In a recent trademark dispute between Goodai Global Inc. v. Shahnawaz Siddiqu, the Delhi High Court on January 28, 2025, directed the removal of the respondent's registered device mark under Section 57 of the Trade Marks Act, 1999. The Court found that the respondent had obtained registration in bad faith and engaged in trademark squatting by adopting a mark nearly identical to the petitioner's well-established "Beauty of Joseon" device mark. In this article, the factual matrix of the case and the judicial findings in the matter are briefly outlined.
Procedure Under Sections 47 and 57 of the Act for Removal of Registered Trademarks
A per Section 47 of the Act, if the mark is not used for a period of five years and three months prior to the date of filing of the petition it can be taken off the register. Section 47(1)(b) of the Act expressly supports this point. In Shell Transource Ltd. v. Shell International Petroleum Co. Ltd., it was observed by the IPAB that the onus of proving non-user is on the person who pleads the same. In Russel Corp Australia Pty. Ltd. v. Ashok Mahajan and anr., it was observed that "it is the settled legal position that, use has to be genuine use in the relevant class of goods and services. Unless special circumstances for non-use are not put-forth, the mark would be liable to be removed for non-use".
Section 57 of the act has been analyzed by the High Court of Delhi in Blue Heaven Cosmetics (P) Ltd. v. Deepak Arora. It was held that, upon an application being filed by any "person aggrieved", the High Court may pass orders cancelling or varying the registration if:
- There is any contravention or failure to observe a condition entered on the register in relation thereto.
- Any entry is made in the register without sufficient cause.
- Any entry is wrongly remaining in the register.
- There is any error or defect in any entry in the register.
It is a settled position of law that if any of the grounds for refusal of the registration under Section 9 or 11 of the act are made out, then such mark would be a mark, which is wrongly entered on the register of trademarks. (Russel Corp Australia (P). Ltd. v. Ashok Mahajan)
Refusal under Section 9 and Section 11 of Trade Marks Act, 1999, the difference
Section 9 deals with cases where a trademark is refused irrespective of any existing trademark rights of others. These refusals are based on the intrinsic nature of the mark itself. The proscriptions envisaged by the various clauses of Section 9 are absolute and do not involve comparison with any other existing mark, or any element of competing intellectual property interests. The proscription under Section 9 relates to the character of the mark itself in relation to the goods it is used. Therefore, the likelihood of deception and confusion under Section 9(2)(a) too has to be seen as an attribute of the mark itself without comparing it with any other mark. It is for this reason that the clause employs the expression "by its very nature". Section 9 applies to inherent attributes of the applicant mark, of its own, whereas Section 9 applies to attributes of the mark in relation to the existing marks of others. (Armasuisse v. Trade Mark Registry)
While Section 9 deals with the absolute grounds for refusal of the registration of trademark, Section 11 deals with the relative grounds for the refusal. Relative grounds are those grounds that arise out of the conflict with another party's trademark or his existing rights over it. Relative grounds for the refusal of trademark registration in this context mean if the registrar finds another mark that resonates with the mark presented for registration.
Section 11(10)(ii) of the Trademarks Act, 1999
This clause requires the Registrar of Trademarks to consider bad faith when assessing both, an application for trademark registration and an opposition filed against that application.
The provision was considered and interpreted by this Court in BPI Sports LLC v. Saurabh Gulati and the Court held that a purposive interpretation must be given looking at the intent and purpose of sub-section (10)(ii) of Section 11, which is to decline the registration of a trademark, for which the request for registration is made under bad faith. The expression 'bad faith' is not defined under the 1999 Act and the Court brainstormed on the concept by referring some English judgements and dictionaries. Broadly understood, 'bad faith' is the opposite of 'good faith' and conceptually understood, it is synonymous with 'dishonest intention'. Further, it was observed that though Trademark Squatting is not mentioned in the Trade Marks Act, it would certainly amount to "bad faith" within the meaning of Section 11(10)(ii).
Further, in the Kia Wang case, reference was made to the BPI Sports case and the court observed that, 'bad faith' is an unfair practice which involves lack of honest intention and a conscious doing of wrong, which is not just a mistake. It includes exchanges which fall short of standards of acceptable commercial behaviour".
Brief Facts and Contentions of the Parties
Goodai Global Inc., a manufacturer based in South Korea which dealt in Korean beauty and personal care products, filed a petition under Section 57 of the Trademarks Act, 1999, for the removal of a device mark registered in favour of respondent no. 1, Shahnawaz Siddiqu. The impugned mark was registered under application number 5635163 in Class 3 on a "proposed to be used" basis on October 3, 2022.
Goodai Global contended that it had been using the Beauty of Joseon brand since 2010 and had gained global recognition, including in India, where its products were available through multiple e-commerce platforms. In December 2023, while responding to a provisional refusal of its international trademark application in India, Goodai Global discovered that respondent no. 1 had registered a deceptively similar device mark. Further, respondent no. 1 had also filed for a wordmark registration of "Beauty of Joseon" in March 2024.
The petitioner argued that the impugned registration was obtained in bad faith, intending to ride on its goodwill and block its trademark registration in India. It relied on decisions in BPI Sports LLC and Kia Wang, which dealt with bad faith trademark registrations and passing off.
Judicial Findings
The Delhi High Court proceeded ex-parte against respondent no. 1 due to his failure to appear or file a reply.
