Protection of Vested Rights of the Trademark Registration

Comments: This section, which corresponds to section 33 of the 1958 Act, makes protection of vested rights, so that the proprietor of a registered of a registered trademark or a registered user cannot interfere with the use of any identical or similar mark if the person has been using the mark from an earlier date.

vested

In order to come within the scope of this provision-

  • The mark must be identical with or nearly resembling the registered mark;
  • The user claimed is from a date prior to the vested rights use of the registered trademark or date of its registration, whichever is earlier; and
  • Such continuous use is in relation to those goods or services covered by the registered trademark; and
  • The user is by the proprietor or his predecessor in title.

In above circumstances, the benefit of section 34 will be available to a defendant to prevent the proprietor or a registered user of a registered trademark to interfere with or restrain the continued use of an identical or nearly resembling mark by the defendant. The use of the mark as envisaged in this section in relation to goods or services is to be construed as the use of the mark upon, or in any physical or in any other relation whatsoever to such goods.Goods or services do not mean the whole category, which is specified in the trademark registration but the particular goods/services in respect of which the defendant proves user, in fact. The goods or services in respect of which an applicant seeks registration are to be identified with the goods or services for which the mark is registered.

Marks nearly resembling

Though there is no specific definition of this expression, in terms of Section 2(1))h), the expression “deceptively similar” is defined as a mark shall be deemed to be deceptively similar to another mark if it so nearly look alike that other mark as to be likely to deceive or make confusion . It will follow therefore that the phrase “nearly resembling” is to be interpreted as equivalent to the expression “deceptively similar”.  In Analco (India) Pvt. Ltd. Versus Navodya Exim Pvt. Ltd., it was held by the Delhi High Court that the defendant’s trademark “ALOCOMAX” was deceptively similar to the plaintiff’s trademark “ALOMAX”. The defendants filed for registration of the trademark “ALOCOMAX” but were not using the mark. The court observed that “It is also settled proposition of law that even filing of application for registration of the trademark shows the intention on the part of the person to use the same in due course. The suit for passing off an infringement is maintainable and in anticipation”. Plaintiff’s suit was decreed and the defendants were restrained from manufacturing, selling any goods bearing the trademark “ALOCOMAX”.

Mark in actual use to be considered

The provision in section 34 is in the nature of a defense to protect anterior use of an unregistered mark. For the benefit of this section, the mark in actual use by the defendant is to be considered. In Cluett Peabody & Co. Inc. Versus Mclntyre Hogg Marsh & CO. Ltd., the plaintiff were the registered proprietors of the trademark consisting of three incrossed arrows and the words “Arrow Brand” in respect of shirts etc. and another mark with the device a single arrow with the word “Arrow” in respect of collars and cuffs. The plaintiffs sued the defendants who were the proprietors of the trademark consisting of the device of horizontal arrow registered for shirts, for infringement of their marks by the use of a mark consisting of a single arrow with the word “Arrow” or words “Arrow Brand”, complaining not of the use vested rights of the device but of the words. In that case, the defendant’s case failed, though they had used the device of an arrow prior to the plaintiff’s registration, they had not used the word arrow in respect of shirts.

Continuously used

It has been held that the expression “continuous used” is not capable of strict definition and that if does not mean in the case of sale of goods, a sale every week or every month. Therefore for the purpose of this section, the continuous use envisaged is to be constructed, as a reasonable commercial use and such use must be from a date prior to the date of registration or commencement by use the registered proprietor, as the case may be. A temporary suspension of user, without any intention to abandon the use of the mark, will not offend the fundamental object of this provision, which is aimed at protecting the bona fide prior user of an unregistered mark. In Kamat Hotels (India) Ltd. Versus Royal Orchid Hotels Limited, while observing that the defendant has not established a crucial requirement of section 34, the Bombay High Court held that “Where a defendant sets up a defense under section 34, the consequence of allowing it is to dilute the protection granted to a proprietor of a registered trademark. The defendant must be held down to establish the requirements of section 34 by cogent material which indicates continuous prior use. A single swallow does not make a summer”. In Manmohan Plastic Pvt.Ltd. Versus Ganpati Plastic Industries, the High court referred to the case of Amaravathi enterprises versus Karaikudi Chettinadu, Amarawati, where the Division Bench of the High court overruled the single Judge of its court on the ground the continues prior user of the vested rights of registered mark had not been made out by the respondent or defendant. The judgment recognized that section 34 of the TM Act is a shield against an action for infringement, upon establishment of continuous user in respect of goods manufactured and marketed by the registered proprietor of the mark. The Division Bench came to the conclusion, based on facts, obtaining in that case, that defense of continuous user was not established. The Court also recognized that in establishing the continuous use vested rights of the mark, the volume of sales etc. assumes significance.

