LegaLogic Legasee – IPR News Letter: Anil Rathi v. Shri Sharma Steeltech – Rejection of Plea for usage of Surname in the course of Trade-October-2020

Whether bona fide use of someone’s surname as part of a trademark can be considered as a trademark infringement?

The exception was recently dealt with by the High Court of Delhi in Mr. Anil Rathi (“Plaintiff”) vs Shri Sharma Steeltech (India) Pvt. Ltd (“Defendant”) CS (COMM) 654/2019. The Plaintiff and Defendant are engaged in manufacturing of steel products. Rathi Foundation (“Foundation”) is the registered proprietor of ‘RATHI’ trademark. An MoU and a Trust Deed were executed which laid down the terms of usage of the trademark between the members of the Rathi Family. Defendants Mr. Arun Kumar Rathi and Shrivats Rathi had granted license to use the Trademark to the Defendant. Plaintiff filed a suit for infringement of the trademark requesting the Court to pass an ex-parte ad interim injunction restraining trademark’s unauthorized use as well to restrain the grant of licenses by the Defendant. The Plaintiff established his claim on Rathi Foundation’s statutory right under Section 28 of the Trade Marks Act, 1999 (“Act”), that the registered proprietor has the exclusive right to use the trademark.

The Court held that the Defendant’s act of issuance of license in his personal capacity for the usage of impugned mark amounts to infringement, as the issuance is beyond the power of the MoU and Trust Deed. The Court observed that only the trustees of the Foundation had a right to issue licenses for use of the impugned mark and the Defendant being a beneficiary of the Foundation has no right to grant such a licence. The Defendant claimed that since it was a part of the Rathi family busines, it has a right to use the trademark under Section 35 of the Act. It was held that Section 35 of the Act will only apply to a full name and that also by a natural person and not by a legal entity, as it is restricted to personal use of marks and does not extend to the grant of licenses or use by artificial entities.

The use of the impugned mark by the Defendant was found not to be in a bona fide manner as it not only granted licenses for its use, but the entities that it was granted to were engaged in an identical area of business as the Rathi family. The Court noted that the Defendant being a beneficiary cannot plead ignorance concerning the terms of the MoU and Trust Deed.

Remedies in case of Counterfeiting

The Trade Marks Act, 1999 (the Act) does not define the term ‘counterfeiting’; However, the Act provides for the offences of ‘falsifying a trademark’ and ‘falsely applying a trademark’. Counterfeit marks include marks that are “substantially indistinguishable” from a genuine mark. Section 102 of the Act dealing with falsifying a trademark states that a person shall be deemed to falsify a trademark who, either without the consent of the proprietor of the trademark makes use of the trademark or any similar mark; or misrepresents any genuine trademark. A person shall be deemed to falsely apply to goods or services a trademark who, without the consent of the proprietor of the trademark applies to such trademark or a similar mark to goods or services or any package containing goods or uses any package bearing a mark which is identical or to the trade mark of the proprietor. Section 115 of the Act provides for remedies for counterfeiting of goods.

Any police officer not below the rank of deputy superintendent of police, if he is satisfied, that on offence has been committed can search and seize without warrant any instruments or things involved in committing the offence and all the articles which have been seized shall be produced before the Court. Further, under Section 64 of the Act, if the police officer is satisfied that an offence involving infringement of copyright in any work has been committed, he may, seize without warrant, all copies used for the purpose of infringing the copyright and shall be produced before a Magistrate. Counterfeiting is increasingly gaining the attention of government agencies as a serious threat of national importance. The government in 2016 took a major positive step in this regard by formulating a national IP rights policy, Scheme for IPR Awareness and establishing a dedicated cell for IP rights promotion and management for efficient administration and implementation of the policy. The cell has also been conducting IP rights awareness and training programmes for enforcement wings such as the police, Customs and judicial academies, in collaboration with rights holders and legal practitioners; this has helped to more effectively equip and educate enforcement wings to combat IP violations.

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