Trademark Rights: The Underdog Atma Nirbhar By CS Shubham Budhiraja


INTRODUCTION

Indian economy at eve of Independence was characterized as backward and stagnant economy coupled with poor Infrastructure, low productivity and Industrial failures. The Primary goal was to achieve self-sufficiency in matter of food security. Though there were plans (not goals) to achieve structural transformation and Industrial Policy of 1956 and Green revolution, 1960’s are instances of same.  The Principles of Comprehensive planning were adopted to achieve aims of socialistic and capitalistic views. Though the goals of compressive planning seem to be a social distancing objective with regulated economy and worst crunch of foreign reserves pushed India to expand its horizon to the globe. This marked the beginning of market economy where demand and supply forces determine the system. Indian policies has always been uncertain of exclusive capitalistic (market economy) or exclusive socialistic (regulated economy). It has always remained a question of debate with regard to the composition of mixed economy. One who favor the dominance of socialistic features, argue for principle of socialist in preamble and concept of social welfare state and substantive equality. On the other hand one who favor the dominance of capitalistic features, argue for private rights of business, occupation & profession and liberal economy.  The truth is that no country in the world can claim itself to be exclusive socialistic and exclusive capitalistic even though manifested as same. The only difference between India & other countries is an expressive balance of mixed economy. Indian economy expressively guide itself with balancing features whereas the countries impliedly perform the same as and when required. Pre 1991 LPG, Indian economy was having a defensive approach and same is evident through policy of import substitution. The policy of Import substitution focused on protecting the domestic economy by restricting the imports. Post 1991 LPG, the import substitution sustain with an amendment that result into promoting the domestic economy with export promotion and same policy is still in subsistence. Post 1991 marked as structural transformation with objective of achieving growth with development.

Hence, it is submit that the Policy of Atma Nirbhar is a new version of Import substitution with a tyndall effect which has scattered the lights of export promotion with an objective to achieve self-sufficiency without expressly compromising the imports in a short run, the result of which in long run supposed to be uplifting of domestic economy.

GLOBAL TREND

From the early days of the Silk Road to the creation of the General Agreement on Tariffs and Trade (GATT),trade has played an important role in supporting economic development. The General Agreement on Tariffs and Trade (GATT) traces its origins to the 1944 Bretton Woods Conference, which laid the foundations for the post-World War II. Though GATT was only a set of rules and multilateral agreements and lacked institutional structure. This is the primary reason for the birth of World trade organization on January 1, 1995 to which India is a founding member. The Policy of WTO is to favor the states having market economy status. Thus, under the pressure / influence of same, Indian marked its economic and legal reforms to which Trademarks act,1999 is a classic example.

HISTORY OF TRADE MARK LAW

The Anglo Indian trademark law had its origin dating back to 1266. It was also called as Bakers marking law. The law required bakers to place a mark on the loaves of bread that they sold, identifying the baker. Any bread offered for sale unstamped was at once confiscated by officer of abundance and the offending bake was mulcted in heavy damages. 

The venetian law of 1474 is the first systematic Intellectual property law which provides that “each person who will make in this city any new & indigenous contrivance, (which is not made before in our dominion) then it would be forbidden for any other to use it in any resemble form without consent and license of author up to 10 years.

1877-1940:

From 1858 onwards, Indian British system marked as CROWN RULE and the systematic process of legislation initiated. E.g. The Indian contract act, 1872, Indian penal code, 1860, Indian evidence act, 1872.

Britain parliament passed the English trademarks registration act, 1875 and accordingly, Bombay mill owners association in 1877 made the first demand for law on trademark in India.

Britain Parliament Introduced a bill in 1879 which referred to select committee but lapsed. A Fresh bill re-introduced in 1880 but opinion gets divided. The select committee favored adoption of a scheme for registration of Indian marks in England. The suggestion met with severe opposition and the Bill was dropped.

In 1884, Britain Govt. of India denied for access to Paris convention. This put Indian manufacturers and traders at a disadvantage in International arena. Thus, Indian traders had to sell products outside Indian under foreign brand name to which they had to pay them heavy royalty.  

