No Bona fide Use of Registered Trademark - Susceptible to Non-Use Cancellation Action
Trade and business are essential for expansion and growth of the world economy. As a result, an increasing number of trademarks are registered on a daily basis. Before delving deeper into the non-use vulnerability of registered trademarks, it’s important examine the legal definitions enshrined in the Trade Marks Act, 1999 (the “Act”).
Section 2 (1) (m):
“mark” includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof.
Section 2 (1) (zb):
“trade mark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours.
Section 2 (1) (t):
“register” means the Register of Trade Marks referred to in sub-section (1) of section 6.
Section 2 (1) (w):
“registered trade mark” means a trade mark which is actually on the register and remaining in force.
Section 6:
Registered trademarks are entered in the Trade Mark Registry in India along with a proprietor’s name, address and description.
This Register is kept at the Trade Mark Registry’s head office.
Notifications of names, addresses, assignments and transmissions and descriptions of registered users are mentioned as well. Other important components include conditions, limitations and other prescribed matters related to registered trademarks.
As is evident, the legal definition of a trademark is inclusive and not exclusive. When a trademark is registered, it remains valid in perpetuity, subject to renewal every 10 years. However, there is an exception to this perpetuity if there is any action by an aggrieved person for non-use of the registered trademark.
Use of a Trade Mark
A trademark is said to be ‘in use’ when it’s used for goods and/or services, either on its packaging or the product or service itself.
But, the term ‘use’ also includes actions other than sale of products or rendering of services. If an entity can demonstrate that it has taken measures to use its registered trademark in India, it will be considered as in ‘use’. Furthermore, Indian courts have stated that advertisement of a trademark will be considered as ‘use of trademark’ as well.
Section 47 of the Act - Non-use Cancellation Action
Section 47 of the Act provides for non-use cancellation action by any ‘person aggrieved’ if, for a continuous period of five years and three months from the registration date, that is, the date on which the trademark was registered and entered into the Trademarks Register, there has been no bona fide use of the trademark for the goods and/or services covered under the registered trademark.
The Supreme Court of India in Kabushiki Kaisha Toshiba vs. Tosiba Appliances Co. & Ors., (2008) 10 SCC 766 observed that “the intention to use a trademark sought to be registered must be genuine and real. When a trademark is registered, it confers a valuable right. It seeks to prevent trafficking in trademarks. 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 trademark, is not expected to get his product registered so as to prevent any other person from using the same. In that way trafficking in trademarks is sought to be restricted.”
If such is the case, a ‘person aggrieved’ may file a non-use cancellation application to the Registrar or the High Court under Section 47 of the Act for removal of the registered trademark.
Person Aggrieved:
It is important to take into account the definition of an ‘person aggrieved’. The Act does not incorporate the definition of ‘person aggrieved’; however, by precedent, the ‘person aggrieved’ as per Section 47 of the Act would include the following as per the observations in Hardie Trading Ltd. and Ors. vs. Addisons Paints & Chemical Ltd., AIR 2003 SC 3377:
“Wherever it can be shown, as here, that the Applicant is in the same trade as the person who has registered the Trade Mark, and wherever the Trade Mark, if remaining on the Register, would, or might, limit the legal rights of the Applicant, so that by reason of the existence of the entry on the Register he could not lawfully do that which, but for the existence of the mark upon the Register, he could lawfully do, it appears to me he has a locus standi to be heard as a person aggrieved.”
Essentially, a ‘person aggrieved’ is someone affected by the registration of a trademark. It can be someone who has had trademark pending for the same mark and/or an authorized user as well.
The burden of proving non-use during the relevant period falls on the applicant for rectification, that is, on the ‘person aggrieved’. Hence, it is advisable to file the investigation details along with the cancellation action to prove that the trademark has not been used by the registered proprietor for the customers and/or trade circle.
Section 47(3) of Act
It should be noted that a registered trademark will not be removed if it comes under the purview of the Section 47 (3) of the Act.
It should be noted that Section 47(3) of the Act protects a trademark from being removed from the Register on grounds of non-use if such non-use is shown to have been due to special circumstances in the trade.
This would include restrictions imposed by any law or regulation on the use of the trademark in India.
Best Practices to Prove Usage of a Trademark
Suppose an entity wants to protect itself from third parties filing applications under Section 47 of the Act citing non-use of trademarks. To best protect their trademark, a trademark owner should focus on getting the following questions answered:
● Has the registered trademark been in usage since its registration date?
● Has a registered trademark been used considerably and has it been used for all the goods and services covered under the trademark registration?
● Are there any goods or services for which the trademark is not being used?
● Is the trademark being used by the registered proprietor and/or any authorised user in India?
Way Forward and Documents to Submit to Prove Usage of a Trademark
Trademark owners/registered proprietors should be aware of the best practices that can effectively prove that they have used their trademarks continuously and uninterruptedly and counter any non-use cancellation action. Therefore, the following illustrative way forward including the details/documents that would enable trademark owners to defend their rights against non-use cancellation applications made by any third parties:
● Repository of commercial invoices and bills comprising of the trademark;
● Brochures, advertisements or pamphlets that provide evidence of the association of a trademark with the goods/services covered under the trademark registration;
● Sales figures attributable to the specific trademark;
● Advertisement expenses attributable to the specific trademark;
● Domain name registrations of the trademark;
● A periodic audit of the trademark by collaborating with the internal stakeholders to understand the business continuity under the specific trademark and thereby outline the future roadmap.