Bonafide use under Indian Trademark Law

Prelude : Bonafide use under Indian Trademark Law

The “bona fide use” is the essence of trademark law. The Prime objective of trademark law in India is to protect the rights of interested parties in the mark, name, device and other forms of trademarks. No court, judge or tribunal provides the protection to the trademark if it’s not a bona fide use even if it is a registered trademark. The word ‘bona fide’ has been used at quite a few instances in The Trademark Act, 1999 (Hereinafter referred to as the act) but the true essence of it is reflected by the whole act and especially illuminates in few targeted sections.

The first leg of the article deals with the section 9 and section 11 of the act because as we move forward with other sections where the concept of bona fide usage would come to play, the test of it whether an adoption is bona fide or not would still flow from section 9 and section 11 therefore before moving on to those parts, basics need to set straight. Then the article explores the scope and meaning of bona fide in different sections (Section 12, Section 30, Section 35 and Section 47) and finally conclude it back to the section 9 and section 11 completing the full circle.

Section 9 and section 11 captures the negative embodiment of bona fide use and lays down the grounds for refusal of trademark registration. In other words, it lays down the conditions where the use of a trademark is not a bona fide use and therefore can be refused registration.

Summarising Section 9 & Section 11

Section 9 provides for the absolute grounds for refusal of registration of trademarks. These grounds include

lack of distinctiveness or distinctive character (means not capable of distinguishing the goods or services of one person from goods of another person),
Use of marks exclusively consisting of marks or indications, which may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods.
Use of trademark exclusively consisting marks or indications which have become the customary in the current language.
Use of mark of such nature that it causes confusion or deceives the public
Use of mark which could hurt religious sentiments of citizens of India
Use of mark containing obscene or scandalous matter and
Use of mark containing the elements under the Emblems and Names (Prevention of Improper Use) Act, 1950.

Further aspects of section can be explored via various judgements of supreme courts namely Hindustan Development Corp. v Deputy Registrar of Trade Mark,[1] Geep Flashlight Industries v Registrar of Trade Marks,[2] and J R Kapoor v Micronix India.[3]

Whereas section 11 provides for the relative grounds of refusal of the registration of the trademark. These grounds includes

Marks which are identical or similar to an earlier trademark
Marks which could take unfair advantage, or could be detrimental to the repute, of the identical mark.
The usage of mark is prevented by the law of passing off or law of copyright. Further aspects of section can be explored via various judgements of supreme courts namely Toshiba Appliances Co. v Kabushiki Kaisha Toshiba,[4] Carrefour v VSubburaman,[5] and Amritdhara Pharmacy v Satya Deo.[6]

As discussed above, section 9 and section 11 of the act are the embodiment of what is not bona fide therefore, anything which confirms with the grounds provided in section 11 and section 9 of the act is treated as not bona fide or a mala fide use of the trademark, and therefore will not be given any registration or protection.

Registration in the Case of Honest and Concurrent Use (section 12)

Now that the groundwork has been laid down and there is a clear picture of what law is for registration of trademark in India, now the grey area of it can be explored. Section 12 explores the realm of honest of concurrent use. In other words, it provides for the registration of identical or similar trademark by more than one proprietor in case of honest concurrent use or other special circumstances. Concurrent use can be established by the documents which may include bills, invoices, transportation and sales proof etc. Though there is no use of word ‘bona fide’ in section 12 but the meaning of the word resonates with the terms mentioned in the section which is honest use. Even the court at times have used the term ‘bona fide use/adoption’ while delving into the subject matter of section 12 and while determining an honest or concurrent use.

The law relating to honest and concurrent use was discussed at length in the Kores (India) Ltd. v. M/s Khoday Eshwarsa and Son and Another.[7] The case lays down the facts that need to be taken into consideration while determining if a mark is entitled to be registered under the section 12(3) of the act.

The honesty of the concurrent use,
The quantum of the concurrent use shown by the petitioner having regard to the duration, area and volume of trade and to goods concerned,
The degree of confusion likely to follow from resemblance of the applicant’s mark and the opponent’s mark,
Whether any instance of confusion have in fact been proved, and
The relative inconvenience which would be caused to the parties the amount of inconvenience which would be caused to the parties and the amount of inconvenience which would result to the public if the applicant’s mark is registered.

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The concept of Bona fide use under section 12 of the act was further explored at length in case of Goenka Institute of Education and Research v. Anjani Kumar Goenka and Anr[8] where the Delhi HC allowed the use of Mark Goenka to two parties. The court observed that the term Goenka is predominantly the part of trademarks of both the parties, the competing marks were GD Goenka Public school and the Goenka Public School.

Second factor which the court took into consideration was that both the parties adopted the name at around same time and that one institute was situated in Rajasthan and another one in Delhi.

The third factor which the court took into consideration is the most important one and is relevant to the current discussion, the court observed that since the locations were different and there is no reason to believe that appellant was aware of the adoption of the mark by the respondent at the time adoption, further that the word ‘Goenka’ forms the part of the appellant’s trust name, all these factors combined inferred towards the honest and bona fide adoption of the mark by the appellant therefore was allowed to keep using the name with a condition of mentioning trust name in the brackets to avoid any conditions in the future.

