VIII. CERTAIN IMPERFECTIONS IN THE TRADEMARK LAW AND PRACTICE- PROPOSALS FOR RECTIFICATION

Transcription

1 VIII. CERTAIN IMPERFECTIONS IN THE TRADEMARK LAW AND PRACTICE- PROPOSALS FOR RECTIFICATION VIII.1. PROPOSAL TO AMEND RULE 54 OF THE TRADEMARK RULES VIII.1.a. Rule 54 and General Principles of Civil Procedure Rule 16. (9) of The Andhra Pradesh Civil Rules Of Practice And Circular Orders, 1990 states that every plaint shall at the foot thereof, contain a list, to be signed by the plaintiff or his advocate of the documents filed therewith, in Form No. 7 or a statement, signed as a foresaid, that no document is filed therewith. Rule 20. (21)(d). of The Andhra Pradesh Civil Rules Of Practice And Circular Orders, 1990 states that every plaint or proceeding presented to or filed in court shall be accompanied by as several copies on plain paper of the plaint or proceedings and the document referred to in Rule 16, as there are defendants or respondents unless the court otherwise dispenses with such copies of the documents by reason of their length or for any other sufficient reason. A conjunctive reading of the provisions above mentioned and corresponding provisions in Civil Procedure Code 1908 leads us to the inference that when a plaintiff institutes a suit by filing a plaint he shall file as several copies of the plaint as there are defendants. The plaint shall also be accompanied with the all those documentary evidence which the plaintiff intends to use to support the averments in the plaint. The same principle is applied when the defendants files his written statement. If there are any documents in support of the pleadings in the plaint, then he shall file the same number of copies of such 303

2 documents as of the plaint in the court. This enables the court serve the plaint along with the documents. Neither the defendants are charged for getting a copy of the supporting exhibits nor they are required to make a requisition to the court to have access to the same. The prudence behind such provisions is to enable the party to have a fair understanding of the pleadings of the opposite party and facilitate them in effectively countering the same. Further it assists in having a fair trial. Rule 54 of the Trademark Rules 2002 reads. Where there are exhibits to affidavits filed in an opposition a copy or impression of each exhibit shall be sent to the other party on his request and at his expanse, or, if such copies or impression cannot conveniently be furnished, the originals shall be left with the Registrar in order that they may be open to inspection. The original exhibits shall be produced at the hearing unless the Registrar otherwise directs. By juxtaposing Rule 54 of the Trademark Rules with the corresponding general rules of practice under the Civil Procedure Code, it can be observed that rule 54 imposes an undue burden on the parties to make a request to the Registrar of Trademarks to have access to the Exhibits relied upon by the other party. This provision is clearly inconsistent with the general rules of practice under the Civil Procedure Code. Moreover it serves no good purpose rather, by necessary implication, it denies the right of the party to have access to all the documents. 304

3 VIII.1.b. Rule 54 and audialterampartem or Rule of Fair Hearing The principle of audialterampartem is the primary concept of principle of natural justice. The expression audialterampartem implies that a person must be given opportunity to defend himself. This principle is sine qua non of every civilized society. This rule covers various stages through which administrative adjudication passes starting from notice to final determination. Right to fair hearing thus includes:- 1. Right to notice 2. Right to present case and evidence 3. Right to rebut adverse evidence (i) Right to cross examination (ii) Right to legal representation 4. Disclosure of evidence to party 5. Report of enquiry to be shown to the other party 6. Reasoned decisions or speaking orders In R. v. Ward (Judith Theresa 365 ), Court of Appeal held that it was the duty of the prosecution to ensure fair trial for both the prosecution and the accused. The duty of disclosure would usually be performed by supplying the copies of witness statements to the defense and all relevant experiments and tests 365 (1993) 2 All E.R

4 must also be disclosed. It was held that the common law duty to disclose would cover anything which might assist the defense. Non-compliance with this duty would amount to irregularity in the course of the trial under Section 2(1)(a) of the Criminal Appeal Act, In Manu Sharma Vs. State (NCT of Delhi) 366 the Supreme Court observed that The concept of fair disclosure would take in its ambit furnishing of a document which the prosecution relies upon whether filed in Court or not. That document should essentially be furnished to the accused and even in the cases where during investigation a document is bona fide obtained by the investigating agency and in the opinion of the prosecutor is relevant and would help in arriving at the truth, that document should also be disclosed to the accused. The Supreme Court in Kraipak and Ors. V. Union of India 367 observed that the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law but supplement it. It is true that if a statutory provision can be read consistently with the principles of natural justice, the courts should do so because it must be presumed that the legislatures and the statutory authorities intend to act in accordance with the principles of natural justice. But if on the other hand a statutory provision either specifically or by necessary implication excludes the (2)ACR1645(SC), AIR2010SC2352, JT2010(4)SC107, 2010(4)SCALE1, (2010)6SCC1, [2010]4SCR103, 2010(3)UJ [1970]1SCR

