US and Indian Trade Marks Law: A Comparison

Transcription

1 US and Indian Trade Marks Law: A Comparison US and Indian Trade Marks Law: A Comparison By Murugendra B. Tubake* Cite as: (2012) PL February S-1 Introduction Intellectual property is created by the application of human mind. It is non-physical (incorporeal) and it derives its value from idea(s). There is no uniform definition of IP. The domain of IP is expanding fast as knowledge and information become key drivers of techno-economic growth and of societal progress in general. IP is a dynamic area. As science and technology make rapid advances, and as competition for markets becomes ever fiercer, human ingenuity is throwing up ever new ideas and newer products. Different types of IP rights like patent, copyright, trade mark, design, etc. can protect these ideas and products. Trade marks have been used for centuriesâ probably as long as there has been more than one person carrying out a particular trade, or selling merchandise of a particular type, at the same market, or in the same town. An important part of business is developing a reputation for selling unusual merchandise, or for quality or variety of products, or for high value.1 The Lanham (Trade Mark) Act, 1946 Title 15, Chapter 22 of the United States Code is a piece of legislation that contains the federal statute of trade mark law in the United States. The Act was passed on and signed into law by President Harry Truman. In India the law relating to trade marks is governed by the Trade Marks Act, 1999 which came into force with effect from vide Notification S.O (E) dated and the Trade Marks Rules, TRIPS applies basic international trade principles to member States regarding intellectual property, including national treatment. TRIPS establishes minimum standards for the availability, scope and use of seven forms of intellectual property. Most of the member countries to the TRIPS agreement including the US and India have incorporated these basic principles in their domestic laws. Since TRIPS agreement provides for only minimum standards so, we find similarity to some extent in the domestic IP laws. Except these principles we hardly find the laws which are uniform as a result of which we find some advantages and disadvantages of nation over other nations IP laws. This article sets out the key differences between Indian and US trade marks law. 1. Two sets of laws In the United States, a trade mark may be registered at the federal level and also with the authorities in each of the fifty States. The law of each State concerning trade mark registration and rights may differ, meaning that the protection afforded by one Stateâ s trade mark registration differs from that provided by the other Stateâ s jurisdiction. 2. State Registered Trade Mark versus Federally Registered Mark How to Obtain A federal trade mark registration is issued by the United States Patent and Trade Mark Office (â œusptoâ ) State registrations are issued by a State office, typically the Secretary of Stateâ s office.2 Use Requirements for Registration A federal trade mark registration is available only for marks used in inter-state commerce or commerce between the United States and another country. Purely inter-state use of a mark is not sufficient to obtain a federal trade mark registration. Intra-State use is sufficient, however, for State registration. A federal trade mark registration is available only for marks used in inter-state commerce or commerce between the United States and another country. Purely inter-state use of a mark is not sufficient to obtain a federal trade mark registration. Intra-State use is sufficient, however, for State registration.3 Presumption of Validity and Ownership While a federal registration provides a presumption of the validity of the registration and ownership by the entity or person identified in the registration records, a State registration provides no such presumption. Basis for Other Filing A federal registration can form the basis for filing in other countries, such as an international registration under the Madrid Protocol. State registrations cannot.4 Customs Recordation A federal trade mark registration can be used to stop unauthorised import at the US border, but a State registration cannot be used for that purpose.5 Geographic Area of Registration A federal trade mark registration provides protection for a trade mark, as well as constructive notice of the validity of and ownership of the trade mark, throughout all fifty US States. State registration protects the mark, at most, within borders of the State and does not protect the mark in the rest of the United States.6 Symbol A State trade mark registration does not convey the right to use the  symbol. Only the owner of a federal trade mark registration may use the  symbol.7 Supremacy of Federal Registration Someone who obtains a federal registration that predates another personâ s use of the same mark has superior rights to use the registered mark throughout the US. This is true regardless of whether the

