India: Prior Trademark Registration Is Of Meagre Consequence In Juxtaposition Of Prior Use Of Trade Mark

Last Updated: 15 March 2016
Article by Rajat Jain

Article by Vijay Pal Dalmia, Advocate, Supreme Court of India and Delhi High Court, Partner & Head of Intellectual Property Laws Division, Vaish Associates Advocates, India

In the matter of Neon Laboratories Ltd. vs. Medical Technologies Ltd. & Ors., 2015(64)PTC225(SC)1,the Supreme Court while interpreting Section 342> of the Trade Marks Act, 1999 ("Act"), has affirmed that the Proprietor of a trade mark does not have the right to prevent use by another party of an identical or similar mark where that use commenced prior to the use or trademark registration by proprietor.

That in the present case, the predecessor-in-title of the Plaintiff, has adopted and coined the trademark "PROFOL" in the year 1998, for manufacturing and marketing of pharmaceutical products and medicinal preparation. That after amalgamating with its predecessor-in-title on 17.2.2000, Plaintiff, Respondent No. 1 herein, became the owner of the trademark PROFOL, and has been using trademark "PROFOL" since 2000, and also applied for its registration in the aforesaid year. The Plaintiff No. 2, Respondent No. 2 herein, is a licensee of the Plaintiff No. 1.

The Defendant, Appellant herein, i.e., Neon Laboratories Ltd., had filed the application for registration of the trademark "ROFOL" in class 5 on 19.10.2012 which got registered on 14.09.2001. The Appellant has conceded that it commenced user of the trademark ROFOL only from 16.10.2004 onwards.

On becoming aware that the Defendant had introduced the same generic drug under the trademark ROFOL into market, the Plaintiffs filed a suit against the Defendant for injunction, damages and account of profits, alleging that the mark ROFOL is identical and deceptively similar to the trademark PROFOL. The Trial Court granted an ad-interim injunction in favour of the Plaintiffs. Aggrieved by the said order, the Appellant preferred an appeal which was rejected by the High Court of Gujarat. Thereafter, the Appellant has filed the present appeal in the Supreme Court of India against the Judgment of the Learned Single Judge of the High Court of Gujarat at Ahmedabad.

While deciding the present appeal, the Hon'ble Supreme Court interpreted Section 343 of the Act and stated that the present Section palpably holds that a proprietor of a trade mark does not have the right to prevent the use by another party of an identical or similar mark where that user commenced prior to the user or date of registration of the registered proprietor. The Supreme Court observed that the "first user" rule is a seminal part of the Act and it has always enjoyed pre-eminence. It was held that the use of the trademark "PROFOL" by the predecessor-in-title of the Respondent is prior to the user of the Appellant and is even prior to the date of registration of the trademark "ROFOL" of the Appellant. 

The Supreme Court further referred to Section 474 of the Act and observed that the legislative intent of the Act is not to permit the hoarding of or appropriation of a trade mark without its utilization and the intention of the aforesaid section is to ordain that an applicant of a trademark does not have a permanent right by virtue of its application alone and such a right is lost if it is not exercised within a reasonable time. It was held that the Appellant had not used the mark ROFOL for over five years and three month after the application for registration of the said trademark was made and Appellant in a way has allowed or acquiesced in the user of the Respondents for several years.

Furthermore, Supreme Court also took into account that the litigation was initiated by the Respondents as opposed to the Appellant, who at any time could have raised the issue of Respondents using a mark similar to its registered trademark and that the Respondents have prima facie supported with proof, that they had already been using their trade mark well before the attempted user of an identical or closely similar trade mark by the Appellant.

Considering all these factors, the Supreme Court held that the Respondents had made out a prima facie case and the two other factors in an interim injunction, namely the balance of convenience and an irreparable loss, were also both in favour of the Respondents, given the potential loss of goodwill and business they could suffer should an injunction be denied, and thereafter, affirmed the decision of the Trial Court and the First Appellate Court.

