TRADEMARKS - Meaning, History, Registration , Assignment & Licensing

 TRADEMARKS

Meaning

A trademark or trademark is a distinctive sign or indicator of some kind that is used by an individual, business organization or other legal entity to uniquely IDENTIFY the source of its products and/or services to consumers and to distinguish its products or services from those of other entities

A trademark is a device that can take almost any form, as long as it is capable of identifying and distinguishing specific goods or services.

A trademark is a word, symbol, slogan, design, sound, colour etc. or combination thereof that serves to identify the source of goods or services and distinguish them from others.

A trademark may be designated by the following symbols

™ (for an UNREGISTERED TRADEMARK, that is, a mark used to promote or brand goods) 

SM (for an unregistered SERVICE MARK, that is, a mark used to promote or brand services) 

® (for a REGISTERED TRADEMARK) 

Trademark Law

Indian trademark law provides protection to trademarks statutorily under the Trademark Act, 1999 and also under the common law remedy of Passing-Off; 

Passing off is a common law tort that can be used to enforce unregistered trademark rights. The tort of passing off protects the goodwill of a trader from a misrepresentation that causes damage to goodwill; 

Statutory protection of trademark is administered by the Controller General Of Patents, Designs and Trade Marks, a government agency which reports to the Department of Industrial Policy and Promotion(DIPP), under the Ministry of Commerce and Industry.

The law of trademark deals with the mechanism of registration, protection of trademark and prevention of fraudulent trademark; 

The law also provides for the rights acquired by registration of a trademark, modes of transfer and assignment of the rights, nature of infringements, penalties for such infringement and remedies available to the owner in case of such infringement.

History

The law of trademark in India before 1940 was based on the common law principles of passing off and equity as followed in England before the enactment of the first Registration Act, 1875; 

The first statutory law related to trademarks in India was the Trade Marks Act, 1940 which had similar provision to the UK Trade Marks Act, 1938; 

In 1958, the Trade and Merchandise Marks Act, 1958 was enacted which consolidated the provisions related to trademarks contained in other statutes like, the Indian Penal Code, Criminal Procedure Code and the Sea Customs Act.

The Trade and Merchandise Marks Act, 1958 was repealed by the Trade Marks Act, 1999 and is the current governing law related to registered trademarks. The 1999 Act was enacted to comply with the provisions of the TRIPS(Agreement on Trade-Related Aspects of Intellectual Property Rights); 

Though some aspects of the unregistered trademarks have been enacted into the 1999 Act, they are primarily governed by the common law rules based on the principles evolved out of the judgments of the Courts; 

Where the law is ambiguous, the principles evolved and interpretation made by the Courts in England have been applied in India taking into consideration the context of our legal procedure, laws and realities of India.

Trademark

Trademark According to Section 2 (zb) of the Trade Marks Act,1999, “trademark 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 the shape of goods, their packaging and combination of colours” 

A mark can include a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any such combinations.

Trademark Classification in India

Trademark in India is classified into about 45 different classes, which includes chemical substances used in industry, paints, lubricants machine and machine tools, medical and surgical instruments, stationery, lather,  household, furniture, textiles, games, beverages preparatory material, building material, sanitary material, and hand tools, other scientific and educational products. These classes again are further sub-divided. The main objective of trademark classification is to group together the similar nature of goods and services. Here are the classes for product and for services.

