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Will Advertisement Constitute The Use Of Trademark?

There is no precise definition of trademark use provided by the Trademark Act, 1999 of India. According to Section 9 (proviso), a trademark registration cannot be denied if, prior to the application date, it has become well-known or has acquired a distinctive character through use. Prior user is covered under Section 34.

The Indian High Courts, including the Hon'ble Supreme Court, repeatedly emphasized that the definition of "use" in relation to trademarks does not require actual use on goods and services.

When marketing of products and services occurs concurrently with advertising and both activities are verified, the advertising will support the authenticity of the use.

If the purpose of the advertising is to create a market for the goods or services, it will usually be accepted as legitimate use. Otherwise, it will not be considered legitimate use.

It seems doubtful that mere advertising, in the absence of any present or future to genuinely market goods or services, qualifies as genuine use. The facts of each case will determine the outcome, as they do in most other situations. For instance, in cases where the products or services-like vacation rentals or specific items-are offered overseas, advertising might be enough to qualify as actual use.

In the 2003 case of Hardie Trading v. Addison Paints and Chemicals, the Supreme Court made it extensively clear that any promotional material could be interpreted as use and that actual trademark use on goods and services is not a prerequisite for use. The use of a mark in relation to goods is to be construed as a reference to the use of the mark upon, or in any tangible or in any other relation whatsoever, and does not necessarily be limited to physical use on goods or to the sale of goods bearing the trademark, the Supreme Court concluded after examining various aspects of "usage" under the Trademark Act, 1999.

With the ease of advertising, it is becoming increasingly common for manufacturers and service providers to promote their products and services even before they are purchased by the public.

In the Pioneer Nuts and Bolts (P) Limited v. Goodwill Enterprises case, the Delhi High Court ruled in 2009 that the issuance of an advertisement alone does not establish a user of the mark. It was noted that in any other case, the owner of a trade mark might, in the absence of any goods to offer, advertise its marks periodically and avoid any attacks on the mark. It was pointed out that "use of a mark in advertising media must be concurrent with the placing of the goods in the market if it is to be regarded as a trade mark".

Furthermore, it was decided that using a mark during business could include publishing a number of ads as part of an introduction campaign, but "not upon the goods or in physical relation thereto." Additionally, it was decided that newspaper ads hardly ever serve as evidence of service against the mark's user as of those dates.

The Hon'ble Bombay High Court made the following observation in Kamal Trading Co., Bombay v. Gillette U.K. Limited, Middle Sex, England: "...the goodwill acquired by the manufacturer is not necessarily limited to the country where the goods are freely available because the goods, though not available, are widely advertised in newspapers periodical, magazines, and in other Medias." As a result, even though the products are unavailable in the nation, their reputation as well as the brand under which they are sold, grow.

On the other hand, the notion of a "well known trade mark" has been introduced by the new Act. According to the Act, a well-known trade mark may be registered without meeting any of the prerequisites listed above. The Indian courts had adopted the view that a trademark could only be "used" in connection with "trade" if it was applied to goods. A trade mark could not be "used" together with "trade" if it was only advertised. To put it another way, a trade mark cannot become "distinctive character" just by being advertised without the goods being sold.

The new law, however, allows a mark to be a "well known trade mark" even in the absence of any products on the Indian market. Advertisement-based familiarity is sufficient to qualify a mark as a well-known trade mark. Moreover, public knowledge of a mark is not a prerequisite for it to be considered a well-known trade mark.

Hardie Trading v. Addison Paints and Chemicals
Facts: The Australian business Hardie Trading Ltd. was the registered owner of the paint brand Spartan. Addison Paints and Chemicals Ltd. applied for the registration of the Spartan mark under its own name in December 1976. Since Hardie Trading Ltd. was the registered owner of the mark Spartan, registration was denied.

