Introduction:
Trade and commerce is the life line of economy of any nation. In the era of competition guided by neo-liberal economics, the goods are traded by their names which indicate quality and identity of the goods. With the emergence of competitive market, huge numbers of similar goods are manufactured.
A consumer is duped if he buys a commodity presuming it to have originated from a certain identified source, but actually it is not and later finds it to be substandard. In such case – the reputation of trader suffers. So to identify their products, manufacturers began to use certain symbols, marks or devices whereby their goods can be distinguished from similar goods manufactured and marketed by others. The interests of both the consumer and the trader can be saved if some definite symbol is attached with the goods which mark out the origin of goods from a definite source and such a symbol is called a trade mark. This also led to trade mark acquiring goodwill and reputation among consumers of goods.
As has been stated, the marks associated with goods acquire a reputation and goodwill. Before the enactment of the Trade Marks Law, the trademarks used to be called common law marks. The common law marks could not be registered as there was no law . The owner of a common law mark had to protect his mark against acts of infringement by initiating common law proceedings for passing off. Such proceedings had to be set in motion each time an infringement occurred. Also such proceedings could be launched only when the mark had actually been used by an infringer. Such proceedings used to be time-taking and burdensome. That brought in the need for a special legislation. The first statutory enactment prior to independence was Trade Marks Act, 1940. But this Act was repealed and a new statute – The Trade and Merchandise Marks Act, 1958 came into existence. New Act gave a system of registration of trademarks and statutory recognition to proprietorship of trademarks and also defined the rights conferred by such registration and prescribed remedies in respect of infringement of those rights. But even this Act of 1958 has now been replaced by 1999 Act. The provisions of the Trade Marks Act, 1999 came into force with effect from 15th day of September, 2003.
What is a trademark?
A trademark is a visual symbol in the form of a word, device or a label, applied to articles of commerce with a view to indicate to the purchasing public, that they are the goods manufactured or otherwise dealt by particular person as distinguished from similar goods manufactured or dealt by other persons.
Section 2(zb) of Trademarks Act, 1999 defines “trademark” as under:
““trade mark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and—
(i) in relation to Chapter XII (other than section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and
(ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark;
Section 2(m) defines “marks” as under:
““mark” includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof;”
Reading together, it can be gleaned that the definition of trademark is inclusive and not exhaustive. There could be various types of combinations of words, names, letters to create a trademark.
Characteristics of Trademark
Some essential characteristics of trademark are:
i) The definition of “trademark” and “mark” includes within itself trade name under which articles, goods are sold. (Use of “Kirloskar”, “Bajaj”, or “Godrej” as corporate names are permissible)
ii) Trademark is a kind of property and is entitled to protection under law.
iii) A trademark is generally transmitted in connection with the goodwill of a business. Therefore, law does not recognize transfer of trademark per se, separate from goodwill of business.
iv) A trademark may be registered or unregistered. Registration ensures ownership of trademark and it enables him to avoid proving his title against any infringement or the mark. But in case of unregistered trademark, the only way in which the owner can protect the infringement is the passing off action.
v) Trademark has many species such as service marks, certification marks, collective marks and well known trademarks.
vi) Distinctiveness is the basic quality of a trademark. In Imperial Tobacco v. Registrar, trademarks, the word distinctiveness was held to be some quality in trademark which embarked the goods marked as distinct from those of other products or such goods.
Functions of Trademark
The basic function of a trademark is to give an indication to the purchaser or possible purchaser as to the manufacturer or quality of the goods. It gives the purchaser a satisfactory assurance of the make and quality of the article he is buying. The goodwill of a product is also reflected through its trademark. It may be classified in the following four categories:
i) It identifies the product and its origin.
ii) It guarantees its established quality
iii) It is a means of advertisement of product. Every company who wishes to popularize his product among public has to give its product a trade name and then create its brand value.
iv) It creates an image of product in the mind of public.
