Trade Marks

Trade Marks: Purpose and function of trademarks, Acquisition of trademark rights, transfer
of rights, Selecting and evaluating trademarks, registration of trademarks, and claims.

Trade Secrets: Trade secret law, determination of trade secret status, liability for
misappropriation of trade secrets, trade secret litigation.
Geographical Indication of Goods: Basic aspects and need for the registration

DEFINITION OF TRADEMARK:

A trademark is a word, phrase, symbol, design, or combination of words, phrases, symbols,

or designs used in the course of trade that identifies and distinguishes the source of the goods
or services of one enterprise from those of others.

As stated above, the definition of "trademark" under Section 2(1) is “A mark capable of
being represented graphically and which is capable of distinguishing the goods or
services of one person from others and may include the shape of goods, their packaging,
and combination of colors and covers both goods and services”.

“Mark” includes a device, brand, heading, label, ticket, name, signature, word, letter,
numeral, shape of goods, packaging or combination of colors or any combination thereof”.
[Section 2(1)].

Purpose and Function of Trademarks:

A trademark (popularly known as a brand name in layman’s language) is a visual symbol that
may be a word to indicate the source of the goods, a signature, name, device, label, numerals,
or combination of colors used, or services, or other articles of commerce to distinguish it
from other similar goods or services originating from another. It is a distinctive sign
identifying certain goods or services as those produced or provided by a specific person or
enterprise. Its origin dates back to ancient times, when craftsmen reproduced their signatures,
or "marks" on their artistic or utilitarian products. Over the years, these marks evolved into
today's trademark registration and protection system. The system helps consumers identify
and purchase a product or service because its nature and quality, indicated by its unique
trademark, meet their needs.
A trademark protects the owner of the mark by ensuring the exclusive right to use it or to
authorize another to use the same in return for payment. The period of protection varies, but a
trademark can be renewed indefinitely beyond the time limit on payment of additional fees.
Trademark protection is enforced by the courts, which in most systems have the authority to
block trademark infringement.

In a larger sense, trademarks promote initiative and enterprise worldwide by rewarding the
owners of trademarks with recognition and financial profit. Trademark protection also
hinders the efforts of unfair competitors, such as counterfeiters, to use similar distinctive
signs to market inferior or different products or services. The system enables people with
skill and enterprise to produce and market goods and services in the fairest possible
conditions, thereby facilitating international trade.

Trademarks perform two critical functions in the marketplace:

 They ensure that goods are of a certain quality and consistency, and
 They assist consumers in making decisions about the purchase of goods.

The main purpose of a trademark is to show the difference in the quality of goods and
services. For example: If a trademark such as NIKE could be counterfeited (imitating) and
used by another on inferior merchandise (goods), there would be no incentive for the owners
of the NIKE mark to produce high-quality shoes and to expend money establishing consumer
recognition of the products offered under the NIKE marks.

Thus, the protection of trademarks results in increased competition in the marketplace, with
both the producer of goods and services and the consumer as the ultimate beneficiaries.
Businesses can reap the rewards of their investment in developing and marketing a product
with one fearing another Businesses will deceive consumers by using the same or a
confusingly similar mark for like goods, and consumers benefit because they can identify and
purchase desired and quality goods.

The value inherent in achieving consumer loyalty to a particular product or service through
the maintenance of consistent quality of the products or service offered under a mark is called
goodwill.

 They identify one maker’s goods or services and distinguish them from those offered
by others
  They indicate that all goods or services offered under the mark come from a single
producer, manufacturer, or “source”
 They indicate that all goods or services offered under the mark are of consistent
quality and

 They serve as an advertising device oath at consumers to link a product or service

being offered with a mark

TYPES OF MARKS

There are four different types of marks. They are:

1. Trademark
2. Service mark
3. Certification mark
4. Collective mark

Trademark

The term trademark thus refers to some physical and tangible good and service mark refers to
an intangible service, in common usage the term trademark is often used to refer to marks for
both goods and services. The key point in this legal description is that a trademark is a visual
mark that may use any combination of letters and imagery to aid a company in differentiating
itself from other entities.

The purpose of a trademark is to visually represent a person, company, or product and the
trademark should be designed to provide easy and definite recognition. The term mark will
be used as a synonym for both trademark and service marks. The federal statute ((law) an act
passed by a legislative body) governing trademark law, the U.S. Trademark Act (Lanham
Act, found at 15 U.S.C 1051etseq.) itself states that the term mark includes any trademark,
service mark, collective mark, or certificate mark.
Service mark

A service mark is the same as a trademark, but instead of a particular product, it identifies
and differentiates the source of a service. A service mark is nothing but a mark that
distinguishes the services of one proprietor/owner from that of another. Service marks do not
represent goods, but the services offered by the company.