5 application of any or all the principles of natural justice then the court cannot ignore the mandate of the legislature or the statutory authority and read into the concerned provision the principles of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power. In Smt. Varshaben Bharatbhai Shah v. Appropriate Authority 368, the Division Bench of the Gujarat High Court consisted of B. C. Patel and R. M. Doshit JJ. And the judgment was delivered on February 5 and 6, The court considered the question about non-observance of principles of natural justice. As held by a catena of decisions that if the adjudicator is going to rely on any material evidence or document for basing his decision against the individual, then the same must be placed before him for comments and rebuttal. It is regarded as a fundamental principle of natural justice that no material should be relied on against a party without giving him an opportunity of explaining the same. The right to know the materials on which the authority is going to take a decision is a part of the right to defend oneself. Non-disclosure of evidence to the affected party had been held to be fatal to the hearing proceedings. In Nathu Lal Jangid and etc.v.state of Rajasthan and Ors. 369 the court observed that The law must now be taken to be well settled that even in a 368 [1996]221ITR819(Guj) 369 AIR2001Raj119, 2001(4)WLC255, 2001(3)WLN

6 administrative proceedings which involves civil consequences the doctrine of natural justice must be held to be applicable. Disclosure of evidence in support of each charge leveled against a delinquent elected member of Board seems to be an Integral part of principle of natural justice. It is to be imbibed that the principles of natural justice are in the process of evolution and its components are increasing day in and day out by judicial pronouncements to suit the social conditions prevailing in our democratic polity. Now, the principles of natural justice do not only include reasonable opportunity of hearing to a delinquent person but it also casts a duty upon the inquiry officer to disclose the evidence and reasons in support of his findings of misconduct or guilt. The inquiry officers are also requires to analyse the oral and documentary evidence adduced by the administration and delinquent in support of their respective claims consciendly with reference to salient features of law. Reasons are link to the conclusigous which indicate application of mind of the inquiry officer to the facts and circumstances of the each case with reference to the evidence adduced by the parties and salient features of law. Therefore, having regard to above stated judicial precedents, it can now be infallibly concluded that disclosure of evidence is a vital element of principles of natural justice. Under Rule 54 of the trademark rules a party to the opposition proceedings shall gain access to the exhibits produced by the other party, which support the pleadings of the latter pleaded in the affidavit only by making a request and at his expanse. In practice, this provision enables the parties to not serve the copies of the exhibits to other party when filing the affidavits. It is a 308

7 serious impediment upon the right of the party to have information about the evidence filed in the form of exhibits. Further it is important to note that replies to the averments of the opposite party should be filed within definite time frames specified in the corresponding Trademark rules. Making a request to the Registrar and then having the copies of the exhibits delivered is a time consuming process. It causes great delay in filing replies with the Registrar. Therefore the parties are put to undue hardships. VIII.1.c.Solution The researcher proposes that Rule 54 be amended and make it mandatory for the parties to serve affidavits along with the appending exhibits on the opposite party. By doing so, firstly the opposition proceedings under the Trademarks Act 1999 will be expedited, secondly it will be in conformity with the general rule of practice under the Civil Procedure Code 1908; thirdly simplifies the process of filing the replies with the Registrar of Trademarks; fourthly contributes in conduction of a fair proceeding devoid of abuse of the current provision by either party. VIII.2. ABUSE OF SECTION 134 OF THE TRADEMARKS ACT 1999 BY MULTINATIONAL COMPANIES VIII.2.a. Interplay between S.134 of Trademarks Act 1999, Section 62 of Copyright Act and Section 20 of CPC S.20. of the CPC reads: 309

8 Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction- (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or I the cause of action, wholly or in part, arises. 1[* * *] 2[Explanation].-A corporation shall be deemed to carry on business at its sole or principal office in 3[India] or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. S.134. of the Trademarks Act reads: (1) No suit- (a) for the infringement of a registered trade mark; or (b) relating to any right in a registered trade mark; or 310

