The Legality Of Imposing Geographical Restriction/Limitation On Trademark Use By The Trade Marks Registry
Trademarks play an integral role in safeguarding of intellectual property rights of a person by acting as a distinctive source identifier of goods and/ or services in the market. In India, the Trade Marks Registry plays a crucial role in handling trademark applications, registration, renewals, oversight and management. Its fundamental objective is to provide for registration and better protection of trade marks for goods and services and for the prevention of the use of fraudulent marks.
While fulfilling its objective and with due process of law, the Trade Marks Registry has been granted with statutory powers to accept or refuse an application or accept an application with some limitations. Such limitations are not exhaustive but depend upon the unique scenario surrounding each case. For instance, such limitations include Restriction and/or Limitations and/or Inclusion and/or Exclusion hereinafter called Limitation) as to Colour, Denize, Artwork and combination thereof, Limitation of the effect of registration in a particular geographical territory, Limitation of goods or services in which the statutory protection of trademark can be extended, etc. Aforesaid limitations (including combination thereof) are either imposed to ensure that a new/subsequent trademark does not infringe upon the rights of some other pre-existing mark or can be imposed to ensure that the trademark itself does not contravene the provisions of the Trade Marks Act, 1999. This action of placing limitations is crucial to ensure that genuine applicants are granted statutory protection while protecting pre-existing users of trademarks and also protecting the intent scheme of the Trade Marks Act, 1999.
UNDERSTANDING GEOGRAPHICAL RESTRICTIONS
Geographical restriction/limitation are limitations placed on the use or registration of a trademark within a specific territorial jurisdiction or geographical area. For ex: "The use of this trademark is restricted to the territory of Maharashtra only". The objective behind such restriction/limitation is often to avoid conflicts with prior used or registered trademarks or to protect regional interests.
LIMITATIONS ON TRADEMARK REGISTRATION V/s TRADEMARK USE
The Trade Marks Act, 1999, is the statute governing the registration and use of trademarks in India. A bare reading of the provisions of said Act makes it outrightly clear that the Trade Marks Registry only has the right to impose the restriction over the operation of registration in a particular area.
Section 2(1)(l) of the Trade Marks Act, 1999 defines the word limitations as under
"(l)"limitations" (with its grammatical variations) means any limitation of the exclusive right to the use of a trade mark given by the registration of a person as proprietor thereof, including limitations of that right as to mode or area of use within India or outside India".
The Act essentially grants the Trade Marks Registry the authority to accept or reject trademark applications for registration based on criteria like geographical restriction/limitation. Once a trademark is granted registration, its use is subject to the rights and privileges conferred by the registration.
ISSUES AND THE LEGALITY OF IMPOSING GEOGRAPHICAL RESTRICTION/LIMITATION ON TRADEMARK USE BY THE TRADE MARKS REGISTRY
The problems arise when the statements used by the Trade Marks Registry while imposing restrictions exceeds its authority and tries to control where a trademark can or cannot be used geographically. While the Trade Marks Registry has the power to impose geographical limitations on the effect of registration of a trademark i.e. effect and limitation of statutory right and protection extended to a trademark in a particular territory or to the exclusion of that territory, the Trade Marks Registry lacks the authority to impose limitation on the actual use of such trademark. Limitation on the use of a trademark can only be imposed by competent Civil Courts. Civil Courts are the only authority in India which can exercise the powers to grant injunctions against the use of a trademark by any person or entity under the Code of Civil Procedure, 1908 as well as Specific Relief Act, 1963 as issues pertaining to this matter involve detailed analysis of a case and all its facts and law surrounding it. Further, the Civil Courts necessitates the Plaintiff to show the basic three relevant facts to issue injunction against third-party users. These factors includes  Prima Facie Case;  Balance of Convenience;  Irreparable Loss/ Injury to the Plaintiff and further involve dwelling and the imposition of reasonable restriction on the fundamental rights guaranteed under Article 19(1)(g) of the Constitution of India, namely the right to carry on any occupation, trade, or business. Only after detailed analysis of all the aforesaid three factors along with other relevant factors surrounding a case, does the Civil Courts issue injunction orders. However, while imposing aforesaid restrictions on the trademarks, the Trade Marks Registry does not go into the examination of these factors. This means restrictions imposed by the Trade Marks Registry, especially geographical ones, are restricted to the extension of statutory protection to the trademarks in the particular geographical area or to the exclusion of that area depending upon the case and not the actual use of the mark by the applicant. This can easily be understood by following example;
For instance, Mr. A file an application for the mark 'BANARASI PAAN' and while examining the mark, the Trade Marks Registry observes that it cannot be granted protection in the State of Uttar Pradesh. In such case, the registry generally imposes a limitation by stating that "the mark shall not be used in the State of Uttar Pradesh" and grants advertisement to the mark with the said restriction. A prima facie view on the restriction statement looks like that the applicant is not allowed to use the mark, however, when a more sensible view is taken, the statement can be interpreted as the applicant can use the mark in the entire territory of India but the statutory protection will not be extended to the mark in the State of Uttar Pradesh which means that the applicant may exercise his statutory right of using the symbol ® in other states, restraining others from the use of deceptively similar marks by the way of infringement remedies, etc. the same cannot be done in the State of Uttar Pradesh.
