1

CHAPTER– I

INTRODUCTION AND RESEARCH METHODOLOGY

I.1 INTRODUCTION

Intellectual Property system (IPR) provides a boost to national wealth

and contributes considerably to its sustainable development. The IPRs are necessary

to protect the product or services for the business corporation to operate in the

market driven economies. Hence, there is a great economic value attached to

promote the use of Intellectual Property system and ensuing its effective protection.

With the system of protection of Intellectual Property, the investors and innovators

are motivated to invest their money and energy in developing the new product,

process, literary work or any other artistic creation. The investment in Intellectual

Property gives further boost to production and commercial activities for acceleration

of the economic growth. Laws for the protection of Intellectual Property are not

static and bound to change with the changes in technology and society.1

The property generated with the help of human intellect is called

“Intellectual Property”. The intellectual property law discourages others from

copying or taking unfair advantages of the work or reputation of another and

provides remedies for their infringement. The main object of this branch of law is

the protection of intellectual property rights.

IPRs are the rights given to people over the creation of their minds. IPRs

are crucial to the business organization. They are stimulus to innovation, vehicle for

technology transfer and attracting finances for further development of IPRs.

2

A basic understanding of the concept of trade mark gives an insight as to

the accommodation of trade mark within the traditional intellectual property

framework.

I.2 TRADE MARK – As a Intellectual Property

Trade mark is one of the Intellectual Property assets. Trade mark has

enormous value for an enterprise. These are the marks that are external to the goods

to make the public identify a certain quality and image associated with that product

or service. It is an important means of promoting goodwill with the clients and

improving the bottom line. It is used as a product differentiator. It speaks about the

product’s origin and its design. It is a valuable marketing tool in today’s competitive

markets. It has a legal protection to keep others away from using it. The trade marks

are associated with quality, security and even a sense of belonging in the minds of

the consumers for that product. Trade mark is a legally protected valuable marketing

tool for the product differentiation.2

The trade marks convey to us the important information of the source and

the distinct characteristics of the product. Therefore, trade marks are important

marketing tools and the foundation of the competition for the businesses. Presence

of a lot of trade marks in market also signifies the freedom of choice to the

consumers.

Once a trade mark is registered, it can be renewed indefinitely, provided

it is still being used in business and commerce. However, the owner must prevent

the public from misusing the brand name to refer to all similar products. This is done

by reminding the public through advertising that their brandnames are trade marks

and not just words.3

3

Procedural aspects of trade marks related issues are

1. Registration of Trade marks

2. Infringement of Trade marks

3. Passing off and

4. Assignment and Transmission of Trade marks

In view of complexity of trade mark related issues, it is necessary to

understand the definition of trade marks, the concept of Intellectual Property Rights

and the evolution of Trade mark Act in India for the study. Hence, the main

concepts in detail are presented with relevant Provisions and Rules of Assignment

and Transmission of Trade marks as per Trade Marks Act 1999 with necessary

amendments.

Trade marks preserve exclusive markets, maintain profit margins,

provide market access and freedom to operate. The Trade mark Law prevents

businessmen from taking unfair advantage of the reputation of another and provide

remedies to the honest adopter of the trade mark. The main objective of this branch

of law is the protection of the private rights. Trade mark laws have inbuilt provisions

to encourage legitimate competition. Deciding between fair and unfair competition

is rather tricky and law making bodies have to exercise caution while framing

national laws.4

I.3 TRADE MARK AND CONSUMER PROTECTION

Trade marks are very valuable form of Intellectual property, since they

always associate with quality and consumer expectations in a product or service.

Trade marks safeguard the interest of both consumer and trader by making out the

origin of goods from a definite source.5

4

It prevents the ‘Consumer Forum’ duped by a substandard commodity.

Trade mark, when attached to goods offered for sale in the market, consumers could

distinguish those goods from similar goods and indentify them with a particular

trader as the owner of a particular business. For example, “Lakme” distinguishes the

goods of Lakme Lever Co. from those of “Revlon”. Sometimes over the period of

time a trade mark usually becomes synonymous with the goods i.e.,Godrej for ‘store

well’ , ‘Xerox’ for photocopying etc., The trade mark rights can also be sold to other

parties.

Trade marks are being used for a long time. Some have been found on

the pottery made around 5000 B.C and were used for different reasons in different

parts of the world. Pottery makers in ancient China used marks as symbols of pride

in their workmenship. Egyptian and Roman masons marked their bricks for the

purpose of accountability, in case the building collapsed. In 1266, England passed a

law requiring bakers to mark their bread, so that “if any bread by faulty in weight, it

can be understood who has committed the fault”. 6

At present, trade marks have an enormous value for a business enterprise.

Trade mark is a valuable marketing tool in the present competitive market. It has a

legal protection to keep others away from using it. Trade mark rights arise

automatically as a result of using a mark on the goods or services. But, registration

is not mandatory. However, without obtaining registration of the mark, the owner’s

rights are limited to the geographic area in which the mark has actually been used.

Two or more parties can simultaneously use the same mark for the same goods or

services in different parts of the country without infringing each other’s rights.

5

The major benefits of registration are

1) Owner has nationwide priority rights to use the trade mark.

2) Prevents anyone else in the region/country from using the mark for

similar goods or services.

3) Owner is legally protected having a considerable advantage in any

contest over trade mark rights.7

Articles 15 to 21 of Trade Related Aspects of Intellectual Property Rights

(TRIPS) deal with the matters relating to trade mark. They deal with protection of

rights of owners of registered trade marks, the terms of protection, cancellation,

licensing and assignment of trade marks.8

The owners of registered trade marks have the exclusive right to prevent

all third parties not having the owner’s consent, from using in the business, identical

signs for goods and services which are similar to those in respect of which the trade

mark is registered to avoid a likelihood of confusion.

