Rights of Prior User of Trademark Prevails over Registered Proprietor

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November 3, 2017

M/s R. J. Components and Shafts vs. M/s Deepak Industries Limited

In this recent judgement passed by the Delhi High Court, the Court recognized the legal principle of Prior user of a mark. The Court’s verdict in the case has reiterated the law that prior user of a trademark will override the subsequent user even if the subsequent user has registered the trademark.

Brief Facts of the case- The instant case was instituted by one, Rajeev Kumar who claimed to be the sole proprietor of M/s. R.J. Components & Shafts (Plaintiff Company) against the Defendants to restrain them from in any manner using the Plaintiff’s registered trademark NAW.

The Plaintiff Company is engaged in the business of manufacturing and marketing of inter alia ‘gears’ being tractor parts with respect to goods falling under Class 12. The Plaintiff contended that its business is well-established and the impugned trademark NAW is a well-known trademark and over the years its brand has garnered abundant goodwill and reputation in the trade.

Rajeev Kumar further contended that initially his grandfather namely, Ramji Das was the sole proprietor of the Plaintiff Company and vide a deed of assignment in the year 2000 Ramji Das assigned all rights, title and interest of the trademark NAW in the assignor. He also contended that pursuant to deed of assignment, he became the registered proprietor of the mark NAW and after the death of his grandfather the disputed mark was being used by him.

Plaintiff’s allegations– The Plaintiff alleged that the Defendants in the case who are also engaged in a similar business have recently started manufacturing gears and have adopted an exactly similar trademark NAW of the plaintiff.

Defendant’s reply– The Defendants refuted the Plaintiff’s claims and stated that Rajeev Kumar’s name had not been entered as ‘subsequent proprietor’ in the records of the Trade Marks Registry. Thus, no valid assignment has been made in favour of Rajeev Kumar by Ramji Das and hence he could not acquire any right in the said trademark NAW.

The Defendant also stated that the disputed mark NAW had been obtained by fraud as Ramji Das and Rajeev Kumar were well aware that the said trademark belonged to the Defendant in the case. The Defendant stated that it has been using the trademark NAW in respect of gears being tractor parts since 1971 through their manufacturing unit M/s.New Allenberry Works. The Respondent also contended that the mark NAW has been coined from the initials of the name New Allenberry Works.

Court’s Order

As stated earlier, the Delhi High Court in this case recognized the prior user right as the superior right which also prevails over the registered proprietor of a similar or identical trademark. In view of the aforesaid facts, the Delhi High Court injuncted the Plaintiff from using the mark NAW and made the following observations:

Lack of Evidence- In the case, the Court stated that in spite of several opportunities the Plaintiff had failed to produce any evidence and no credible evidence had been adduced to infer that the trademark NAW was registered in the name of Ramji Das was ever used by him or was assigned to Rajeev Kumar. Moreover no evidence had been produced by the Plaintiff to controvert the Defendants’ assertion that they were prior user of the mark NAW since 1971.

Defendant is Prior User of the Mark- The Court found that on examination of evidentiary documents like cash memos and other documents pertaining to the period 1971 onwards on the letterheads the defendant, the trademark NAW has been prominently used. Such documents establish beyond doubt that the mark NAW was being used extensively by the Defendant since 1971 and hence Defendant is a prior user of the trademark NAW.

Rights of Prior User of Trademark in India

It is a well settled principle of Trademark Law that prior use of the goods will override the subsequent user, even though subsequent user has a registered trademark. Thus, the rights conferred by registration of trademark is subject to the rights of the prior user of the mark. In a recent case the Supreme Court in the case of S. Syed Mohideen vs. P. Sulochana Bai, had held that the scheme of the Act is such where rights of the prior user are recognised superior than that of the registration and even the registered proprietor cannot disturb interfere with the rights of the prior user.

Statutory recognition to the aforesaid principle can be found under Section 34 of the Trademark Act, 1999 which enumerates that a registered proprietor or registered user of a trademark cannot interfere with the use of any identical or similar mark is a person has been using a mark from an earlier date. Another recent case which establishes a similar legal proposition is the case of Neon Laboratories Ltd. v. Medical Technologies Ltd. & Ors., wherein the Supreme Court opined that a registered proprietor of a trademark does not possess the right to prevent use by another party of an identical mark if that use commenced prior to the use of the registered mark.

In view of the aforesaid settled Law, it is advisable that companies and individuals who are seeking trademark registration in India shall conduct a prior trademark search of similar marks which though not registered are in being used prior to registration of their trademark.  

 

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