as your firm expands, the value of your trade marks increases naturally. As a result, the value of your trade mark increases as your business does.

• Safeguarding your brand

A trade mark registration establishes ownership of a brand, name, or logo. It safeguards your brand against unlawful third-party use. The registered trade mark establishes that the product is entirely yours, and you have the exclusive right to use, sell, and change the brand or items in any way you see fit. Aside from that, having a trademark fosters a trusting relationship with clients, allowing a firm to build a loyal customer base and boost its reputation.

• Bringing individuality to a brand

Every firm requires a distinctive brand or logo that sets it apart from the competition, hence, such a brand must be registered. As a result, a registered trade mark provides your brand with a distinct identity. It also helps to avoid customer confusion by indicating the source of the items as well as a constant degree of quality.

• Tool for simple communication

Trade Marks may prove to be useful and simple communication tools. They are self-explanatory. With a registered trade mark, the brand to which your goods belong may be determined. For instance, you can tell that a gadget is an Apple when you see a half-bitten apple in silver on it, whether it’s a laptop or a phone.

• Customers can easily locate you

A registered trade mark makes it easier for buyers to locate the goods since it attracts the consumer’s attention and makes the product stand out. It is also an effective instrument with a distinct identity; registered trade marks are easily traceable, and buyers can quickly find your goods.

• A trade mark lasts forever

Once registered, a trade mark can remain in effect in perpetuity. Any company’s registered trade mark is theirs forever, and thus a trade mark registration must be renewed every ten years as it will maintain the brand’s identity and go on in perpetuity.

4. Objectives of The Trade Marks Act 

The goal of a legal system for trade mark protection in India can be deduced from an examination of constitutional provisions to protect trade, statutory provisions and common law rights, and their judicial interpretation, as well as fulfilment of international obligations under various international treaties to which India is a signatory.

• Based on Constitution’s provisions

Article 19 of the Indian Constitution lists freedom of trade and movement as one of the essential rights. In addition to this, several additional fundamental rights ensure the safety of the trade and profession of its residents as well as non-citizens including jural/legal people. As a result, one of the goals of the Trade Mark Act is to secure the preservation and fulfilment of these fundamental rights. 

• Based on statutory provisions and common law rights

The granting of specific civil rights in each civilised society to protect its people, trading partners, and others from any harm, whether criminal or civil, is essential to the civilization’s survival and progress. The fundamental right to freely trade includes the freedom to establish, develop, and grow one’s own business by legal means. As a tool for promoting one’s own business, a trade mark must be protected from illegal uses to safeguard the legitimate owner from dishonest and criminally motivated individuals. Additionally, safeguarding the standard of goods and services is the only way to advance the greater good of the public. The availability of identical items on the market results in the duplication of well-known and well-liked products and services by unlicensed users, as well as the original proprietor’s incapacity to maintain the quality owing to losses in terms of revenue, reputation, and public confidence. As a result, the Trade Marks Act was created to safeguard people’s basic, constitutional, and civil rights, as well as to serve the public interest.

• Based on Act’s preamble

The Trade Marks Act, 1999’s preamble states that the Act’s purpose is to protect trade marks and prohibit fraudulent use of trade marks. Similarly, one goal of the Indian Penal Code involves the preservation of people’s civil rights, including the right to grow one’s own business through the creation of a brand through the use of certain trade marks and the advancement of public interest. As a result, both Acts allow for the penalty of any unauthorised person who uses a trade mark fraudulently.

• Based on Judicial Interpretation

The Supreme Court provided the following explanation of the purpose of the Trade Mark Act in Dau Dayal v. State of Uttar Pradesh (1959): The goal of trade mark law is to defend the rights of individuals who produce and sell items bearing distinctive trade marks against infringement by third parties that misrepresent the origin of their products by using trade marks that are not their own.