Infringement of Trademark
A registered trademark is infringed by a person who not being a registered proprietor or a person using by way of permitted use in the course of trade, a mark which is identical with or deceptively similar to the trademark in relation to goods or services in respect of which the trademark is registered. After infringement, the owner of the trademark can go for civil legal proceedings against a party who infringes the registered trademark. Basically, Trademark infringement means the unapproved use of a trademark on regarding products and benefits in a way that is going to cause confusion, difficult, about the trader or potentially benefits.
Balancing Trademark Rights vis-à-vis Other Fundamental Rights
The Constitution of India enshrines the freedom of trade, commerce and intercourse under Article 301. The Article declares that the trade, commerce and intercourse throughout India shall be free, subject to some restrictions. This freedom is assured not only for inter-state trade, commerce and intercourse but also for intra-state trades. The constitution also guarantees under Article 19(1)(g) that all citizens shall have the right to practice any profession, or to carry on any occupation, trade or business. Article 19(1)(g) is a subset of Freedom of Speech and Expression. Against this backdrop, a collision between trademark rights and some fundamental rights i.e. Freedom of Speech and Expression becomes imminent. In this essay, I attempt to delineate it further.
The issue of reconciling trade mark rights and freedom of expression is a classic question discussed by European scholars which has recently been reopened because of the express reference to “fundamental rights and freedoms, and in particular the freedom of expression” in the preambles of Directive 2015/2436 and of Regulation 2017/1001 of European Union.
By their very nature, trade mark rights, which confer exclusivity of use of a sign on its proprietor, based on the concept of property rights to tangible objects, limit the freedom of trade and industry and the related freedom of competition of others. The monopoly resulting from registration is nevertheless relative. Trade mark rights do not confer exclusivity on the sign per se, but only in so far as it designates the goods or services concerned. In trade mark law, the freedom of trade and industry (freedom of competition) is reflected in the so-called principle of “speciality” which traditionally governs this area of law. In the light of this rule, the protection of a trade mark is restricted to the industry concerned. However, the scope of this protection is broader vis-à-vis third parties who use similar signs in relation to similar goods or services. The rule of speciality is mitigated with respect to trade marks with a reputation which enjoy a special regime of protection, providing for specific conditions for trade mark infringement irrespective of the similarity of the goods or services concerned. A third party should not therefore use a trade mark if such use falls within the monopoly conferred on the proprietor. There is, however, no doubt that such limitations of the freedom of trade and industry are justified since trade mark rights are at the same time necessary for all undertakings to carry on their economic activity. Indeed, trade marks ensure the proper functioning of the market and make progress possible, by encouraging their owners to invest in the quality of goods or services in order to satisfy the consumer. Hence, trade mark rights protect the sign to the extent that its reservation constitutes a necessary and justified limitation of the freedom of trade and industry (freedom of competition).
Insofar as the trade mark owner has, within some limits, a monopoly over the use of its sign, a conflict may also potentially occur with the freedom of expression of others who wish to refer to a registered mark. This may concern use made in the context of freedom of artistic creation and public information. The most controversial aspect of the conflict between trade mark rights and the freedom of expression appears to be the so-called “trade mark parody”. The question whether the user of a trade mark can avoid liability for trade mark infringement because of the humorous or critical nature of its use, relying on the freedom of expression, has long been a matter of concern in doctrine and case law in many European countries. Since the freedom of expression is one of the fundamental freedoms of constitutional value, many authors, often influenced by copyright provisions or American trade mark law, plead to consider the use of another’s mark which falls within the freedom of expression as a fair defence which could be invoked by the alleged infringer.