Since the Spartan mark had not been used in India for more than five years, Addison Paints and Chemicals Ltd. filed an application to have it removed from the trade mark register. But according to Section 46(3), if the lack of use of the trademark is "due to special circumstances in the trade and not to any intention to abandon or not to use the trade mark in relation to the goods," rectification will not be allowed.

Hardie Ltd. contended that because of import restrictions, it was no longer economically feasible to import the products. This was rejected by the Court as a "special circumstance in trade," and the mark was taken off the register. This was a landmark decision that stated that a person's name could not be removed from the register due to government restrictions on the import of goods.

Decision: It is well known that the manufacturer is the only one who can legally claim ownership of the name as a trade mark if he was the first to use the device as a trademark. Therefore, the High Court's factual conclusion that Hardie had never marketed products it had manufactured in India was not only incorrect, but it also seriously jeopardized Addison's registration application's maintainability.

On the one hand, it was challenging to register foreign trade marks under the previous legislation. However, even the foreign marks that were listed were taken off the register due to non-use. All of this has changed since the Trade Marks Act of 1999.

N.R. Dongre v. Whirlpool Corpn. Ltd.
Facts: Respondent were the manufacturing Washing Machine under the trademark WHIRLPOOL and had their mark registered in different countries. In India, their registration expired in 1977. Appellant, an Indian company, in 1922 got the trademark WHIRLPOOL registered in washing machine. Respondent filed a suit of passing off. A single judge bench and division bench restrained the appellant from using the trademark. This was appealed.

Decision: The Supreme Court upheld the decision of the High Court and observed that the trademark WHIRLPOOL is associated for long, much prior to the defendant's application in 1986. The plaintiff ifs the prior user and has a Trans-border reputation extending to India. Court further said, "Dissemination of the knowledge of a trademark in respect of a product through advertisement in media amounts to use of the trademark, whether or not the advertisement is coupled with the actual existence of the product in the market."

Milmet Oftho Industries v. Allergen Inc.
Facts: Appellant are the Indian Pharmaceutical Company selling OCUFLOX, a medical preparation of CIPROFLOXACIN HCL to be used for the treatment of the eye and the ears. The respondent filed a suit for injunction based on an action for passing off in respect of the mark OCUFLOX used on a medical preparation manufactured and marketed by the respondents. The Division Bench of Calcutta High Court held that as the respondent's product was advertised before the appellants entered the field, so on that basis respondent were the first to adopt the mark in the market and allowed injunction. This was challenged.

Court held that nowadays goods are widely advertised in newspapers, periodicals, magazines & other media, which is available in the country. Thus, if a mark in respect of drug is associated with the respondents worldwide it would lead to an anomalous situation if an identical mark in respect of a similar drug is allowed to be sold in India. Supreme Court did not disturb the order of injunction restraining the appellants.

Pioneer Nuts and Bolts Pvt. Ltd. v. M/s. Goodwill Enterprises
The Delhi High Court's Division Bench provided the most authoritative decision on this matter in Pioneer Nuts and Bolts Pvt. Ltd. v. M/s. Goodwill Enterprises. In this case, the court rejected the defendants' argument that it could gain preferential rights simply by publishing advertisements using the contested trademark, even as it elaborated on the meaning of "use" under Section 34.

Because the case involved the rectification of the trademarks register under Section 46 of the Trademarks Act and the question of a prior continuous user under Section 34 was not subject to adjudication before the court, it was explained that reliance on Hardie Trading is misleading.

Kabushiki Kaisha Toshiba v. Toshiba Appliances Co.
The term "use" refers to any method of using the trademark; it need not even indicate a physical sale; an advertisement alone, without any reference to the goods' existence, can be considered a "use." Later, in Kabushiki Kaisha Toshiba v. Toshiba Appliances Co., this line of reasoning was also upheld.

The Indian Courts have had difference of opinion in deciding the meaning of the term "Use" under section 34 of the Trademarks Act, 1999. However, the contrary approach in the different cases have made the legality of this term a daunting task. Now it is vitally important for the courts to clear up the unclear issues related to the meaning of this term.

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