2 person has been granted a State registration or was the first person to use the mark in the State. When there is a conflict between a federal registration and a State registration, because of the supremacy clause the federal registration usually wins.8 For instance, a prior federal mark takes priority over a subsequently registered, or â œjuniorâ, State mark. Under trade mark law, a federal registrant has a nationwide right to a mark if they have a federal registration and show a likelihood of entry into an area where a local junior user exists. The junior user may continue to use the mark in the State for as long as the federal registrant remains outside the market area. But once the federal registrant shows a likelihood of entry, the junior user must cease use of the mark. A federal registration is constructive notice that the registrant has the right to use the mark throughout the entire country and can prevent the others from using the same mark.9 Status of Indian law In India there is no classification of laws into State law and Central law for the purpose of trade mark protection. The Constitution of India under Entry 49 of the Union list of matters falling within the Union Government for the purpose of legislation mentions about patents, inventions and designs, copyright, trade marks and merchandise marks. So it is only the Union i.e. the Central Government that has the power to enact the legislations on intellectual property, States do not enjoy such power. Thus, in India trade marks can be registered with the Controller-General of Patent, Designs and Trade Marks which will have the same effect as that of federal registration in the US. 3. Principal Register and Supplemental Register versus Registrar of Trade Marks Principal and Supplemental Register Sub-chapter I of the Lanham Act, 1946 establishes the principal register. The owner of a trade mark used in commerce may request registration of its trade mark on the principal register by paying the prescribed fee and filing in the Patent and Trade Mark Office an application and a verified statement in a manner as prescribed by the Director of the United States Patent Trade Mark Office along with such number of specimen or facsimiles of the mark as used as may be required by the Director. So, trade marks which are â œcapable of distinguishingâ the applicantâ s goods or services may b registered on the principal register. Supplemental Register Sub-chapter II of the Lanham Act, 1946 establishes the supplemental register. Trade marks which are â œcapable of distinguishing applicantâ s goods or services and not registrable on the principal registerâ may be registered on the supplemental register. Generally speaking, marks which are not inherently distinctive and do not yet possess secondary meaning are considered appropriate for the supplemental register. Of course, in the United States system, use of the trade mark determines how courts will categorise the mark. Therefore, even if a mark is only registered on the supplemental register, this has no binding effect on a courtâ s determination of whether the mark has come, through use subsequent to the registration, obtained secondary meaning or even become intently distinctive.10 The supplemental register is available only for use based applications and not intent to use applications. Once use is claimed in a statement of use, the applicant can amend its application and choose the supplemental register instead of the principal register. Indian position In India trade mark registry is under the charge of the Registrar of Trade Marks who is also the Controller- General of Patent, Designs and Trade Marks. He is assisted by officers designated as Joint-Registrar, Deputy Registrars, Assistant Registrars and Examiners of Trade Marks.11 Those officers discharge the functions of the Registrar under his superintendence and direction. Ordinarily the Joint-Registrar, Deputy Registrars, Assistant Registrar are authorised to hear and decide cases in respect of all proceedings under the Act before the Registrar. The Examiner of Trade Marks examines applications for registration of trade marks to see whether they qualify for registration under the provision of the Act and the Rules. They also assist the Registrar in all various proceedings under the Act and the Rules. The marks which are not registrable with the Registrar of Trade Marks will not have any alternative registration procedure as the Indian Trade Marks system does not have any provision for supplemental register for the purpose of registration of marks which are not registrable with the Registrar. 4. Effect of Non-use of a Trade Mark In the US prior use is required to register trade marks and proof of use is required to maintain registrations during their sixth anniversary. An increasing number of countries have adopted user requirements. User requirements are given stricter interpretation by the courts and there is a tendency to require use upon renewal. Trade mark user requirements are periods of time provided by law during which a registered mark must be used or the registration will become invalid or at least is subject to cancellation. Chapter VI of the Trade Marks Act, 1999 deals with the use of trade marks and registered users and Section 47 allows removal of a trade mark from the register for non-use. According to Section 1127 of the Lanham Act â œuseâ of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark. It also provides that non-use of a mark for three consecutive years is prima facie evidence of abandonment and the mark shall be deemed to be â œabandonedâ if either its use has been discontinued with intent not to resume such use or when any course of conduct of the owner causes the mark to become the generic name for the goods or services on or