Admittedly, it needs to be noted that the freedom of expression referred to in Art. 10 of the European Convention on Human Rights is interpreted broadly and the term “expression” covers any form of communication of information or ideas regardless of their content or manner of communication, including information of a commercial nature. Consequently, in certain cases, use made even as a trade mark and in the course of trade is likely to fall within the scope of the freedom of expression, since it can be considered as “expression” within the meaning of Art. 10 ECHR. Apart from the situation of use of a mark which is at the same time humorous or artistic, this may include use of a mark in advertising or comparative advertising. Indeed, commercial advertising is a matter of freedom of expression. However, in the light of Art. 10 ECHR, advertising may be subject to several restrictions intended to prevent unfair competition and to ensure respect for the rights of others. Trade mark rights therefore constitute a justified restriction of the freedom of expression in advertising.
Furthermore, it needs to be stressed that intellectual property rights are also fundamental rights whose value is, in addition, constitutional. In the light of the case law of the European Court of Human Rights, the trade mark constitutes “possession” within the meaning of Art. 1 of Protocol No. 1 to the European Convention on Human Rights. Consequently, intellectual property is a fundamental right. This also results clearly from Art. 17(2) of the Charter of Fundamental Rights of the European Union. Thus, even if the freedom of expression in some situations is truly affected, this fundamental freedom also has its limits and must give way to other fundamental rights. As has been rightly observed by several authors, it would be wrong to assume that, in the hierarchy of norms, the freedom of expression prevails over trade mark rights. They both have equivalent value, neither of them is superior to the other.
With the recent expansion of Trademark Rights and the increased protection of speech, including commercial expression, there are a growing number of potential conflicts between laws prohibiting unauthorized use of another’s mark and the right to freedom of expression.
Artists and other creators of expressive works often incorporate trademarks and trademarked products as part of their works. They do so for multiple reasons, including light-hearted humor, critical cultural commentary, parody, or even simply to shock. In instances where such use is both unauthorized and perceived as disparaging to the mark owner or the trademarked product, owners have attempted to sue under Trademark Law to enjoin the expressive use. However, there is not much clarity on how such situations are handled by various authorities. The balancing of public interest in freedom of expression on one side and the business owner’s right to use and prevent his trademark from unauthorized use on the other can be challenging.
International Viewpoints
Many states protect the free flow of information and ideas from restriction by the government. Freedom of expression is acknowledged by some countries as a fundamental right in their constitutions, such as in the United States Bill of Rights. Other nations, such as New Zealand, the United Kingdom, and Australia, have no constitutional free speech right but still recognize the right to freedom of expression in statutes or cases. At the same time, few people argue that trademark owners have property rights in their trademarks and note that property rights are also protected by national constitutions and some human rights treaties, such as the European Convention on Human Rights. Few countries provide robust protection for trademarks and speech interests in their trademark statutes and court decisions.
In a recent case before the European Court of Human Rights involving the mark ‘Budweiser’ for beer, the Court agreed that trademarks could be regarded as property rights for purposes of human rights analysis. Regardless of whether trademarks are property rights, states must balance trademark rights against the right of free speech.
In the United States, the federal trademark law provides significant protection for trademarks, including dilution protection for famous marks. Yet the United States also protects free speech values by exempting from dilution liability the fair use of another’s mark “other than as a designation of source” in comparative advertising, parody, criticism, and commentary; news reporting and news commentary; and non-commercial uses of a mark. The US Trademark Law also shelters speech interests by requiring distinctiveness of trademarks for protection and a likelihood of confusion for infringement claims and permitting the fair use of descriptive terms to describe the qualities or characteristics of goods or services. In addition, the US courts also create and apply speech-protective trademark laws, such as a balancing test used in infringement cases involving unauthorized use of marks in the titles or content of songs (such as Barbie Girl), films (such as Ginger & Fred), and other types of literary or artistic expressions. Free speech rights override trademark rights unless the use of the mark is not artistically relevant or it explicitly misleads as to the source of the content of the work. The US courts have also held that the First Amendment prohibits the application of trademark dilution law to uses of marks in non-commercial speech and have declined to find infringement or dilution of a trademark even in a commercial context when the mark is used in a successful parody, such as the ‘Chewy Vuitton’ dog toy parodies of the Louis Vuitton handbags and trademarks.