A side by side comparison of the impugned device mark and the petitioner's device mark was done by the court:
A perusal of the aforementioned would show that respondent no. 1 has adopted a mark that is almost identical to the mark of the petitioner. The petitioner's mark features black Hangeul characters spelling "Joseon" and "Mi Nyeo" arranged in two lines at the center. Hanguel is the Korean alphabet, which is used to write the Korean language and "Joseon" is a historical Korean dynasty. The term "Joseon" has no relation to any person or place in India and the Respondent No. 1 could not provide a reason for adopting a device mark of a Korean name, that too in Hanguel (Korean) characters.
Comparing the petitioner's and respondent's marks, the Court found them to be nearly identical, covering identical goods and targeting the same consumers. This was likely to cause confusion among ordinary consumers.
The court cited the case of Kia Wang v. Registrar of Trademarks, in which a petition was filed against the registered trademark "Rockpapa" which was identical to the petitioner's mark adopted in the UK in 2014, and subsequently became highly popular worldwide. The petitioner in this case contended that they were "first in the market" to adopt and use the trade mark and have superior right in the trademark over the Respondent. To buttress the case of the 'prior user', learned counsel in Kia Wang case relied upon the judgments in Milmet Oftho, Neon Laboratories, and S. Syed Mohideen. In Milmet Oftho, the Supreme Court held that the ultimate test should be, who is 'first in the market', where the trademarks are similar. In Neon Laboratories the Supreme Court observed that the 'first user' rule is an important part of the 1999 Act and it is recognized that the rights of the 'prior user' are more crystalized as compared to the rights of subsequent registrant of the trademark, upholding the law declared in S. Syed Mohideen. In wake of the prior use, the trademark had become distinctive of the goods of the petitioner and was associated with him.
In the present case, the court held that the respondent
no.1's registration of the impugned mark was executed with a
clear objective of appropriating the petitioner's device mark
and to restrain the petitioner from registering it in its name in
India. Such acts of respondent no. 1 constitute trade mark
squatting and amount to 'bad faith' and fall squarely
within the scope of sub-section (10)(ii) of Section 11 of the Act.
Additionally, his failure to contest the suit corroborated that
they registered the impugned mark in "bad faith".
Accordingly, the present petition is allowed and the trade mark
registry is directed to remove the impugned registered trademark
from the register of trademarks
under the provisions of Section 57 of The Trade Marks Act,1999.
If the Defence of "Honest Concurrent use" were used by the Respondent in the Pleadings
In this case, the Respondent could have raised the defence of honest concurrent use as contemplated in Section 12 of the Act. It says that, in the case of honest concurrent use or of other special circumstances, the registrar may permit the registration by more than one proprietor of the trademarks which are identical or similar in respect of the same or similar goods or services, subject to certain conditions and limitations, the Registrar may think fit to impose.
In the case of RPG Enterprises Ltd. v. RPG Industrial Products, it was observed that "Honesty of adoption at the initial stage itself has to be established to take benefit of concurrent registration under Section 12 of the Trade Marks Act, 1999. What is protected is the innocent use of a mark by two or more persons unknown to each other and unaware of the mark used by the other. Adoption must be honest, bonafide, and without any knowledge on the part of the adopter".
Therefore, for claiming the defence of honest concurrent use, the respondent must be unaware of the petitioner's mark. But, as the petitioner's device mark stands registered across 40 countries and thus, it discloses clear bad faith on the part of the respondent to have registered identical mark for identical goods. Therefore, in my opinion, the defence of honest concurrent use, if raised in this case would have been rejected by the Hon'ble Court due to the above-mentioned reasons.
In summary, the Delhi High Court's cancellation of the respondent's trademark registration of "Beauty of Joseon" reflects the strict approach of the Indian judiciary in dealing with bad faith trademark registration and trademark squatting, particularly with respect to foreign players' well-known marks. The case highlights the importance of safeguarding prior users' rights, even if the mark is not registered locally. The Court's reliance on previous judgments like BPI Sports LLC and Kia Wang supports the fact that bad faith adoption, involving the malafide intention to take advantage of another's goodwill, is a basis for cancellation under Section 57 read with Section 11(10)(ii) of The Trade Marks Act, 1999. The ex-parte ruling against the respondent, due to their absence or not contesting the claims, has the rationale that the averments made in the petition are deemed to be admitted by the respondents and they have nothing substantial to put forth on merits. This ruling emphasizes that overseas brands with high goodwill and existing usage can effectively contest wrongful registrations in India, thus discouraging trademark squatters from appropriating internationally known marks.
References
Statutes
The Trade Marks Act, 1999 (Act 47 of 1999), ss. 9, 11, 12, 47, 57
Cases
- Goodai Global Inc. v. Shahnawaz Siddiqu & Anr., 2025 SCC OnLine Del 541
- Shell Transource Ltd. v. Shell International Petroleum Co. Ltd., 2012 SCC OnLine IPAB 35
- Russel Corp Australia (P). Ltd. v. Ashok Mahajan, 2023 SCC OnLine Del 4796
- Blue Heaven Cosmetics (P) Ltd. v. Deepak Arora, 2022 SCC OnLine Del 1001
- Armasuisse v. Trade Mark Registry & Anr., 2023 SCC OnLine Del 4
- BPI Sports LLC v. Saurabh Gulati, (2023) 3 HCC (Del) 164
- Kia Wang v. Registrar of Trademarks, 2023 SCC OnLine Del 5844
- Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624
- Neon Laboratories Ltd. v. Medical Technologies Ltd., (2016) 2 SCC 672
- S. Syed Mohideen v. P. Sulochana Bai, (2016) 2 SCC 683
- RPG Enterprises Ltd. v. RPG Industrial Products., 2025 SCC OnLine Del 22
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.