They are used in a service business where actual goods under the mark are not traded.
Companies providing services like computer hardware and software assembly, restaurant and
hotel services, courier and transport, beauty and health care, advertising, publishing, etc. are
now in a position to protect their names and marks from being misused by others. The rules
governing the service marks are fundamentally the same as any other trademarks.

Certification mark

A certification mark is a word, name, symbol, device, or combination thereof used by one
person to certify that the goods or services of others have certain features regarding quality
material mode of manufacture or some other characteristic (or that the work done on the
goods or services was performed by members of a union or other organization).

For example, Hallmark, ISO mark, and in U.S Underwriters Laboratory seals of approval
(Underwriters Laboratory is the largest stand best known independent, not-for-profit testing
laboratory in the world based in Northwood, Illinois, UL conducts safety and quality tests on
a broad range of products, from fire doors to CCTV cameras seals of approval).
Collective Mark

A collective mark is used by a collective membership organization, such as a labor union,

fraternity, or professional society, to identify that the person displaying the mark is a member
of the organization. These are the trademarks used by a group of companies and can be
protected by the group collectively. Collective marks are used to inform the public about a
particular characteristic of the product for which the collective mark is used. The owner of
such marks may be an association or public institution or it may be cooperative. Collective
marks are also used to promote particular products that have certain characteristics specific to
the producer in a given field. Thus, a collective trademark can be used by more than one
trader, provided that the trader belongs to the association.
ACQUISITION OF TRADEMARK RIGHTS

In a global scope, obtaining a trademark right through Use or through Registration are
two major legislative models of a system for the grant of trademark rights.

 By Use

 By Registration

The “use” model is based on the objective facts of trademark use and decides the ownership
of a trademark according to the time that the trademark was first used.

The “registration” model grants trademark rights according to registration and the first
applicant will obtain the trademark right.

In history, the earliest trademark legislations all took the “use” principle, for instance, the
first statute of trademark-Law of Manufacturing Signs and Trademarks concerning the
Content of Use and Non-examination Principle enacted by France in 1857 took the “use”
model.

However, since there were many defects in the “use” principle, France abandoned this
principle which had already been implemented for more than one hundred years in 1964, and
shifted to adopt the “registration” model which was succeeded by the current Code of
Intellectual Property. Article 712-1 of the code provides: “Trademark rights shall be obtained
through registration”.

In India, one can acquire and claim a Trademark only by Registration and not by Use

The registration of a trademark confers on the registered proprietor of the trademark the
exclusive right to use the trademark about the goods or services in respect of which the
trademark is registered. While registration of a trademark is not compulsory, it offers better
legal protection for an action for infringement. As per Section 17 of the Act, the registration
of a trademark confers the following rights on the registered proprietor:

(i) It confers on the registered proprietor the exclusive right to the use of the
trademark about the goods or services in respect of which the trademark is
registered.
(ii) It entitles the registered proprietor to obtain relief in respect of infringement of the
 trade mark in the manner provided by the Trade Marks Act, 1999 when a similar
mark is used on (a) same goods or services, (b) similar goods or services, (c) in
respect of dissimilar goods or services.

(iii) Registration of a trade mark forbids every other person (except the registered or
unregistered permitted user) to use or to obtain the registration of the same trade
mark or a confusingly similar mark in relation to the same goods or services or the
same description of goods or services in relation to which the trade mark is
registered.

(iv) After registration of the trade mark for goods or services, there shall not be
registered the same or confusingly similar trade mark not only for the same goods
or services but also in respect of similar goods or services by virtue of Section
11(1) of Trade Marks Act, 1999.

(v) Moreover, after registration of the trade mark for goods or services, there shall not
be registered the same or confusingly similar trade mark even in respect of
dissimilar goods or services by Section 11(2) in case of well-known trademarks.

(vi) Registered trademark shall not be used by anyone else in business papers and in
advertising. Use in comparative advertising should not take undue advantage of
the trademark. Such advertising should not be contrary to honest practices in
industrial or commercial matters. The advertising should not be detrimental to the
distinctive character or reputation of the trademark.