The Australian Trademark Law currently requires an allegedly infringing mark to be used as a mark for trademark liability and does not contain a cause of action for dilution. The Australian Trade Marks Office found that certain uses of marks in parodies were not deceptively similar when trademark owners filed oppositions to applications for Trademark Registration, such as for ‘Tenfolds Grunge’ for wine (a ‘cheeky reference’ or parody of ‘Penfolds Grange’ wine), ‘Dogue’ for dog gifts (a parody of ‘Vogue’ magazine).
The Constitutional Court of South Africa narrowly construed its trademark laws to protect speech interests in a case involving the unauthorized use of the mark ‘Carling Black Label’ and related marks for beer in the parody ‘Black Labour’ beer label displayed on the front of T-shirts sold for profit.
Citing the defendant’s constitutional right to freedom of expression, a French court allowed the non-profit environmental group, Greenpeace, to use a parody of the logo of an oil company, Esso, on a website to criticize the company and its industrial activities. For similar reasons, the German Federal Court of Justice rejected a trademark claim by the distributor of Marlboro cigarettes and its request for an injunction to prevent an anti-smoking organization from using the Marlboro marks in a parody of a Marlboro advertisement.
TRIPS’ Take on Free Speech
Article 17, which allows limited exceptions to trademark rights, is sufficiently wide to allow members to incorporate free speech values into their national trademark laws.
Among other things, member states may:
- Refuse to protect trademark rights in descriptive terms;
- Implement a commercial use or trademark use requirement for prima facie trademark liability;
- Refuse to enact a trademark dilution cause of action; and/or
- Specifically exempt from trademark liability uses of marks in political expression, news reporting, literary and artistic works, comparative advertising, parody, satire, criticism, and other commentaries.
Speech protective national trademark laws do not violate international obligations to protect trademarks in the Paris Convention and the TRIPS Agreement. In fact, TRIPS enable the states to protect the right to freedom of expression in their domestic trademark laws by excluding some specific terms or other ‘signs’ from the protectable subject matter, limiting the scope of rights conferred by a trademark, implementing limited exceptions to trademark rights, and tailoring the remedies imposed in trademark disputes to protect speech interests.
The preceding analysis has shown that the lines apparently dividing freedom of expression and trademark dilution are not and need not be sharply drawn. It is clear that both rights are deserving of a measure of protection. Trademarks are not “tenuous” and should not automatically be ousted by robustly championed freedom of expression rights. The courts must be wary of tolerating an “abuse of the right to freedom of expression,” or sacrificing “intellectual property law rights in the form of trade mark protection at the altar of fundamental human rights”.
Limitations of Registered Trademark (Under Section 30 of the Trademark Act, 1999)
The grant of a trademark grant a set of exclusive rights to the trademark proprietor that are enumerated in Section 29 of the Trade Marks Act, 1999 and which have been explained to you in previous modules. However, these rights are not absolute and the statute itself recognizes a set of limitations on the rights of a trademark proprietor. These limitations are thought to be necessary for ensuring that normal course of trade is not hindered by the grant of trademark rights. Such limitations are listed in Section 30 the Act. It reads as under:
“30. Limits on effect of registered trade mark.—
(1) Nothing in section 29 shall be construed as preventing the use of a registered trade mark by any person for the purposes of identifying goods or services as those of the proprietor provided the use— (a) is in accordance with honest practices in industrial or commercial matters, and
(b) is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark.