• In light of India’s duties to other countries

India is required to consolidate its municipal law by such treaties and conventions because it is a signatory to numerous significant international treaties, such as the Trade-Related Aspects of Intellectual Property Rights (TRIPS), and because it is a part of various conventions and agreements under these conventions, such as the Paris Convention and Madrid Agreement. Additionally, it must safeguard the commercial interests of local traders from unwarranted harm brought on by unfair competition from outside. With these goals in mind, India has modernised and strengthened its legal framework for trade marks.

5. Salient features of The Trade Marks Act 

The Trade Marks Act, of 1940 was India’s first trade mark law. Before then, trade mark protection was controlled by common law. The Trade Marks Act, 1999, as modified, is the current controlling legislation in India for trade marks. The 1999 Act was passed to comply with the TRIPS rules. The salient features brought about in Indian trade mark law by the Trade Marks Act, 1999, are as follows:

1. Including a service mark in the definition of a trade mark;
2. A new clause for collective marks’ registration;
3. Prohibition on registering some marks that are merely replicas or imitations of well-known marks;
4. Provision for filing a single registration application for several classes of products and/or services;
5. Increasing the term of registration of a trade mark from 7 to 10 years, including a six-month grace period for payment of renewal costs.
6. Expansion of conditions under which registration validity may be challenged;
7. Giving the Registrar ultimate power over applications for registration of Certification Trade Marks;
8. Aligning the punitive provisions of the Trade Marks Law with those of the Copyright Law;
9. Provision for the formation of an Appellate Board. 

6. Registration of Trade Marks under the Act 

Anyone claiming to be the trade mark’s owner or who intends to use the trade mark in the future may submit an application in writing to the relevant Registrar by the established procedures. The application must include the name of the goods, mark, and services, as well as the class of goods and services it belongs to, the applicant’s name and address, and the amount of time the mark has been in use. Here, the term “person” refers to a group of businesses, a partnership, a corporation, a trust, a state government, or the federal government.

Application for registration 

Section 18 of the Act outlines the process for registering a trade mark. Thus, in order to apply for registration, the applicant must meet the requirements outlined in the Act.

• Subsection 1 states that any person claiming the trade mark may submit an application in writing to the Registrar in the appropriate way. A single registration application can be submitted for many classifications of products or services. However, as stated in Section 2 of the Act, various fees will apply to each kind of product or service. If the applicant or joint applicants desire to apply, they must do so within the geographical limitations of their primary place of business. If they do not conduct any business, the application must be lodged inside the geographical limits of the site for services.

• Subsection 4 specifies that the Registrar has the authority to accept, reject, or make certain adjustments and revisions subject to specific restrictions or limits. If the Registrar refuses or imposes restrictions, he must explain why and what materials were utilised.

Registration requirements

The central government appoints a person to be known as the controller general of patents, designs, and trade marks, who will be the Registrar of the trade mark, by stating it in the official gazette. The central government may designate additional officials if they believe they are appropriate for discharging, and the Registrar may permit them to discharge under the supervision and control of the Registrar. The Registrar has the authority to transfer or remove cases by a written request with justification. It is covered under Section 6 of the Act on how to keep a registered trade mark active. Except for the trust notice, all specified details, including those of registered trade marks, must be recorded at the main office. Each branch office is required to maintain a copy of the register. It permits the preservation of documents on diskettes, computers, or in any other electronic format.

Absolute grounds for registration denial

Section 9 of the Act defines absolute grounds for registration refusal. Any trade mark that falls under one of the reasons specified in this Section cannot be registered. The following are the absolute grounds for denying registration:

1. Trade Marks that do not have any distinguishing characteristics. Distinctive character refers to trade marks that are capable of differentiating one person’s goods or services from those of another.
2. Trade Marks that consist only of markings or indications used in commerce to designate the kind, quality, amount, intended purpose, values, or geographical origin of products or services delivered.
3. Trade Marks that only comprise markings or indications that have become usual in the present language or established trade practices.
4. Trade Marks that deceive or confuse the public.
5. Trade Marks that contain anything likely to offend the religious sensibilities of any class or section of Indian people.
6. Trade Marks containing or including scandalous or indecent material.
7. If the trade mark’s use is forbidden under the Emblems and Names (Prevention of Improper Use) Act of 1950.
8. Marks are derived from the form of the items themselves and are used as trade marks.
9. Trade Marks consist of markings on items whose shapes are required to achieve a technological outcome.
10. Trade Marks are made up of symbols resembling the form that provides products with their significant value.
11. The Act makes an exemption for the first three points, namely where the trade marks lack uniqueness, comprise exclusive marks used in the trade to indicate sort, quality, etc., or contain marks that have become usual in trade practices.

7. Trade mark infringement

Infringement of trade marks occurs when someone other than the registered proprietor uses the same mark or one that is confusingly similar in the course of business in relation to the same products or services for which the trade mark is registered. In general, trade mark infringement suits entail the problems of the likelihood of confusion, counterfeit marks, and mark dilution. The likelihood of misunderstanding occurs when customers are likely to be confused or misled regarding two parties’ usage of marks.

The plaintiff must demonstrate that many customers are likely to be confused or misled regarding the origins of the items bearing these marks as a result of the identical markings. Dilution is a trade mark law term that prohibits the use of a well-known trade mark in a way that diminishes its distinctiveness. Most incidents of trade mark dilution involve the unlawful use of another’s trade mark on items that do not compete with and have little in common with, the trade mark owners.

Section 29 talks about the infringement of registered trade marks under the Act. Infringement refers to the violation of someone’s rights. As a result, trade mark infringement implies a breach of trade mark rights. Infringement of a trade mark occurs when an unauthorised use of a trade mark or a substantially similar mark on goods or services of a comparable type occurs. In such a scenario, the court will consider whether the use of the trade mark would lead to consumer confusion about the genuine brand they are purchasing. Thus, the following elements must be completed to categorise trade mark infringement as provided under Section 29 of the Act:

1. If the trade mark is a copy of an existing trade mark with minor modifications or changes.
2. If the infringing trade mark is printed or utilised in advertising.
3. If the infringing mark is employed in commerce
4. If the mark utilised is sufficiently similar to a registered mark a customer is likely to be confused or misled when picking a product category.

Apart from this, Section 103 of the Act talks of the provisions for penalties for applying false trade marks, trade descriptions, etc. According to this Section, a person is deemed to be filing for a trade mark incorrectly under the following circumstances:

1. If a trade mark fabrication has occurred;
2. If a trade mark has been wrongfully applied to products or services;
3. Makes, acquires or disposes of any device with the intent to falsify a trade mark;
4. Falsely represents the name of the nation or location where the items were manufactured, as well as the name or address of the person responsible for their production.
5. Tampers with the origin indication that is applied or needed to be applied to a product.
6. Infringement of trade marks as a consequence of falsification shall result in a penalty of not less than six months, but not less than three years, and a fine of not less than fifty thousand rupees, but not less than two lakh rupees. Provided, however, that the accused offender did not perpetrate such deception on the following grounds:

All reasonable efforts were taken to avoid the commission of such fabrication, and there was no legitimate reason to doubt the legitimacy of the trade mark at the time of the alleged violation.

That he had done lawfully.

On the prosecutor’s request, such relevant documentation about the way and person from whom the products were received.

8. Judicial pronouncements

• Yahoo!, Inc. v. Akash Arora and Anr,1999

For the first time ever in India, the Delhi High Court ruled in the case of Yahoo!, Inc. v. Akash Arora and Anr (1999), that a domain name serves the same purpose as a trade mark and is entitled to the same level of protection. The accused’s domain name was “Yahoo India!” This was the same as the plaintiff’s trade mark “Yahoo!” and was phonically comparable. According to the court, internet users would be misled and duped into thinking that both domain names originated from the same source. The argument used by the defendant was that a disclaimer had been posted on its website. However, it was revealed that a mere disclaimer was insufficient since the internet is structured in such a way that the use of a similar domain name cannot be corrected by a disclaimer, regardless of whether ‘yahoo’ is a dictionary term. The appellation has gained distinctiveness and originality, and it is strongly associated with the plaintiff.

