Ways of acquisition of Trademark

- Fathwima Beevi T S
- 3rd sem LLM, GLCE
Introduction
● According to Section 2(1) (zb) of the Trade Marks
Act, 1999, a ‘trademark' means a mark which is
capable of being represented graphically and capable of
distinguishing the goods or services of one person from
those of others, and may include the shape of goods or
their packaging and combinations of colours.

● A trademark is a type of intellectual property; typically

a name, word, phrase, logo, symbol, design, image, or a
combination of these elements.
Trademarks are identified with the trade of a person or entity. It is a distinctive mark
which helps to identify and differentiate the goods and services of one person to
another. This mark is displayed on the goods or services by its proprietor (owner) to help
customers identify his products or services.
How do Trademark rights arise ?
A person may acquire rights in a trademark either by its use in the course of trade in
relation to certain goods and/ or service or by registration under the Trade Marks Act,
1999. The rights in a trademark may also be acquired by assignment or by inheritance.
Judicial precedent in India has recognised the right of a prior user of a trademark as a
superior right, which also prevails over the registered owner of a similar or identical
trademark. If two or more similar or identical trademarks have been filed on the basis of
future use (also referred to as ‘proposed to be used'), the trademark with the earlier
application date is given priority.
Whether the trademark rights are acquired through registration or use?

In a global scope, obtaining a trademark right through use or through registration are two
major legislative models of system for the grant of trademark rights. The “use” model is
based on the objective facts of trademark use, and decides the ownership of a trademark
according to the time that the trademark was first used. While the “registration” model
grants trademark rights according to the date of registration and the first applicant will
obtain the trademark right.

So far, the trademark grant systems in the world have been divided into the France
represented “registration” model and the US represented “use” model.
Is ownership of a trademark in indian jurisdiction determined on a first-to-file or
first-to-use basis?

Ownership of a trademark in India is determined on a first-to-use basis. Unlike the law on

patents or designs, the trademark law mandates the first-to-use rule over the first-to-file
rule.

Anyone that claims rights in a trademark, as long as the trademark is pending registration,
can use the symbol TM after the trademark. Once the trademark is registered, the person
may use the symbol ® after the trademark. The use of the TM and the ® symbol in
connection with a trademark aims to inform potential infringers that the particular
word/combination/logo is being claimed as a trademark.
Trademark Registration
To have ownership over a particular trademark, the proprietor who is using the mark has
to get it registered from the Registrar of Trademarks. Once registered, it is valid for ten
years, and no other person can put the same mark as his on in their goods or services.

A trademark registration:

● provides prima facie evidence of ownership and validity;

● provides statutory protection in India;
● helps to deter others from using the trademark unlawfully; and
● allows a suit for infringement to be brought.
Legal requirements of registration
● The selected mark should be capable of being represented graphically (that is in the
paper form).
● It should be capable of distinguishing the goods or services of one undertaking in
relation to which it is being used from those of others.
● It should be used or proposed to be used in relation to goods or services for the
purpose of indicating a connection in the course of trade between the goods or
services and some person having the right to use the mark with or without revealing
identity of that person.
Duration of Trademark protection in India

Term of registration of a trademark is ten years, which may be renewed for a further
period of ten years on payment of prescribed renewal fees.

However, non-usage of a registered trademark for a continuous period of five years is a

valid ground for cancellation of registration of such trademark at the behest of any
aggrieved party.
Infringement of Trademark

Infringement of trademark is violation of the exclusive rights granted to the registered

proprietor of the trademark to use the same. A trademark is said to be infringed by a
person, who not being a permitted user, uses an identical/ similar/ deceptively similar
mark to the registered trademark without the authorization of the registered proprietor of
the trademark.

However, it is pertinent to note that the Indian trademark law protects the vested rights of
a prior user against a registered proprietor which is based on common law principles.
The HONDA Case
Petitioner : The Honda motors Co. Ltd., Japan

Respondents: Non-electric pressure cookers manufacturing Co.

