November 17, 2019, was the date when the first known case of the COVID-19 was detected. Back then, no one would have thought that this virus would turn into a pandemic and would bring the world to a stand-still as we know it. Day-to-day activities as simple as running errands would become a luxury.
To contain the spread of COVID-19, many countries including India imposed nation-wide lockdowns. In India, the lockdown was not a sudden step taken by the government. It started with few temporary measures such as school closures, thermal screening at airports to name a few. With these measures in place, the virus still managed to slip in and enter the country.
Given the current situation, it is difficult to say, when the country will resume to its normal operations even though the lockdown has been lifted in quite a few parts of the country. Apart from various other concerns, one of the key concerns for trademark holders is their obligation to use their trademark(s) in order to circumvent any challenges arising from the non-use of a trademark in such times.
According to Section 47 of the Trademarks Act, 1999 ('Act'), a trademark becomes vulnerable for non-use cancellation, if there has been no bonafide use of the trademark or intention to use the trademark, continuously for five years and three months from the date of petition for cancellation.
For a cancellation action to be successful, it would have to meet the three essential criteria:
'Use' of the mark has been defined under Section 2 (2) (b) of the Act as a reference to the use of printed or other visual representation of the mark. Concerning goods, it is to be construed as a reference to the use of the mark upon, or in any physical or in any other relation whatsoever, to such goods. In relation to services, it is to be construed as a reference to the use of the mark as or as part of any statement about the availability, provision or performance of such services.
What amounts to use of a trademark for a non-use cancellation action has been a topic of much deliberation. The courts of India have shed light on what amounts to 'use' through various case laws. While primary forms of use i.e. India specific invoice(s) have been given utmost weightage, the courts have also held that a mere 'intention to use' at times is also sufficient. However, such intention has to be specific and genuine. Such intention can either be the marketing of the goods like a soft-launch or at times, intention to permit the use of the trademark by the registered user.
Clause 3 of the section 47 of the Act states that if the non-use is due to special circumstances in trade, which includes restrictions on the use of the trademark in India imposed by any law or regulation and not to any intention to abandon or not use the trademark, then the cancellation application would not have met the requisite criteria.
The Courts have defined 'special circumstances' as some external force, which is distinct from the voluntary acts of any individual. The existence of this aspect is to conclude as to whether there was any intention on the part of the proprietor to abandon the trademark or not.
To streamline, what could be construed as 'special circumstances' the Hon'ble High Court of Calcutta held that..."not any special circumstances merely attendant on or attached to any particular individual business. It must be a kind of special circumstance for all the trade in those particular goods".
Based on the above, it can be inferred that special circumstances are those which arise out of certain conditions, which make it impossible to trade or use a trademark, which would entitle a person to claim that even though the goods under a trademark were not being sold, that was because of conditions beyond anyone's control and that there certainly was no intention to abandon a trademark.
The situation arising out of COVID-19 is rather a unique one, something that India has not faced before. The standstill caused by the lockdown imposed to curb the increasing cases caused due to the virus has all the ingredients to be termed as 'special circumstances' as per the Act.
However, whether or not an owner can successfully claim the defense of 'special circumstances', the same will surely depend upon the facts and circumstances of each and every case. Blanket immunity cannot be expected. In India, industries and businesses responsible for the production of essential items have been given some relaxation to work, with some strict measures in place. Few states have also gone to the extent to allow deliveries of food and other essential items to limit public outings as much as possible.
In light of the above, if there are circumstances to show that use of a trademark was very much possible and that the proprietor or the business owner took the conscious decision to halt all activities until the situation is safe for the sole purpose of the well-being and health of their employees is up for debate.
In the meantime, business owners can take measures to put the mark in use, just enough for the audience to be made aware of. With nearly the entire population on the internet nowadays, pre-launch marketing over the internet seems to be a good investment.
American Home Products Corpn. V. Mac Laboratories (P) Ltd. (1986) 1 SCC 465
Fedders Lloyd Corporation Ltd. and Lloyd Sales Corporation Pvt. Ltd. vs. Fedders Corporation and The Registrar of Trademarks 2005 (30) PTC 353 (Del)
Aktiebolaget Jonkoping Vulcan vs. V.S.V. Palanichamy Nadar and Ors. (06.06.1968 - CALHC) AIR1969 Cal 43