But, the registration of a trade mark can be cancelled, if it is not used for

an uninterrupted period of atleast three years and user is required to maintain a

registration. In this regard, the trade mark owner can show valid reason based on the

existence of obstacles to such use.9

I.4 IMPORTANCE OF TRADE MARK IN TRADE AND

COMMERCE

Importance and justification of trade mark in present global business

environment are:

6

i. Economic justification

From the economic point of view, a trade mark is merely a symbol that

allows a purchaser to identify goods or service that have been satisfactory in the past

and distinguish the goods or service that have failed to give satisfaction. Trade

marks perform two important market functions (i) They encourage the production of

quality products and (ii) They reduce customer’s cost of shopping and making

purchase decisions. Trade marks play a crucial role in own free market economic

system.

ii. Quality Justification

An important purpose underlying trade mark law is the protection of the

trade mark owner’s investment in the quality of the mark and the quality of the

goods or service, which the mark identifies. A certain amount of image

differentiation also helps consumers select products of high quality and reliability. It

motivates producers to maintain adequate quality standards.

iii. Advertising Justification

A trade mark is species of advertising, its purpose being to fix the

identity of the product and the name of the producer in the minds of the people, who

see the advertisement for marketing decisions.

If the trade mark owner succeeds in creating a favourable image for the

trade mark in the market place, the mark itself can become a significant factor in

stimulating sales. The ability of a mark to generate goodwill through advertising has

also gained recognition under the law of trade mark.10

7

I.5 ROLE OF TRADE MARK

Trade mark, being a relevant component, in a competitive market

environment is assuming growing significant in the recent era. The trade marks

came to serve a different function with the development of commercial trade. There

is identification of source of goods offered for sale in the market place.

The good trade marks are associated with quality, security and sense of

belonging in the minds of the consumers for that product. Few trade names like

those of TATA, Godrej, Parley’s, embody the goodwill of the company and

institution they represent.

Trade mark is a legally protected valuable marketing tool for product

differentiation and presence of a lot of trade marks in the market also signifies the

freedom of choice to consumers. Hence, in today’s competitive markets, the

importance of trade mark as valuable intellectual property cannot be ignored.

A registered trade mark gives the legal right to use, license or sell it within the

territory, country or region from the goods and service for which it is registered.11

I.6 MEANING AND DEFINITION OF TRADE MARK:-

`Mark’ has many meanings according to the context in which it is used.

Dictionary meaning is “a sign affixed or impressed for distinction”. The mark must

be used visually and not orally and legally, a trade mark is recognized as intellectual

property. It has no meaning unless it is used in relation to some goods. The life of a

trade mark depends on its use and continued non-use may lead to its eventual death.

8

Statutory Definition

The Trade marks Act 1999 came into force with effect from 15-09-2003.

Section 2 (1) (2b) “Trade mark means a mark capable of being

represented graphically and which is capable of distinguishing the goods or service

of one persons from those of others and may include shape of goods, their packaging

and combination of colours.

I.7 ESSENTIAL FEATURES OF A TRADE MARK

A trade mark is visual symbol used in relation to any goods or services to

indicate some kind of trade connection between the goods or services and the person

using the mark. In order to bring it within the scope of the statutory definition, a

trade mark should satisfy the following essential requirements

(1) It must be a mark that is a device, brand, heading, label, ticket,

name or an abbreviation of a name, signature, word, letter or

numeral shape of goods, packing or combination of colours or any

combination thereof.

(2) It must be capable of being represented graphically.

(3) It must be capable of distinguishing the goods or services of one

person from those of others.

(4) It must be used or proposed to be used in relation to goods or

services.

(5) The use must be of a printed or other visual representation of the

mark.

9

(6) In relation to services, it must be the use of the mark or availability

or performance of services.

(7) The use must be for the purpose of indicating the connection in the

course of trade between the goods or services, and some person

having the right to use the mark either as proprietor or by way of

permitted user as the case may be. It is not necessary that the

person using the mark should reveal his identity.12

I.8 SIGNIFICANCE AND TYPES OF TRADE MARKS

i. Significance

The Significance of a trade mark is to give an indication to the purchaser

as to identification of its manufacture or quality of the goods.

(1) It gives the purchaser a satisfactory assurance of the mark and

quality of the article he is buying.

(2) A trademark may be used to indicate not only that the goods are of

a particular maker but are goods of that maker of a particular kind

or quality.

ii. Functions of a trade mark in modern business

(1) It identifies the products design and distinguishes them from goods

sold by others. Trade marks are essence of competition.

(2) It signifies that all goods bearing the trade mark are of an equal

quality.

(3) It is a prime instrument in advertising and selling the goods.

10

(4) A symbol representing the goodwill of the business in which it is

used. It is identified with the patronage and registration of the

product.

(5) It creates an image to the business in which it is used.

(6) Trade marks promote competition and the maintenance of product

quality. Therefore, to protect trade mark is to protect the public

from deceit and to foster fair competition.13

iii. Types of trade marks

To understand the scope of trade mark, it is imperative to know the

different types of marks. Hence, the details of different marks are explained.

A Mark includes a device, brand, heading, label, ticket, name, signature,

word, letter, numerals, shape of good, packing or combination of colours or any

combination thereof. Hence, it is imperative to know different types of marks in

existence in modern business.

1. Device

Device is a mark, which refers to any pictorial representation, which does

not come under any other category, Objects like animal, birds, landscape building,

etc., falls within this category. Macdonald’s double arches, Apple Computer’s bitten

apple and NBC’s Peacock are some of the examples of logos that have become

trademarks.

2. Brand

Brand refers to those kinds of marks which are branded on the goods or

services. It implies that the symbols themselves constitute the trade mark.