9 I for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff s trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit. (2) For the purpose of clauses (a) and (b) of sub-section (1), a District Court having jurisdiction shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain. Explanation.-For the purposes of sub-section (2), person includes the registered proprietor and the registered user. S. 62. Of Copyright Act reads: (1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction. (2) For the purpose of sub section (1), a district court having jurisdiction shall notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, include a district court within the local limits of whose jurisdiction, at the time of the institution of the suit or 311

10 other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain. The Hon ble Division Bench of the Delhi High Court in the case of Indian Performing Right Society Ltd. Vs. Sanjay Dalia &Anr 370. Discussed in detail the scope of section 134 of TM Act vis a vis section 20 of CPC. 3. We have carefully cogitated upon the contentions articulated before us on behalf of the litigating adversaries. Intas Pharmaceuticals Ltd. V. Allergan Inc 371 lays down an important principle of law in that it interprets Section 134 of the Trademarks Act as not whittling down the provisions of Section 20 of the CPC but providing an additional forum and a place for filing a suit in case of an infringement of a trademark. The Division Bench presided over by Dr. Mukundakam Sharma, J. (as his Lordship then was) has also opined that the words notwithstanding anything contained in the CPC are indicative of the position that Section 134 of the Trademarks Act has to be read conjointly with and in addition to the provisions of Section 20 of the CPC. To those observations we may add that it is only in the event of a conflict between the provisions of Section 20 of the CPC and those of Section 134 of the Trademarks Act that the latter would prevail. The effort of the Court must be, so far as is possible, not to curtail the role that can be played by either of the provisions acting conjointly or simultaneously. This Court in Intas had predicated its decision on the opinion of (2008)DLT AIR 2007 Delhi

11 the Supreme Court in Dhodha House v. S.K. Maingi 372 in which it has been enunciated that Section 62(2) of the Copyright Act provides an additional forum to enable the holder of a copyright to file a suit at the place of his residence, thereby insulating him from the tedium or vexatiousness of taking the fight to the doorstep of the violating Defendant. The Trade and Merchandise Marks Act, 1958 did not contain a provision akin to Section 134(2) of the Trademarks Act, 1999 enabling the plaintiff to enjoy the convenience of filing a suit at the place where he resides or carries on business etc. The extant provisions are indeed salutary in purpose and effect, since otherwise the legal remedy available for a breach of copyright or an infringement of trademark often remains illusory. It appears to us that the Court would be acquiescing in an assault on a general principle of law prevalent at least in all common law systems if it were to allow a lis to continue at a place where neither has the cause of action arisen nor has the Defendant have a residence or place of business. This legal principle attempts to obviate the use of litigation as a device of harassment calculated to force an adversary into succumbing into a settlement for fear of fighting a lis at an inconvenient venue. Having made this observation, we see no impediment in extrapolating this impeccable reason onto an interpretation of Section 62(2) of the Copyright Act and Section 134(2) of the Trademarks Act, (which are verbatim to each other), by requiring the plaintiff to file a suit at the place where it has its principal or subordinate place of business if the cause of action has arisen there. Alternatively, the plaintiff may take recourse to the provisions of Section 20 of the CPC (32)PTC1(SC) 313

12 VIII.2.b. Intention of the Legislature The intent of Section 62 of the Copyright Act and Section 134 of the Trademarks Act is to enable the plaintiff to initiate litigation at a forum convenient to it. It is not intended to allow the plaintiff to choose a territorial forum which is not convenient to either of the parties, as is demonstrated by the case in hand. Bill No. XV of 1955 sought to amend and consolidate the law relating to copyright. The Parliamentary Committee was of the opinion that several authors are deterred from instituting infringement proceedings because the court in which such proceedings are to be instituted is situated at a considerable distance from the place of their ordinary residence. The Committee feels that this impediment should be removed and the new sub-clause (2) accordingly provides that infringement proceedings may be instituted in the district court within the local limits of whose jurisdiction the person instituting the proceedings ordinarily resides, carries on business, etc. 373 VIII.2.c. Abuse by the Multinational Companies In Parliamentary Debates relating to the amendments carried out to the law of copyright and trademark, one of the Objections that was raised was that the new jurisdictional dispensation would favour multinational corporations as they would be able to initiate litigation according to their choice and secondly that a poor holder of a trademark will be at a disadvantage. In the context of the first Objection it was clarified that the new provisions would be to the advantage of the 373 Lakhan Pal Shyam Kumar v. Ram Prasad Gupta &Anr 190(2012)DLT659, (51)PTC141(Del). 314

