Trademark Act, Section 34 provides the right of prior use. In reference to goods
or services that the owner or registered user of a registered trademark has
continuously used since a previous date. In short, section 34 says that if a third
party has been using a registered trademark consistently from an earlier date,
the registered user cannot prevent the third party from using the brand.
According to Section 34, the user must have been using the mark consistently
in addition to being a previous user. A simple interpretation of the section
indicates that continuous prior use of the mark must exist; sporadic/
minimal prior use of the mark is not permissible to invoke Section 34 and
establish the right of prior use. Consequently, Section 34 need not be used in
cases where there has been sporadic earlier use.
The consumer is unlikely to have been particularly affected by sporadic prior
use. Consumers won't be able to remember anything unless they use it
regularly. It is likely that the customer won't remember the mark if it is used
infrequently. For this reason, Section 34 makes it very evident that the previous
use must have been continuous.
The rights of a prior user of the mark are preserved and are superior to those
of the registered owner of a trademark who received registration later.
However, the prior user must satisfy the following crucial conditions in order to
be eligible for the benefits under Section 34:
1. For the owner to be considered the prior user, the trademark must be
"used" by them;
2. The owner of the trademark must continuously use it within the borders
3. The trademark may only be used in connection with the products or
services listed in the registered proprietor's application.
4. The trademark must have been in use earlier than the date on which the
subsequent user began using it.
According to Section 34 of the Act, if a user has been "continuously" using a
trade mark before the registered user or the date of registration, whichever is
earlier, the registered proprietor or user of the mark does not have the right to
stop any other user from using an identical or similar mark. Additionally, this
section limits the application of Section 28 of the Act, which grants specific
exclusive rights to the registered user of a trade mark (due to the non-obstante
clause). Therefore, it is a well-established rule that the registered owner of a
mark may not infringe upon or interfere with the rights of the previous user of
the same mark or one that is similar.
However, for the defence of prior use to be effective, a few requirements must
be met, making this principle entirely applicable.
In the recent Peps Industries
Private Limited v. Kurlon Limited case, the Hon. Delhi High Court in India
clarified this position. According to the Court's opinion in this case, the prior
user must demonstrate "continuous and consistent" use of the trademark for
the defence of prior use to be successful. The Court added that for the defence
to be successful, the previous user must also demonstrate the "volume of
In Kamat Hotels (India) Ltd. vs. Royal Orchid Hotels Ltd. & Anr., the Bombay
High Court examined the provisions of Section 34 and provided a detailed list
of the requirements that must be fulfilled for an individual to be eligible for
protection under the provisions of the section. The Court said that the mark
must have been continuously used before. Isolated or sporadic use is not
permitted. Simply adopting the mark or releasing an advertisement by the
owner is insufficient; the mark must have been used continuously and
commercially in relation to the goods and services.
In Neon Laboratories Ltd. Vs. Medical Technologies Ltd. and Ors., the Supreme
Court ruled that the courts must balance the rights of the parties involved in
the dispute while applying the "first in the market" test. Put another way, if a
previous user can show that they have been using the mark continuously and
commercially since before the date of registration or use of the mark by the
registered proprietor, then even the registered proprietor is barred from taking
legal action against the previous user.
Peps Industries Pvt. Ltd. V. Kurlon Ltd.
FACTS: Peps Industries requested a permanent injunction to prevent Kurlon
from using the mark "NO TURN," which it had registered. The defendant
asserted that it was the previous user of the "NO TURN" mark. Since January
15, 2008, the plaintiff has adopted and used the same continuously. According
to the defendant, they have been utilizing the trademark since 2007.
ISSUE: If the defendant was, in fact, the previous user of the mark "NO TURN,"
among other things.
DECISION: The court held that even while the defendant has been using the
mark since 2007, the usage was sporadic during those years, thus it does not
qualify as prior use for the purposes of section 34. Furthermore, there were
not many sales. The defendant cannot rely on Section 34 because there was no
evidence of continuous usage of the mark "NO TURN" by the defendant. In
other words, the court declared that even though the defendant was the
original user of the mark, usage of the mark has been sporadic and not
extensive since 2007. Therefore, under Section 34, the defendant is ineligible to
assert the defence.
Neon Laboratories Ltd. v. Medical Technologies Ltd. and Ors.
FACTS: Pharmaceutical production and marketing were activities shared by
Neon Laboratories and Medical Technologies, the case's two parties. The mark
"ROFOL" was registered by the appellant, Neon Laboratories, in 1992. The
application was approved in 2001. Nevertheless, it wasn't until 2004 that Neon
Laboratories released a product under the registered trademark name.
In 1998, the respondent, Medical Technologies, launched a generic medication
called "PROPOFOL" into the Indian market. The medication was sold under the
brand name "PROFOL." Later, there was an amalgamation of the predecessor-in-title, which led to the respondent being awarded trademark ownership of
"PROFOL." The respondent went ahead and registered the trademark in
addition to starting to use it.
Medical Technologies discovered in 2005 that Neon Laboratories had released
an identical generic drug under the trademark "ROFOL." Because of Neon
Laboratories' use of a trademark that is confusingly similar to and identical to
Medical Technologies' trademark "PROFOL," the later was sued by the former.
A lawsuit was brought by Medical Technologies in the Ahmedabad trial court
for passing off. The court issued a temporary injunction against Neon
Laboratories. In response to an appeal, the Gujarat High Court upheld the same
ISSUE: Whether credit must be given to the party who registered the
trademark first or the one who introduced the drug in the market first?
DECISION: The Supreme Court declared that the registration of the trademark
"ROFOL," which has retroactive effect from the date of its application, would
have helped in the case being decided in favour of the defendant-appellant if
the defendant had begun using its trademark "ROFOL" before, simultaneously
with, or immediately after the respondent began marketing their products
under the trademark "PROFOL." But the defendant-appellant did nothing to get
its products into the market under the "ROFOL" trademark. Furthermore, it
was "legally lethargic" of the appellant to take any action that would have
prevented the respondents from using the trademark "PROFOL" while the
registration application was still pending. Additionally, the Supreme Court
declared that the respondents, not the appellants, who could have objected to,
started the litigation.
CONCLUSION: It is well-established that the act of merely registering a trademark does not
prevent earlier users from using a mark that is identical to or similar to the
registered trademark. But such prior use should be intermittent or substantial
and not sporadic or minimal. If the trademark has been used continuously and
develops a goodwill in the market and the customers start associating the
trademark with a specific quality of goods or services, and they are able to
prove it through evidences, then the continuous prior user of trademark will be
kept on higher footing.