In 1905, the Association of chambers of commerce of U.K stated that – “There was no valid why Indian empire should stand in Isolation from rest of the world in this matter”.  Commerce Industry in U.K wanted IP law in India because German, Australian were selling their copied products in Indian market.

In 1927, Commercial congress UK passed a resolution doubting efficacy of common law for protecting trademark and were demanding for trademark law in India[1].  In 1935, Chief Justice of Patna High court endorsed the demand for trademark legislation in India[2].

The delay of about 60 years in legislation and slow pace of Industrial development appears to be largely responsible why Indian cannot boast of Internationally famous trademarks. Also, during this period foreign trade marks established strong foothold in India market making it difficult for Indian brands to develop even within Indian market.

1940-1958:

1940 act established trademark registry combined with patent office which by 1943 amendment separated to a separate registry.

In 1953, Government of India appointed a committee known as trademark enquiry committee for reforms in trademark law. Justice N. Rajagopala Ayyangar of Madras High court was appointed to examine the committee report.

In October 1955, Government of India asked Dr. Venkatesawaran, Officer on special duty (trademark, patents & design) to draft a comprehensive law on basis of Ayyangar report.

The Trade & Mercandise act, 1958 passed as act no. 17 of 1958 which brought in force from 25th November 1959.

1958-1999:

The Judgment of Calcutta High court in American Home v. Mac (Dristan case), which made it almost impossible for foreign trademark to get registered in India. The apex court overruled this judgment in 1985.

The necessity to amend the law also become important due to pressure and influence of International events such as Indian becoming original member of WTO in 1995 and Joining the Paris convention with effect from December 8, 1998.

TRADEMARK : INSIGHT INTO ECONOMY

Trademark rights are private and negative rights based on principle of national treatment which has far reaching implications. The Indian government joined the Madrid protocol, 1989 and on February 7, 2007 decided to accept this protocol. Trademark amendment act of 2010 allows any person or enterprise to seek registration in any of 84 member countries of Madrid protocol through a single application. There are 3 dominant players in exploitation of Intellectual property:

  • Intellectual property right holder
  • Licensee
  • Consumer

The system of exploitation has to be fair and reasonable to all the players. If the subject matter of IPR has good demand in market and right holder do not apply it then necessarily the pirates will produce parallel products and thus grey market producers will supply the product to market. The philosophy of IPR is that one else can supply the market even in the dire need and anyone who supplies it would commit Infringement. But the question is should the right holder have the right to short supply or not to supply the market? These questions have been raised with respect to medicines and drugs in pharmaceutical sector but they are equally important in all sectors of various subject matters covered by IPR as they are vital to Industry and economy.

Monopoly and Competition are two sides of IPR. An IPR must give way only if it operates as monopoly and subject matter to be fairly allowed be used by other as well.

Each country has its own strength or weakness in relation to different types of IPR. Increased protection to one form of IP may be advantages to domestic enterprises or consumers whereas may not be useful if enhanced rights given to other type of IP.

Example, U.S did not join Berne convention on Copyright till 1987 because copyright protection was not advantageous in his country. Post 1987, U.S not only joined the Berne convention but also become the vocal supporter of it because of high copyright stakes in Hollywood Industry and software. Hence, U.S diplomatically played comparative advantage.

Thus, to generate wealth for one’s country, it is imperative to analyze in what particular field the country have potential of generating wealth. Worldwide there is no well-known trademark of India. Even FMCG sector is dominated by foreign trade mark. India will not be benefited if judiciary throw its weightage in favor of foreign trade marks without keeping Interest of domestic market. India’s Interest lies not in protecting Well known trademarks but in licensee rights.

There is a need to have debate on whether rights granted are used to contribute to the society. There is a need to appreciate the abuse of IPR together with impact of IPR on development, growth, establishment and displacement of Industry and most importantly the access to market.

