Indian trademark law, like U.S. trademark law but unlike most European trademark laws (and Community trademark law), is based on a “first to use” system. Although the principle was codified for the first time in the Trade Marks Act 1999, a number of earlier judicial decisions gave the term “first to use” a wide interpretation. Unlike in the United States, first use anywhere in the world accompanied by a transborder reputation of the mark in India is the determinant for ownership of trademark rights in India.
This transborder reputation can be established through the mere availability in India of literature or advertising materials featuring the mark in question, which need not even be directed to Indian customers. Thus, the appearance of advertisements in in-flight magazines on flights bound for India has been considered sufficient evidence to demonstrate a “reputation.” Even the existence of materials that are dedicated to products that are banned in India—and therefore clearly not directed toward the Indian public—has been considered sufficient for these purposes. For example, Playboy, whose own magazines are banned in India, relied on global advertisements to claim that the mark PLAYBOY had goodwill and reputation in India. This is in stark contrast to the position in the EU, where an action for passing off or unfair competition typically requires an established goodwill among actual customers of the relevant product or service in the respective country, and the position in the United States, where generally use of a mark in commerce in the United States or in commerce between a foreign country and the United States is necessary to establish rights in the mark.
Trademark rights in India can also be acquired through registration. A trademark may be registered, even if use of it has not commenced, on a “proposed to be used” basis. The mark may remain unused, but still protected, for a maximum period of five years after it is entered onto the register. At the end of this five-year period, it will become liable for rectification (cancellation). However, rectification can occur only at the instigation of a third party; registered trademark owners are not required to periodically prove that their marks are in use in order to maintain their registrations. This is the same as in the EU, but different from the position in the United States, where, except as noted below, a registration based on use can be obtained only after a mark is used in U.S. interstate commerce or in commerce between a foreign country and the United States. Foreign treaty applicants may base a U.S. registration on their foreign registration without demonstrating use in the United States, with the effect that registration will be cancelled automatically after five years if use is not shown.
But the position in the EU and India also differs in one important respect. In India, cancellation actions often fail, even before any assessment of actual use of the challenged mark is carried out, on account of the lack of a bona fide intent of the third party bringing the action. A 2008 judgment of the Intellectual Property Appellate Board (IPAB) in Kanishk Gupta v. Liberty Footwear discussed how removal of a mark on grounds of non-use is discretionary. The IPAB went on to rule that the blatant adoption by a third party of a mark that is deceptively similar to an invented mark on the register disentitles that party to seek its removal. In other words, a mark consisting of an invented word cannot form the subject matter of a cancellation application, especially when the party seeking cancellation has adopted a similar mark with the intention to deceive.
What Constitutes “Use” in India?
Use of a mark outside India or a transborder reputation of a mark in India may not be enough to sustain a registration if it is attacked on grounds of non-use. Some use of the mark in India is required, although “use” generally has been given a broad meaning by the Indian courts. In its 2003 judgment in Hardie Trading v. Addison Paints, the Supreme Court of India ruled that “use” may be “non-physical” but must be “material,” that is, meaningful.
The test itself is not that different from the test in the EU, where use must be “genuine” and not mere token use. In practice, however, it is probably easier to meet in India. In the Hardie case, the circulation of a price list for a product that was not yet available for sale was on its own held to amount to “material” use of the mark.
There is no quantity threshold that needs to be met to establish use of a registered mark in India. In the case of well-known marks, for instance, a single advertisement may be considered sufficient. In a recent judgment in a case involving Toshiba Corporation, the Supreme Court of India held that, against the backdrop of a government ban on account of which goods could not be imported into India, a single instance of an advertisement by Toshiba in India, coupled with its global reputation, registrations for the TOSHIBA brand and marketing, gave the corporation’s trademark immunity from cancellation.
In the United States, the owner of a famous and distinctive mark has a cause of action for dilution. This applies to dilution by blurring and dilution by tarnishment. However, a mark must be used in the United States to qualify as a famous mark (i.e., a mark “widely recognized by the general consuming public of the United States”). In the EU, the trademark need not be “famous” but it must be known by a significant part of the public concerned with respect to the products or services covered by the mark.
The principle of dilution has traditionally been well recognized in Indian trademark jurisprudence, with the result that proprietors of globally well-known trademarks, including APPLE, CARTIER, CATERPILLAR, DUNHILL, FORD, HONDA, HYUNDAI and MERCEDES-BENZ, have succeeded in passing-off actions in India against users of identical or similar marks in relation to dissimilar goods. As the Delhi High Court, in the 1994 case of Daimler Benz Aktiegesellschft v. Hybo Hindustan, observed, “