(vii) There is a right to restrain the use of the trademark as a trade name or part of a
trade name or name of a business concern dealing in the same goods or services.
The registered trademark continues to enjoy all the rights that vest in an
unregistered trademark. By registration, the proprietor of an unregistered
trademark is converted into the proprietor of the registered trademark. An
application for registration may be based on a trademark in use before such
application and such a trademark is already vested with rights at Common law
from the time the use of the mark was commenced.
Protectable Matter:

The definition of a trademark or service mark is that it is a word, name, symbol, device, or any
combination thereof used to identify products or services. Words such as IN-N-OUT BURGER®
and designs or symbols such as Mercedes Benz’s segmented circle or the Mr. Peanut design
can function as trademarks. There are, however, a host of other items that can be protected
as marks, generally because of the flexibility in the language of the Lanham Act allowing for
registration of a “symbol” or “device.” A symbol or device might include anything capable of
conveying meaning to a person, such as sounds, smells, and shapes.

Slogans, Letters, and Numbers

A slogan can constitute a trademark if it is distinctive. Thus, the slogan HAVE IT YOUR WAY® is
protectable. Alphanumeric symbols (letters and numbers) may be protectable as long as they
are not merely descriptive. Thus, broadcast station call letters such as NBC® or CNN® are
registrable. Similarly, numbers (either alone or with letters) can function as marks.
For example, Ford Motor Company received a registration for F-550® for automobiles after
explaining to the USPTO that the letters and numbers had no significance in the automobile
industry. If the numbers or letters describe something about the product or service offered
under the mark, however, the mark will not be registrable un- less proof of secondary
meaning is shown.

Logos and Symbols

Some of the most famous trademarks in existence consist solely of logos or symbols. Thus,
registrations exist for Nike’s famous “swoosh” mark, McDonald’s golden arches, and Ralph
Lauren’s figure of a polo player on a horse. Some symbols, however, such as a peace symbol or
smiley face, do not serve a trademark function and would not be registrable. Similarly, logos that
are purely ornamental or are mere background material may not be protectable.

Names of Performing Artists

A mark that merely serves to identify an artist, entertainer, or group is not registrable. However, if
the owner of the mark has controlled the quality of the goods or services or the name of the artist or
group has been used numerous times on different recordings or works (thereby representing an
assurance of quality to the public), the name may be registered as a trademark. Thus,
COLDPLAY® has been registered for musical sound recordings, and JOHN MELLENCAMP®
has been registered for entertainment services.
Domain Names

Domain names, for example, www.ibm.com, are registrable as trademarks or service marks only if they
function as an identification of the source of goods and services. In many cases, applications for domain
names are refused because the domain name merely describes the goods or services offered under the
mark or merely serves as an address where the applicant can be located.

Thus, www.eilberg.com was refused registration because the mark merely indicated the location
on the Internet where the applicant’s website appeared and it did not separately identify the applicant’s
legal services.

Foreign Terms
Foreign terms are registrable as long as they comply with the requirements of the Lanham Act. Foreign
wording will be translated into English and then examined by the USPTO for descriptiveness.

Shapes and Containers

Shapes or configurations can function as trademarks if they are distinctive rather than functional. Thus,
the famous Coca-Cola bottle shape is registered with the USPTO, and a competitor who adopts a
confusingly similar shape container for its product will likely be enjoined from use. The curvy shape of
the Coke bottle is not functional because it is not essential to the use or purpose of the product. If the
shape aided or promoted better functioning of the bottle, such as a more efficient lip or handle, it would not be
registrable.

Trade Dress
The total image of a product, such as size, shape, color, texture, packaging, and graphics, may be
protected through trademark registration. This total image and overall appearance are called trade
dress.

Color

Until relatively recently, a single color was not protected- able as a trademark. This general rule was
based on the color depletion theory: There are only a limited number of colors in the world; if
businesses could appropriate a color and exclude others from using it, competition would be impaired.
The present rule is that a trademark may consist of color as long as the color is not functional, the color
is shown to have acquired distinctiveness either through long use or a high level of consumer
recognition, and there is no need for competitors to have the color available to them.

Fragrances, Sounds, and Moving Images

A fragrance can function as a trademark if it has acquired distinctiveness and is not functional.
Designs and Ornamentation
A design can function as a trademark as long as it is distinctive rather than merely functional or
ornamental. Some designs are protected on their own, such as Nike’s famous “swoosh” design, the
alligator that appears on shirts, and Betty Crocker’s spoon. However, if pictorial matter is merely
descriptive, it cannot achieve registration without secondary meaning.

Serialized Literary and Movie Titles

The title of a single creative work, such as a book or movie title, is generally not protectable. The title of
a serialized work, such as REAL HOUSEWIVES® or NEWSWEEK®, however, can be protected as a
trademark or service mark.

SELECTING AND EVALUATING TRADEMARK

Selecting a Mark

The selection of mark occurs in a variety of ways companies hold contests and encourage
employees to create a mark for a new product line or service. Companies engage in
sophisticated research. Branding firms will conduct surveys and create a mark and a logo or
design for the company.

