Dealing with Trademark Squatting in India

With the business ecosystem evolving larger and broader, trademarks are very critical to the identity of a brand. But there are a few problems with this; unethical trademark squatting, for example, registering a big name or potential name ahead of time with the hopes of later selling it for nearly triple what they paid for it. This is especially important for Indian businesses who are in the process of protecting their IP.

This guide will help you to deal with that under Indian trademark laws if you are either facing trademark squatting or want to avoid it.

What is Trademark Squatting?

This is often referred to as trademark squatting, where someone registers a trademark in bad faith and typically an individual or company without a bona fide intention of using it. This is usually done to either sell the trademark to the actual owner of the brand at an exaggerated price or to prevent the legal owner from accessing the market.

This is a common unethical practice in India — particularly in the burgeoned e-commerce and startups sector. Several famous brands have experienced squatting instances when they have ventured into Indian market.

What is the impact of trademark squatting on businesses?

Law Suits: Business may find themselves fighting long and costly legal battles to get their brand name back. Barriers to Entry: Squatter can block real businesses from operating their own brand  Consumer Confusion — Fake brands work by attempting to confuse the consumer into believing that they are dealing with the original brand, hence, effecting a tarnished reputation on the brand from whom the trademark is stolen. Media exposure: may have to pay a lot of money to take the trademark right back to their own.

Preventing Trademark Squatting — How Do You Do It?

Get Your Trademark Registered as Soon as Possible:

If you have an offbeat brand name, apply for registration of trademark   at the earliest under the Trademarks Act, 1999.

Filing before squatters can take by your brand

MEMO   International Trademarks:

If You need to register your trademark in many countries in the world, you can apply under the Madrid Protocol.

Track Your Trademark: The New Normal

Run trademark searches on the IP India website https://ipindia.gov.in to identify any counter filings.

ACTIVELY USE YOUR TRADEMARK[S]:

Unused trademarks are common targets of squatters. Your use has to be regular to enforce your trademark rights.

What Are Your Options to Tackle Trademark Squatting in India?

So, if you find that someone has squatted on your trademark, here is what to do legally:

Suing the squatted trademark through an Opposition

You can file an opposition against trademark applications of squatters, provided it is at examination or journal publication stage, within 4 months of it being published under Section 21 of the Trademarks Act, 1999.

So, you have to apply for Trademark Rectification

If the trademark is already registered, you can file a rectification petition under Section 57 of the Act, to strike out a fraudulent trademark, on the register. You will have to show: ✔ The registration was in bad faith. The squatter had no true intention of using the trademark. ✔ Your brand is trying to be recognized and endorsed in the market.

Demonstrate Prior Use of the Trademark

Section 34 of Trademarks Act provides that prior users have a superior right over a mark though not registered. Demonstrating that you have been using your mark (any old advertisements, invoices, or other résumé items or social media could help regain your mark).

Indefinite time to file a suit for Trademark Infringement and Passing Off

If you feel the squatter is passing off the brand name as their own and using it to confuse customers, you can sue them under common law for passing off.

If you have already acquired a registered trademark, you can sue for trademark infringement under Section 29 of the Act.

Negotiate with the Squatter

In some cases, reaching some form of amicable agreement with the squatter may be the fastest way to move forward. But this option is only available if pursued a bit slowly in a time-consuming and capital-intensive manner.

Few Landmark Indian Cases on Trademark Squatting

Yahoo! Inc. & Anr v Akash Arora & Anr 1999: [2] Infringement of Service Marks in the USA; Yahoo! won a case against the cybersquatted of “Yahoo India.” Yahoo! won the decision in court. on the grounds of the passing off Toyota vs Prius Auto Industries (2017): Toyota could not win a case against an Indian company using the mark “Prius,” because the court found no prior reputation having been established in India.  Kraft Foods v. Neeraj Food Products (2007) – Kraft Foods, in an action against an Indian Company using “Oreo” on Biscuits, proved the prior and world-wide reputation of “Oreo”.

Conclusion

Though an eminent threat to businesses, Indian laws have remedies at hand to address such an issue of trademark squatting. Proactive registration, monitoring, and litigation if needed are the best lines of defence.

Head to Kaagzaat.Org if you need help protecting your trademark or are fighting squatters for professional legal advice and trademark services.