(2) A registered trade mark is not infringed where—
(a) the use in relation to goods or services indicates the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or other characteristics of goods or services;
(b) a trade mark is registered subject to any conditions or limitations, the use of the trade mark in any manner in relation to goods to be sold or otherwise traded in, in any place, or in relation to goods to be exported to any market or in relation to services for use or available for acceptance in any place or country outside India or in any other circumstances, to which, having regard to those conditions or limitations, the registration does not extend;
(c) the use by a person of a trade mark—
(i) in relation to goods connected in the course of trade with the proprietor or a registered user of the trade mark if, as to those goods or a bulk of which they form part, the registered proprietor or the registered user conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of the trade mark; or
(ii) in relation to services to which the proprietor of such mark or of a registered user conforming to the permitted use has applied the mark, where the purpose and effect of the use of the mark is to indicate, in accordance with the fact, that those services have been performed by the proprietor or a registered user of the mark;
(d) 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 or 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;
(e) the use of a registered trade mark, being one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.
(3) Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of the goods in the market or otherwise dealing in those goods by that person or by a person claiming under or through him is not infringement of a trade mark by reason only of—
(a) the registered trade mark having been assigned by the registered proprietor to some other person, after the acquisition of those goods; or
(b) the goods having been put on the market under the registered trade mark by the proprietor or with his consent.
(4) Sub-section (3) shall not apply where there exists legitimate reasons for the proprietor to oppose further dealings in the goods in particular, where the condition of the goods, has been changed or impaired after they have been put on the market.
Comments on Section 30 of the Act
Where the Defendant is the registered proprietor of the trademark
Despite the procedures prescribed under Section 9 and 11 of the Trade Marks Act, 1999 oftentimes two entities have registrations over the same or similar trademark for the same goods. For instance the trademark SPARX is registered in favor of Bata India Ltd. with effect from the year 1978. At the same time, the Trademarks Registry has granted a registration in favor of RelaxoFootwears Ltd. for an identical trademark SPARX with effect from the year 2004.Now who gets better rights over the trademark SPARX – Bata or Relaxo? The Act itself envisages that such a situation might exist and provides a scheme for dealing with the situation when one trademark proprietor sues another.
Section 28(3) and Section 30(2)(e) suggest that one trademark proprietor does not get exclusive rights over another i.e. if two identical or closely resembling trademarks are registered in favor of two different entities, neither of the two entities obtains better rights against each other. Section 30(2)(e) makes it clear that use of one’s own registered trademark does not infringe another person’s registered trademark. Section 28(3)however makes it clear that this does not affect the rights of these registered proprietors against third parties – these rights continue to exist as if each party was a sole registered proprietor. It is also important to clarify here that this limitation is only placed on statutory rights and the common law rights of a prior user continue to exist unaffected.
An interesting question that arises is this – is a suit for infringement of trademark maintainable against a registered proprietor of a mark? Let’s answer this question using the Bata and Relaxo example that we have cited above. A bare reading of Sections 28 and 30(2)(e) may suggest that neither Bata nor Relaxo can sue each other for infringement of trademark. What if Bata claims that Relaxo’s registration is invalid since it was obtained by fraud? Or Relaxo claims that Bata’s registration is invalid since it has not been used after registration? It is also to be noted that the it is only the Registrar or the Intellectual Property Appellate Board that can grant the relief of rectification of a trademark on any of these grounds in a rectification proceedings. Can rectification proceedings proceed simultaneously along with a lawsuit? Section 124 of the Act provides some answers to these questions. The Delhi High Court in the Clinique Laboratories LLC &Anr.versusGufic Limited &Anr. case, attempted to harmonize these provisions.
The law laid down by the Delhi High Court can be summarized as under:
(A) There can be a suit for infringement against the registered proprietor of an identical or similar trademark;
(B) That upon the defendant taking the plea of his registration and of there being thus no infringement, such suit has to be stayed awaiting the rectification proceedings; and
(C) Only the trial of the suit shall be stayed. By virtue of Section 124(5), the court remains empowered in such cases to pass any interim order including grant of an interim injunction.;
(D) The court while passing an interim order will necessarily have to prima facie adjudicate the validity of the two competing registrations.
