I think you would agree with me that protecting a brand has become increasingly difficult in this digital era, where originality is becoming a thing of the past. Recently, one of the most frustrating challenges awaiting brand owners at the time of filing a trademark application doesn’t seem to be the lengthy registration process of the Registry, but instead the discovery of an already registered identical mark which primarily raises two red flags – One, a third-party is infringing their rights through unauthorised use which they had no idea about; and Two, they can’t register their brand immediately even though they are the rightful owner of it.

To add more clarity to this, ‘Trademark squatting’ – in which one person obtains registration for a trademark which does not actually belong to them nor do they have any right/ claim over the same – has evolved into an actual business today. This practice of a person obtaining registration with mala fide intention & bad faith, in turn, acts as a huge hinderance for the true owner/ proprietors in obtaining registration for their mark as our law does not allow for the registration of any identical/ confusingly/ deceptively similar marks under Section 11 of the Trade Marks Act, 1999. The infringing mark is highly likely to be cited as conflicting in the examination report, and unless the owner can provide reasons to overcome the objection, the application would not proceed towards acceptance and subsequently registration.

Recently, we had a case wherein our Client’s IR application was provisionally refused by the Indian Registry due to the existence of an already registered identical mark. We are well aware that there are circumstances where identical/ similar marks are registered by honest users at times, however, this case seemed to be different. Upon perusal of the conflicting application, the mark (which was identical to our client’s, who is a leading business entity in foreign jurisdiction but was yet to enter the Indian markets) seemed to have registered the identical mark for the exact same goods which our client offers on a proposed to be used basis. This was an immediate cause of concern which prompted us to research on the adverse party and his mark, but we were unable to find any use of the conflicting mark through extensive search on the internet even though the mark had been registered for nearly 5 years. However, the situation became pretty clear when we went on to look for other trademarks registered by the adverse party and found about fifteen other registered marks of other popular foreign brands which too hadn’t entered the Indian markets yet like our client but did have extensive presence in many other jurisdictions for several years. We quickly understood that the case seemed to be standard case of trademark squatting, wherein the adverse party seemed to be in the habit of squatting and obtaining trademark registrations for brands which had yet not entered the Indian markets and was probably hoping to get payouts from these brands when they eventually notice the adverse party’s registration and try to enter into negotiation with him in order to register their marks in that country. Out of those 15 registrations, there is a possibility of at least a few brands choosing to pay him off, rather than choosing to deal with the hassles of long drawn out legal processes, which would work to his advantage since it would still be a lot more than what it cost him to obtain all the registrations.

So, how do you approach this issue when your brand is caught in the middle of it?

Here’s what you can do:

  • Firstly, if you did find any use of the infringing mark, you can proceed to conduct an on-ground investigation to determine the actual extent of use of the infringing mark in India. Do note that India follows the principle of territoriality, which basically means the prior user of the mark in India would be given protection unless the transborder reputation and well-known status of the mark can be strongly established. Considering this, it is good to know the actual extent of use of the infringing mark based on which you will be able to strategize your further actions more appropriately.
  • Cease & Desist Notice – If you are dealing with a repeat squatter, sending a cease & desist notice might probably do the trick. You can ask for the infringing party to stop use of the mark (if any) and demand for the assignment of the infringing mark to you. Alternatively, you can simply ask the adverse party to withdraw their application and get a written undertaking of all the terms and conditions you deem necessary for preventing misuse of your brand once again. This is the most cost effective and time conscious way to prevent squatters.
  • Cancellation proceedings – Even though Cease & Desist notice works in few cases, the more effective strategy for the stronger protection for your rights and brand would be to initiate Cancellation proceedings against the other party’s infringing mark. You can initiate the proceedings based on mala fide intention/ bad faith under Section 47 and 57 of the Act and prove your bona fide rights in the mark along with your arguments as to why the other party’s registration was obtained in bad faith and is an infringement of your rights.
  • Social media & E-commerce takedowns – In case you do find infringing use of the mark on social media or e-commerce platforms, make sure to take appropriate measures separately for taking down of those contents, as those affect your rights more adversely considering the power of digital media today. You can read more about the ways to do the same at our blog available here.

Over the years, we have come across many such cases where people obtain registrations in bad faith without any bona fide rights in the marks either to sell counterfeit products in ecommerce platforms or to simply bully the original owners into paying them off in the pretext of ‘negotiations’/ ‘amicable settlement’. Regrettably, most owners do end up paying the amount to save time and avoid the hassles of long drawn out legal proceedings as cancellation proceedings take about 2 to 3 years until conclusion in India.

We strongly recommend true owners to keep monitoring the Global Brand Database regularly, to check for new applications for your brands by third parties. It is always easier to prevent the registration at the when the application is still being prosecuted rather than to cancel a registered trademark.

Can the Examiners be blamed for granting registrations to such infringing brands?

While it is impractical for the Examiners in the Trade Marks Registry to check upon the veracity and ownership for each and every application, especially taking into account that our law provides for the applications to be filed on a proposed to be used basis which makes it impossible to find out who coined and invented the term, it is not unreasonable to expect Examiners to carry out basic additional due diligence such as a cursory internet search. Additionally, in India, when a mark is examined for similarity with existing marks, Examiners run a search only within the Indian trademark database, to the exclusion of brands which do not yet have an Indian presence.

Hence, it is high time that the process of examination of a trademark takes into consideration existing registrations in various other jurisdictions especially since the goodwill and reputation of brands are transcending boundaries in this digital age. While it is important that brands keep a careful watch and enforce their rights, it is not feasible for them to keep monitoring for mala fide registrations in all the countries around the world. It is important for transborder reputation of true brands to be given weightage at the examination stage. A simple internet search or search in the Global Brand Database for the applied mark by the Examiner would clearly indicate the true proprietorship and could prove to be very useful to avoid the registration of such infringing marks. In case of doubt, the Examiners can always ask the applicant for proof of relation to the true brand owner instead of allowing the mark to proceed towards acceptance and registration. Any honest adoption of a similar mark would surely not be identical to the true brand nor would it be applied for identical goods, and thus the rights of honest users would also be protected.

Practically, it should also be taken into account that a person who is intentionally replicating and registering marks is more likely to be doing it on a regular basis, affecting the rights of many true owners and not just one. Unfortunately, even if one is sure that the adverse party is a regular squatter, there is no provision to check the validity of all his registrations or initiating proceedings against him as a whole. This has also truly become a need of the hour!

We can only hope for the existing provisions of the legislation to be amended to include the ways to mitigate squatters, failing which the very purpose of protecting IP rights would be at threat in the near future.

Written by Keerthana K