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Honest Concurrent User of Trademarks

By Shradha Sharma | Views 21926

This article aims to explain the exception of Honest Concurrent User for the registration of trademarks. The article firstly explains the concept of Honest Concurrent User as enriched under Section 12 of the Trade Marks Act, 1999[1]. Concurrent use is when users have similar marks on similar or non-similar goods.

The main contention to prove the honest concurrent use is that the applicant has been using the mark in good faith and/or he didn't have the knowledge of the earlier registered trademark and thereafter explains the legal requirements to prove the claim of the bonafide user of the Trademark.

Furthermore, the article discusses five landmark Judicial Pronouncements in detail to give a broader view on this exception to the general rule that no trademark will be recognized when it is identical to a registered trademark. The article would give a wholesome view in a capsule.

Introduction
A Trademark which is similar to an already registered trademark would not be recognized. According to Section 11 of the Trade Marks Act, 1999, a trademark shall not be registered if it is similar to a registered trademark. This provision is there to prevent confusion among the consumers as to the ownership or origin of the goods claimed.

Defence of Honest Concurrent User
For a trademark to get protection under the Trade Marks Act, 1999, it has to be registered with the Registrar of Trade Mark. When an application is filed for registration, it can be objected by the Registrar under two broad grounds, that is, Absolute Grounds & Relative Grounds. Section 9 of the Act governs absolute grounds for refusal of registration whereas Section 11 lays down relative grounds for refusal of registration of the trademark.

Section 11 basically prevents a mark which is identical to a previously registered mark from getting registered. When the registration is objected under Section 11 of the Act, the applicant can put forth several defences. Honest Concurrent Use as mentioned under Section 12[2] of the Act is one of those grounds on which the applicant can make use of, to defend from getting tangled in a trademark infringement battle. Section 12 governs the doctrine of Honest Concurrent User.

Concurrent use is when users have similar marks on similar or non-similar goods. The main contention to prove the honest concurrent use is that the applicant has been using the mark in good faith and/or he didn't have the knowledge of the earlier registered trademark. The applicant also has the burden to prove that the relevant customers associate their mark with their product or service.
Proof of the Claim
The section also provides that the registration of such a trademark is upon the subjective discretion of the Registrar, thus the Registrar of Trademarks is no way obliged to register such mark.
Documents to prove Honest Concurrent Use:
Some of the documentary evidence which would prove honest concurrent use under Section 12 of the Act are:
1. If it is a mark already in use then the evidence to prove the term of usage of the mark;
2. Advertisements of the mark and the proofs of the funds spent on the advertisement of the mark;
3. The applicant can also submit books of accounts showing the yearly sales figures for goods/services offered under the mark.
The above evidence helps the applicant to prove that the consumers have started associating the mark with his product/services offered under the trademark.

The law pertaining to 'honest concurrent use' was first laid down in Kores India Ltd v. M/s Khoday Eshwarsa and Son in relation to Section 12 Clause 3 of the Trade and Merchandise Marks Act 1958. It was held that the following facts are required to be taken into account while determining the registrability of a trademark under the said provision:
1. The genuineness of the concurrent use
2. The quantum of concurrent use of trademark shown by the applicant having regard to the duration, area, and volume of trade and to the goods concerned.
3. The probability of confusion resulting from the similarity of the applicant's and opponent's trademarks, as a measure of the public interest or public inconvenience.
4. Whether any instances of confusion have on record been proved
5. The relative inconvenience that may be caused to the parties concerned.
Judicial Pronouncements
1. Lowenbrau AG v. Jagpin Breweries Limited
  In the case of Lowenbrau AG v. Jagpin Breweries Limited[3], the plaintiff Lowenbrau and the defendant Jagpin Breweries, both companies incorporated in Germany were involved in the dispute over the usage of the term 'Lowenbrau' for their liquor in India. The Court held that the word 'Lowenbrau' means lion's drink and had also been used by many other beer manufacturers in Germany for a substantial time, thereby making the word mean the same with beer of German origin and source.
  
  Furthermore, the plaintiffs failed to take any legal action against the defendants for a long time as both of them were involved in their business in other countries as well. It was the case of that the word 'Lowenbrau' having become public Juris or a generic word.
  
  After taking into consideration the high quantum of sales of the defendant's products, the Court did not find merit in the grant of injunction in favour of the plaintiff and therefore, allowed the defence of honest concurrent users in favour of the defendant along with damages to the extent of Rs 20,000.
2. London Rubber Co. Ltd v. Durex Products
  In London Rubber Co. Ltd v. Durex Products[4] the respondent made an application before the Deputy Registrar of Trade Marks for registering the trademark, "Durex" used by it on the packing of the contraceptive products manufactured and marketed by it.
  
  The registration was disputed by the appellant on the ground that it has been using the trademark "Durex" in India ever since 1932 and its registration was renewed in the year 1954 for a period of 15 years. The Deputy Registrar of Trade Marks overruled the objection and admitted the mark "Darex" to registration as prayed by the Respondent.
  
