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From: Nandita Narayan

Registered proprietors and registered users[1]

Introduction

A consumer is duped if he buys a commodity presuming it to have originated from a certain identified source when actually it is not, and later he finds the commodity substandard. In the process, the reputation of the trader suffers. The interest of both the consumer and the trader can be saved if some definite symbol which marks out the origin of the goods from a definite trade source is attached with the goods emanating from such source. Such a symbol is called the trade mark. A trademark or trade mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities. The essential function of a trademark is to exclusively identify the commercial source or origin of products or services, such that a trademark, properly called, indicates source or serves as a badge of origin. In other words, trademarks serve to identify a particular business as the source of goods or services. The use of a trademark in this way is known as trademark use. Certain exclusive rights attach to a registered mark, which can be enforced by way of an action for trademark infringement, while unregistered trademark rights may be enforced pursuant to the common law tort of passing off.

The Trade Marks Act, 1999, is the statute that lays down the laws for Trade Marks in India. The Act is in compliance with the TRIPS agreement and has been amended in the recent past.

Registered proprietor

A registered proprietor of trademark means the person for the time being entered in the register as proprietor of the trademark.[2]Any person claiming to be the proprietor of a trademark used or proposed to be used by him, who is desirous of registering it, shall apply in writing to the registrar in the prescribed manner for the registration of his trademark.[3] The procedure for registration is as specified under the Act.[4] The registration of the trademark shall be for a period of 10 years, and it can be renewed after that once the prescribed fee is paid to the registrar.[5]

As long as a proprietor of a trademark can prove that the mark is associated with the company alone, which is also the source of the trademark, and any use of the same by a third party is detrimental to its business interest or is bound to raise confusion among the public, the proprietor will be in a position to protect its rights in that particular mark. These rights may comprise the common law right of “passing off” or the statutory right of infringement of registered trademark or both.  Passing off is a type of unfair trade competition, or what may be termed “actionable unfair trading”, through which one person, through deception, attempts to obtain an economic benefit of the reputation which another has established for himself in a particular trade or business. The action is regarded as an action for deceit. Under the Act, an unregistered trademark does not receive protection, but it nothing in this Act shall be deemed to affect the rights of action against any person for passing off goods or services provided by another person.[6]The registered proprietor, if the trademark is valid has the exclusive right to use the trademark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark.[7]

In order to establish infringement with regard to a registered trademark, it is necessary only to establish that the infringing mark is identical or deceptively similar to the registered mark and no further proof is required. Infringement occurs when someone else uses a trademark that is same as or similar to your registered trademark for the same or similar goods/services. Trademark infringement claims generally involve the issues of likelihood of confusion, counterfeit marks and dilution of marks. Likelihood of confusion occurs in situations where consumers are likely to be confused or mislead about marks being used by two parties. The plaintiff must show that because of the similar marks, many consumers are likely to be confused or mislead about the source of the products that bear these marks.[8] Where the plaintiff was the registered owner of the trade marks Castrol, Castrol Gtx And Castrol Gtx 2 in respect of oils for heating, lighting and lubricating and comes to know that the defendant was carrying on business of selling multigrade engine oil and lubricants under the trade mark ‘Castrol Gtx & Castrol Crb’ in identical  containers as used by the plaintiffs. The prayer of the plaintiff for injunction was accepted as the user of the said trade marks by the defendants, had no right whatsoever to use the same is clearly dishonest and is an attempt of infringement.[9]  In another case, the plaintiff company manufactured drugs under the trade name “Calmpose”. The defendant company subsequently floated its similar product under the trademark “Calmprose”. The said two trademarks having appeared phonetically and visually similar and the dimension of the two strips being practically the same including the type of packing, the colour scheme and manner of writing, it was found to be a clear case of infringement of trade mark and the ad interim injunction granted in favour of the plaintiff was accordingly made absolute.[10] The aspects not amounting to an infringement or which can be used as a defence such as honest practices industrial or commercial matters, it is not such that to take undue advantage or be detrimental to trademark, etc are specified under the Act.[11] In Beecham Group Plc. vs. S.R.K. Pharmaceuticals 2004[12] the appellant was using the mark ‘AMOXIL’ in India since 1990. The respondent started using the mark ‘LYMOXYL’ in India from 1985. The respondent filed the application for registration of the mark in 1987 in India in the same class with respect to similar goods. The only difference between the two marks is in the prefix ‘LY’ and ‘M’. The Intellectual Property Appellate Board (IPAB) held that the respondent dishonestly adopted the mark by copying it from the appellant who had got the mark registered long ago.

