Infringement of Unregistered Trademark and defence of ‘Prior Use’

Research Note on Infringement of unregistered trademark

• Under the Lanham Act, the PTO administers a federal registration system for trademarks. See 15 U. S. C. §§1051, 1052. Registration of a mark is not mandatory. The owner of an unregistered mark may still use it in commerce and enforce it against infringers.
• In our jurisdiction(Malaysia), if the proprietor of common law or unregistered trade mark does not wish to file for registration under the Act, which he is entitled to, his common law right to the mark is nevertheless preserved by section 82(2) of the Act which provides “… notwithstanding sub-section (1) nothing in this Act shall be deemed to affect the right of action against any person for passing off goods or services as those of another person or the remedies in respect of thereof”.[1]
• An Administrative Panel has in an earlier case (WIPO Case No. D2001-1401) considered the scope of protection for unregistered trademarks under the German Trademark Act. According to Article 3, item 1. of that Act trademarks are: “Any signs, particularly words, including personal names, designs, letters, numerals, sound marks, three-dimensional configurations, including the shape of goods or their wrapping as well as other packaging, including colors or combinations of colors, which are capable of distinguishing the goods or services of one undertaking from those of another undertaking….”
• In the case at hand, in light of the evidence provided by the Complainant and also of the information available online on the use of the name “Gregor Fisken” in connection with the trade of historic cars, the Panel finds that the Complainant has reached a sufficient level of goodwill at least within the classic automobile industry and has thus established common law trademark rights in the unregistered trademark GREGOR FISKEN.

In view of the above, the Panel finds that the Complainant has proven that the Domain Name is identical to the unregistered trademark in which the Complainant has rights in accordance with paragraph 4(a)(i) of the Policy.[2]

• A. Identical or Confusingly Similar

To prove this element, Complainant must first establish that there is a trademark or service mark in which it has rights. To prove this element, Complainant must first establish that there is a trademark or service mark in which it has rights.

B. Rights or Legitimate Interests

Under paragraph 4(a)(ii) of the Policy, Complainant has the burden of establishing that Respondent has no rights or legitimate interests in respect of the Disputed Domain Name.

It is established case law under the Policy that it is sufficient for Complainant to make a prima facie showing that Respondent has no rights or legitimate interests in the Disputed Domain Name in order to place the burden of rebuttal on Respondent (see Champion Innovations, Ltd. v. Udo Dussling (45FHH), WIPO Case No. D2005-1094; Croatia Airlines d.d. v. Modern Empire Internet Ltd., WIPO Case No. D2003-0455; Belupo d.d. v. WACHEM d.o.o., WIPO Case No. D2004-0110).

C. Registered and Used in Bad Faith

Complainant must prove on the balance of probabilities both that the Disputed Domain Name was registered in bad faith and that it is being used in bad faith (see e.g., Telstra Corporation Limited v. Nuclear Marshmallow, WIPO Case No. D2000-0003; Control Techniques Limited v. Lektronix Ltd, WIPO Case No. D2006-1052).[3]

Indian Cases

• In Satyam Infoway Ltd. case [4]it was held that to establish an action of passing off three elements are needed to be established. They are as follows: (SCC pp. 150-51, paras 13-15)

(a) The first element in an action for passing off, as the phrase ‘passing off itself suggests, is to restrain the defendant from passing off its goods or services to the public as that of the plaintiff’s. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant’s goods or services are the plaintiff’s.

(b) The second element that must be established by the plaintiff is misrepresentation by the defendant to the public and what has to be established is the likelihood of confusion in the minds of the public that the goods or services offered by the defendant are the goods or the services of the plaintiff. In assessing the likelihood of such confusion the courts must allow for the imperfect recollection of a person of ordinary memory.

(c) The third element of a passing-off action is loss or the likelihood of it.

