Loss of Trademark Rights

Contrary to popular belief, you can lose your trademark even after registration. This article cites court rulings to help uncover this complex subject and introduces to you to various grounds under which you might lose your trademark even after registration.

In October 2013, in the case of M/s ITC Ltd. vs. M/s Cadbury Schweppes Overseas Ltd., the Intellectual Property Appellate Board (IPAB) in a surprise order directed the Registrar of Trade Marks to remove three of Cadbury’s trademarks registered under Nos. s.298102, 353398 and 327607 from the Register.

It all began when in April 2005, Cadbury slapped an ex-parte injunction restraining ITC from using the trademark “Eclairs” or any other deceptively similar trademark.

On background research conducted on the use of all four trade marks in question i.e. Cadbury’s Chocolate Éclairs (a label mark), Cadbury Chocolate Éclairs (a label mark),

Chocolate Éclairs Pop (a label mark) and Cadbury’s Orange flavoured Chocolate Éclairs (a label mark), ITC filed rectification petitions before the IPAB.

One of the trademarks was automatically removed owing to non-renewal, whereas the other three trademarks were removed,

On the basis of arguments tendered by both parties as well as evidence brought on record, which proved that though Cadbury had filed registration certificates obtained in various countries, there was nothing in support of usage of the same.

The Board therefore held on account of section 47 of the Trade Marks Act, 1999, that registration alone would not prove use of trademarks, the same were liable to be cancelled if allegations of non-use are not rebutted by registered proprietors (as Cadbury had done in the instant case).

As surprising as it may seem to laymen and even entrepreneurs seeking to secure trademarks for their business, it is pertinent to note that merely registering a trademark cannot guarantee its survival in perpetuity.

Section 47 of the Trade Marks Act, 1999 provides for removal of a registered trademark in two scenarios, if it is proved that:

1. The trademark was not registered with a bona fide interest and was not put into use three months prior to the date of application
2. If there has been continuous non-use of the mark for a period of 5 years

Exceptions couched under clause 3 of section 47, are allowed on the following grounds: if the non-use of the trade mark can be proven due to due special circumstances in the trade, which includes restriction on the use of the trade mark in India imposed by any law or regulation but does not include any intention to abandon the trade mark in relation to the goods or services to which application for removal relates.

In May 2013, yet another proprietor, a Kolkata-based firm faced cancellation of the trademark ‘Haldiram Bhujiawala’ on account of non-use of the trade mark by the registered proprietors, thus attracting removal under section 47 of The Trade Marks Act. Other grounds included lack of evidence proving distinctiveness of the mark as well as suppression of certain material facts.

It may be noted that where there has been proved no bona fide intention on the part of the proprietor to trade in or manufacture the other articles or goods falling under a particular class but has obtained registration of its trade mark under that class which covers several other articles or goods, registration is liable to be rectified confining it to the specific articles or goods which are actually intended to be traded in or manufactured” as held in Vishnudas Trading as Vishnadas Kishendas Vs. Vazir Sultan Tobacco Co. Limited.

Other grounds leading to Loss of Trademark

1. Improper assignment of trademark – When third parties are licensed or authorized to use the mark and fail to adequately control the quality of goods or services offered under the trademark, this can lead to loss of rights over the said trademark. In this case, consistent monitoring is necessary to ascertain proper usage and quality control under the mark so as to main the distinctiveness and goodwill of the same and maintain market trust in the goods/services offered. Improper licensing may also lead to confusion among the public as to source or origin of the product. So this must be guarded against, and this can be done by clearly demarcating the licensee’s rights and limits in structured guidelines annexed to the main licensing agreement.
    
2. When the mark becomes generic – The primary function of a trademark is to distinguish certain classes of goods or services provided under a distinct mark, which essentially acts as the representative of such products, and trace it back to the owner.

Genericide however, can spell the death-knell for the expansion and reach of a trademark. This happens when the public associates the trademark with a general category of goods or services rather than trace it back to the intended owner. For example, Asprin for acetylsalicylic acid pain reliever, cellophane for transparent cellulose sheets, pilates as a form of exercise have all held to be generic by the US Supreme Court. In short, no matter how fanciful, suggestive or descriptive the mark is, once it becomes generic like “Google” or “XEROX” it faces danger of extinguishing the rights associated with it.

To avoid getting embroiled in such situations, one needs to consistently work on new strategies to educate the public about the brand, as well as invest in advertising and marketing to keep the uniqueness of the brand alive in the minds of the public. Efforts need to be made to not use the mark as a verb, or in plurality to protect its distinctiveness.