Ease of doing business - Can the Trademark law be simplified?

One of the important factors that determines favorable environment for doing business is the ease of registration of Trademarks as well as proper administration and management of registered marks. Protection of Trademark is paramount. It ensures that nobody else can take undue advantage of brand's goodwill and reputation. It is therefore quintessential that this process is not too cumbersome. At the same time, it is also important that the process should protect and efficiently manage the registered marks to ensure uniformity and parity in trade and commerce.

Before reviewing the effectiveness of the Indian Trademark registration and post-registration process, let us first analyze Trademark registration processes of some of the developed countries.

An application for registration of Trademark in the United States of America needs to identify the precise goods/services that the applicant deals or wishes to deal in. Once the application is filed with the USPTO, it is checked for compliance with minimum filing requirements. The application is then examined, wherein the examining attorney either approves the mark for publication, or raises objections and intimates the applicant. If the applicant is able to satisfactorily address these objections, then the mark is sent for publication in the "Official Gazette" of USPTO. The mark is then open to opposition by interested third parties for a period of 30 days from date of publication. In the event there is no opposition, the applicant is issued a certificate of registration, provided that the mark is already in use at the time of application. For marks that are applied on "intent to use" basis, at this stage, a notice of allowance is issued by the USPTO, wherein the applicant is provided time to submit a ‘Statement of Use’ of the mark in US Commerce. It is only after the ‘Statement of Use’ with evidence is filed, the USPTO issues the registration certificate. Further, post the registration of mark it is also a requirement that the registrant files relevant ‘Use’ documents, also known as specific maintenance documents, from time to time in order to keep the registration "live". Failure or default in filing the maintenance document may result in cancellation of the registration.

Similar process is followed in Canada, only difference being that once the notice of allowance is issued, applicant is required to pay the registration fee along with declaration of use of the mark.

Hence, for the purpose of securing and maintaining registration in the US & Canada, it is essential that the mark is actively used in the respective countries.

The process of registration in Australia, China, EU and Singapore are also almost similar. The only difference being that there is no prerequisite to show actual use of the mark in these countries. However registration may be subject to cancellation if the mark is not used for 3 (or more) consecutive years. There is no automatic cancellation, but is based on a dispute raised by another party.

The process in India too is more or less similar. Upon filing of application, the Trademark Registry examines the application and issues the examination report. The applicant is given time to comply with the report, and in most of the cases, the application is then listed for hearing before the Registrar of Trademarks. During the hearing, Registrar may require the applicant to file an affidavit to testify the use of the marks, along with exhibits showing that the mark has been used. If the Registrar is satisfied, an acceptance order is issued, after which the mark is published in the Trade Marks Journal. If there are no oppositions within 4 months from date of such publication, the registration certificate is issued. India does not have a prerequisite or continuing use criterion. Marks can also be registered on a proposed to be used basis. However, if a mark has not been used for 5 years or more, such registration is liable for cancellation, based on a dispute raised by another (interested!) party.

The registration process followed by India, China, Australia, European Union and Singapore, are similar to that of Canada and the USA. They all permit application for registration of a mark which is either in use at the time of application or is intended to be used. However, if the mark is filed on ‘intent to use’ basis, the first five systems do not require the applicant to show actual use of the mark, prior to issuance of a certificate of registration. The latter two, on the other hand, require the applicant to mandatorily show use by way of submission of a declaration of use, before the mark is bestowed with "registered mark" status. Further these two countries also require the proprietor to be explicit and specific in terms of describing the nature of goods or services provided by them, for which they are seeking to register the trademark, and also prove use of trademark with respect to all the specified goods/services. This ensures that there are no frivolous registrations that are granted, which may stand in the way of genuine proprietors who are actually involved in that particular commerce.

In the absence of such regulations, for instance in India, we have seen umpteen instances where entities have abused the process of law by misusing trademark registrations for their selfish motives and hijacking marks (even common names) by registering them in all the classes (including classes in which they have never manufactured any goods, and apparently they never will), to harass and file frivolous litigations against other businessmen who have honestly adopted and used the trademark in totally different trade and business.

In one of the cases (Taegu Tec Ltd. vs. T.T. Industries) where the applicant registered the mark in all classes, the Intellectual Property Appellate Board stated that such act is only an exercise to block the register against genuine business competitors seeking protection for unrelated goods, and exposed the intent to traffic on the trademark. The Board further stated that such practice is against the mores and conventions of Indian business practice and is completely against the spirit and raison d'etre of the Act 'Óne product, one mark, one source'.

In yet another case (Kamdhenu Ispat Ltd. vs. Kamdhenu Pickles & Spices Ind. Pvt. Ltd.), wherein plaintiff registered its mark in all the classes and filed a suit for infringement of trademark, the Delhi High Court said that Trademark law, does not imply formalistic or ritualistic application of abstract principles; its existence and rationale is to protect businesses built up to match certain standards. If a trader or manufacturer uses words that acquire some distinctiveness, he is undoubtedly entitled to protection in respect of the goods he deals in. However, merely because he acquires registration (of the mark) he does not become its exclusive owner.

Not only does this frustrate genuine businesses in view of contesting such frivolous litigations, but also the precious time and effort of Courts and the Registry is wasted by making them endure the process of trademark registration and maintain/ enforce it.

Furthermore, post the registration of Trademarks, there is no monitoring or maintenance process that ensures that the non-used marks are identified and removed, unless they are brought to Registry's notice (by an interested party, who basically will be a deprived/ suffering litigant who is slapped by an infringement case by the proprietor of the mark). This paves way and feeds fodder to an increasing number of frivolous registrations as well as litigations.

The systems in Canada and the USA are such that the registrants are required to file maintenance documents from time to time even within the registration validity period, so as to prove that the mark in effect is being used. This proves to be an automated way of keeping a check on non-use of marks and exposes proprietors to the risk of cancellation. This also dissuades applicants from wasting resources on frivolous registrations since there is a risk of almost immediate cancellation in the event of failure to prove use.

Overall the Canadian and American systems seem far more prudent in terms of ensuring better protection and administration of Trade Marks as well as protecting the general interests of its business. With India emerging to be a market superpower in the near future and propagating the need to relax stipulations for the ease of doing business, we feel that India should adopt such a model and modify its statutory policies so as to administer a Trademark registration system which is more vigilant, self-regulatory and business friendly.