Example : Cycle brand Agarbathis

11

3. Label

It refers to a composite mark containing various devices, words and

descriptive expressions, usually printed on paper, which can be pasted or attached to

the goods themselves or their containers.

4. Ticket

It appears to be something stitched or tagged on the goods and containing

the mark printed or pasted thereon.

Example: “ ” Mark, Crocodile, Fast Track etc.,

5. Name

It refers to the name of a company, individual or firm. It includes an

abbreviation of a name and also word, letter. Example: TATA

6. Shape

Shape of goods and package including case, box and container etc., does

form a trade mark. Example: Shape of the coco cola bottle called the contour bottle.

7. Letter

Letter as mark is the identity created out of letterforms and has its inbuilt

strength of individuality. The letter forms have been very useful elements for

designers to work with and develop a successful mark. Some popular examples of

letter marks as trade marks are IBM, GM, etc.,

8. Numerals

Numerals can be registered as trade mark upon evidence of uses example

555 for cigarettes and 501 for bar soaps.

12

9. Symbol

Symbol may take the shape of brands or logos. A logo is a visual

depiction of a manufacturer or a company and gives an identity to it.Presently logos

are identified by consumers as symbols that belong to a particular company and

representing quality, elegance etc., Some popular examples are BMW, Maruthi,

Benz etc.,

10. Colour

Combination of colours can be considered as a trade mark. Colour has

been held to be registrable and hence protectable, Example : Cococola, Fanta and

Fruit juice drink.

iv. Sound Tracks as Trade mark

A sequence of musical notes was registered in the name of “National

Broadcasting Corporation for its services of broadcasting. Famous “TARZAN

YELL” was registered by the Edgar Rice Burroughs, Inc.

The “Roar of the Lion” sound has been registered by the MGM Pictures,

Britannia Biscuit, Ting Ting Ti Ting.

The hoo-hoo of the Pillsbury Doughboy

Musical notes of A.R. Rahman for Airtel

Musical song used in Kingfisher advertisement.

The sound trademarks are becoming popular, as sound signatures do not

need translation.14

13

I.9 SPECTRUM OF DISTINCTIVENESS

The arbitrary, fanciful and suggestive marks are sometimes called

“technical trade marks”. These marks may be registered without any proof of

“Secondary meaning” that is, without demonstration that the public recognizes these

terms or symbols as indications of the source of the goods or services. The technical

trade marks are endowed with trademark significance “abinitio” itself.

1. The following can be brought under the category of arbitrary marks.

APPLE - Computer

BLACK & WHITE - Scotch Whiskey

ICE CREAM - Chewing Gum

MOUNTAIN - Computer Data Storage Devices

NOVA - Television series

CAMEL - Cigarettes

SHELL - Gasoline

2. The following fall under the category of fanciful marks :-

KODAK - For Photographic suppliers

CUTICURA - For toilet soap and talcum powder

ARGYROL - For antiseptic

KOTEX - Sanitary pads

ODOL - Mouthwash

POLAROID - For optical devices, cameras

CUTEX - For cuticle, removing liquid.

3. The following marks come under suggestive marks category

ACTION SLACKS - pants

AT A GLANCE - calendars

CHEW ‘N’ CLEAN - Dentifrice

STRONGHOLD - nails

The test for determining a ‘term’ to be suggestive is when it requires

using imagination, thought and perception to reach a conclusion as to the nature of

the goods in the minds of consumers. Thus, these marks are entitled for registration

without proof of secondary meaning.

14

4. Descriptive marks

A term is descriptive if it conveys immediately to one seeing or hearing

it, the knowledge of the ingredients, qualities or characteristics of the goods or

services with which it is used. Descriptive mark intended its purpose, function or use

of the goods, the size of the goods, the class or users of the goods and desirable

characteristics of the goods. For example, the following end effects influence the

nature of goods on the consumers.

5 minute glue which sets in 5 minutes

Homemakers for family housekeeping

International for maps and globes

Joy for perfume

Quick print printing and duplication service

Paper cutter for Paper ornaments.

5. Generic Marks

The generic marks are those that refer to a genus or type of product rather

than particular product originating from particular source.15

Example : Aspirin, Cellphone, Gramophone, Nylon & Cellophanetapes.

Trade mark distinguished from patent, design and copy rights

Patents, designs, copy right and trademarks are industrial property used

in some and also apply termed as intellectual property, since they are the product of

purely intellectual effort of pioneering businessmen.

A patent gives its owner a monopoly right to make and sell or use the

patented product or process for an invention for a limited period of time. The owner

of a registered design similarly gets a monopoly right to apply the design to the class

15

of articles covered by its registration for a limited period of time. In Copy Right the

author of a work of art or any other work in which Copy Right subsists, is granted

the exclusive right to make copies or reproduction of the subject matter for a certain

period.

In all these cases, monopoly rights are associated with a product of

invention, discovery or intellectual effort and the duration of the right limited. On

the other hand, it is not necessary that the trade mark chosen by a trader should be

the result of inventive skill of intellectual labour. Subject to certain conditions, the

owner of the mark, whether registered or unregistered gets perpetual right to the

exclusive use of it in relation to particular goods in respect of which it is registered

or used.16

A comparative chart of intellectual property rights, patents and

trademarks explained above are presented below:

I.10 COMPARATIVE CHART OF INTELLECTUAL PROPERTY

RIGHTS

Categories Patent

Patents Act, 1970

Copyright

The Copyright Act,

1957

Trade mark17

Trade marks

Act, 1999

1. Subject

matter of

protection

Invention :

Product, Process

Literary works,

Artistic works,

Musical works,

Dramatic works,

Sound recordings,

Cinematograph films.

Reputation and

Goodwill in goods

and services

2. Criteria for

protection

Novelty, Utility,

Non-obviousness.