Once the mark is selected, it must be screed and evaluated for use and registrability, if failed
then it leads to waste in expenditure of time and money in advertising, using and applying for
a mark that is rejected for registration by the PTO or, in the worst case scenario, might
subject the owner to damages for trade mark infringement and unfair competition.

Once a mark is selected, it should be carefully scrutinized to ensure that it will not be
excluded from protection under the Lanham Act.

 Firstly, they have to check whether the mark contains scandalous (offending moral
sensibilities and injurious to reputation)
 Whether consent from a living person will be required,
 Whether the mark is generic,
 Whether it is statutorily protected

 Whether the mark is descriptive of some feature of the goods and services offered
 under the mark,
 It also see that the mark includes foreign terms
 Many law firms specializing in trademark work use a questionnaire form or datasheet
to gather questionnaire form or datasheet together basic information from clients
about their marks.

Evaluating Trademark

Trademarks are not only used to provide legal protection to a company's name, design, word,
etc. rather are intangible assets. Evaluating the exact value of the trademark is challenging.

Till a decade or two ago, no one used to evaluate the value of the intangible assets of the
company. However now, brands create the reputation of a product; motivate the purchasing
power; and make the product different from other generic products. Almost every brand
fetches a good amount of value. However, evaluating the exact value of the trademark is a
big challenge, and one must know the correct way to evaluate it.

Valuating intangible assets of your company like a trademark or patent is a complex task that
can turn your head upside down, and thus make the selling transaction adversative. However,
the need to evaluate a brand is essential for many business activities, like a merger or
acquisition; sale or purchase of the trademark, or if you want to sell your company.

The first step in evaluating the trademark is to examine the historical prospects of the
trademark like the total cost invested in it; the profit margin associated with the products the
time it was first used, etc.

After considering these options, one must follow the methodologies and different
approaches listed below:

The Income Approach

The most crucial element on which a trademark's value is determined is the income-
generating power of the business. The more the earning power, the higher the value of the
brand would be.

Through future estimates of economic benefit, cash flows, and risks involved, and converting
this analysis into simple information; the income approach enables you to evaluate your
company trademark.
Market Approach
In this method, the price of similar marks is considered and compared. It uses market-based
indicators of value and takes similar marks into account; it analyses royalty rates and
transaction prices to determine what the market is paying for similar intangible assets. In this
approach, market trends are considered, and other transactions are analyzed.

Cost Approach

The cost approach considers the implicit as well as explicit costs incurred in creating the
Trademark. The cost approach also covers the cost accrued in promoting the company and its
brand promotion. A particular focus on forecasts of market transactions is employed and
estimated time and cost that would be required to make a similar trademark are considered.

Other Factors

Along with the ones listed above, there are other factors that a company should consider
while evaluating a trademark or trademarks to maximize their values:

 Qualitative and quantitative characteristics of the trademark.

 If there is any contract assigned or associated with the trademark.
 Sustainability of the trademark in the market in the future.
 Market positions a trademark holds in the current business.
 The capital structure of the company and its modifications according to the needs.

Trademark carries a significant value in the business, and a company should evaluate its
brand and know the exact value of its intangible assets. A company should work towards the
goal of enhancing the value of trademarks and other intangible assets for long-term profits.

TRADEMARK REGISTRATION PROCESS:

⚫ Investing your time and money to build a particular brand and seeing the same brand
name being used by another, robbing you of your hard-earned brand reputation is not
an agreeable state of affairs.

⚫ Many a time, trademark (TM) owners end up in protracted litigation because when the
time was right, they did not do trademark registration in India of their brand name.
 ⚫ The trademark registration process for the brand name is not a difficult task.

⚫ A few simple steps, as explained below and you would have the much-needed legal
protection of your brand name registration in India.

A trademark application can be made by:

 Private firms
 Individuals
 Companies- Limited Liability Partnership, OPC, Private Limited, Public, Partnership,
etc.
 NGO’s

Note: In the case of NGOs and LLP companies the trademark has to be applied for
registration in the name of the concerned business or a company.

Any person, pretending to be the proprietor of a trademark used or intended to be applied by

him, may apply in writing in a prescribed manner for registration. The application must
include the trademark, the goods or services, the name and address of the candidate with
power of attorney, and the time of use of the mark. The application must be in English or
Hindi. It must be registered at the appropriate office.

Step 1: Trademark Search

⚫ Many entrepreneurs do not comprehend the importance of a TM search.

⚫ Having a unique brand name in mind is not a good enough reason to avoid a TM
search.

