In the world of intellectual property, trademarks often surpass their role as mere identifiers of origin, becoming powerful symbols of goodwill, reputation, trust and quality. Among trademarks, there are certain well-known trademarks which occupy a unique pedestal. These well-known marks enjoy an elevated status that transcends territorial and market boundaries, protecting their owners from misuse and dilution even in unrelated industries. In 2017, the Trade Marks Rules were amended to provide a formal process for declaration of well-known status, and there are now hundreds of brands which have claimed their place on the list. But how far does this protection truly extend? As the legal landscape evolves, the boundaries of protection for well-known trademarks continue to be tested.
A recent decision of the Madras High Court dated 07 January 2025 seeks to answer this question. In Paragon Polymer Products Pvt. Ltd. (formerly M/s. Paragon Rubber Industries) vs Sumar Chand Nahar and Ors. ((T)CMA(TM) No.80 of 2023) the court states that well known protection does, in fact, have certain limits, and the decision serves as a reminder of the complexities involved in determining the boundaries of protection for well-known marks.
A conflict arose when Paragon Polymer ("Appellant"), opposed an application filed by Paragon Engineers ("Respondent"). The Appellant Paragon Polymer owns rights in its trade name and trademark PARAGON since 1975, for footwear, registered in Class 25. The Respondent Paragon Engineers owns rights in its trade name and trade mark PARAGON ENGINEERS since 1986, for electric motors, registered in Class 07. The Respondent Paragon Engineers had sought to register its mark in another Class 09, which was opposed by the Appellant Paragon Polymer. The rival marks are shown below:
To support their respective claims, the arguments presented by both the parties can be summarised as follows:
Appellant (Paragon Polymer Products Pvt. Ltd.):
- History of Use: The Appellant's mark 'PARAGON' has been a household name in the footwear industry for decades, signifying exceptional quality and reliability, and has garnered immense goodwill and reputation across India. The Appellant has been using the mark 'PARAGON' in the footwear industry since 1975, with registrations in multiple classes, including Class 25.
- Well-Known Mark: The Appellant's mark 'PARAGON' has been declared a well-known mark by the Trade Marks Registry in 2017.
- Risk of Confusion: The Appellant claimed that allowing the Respondent to register the mark 'PARAGON' for electric motors (Class 9) would cause confusion among consumers, as 'PARAGON' is associated with the Appellant's footwear products.
- Non-Bonafide Adoption: The Appellant claimed that the Respondent started using the mark 'PARAGON' only in 1986, long after the Appellant had already established its mark.
Respondent (Paragon Engineers):
- Honest Adoption: The Respondent has been using the mark 'PARAGON' with a bird device since 1986 for electric motors (Class 07).
- Registration in Class 7: The Respondent's mark has already been registered in Class 7 for electric motors, and the Appellant did not oppose it.
- Acquiescence: The Respondent claimed that the Appellant had acquiesced to the Respondent's use of the mark in Class 7 and was estopped from objecting to its application in Class 9.
- Distinct Industries: The Respondent claimed to operate in a different industry (electric motors) from that of the Appellant (footwear), with distinct consumer bases, so there was no risk of confusion.
- Secondary Meaning: The Respondent's mark had acquired secondary meaning in the field of electric motors and products, while the Appellant's mark was well-known only for footwear.
- Common Dictionary Word: The Respondent claimed that 'PARAGON' is a dictionary word, and that the Appellant cannot claim exclusive rights to it, particularly across different industries.
- No Conflict in Market: The Respondent claimed that since the Appellant and Respondent cater to different industries, there is no likelihood of consumer confusion.
After hearing arguments from both sides, the Court ruled that the Appellant's mark had indeed acquired well known status, however, this did not entitle them to retrospectively enforce their rights against honest and concurrent users of trade marks. Relying on previous decisions concerning well known marks in M/s VANS Inc USA Vs. FCB Garment Tex India & Anr. [Delhi High Court-C.O. (Comm. IPD-TM) 161/2021 & I.A. 15763/2022] and VANS Vs. Fateh Chand Bhansali & Anr. [Delhi High Court-C.O. (Comm. IPD-TM) 416/2022] the Court emphasized that while the recognition of a mark as well-known certainly provides it added protection, that protection is prospective, not retrospective. In simpler terms, being declared a well-known mark will not grant rights to a proprietor over marks used by others before its recognition as a well known mark. The Court also highlighted that the Respondent had been using the mark 'PARAGON' in the electric motor industry for several decades, acquiring distinctiveness in its own right.
The ruling also brought into focus the balance between protecting consumers from confusion and safeguarding the legitimate interests of businesses that have used a trademark honestly and without intent to deceive. While the Court acknowledged that trademark laws aim to protect consumers, it also noted that businesses have a legitimate interest in protecting their marks, especially when these marks represent significant goodwill built over years of use. The Court ultimately remanded the case to the Trade Marks Registry to explore ways in which both companies could coexist, potentially by limiting the use of their respective marks within their specific industries.
This decision puts forth an important principle in trademark law: the recognition of well-known marks does not grant a monopoly across all goods and services, particularly where long-standing users of a similar mark can demonstrate independent use and distinctiveness in a different market sector. It also emphasizes the challenges in balancing the rights of established brands with the rights of honest, concurrent users who have built goodwill in their own right. For businesses navigating the complex world of trademarks, the ruling serves as a reminder that trademark protection is not absolute but must be carefully balanced against the interests of other market players.
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