Originality /

Creativity, Fixation

Distinctiveness,

Non-

descriptiveness

16

3. Term of

Protection

20 years from the

date of filing the

application

Life of author + 60

years from the date

of creation of the

work in the case of

literary, dramatic,

artistic and musical

works, anonymous

and pseudonymous

works, posthumous

works, 60 years

from the date of

publication in the

case of photographs,

cinematograph films

and sound

recordings.

10 years from the

date of registration

+ renewal each for

a period of 10

years.

4. What amounts

to Infringment

Making or using or

importing of a

patented product,

using of a patented

process.

Direct and indirect

copying

Use of deceptively

similar or

confusingly

similar registered

trade mark,

application of a

registered trade

mark on a material

intended to be

used for labelling,

packaging goods,

business papers or

for advertising

goods or services.

5. Principles of

Infringment

Direct

Infringement,

Indirect

infringement

Substantial

Similarity

Protection of the

reputation and

goodwill of goods

and services.

6. Remedies

(Civil)

Injunction, damages

or accounts of

profits

Injunction, damages

or, accounts of

profits, delivery up

of infringing articles

Injunction,

damages or,

accounts of profits,

delivery up of

infringing articles.

7. Remedies

(Criminal)

Imprisonment or

fine or both

Imprisonment or

fine or both

Imprisonment or

fine or both.

17

I.11 PROCEDURES FOR ASSIGNMENT REGISTRATION

i. Procedures

The main purpose of trade mark law is that public should not be confused

and one trader should not trade upon the reputation of another trader.

A trade mark qualifies registration only if it is distinctive or capable of

being distinguished. Registration enables the registered proprietor to sue for

infringement of registered trade mark irrespective of the fact, whether it is used or

not used. The Registration confers on the proprietor a monopoly right over the use

of the mark.

But, proprietary right in a trade mark acquired by use is superior to the

right obtained by registration under the Act. Therefore, prior user of the marks

should be protected against monopoly rights conferred by the Act. Registration is a

genus whereas the Assignment is specie for which registration is compulsory. The

registration includes the registration of assignment and transmission. The

registration of assignment gives legal sanctity and validity.18

Assignment is a “sale” of the mark by the registered proprietor to a third

party for consideration. It should be in writing and should be unconditional. The

person who is assigning is called assignor and the person to whom the mark is

assigned is called assignee. The rights of the assignor as per the Register of Trade

Marks will be the rights of the assignee. Any consideration for an assignment will be

taken as consideration for the contract of assignment. However, a Registered User

cannot be an assignor. The Registered User (Licensee) of a trade mark does not have

a right of assignment or transmission.

18

A registered proprietor of a trade mark cannot interfere with the use of

the trade mark by a prior user of the same. It is the prior adopter and user of the

mark who is entitled to claim proprietorship of the mark. Transferring proprietary

rights in the property of the proprietor can be referred to as Assignment. Section 2

(b) of the Trade marks Act, 1999 describes an Assignment as an assignment in

writing by the act of the parties concerned.19

An assignment is a transfer of some right or interest from an assignor to

an assignee that confers a complete right in the subject matter to the assignee. An

assignment is regarded as invalid if the same is against public policy. Obtaining an

assignment through fraudulent means invalidates the assignment. Fraud destroys the

validity of everything into which it enters. Hence, there are certain requisites that

make an assignment a valid one. They are

An assignment must be clear.

There must be clear evidence of the intent to transfer rights.

An assignment must describe the subject matter of the assignment.

An assignor cannot cancel or modify the completed assignment by

unilateral action without the consent of the assignee once a valid assignment is

made. Similarly, the presence of a condition relating to an assignment will not

invalidate the effectiveness of an assignment. Thus, an assignment is not ineffective,

because it is conditional. If the assignment is not written, courts have to look at the

circumstances surrounding the assignment agreement and the acts of the parties to

ascertain their intentions. Written assignments can act as an evidence of the

intention of parties regarding transfer of some identifiable property, claim, or rights.

Generally, an assignment should be in written form. However, oral assignments can

also be valid. When the statute of frauds applies or there is a statutory requirement

19

that an assignment should be in writing to make it valid. An assignee is the party to

whom something is assigned. For an assignment to be valid, acceptance of the

right/interest by the assignee is necessary.

The assignment should not create multiple exclusive rights. Assignee

gets the rights on the registered mark subject to conditions of registerablity imposed

on the owner of the mark. The mark can be transferred with or without the goodwill

of the business concerned.Assignment can be with regard to all or some of the goods

related to the mark. The unregistered trade mark can also be transferred with or

without the goodwill of the business concerned. The creation of multiple exclusive

rights is prohibited.The power to certify the validity of the registration rests with the

registrar alone. The mark can be assigned in favour of two different persons if they

are operating in different countries. There are certain exceptions to the rule of

multiple exclusive rights. It provides for assignment with territorial restrictions.20

Section 42 of the Trade Marks Act 1999 explains the procedure for

assignment without transfer of goodwill. An assignment of trade mark has to be

registered within 6 months from the assignment date. Extension can be sought for a

maximum three months.

Application to the Registrar of trade marks for advertisement of the

assignment is to caution the public. Application for the registration of the trade

mark shall be made to the Registrar in the prescribed manner for registration of the

assignment. Incase of dispute over the validity of the assignment, the Registrar may

refuse to register until the dispute has been settled by a competent court. An

assignment, which is not registered shall not be treated as proof of title to the

assignment, unless directed otherwise Registrar, Appellate Board or the Court.