Class 1  (Chemicals)

Class 2 (Paints)

Class 3 (Cosmetics and Cleaning Preparations)

Class 4 (Lubricants and Fuels)

Class 5 (Pharmaceuticals)

Class 6 (Metal Goods)

Class 7 (Machinery)

Class 8 (Hand Tools)

Class 9 (Electrical and Scientific Apparatus) 

Class 10 (Medical Apparatus)

Class 11 (Environmental Control Apparatus)

Class 12 (Vehicles) 

Class 13 (Firearms)

Class 14 (Jewellery)

Class 15 (Musical Instruments)

Class 16 (Paper Goods and Printed Matter) 

Class 17 (Rubber Goods) 

Class 18 (Leather Goods)

Class 19 (Non-metallic Building Materials)

Class 20 (Furniture and Articles Not Otherwise Classified)

Class 21 (Housewares and Glass)

Class 22 (Cordage and Fibres)

Class 23 (Yarns and Threads)

Class 24 (Fabrics) 

Class 25 (Clothing)

Class 26 (Fancy Goods)

Class 27 (Floor Coverings) 

Class 28 (Toys and Sporting Goods)

Class 29 (Meats and Processed Foods)

Class 30 (Staple Foods)

Class 31 (Natural Agricultural Products) 

Class 32 (Light Beverages)

Class 33 (Wines and Spirits) 

Class 34 (Smokers Articles)

SERVICES

Class 35 (Advertising and Business)

Class 36 (Insurance and Financial)

Class 37 (Building, Construction and Repair)

Class 38 (Telecommunication) 

Class 39 (Transportation and Storage) 

Class 40 (Treatment of Materials) 

Class 41 (Education and Entertainment)

Class 42 (Computer, Scientific and Legal)

Class 43 (Hotels and Restaurants) 

Class 44 (Medical, Beauty, and Agricultural)

Class 45 (Personal and Social Services)

Trademark Registration

What are the types of Trademarks that can be registered?

Under the Indian trademark law, the following are the types of trademarks that can be registered:

Product trademarks: are those that are affixed to identify goods

Service trademarks: are used to identify the services of an entity, such as the trademark for a broadcasting service, retails outlet, etc. They are used in advertising for services

Certification trademarks: are those that are capable of distinguishing the goods or services in connection with which it is used in the course of trade and which are certified by the proprietor with regard to their origin, material, the method of manufacture, the quality or other specific features

Collective trademarks: are registered in the name of groups, associations or other organizations for the use of members of the group in their commercial activities to indicate their membership of the group.

Advantages of Registration of Trademarks

1. Protects your hard-earned goodwill in the business
2. Protects your Name / Brand Name from being used in the same or similar fashion, by any other business firm, thus discourages others from cashing on your well-built goodwill.
3. Gives your products the status of Branded Goods.
4. Gives an impression to your customers that the company is selling some standard Products or Services.
5. The exclusive right to the use of the trademark in relation to the goods or services in respect of which the trademark is registered.
6. To obtain relief in respect of infringement (misuse by others) of the trademark.
7. Power to assign (transfer) the trademark to others for consideration.

Who may apply to register?

• Any person claiming to be the proprietor of the trademark used or proposed to be used by him can apply. 
• The application may be made in the name of an individual, partners of a firm, a Corporation, any Government Department, a Trust or joint applicants.

What is the procedure for registration?

Sections 18-24 of Trademarks Act, 1999

The trademark Registry having its head office in Mumbai and branch offices at Delhi, Kolkata, Ahmedabad and Chennai keep a register of trademarks.

Procedures/Steps for Registration of Trademarks

1. Filing of an application for registration by a person claiming to be the proprietor of a trademark, in the office of the Trademark Registry, within the territorial limits of the place of business in India.
2. Examination of the application by the Registrar to ascertain whether it is distinctive and does not conflict with existing registered or pending trademarks and examination report is issued.
3. Publication of the application after or before acceptance of the application in the Trademark Journal.
4. After publication, if any person gives notice of his opposition to the registration within three months which may be extended to the maximum of one month.
5. If the opposition has been decided in favour of the applicant of the registration of a trademark, the Registrar shall register the Trademark.
6. On the registration of the Trademark the Registrar shall issue to the applicant a Trademark Registration
7. Today, as per the Trademark Rules, 2002, the application fees (similar to a tax) are Rs. 3500 per trademark.