At this preliminary stage of the matter, i.e. confirmation of the temporary injunction, the Supreme Court abjured itself from going into minute details of the case and adroitly left the issue that whether the situation on the date of application for registration alone would be relevant, or whether the developments in the period between this date and the date of grant of registration would have any bearing on the rights of the parties, to be appreciated by the Court before which the suit is being contested.

Footnotes

1 http://judis.nic.in/supremecourt/imgs1.aspx?filename=43005

2 Section 34  of the Trade Marks Act, 1999

Saving for vested rights.—Nothing in this Act shall entitle the proprietor or a registered user of registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods or services in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior—

(a) to the use of the first-mentioned trade mark in relation to those goods or services be the proprietor or a predecessor in title of his; or

(b) to the date of registration of the first-mentioned trade mark in respect of those goods or services in the name of the proprietor of a predecessor in title of his; whichever is the earlier, and the Registrar shall not refuse (on such use being proved), to register the second mentioned trade mark by reason only of the registration of the first mentioned trade mark.

3 Ibid.

4 Section 47  of the Trade Marks Act, 1999 

Removal from register and imposition of limitations on ground of non-use.—

(1) A registered trade mark may be taken off the register in respect of the goods or services in respect of which it is registered on application made in the prescribed manner to the Registrar or the Appellate Board by any person aggrieved on the ground either—

(a) that the trade mark was registered without any bona fide intention on the part of the applicant for registration that it should be used in relation to those goods or services by him or, in a case to which the provisions of section 46 apply, by the company concerned or the registered user, as the case may be, and that there has, in fact, been no bona fide use of the trade mark in relation to those goods or services by any proprietor thereof for the time being up to a date three months before the date of the application; or

(b) that up to a date three months before the date of the application, a continuous period of five years from the date on which the trade mark is actually entered in the register or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods or services by any proprietor thereof for the time being: Provided that except where the applicant has been permitted under section 12 to register an identical or nearly resembling trade mark in respect of the goods or services in question, or where the tribunal is of opinion that he might properly be permitted so to register such a trade mark, the tribunal may refuse an application under clause (a) or clause (b) in relation to any goods or services, if it is shown that there has been, before the relevant date or during the relevant period, as the case may be, bona fide use of the trade mark by any proprietor thereof for the time being in relation to—

(i) goods or services of the same description; or

(ii) goods or services associated with those goods or services of that description being goods or services, as the case may be, in respect of which the trade mark is registered.

(2) Where in relation to any goods or services in respect of which a trade mark is registered—

(a) the circumstances referred to in clause (b) of sub-section (1) are shown to exist so far as regards non-use of the trade mark in relation to goods to be sold, or otherwise traded in a particular place in India (otherwise than for export from India), or in relation to goods to be exported to a particular market outside India; or in relation to services for use or available for acceptance in a particular place in India or for use in a particular market outside India; and

(b)a person has been permitted under section 12 to register an identical or nearly resembling trade mark in respect of those goods, under a registration extending to use in relation to goods to be so sold, or otherwise traded in, or in relation to goods to be so exported, or in relation to services for use or available for acceptance in that place or for use in that country, or the tribunal is of opinion that he might properly be permitted so to register such a trade mark, on application by that person in the prescribed manner to the Appellate Board or to the Registrar, the tribunal may impose on the registration of the first-mentioned trade mark such limitations as it thinks proper for securing that registration shall cease to extend to such use.

(3) An applicant shall not be entitled to rely for the purpose of clause (b) of sub-section (1) or for the purposes of sub-section (2) on any non-use of a trade mark which is shown to have been due to special circumstances in the trade, which includes restrictions on the use of the trade mark in India imposed by any law or regulation and not to any intention to abandon or not to use the trade mark in relation to the goods or services to which the application relates.

© 2016, Vaish Associates Advocates,
All rights reserved
Advocates, 1st & 11th Floors, Mohan Dev Building 13, Tolstoy Marg New Delhi-110001 (India).

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