• Milmet Oftho Industries and ors. v. Allergan Inc., 2004

A well-known international brand was given trade mark protection by the Supreme Court in the case of Milmet Oftho Industries et al. v. Allergan Inc. (2004). The court barred an Indian firm from using the OCUFLOX trade mark. The decision was made despite the fact that the mark has never been used or registered in India. According to the court, the respondent was the first to enter the market and use the mark. If the respondent is the first to join the global market, it makes no difference that they have not utilised the mark in India. In the realm of healthcare, it is critical to eliminate any possibility of deceit or confusion, while also ensuring that the public interest is not threatened.

• Sony Corporation v. K. Selvamurthy, 2021

In the case of Sony Corporation v. K. Selvamurthy (2021), Sony Corporation filed a lawsuit for trade mark infringement against a sole owner operating a tours and travel company under the name Sony Tours and Travels, alleging dilution of its well-known ‘SONY’ trade mark. The District Court concluded after considering the available evidence that Defendant had not unfairly exploited or damaged Plaintiff’s SONY mark’s unique character or reputation. The Court reached this determination because Sony Corporation’s business is restricted to electronics and media, which may be distinguished from the defendant’s tours and trips business. nThe Court further recognised that there was no misunderstanding among consumers as a result of Defendant’s usage of the phrase “Sony.” Additionally, it noted the plaintiff’s excessive delay in contacting the court and awarded the defendants Rs. 25, 000 as costs.

• ITC Limited v. Maurya Hotel (Madra) Pvt Ltd, 2021

The Madras High Court in ITC Limited v. Maurya Hotel (Madra) Pvt Ltd (2021), allowed the plaintiff to add a remedy for trade mark infringement to a passing off complaint based on the plaintiff’s later registration of the trade mark. The Court in the case stated that adding a remedy is permissible and aids in avoiding several litigations. It further said that the conclusion may change if the application was for the conversion of the plaintiff from passing off relief to an infringement remedy.

• Sun Pharmaceutical Industries Limited v. Cipla Limited, 2021

In this case of Sun Pharmaceutical Industries Limited v. Cipla Limited (2021), the respondent/plaintiff filed a perpetual injunction suit against the applicant/defendant before the Madras High Court for violation of its copyright and trade mark. In this case, the Court awarded an interim injunction in favour of the respondent/plaintiff. Following that, the applicant/defendant filed three petitions, each with a request to dismiss the temporary relief granted on the grounds of urgency. The appeal was predicated on the fact that the medications were in large quantities, had a one-year expiration date, and were in high demand because of the ongoing epidemic since they helped relieve Covid-19 symptoms. The balance of convenience remained in favour of the respondent/plaintiff, thus the court determined that they had shown a prima facie case for the continuation of the interim injunction.

Despite the nation dealing with an unprecedented medical emergency, the Court noted that they could not let a party violate another person’s intellectual property rights when ruling. The interim injunction was maintained by the court, and it was decided that it would remain in effect pending the outcome of the case.

Conclusion

The whole of the Trade Marks Act, 1999, does away with the cumbersome requirements of the previous Act, and it has undoubtedly greatly bolstered the rights of business owners and other service providers. This Trade Marks Act functions as a warning to those who infringe. Positively, this Act takes into account changes in business and commercial practices, the growing globalisation of trade and industry, the need to promote investment flows and technology transfers, the need for trade mark management systems to be simplified and harmonised, and it also gives effect to pertinent judicial decisions. The legal and corporate communities both eagerly awaited this law. The long-standing ambition has now been satisfied.