 

Licensing of trademarks or registered users

The most significant difference between a trademark and copyright or patent is the inherent property right that exists once the work or the invention comes into existence. The symbols, logos or words, on the other had does not have in it any inherent property right, it is in fact derived by the association of such symbols with certain goods, and the goodwill created by such association.[13] However, since originally the sole function of trademark was considered identification of the source both in UK and USA, trademark and goodwill of business was considered inseparable and hence assignment of trademark without goodwill was considered not feasible.[14] This state of law caused considerable hardships and the Goshen Committee reported that such a theory based on goodwill governing assignment was no longer universally correct. They accepted the commercial view that goodwill of a business is inherent in the trademark itself, and thus UK and USA began to accept assignment without goodwill. This revelation slowly paved way for the lessening of the relevance of the source, provided the proprietor exercised sufficient control over the quality of goods.[15] In India trademarks both registered and unregistered is assignable.[16]

Licensing of trademarks is also permitted, where the proprietor of a trademark may, license the rights in the trademark to a third party, thereby permitting the third party to use its trademark in the course of trade.[17]

Any person other than a registered proprietor may be registered as a registered user of trademark in respect of all or any goods or services in respect of which the trademark is registered. This licensing is usually by way of an explicit contract that must be accompanied with the application for registration.[18]This agreement should disclose terms as to royalty, means for bringing permitted use to an end etc[19]. The permitted use of the trademark shall be deemed to be used by the proprietor for the purposes of section 47. [20]The term “permitted use” as defined under the Trade Marks Act, 1999, entails the use of the registered mark by a third party with the consent of the registered proprietor by way of a written agreement or by a registered user. [21]It is to be noted that even where a trademark is unregistered, the common law recognizes the licensing of such unregistered trademark. A leading case in this respect is the Cycle Corporation of India Ltd. v T.I Raleigh Industries Ltd.[22]The  question that arose in this case was whether a person other than the registered user and registered proprietor could be termed as a bona fide ‘user’ especially when there was no agreement existing at the time of filing an application for removal of trade mark under S. 46 of Trade Marks Act, 1940(present S. 47)? This was answered in the affirmative by the court, where it was held that even though the user was an unregistered user, the user will come within the perview of section 46, where the period of non-use by registered user or proprietor is determined and the registration is removed. But the court while deciding this should look into not only commercial interest of the parties but also public interest. There must be a direct connection between the, i.e. the unregistered has been supplying goods in the name of the registered trademark in question.

It should, however, be noted that such licensing should not result in causing confusion among the public or destroy the distinctiveness of the trademark being licensed.[23] In order to achieve this, licensing of trademark by the proprietor of the mark should be subject to strict conditions and requirements so as to ensure that the link between the source of the trademark and goods or services on which the trademark is being used is maintained.[24]