13 petty trader incidentally doing his trade on the basis of a registered trademark, and that if this purpose was not achieved, an amendment would be brought in. 374 The plaintiff, a multinational company has branch office or subordinate office in India. Let us assume that the cause of action has arisen in Kanyakumari. It is axiomatic that in the case of a violation of a trademark or copyright the Defendant would have some presence, that is, actual and voluntary residence, or carrying on of business or working for gain, in Kanyakumari. If the plaintiff also carries on business etc. in Kanyakumari there would be no justifiable reason not to bring the suit only at Kanyakumari. Assuming, however, that the plaintiff does not carry on business in Kanyakumari but in Delhi or in Bombay or Calcutta, he would face the disadvantage of having to file his suit at a hostile or inconvenient place. Section 62 would then enure to his benefit and enabling it to file the action in any of the three cities. However, if the plaintiff were to be free to choose from any of the places where he is carrying on business etc. with no correlation to the cause of action, the consequence would be that his choice would create for the Defendant the very disadvantage which the legislation has sought to alleviate for the plaintiff. In that event, no useful purpose would be served for the plaintiff except for additional harassment to the Defendant. Section 134 does not prescribe the aspect of cause of action. But it is found in Explanation to Section 20 of the CPC. Taking advantage of this lacunae in the legislation the multinational companies having branch offices at numerous places in the country have made it a practice to file a suit for infringement of the 374 Ibid. 315

14 trademark with the sole motive of harassing the defendants and ultimately coercing them for settlement of dispute. Due to this the defendants, mostly the poor ones, are victimized and are incapacitated to carry on the litigation and assert their rights over the trademark. The researcher being a practicing advocate in the field of trademark law has personally witnessed such abuse by the multinational companies. This effect was foreseen by the legislators before the enactment of Section 62 of the Copyright Act and it was clarified stating that such abuse shall be curtailed by amending the section. VIII.2.d. Solution Now the time has come to amend Section 134 of the trademark act 1999 and insert a specific explanation similar to that of the one under Section 20 of CPC which is reproduced below [Explanation].-A corporation shall be deemed to carry on business at its sole or principal office in 3[India] or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. Above insertion, firstly, will prevent the multinational companies from instituting a suit for infringement according to their whims and fancies. It will impose an additional prerequisite to institute a suit i.e. the cause of action should arise at the subordinate office. Secondly, it will serve the original purpose intended by the legislature to provide an additional forum for the convenience of the plaintiff but not to unnecessarily harass the defendants with scanty resources. Thirdly it helps in expediting the litigation. 316

15 VIII.3. NON RECOGNITION OF SMELL MARKS A REGRESSIVE APPROACH BY THE JUDICIARY Another defect which the researcher found was that the law recognizes and protects the sound marks but does not recognize and protect the smell mark. Here the researcher thinks that if the law recognizes the sound marks as a trademark then why not the smell or olfactory marks. If the sound mark can be graphically represented or can be embedded on a piece of paper, in the form of musical notations, then why can t the smell marks be sought protection under the law. The smell marks can also be represented graphically in the form of recipe in case of aroma or the chemical combination of the smell in case of fragrance. Solution Here the researcher would like to suggest that, if the sound marks are recognized and are protected under in India law, then the smell marks should also be recognized and should be protected under the said law. Otherwise it would be unfair on the part of the persons interested in registering the smell marks as their trademark, because the sound marks are also the non-conventional trademarks. Here the researcher personally feels is that the smell mark or olfactory marks should also be recognized and be protected. 317

