INTRODUCTION: THE PRINCIPLE OF PRIOR USE
In the realm of trademark law, trademarks play a pivotal role in distinguishing the goods or services of one business from those of another. Under the Trademarks Act, 1999, the registration of a trademark grants the proprietor exclusive rights to its use, allowing them to prevent unauthorized use of the mark by others. However, trademark rights are not absolute, and certain exceptions exist to ensure fairness and equity in their enforcement. One such critical provision is Section 34 of the Trademarks Act, which prioritizes the concept of “prior use” over registration rights.
Section 34 of the Trademarks Act, 1999 serves as a safeguard for individuals or entities that have been using a particular trademark continuously from a date earlier than the registered trademark’s use or registration. It ensures that the rights of prior users are recognized and protected, even when a similar or identical trademark is later registered by another party.
This provision strikes a balance between the exclusivity of trademark registration and the legitimate interests of those who have been using the trademark in good faith over time, thereby upholding the principle that usage rights take precedence over registration.
ESSENTIALS OF PRIOR USE
Section 34 serves as a defence for prior users of a trademark against claims of infringement by registered trademark owners. The essentials of prior use are as follows:
- The third party must have used a mark that is identical or similar to the registered trademark.
- Prior use must demonstrate continuity in the use of the trademark and not isolated, scattered, or disconnected usage.
- The mark must have been used for the same or similar category of goods/services for which the registered trademark is being used.
- The third party must prove that their use of the mark predates the registered mark owner’s use or registration date, whichever is earlier.
BRIDGING COMMON LAW AND STATUTORY RIGHTS
The connection between the doctrine of prior use and Section 34 of the Trademark Act, 1999, highlights the fundamental principle that trademark rights are primarily derived from use rather than registration. The doctrine of prior use, rooted in common law, grants superior rights to the first user of a trademark, ensuring their exclusive entitlement even against a subsequent registrant. Section 34 reinforces this principle in statutory terms, providing legal protection to prior users against infringement claims by registered proprietors. Together, they bridge common law and statutory frameworks, affirming that actual use of a trademark establishes precedence and ensures its rightful ownership.
CONCEPT OF VESTED RIGHTS AND CONTINUOUS USE
a. Vested Rights
In trademark law, the concept of vested rights refers to the legal recognition of a person’s right to use a trademark based on their prior and continuous use, even if the trademark has not been registered.
b. Continuous Use
The term “use” under section 34 of the Trademarks Act, 1999 is of paramount importance because it signifies consistent and continuous usage of the mark in commerce for a substantial period, creating a proprietary right. It must be uninterrupted and without any gap, ensuring that the mark remains in active commerce for a substantial period to maintain the vested rights of the prior user. The provision plays a crucial role in safeguarding these vested rights by allowing individuals who have used a trademark before its registration to continue using it, even if a later registrant claims exclusive rights to the same or a similar mark.
In other words, the statutory guarantee of a registered mark can be diminished if a prior user demonstrates legitimate, uninterrupted use of the mark in relation to specific goods or services. For instance, if a local bakery has been using the name “Lively Bakes” for years but another company later registers the trademark for the same, Section 34 ensures the bakery can continue using the name without interference, provided they can prove continuous use. By protecting the interests of those who have a legitimate and long-standing use of a trademark, Section 34 balances the protection of registered trademarks with fairness toward honest, prior users.
JUDICIAL PRECEDENTS ANALYSIS
- S. Syed Mohideen V. P. Sulochana Bai, (2016) 2 SCC 683 (https://indiancaselaw.in/s-syed-mohideen-v-p-sulochana-bai/)
In this case, the Court emphasized:
“It is also a well-settled principle of law in the field of the trademarks that the registration merely recognises the rights which are already pre-existing in common law and does not create any rights.”
The Hon’ble Supreme Court upheld the Respondent’s claim of prior use and goodwill associated with the trademark ‘Iruttukadai Halwa,’ used since 1900. The Court clarified that under Section 34 of the Trade Marks Act, 1999, the rights of a prior user take precedence over a registered proprietor. Despite the Appellant’s registered mark, the Respondent was entitled to maintain a passing-off claim under Section 27(2), as the Appellant’s use could mislead the public and exploit the Respondent’s reputation. This case highlights that Section 34 protects prior users’ rights against registered trademarks when their use predates the registrant’s.
- Century Traders v. Roshan Lal Duggar & Co. (AIR1978DELHI250)(https://indiankanoon.org/doc/1181080/)
Hon’ble Justice Avadh Behari in this case observed:
“….First is the question of the use of the trade mark. Use plays an all-important part. A trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directs the article having assumed a vendible character is launched upon the market. Registration under the statute does not confer any new right to the mark claimed or any greater rights than what already existed at common law and at equity without registration. It does, however, facilitate a remedy which may be enforced and obtained throughout the State and it establishes the record of facts affecting the right to the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the statute. Common law rights are left wholly unaffected.”
Thus, emphasising that the right to a trademark arises from its use in commerce, not from registration. While registration provides statutory remedies and formal recognition, it does not create the trademark itself, as common law rights remain unaffected.
- NR Dongre & Ors. v. Whirlpool Corporation & Anr. (1996) 5 SCC 714 (https://indiankanoon.org/doc/1732339/)
The division bench in this case stated:
“….A trader needs protection of his right of prior user of a trade mark as the benefit of the name and reputation earned by him cannot be taken advantage of by another trader by copying the mark and getting it registered before he could get the same registered in his favour.
We see no reason why a registered owner of a trade mark should be allowed to deceive purchasers into the belief that they are getting the goods of another while they would be buying the goods of the former which they never intended to do. In an action for passing off it should not matter whether misrepresentation or deception has proceeded from a registered or an unregistered user of a trade mark. He cannot represent his own goods as the goods of somebody else.”
This ruling highlights the principle that the first user of a trademark has exclusive rights to its use and protection, irrespective of registration status, safeguarding them from deceptive practices by later registrants.
- Lowenbrau AG & Another v/s Jagpin Breweries Ltd. & Another (https://indiankanoon.org/doc/276675/)
In this case, the Hon’ble Justice Sanjiv Khanna observed that all things considered, both the parties were unfamiliar organizations and both of them were using the mark, in the said case everywhere in the world and needed to extend in India and in these conditions the situation as it exists abroad, and usage of the mark abroad were held to be significant as far as Section 34 of the Act.
The Court addressed the issue of prior use of a trademark by the defendant outside India, recognizing that the earlier international use of a trademark could establish rights in India, even in the absence of local registration.
CONCLUSION
The principle of prior use plays a crucial role in balancing the rights of trademark proprietors under both common law and statutory frameworks. Section 34 of the Trademarks Act, 1999, protects the rights of prior users by prioritizing continuous use over registration, ensuring fairness in trademark enforcement. Several judicial precedents, such as NR Dongre v. Whirlpool and S. Syed Mohideen v. P. Sulochana Bai, emphasize the importance of prior use in establishing and maintaining trademark rights, even against later registrants. These cases highlight that the legitimate, uninterrupted use of a mark grants the prior user exclusive rights, safeguarding their reputation and business interests. Thus, Section 34 upholds the principle that use, rather than registration, is paramount in determining trademark ownership.
AUTHOR: MS. PRACHI RAI, LAW STUDENT AT AMITY UNIVERSITY MADHYA PRADESH
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