So far as a connection in the course of trade with the trademark continues to exist between the goods and the proprietor of the mark, the goodwill accruing out of such use shall get routed back to the licensor. This link among adoption of certain other measures can be maintained by way of use of appropriate trademark signifiers, references to the extent that the mark is being used under license, quality control and by maintaining and protecting the licensed trademarks against third parties by the licensor. In the event that a licensor uses the trademark as a commodity without establishing a trade connection between the licensor and the products, the goodwill arising out of such use may accrue to the licensee. In such a situation and in case of a dispute between the licensor and the licensee, the licensee shall be able to challenge the validity of the licensed trademark submitting the plea that with the trade connection between the licensor and the licensed trademark is missing, the licensee has accrued rights over the trademark and the licensed trademark is now pointing towards two sources, which is forbidden under law. In Barcamerica International USA Trust v Tyfield Importers Inc et al. [25] The Barcamerican Co had marketing rights in the U.K. for wines under the name of. They had registered this trademark, that later expired, and after which they licensed it to another company by a written agreement.  It did not provisions grant Barcamerica the right to quality control over the licensee’s production of wine.  A foreign company wanted to cancel this trademark for the purpose of selling their wine under the same name, and hence put in an application for the same. The court held that uncontrolled or ‘naked’ licensing may result in the trademark ceasing to function as a symbol of quality and controlled source… Consequently, where the licensor fails to exercise adequate quality control over the licensee, ‘a court may find that the trademark owner has abandoned the trademark, in which case the owner would be estopped from asserting rights to the trademark.’

Use and Non-Use

The application for registration of trademarks cannot be refused or the permission for such registration cannot be withheld on the ground only that the applicant does not use or propose to use the trademark and the registrar is satisfied that it is a company about to be registered under the Companies Act 1956, and the applicant intends to assign the trademark to that company, or the proprietor intends it to be used by a person as a registered user. If an aggrieved person feels that the trademark has been registered without a bona fide intention, and it has not been used by the registered user for a continuous period upto 3 months before the application for removal has been filed, then on filing of such application, the registrar can remove the trademark from the register. [26] And in cases where there was a bonafide intention at the time of registration, but there no bonafide use of the goods or services for continuous period of 5 yrs, upto 3months before the filing of the application by the aggrieved person, this would amount to non-use. This is for the purpose of preventing trafficking in trademarks. It considered as one of the cardinal sins of trademark.[27] In American Home Products V Mac Laboritories P.Ltd,[28] an American Co entered into an agreement with an Indian distributor to distribute its goods in India. The Indian company, imported a machine for the manufacturing of such goods, but did not manufacture for a considerable period of time. The Indian distributors entered into an agreement as the registered user only after the application for rectification on the basis of non-use was filed. The court held that since the company made preparations for the manufacture of goods, although it did not commence its marketing, it would not amount to non-use as intention does not mean that the proprietor should necessarily market the goods. In Bon Mattin Trade Mark,[29] the trademark was registered in U.K. but the proprietor was from France and he sold the products there. An application of removal was filed on the basis of non- use in U.K. but the proprietor had entered into an agreement with a distributor, after the application for rectification and he the first sale was after three years of the application. It was held that there was intention to establish a market in U.K by the proprietor. In Mouson & Co v Boehm,[30] it was held that the proprietor’s intention to abandon the trademarks was a necessary component for their non-user justifying removal. In Vishnudas Trading v Vazir Sultan Tobacco Co. Ltd,[31] the respondent company registered the trademark “Charminar” for all “manufactured tobacco”. The Appellants also used the same trademarked name for zadra and quiwam that are also tobacco products. It must be noted that the respondents only manufactured cigarettes and nothing else. The appellants filed for rectification application on the ground of non-use in relation to zadra and quiwam. The court held that even though manufactured tobacco gave a very wide interpretation to the goods that will fall within the trademark, since the respondents manufactured only cigarettes, they will have trademark only with regard to that product, and the provisions of non-use will apply

 Registered user , permitted user and a registered proprietor

A permitted user shall have no right to institute any proceeding for any infringement.[32] But a registered user can take proceedings against infringement. Subject to any agreement subsisting between the parties, a registered user may institute proceedings for infringement in his own name as if he was the registered proprietor and he shall not be liable to costs unless he enters and makes an appearance. The registered user does not have the right to assignment and transmission. But the right of a registered user of a trade mark shall not be deemed to have been assigned or transmitted within the meaning of this section where the registered user being an individual enters into a partnership with any other person for carrying on the business concerned; but in any such case the firm may use the trade mark, if otherwise in force, only for so long as the registered user is a member of the firm and where the registered user being a firm subsequently undergoes a change in its constitution; but in any such case the reconstituted firm may use the trade mark, if otherwise in force, only for so long as any partner of the original firm at the time of its registration as registered user, continues to be a partner of the reconstituted firm.[33]