Marketing or sales are ways to part a person from his money. Thus, trademark are the most important player in this activity. Trademark deserve more attention than patents or copyright. Even though trademarks are for limited duration as compared to patents still they have much more value because trademark have a direct impact on mind of its users. Patents have an impact limited to producers only. Even copyright works and its contents are sold under trademark of publishers. A patent would be fruitful only if it reaches the mass which is through a reputed brand name/trade mark.

The market access, market power, ownership of Industry, displacement of local industry are related to ability to sell which are achieved through TRADEMARK.

COMPETITION LAW: CREAM OVER CAKE FOR IPR

In TRIPS, the competition law were designated to protect against abuse of IPR. However, India has not successfully utilized the competition law to turn IPR to its advantage. It is the policy of competition law and the public Interest that anti-competitive agreements are to barred and declared void. Section 3(5) of competition act is a root cause of abuse of IPR.

Section 3(5) in the Competition Act, 2002

Nothing contained in this section shall restrict—

⇒ the right of any person to restrain any infringement of, or to impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under:

  • the Copyright Act, 1957 (14 of 1957);
  • the Patents Act, 1970 (39 of 1970);
  • the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade Marks Act, 1999 (47 of 1999);
  • the Geographical Indications of Goods (Registration and Protection) Act, 1999 (48 of 1999);
  • the Designs Act, 2000 (16 of 2000);
  • the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of 2000)

⇒ the right of any person to export goods from India to the extent to which the agreement relates exclusively to the production, supply, distribution or control of goods or provision of services for such export.

Section 33(3) of MRPT act was somewhat similar to Section 3(5) of competition act. But the purpose of competition act is to strengthen the competition and remove the difficulties experienced in MRTP act. The use of “as may be necessary” suggest that all steps or conditions or clays secured by IP right holder would be considered as reasonable because agreement would couch the conditions in the language in a manner which would establish necessity condition to protection IP rights.

On face of it, Section 3(5) looks perfectly fine. Necessarily, IP right holders should have a right to restrain Infringements and should be in a position to protect IP. There is nothing wrong in permitting them to impose reasonable conditions as necessary for protection of IPR. But these rights are already granted to right holders under respective IP legislations. Section 3(5) does not make the protection against Infringement any stronger for right holder.

All forms of IP have the potential to raise competition law problem. There is a dichotomy between IPR and competition law here former endangers the competition while latter engender the competition. There is a need to appreciate the existence of a right and its exercise but if during exercise of such a right any anti-competitive practice is visible to the detriment of consumer Interest or Public Interest then it must be dealt with by competition law. Thus, tool of IPR cannot/should not become a reason to justify anti-competitive agreements.

CONCLUSION:

SELF SUFFICIENCY- A SOCIAL DISTANCING ?

The original goal of LPG policy was to Promote the domestic economy with export promotion through dominance of market economy over regulated economy. It is important to note that

Indian traders failed to have a well-known reputed trademark due to 2 major reasons.

  1. No legislation for 60 years (1877-1940)
  2. Dominance of Foreign trade mark in Indian market during this course

These uncontrollable reasons prevent small & medium Indian traders have a fame & reputed trade mark worldwide. Noting these lacunas, 1991 LPG was Introduced to assist the domestic economy and to make these domestic traders self-sufficient. However, the practice to achieve this aim was somewhat contrary owing to influence of WTO TRIPS & Paris convention.

At one hand, India wanted to achieve self-sufficiency and help domestic traders reputed globally and on other hand, the trademark law of 1999 giving excessive special rights to foreign trade marks. India under the pressure of world diplomacy enacted laws and policy which result into giving excessive benefit to the foreign trade marks through statutory rights, and special relief against anti-competitive agreements which squarely failed the aim of self-sufficiency. All these chocolates have spoon feed the giants and prevented domestic players to have their stake and thus in this way special focus required in trademark policy.

[1] Ventakteswaran, 1937

[2] COURTNEY TERRAL,CJ , Patna High Court in the foreword to a book by S. Venkateswaran on the Law of Trade and Merchandise marks in India, Madras, Madras law journal office,1937.

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