REFUSAL OF TRADEMARK REGISTRATION

ABSOLUTE GROUNDS

1. Which is devoid of any distinctive character.
2. Which have become customary in the current language.
3. Which indicates the quality or other descriptive characters of the goods or services

RELATIVE GROUNDS

1. A mark, which by its very nature will deceive the public or cause confusion.
2. A mark, which is likely to hurt the religious susceptibilities.
3. A mark, which contains scandalous or obscene matter.
4. A mark, the use of which is prohibited under the Emblems and Names (Prevention of Improper Use) Act 1950

Term/Duration of a Trademark in India

• The term of registration of a trademark is 10 (Ten) years but may be renewed subject to the payment of the prescribed fee, in accordance with the provisions of the Trademarks Act,1999.
• Subsequent renewal is for seven years.

• Non-use of a registered trademark for a continuous period of five years is a ground for cancellation of registration of such trademark

Use of the TM and ® symbols

Generally, one who has filed an application (pending registration) can use the TM (trademark) designation with the mark to alert the public of his exclusive claim. The claim may or may not be valid. 

The registration symbol, ®may only be used when the mark is registered.

Assignment of Trademarks

Complete Assignment to another entity: 

Here, the owner transfers all its rights with respect to a brand/mark to another entity including the transfer of the rights such as the right to further transfer, earn royalties, etc. 

(E.g. X, the proprietor of a brand, sells his mark completely through an agreement to Y. After this X does not retain any rights with respect to the brand)

Assignment to another entity but with respect to only some of the goods/ services: Here, the transfer of ownership is restricted to specific product or service only. 

(E.g. P, the proprietor of a brand used for jams and jellies and dairy products. P assigns the rights in the brand with respect to only dairy products and retains the rights in the brand with respect to jams and jellies. This is partial assignment)

Assignment with goodwill: 
Such assignment is, where the rights and value of a trademark as associated with the product is also transferred to another entity.

(E.g. P, the proprietor of a brand “Nandini” relating to dairy products, sells his brand to Q such that Q will be able to use the brand “Nandini” with respect to dairy products as well as any other products it manufactures.)

Assigned without goodwill: 
Such assignment also referred to as a gross assignment, is where the owner of the brand restricts the right of the buyer and does not allow him to use such brand for the products being used by the original owner.

(E.g. P, the proprietor of a brand “Nandini” relating to dairy products, sells his brand to Q such that Q will not be able to use the mark “Nandini” with respect to dairy products but can use this brand for any other products being manufactured by it. In such case the goodwill which is associated with brand “Nandini” for dairy products is not transferred to Q and Q will be required to create distinct goodwill of brand “Nandini” for any other product or service like Restaurant wherein Q proposes to use this brand.)

In many jurisdictions like the United States, assignment of the mark without goodwill is not allowed at all. India on the other hand allows assignment without goodwill.

Restrictions on Assignments

In the case of registered Trademarks, the Trade Mark Act 1999 puts certain restrictions on the assignment of a registered trademark wherein there exist possibilities of creating confusion in the mind of the public/ users. Such restrictions are:

1. Restriction on an assignment that results in the creation of exclusive rights in more than one persons with respect to the same goods or services, or for the same description of goods or services or such goods or services as associated with each other.
2. Restriction on an assignment that results in different people using the trademark in different parts of the country simultaneously.

Licensing of Trademarks

• The Trademarks Act does not mention the term ‘License’, the concept under the Act is mentioned as that of a ‘Registered User’.
• Trademark licensing is advantageous to both parties. While the licensor enjoys its rights to the mark by getting the royalties for its use, the licensee is able to expand its market operations by using the brand and developing its reputation.
• In the case of Licensing, the licensor is open to licensing the rights over the trademark in the manner it may like. 
• The Licensor can restrict the rights of the licensee in a trademark or brand with respect to the products or services wherein the licensee can use such brand with respect to time for which it can use such brand, with respect to area within which it can use such brand etc.