(E) The legislature under Section 124 (5) has thus empowered the court to grant injunction against use of a registered trademark also if the court is satisfied of the invalidity thereof. Though in view of Section 31, the test would be much stricter; A single Judge of the Bombay High Court has taken a similar view in Siyaram Silk Mills Ltd. v. Shree Siyaram Fab Pvt. Ltd.
Non brand use of a trademark
Section 30 (2) (d) deals with the situation where the manufacturer of goods which form part of or are an accessory to other goods for which a trademark exists is entitled to use the trademark to indicate that the accessory goods are adaptable to some other goods and it is reasonably necessary to so indicate. The kind of situations in which this sub-section applies can be best explained by reference to a case decided by the Delhi High Court: The Defendant was manufacturing gaskets for pressure cookers. The trademark under which these gaskets were being manufactured was “MAYUR”. However, on the packaging, the Defendant used the following language “Suitable for use with Hawkins Pressure Cookers”. The makers of Hawkins Pressure Cookers filed a lawsuit for trademark infringement. The Defendant took the defence of Section 30(d). The Court’s analysis of the Defendant’s defence is interesting.
The question that the Court attempted to answer was this: “When would it be a case of the use of the trademark being reasonably necessary in order to indicate that the goods are so adapted?”
The Court focused its analysis on the meaning of the words “reasonably necessary” and found that the meaning of the word “necessary” is “inherent in the situation” and the meaning of the word “reasonable” is “just”. The Court held that the defence of Section 30(2)(d) would not be available where though the Defendant’s goods were adaptable to the goods of many different manufacturers, he had chosen to only use the trademark of one such manufacturer. For instance, in the case at hand, even though the Defendant’s gaskets could act as an accessory not only to the Plaintiff’s HAWKINS pressure cookers but also other pressure cookers, the Defendant has chosen to only use the Plaintiff’s HAWKINS trademark. Based on this finding, the Court found that the Defendant’s use of the Plaintiff’s trademark HAWKINS was not protected under Section 30(2)(d).
Descriptive use of a trademark
The use of a trademark is said to be non – infringing if it is used in a manner such that it indicates the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or other characteristics of goods or services.
It is important to distinguish this limitation on the rights conferred by a registered trademark from the limitation mentioned in Section 9 of the Act. Section 9 prohibits registration of trademarks that consist exclusively of marks that designate the kind, quality, quantity, intended purpose, values, geographical origin, or the time of production of the goods or rendering of the service or other characteristics of the goods or services. Section 9 is a bar on the registration of such marks. For instance, application for registration of the trademark COLD for ice – creams is likely to be refused since COLD describes a quality of the ice – cream and to a certain extent even its intended purpose.
Compare this with the limitation under Section 30(2)(a) – let’s say Maruti Suzuki Pvt. Ltd. is the owner of the trademark MARUTI. A spare parts manufacturer makes spare parts that are compatible with Maruti cars. By virtue of Section 30(2)(a), a proprietor is entitled to describe this quality of compatibility of its goods by using the trademark MARUTI. However, it is important to emphasize that such use of the trademark must be strictly descriptive as opposed to trademark use i.e. such use must not give any undue significance to the word ‘MARUTI’ – in finding out whether undue significance has been given, Courts usually consider whether the trademark has been used in a larger font or is used more prominently than the rest of the text used by the Defendant .
For instance, in the case of Cadila Healthcare Ltd. Vs. Gujrat Co-operative Milk Marketing Federation Ltd &Ors, the Plaintiff who are the makers of the artificial sweetener SUGAR FREE sought to restrain the Defendant from using SUGAR FREE for their frozen deserts which did not contain sugar. A Division Bench of the Delhi High Court held that use of a descriptive expression such as SUGAR FREE as a trademark by a trader does not entitle such trader from precluding others from using the said expression for the purposes of describing the characteristic features of their products.
Similarly, in the case of Marico Ltd. v. Agrotech Foods Ltd., the Court held that the expression “LOW ABSORB” used by the Defendants is not a coined word and at best it is a combination of two popular English words which are descriptive of the nature of the product insofar as it immediately conveys the meaning of the expression that something which absorbs less. The Court went on to hold that those who adopt such descriptive terms as trademarks must be discouraged from appropriating such terms and claiming exclusive rights over the same.
