'Trade Mark Squatting' Amounts To 'Bad Faith' Within Meaning Of S. 11(10)(ii) Of Trade Marks Act: Delhi High Court

The Delhi High Court, while directing removal of a word mark from the register of trade marks, has observed that 'trade mark squatting', which is an internationally known intellectual property misdemeanour, would certainly amount to “bad faith” within the meaning of Section 11(10)(ii) of the Trade Marks Act even if the term does not find a special mention in the law.The court held that the real intent and purpose of Section 11(10)(ii) is to disentitle registration of a mark, the request for registration of which is tainted by bad faith.Justice C. Hari Shankar was dealing with a petition under Section 57 of the Trade Marks Act, filed by the BPI Sports LLC, seeking removal of the trademark “BPI SPORTS” registered in favour of one Saurabh Gulati. The bench observed that Gulati was aware that the mark was registered in the name of BPI Sports in the USA and that the company enjoyed global repute in the said mark."There is no dispute, in the present case, of the fact that the respondent was the importer of the petitioner. It was in his capacity as such importer that the respondent was actually using the mark BPI SPORTS which, later, the respondent has registered in its own favour, for identical goods. The intention of the respondent to capitalise on the petitioner‟s reputation with respect to the said mark appears, therefore, to be transparent," said the court.The court said that there was a clear intention to steal the mark of the petitioner-company, so as to block the company’s attempt to have it registered in its name in India, which is also the textbook definition of trade mark squatting.BPI Sports argued that Gulati had fraudulently obtained registration of the mark “BPI SPORTS”, which belongs to it and stands registered in its favour in the US.It alleged that Gulati was resorting to trade mark squatting, as he had no intention of using the mark and had merely got it registered in its favour to avoid it being registered in favour of the petitioner-company. It claimed that Gulati was only importing goods under the impugned mark and had no intention to use the mark in India.The US based company further said that it is a leading player in the dietary and nutritional supplements sector and that the word mark “BPI SPORTS” stands registered in its favour in the US in respect of dietary and nutritional supplements. As per the company, it started using the mark “BPI SPORTS” in India in January 2019.BPI Sports argued that as the prior adopter and user of the mark, which was registered in its favour in the US, it would entitled to claim common law rights over the mark, in preference to Gulati.The court dismissed the contention of the petitioner-company that the registration of the word mark “BPI SPORTS” in favour of Gulati infringed its registered trade mark. "This is an obviously incorrect submission, as the petitioner holds no registration in its favour in India of the mark BPI SPORTS either as a word mark or as a device mark, and infringement, under Section 29 of the Trade Marks Act, can only be of a registered trade mark," it added.The bench noted that Section 11(1) and (2) are applicable where the mark whose registration is sought, is identical with, or similar to, an “earlier trade mark”. While holding that BPI Sports’ trade mark is not a “well known trade mark”, as defined in clause (zg) of Section 2(1) of the Trade Marks Act, the court said, “The petitioner’s marks, therefore, do not qualify as “earlier trademarks” for the purposes of Section 11. Sub-sections (1) and (2) of Section 11 would not, therefore, apply in the present case.” The bench further dismissed the argument that by use of the said mark, Gulati was seeking to pass of its products as that of the petitioner-company and, therefore, for that reason, the mark was not entitled to registration under Section 11(3).“For a mark which is primarily used in abroad, if a case of passing off, against an Indian mark is sought to be made out, the plaintiff has necessarily to establish that the reputation of the mark abroad has spilled over into India, to the extent that the plaintiff has sufficient trans-border reputation, as would make out a case of passing off,” said the court.While holding that the company had failed to make out a case of worldwide or global reputation of the “BPI SPORTS” mark, the court concluded, “Sub-sections (1) to (3) and Section 11 of the Trade Marks Act, which stand specifically and exclusively invoked in the petition cannot, therefore, come to the aid of the petitioner.” The bench, however, said that BPI Sports was entitled to relief on the basis of Section 11(10)(ii) of the Trade Marks Act, which requires the Registrar, while registering the mark, to take into consideration the bad faith involved either of the applicant or the opponent affecting the right relating to the trademark.Referring to Section 11(10)(ii), the court said, “Though the provision is worded in a somewhat open-ended fashion, requiring the Registrar to,...

'Trade Mark Squatting' Amounts To 'Bad Faith' Within Meaning Of S. 11(10)(ii) Of Trade Marks Act: Delhi High Court

Parina Katyal

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