20

A Company may be registered as the subsequent proprietor of a

registered trade mark upon application is made under rule 68 of Trade Marks Rules,

2002. It shall be six months from the date of advertisement in the journal of the

registration of the trade mark or such further period not exceeding six months as the

Registrar may allow on application being made in Form TM-25.

ii. Rules and Procedures

Trade Marks Rules, 2002 governs the procedure for registration of a

trade mark assignment. Rules 68- 79 deal with the procedures for registering the

assignment of trade mark.21

TM 23- Joint request for registration by registered proprietor &

transferee

TM 24- When request is made by the transferee alone

TM 20- Application of advertisement of trade mark

TM 21-Extension for filing form TM 20

TM 18- Affidavit for verifying case accompanying application

TM 17 & TM 19- Registrar’s Certificate of Approval

TM 25- Registration of Assignment to a Company

In the application for the assignment, the following particulars should be stated.

Full name, address, and nationality of registered proprietor, or other

assignor or Transmitter.

Full name, address and nationality of transferee

Description of transferee(calling or profession)

Address of the principal place of business in India, if any, of the

transferee. If there is no place of business in India state the address

of the place of residence in India. If there is not even a place of

21

residence in India state the address in the home country abroad and

an address for service in India.

Additional numbers may be given in a signed schedule on the back

of the Form

Date of acquisition of proprietorship

Full particulars of the instrument of assignment or transmission, if

any or statement of case.

Strike out any words not applicable

Signature of assignor or transmitter or of his agent

Signature of transferee or of his agent

Name of the place of the appropriate office of the Trade Marks

Registry

iii. Legal advertisement

Advertisement of assignment is necessary when the Trade mark is

transferred without goodwill. Application to be made in Form TM 20. The Registrar

may call for further proof, if he is not satisfied. For Certification Marks reference

identifying the Registrar's notification of approval has to be included in the

application. A request for extension of time period can be sought under For TM 21.

iv. Particulars to be entered in the Register

The name and address of the assignee

The date of the assignment

Where the assignment is in respect of any right in the mark, a

description of the right assigned

The basis under which the assignment is made

The date on which the entry is made in the register

22

The Trade marks Act 1999 permits the assignment of a registered trade

mark and an unregistered trade mark with or without the goodwill of the business

concerned.22

An application to register the title of assignment and transmission of

registered mark with goodwill should accompany either FORM TM – 23 or FORM

TM – 24. The application in FORM TM 23 will be submitted at the joint request of

the registered proprietor and the transferee, to register the transferee’s name as a

subsequent proprietor of the trade mark. The application in FORM – TM 24 will be

submitted at the request of the assignee or the transferee to register the transferee as

a subsequent proprietor of the trade mark.

An application to register the title of assignment and transmission of

registered mark without goodwill should accompany FORM TM – 20. It is

submitted in order to get direction for the advertisement of an assignment of a trade

mark without goodwill in newspaper, trade mark journal within six months from the

date of assignment. FORM TM – 21 can also be applied for the extension of time for

three months. FORM TM - 23 or FORM TM - 24 can be applied for getting

approval from the registrar for the registration of assignment. FORM TM – 25 is

used to apply for the extension of time for the registration of the name of a company

as a subsequent proprietor of a trade mark in the register.

A Valid Assignment confers on assignee the rights of the registered

proprietor including action against infringement of the trade mark by others. The

rights conferred u/s.28 (Rights conferred by Registration) passes to the assignee.

23

In the case of pending application for registration of assignment,

subsequent proprietor is not a bar to file a suit for injunction for and on behalf of the

plaintiff. The pending application can be assigned along with goodwill of the

trademark and for that purpose the trade mark should have been used before the date

of filing of application. The registered mark can be assigned with or without good

will.

Pending mark

When application for assignment is pending, that can be assigned only

along with the goodwill. When the mark is advertised in Trade mark Journal, any

person can file opposition in the case of pending application. When mark is already

registered, rectification can be done by any aggrieved person for the registered trade

mark.23

A trade mark can be assigned with or without the goodwill of the

business concerned. This recognizes the modern principle that a trade mark and the

goodwill of the business are two separable entities.

The following flow charts explain the procedures to be followed at the

time of registration of assignment of trade mark with or without goodwill. Further,

the procedures related to assignment of trade mark to a proposed company and the

trade mark registration procedures are also explained in the flow charts. 24

24

Figure No.1.1.

ASSIGNMENT OF A TRADE MARK WITH GOODWILL

25

Figure No. 1.2.

ASSIGNMENT OF A TRADE MARK WITHOUT GOODWILL

26

Figure No 1.3

ASSIGNMENT OF A TRADE MARK TO A PROPOSED COMPANY

27

Figure No 1.4.

TRADE MARK REGISTRATION FLOW CHART

28

An application for rectification can only be made by an aggrieved person.

Persons who are aggrieved or persons who are in some way or other substantially

interested in having the mark removed from the register or persons who would be

substantially damaged, if the mark remained. In this regard, certain provisions of the

law are presented below:

v. Sec. 45 of TRADE MARKS Act 1999

Without registration of assignment or transmission no rights can be

pleaded on the ground that the trade mark has been assigned or transmitted. Legal

right of remedy is available only after Registration.

vi. Sec. 45 (2) and Sec. 28 (1) Rights conferred by Registration

(1) Registration of assignment is compulsory

(2) Valid assignment confers on assignee the rights of Registered

Proprietor ie., a right of action against infringement.

In the case of assignment of trade mark belonging to the partners /

partnership firm if the assignment is executed by one of the existing partners,

opportunity of hearing should be given to all the partners including the retired

partner in the interest of natural justice. An assignment which is not registered shall

not be admitted as evidence before a court of law. For the ‘Registration of

Assignment’, the original deed of assignment has to be filed.