3 in connection with which it is used or otherwise to lose its significance as a mark.12 In the US Section 45 of the Lanham Act provides that a mark shall be deemed to be abandoned when its use has been discontinued with intent not to resume such use. â œintent not to resumeâ may be inferred from circumstances and non-use for three consecutive years shall be prima facie abandonment. Use of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark. â œuseâ has been defined by the US Trade Mark Law Revision Act, 1988 to mean use â œmade in ordinary course of trade, and not made merely to reserve a right in markâ. This practice of making â œtokenâ or â œprotectiveâ sales will not qualify as â œuseâ under the revised applies under Section 45 of the revised Act in relation to both the terms â œuse in commerceâ and â œabandonmentâ.13 In India, Chapter VI of the Trade Marks Act, 1999 deals with â œuseâ of trade marks and Section 47 of the Act provides that a registered trade mark can be taken off from the register on an application made by any person aggrieved if there was no bona fide intention of using the mark by the registrant or by the company to be formed and the mark had not been used up to three months prior to the application.14 In cases such as J.N. Nichols (Vimto) Ltd. v. Rose and Thistle15 the Indian courts have interpreted that â œuseâ does not necessarily mean and imply actual physical sale, even mere advertisement without having even the existence of the goods can be said to be a â œuseâ of the mark Incontestability â œincontestabilityâ under the Lanham Act is premised on the notion that at some point, trade mark owners ought to be able essentially to quiet title and rely on the registration as proof that no other party has superior rights in or to the relevant trade mark. Therefore, Section 33(a) of the Lanham Act states that once a trade mark has been registered for at least five years and certain formalities addressed by the Act completed by the registrant, the registration becomes conclusive evidence of the validity of the trade mark and the registrant has the exclusive right to use the mark on or in connection with the identified goods or services. Indian Position Indian trade mark does not require filing of an affidavit for the continuous use of trade mark however nonuse of trade mark for five years is a ground for removal from the register. Under the Indian trade mark system once the owner of a mark registers the mark it is sufficient for such registration to be prima facie evidence of validity. 6. Trade Mark Dilution Trade mark dilution is a trade mark law concept giving the owner of famous trade mark standing to forbid others from using that mark in a way that would lessen its uniqueness. In most cases, trade mark dilution involves an unauthorised use of anotherâ s trade mark on products that do not compete with, and have little connection with, those of trade mark owners.17 The US Law incorporated the provision for remedies for dilution of famous marks. The owner of a trade mark apart from bringing an action for infringement can bring separate action for dilution of his mark provided that his mark is a famous mark. Trade Mark Dilution in India The law in India does recognise the concept of trade mark dilution by virtue of Section 29(4) which reads as follows: 29. (4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark whichâ (a) is identical with or similar to the registered trade mark; and (b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and (c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or reputation of the registered trade mark. However, the paradox of the Indian courts is that in practice the concept is referred to in the matters not of dilution but in relation to the common law action of passing-off. It has been held by the Indian courts that even when a mark is well known in India, the use of the same for different goods cannot be restricted Treble Damages Treble Damages under the Lanham Act Under the Lanham Act the court may award three times actual damages. The Act authorises courts to exercise their own discretion in awarding up to three times damages for any wilful violations of the Act. However, any increases over provable, actual damages have to be for the purpose of compensation, and not designed as penalty.19 Damages under Indian law Under the Indian law the relief which a court may grant in any suit for infringement includes either damages or an account of profits, together with or without any order for the delivery of the infringing labels and marks for destruction or eraser. But there is no specific provision as to the treble damages Cyber Privacy Prevention Domain Names and Domain Name Disputes On the internet, every computer which has an inbuilt capacity to transform each numeric address (IP address) to corresponding mnemonic alphanumeric equivalent is known by a domain name. Thus the domain name serves as user friendly equivalent of numeric IP address. It is an identifier that uniquely identifies the desired page.21 Very simply put, a domain name is the linguistic counterpart of what we call an internet protocol (IP) address.

4 Domain name disputes tend to four categories: 1. Cybersquatter 2. Cyber parasites 3. Cyber twins 4. Reverse domain name hijacking22 The term â œcybersquatterâ refers to someone who has speculatively registered or has acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant who is the owner of the mark. Sometimes parties register names expecting to auction them off to the higher bidder.23 As long as a cybersquatter owns a domain name the trade mark owner cannot register his own trade mark as domain name. Thereby a cybersquatter breaches the right of the trade mark owner to utilise his own trade mark. It is relevant to note that there is nothing wrong with the practice of reserving a domain name. Often a cybersquatter registers words or phrases they hope will someday be sought after by new companies or new business.24 Cyber Privacy Prevention in the US On a global basis, domain name specific legislations are very rare. But the US has enacted the Anti Cybersquatting Consumer Protection Act in The Anti Cybersquatting Act would place civil and criminal penalties on those who violated the proposed law, allowing the plaintiffs to recover damages of $50,000 to $100,000 per domain name.25 The Act articulates a strong