The ambiguous concept of “Well-Known Trademark”?

The category of well-known trademarks is considered essential to protect those marks that are very popular and, thus, prone to the violation. Historically, the TRIPS Agreement of 1967 expanded and re-defined the scope of the “well-known trademarks” category. Following the Paris Convention and the TRIPS Agreement, the majority of nations amended their trademark legislation accordingly to include special protection for well-known marks.

What are well-known trademark, and why are they necessary?

Previously, well-known trademarks were protected under Section 47 of the Trademark and Merchandise Act of 1956, which only allowed for defensive registration and passing-off actions. Later, confusion and deception in the minds of the general public about the true owner of the trademark were pointed out as the main problem, especially for popular goods and services.

In Sunder Parmanand Lalwani & Ors v. Caltex (India) Ltd.^[1], the Bombay High Court held that CALTEX (a well-known mark) is capable of creating confusion and deception in the minds of people even though the two disputed parties’ goods and services are registered under different classes. Thus, the violation of someone’s goodwill due to the deceptive use of a well-known trademark is considered to be a serious issue by the courts.

After ratification of the Paris Convention and the TRIPS Agreement, the Trade Marks Act, 1999 was enacted, and the previous act was repealed. The Act defined well-known trademark in Section 2(1)(zg), stating, “a mark which has become so to the substantial segment of the public which uses such goods or receives such services that the use of such mark concerning other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark concerning the first-mentioned goods or services.” Thus, it purely prevents third parties from registering or using identical or deceptively similar trademarks, even if the goods or services are unrelated.

What is Rule 124 of Trademarks Rules 2017?

This rule determines that the trademark owner can go to the Trademark Registrar and apply for their Trademark in the category of well-known trademarks. The application to the registrar should also contain necessary documents to prove the popularity of that trademark. In addition, there are also stipulated fees along with documents.

Rule 124 r/w the Trademarks Act, 1999

There are several other sections in the Trade Mark Act of 1999, along with Rule 124, to protect well-known trademarks. For instance, Section 11(2) protects well-known marks across all classes. The scope of trademark protection accessible to well-known brands is expanded in this section. Well-known trademarks must be recognised and protected across all product and service categories. Similarly, Section 11(6) determines the factors taken into account when determining whether a brand is well-known.

These elements are:

1. The mark is well-known among relevant members of the public;
2. The extent to which the mark is used, as well as the geographical area in which it is used; and
3. The record indicates that the mark has become well-known.

The registration of a well-known trademark is not subject to any conditions as mentioned under Section 11 (9). The following are some specific requirements that are not required for the registration of a well-known trademark:

1. The fact that the trademark has been used in India;
2. That the trademark is protected by law with registration in the country;
3. The application for trademark registration was filed in India;
4. In any country other than India, the trademark is well-known or registered; and
5. The brand is well-known among the general public of India.
6. It might indeed be argued that for a trademark to be protected in India, the mark owner does not need to establish a firm in India or have the trademark registered there, nor does the brand need to be well-known among the general public.

Cases to determine the concept of the well-known mark

Section 29(c), which deals with infringement of registered trademark, when read with Section 11(2) of the Trademarks Act, 1999, protects the marks from infringement through the concept of dilution of the reputation of the well-known mark.

This unique concept of dilution is used by the courts on several occasions while dealing with infringement cases of well-known marks. For instance, in one of the cases where Facebook opposed when a bakery store was using FACEBAKE.^[2] They claimed that the mark FACEBOOK is a well-known mark in India, and the use of FACEBAKE is the sheer act of infringement and deception in the public domain. As a result, the court granted an Interim Injunction. This was granted on the contention of “well-known mark” rather than the foreseeable threat of confusion in public at large.

Similarly, in N.R. Dongre v Whirlpool Corporation,^[3] the plaintiff, i.e., Whirlpool, claimed for a permanent injunction against the defendant for deceptively using their well-known mark. However, the plaintiff has no prior supply of its goods that would lead to the presumption of popularity in India. Despite the lack of sales and reputation in India, the court acknowledged the “global goodwill” of the company and granted an injunction against the defendant. On the contrary, the courts have determined that goodwill in local markets, including sales and advertisements, are important factors to grant the status of well-known marks.^[4]

In Sarda Plywood Industries Ltd. v. Deputy Registrar Of TradeMarks,^[5] the Intellectual Property Appellate Board (IPAB) held that a one-year term was insufficient for a product to meet the condition of being distinctive under Section 9 of The Trademark Act, 1999. This position was reversed in the case of Britannia Industries Ltd v. Itc Limited when the court concluded that a product with distinctive packaging does not need to be distinctive for a set number of years.