⚫ TM search helps you to know if there are similar trademarks available and it gives
you a fair picture of where your trademark stands, sometimes, it also gives you a
forewarning of the possibility of trademark litigation.

⚫ Why waste your money in time-consuming trademark litigation later when you can
choose to avoid it in the first place?

Step 2: Filing Trademark Application

⚫ Based on the nature of the product a class is chosen among 45 classes of trademark.

⚫ Once the chosen brand name or logo is not listed in the Trademark Registry India,
 then we can opt for registering the same.

⚫ The first step is to file a trademark application at the Trademark Registry India
online / offline.

⚫ Once the application is filed, an official receipt is immediately issued for future
reference with the TM application number.

Step 3: Examination

⚫ The examination might take around 12-18 months.

⚫ The examiner might accept the trademark absolutely, conditionally or object.

⚫ If accepted unconditionally, the trademark gets published in the Trademark Journal.

⚫ If not accepted unconditionally, the conditions to be fulfilled or the objections would

be mentioned in the examination report and a month's time would be given to fulfill
the conditions or response to the objections.

⚫ Once such response is accepted, the trademark is published in the Trademark Journal.

⚫ If the response is not accepted, one can request a hearing. If in the hearing, the
examiner feels that the trademark should be allowed registration, it proceeds for
publication in the Trademark Journal.

Step 4: Publication

⚫ The step of publication is incorporated in the trademark registration process so that

anyone who objects to the registering of the trademark has the opportunity to oppose
the same.

⚫ If, after 3-4 months from publication there is no opposition, the trademark proceeds
for registration.
⚫ In case there is opposition; there is a fair hearing and decision are given by the
Registrar.
Step 5: Registration Certificate

⚫ Once the application proceeds for trademark registration, following publication in

Trademark Journal, a registration certificate under the seal of the Trademark Office is
issued.
Step 6: Renewal

⚫ The trademark can be renewed perpetually after every 10 years. Hence, your logo or
brand name registration can be protected perpetually.

While filing for the trademark registration, the documents required to provide are as follows:
Identity and business proofs: The trademark owner or the person who is approved by the
trademark owner is required to present their identity proof. It can be your Aadhar Card,
Driving License, Passport, Ration card, or Voter’s ID.

Using Logo with Tagline: If a trademark application is prepared for a tagline with only
words, then there is no requirement for a logo. In cases where a logo is applied, then it must
be submitted in black-and-white format. The number of words in the logo must exactly be the
same as specified in the application for a trademark.

Brand Name & Logo: The logo must have the brand name.

User Affidavit: If a particular user data is to be claimed, the user affidavit is expected to be
submitted.

Proof of TM use: To demand specific user date, documentary proof like invoices,
registration certificates, etc. with the brand name must be given.

MSME or Start-up Recognition: A partnership firm or Corporate entities can give a

certificate of registration under MSME or Start-up India scheme to get a 50% rebate on the
Government fee

Signed Form TM – 48: M-48 is a lawful document that enables the attorney to file the
trademark on your behalf with the trademark registry. The document will be made by LW
professionals for the signature.

International Registration

The system of international registration of marks is governed by two treaties:

The Madrid Agreement, concluded in 1891 and revised at Brussels (1900), Washington
(1911), The Hague (1925), London (1934), Nice (1957), and Stockholm (1967), and amended
in 1979, and the Protocol relating to that Agreement, which was concluded in 1989, to render
the Madrid system more flexible and more compatible with the domestic legislation of certain
countries which had not been able to accede to the Agreement.
The Madrid Agreement and Protocol are open to any State that is party to the Paris
Convention for the Protection of Industrial Property. The two treaties are parallel and
independent and States may adhere to either of them or both. In addition, an
intergovernmental organization that maintains its own Office for the registration of marks
may become party to the Protocol. Instruments of ratification or accession must be deposited
with the Director General of WIPO. States and organizations which are party to the Madrid
system are collectively referred to as Contracting Parties.

The system makes it possible to protect a mark in a large number of countries by obtaining an
international registration which has an effect in each of the Contracting Parties that has been
designated

CLAIMS

Intellectual property claims are legal actions brought by one party against another when a
party feels its intellectual property (IP) rights have been infringed upon. India being a mixed
market has many industries that operate under the free market concept. The competition in
the market system is extreme. For any enterprise to thrive in the open market, they have to
create brand recognition and brand value. The simplest way through which this is achieved is
via trademarks.

The need for trademarks can be considered a three-prong approach to represent goods or
services:

 Helping consumers recognize the source

 Helping consumers determine the quality
 Helping consumers make a purchasing decision
Once such value is attached to the trademark, it is imperative to protect it from misuse and
infringement by others.