In the case of transmission, assignment deed, legal heir certificate have to

be filed, that will be returned after registration. The Registrar will keep the certified

29

copy of original assignment deed and return the original deed after the registration

of assignment.25

Well known trade mark (even though it is not registered) if it is used by

other person, the proprietor is having the right to restrain the others not to use by

usage and customs of trade. Example: TATA.

Use of a distinctive mark by someone else other than trade mark owner

in relation to even unrelated goods may result in dilution of brand and consequential

reputation, thereby resulting injury to the trademark owner.

Permitted use of a trade mark by a person other than the registered

proprietor, with the consent of the registered proprietor would not amount to

infringement of trade mark. As per Sec. 54 Registered User cannot assign the trade

mark since he is not having the right of assignment and transmission. Further, if

trade mark advertisement is defective, then it has to be removed from the register of

trade marks.

There are sales tax and Income tax problem for branded items. Tax will

be very high for registered trade marks compared to unregistered trade marks. To

avoid tax problem, most of the traders are having unregistered trade marks in India.

If there is a dishonest adoption of the trade mark of the plaintiff’s product

by the defendant, an injunction order can be granted. If there is any dispute

regarding validity of ownership of trade marks that will be determined by the court

of competent jurisdiction.

30

Suit seeking relief by means of permanent injunction in a trade mark

infringement case is to be initiated only in the High Court and not before the City

Civil Court. It has no meaning even if it is registered, unless it is used in relation to

goods. Its non-use may lead to its death. A trade mark which drops out of the use

dies. Where there are no goods offered for sale, there is no use of the trademark. The

lapses due to non-renewal of trade mark, it cannot be assigned. Abandoned trade

mark is not capable of assignment.

When the assignee is having valid assignment, he has got the right

u/s.28 ( Right conferred by Registration) and u/s.29 protection against infringement

of trademark under the Trade marks Act 1999. Further, Sec.38. deals with

assignability and transmissibility of registered trade mark with or without goodwill

of the business either in respect of all goods and services. Further, Sec.39. deals

with assignability and transmissibility of unregistered trade mark. An unregistered

trade mark can be assigned with or without the goodwill of the business.

Registration u/s. 45 (1) is “on proof of title” and thus the title exists in assignee even

before registration. Title in registered trade mark vests in assignee after assignment

but before registration law provides legal sanction to the trade mark by its

registration and not necessarily to the holder of the trade mark.

vii. TRANSMISSION RIGHT

Transfer of ownership right to legal heirs by operation of law. The suit by

the legal representations is maintainable even without an order of Registrar. Law

gives recognition of the title which already in heirs in the legal representatives of the

deceased proprietor.26

Overall view of the concept of the trade mark, as one of the Intellectual

Property assets is presented for this study. Its importance in trade and commerce are

31

dealt with in detail together with legal procedures to be adhered to the registration of

Assignment and Transmission of Trade marks in India. Complexity arising from the

operation of assignment and transmission procedures led to the present research

effort.

I.12 NEED FOR THE STUDY

The present study attempts to critically examine the compliance of law

related to Assignment and Transmission of Trade marks in India.

The Intellectual property is of recent origin. This research study is to

highlight the growing importance of the trade mark (one of the Intellectual

properties) and its assignment. Considering the necessity to protect the interest of

the business community and the consumers, the need for the research is felt to

explore the various aspects of trade marks.

Further, it is imperative to identify the awareness of trademark by the

businessmen and the consumers at large and the extent to which the businessmen are

utilising for their business promotion.

It is also needed to understand their legal rights obtained by registration

of the assignment of the trade marks and to identify the rights of the registered

proprietor to assign the trade marks for any consideration.

Hence, a research enquiry into the legal aspects such as validity, rights

secured, legal compliance on registrations of assignment/transmission and obstacles

in the implementation of law related to assignment and transmission are considered

for the present study.

32

I.13 SCOPE OF THE STUDY

A trademark came to be necessary as a means of indicating trade origin,

the intention being at that time, that the buyer of a product bearing any trade mark

knew who the supplier was and what level of quality could be taken as assured. Over

the years, with the enormous growth in advertising in business and along with

commercial growth, owners of trade marks found the extraordinary power placed in

their hands. Consumer began to develop an attitude as it was fashionable to call as

“brand loyalty”.

The present study concentrates on assignment and transmission of

trademark which is a part and parcel of trade mark law. This study brings out certain

importance factors viz. registered and unregistered assignment, legal rights

available to assignor and assignee, validity of title, reassignment , transmission -

transfer of ownership right to the legal heirs by operation of law and right of the

owner of the registered trade mark to assign his trade mark with or without the

transfer of the business to which the trade mark belongs.

Further, the present study is undertaken to understand the consumers

awareness about the trade mark, how the trade mark promotes the business and how

the businessmen are protected and their monopoly rights conferred under the Trade

Marks Act 1999. The object of the act is to avoid confusion in the minds of the

consumers about the trade mark and to protect the proprietary right of registered

trade mark holders.

33

I.14 STATEMENT OF THE PROBLEM

Prior to 1940 there was no statutory law relating to trade marks in India.

The law applicable to the subject was based on common law of England before the

passing of the First Registration Act 1987.

The Trade marks Act 1940 introduced for the first time addressed the

need for the registration and statutory protection of trade marks in India. This Act

was in force until 1958 and Trade and Merchandise Marks Act was introduced on

1958. This Act was repealed and the present law is governed by the Trade marks Act

1999.

The Trade marks Act 1999 has made substantial changes in law. As

regards unregistered trade marks some of the laws are codified, while others are

based on common law for which one has to refer decisions of courts. The statutory

rights conferred by the registration of a trade mark, infringement, assignment and

transmission are so wide and complex. Hence, it has been found necessary to

safeguard the purchasing public from imposition and fraud by infringers of genuine

trade marks.