Goods or services

In connection with an application for trademark registration, to rely on section 34, the goods or services should be identical with any of the goods for which the opponent’s mark is registered or in respect of which they have used the mark. The expression “goods or services” is used “not as synonymous with the whole category which is specified in the trademark registration, but is used to refer to the particular goods or spices of goods (or services) in respect of which the defendant proves user in fact.

Defense of section 34 in infringement or passing off suits

Provisions contained in section 34, which are in effect supplementary to the provisions in Section 30, will be available as a defense in a suit of infringement or passing off where the defendant is able to demonstrate by evidence the prior use of his mark in relation to such goods or services.

Section 27(2) expressly recognizes the common law principles of passing off. Section 34 takes the law further to reaffirm the superiority of prior use of trademarks over rights acquired by “registration” of a trademark. Also section 11(3) provides that a trademark shall not be registered, if its use in India is liable to prevented by virtue of any law, in particular the law of passing off. In Inter Lotto (UK) Ltd versus Camelot Group plc., an action for passing off succeed against the defendant who sought to register trademark ‘HOTPICKS’. The Court upheld the principle of earlier rights and goodwill. In Vikas Makhija versus Bengal Phenyle & Allied products (p) Ltd, it was held that, “This section confers absolute protection or immunity on a defendant who is able to prove or establish continuous user prior to the date of registration of the trademark of the plaintiff who is seeking an order of injunction or restraint against him. It is not the actual previous use which is protected from interference or restraint against him. It is not the actual previous use who is protected from interference or restraint but all use, Ref. Indo Pharma Pharmaceutical works Private Ltd versus Pharmaceutical Company of India. In Vanita Dilip Chawla versus Fresh meals India Private Ltd., the Bombay High Court held that “Provision of section 34 if read in its proper perspective would clearly go to show that if a person is using vested rights of the trademark prior to commencement of the business by a person like plaintiff, such a prior user is required to be protected because the person using the trademark prior to the user of the trade name like plaintiff would not know that in future somebody else is going to use his trademark and start the business.”

Benefit of section 34 for registration

The concluding part of section 34 mandates the Registrar to register the mark by explicitly enacting  “the registrar shall not refuse (on such use being proved) to register the second mentioned trademark by a reason only of the registration of the first mentioned trademark”. Thus, section 34 overrides an objection under section 11 by reason of registration of an identical or similar mark in respect of same or similar goods or services. A third party opposition based on section 11 may also fail if the applicant is able to successfully invoke the provisions of section 34. In Bansi Dhar Bajaj versus Bajaj Biscuit Products, prior adoption and user of the mark was taken into consideration in allowing registration. The decision of Deputy Registrar was upheld by the Appellate Board. For purpose of registration of a trademark based on section 34, the Registrar will have to exercise his power under section 12 of the Act which permits registration of the same mark by more than one proprietor based on honest concurrent use or of other special circumstances. Therefore, it is obvious the onus is on the applicant to demonstrate his case for registration of his mark in terms of section 12 to entitle him to trademark registration. While allowing such registration under section 34, the Registrar is entitled to impose, including the territorial area of use. In Fitton & co. Ltd’s Application, registration allowed subject to the amendment of the specification of goods as “medicated boiled  sweets for sale in England and Wales”. No doubt when a person gets his trademark registered, he acquires valuable right by reason of such registration and registration of his trademark gives him exclusive right to the use of vested trademark in connection with the goods in respect of which it is registered. If there is any invasion of this right by any other person using his mark which is the same or deceptively similar to his trademark he can obtain injunction, damages or account of profits made by the other person. However, this right of the owner of the registered trademark is subject to other provisions contained in the Act. In the present case, the defendant has been able to establish his right to use his trademark, notwithstanding the registration thereof in the name of the plaintiff, in view of the provision of section 30 and 33 read with section 12(3) of the Act. A similar view on vested rights was taken by the Division Bench in an appeal from an interim order in Bal Pharma Ltd. Versus Centaur Laboratories Pvt. Ltd.

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