16 VIII.4. MENACE OF GRANTING UNNECESSARY EXPARTE ORDERS- NEED FOR INTROSPECTION VIII.4.a. Guidelines of the Supreme Court The Supreme Court of India in a recent judgment, Ramrameshwari Devi & Ors. Vs Nirmala Devi & Ors. 375 Has laid down guidelines which the courts should adopt in preventing such litigation and also cautioning courts on the grant of indiscriminate ex parte orders: The Presiding Judge must exercise due care, caution, diligence and attention while framing the issues for the suit so as not to include issues already decided by other courts in violation of the principle of res judicata. The trial judge must carefully scrutinize, check and verify the pleadings and the documents filed by the parties. The court should order discovery and production of the documents at the earliest so as to focus on the main controversies of the case and arriving at the truth of the matter. Courts should impose realistic costs on parties who engage in frivolous litigation. In our present system, courts do not impose penalties on the parties who prolong the suit. Thus unscrupulous parties are 318lobalizatio to carry out a cost-benefit analysis between the likelihood of tiring the other party into settlement and prolonging the case to such an extent that (8) SCC

17 the other party suffers. In the present case, the court imposed Rs. 2 lakhs as costs on the Appellants for unnecessarily prolonging the dispute. Courts have to be very careful in imposing ex parte orders. If an injunction has been granted on the basis of false pleadings or forged documents (which is very often the case in India) courts must impose costs on the litigants. Courts should give short notice to the Defendants and hear both parties before passing ex parte interim orders since the experience has been that once granted these orders cause havoc and getting them modified is next to impossible. In an exceptional case where the court has to grant an ex-parte injunction it must record in the order that if the suit is dismissed the petitioner will have to pay full restitution, actual or realistic costs and mesne profits. If ex parte order is granted then all endeavours should be made to dispose the application for injunction as expeditiously as possible, preferably as soon as the defendant appears in court or another option available is, to limit the life of the ex parte order for a week so as to prevent any incentive of prolonging the matter on the plaintiff s part. The Apex Court reiterated the factors which should weigh with the Court in the grant of ex parte injunction in Morgans Stanley Mutual Fund v. Kartick Das as follows: (a) whether irreparable or serious mischief will ensue to the plaintiff; (b) whether the refusal of ex parte injunction would involve greater injustice than the grant of it would involve; 319

18 I the court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented; (d) the court will consider whether the plaintiff had acquiesced for some time and in such circumstances it will not grant ex parte injunction; (e) the court would expect a party applying for ex parte injunction to show utmost good faith in making the application; (f) even if granted, the ex parte injunction would be for a limited period of time; (g) general principles like prima facie case, balance of convenience and irreparable loss would also be considered by the court. VIII.4.b. Unhealthy Practice of Granting Unnecessary Exparte Injunctions a Case Study Although the decision of the Apex Court should be followed by all courts and tribunals and all concerned throughout India, it would be evident from the orders made even by the District and Sub-Divisional Courts that neither the provisions of the Code nor the factors laid down by the Apex Court are followed and ex parte orders granted without even stipulating any time for hearing even though it has been provided in the Code of Civil Procedure that application for interim order should be heard within 30 days. The practice of granting injunction merely on asking has been deprecated by the Apex Court several times and it is really unfortunate that the observations of the Apex Court are not followed by the 320

19 subordinate courts as well as the High Courts. The issuance of a preliminary injunction is a remedy to be used only to preserve the status quo between the parties. In several cas`es, the issuance of a preliminary injunction effectively ends the matter for all practical purposes between the parties, and acts as indicator of defeat to the defendant. Achieving preliminary injunctions through such ex-parte order is not a healthy judicial practice. The following case study throws light on the menace of granting unnecessary injunctions. Facts of the case M/s Sentini Bio Products Pvt Ltd manufactures liquor products and sells it under the trademark OFFICER S SPECIAL. Their application for registration of the said trademark is pending before the Registar of Trademarks. Their label OFFICER S SPECIAL received approval from the Excise Department of Andhra Pradesh and also Excise Department of Chhattisgarh. M/s Allied Blenders Pvt Ltd also manufactures liquor products and sells it under the registered trademark OFFICER CHOICE. They filed an opposition against the label OFFICER S SPECIAL with the excise departments of Andhra Pradesh and Chhattisgarh. Both the opposition have been rejected by the respective departments. Then they have filed a suit for injunction against M/s Sentini Bio Products Pvt Ltd in the Delhi High Court along with an application for passing an exparte order under order 39 of the Civil Procedure Code. Order passed by the High Court. The High Court has passed an exparte ad interim injunction against M/s Sentini Bio Products Pvt Ltd prohibiting them from usage of the trademark OFFICER S 321