The present Trade marks Act 1999 has introduced better reforms in the

law concerning licensing of trade marks but the same view is lacking in the area of

assignment of trade marks. In the case of licensing, the right in the trade mark

continues to be with the proprietor, in assignment there is a change of ownership of

the trade mark. Therefore, there is no justifiable reason for not adopting a more

liberalised approach in respect of the reforms of law relating to assignment.

Often companies engaging in an assignment arrangement overlook the

fact that Indian Reserve Bank Rules must be followed when issuing shares as

consideration to an assignor who is a non-resident. The present study tries to

examine the related issues through the following objectives.

34

I.15 OBJECTIVES OF THE STUDY

1. To analyse the legal protection given by registration of trade mark.

2. To review the procedures followed in assignment and transmission

of trade mark.

3. To understand and evaluate the problems during the assignment or

after the assignment of trade mark.

4. To identify the awareness of trade mark among the consumers,

businessmen and trade mark attorneys for its implications.

5. To examine the legal remedies for the businessmen and consumers.

6. To suggest suitable remedies to solve the problems of assignment

of trade mark.

I.16 RESEARCH METHODOLOGY

i. Method of Research

This research work is focused on the problems which will arise during

and after assignment of trade mark. Therefore, case study approach and Analytical

Study method are adopted. Moreover, the descriptive methodology has become an

essential factor in this study inorder to review the legal literary background.

Survey method through structered questionnaires was adopted for the

study, to understand the perceptions of consumers, businessmen and legal attorneys

specially. Legal provisions and related references of trade mark assignment and

transmission are taken into consideration as primary factors for the research study.

The secondary data were collected from various IPR Law Firms, Trade mark

Attorneys, Legal experts and Judgements.

35

Sampling frame and data collection procedure

ii. Preliminary survey

Initially, in order to understand the level of knowledge on trade marks

and its assignment/transmission related issues, attempts were made to elicit the

opinion of traders, legal attorneys and consumers. Based on preliminary interviews

and references in legal provisions, separate questionnaires were drafted to elicit their

opinions/ perceptions on the related issues. Necessary modifications were carried

out to include the core objectives of the study. Then, final version of the

questionnaire was prepared for sample survey.

Thus, the study is based on primary data and secondary data. The

primary data was collected through distribution of questionnaires to 400 Consumers,

150 Businessmen and 150 Trade mark Attorneys. Secondary data was collected

from various law books and from practising Trade mark Attorneys, those who are

having legal knowledge about the trade mark registration, assignment registration.

For primary data collection questionnaires were distributed to a spectrum of

different category of consumers.

iii. Sampling method

Convenient sampling was adopted taking into consideration the

availability and approachability of various respondents for the purpose of data

collection, to elicit adequate information.

Therefore, separate questionnaires for consumers, businessmen and

Trade mark Attorneys were prepared. 342 questionnaires were collected from

consumers, another 103 questionaires from Trade mark Attorneys and 126

36

questionnaires were collected from the businessmen. Thus, 571questionnaires of

different categories which were complete in all respects are used for statistical

purposes. Since the concept of assignment of trade mark is new to South India, non-

random sampling method has been used to collect data.

iv. Data Collection period

The entire research study was carried during April 2010 to December

2013. Actual data collection efforts were carried during the period January 2011 to

December 2012.

v. Research Instrument

The research instruments used for this study are based on structured

questionnaires. Three types of questionnaires were prepared for the consumers,

businessmen and for the Trade mark Attorneys exclusively for this purpose. They

are,

1. Questionnaire for the consumers was designed to study the factors

which show the purchase decisions, preference to product with

trade mark etc., It contains the profile of the consumers, shops

preferred, influence of others at the time of purchasing and

identification of trade mark of the product.

2. Questionnaire for the businessmen included the factors that show

the profile of business organization, the use of trade mark for their

products and their understanding of assignment of trade mark

related issues.

3. Questionnaire for the Trade mark Attorneys is designed to elicit

information on the profile of Trade mark Attorneys and their

opinions on the assignment of trade marks issues.

37

vi. Questionnaire design

1. The questionnaire for consumers was presented in two parts.

They are

Part A

This section deals with the personal data of consumers to understand the

demographic profile of the respondents like gender, age, types of consumers and

their qualification, shops preferred, purchase decision, persons helping to identify

the trade marks and consumers’ preferences to products with or without trademarks,

etc.,

Part B

This section deals with consumer – trade mark link. This section helps to

identity, how the consumers are making decision at the time of selection of goods.

The main variable is awareness of trade marks among the consumers.

Sub variables 1 to 17 were fitted to two point scale viz. yes or no. Sub

variables were indentified in order to examine, whether the consumers are aware of

the trade mark of the product or whether their decision of purchase is based on trade

mark symbols.

2. The questionnaire used for businessmen/traders is divided into

two parts. They are,

Part A

This section deals with the details of business organizations to

understand the profile of the respondents like name and address of the organization,

year of establishment, types of business, business experience and usage of

trademarks for their products in a symbol forms .

38

Part B

This section deals with the perceptions of businessmen on trade mark

link. It helps to identify, whether the trade marks are promoting their business,

registration of trade mark for business protection and practice of assigning the trade

mark. The second section consists of 30 statements. These were presented in a five

point scale viz. Strongly agree, agree, neutral, disagree and strongly disagree. They

are,

S.No. Variables Statement number

1. Awareness 1 to 8

2. Promotion 9 to 15

3. Protection 16 to 23

4. Knowledge of Assignment 24 to 30

Statements 31 to 35 help to indentify, whether the businessmen are

having registered trade mark or unregistered trade mark, license to use registered

trade mark and the practices of assigning the trade mark etc.

