Remedies Against Trade Names That Incorporate Trade Marks of Others

Under the Trade Marks Act, 1999 (hereinafter “the Act”), a trade mark includes a trade name.

The Act states that a registered trade mark may be infringed owing to unauthorized use of the trade mark as a trade name or part of a trade name if the party accused of such unauthorized use is dealing in goods or services in respect of which the trade mark is registered. Similarly, an unauthorized use of an unregistered trade mark as part of a trade name may be an actionable common law tort of passing-off. There is adequate case law restraining the use of trade names that pass off unregistered marks covering goods or services different from the one in which the business concern deals.

The Act, however, fails to address the concerns of trade mark owners whose marks are registered in respect of goods or services different from the ones in which the offending enterprise deals. The question that necessarily follows is whether a trade mark owner could sue such an offending business concern dealing in different goods/ services, by invoking the plea of dilution of its reputed trade mark in India?

Courts in India are not consistent on this issue. While few courts are of the opinion that the statutory protection accorded to well-known marks in respect of dissimilar goods or services, is inapplicable to situations where such marks are infringed by being used as part of trade names, others are of the view that the above provision is a ‘no-fault’ provision which offers a higher degree of protection since there is no requirement to show that any confusion is likely to arise from the use by the infringer of the registered mark as part of its trade name.

The Delhi High Court, for instance, has considered the dishonest intention of the defendants in cashing on to the reputation and goodwill acquired by the plaintiff in quite a few cases and has restrained the defendants that deal in goods dissimilar to the ones in respect of which the plaintiff’s trade mark is registered, from using the plaintiff’s registered trade mark or any other mark identical with or deceptively similar thereto, as a trade name, corporate name or trading style.

Apart from trade mark law, an additional and independent remedy in respect of corporate names incorporating someone else’s trade marks, is available to trade mark owners under the new law governing companies in India.

The law governing companies clearly stipulates that the proposed name of a company would be considered undesirable if it includes the name of a registered trade mark or a trade mark which is subject of an application for registration, unless the consent of the owner or applicant for registration, of the trade mark, has been obtained by the promoters. Despite such an explicit criterion been laid down, cases of company names incorporating trade marks of others without authorization, are not uncommon in India.

Under the law governing companies, the registration granted to a company name may be cancelled if a company is registered by a name which is identical with or too nearly resembles a registered trade mark. The owner of the registered mark must petition to cancel an offending company name within three years of incorporation or change of name of the company.

The provisions of the law on companies evidently seem much wider in ambit than those of the Act as they provide trade mark owners the alternative of seeking cancellation of offending company names, regardless of the identity or similarity of goods traded in or services provided by the company. However, the effectiveness of these provisions is yet to be examined.