• In Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.[5] this Court laid down certain factors in order to decide an action of passing off on the basis of unregistered trademark. It has held that factors like nature of the marks i.e. whether the marks are word marks or label marks, the degree of resemblance between the marks phonetically similar and hence similar in idea, the nature of the goods in respect of which they are used as trademarks, the similarity in the nature, character and performance of the goods of rival traders, the class of purchasers who are likely to buy the goods bearing the marks they require, the mode of purchasing the goods or placing orders for the goods and any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks are to be considered.
• Learned Advocate for the petitioner next refers to Section 34 of the Trademarks Act which provides that nothing in this Act shall entitle the registered proprietor or registered user to interfere with the rights of prior user. He also draws my attention to Sections 27, 28 and 29 of the Trademarks Act and submits that the scheme of the Act is such that the rights of prior user are recognized superior than that of the registration and even the registered proprietor cannot disturb/interfere with the rights of prior user. He further submits that passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in course of trade and for prevention of restraint damage on account of the said misrepresentation. In support of his contention, he refers to a decision of the Hon’ble Supreme Court in S. Syed Mohideen v. P. Sulochana Bai reported in (2016) 2 SCC 683. It was held by the Hon’ble Supreme Court in the aforesaid report that the passing off action is essentially an action in deceit where the common law rule is that no person is entitled to carry on his or her business on pretext that the said business is that of another.[6]
• Sub Section (1) of Section 27 of the Trade Marks Act, 1999 mandates that no person shall be entitled to institute any proceeding to prevent or recover damages for the infringement of an unregistered trademark. However, sub-section (2) thereof saves the right to take action against any person for passing off his goods or services as the goods and services of the applicant and preserves the remedies to prevent passing off actions. Since our client does not have a registered trademark, it can have the case base on the action of passing off.[7]
• If two or more persons are registered proprietors of the trademarks which are identical with or nearly resemble each other, they shall not have exclusive rights of any of those trademarks to the exclusion of the persons whose identical marks are registered. However, the person who is having registered trademark will have the same right as against the other persons whose marks are not registered, as he would have if he were the sole registered proprietor. It is, thus, clear that the plaintiffs herein may not be entitled to an order of injunction against the persons who are having similar or identical trademarks with that of the plaintiffs and whose trademarks are registered. However, the plaintiffs would be entitled to enforce their rights against the persons whose marks are not registered as if the plaintiffs are the sole proprietor of their registered trademark. It can, thus, clearly be seen that since Plaintiffs’ mark is registered trademark and the defendants’ mark is not a registered one, the contention of the defendants in that regard is without any substance.[8]
• 11. In the case of N.R. Dongre v. Whirlpool Corporation reported in 1996 PTC 583 as cited by Mr. Chatterjee the Supreme Court upheld the decision of the Division Bench of Delhi High Court which held that Registration of the trade mark by the defendant was of no consequence in a passing off action and further that a trader needs protection of his right of prior user of a trademark, as the benefit of the name and reputation earned by him cannot be derived by a traders by illegal adoption of much known earlier mark followed by registration.[9]

14. In a decision of the Delhi High Court reported in 1997 PTC 347 in the case of Bimal Govindji Shah v. Panna Lal Chandu Lal the effect of Section 28 sub-sections (1) and (2) of the said Act have been explained and it has been held amongst others that, “in other words registration of trade mark does not provide a defence to the proceeding for passing off as provided for under Section 27(2) of the said Act the prior user of a trademark is entitled to maintain an action against a subsequent user of identical trademark including register user thereof.”

[1] Mesuma Sports Sdn Bhd v. Majlis Sukan Negara Malaysia, 2015 SCC OnLine MYFC 26

[2] Gregor Fisken Limited v. Private Registrations Aktien Gesellschaft CNR of Granby & Sharpe St., 2009 SCC OnLine WIPO 1120

[3] ETH Zürich (Swiss Federal Institute of Technology in Zurich) v. John Shao, 2016 SCC OnLine WIPO 106

[4] Satyam Infoway Ltd. Case, 2 (2004) 6 SCC 145

[5] Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., 3 (2001) 5 SCC 73

[6] SRMB Srijan Private Ltd. v. Super Smelters Ltd., 2019 SCC OnLine Cal 2444

[7] Cutis Biotech Sole v. Serum Institute of India Pvt. Ltd., 2021 SCC OnLine Bom 616

[8] SMS Formulations Pvt. Ltd. v. Sahib Singh Agencies (Bom.) Ltd., 2012 SCC OnLine Bom 1167

[9] EMCEE Pharmaceuticals Pvt. Ltd. v. Centaur Laboratories Pvt. Ltd., 2002 SCC OnLine Cal 617