3. The questionnaires used for data collection is divided into two parts

to get opinions of Trade mark Attorneys

Part A

This section deals with the personal data of Trade mark Attorneys to

understand the demographic profile of the respondents like, gender, age,

qualification, years of experience, numbers of cases dealt in trade mark and

assignment related disputes.

39

Part B

This section deals with their perceptions on assignment and transmission

related issues. To identify the legal implications related with assignment of trade

marks wherein, the statements were presented with five point scale viz strongly

agree, agree, neutral, disagree and strongly disagree.

S.No. Variables Statement number

1. Legal Protection 1 to 9

2. Validity 10 to 15

3. Rights secured 16 to 22

4. Legal Compliance 22 to 32

First nine statements are taken to analyse the legal protection available to

the businessmen at the time of assignment of trade mark.

Statements 10 to 15 proposed to analyse the validity of assignment and

16 to 21 statements are taken to analyze the fact that rights secured by the assignee

during assignment process. 22 - 32 statements represent the legal compliance at the

time of assignment of trade marks.

The first, second, third and fourth sub sections deal with statements on a

five point scale. The following weights are assigned to calculate the global score of

each variable, when such dimensions were presented in five point scales. They are,

Strongly agree with the statement - 5

Agree with the statement - 4

Neutral with the statement - 3

Disagree with the statement - 2

Strongly disagree with the statement - 1

For each statement Average Mean Score is calculated for statistical comparison.

40

vii. Limitations of the study

1. The study is confined to assignment and transmission of the trade

mark practices in India only.

2. The study does not cover international aspects of assignment of

trade marks.

3. The observation for this study is based on Judgements of various

High Courts and Supreme Court compiled upto 2012 relating to

core dimensions of the study.

4. Though the perceptions of consumers and businessmen tend to

change over time, necessary caution is applied in drafting the

survey questionnaire.

I.17. CHAPTER ARRANGEMENT

The present study is comprehensively presented in six chapters. They are,

CHAPTER - I Introduction and Research Methodology

This chapter introduces the concept of trade mark, assignment and

transmission of trade marks in India. It further elaborates on the need for the study,

objectives of the study and the methodology adopted. This chapter identifies certain

core variables which influence the promotion of the business. The core variables

selected are consumer awareness of trade mark, protection, promotion and

assignment of trade mark by the businessmen, validity, rights secured, legal

protection and legal compliance in the assignment related issues.

41

CHAPTER - II Review of literature

This chapter provides an extensive review of related literature,

synthesizing the early researchers on the topic and selection of topic for the present

study. Articles, books, reports and judgements on topic relating to trade mark and

assignment of trade mark in India were reviewed.

CHAPTER - III Evolution of Indian Trade Marks Act

This chapter deals with the Evolution of Indian Trade Marks Act, salient

features, provisions, procedures for assignment registration and rules related to

Assignment and Transmission of Trade marks in India.

CHAPTER - IV Analysis and Interpretation - I

This chapter analyzes the important case laws and judgements with

reference to Assignment and Transmission of Trade marks issues in India.

CHAPTER - V Analysis and Interpretation - II

This chapter makes in depth analysis of the perceptions of Consumers,

Businessmen and Trade mark Attorneys on trademarks compatiability by applying

various statistical tools. Correlation analysis, regression analysis and factor analysis

are carried out.

CHAPTER - VI Summary and Conclusion

This chapter consists of summary of the finding of the study.

Implications of the study are presented. Suggestions and opinions of the sample

respondents are also presented with general observations from the study.

CHAPTER – I END NOTES

1. Intellectual Property Rights in India – V.K.Ahuja Volume 1.

2. Intellectual Property Global and Indian Dimensions – J.K.Bagehi IAS

(Retired).

3. Trade Marks Law and Practice – J.S.SARKAR Pg no 545- 560.

4. www.lexisnexis.com

5. Trade mark’s Passing off and Geographical Indication of goods Law and

Practice – D.P.Mittal.

6. PSF Journal – Assigning and Licensing IPR in India 14th

October 2009.

7. Law of Trade marks by Ashwani Kr.Bansal 2006 Pg. 360 -365

8. Intellectual Property Law by Prof.A.Chandrasekaran Pg no 76-81.

9. E.Bowen, ‘the concept of Private Property’ Cornell Law Quarterly, 1925,

pg 42.

10. Dr.Vikas Vashishth, Law and Practice of IPR in India pg 14.

11. Trade marks Law Revision 1955 Justice Rajagopalan Iyyengar.

12. Reforms of Trade mark Law issued by the department of trade and industry

in September 1990 pg 440.

13. Dr. Venkateswaran on Law of Trade marks pg 731.

14. Trade marks Application and appeals to the Intellectual Property Board rules

2003.

15. Ramasamy Iyer’s Law of Torts pg 702 – 703.

16. Trade marks Law in India 2007 by Sudhir Kumar Aswal pg 288 -230.

17. Meenu Paul, “Intellectual Property Laws,” Allahabad Law Agency, 2004.

18. P.Narayanan., “Intellectual Property Laws,” 1999 pg 59 -63.

19. Wadehra B.L., Law relating to Patents Trade marks Copyrights Designs and

Geographical Indications”, 2000 pg- 578-590.

20. Intellectual Property Law in India by Justice Narayana , Retired Judge.

21. Origins of Intellectual property Law by Judith Silver. www.coollawyer.com

22. Intellectual Property by David BainBridge pg 5 – 10.

23. Intellectual Property Rights under WTO tasks Before India pg 49 to 63 by

T.Ramappa, Advocate, and Chennai.

24. Altacit global www.altacitglobal.com.

25. Protection of Trade marks An overview of Trade mark Law in India Chapter

8 pg-133 by Chandrakanthi.L.

26. Intellectual Property Rights 2007 PG 339 Dr.Sreenivasulu .N.S.