Trade Mark: “HONDA”

Decided by the High Court of Delhi in 2002, this case concerned the use by a local defendant of
the mark HONDA in connection with pressure cookers. Even before the filing of the lawsuit,
the parties had locked horns in 1991 before the Trade Marks Office. An opposition by the
plaintiff, Honda Motors Co. Ltd., Japan, was granted by the Registrar of Trade Marks against
the defendant’s application to register HONDA in connection with non-electric pressure
cookers.
The plaintiff assumed that after rejection of its application, the defendant stopped using
the mark HONDA in connection with pressure cookers. However, in 1999, the plaintiff
came across another application for registration of the mark HONDA with respect to
“pressure cookers.” In addition to filing an opposition, the plaintiff filed an instant suit for
passing off, claiming, inter alia, prior rights based on use in India going back to the 1950s
and international reputation and goodwill including in India. The defendant challenged the
plaintiff’s preliminary injunction request on various grounds, alleging, inter alia, that: its
use of the mark at issue dated back to 1985; that the defendant was the prior user of the
mark in connection with pressure cookers; that the parties’ respective goods were different
and hence there would not be any confusion or deception; and that the plaintiff’s claims
were barred by laches as a result of its delay in filing the suit.
Holding in favor of the plaintiff and enjoining the defendant, the Court found that
HONDA had a reputation for superior quality products in the field of automobiles and
power equipment and that the defendant’s use of this mark in connection with
pressure cookers would mislead the public into believing that the defendant’s business
and goods originated from the plaintiff. The Court found that such user by the
defendants had also diluted and debased the goodwill and reputation of the plaintiff.
Passing off
● Passing off occurs in the case of unregistered Brand Names.
● The owner or the Brand holder has the preferred right over the Brand owing to
long and continuous use though the Brand being unregistered (under the
Trademark Act), Here, an action of Infringement cannot be initiated.
● In such a situation, action of PASSING OFF is an alternate remedy. A ‘Passing
off’ action can be initiated in the appropriate Court of law.
● A Passing Off action can be brought in by the original owner or user of a Brand
against another person, who in the course of trade, misrepresents to its
prospective or ultimate customers about its goods or services in a manner so as
to show that they are connected to the goods or services of the original owner
and this is done in a calculated fashion to injure the business or goodwill of the
original owner or to earn benefit at the cost of the original owner. It is also
important that actual deception and actual damage has to be proved for any
relief of passing off.
Transfer of Trademark rights in India

Trademarks can be assigned, merged and transmitted under The Trademarks Act,
1999. Trademarks are transferred to another person or entity by assignment, merger or
transmission. When such transfer happens, the party who acquires it gets a right to use
the trademark. The acquiring party can use it according to the terms of the transfer. If
all rights are transferred, the acquiring party can use it similarly as of the proprietor.
 ● Amalgamation

When companies go through merger, acquisition or amalgamation, the rights in the

trademarks are either transferred along with the business or sold off separately. In the
event of them being sold off separately, then an assignment deed is executed.
However, in most cases, the rights in the trademarks are transferred along with the
business to the new entity. The transfer is effected by mentioning the transfer of
trademark rights in the business transfer agreement or any document that is used to
effect such transfer.

When two companies merge, the trademark of the merging company gets transferred
to the merged company. This merger of the trademark between the companies also
constitutes an assignment.
Assignment of Trademark
According to section 39 of the Indian Trade Marks Act,
1999, a registered trademark is assignable with or without
the goodwill in respect of all or only some of the
goods/services for which the mark is registered.

Assignment, according to the Act, means assigning the

trademark in writing by the act of the concerned parties.
Simply, it is transferring of a trademark in writing by the
proprietor or any person authorised by him to another
person.
1. Complete Assignment of Trademark:

In case of Complete assignment of Trademark, the Trademark Owner/ Brand

transfers all its rights to another entity. Including Right to further transfer, to earn
royalties, etc. Complete assignment does not allow Trademark holder to retain any
Right with them.

