USE IT OR LOSE IT!

Romer, J., said in the case of Registered Trademarks of John Batt & Co. and In re Carter's Application for a Trademark- "one cannot help seeing the evils that may result from allowing Trademarks to be registered broadcast, if I may use the expression, there being no real intention of using them, or only an intention possibly of using them in respect of a few articles. The inconvenience it occasions, the cost it occasions, is very large, and beyond that I cannot help seeing that it would lead in some cases to absolute oppression, and to persons using the position they have obtained as registered owners of Trademarks (which are not really bona fide Trademarks) for the purpose of trafficking in them and using them as a weapon to obtain money from subsequent persons who may want to use bona fide Trademarks in respect of some classes in respect of which they find those bogus Trademarks registered.".

 

The ethos of the above statement has been perfectly encapsulated in the provisions of the Indian Trademarks Act, 1999 ("Act"). The Act clearly lays out provisions for the rectification of the Register and cancellation of a registered trademark under Sections 47 and 57 of the Act (which were covered under Sections 46 and 57 of the previous Act titled "The Trade And Merchandise Marks Act, 1958").

 

Section 57 deals with the rectification of the Register of Trademarks where a Trademark is entered in the Register without sufficient cause or wrongly remains on the Register.

 

Section 47 deals with the cancellation of registration of a trademark on the grounds of non-use and the conditions which need to be satisfied are specified under sub-section 1(a) & 1 (b) which are required to be satisfied by the aggrieved person (hereinafter referred to as the Petitioner) instituting the action.

 

Under Section 47 (1)(a), the Petitioner shall prove -

 

  • that the trademark was registered without any bona fide intention, and;
  • there has been no bona fide use of the registered trademark for a period of three months preceding the date of the cancellation petition.

 

Under Section 47 (1)(b), the Petitioner shall prove -

 

  • that a period of five years and three months has elapsed since the Trademark was entered into the Register of Trademarks during which there has been no bona fide use of the registered trademark.

 

The exceptions as laid out in the statute to the conditions mentioned in Section 47 (1) are -

 

  1. Where the application for registration has been permitted under Section 12 of the Act to register an identical or similar Trademark, or where the Tribunal is of opinion that he might properly be permitted so to register such a Trademark, the Tribunal may refuse an application for cancellation, if it is shown that there has been bona fide use in relation to either goods or services of the same description of goods or services associated with those goods or services of that description for which the Trademark has been registered.
  2. Provisions of Section 47 (1) (b) shall not apply to a mark if the proprietor is able to show the existence of special circumstances in trade which prevented him from using the Trademark.

 

The difference between Section 47 (1)(a) & 47 (1)(b) has been explained by the Supreme Court in the case of American Home Products Corporation vs. Mac Laboratories Pvt. Ltd. and Ors. when the Supreme Court while interpreting Section 46 (1)(a) & (b) of the Trade and Merchandise Marks Act 1958opined that "The distinction between Clause (a) and Clause (b) is that if the period specified in Clause (b) has elapsed and during that period there has been no bona fide use of the Trademark, the fact that the registered proprietor had a bona fide intention to use the Trademark at the date of the application for registration becomes immaterial and the Trademark is liable to be removed from the register unless his case falls under Section 46(3), while under Clause (a) where there had been a bona fide intention to use the Trademark in respect of which registration was sought, merely because the Trademark had not been used for a period shorter than five years from the date of its registration will not entitle any person to have that Trademark taken off the Register. Under both these clauses the burden of proving that the facts which bring into play Clause (a) or Clause (b) as the case may be, exists is on the person who seeks to have the Trademark removed from the Register. Thus, where there has been a non-user of the Trademark for a continuous period of five years and the application for taking off the Trademark from the Register has been filed one month after the expiry of such period, the person seeking to have the Trademark removed from the Register has only to prove such continuous non-user and has not to prove the lack of bona fide intention on the part of the registered proprietor to use the Trademark at the date of the application for registration. Where, however, the non-user is for a period of less than five years, the person seeking to remove the Trademark from the Register has not only to prove non-user for the requisite period but has also to prove that the petitioner for registration of the Trademark had no bonafide intention to use the Trademark when the application for registration was made."

 

Whilst on the first glance the provision appears to be straightforward, there has been a great deal of deliberation regarding the meaning of the words "bona fide intention" and "bona fide use".

 

Firstly, it has been held that the two conditions set out in clause (a) are cumulative. This means that in order to succeed under clause (a) the Petitioner must show lack of bona fide intention as well as bona fide use. Therefore, clause (a) will not prevail where there was no bona fide intent to use but there has been a bona fide use of the trademark and vice versa.

 

There should be 'bona fide intention" to use the mark on the date when such application is made for registration. The intention to use a trademark sought to be registered must be genuine and real and the fact that the mark was thought to be something which someday might be useful would not amount to any definite and precise intention at the time of registration to use that mark. The intention to use the mark must exist at the date of the application for registration and such intention must be genuine and bona fide.

 

The word use has been defined under Section 2 (2)(b) of the Act as to the use of a mark shall be construed as a reference to the use of printed or other visual representation of the mark. The Courts have settled that use may be other than physical and include actions other than actual sale and thus this will be taken into account while determining bona fide use of the Trademark.

 

The intention of the legislature behind permitting cancellation of registration on the basis of non-use is to keep the register clean and prevent trademark squatting. Therefore, brand owners should be careful while making applications for registration as lack of bonafide intent to use the mark or the lack of bonafide use may render the registration vulnerable to a cancellation action.