While referring to foreign cases on well-known trademarks, recently, authorities in Denmark examined the dispute between Puma and DK company.^[6] The DK Company applied for a trademark registration which was opposed by PUMA on the contention of infringement of their well-known trademark. The Court decided that the trademarks of PUMA were determined to be more compact and to have a more variable course than those of DK COMPANY. As a result, the Board concluded that the brands express themselves in distinct ways and are not confusingly identical.

Extensive procedure to determine a well-known trademark

Under Rule 124 of the Trade Mark Rule, 2017, an application is filed for the determination of a well-known trademark. The following is the standard operating procedure in this regard:

1. Application to be filed under Section 124 of the TM Rules, 2017 via the official website’s online compressive e-filing platform. A detailed set of guidelines was already published in a public notice dated May 22, 2017.
2. Applications for the inclusion of a trademark in the list of well-known trademarks filed under Rule 124 are processed directly at TMR, Mumbai.
3. A dedicated section, called the “Well-Known TM Section,” has been established to process such applications in accordance with the prescribed protocol and to take action promptly.

Designated Officer In-charge of the Well-Known TM Section will ensure that:

• Basic examination of trademark applications filed under rule 124 for inclusion in the list of well-known trademarks must be completed within 30 days of receipt of the application.
• If any discrepancy is discovered by the Section-In Charge during the scrutiny process, a compliance letter will be sent to the applicant by post/email within seven days of the completion of the scrutiny.
• If any discrepancy is discovered by the Section-In Charge during the scrutiny process, a compliance letter will be sent to the applicant by post/email within seven days of the completion of the scrutiny.
• If the Tribunal finds no objections in the application, the mark is published in the TM Journal to elicit public objections, if any, under rule 124 (4) of the TM Rules, for ultimate judgment of acceptability:

If the Tribunal determines that the mark has already been determined to be a well-known trademark by a competent Court or Tribunal, the mark will be published in the TM Journal under rule 125 (5) of the rules.

• If the section or tribunal objects to the mark being included in the list of well-known trademarks, the matter will be scheduled for hearing before a hearing officer assigned to the section, and a hearing notice will be issued in conjunction with the hearing officer.
• After providing the applicant due notice, the hearing officer shall dispose of the matter by spoken order
• In most cases, where no hearing is required for acceptance, a decision should be made within three months of the date of compliance, if any. If it is determined that a hearing is warranted in the matter, the first hearing is usually scheduled within six months following the last compliance date.

4. If no objection is received within the prescribed time after the mark is published under rule 124 (4) or an objection-related proceeding is decided in favour of the applicant, the trademark is published as a well-known Mark in the TM Journal and added to the list of well-known trademarks under rule 125 (5).

Conclusion: For many, the well-known trademarks concept encourages biases and monopoly. This is due to the ambiguous criteria to grant special rights to one mark mostly based on the popularity of their goods and/or services. In addition, one of the threats from well-known mark owners is the act of “Trademarks Bullying“. This is covered and protected under Section 142 of the Trade Marks Act, 1999, which states that if a person threatens another person with any suit for infringement of a registered trademark or threatens with any other gambit, the other party may file a lawsuit. Besides the contentions, protection of popular marks which exhibits trans-border goodwill is of utmost necessity. Henceforth, global or local reputation is the ultimate deciding factor in the grant of well-known marks.

References:

^[1] AIR 1969 Bom 24.

^[2] Facebook, Inc vs Mr Noufel Malol CS(COMM) 499/2020.

^[3] (1996) 5 SCC 714.

^[4] Toyota Jidusha Kabushiki Kaisha v Prius Auto Industries; Tata Sons Ltd v Manoj Dodia

^[5] 2007 (34) PTC 352.

^[6] https://www.pv.eu/news/puma-dk-company-in-trademark-confct/.li

Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.