A trademark means a brand, label, name, signature, word, letter, logo, numeral, shape of goods, packaging or combination of colours, capable of distinguishing the goods and services of a person from those of others, as per section 2(zb) r/w section 2(m) of the Trade Marks Act, 1999 ("Act"). The proprietor of a trademark invests a considerable amount of time, money and effort to build a reputation and goodwill for his trademark, such that the consumers of his goods or services associate the goods or services offered by him with the trademark. As such the trademark has an economic value and it is an intangible property owned by its proprietor. Being a property, a trademark is capable of being owned and transferred. Further, if someone unauthorizedly uses the trademark, the proprietor of the trademark could resort to legal remedies.
The proprietor of a trademark has the option to register the same with the Registrar of Trademarks as per the provisions of the Act. Although registration is not mandatory, a registered trademark has certain advantages as opposed to an unregistered trademark. Thus, the effects of registration and non-registration of trademarks shall be discussed hereunder:
Right To Exclusive Use
The registration of a trademark shall give the registered proprietor of the trademark the exclusive right to the use of the trademark in relation to the goods or services in respect of which the trademark is registered as per section 28(1) of the Act. In other words after the registration of a trademark no one other than its registered proprietor or permitted user, is entitled to use the said trademark in relation to the goods or services in respect of which the trademark is registered.
Registration To Be Prima Facie Evidence Of Validity
As per section 31 of the Act, the original registration of the trademark and of all subsequent assignments and transmissions of the trademark shall be prima facie evidence of the validity thereof in all legal proceedings relating to a trademark registered under the Act.
Right To Sue For Infringement
If a mark that is identical with, or deceptively similar to a registered trademark is used by a person other than the registered proprietor or a permitted user, in the course of trade, in relation to goods or services in respect of which the trademark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trademark, such person is said to have infringed the trademark according to section 29(1) of the Act.
The registered proprietor of the trademark has the exclusive right to sue for infringement of the trademark as per section 28(1) of the Act. Whereas, as per Section 27 (1) of the Act, no person shall have the right to sue for the infringement of an unregistered trademark.
In a suit for infringement of a trademark, the court could grant reliefs by way of an injunction order restraining the person who infringes the trademark from using the trademark and could also order the person who infringes the trademark to pay damages to the proprietor of the trademark for such infringement, according to section 135(1) of the Act.
The proprietor of an unregistered trademark is not without a remedy in the event a person unauthorizedly uses his trademark. In such an event he could file a suit for passing off as per section 134(1)(c) of the Act. Passing off is a common law remedy based on the principle that nobody has the right to represent his goods as the goods of somebody else. In a suit for passing off the court could grant the same reliefs as in a suit for infringement of a trademark.
Infringement Of Trademark Vs. Passing Off
Although the court could grant the same reliefs in a suit for infringement of a trademark and in a suit for passing off, the degree of burden of proof significantly varies. As aforestated, the registration of a trademark is prima facie evidence of the validity of the said trademark in all legal proceedings relating to the trademark. In a suit for infringement of trademark the registered proprietor only needs to prove that the infringing trademark is identical with or deceptively similar to the registered trademark and that it is used in the course of trade, in relation to goods or services in respect of which the trademark is registered. Whereas in a suit for passing off the proprietor of an unregistered trademark has to prove that: i) he is the owner of the trademark, ii) there is some goodwill attached to his trademark, iii) he is the prior user of the trademark, iv) the person who unauthorizedly uses his trademark has misrepresented his trademark and v) due to such misrepresentation he has suffered a loss of business.
Further, in a suit for passing off, it is difficult to obtain an interim order injuncting the usage of an unregistered trademark by an unauthorized user, as the burden of proof is high. Whereas, as the registration of the trademark is prima facie evidence of validity thereof, it is comparatively easy to get an interim order injuncting the usage of a registered trademark by an unauthorized user. Interim injunction orders are important in case of unauthorized use of trademarks because otherwise, the unauthorized user could continue using the trademark until the disposal of the suit, which could be prolonged.
Assignability And Transmissibility Of Trademarks
As stated earlier a trademark is an intangible property owned by its proprietor having a certain economic value. A proprietor of the trademark, whether registered or unregistered, could assign or transfer the said trademark to another person as per sections 38 and 39 of the Act. Thus, the ownership of a trademark could be transferred to another person for consideration that its proprietor deems fit, just like the transfer of movable and immovable properties. Although both registered and unregistered trademarks could be transferred or assigned, a buyer would prefer a registered trademark over an unregistered one, because the registration of a trademark is prima facie evidence of ownership thereof and the registered owner is entitled to exclusive use of the trademark and has advantages as aforestated. As far as an unregistered trademark is concerned the buyer does not know whether the proprietor of the unregistered trademark is the first owner of the trademark. Also, it would be difficult for the buyer to pursue legal remedies in case of an unregistered trademark as opposed to a registered trademark.
Further as per section 45 of the Act, in case of assignment or transfer of a registered trademark, the person to whom the trademark is transferred or assigned should register his title with the registrar and once registered he shall be the proprietor of the trademark. Thus, in case of assignment or transfer of a registered trademark, the buyer would get a registered title. Whereas, in case of transfer or assignment of an unregistered trademark there shall be no such title.
Thus to conclude, while a registered trademark has certain advantages over an unregistered one, the rights of the proprietor of an unregistered trademark are also amply safeguarded by law.
Author is a practicing lawyer at Kerala High Court and a partner at M/s Cyriac & Cyriac