As can be observed hereinabove, the Trade Marks Registry does not seem to have the power to impose restriction on the actual use of the trademark. Therefore, the statement of restriction/limitation rather than being "the mark shall not be used in the State of Uttar Pradesh" shall instead be "The operation of registration/ statutory rights in the mark should not extend to the State of Uttar Pradesh".
Section 2(1)(l) of the Trade Marks Act, 1999 provides ad under, to quote;
""limitations" (with its grammatical variations) means any limitation of the exclusive right to the use of a trade mark given by the registration of a person as proprietor thereof, including limitations of that right as to mode or area of use within India or outside India"
A careful analysis of the language of Section 2(1)(l) of the Trade Marks Act, 1999 clearly seems to suggest that any limitations which are described under the Act are exclusively limited to the limitations on exclusive rights which are provided by the Registration and the limitations on the right provided by the said Registration to the exclusive use of the trademark in an area. However, what the aforesaid language clearly excludes is the limitation on the actual use of a trademark by a person or entity in an area.
It is crucial to understand the difference between trademark registration and trademark use. Trade Mark registration grants its owner the legal protection and exclusive rights to use that mark and restrain others by the way of statutory remedies. On the other hand, trademark use refers to the actual application of the trademark in commercial activities by its owner. So, registration is about obtaining legal rights, while use is about putting the trademark into practice in business. The Trade Marks Registry, undoubtedly possesses the authority to impose geographical restriction/limitation on registration, however, extending these limitations to the actual use of a trademark does not seem to be within the powers or purview of the Trade Marks Registry.
The power to impose restriction/limitation on the use of trademarks must be only lie in the hands of Civil Courts and not in the hands of the Trade Marks Registry. By granting the Trade Marks Registry the power to curtail the usage of a trademark, it runs the risk of overreach, exceeding jurisdiction and infringing upon the powers of the Civil Courts.
The power to impose restriction/limitation on the actual use of trademark is a delicate matter that requires a case-by-case scrutiny. Civil courts play an integral role to ensure that these restriction on the use of a trademark are just, reasonable and do not unduly encroach the rights of any individual or entity. Further, the restrictions/ limitations imposed by the Trade Marks Registry are absolutely integral to maintaining the integrity of the Register of Trade Marks so that actual users can enjoy statutory protection meanwhile also ensuring that such statutory protection is within the limits so that it does not infringe upon the rights of any third parties.
It is essential for the Trade Marks Registry to revaluate their statements of limitations/ restrictions imposed against particular marks such that they fulfil the intent purpose of the Trade Marks Act, 1999 without exceeding its powers. Statements like the aforesaid ones are open to misinterpretation and can easily lead to disputes, therefore it is integral to correct the said statements in conformity with the purpose and scheme of the Trade Marks Act, 1999. Until such time as the statements are corrected and made in conformity with the scheme of the Trade Marks Act, 1999, such statements imposing limitations by the Registry shall be interpreted as limitations on the effect of registration of a trademark i.e. effect and limitation of statutory right and protection extended to a trademark in a particular territory or to the exclusion of that territory rather than limitation on the actual use of the marks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.