federal policy against registering or keeping domain names for the main purpose of profiting by selling those domain names to the trade mark owners or to people whose personal names are similar to the domain name. Under the new law, it will be much easier for a plaintiff to take action against the owner of a domain name that corresponds to his or her trade mark or personal name and to obtain an order cancelling or transferring the domain name.26 Cyber Privacy Prevention in India India has no domain name specific legislation. It is impractical that our lawmakers and judiciary keep abreast of the global legal developments in this arena. In India domain name disputes are regulated under Section 29 of the Act and by an action for passing-off. 9. Remedies Remedies for Infringement in the US Successful plaintiffs are entitled to a wide range of remedies under federal law. Such plaintiffs are routinely awarded injunctions against further infringing or diluting use of the trade mark. In trade mark infringement suits, monetary relief may also be available including: (1) defendants profits,27 (2) damages sustained by the plaintiff28, and (3) the costs of the action.29 In trade mark dilution suits damages are available only if the defendant wilfully traded on the plaintiffâ s goodwill in using the mark. Otherwise, the plaintiffs in dilution action are limited to injunctive relief. The Lanham Act does not provide for criminal remedies for trade mark infringement. In most jurisdictions, punitive damages are awarded: (1) to punish guilty of a wilful wrong; (2) to make an example of the defendant to others; (3) to deter the defendant from future misconduct; and (4) as an approximate award to the plaintiff of his expenses of litigation. In most jurisdictions, punitive damages are awarded only where the defendantâ s conduct in tort case has been egregious.30 Remedies for Infringement in India In an action for infringement of trade mark the plaintiff is entitled to injunction and at the option of the plaintiff either damages or an account of profits, together with or without any order for the delivery of the infringing labels and marks for destruction or eraser.31 Indian law unlike the US provides criminal remedies for trade mark infringement. Under Indian law applying of false trade marks, trade description is punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than Rs 50,000 but which may extend to Rs 2 lakh. The Act also provides that falsely representing a trade mark as registered shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.32 Conclusion In the light of the above discussion we find that the US law has many advantages over the Indian trade marks law. So, there should be a provision for supplemental register for every State under the Indian trade mark legislation so that the owner of the mark having short market life and restricted territorial business can be able to register his mark without observing procedural formalities. The period of non-use of a trade mark for five years as a ground for revocation should be reduced to three years under the Indian law. To make our country a true global powerhouse there is a need of provision, for regulation of cyber crimes especially cybersquatting, not only under trade mark law but even under information and technology law. Then only our country has a golden chance to become an IT superpower in this millennium. There should be a separate provision under Indian legislation for remedies for dilution of famous marks. Provision should be made to the effect that, apart from bringing an action for infringement of trade mark, the owner of trade mark could initiate a dilution suit for claiming special damages, as famous marks have close association with goodwill of the business. Since trade marks are the face of trade they represent the credibility, reputation and fame of goods or services, so in an action for infringement suit if the plaintiff proves the bad motive on the part of the defendant,

5 the provision should be made under the Indian law to the effect that treble damages should be awarded to the plaintiff. * Asst. Prof. of Law, Karnataka State Law Universityâ s Law School Rayapur, Dharwad. - Dana Shilling, Essentials of Trade Marks and Unfair Competition (1st Edn., John Wiley & Sons Ltd., New York 2008) copyrights/trademarks.aspx last accessed FactSheets/Pages/StateTrade Mark Registrations US Fact Sheet.asx last accessed Mark-FAQ/faqbasic.htm last accessed Basics/ FactSheets/Pages/StateTradeMark RegistrationsUSFact Sheet.as last accessed USC Â 1091(c) [Lanham Act Section 19(a)]. - The Trade Marks Act, 1999 S Thilini and Kahandawaarachchi, â œa Study of Indian and U.S. Trademark Law Relating to Effect of Non-use of a Trademarkâ March 2007, Vol. 12, Journal of Intellectual Property Rights. - B.L. Wadhera, Law Relating to Patents, Trademarks, Copyright, Designs and Geographical Indications (3rd Edn., Universal Law Publishing Co., Delhi 2004) (1993) 2 CHN 395 (Cal). - S.K. Chowdhury, Law Relating to Trademarks, Copyright, Patents and Designs (1st Edn., Kamal Law House, Kolkata 1996) ip/publications/docs/trade Mark_Dilution_Famous.html last accessed mentor/2009/04/20/stories/ htm last accessed USC Â 1117 (Lanham Act S. 35). - The Trade Marks Act, 1999 S Yatindra Singh, Cyber Laws (4th Edn., Universal Law Publishing Co., New Delhi 2010) last accessed publications/ip/ip_rights_on_the_internet.pdf last accessed R.K. Chaubey, An Introduction to Cyber Crime and Cyber Law (1st Edn., Kamal Law House, Kolkata 2008) USC Â 1116(a) [Lanham Act S. 34(a)] USC Â 1117(a) [Lanham Act S. 35(a)] USC Â 1125(c) [Lanham Act S. 43(c)]. - montecarlo99/damages.html last accessed The Trade Marks Act, 1999 S The Trade Marks Act, 1999 Ss. 103 and 107.