Example: “ABC” a registered Trademark holder sells all his Rights to “EFG” by
way of assignment, after this the ABC does not retain any right with them.
2. Partial Assignment:

In case of Partial Assignment of a Trademark, the Trademark holder transfers limited

Rights with respect to particular goods or services.

Example: “X” the proprietor of a brand used for electronics, clothes and dairy
products, assigns the rights in the brand with respect to only dairy products to “Y”
and retains the right in the brand with respect to clothes and electronics.
3. Assignment with Goodwill:

In case of assignment with goodwill, the right and value of the trademark as
associated with the product are also transferred. The person acquiring or purchasing
such trademark can use the goodwill for selling other products as well.

Example: “A” the Proprietor of a brand “Abibas” relating to shoes, sells his brand to
“Q” so that “Q” will be able to use the brand “Abibas” to sell shoes and as well as
any other products it manufacturers.
4.Assignment without Goodwill:

In case of assignment without goodwill, the Trademark owner Transfers all his rights of
the product except goodwill. The owner of the brand restricts the purchaser from using
the trademark for any other product it manufactures which is being used by the original
owner. Thus, the goodwill attached to such brand with respect to the product already being
sold under such brand, is not transferred to the buyer.

Example: “A” is the proprietor of a brand “Puba” functioning in all the areas with respect
to electronics, bags and shoes. “A” assigns his trademark “Puba” to “B” with respect to
bags, that means “B” has the right to sell only bags under such mark, if he plans to do
some other business like selling shoes, he has to create another brand name of his own.
Transmission of Trademark
According to the Act, transmission means the transfer of a trademark by
operation of law or devolution on the personal representative of a
deceased person, which is not an assignment. It implies a trademark is
transferred from the proprietor to the other person by some reason of
law, or his legal representatives on death. Any mode of transfer which is
not by assignment is a transmission. Transmission can be relating to
either some of the trademarks or all the trademarks in the goods and
services. It can be with or without the goodwill of the business
concerned.
Restrictions on Assignment and Transmission

1. A trademark cannot be assigned or transmitted when more than one person gets
exclusive right to use the trademarks which are resembling or identical to each
other and causes confusion to the public relating to the-
● Same goods or services or
● Same description of goods and services or
● Goods or services or description of goods or services which are associated with each
other.

2. A trademark cannot be assigned or transmitted when one person gets exclusive right to
use the trademarks relating to goods or services sold or given in India, and another
person receives exclusive rights to goods or
services sold or delivered outside India which confuse the public due to trademarks being
resembling or identical to each other relating to the-
● Same goods or services or
● Same description of goods and services or
● Goods or services or description of goods or services which are associated with each
other.

However, such trademarks can be assigned or transmitted, if the proprietor or person

claiming the transmission, makes an application to the Registrar along with a statement
setting out the circumstances and the Registrar issues a certificate stating that the proposed
assignment or transmission is valid. The certificate issued is conclusive as to the validity
of the assignment or transmission, if the person to whom it is assigned or the person
claiming transmission, applies to get the trademark registered in his name within six
months from the date of issuing of the certificate by Registrar.
Registration of Assignment and Transmission
When a person becomes entitled to a registered trademark through
assignment or transmission, he should apply to the Registrar along with
the proof in his name. After going through the proof of documents, the
Registrar will enter particulars of such assignment or transmission in his
register. The entry in the register is proof of ownership of the trademark
to the person assigned or transmitted.
Conclusion
● The trade mark is for protecting the name of the product or services rather the
product itself
● Trade mark assures the customer about the source of a product
● The trade mark should be distinctive
● Deceptively similar marks, geographical names etc. can not be registered as a
trade mark
● Assignment and Transmission of a Trademarks create ample opportunity for the
owner as well as for assignee. It helps the new brand to get developed because of
its usage from more than one place simultaneously. Developed brands used it as a
tool to generate more revenue and business for themselves.