Status of Well-known Trademarks under the Trademark Rules, 2017

Well-known trademarks have been granted extraordinary protection under the Indian Trademark Act, 1999 (“Act”). It has been defined as a “mark which has become so to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first-mentioned goods or services.”[i] Once a mark attains the status of a well known trademark, the Registry is prevented from registering any other mark that is identical or similar across all classes of goods and services.

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Accessed from here.

Prior to the Trademark Rules, 2017 (“2017 Rules”), the procedure for obtaining the status of a well-known trademark was entirely different. The status was conferred by judicial bodies and the Registrar in the course of infringement or passing off proceedings. Number of marks like “Google”, “Bata”,”Honda”, “Pepsi”, “Pizza Hut” have been accorded the status of a well-known trademark by the Indian Courts; and a list of the same has been prepared. Number of factors like the recognition of the trademark, the extent of its usage, number of actual or potential consumers were considered by Courts while deciding whether a trademark is a well-known mark. However the 2017 Rules have completely shifted the power to confer the status of a well-known trademark in the hands of the Registrar of Trademarks. An application can be filed by any person who wishes to get their mark registered as a well-known mark along with a statement of case. The Registrar will then examine the application in accordance with Rule 124 and may even invite objections.

The fundamental question that arises here is whether rule 124 is unconstitutional? Rules are basically delegated legislation, which are an extension to the parent statute and hence derive their authority and scope from them. They cannot supersede the parent statute. Similarly in the present scenario, the Trade Mark Rules, 2017 draw their legitimacy from their parent statute being Trade Marks Act, 1999. This legislation however does not delegate to the Central Government adequate powers to enact whole new procedure for well known trademark. Section 157 of the Act[ii] prescribes rule making power of central government related to the Act and it does not prescribe any guidelines related to well known trademarks. There is a residuary provision in Section 157(xli) that gives the Central Government the power to make rules for “any other matter which is required to be or may be prescribed.” However it also has to be guided by two important principles. The first principle is that delegated legislation cannot conflict with parent legislation. Secondly some essential functions cannot be delegated by the parliament to the executive.

In Re Delhi laws case[iii], it was stated that when power is given to a legislative body, it cannot be absolutely delegated. Essential function must be performed by it. Executive rule making body can only run in periphery. Also, in a landmark case, staff of 535 people belongs to various government engineering colleges were working on various posts like clerk, hostel manager, etc. Out of 53545 belonged to ministerial and administrative category and 19 belong to class IV in the government service and their age of supernaturation was fixed to 60 years. For rest age of superannuation was fixed at 55 years Actually, the 1st respondent made a statute prescribing 60 years of superannuation to 471 people and 55 years for the rest of them. The petitioners objected that that as all the employees are from the same source and place, then there is no rationale behind choosing a different age of supernaturation for the two classes. It was violative of constitution and supersedes the parent statute.[iv]

In the Prevention of Food Adulteration Act, 1954, government can enact any rules to protect the consumers. These rules stated that every manufacturer of sealed food must display a label containing quantity, manufacturing date, quality and address. The petitioner did not meet the requirement of addresses. The court observed that the requirement of address is not contemplated by the enabling legislation. The domain of enabling legislation was only confined to quantity and quality of the product. Rules cannot surpass enabling legislation and hence are invalid.

Thus in light of the above arguments, it can be observed that the rule in question carves out an entirely new procedure for well known trademarks which in all certainty exceeds the boundaries of its parent statute. Also the adversarial procedure suggested stands in conflict with the procedure mentioned in the Section 11 of the Food Adulteration Act[v] which requires an opposition, rectification or infringement proceeding to trigger adjudication on well known trademark. Thus it supersedes the parent act and hence is unconstitutional.

While the constitutionality of the procedure laid down by the Trademark Registry is questionable, we feel that it is a positive move as it ensures faster processing of applications and reduces burden on Courts. It is extremely important for users of well-known trademarks to acquire this status as it will protect their brand and goodwill at national level. Unauthorised use of such mark creates confusion in the minds of people and tarnishes the reputation of brands. Infringement and passing off proceedings, where Courts may also decide on the status of a well-known trademark go on for a very long period of time and increase the burden upon them. Courts are expected to examine evidence and consider several other factors to ascertain the extent of usage of the mark. Post the 2017 Rules, any person who wishes to get their mark registered as a well-known trademark can file an application under the TM-M form along with a statement of case which will then be assessed by the Registrar. Since the Registrar is an expert in the field and assesses multiple trademark applications everyday, he is placed in a better position to examine the evidence and determine whether the status of a “well-known trademark” should be conferred upon a particular mark. While there is no specific time period for processing such applications, it has to be done within a reasonable time limit and is much faster than the time taken by the Courts. Another advantage of the new procedure is the power conferred by Rule 124(6) which allows the Registrar to remove the trademark is the mark has been included erroneously and is no longer justified. This ensures that those marks whose brands have lost their reputation and do not retain the same position in society are removed from the list of well known marks and are not allowed to take advantage of this special status.

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Accessed from here.

While the change in procedure to register a mark as a “well-known trademark” is a positive development which places power in the hands of trademark experts, the manner in which the change is introduced, i.e. through the Trademark Rules 2017 is questionable on the grounds of its constitutionality.Ideally the change in procedure should be incorporated in the parent legislation i.e the Trademark Act, 1999 by way of an amendment.

[This post has been written by Ananya Mishra and Anushka Mehrotra, 4th year and 3rd year law students at WBNUJS, Kolkata respectively and edited by Drishti Das, a 5th year law student at WBNUJS, Kolkata].

References

[i] The Trademark Act, 1999, § 2(z)(g).

[ii] The Trademark Act, 1999, § 157.

[iii] 1951 AIR 332.

[iv] S. Rama Rao v. Jawaharlala Nehru, AIR 1978 AP 264.

[v] The Trademark Act, 1999, § 11.

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