20 CHOICE in The order is still not vacated by the high court despite of the fact that CPC prescribes 30 days time limit either to confirm or to vacate the exparte order. Analysis of the order The issue at hand is whether an irreparable loss would have occurred if the said exparte order was not passed by the High Court. Both the parties were involved in liquor business. The products sold by the parties are neither essential items nor of the nature of having an adverse impact on the people at large if appropriate action were/or were not to be taken. There was no urgency in dealing the matter. As far as loss, monetary or otherwise, that might have occurred to the plaintiff is concerned, it could have been made good by passing an appropriate at the later stage of the trial. So the grounds for passing an exparte order were clearly not fulfilled. VIII.4.c. Suggestions Passing of exparte orders is a prerogative of the judge. He can pass such order if the case in hand qualifies to be one. But experience has shown that such orders are being passed without carefully considering the important factors. Supreme court s guidelines issued on a regular basis to prevent such activity proved to be little of use. In light of the above the researcher proposes following courses of action to avoid unnecessary exparte orders from being passed: 1. Courts while adjudicating upon cases related to trademarks and mulling over the question of granting an exparte order, should give greater emphasis on the factor of cause of irreparable loss or injury. For instance if 322

21 the loss is only monetary the courts should refrain themselves from passing exparte order because such loss can always be made good by an appropriate order at a later stage of the trial. But if the loss so to occur shall have substantial negative implications on the reputation associated with the trademark, then the court may consider passing an exparte order. 2. Generally the court takes into consideration the interests of either the plaintiff or the defendant or both while deciding on the question of passing an ex parte order. Some cases, apart from the contending parties have elements that affect the public at large such as cases pertaining to trademarks of pharmaceuticals, food items etc. In such cases well being and welfare of the people at large should become a deciding factor rather than the financial interests of contending parties. If an essential drug (though essential to a small group of people) is manufactured by a domestic company and a suit for infringement of trademark coupled with an application for passing an ex parte interim injunction is filed by a foreign company, then such an application should necessarily be rejected. 3. Exparte orders are supposed to operate as an exception to the general rule of audi alteram partem. This presumption in law exists from the very inception of this doctrine. Evidently this principle has not sufficiently percolated into the judicial system. Time has come for the Supreme Court to develop a clear doctrine on exparte orders so efficient as to that of rarest of rare cases doctrine applied when awarding a death sentence. 323

22 4. Trademark law and its operation is yet to be properly understood by majority of the judges in the country. It is a special law and to adjudicate upon such disputes, knowledge of not only the law but also economics, finance etc is needed. This provides an opportunity for lawyers to manipulate the court into believing that a fit case to pass an exparte order is made. To avoid such peril Judges should furthermore be directed to refrain themselves from passing exparte orders specifically in trademark cases. VIII.5. LOOPHOLES IN THE PROPOSED TO BE USED CLAUSE- CALLS FOR REVISION Section 18 (1) of the Trademarks act reads Any person claiming to be the proprietor of a trade mark used or proposed to be used by him, who is desirous of registering it, shall apply in writing to the Registrar in the prescribed manner for the registration of his trade mark. It means that any person desirous of registering a trademark may do so by making an application to the Registrar even without using the trademark at the time of making the application. The legislative prudence behind such provision is to provide flexibility to those applicants who bonafidely intend to use the mark in future. Traders or businessmen before concretely launching a product into the market or offering a service to people need time to acquaint the end users of the same. Advertising the goods/services by the applicant is one way of familiarizing the consumers. The idea behind proposed to be used clause is to protect the mark of the applicant during the incubation period of the business. 324

23 But actual purpose of the said clause is defeated by those unscrupulous applicants who register marks devoid of any intention to use the mark in future. In addition to this there is absolutely no mechanism adopted by the trademark registry to regularly check the actual usage status of the registered trademark holder. Thus there are numerous marks registered by Registrar of Trademarks which appear in the Registry without any actual usage by the so called proprietor of the trademark. VIII.5.a. Problems with the Current System 1. Trademark registry is getting filled with marks that are never going to be used by the registered owner of the mark. Thus the number of marks available for registration for an honest applicant is becoming increasingly less. 2. It opened opportunities for those applicants who are registering trademarks with the sole motive of selling the same in future, thus clearly deviating from the original purposes of trademark protection. This is clearly not a healthy practice because a. It puts honest applicants at the behest of devious registered trademark holders. b. Commercial value of the trademark gets determined not by factors of reputation, quality of goods, end user satisfaction etc; but merely by its non availability. 3. Availability of trademarks/tradenames, may not appear to be of concern currently but one cannot assure that it will not be of concern in future. 325