Use which falls outside the scope of protection of a trademark
Trademarks are sometimes registered with some conditions or limitations. For instance, a trademark proprietor may obtain a registration that extends only to a few states in India. This type of arrangement is usually exists where there are multiple proprietors of the same trademark, each of whom enjoy exclusivity in a particular region or state. Take for instance, a very famous sweet shop in Delhi by the name of GOPAL SWEETS. Let’s say, consumers in Delhi exclusively associate the name with a particular maker of sweets (say Mr. Halwai). However, there exist many sweet shop owners all over India with an identical name, some of who may be using the trademark GOPAL SWEETS even before the sweet shop owner in Delhi. In such situations, Mr. Halwai can consider registering the trademark GOPAL SWEETS which is restricted to a particular territory i.e. Delhi. Now, if another sweet shop opens up in Delhi by a same or similar name in Delhi, such use will infringe Mr. Halwai’s trademark. Now, what if this entity opens a shop in Chennai? The logical answer is no and this is also specifically embodied in Section 30(2)(b).
From a combined reading of all subsections of Section 30 of trademarks Act,1999, the following classification with respect to the limitations of registered trademarks can be made:
Functionality Limitation
One of the limitations lies in what can be trademarked. The limitation arises from the fact regarding what can be trademarked and what cannot. A person can secure only certain things with the trademark registration. Any factor that enhances the functionality or usability is not protected under the trademarks act. This limitation suggests that the product must not be non- functional, it must not have any function or purpose to it. For example; if one person sells a product under a typical shape or special packaging which is enough for making it distinct in character, then it is quite possible to get a trademark for that. But however, if such a packaging or shape enhances the usability of the product, then the registration is not possible. This kind of rule helps to maintain a healthy competition between the competitors.
Fair Use Limitation
The doctrine of fair use is applied to the trademark laws. Under the trademark laws there are many commonly used words and the owner cannot claim exclusive rights over such words if his trademark is used in a different context. Since, many trademarks rely on the words that are commonly used in everyday language; the owner of the trademark cannot enforce his rights on it. For example, a trademark is used in parodies, advertising and non- commercial use in academic articles, media reports etc. therefore, claiming exclusive rights is not allowed if a third party uses a trademark in accordance with the doctrine of fair use. For example, in the case of a trademark “Super Nirma”, the owner of the trademark cannot stop any person from using the work super in their trademark. Under Section 30(2)(d) of Trademark Law, in order to claim the defence of nominative fair use, the user must establish that it is crucial for him/her to use the registered mark to identify the product in the market.
According to Section 30(2) (d) of the Trademarks Act, to claim the defence of doctrine of fair use, the user must establish that it is necessary for him/ her to use the registered mark to identify the product in the market.
Geographical Area Limitation
The Trademark applies in the geographical area where it has been imposed. Geographical boundaries plays a crucial role in deciding the in which country the trademark shall be valid. When a trademark is registered in India, then the enforcement of such trademark is valid only within the Jurisdiction of India. If one required protection of trademark in more than one country, a separate international application is required to be applied in that country. Such limitation is even more restricted when it comes to unregistered trademarks, where such trademark is can only be enforced locally.
Import Limitation
Parallel imports mean the acquisition of product/goods from the rightful owner and selling it for a lesser price via unaccredited channels in the market. Trademark Law cannot protect against parallel importation. It is considered legal and hence if a trademarked product/goods are imported without the consent of the owner and sold for a lesser price, the owner has no rights on the subsequent sale, his rights are exhausted on the first sale.
So, it can be concluded that Trademark registration provides benefits to an organisation like recognition, adding value and also rights against infringement. However, there are some statutory limitations which exist, and organisations must check which of the limitations apply and seek professional help.