Further, in case of, Lowenbrau AG and Anr v Jagpin Breweries Ltdand Anr,[9] the dispute was over the use of word mark ‘Lowenbrau’. Both the parties were of German origin and were using the work mark ‘Lowenbrau’ to endorse their beer in India. The court observed that the word ‘Lowenbrau’ is synonymous to Lion’s Drink in German and is being used by many German beer brands so much so that it has become synonymous to the beer of German origin. The court observed that due to this reason the defendant couldn’t seem to have adopted the word mark with a mala fide and the fact that the defendant’s huge sales number also indicates that the defendant didn’t had a need to use wrong means all contributed the decision that the defendant’s use was bona fide, honest and concurrent therefore was allowed to keep using the name.

The case of Dr. Reddy’s Laboratories Ltd. v. M/s. Reddy Pharmaceutical Limited[10] highlight the other side of the coin where there is no bona fide adoption of the mark and the later adopted was prohibited to use it. The IPAB observed that all the factors considered points that the mark was adopted to create confusion and deceive the public therefore is not a bona fide adoption and can’t be given protection of section 12.

One interesting observation that is common among all these cases is that the test of being bona fide or not ultimately flows from section 9 or section 11 as discussed in the first leg of the article.

Nominative Fair Use (section 30)

Section 30(2)(d) of the act provides for the nominative fair use of the mark. Section 30 (2)(d) provides that: “the use of a trade mark by a person in relation to goods adapted to form part of, or to be accessory to, other goods or services in relation to which the trade mark has been used without infringement of the right given by registration under this Act r might for the time being be so used, if the use of the trade mark is reasonably necessary in order to indicate that the goods or services are so adapted, and neither the purpose nor the effect of the use of the trade mark is to indicate, otherwise than in accordance with the fact, a connection in the course of trade between any person and the goods or services, as the case may be.”

In other words, use of other’s trademark will not be an infringement, if the use of the trademark is reasonably necessary in relation to accessories or genuine spare parts or tools adapted to form part of the defendant’s good given that the purpose or the effect of the use of the trademark will not cause any confusion to the original product.

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The factor of bona fide adoption while determining the nominative fair use was discussed in the case of Hawkins Cookers Ltd. vs Murugan Enterprises.[11] The court considered 3 major factors while determining the nominative fair use:

If the use of the mark was reasonably necessary to describe the product
Was the use of the mark bona fide and
If the use of the mark deceived or likely to deceive public regarding origin of trade.

It is to be observed here that the 3rd factor is actually the test to determine factor 2. If the use of trademark is likely to cause confusion in the minds of the origin of trade then it would mean that there was mala fide of the part of the defendant and therefore can’t be given the protection of the nominative fair under section 30(2)(d).

It is further to be noticed that as discussed in the first leg of the article, herein also, the test of bona fide usage is derived from section 9 and section 11.

Usage of common surnames (section 35)

Section 35 provides that among other relaxations provides that one’s surname in the course of trade cannot be restricted even by a proprietor of a registered trademark, given that such use is in a bona fide manner.

In the case of Precious Jewels v. Varun Gems[12]

The court in this case observed that the use of the surname in mark Precious Jewels was bona fide in nature, as it was used as a part of full name. Further, the court observed that “no doubt, law recognizes the right of bona fide use as of his own common name provided that the user is in no way fraudulent but the same is used with honesty.

Thus, once again establishing the importance of bona fide adoption/usage in the trademark act.

Non-Use Cancellations Actions (Section 47)

The Trademarks Act, 1999 of India provides the provision for the cancellation of a trademark registration under its section 26. The condition for the cancellation is that if for a continuing period of 5 years and 3 months from the date on which the mark was entered into the Trade Marks Register, there has been no bona fide use of the trademark for the goods/services covered by the registration, then such trademark can be cancelled.

The Supreme court was called upon to decide if there was bona fide use of trademark or not in last 5 years and 3 months in case of American Home Products Corpn. v. mac Laboratories (P) Ltd.[13] The apex court observed that both the actual non-use of the mark and the intention of the proprietor to not use the mark must be considered and proved. The circumstances of the case were such that there was no actual usage of the mark in the prescribed time but the proprietor had recently signed a registered agreement to start the import of the products under the trademark of the proprietor which shows that the there was an intention on the part of the proprietor to use the trademark and such intention can be traced during the given period of 5 years and 3 months of non-use therefore the there is a right intention (bona fide) to use the mark on the part of proprietor and cannot be cancelled under the act on the grounds given in section 47.

Conclusion

Herein concluding the bona fide usage of the mark under the act, except the usage under section 47, everywhere else, the bona fide usage can be traced back to section 9 and section 11. Section 9 being the ultimate hub of grounds for refusal of the registration of trademark provides the genesis to the tests use to determine the bona fide usage. The act has been drafted in such a manner so as to protect the rights of the proprietor as well as the bona fide user. The Act strikes the right balance between the enforcement of rights of proprietors and the privileges of the bona fide users, and in areas where the act lacked, the Hon’ble courts of India have filled the lacunas of Trademark Law.

References:

[1] AIR 1955 CAL 519

[2] AIR 1972 DEL 179

[3] 1994 supp (3) SCC 215

[4] 2002 (24) PTC 654

[5] 2007 (35) PTC 225

[6] 1963 AIR 449

[7]1984 Arb. L.R. 213 (Bom)

[8]2009 (39) PTC 720 (Del.)

[9] 2009 SCC OnLine Del 45

[10] 2013 SCC OnLine IPAB 17

[11] (2008) 36 PTC 290 (Del)

[12]2013(53) PTC 233(Del)(DB)

[13](1986) 1 SCC 465