  An appeal preferred to the High Court against this order was also dismissed. The appellant's main contention in the Appeal was that as the arks are identical, the registration had to be refused under s. 8a of the Act, the provisions of which are not subject to the provisions of s. 10 (2). Furthermore, the requirements of the section. 10 (2) were not satisfied in this case and its provisions were not applicable.
  
  The Supreme Court held that Section 10(2) of the Trade Marks Act, 1940 permitted the Registrar to admit registration of marks which are identical or nearly resemble one another in respect of the similar goods or description of goods provided he is of the opinion that it is proper to do so because there was honest concurrent use of the mark by more than one Proprietor or because of the existence of special circumstances.
  
  The Supreme Court further held in the said case that the provisions of Section 10(2), were by way of exception to the restrictive provisions contained in the Act, and hence they override the provisions of Section 8(a) and 10(1) of the old Act.
  
  It was also held in the same judgment that even the quantum of honest concurrent use is of no significance and even a small trader is entitled to the protection of his trademark in case there is honest concurrent use. However, the Registrar and the learned Judge did not go into detail with regard to the claim made by the appellants regarding honest concurrent use, with reference to any of these salient features.
3. Goenka Institute of Education and Research v. Anjani Kumar Goenka
  In Goenka Institute of Education and Research v. Anjani Kumar Goenka,[5] both the applicant and respondent had "Goenka" as a principal part of their trademarks, the competing marks were Goenka Public School and G.D. Goenka Public School.
  
  Honest and concurrent use was established through of the following: first, it was established that both parties started using the word "Goenka" around the same point time, secondly, one institution was based in Delhi and the other in the state of Rajasthan so the appellant could not have known of the respondent's mark when he started using the same and lastly, the fact that Goenka forms part of the appellant's trust name, all pointed to honest and concurrent adoption.
  
  Hence, the Registrar allowed both marks to be registered along with certain conditions, such as the Appellant was directed to insert the name of their trust in brackets below the name of their school in order to clarify and differentiate between the two trademarks.
4. Satilila Charitable Society v. The Skyline Educational Institute
  Once again, in the case of Satilila Charitable Society v. The Skyline Educational Institute[6], an engineering institution in the name of Skyline was allowed to be continued despite the existence of Skyline business school of the other party. The Court held the following that, to say the least, the present litigation is to have more commerce in education and less education in commerce.
  
  Private commercial houses by the advertising name of foreign universities lure students in this country. All these exercises are not only in the realm of imparting education but knowing fully well that in India the name of a foreign university is lucrative enough to get a larger chunk of money from the pockets of the parents.
  
  The Court also observed that a student who would like to go to an educational institution is not a lay customer. If he/she prefers to go to a specific college, say, St Stephens College or Hindu College in the NCT Delhi, he/she will go to these colleges and not to others although there may be other colleges with similar names.
  
  The Court was thus of the view that students are sufficiently aware of the credentials of the institutions they wish to enrol in and thus there would be no likelihood of confusion among the student fraternity.
5. Dr. Reddy's Laboratories Ltd v. M/s. Reddy Pharmaceutical Limited
  In Dr.Reddy's Laboratories Ltd v. M/s. Reddy Pharmaceutical Limited[7] Dr. Reddy was the trademark adopted and used by Dr. Reddy Laboratories ever since 1984 and has acquired reputation and goodwill. Nevertheless, application for registration of this mark was filed only in 2001 under various classes.
  
  Reddy Pharmaceuticals Ltd, the Respondent herein, was an agent of Dr Reddy Laboratories for about 10 years. This association was terminated in 2003 and on 17th April 2003, the Respondent filed the impugned trademark application for the trademark 'Reddy'. Though the respondent's application was filed subsequent to the applicant's application, the mark was registered in favour of the respondent in the year 2005 under 'medicinal and pharmaceutical preparations'.

The IPAB observed that the Appellant was the first to apply for the mark in 2001 and the respondent's application was subsequent to the applicant's in the year 2003. Hence, the registry erred in accepting the respondent's application. The Appellate body further stated that it is true, law recognizes and preserves the right which every man has to use his own name including for carrying on trade/business provided such use is not fraudulent.

In the present case, it was held that all the facts point towards the fact that the respondent deliberately adopted the impugned mark to confuse the public. It was not a bonafide user and therefore the respondent could not take the support of honest and concurrent use under Section. 12.

Conclusion
To conclude, upon claiming honest concurrent use after receipt of a similarity objection or opposition, the applicant or the defendant should produce conclusive evidence to substantiate such claims of extensive, honest, and concurrent use of the mark. Extensive, honest, and concurrent use of the disputed mark does not negate, instead, it mitigates the likelihood of customer confusion due to the conceptual similarity of the marks.

The primary objective of a TradeMark is to act as a source finder, and if two identical or similar marks can exist without any public confusion then the mark can be registered, subject to the discretion of the Registrar.

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