Bibliography

Books

  • Principles of Intellectual Property, N.S. Gopalkrishnan and T.G.Agitha, Eastern Book Company, 1st edn, 2009
  • Law relating to intellectual property rights, Ahuja

Articles

  • ‘Naked’ licensing, Ivan Hoffman
  • Trademark and their licensing to prevent distinctiveness of the brand, Anupam Panday, AZB & partners
  • India- a changing IP environment, Anoop Narayanan, Majmudar & Co
  • Trademark law in India and its violation- an analytical study, Subhojyoti Acharya
  • Trademark law in India: law and procedure, George Kutty
  • Infringement of a trademark, Amarjith and associates

 


[1] Nandita Narayan ,VII Semester, National University of Advanced Legal Studies, Cochin

[2] Section 2 (1)(v) of the Trade Marks Act 1999

[3] Section 18 (1) of the Trade Marks Act 1999

[4] Chapter III of the Trade Marks Act. Sections 18-26 of the Act.

[5] Section 25 of the Trade Marks Act 1999

[6] Section 27 of the Trade Marks Act 1999

[7]Section 28(1) of the Trade Marks Act 1999

[8] Section 29 of the Trade Marks Act 1999

[9] Castrol Limited Vs P.K. Sharma  2000(56)DRJ704

[10] Ranbaxy Laboratories Ltd. Vs. Dua Pharmaceuticals Ltd.  AIR1989Delhi44, 1988(2)ARBLR315(Delhi), 36(1988)DLT133

[11] Section 29

[12] (28) PTC391 (IPAB)

[13] Neil J. Wilkof, Trade mark Licensing, Sweet & Maxwell, 1995, p23.

[14] Pinto v Badman (1891)8 RPC 181, “The brand is an identification of the origin and if you transfer the indication of the origin without transferring the origin itself, you are transferring a right, if any right at all. To commit a fraud upon the public, and such a right is not recognised by the law of England.”

[15] In Bowden wire Co Ltd. V Bowden Brake Co Ltd. (1913) 30 RPC 580 “the argument that the trademark and the goodwill attached to the business are inseparable, is slowing losing its strength today as merchandising in the trademark has itself become the trend of the day.”

[16] Section 38 and 39 of the Trade Marks Act 1999

[17] Registered users under section 48 of the TradeMarks Act.

[18] Section 49 ; in Gujarat Bottling Co Ltd v Coca Cola Co (1995) 5 SCC 545.the use of trademark by a person could either be by grant of a license which is to be governed by common law or by way of registration under the statute, the later requiring a written contract between the registered proprietor and the registered user.

[19] Trade Marks Rules 2002, R.81

[20] Section 48 

[21] Section 2 (1)( r )

[22] (1996) 9 SCC 430

[23] Section 50 (1) (c) (i)

[24] Section 50 (1) (d) : may be cancelled by the Registrar on his own motion or on the application in writing in the prescribed manner by any person, on the ground that any stipulation in the agreement between the registered proprietor and the registered user regarding the quality of the goods or services in relation to which the trade mark is to be used is either not being enforced or is not being complied with;

[25] 289 F.3d 589, 595- 98 (9th Cir.2002).

[26] Section 47(1).

[27] Re American Greetings Application  (1983) 2 All ER 609

[28] (1986) 1 SCC 465

[29] (1989) RPC 536

[30] 26 Ch D 398

[31] (1997) 4 SCC 201

[32] Section 53

[33] Section 54


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2 Comments on "Registered users and Registered Proprietors Under the Trademark Law"

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smarti chauhan
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Very informative article on Trademark.

shuaib
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me planned to start a new hotel in place hav the name zam zam royal
estaurent but in another city a hotel named zam zam they registered under 1999 act shall i go ahead with this name or where i can check the registerd names is it registerd or not

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