10 Dec 2018

COMMON LAW RIGHTS: FIRST TO USE A TRADEMARK CAN PREVAIL OVER FIRST TO REGISTER

Introduction

The well-settled doctrine of the trademarks law enumerates that the right of prior user of a mark prevails over the subsequent user in relation to same or similar goods or services, even though the subsequent user is the registered proprietor of the trademark. One can establish the ownership of a mark by using it in the course of trade and by substantiating prior use of the mark. Prior use of a trademark by its owner may build common law rights if he can prove continuous use of the mark in commerce. It may be however be noted that common law rights are limited to the geographical area in which the trademark is used.

 

Statutory provision governing the prior use right

The law provides a provision which enumerates that a registered proprietor of a mark is not entitled to restrain use of an identical or similar mark by a person vis-à-vis similar goods or services, who is continuously using the mark from an earlier date. Section 34 of the Trade Marks Act, 1999, mandates that the proprietor of a trade mark cannot interfere with the use of an identical trade mark by a person who has been continuously using the mark from a date prior-

  1. to the use of the first-mentioned trade mark in respect of the same or similar goods or services; or
  2. to the date of registration of the first-mentioned trade mark in respect of the same or similar goods or services.

‘Use’ refers to the continuous use of a trademark in relation to the goods or services for which it is applied and mere adoption (of the mark) is not sufficient to claim right over the mark. For an owner to prevail on the requirement of having the trademark rights, the date of first use must pre-date the date of registration by the other person. The key requirements under this provision are listed below:

  • The trademark must be used by its owner;
  • The trademark must be in continuous use within the geographical boundaries of India by its owner;
  • The use of the trademark must be in relation to the goods or services covered by the registered proprietor; and
  • The trademark must be in use from an earlier date as compared to the date of use of the mark by the registered proprietor.

Passing off

‘Passing off’ refers to an unauthorized use of a trademark which is considered to be of similar nature in relation to same goods and/or services and takes place in case of an unregistered trade mark. Thus, passing off happens when an identical trademark is used by a person other than the prior user, in relation to similar goods or services and is intended to deceive the members of trade and to tarnish the goodwill of the prior user. Here, prior user of the mark secures preferred rights as a result of continuous use of his trademark. In case of passing-off, an action may be initiated by the owner (or prior user) of a trade mark against the person or entity, who in the course of trade, misrepresents about its goods or services in a manner which makes the purchasers believe that they are emanating from the source of original owner. The essential features of a passing off action may include:

  • Misrepresentation of a trademark by other person in the course of trade;
  • Use of the mark must have resulted in the customers to believe that the goods or services are manufactured or provided by the original owner;
  • The trademark is used to tarnish the goodwill and reputation of the original owner and has caused irreparable cause and injury;
  • Use of the mark has caused confusion and deception among the members of trade and public

Common law remedy

As enumerated under Section 27 of the Act, common law rights mandate the trademark owner to take an action against any person for passing off their goods or services as the goods or services of another person. In general, the tort of passing off comprises the following elements:

  • Misrepresentation – The most significant principal behind the tort of passing off is an act of misrepresenting own goods and/or services as the goods and/or services emanating from another source;

  • Goodwill – Another element of passing off action is misrepresentation of goods and/or services which has resulted in confusion and deception in the market or is likely to cause confusion and deception in the market. Misrepresentation of goods or services by a person is intended to harm the business and goodwill of the actual owner; and

  • Damage – Due to misrepresentation of goods and/or services by a person other than the owner, severe loss and damage to the business and goodwill of the actual owner has been occurred.

The prior user may institute a passing off action against the opposite party if the aforementioned elements are satisfied. The rationale behind the law of passing off is to defend the rights of the owner and to protect him against any misuse of his trademark which results into the loss of goodwill and reputation. The onus lies upon the prior user to prove that the goods and/or services offered by him under his trademark have acquired substantial reputation in the market, which is calculated to be violated by the other person. However, before adjudicating a case, it is seen if the rival marks are identical and are being used in respect of identical goods or services. Further, the prior user must prove that use of the mark by the opposite party is likely to deceive and/or cause confusion in the course of trade. Upon reaching the conclusion that there has been a misrepresentation, no further proof or evidence is required to establish the tort of passing off.

Some recent judgements

Shambhu Nath & Brothers & Ors vs Imran Khan

The petitioners claimed to have adopted the trade mark TOOFAN (Device) in 1987. The petitioners filed an application for registration of the mark TOOFAN (Device) which was granted registration in April 2012. The respondent applied for registration of the trade mark SNJ TOOFAN claiming use since August 1, 2016. The Hon’ble High Court of Calcutta observed that upon comparing the rival marks and nature of goods the trademark SNJ TOOFAN of the defendant appears deceptively similar to the registered trademark TOOFAN of the petitioners. It was further established that the respondent is seeking to pass off his goods as that of the petitioners and resultantly, an order of injunction was passed in favour of the petitioners.

 

Turning Point Institute Private Limited vs M/s Turning Point

 

The plaintiffs, Turning Point Institute Private Limited claimed to have used the mark TP TURNING POINT (Device) in relation to their services since March 1994, whereas the defendants M/s Turning Point claimed to have used the mark TP TURNING POINT (Device) since 1998. The defendants’ mark got registered in November 2005. The plaintiffs have established their use since 1994 by adducing documentary evidencing corroborating their claims. Thus, rights to use the mark are conferred upon the plaintiffs owing to the prior use of the mark TP TURNING POINT (Device) by them.

 

It was observed by the Hon’ble Court on the basis of documentary evidence adduced by plaintiffs that use of the mark TP TURNING POINT (Device) by them in respect of their services may be considered distinctive and deserves to be protected as use of the same has been prior in point of time when compared to use of the mark by the defendants. The Hon’ble Court injuncted the defendants from using the mark TP TURNING POINT (Device), or any other similar word mark or device mark or as a part of their corporate name qua their services.

 

Conclusion

Our country acknowledges the common law rights according to which unregistered trademarks with prior use are protected against passing off. In such cases, to reach to a conclusion, it is seen whether the rival marks are similar to each other by assessing the essential features of the two marks. However, as per the well-established legal proposition, in order to assess the marks they should not be placed side by side, rather the marks should be viewed as a whole. Further, it should also be seen if there exists overall similarity between the marks and if use of the mark by the other person is likely to cause confusion or deception in the market and would result in serious loss and injury to the prior user. If the prior user of the mark is able to prove that there has been a misrepresentation of its mark which has created a dent on the reputation and goodwill earned by him through the incessant use of its mark, the common law rights will come to his aid and he may obtain relief by instituting a passing off action.

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