24 4. Applications for registration of trademark in all classes although there is no actual use in all classes of goods. VIII.5.b. Comparision with other Jurisdictions VIII.5.b.(i). United States of America In United States of America an application for registration of trademark must specify the basis for filing. Generally applicants base their application on either their current use of the mark in commerce or their intent to use the mark in commerce in the future. Under either basis, prior to registration one must demonstrate that he has used the mark in commerce in connection with all the goods/services listed in your application by submitting an acceptable specimen. The basic difference between these two filing bases is whether one has started to use the mark on all the goods/services. If he has already used the mark in commerce in connection with all goods or services listed in the application, he can file under use in commerce basis. If he has not yet used the mark, but intend to use it in the future, he must file under intent to use basis 376. Therefore under the US Trademark Law, flexibility is provided to the applicants only at the stage of filing of the application. To file an application actual usage of the mark is not a condition precedent. But to obtain registration and to enjoy benefits thereof the applicant should necessarily show current actual usage by filing a Declaration of Use with the United States Patent and Trademark Office. 376 Basic Facts About Trademarks published by USPTO in

25 Further to maintain trademark registration and keep it alive, the registered owner must file a maintenance document between the 5 th and 6 th year after the registration date and other maintenance documents thereafter. If the documents are not timely filed, registration will be cancelled and cannot be revived or reinstated, making the filing of a brand new application to begin the overall process again necessary 377. An example of a trademark application that was denied due to a lack of intent to use is SmithKline Beecham Corp. v. Omnisource DDS, LLC 378. In that case, Omnisource applied for the mark AQUAJET, certifying its intent to use the mark in connection with dental instruments, namely oral irrigators. SmithKline opposed the mark as confusingly similar to its AQUAFRESH mark, associated with toothpaste, toothbrushes, and related oral care products. SmithKline later amended its opposition, claiming that Omnisource lacked a bona fide intent to use the mark in commerce when the application was filed. SmithKline alleged that Omnisource had not used or licensed the mark and had not produced documents supporting its intent to use. The Board found that such a lack of documentary evidence is objective proof that is sufficient to prove that the applicant lacks a bona fide intention to use its mark in commerce. 379 Thus, the Board held that SmithKline had fulfilled its burden of proving, by a preponderance of the evidence, that Omnisource lacked a bona fide intent to use the mark AQUAJET 377 Basic Facts About Trademarks published by USPTO in U.S.P.Q.2d 1300, 1305 (Trademark Trial and Appeal Board. 2010) U.S.P.Q.2d 1300, 1304 (Trademark Trial and Appeal Board. 2010). 327

26 commercially in connection with oral irrigators, and denied the application for registration. VIII.5.b.(ii). Canada When an applicant files an application to a Canadian trademark, the applicant may: a) Already be using the trademark in Canada; or b) Propose to use the trademark in Canada at a later date. A trademark cannot be registered until the trademark is used in Canada by the applicant. Accordingly, when a Canadian trademark application is filed on the basis of proposed use, ultimately (assuming all other hurdles to registration of the trademark are overcome in prosecution) before the trademark can be registered, the applicant must file a Declaration of Use. The date of first use in a Declaration of Use must be after the date that the application based on proposed use was filed (ie. An applicant cannot file based on proposed use, and then later claim use prior to the date of the application) 380. VIII.5.c. Suggestions The problems with the current system of granting registration unmindful of the usage of the trademark are many. Some of the problems practically witnessed by the researcher are enumerated above. It is evident that this system is

27 not a fool proof method to prevent malafide applications. The researcher also gave a quick overview of the position in other foreign jurisdictions. In order to avoid any further damage the researcher suggests that, for filing an application the applicant shall be provided with the flexibility of not showing the actual usage of the mark. But for registration of a trademark, evidence of actual usage of the mark should necessarily be filed with the trademark registry. Actual usage shall be made a condition precedent for granting registration but not for filing of the application. Further during the pendency of the registration no other application seeking registration of an identical or deceptively similar mark shall be entertained by the registry. By doing so the following objectives can be fulfilled: The applicant gets time to prepare himself and familiarize customers of his goods/ services before actually launching the goods/offering services in the market. Prevent malafide applications and consequently stop commercial dealing of trademarks. Prevent the trademark registry from getting inundated with unused trademarks 329