Cogent Evidence To Establish Prior Use

Cogent Evidence

Whether there has been a prior use by a proprietor is a question of fact. There is a need for
producing cogent or factual evidence in order to prove prior use. It may be production of
books of registration, accounts, invoices or any other details that help in proving the prior use
of a trademark by a proprietor.

What Are The Requirements For Action Under Prior Use?

Given below are the requirements to be fulfilled if prior use needs to be considered against a
trademark registered in India –

1. The trademark may be identical or similar to the subsequent mark registered.

2. The trademark must be used in the particular class of goods as the subsequently
registered mark. If it belongs to a different class, there would be a need to apply other
provisions such as being a reputed mark in India and the use would be detrimental to
the goodwill of the prior user.
3. The prior use should pertain to a trademark in the territory of India. Prior use in other
lands cannot be considered against a trademark registered in India.
4. There must be a continuous use of the trademark. In other words, the use should not
be of temporary nature. It is essential that the trademark should have some reputation
and association with a particular proprietor.
5. The usage of the trademark must be before the date of the registration or use of the
trademark whose registration is in question.

Registration and Defence of Prior Use

Section 34 of the Act stipulates that a registered user or proprietor cannot interfere with or
restrain a third person from using a mark identical or resembling the registered mark which
the third party has continuously used from a date prior to the registered mark user's first use
of the mark or from the date of registration, whichever is earlier. The provision in effect is an
overriding provision preventing a proprietor or registered user of a trademark from interfering
with the honest use of an identical trademark or a mark nearly resembling with the registered
mark.

The fundamental requirements under the provision are – (1) the use of a mark identical or
nearly resembling the registered mark, by a third person, must be in relation to the goods and
services for which the first mentioned mark is registered; (2) the use must be a continuous use
of the trademark; (3) the trademark must be used by the proprietor in order to avail the
protection; (4) the mark must have been used from a date prior to the use of the registered
trademark or the date of registration whichever is earlier.
'Use' under Section 34 of the Act mandates notion of continuous use. It is a test of a high
order fulfilling the requirement of a commercially continuous use of the mark in
relation to goods and services. The expression "continuously used that trade mark" has
the specific connotation of vesting of a right in a person when he puts his goods with the
mark in the market. A continuous use being distinct from a stray, isolated and a
disjointed use, also establishes that a mere adoption of a mark is not sufficient.

Hence, section 34 thus provides for specific requirements which relate to (i) the nature of
goods or services in relation to which the mark is used; (ii) the nature and character of use;
(iii) the person who must use; and (iv) the date from which the mark should have been used.

Royal Orchid Hotels Limited is prevented by a court's order to name its new hotels 'The
Orchid'. Bombay High Court, in an interim order, has restrained Bangalore based Royal
Orchid Hotels from using the trademark "The Orchid" on its new hotels or line of business,
however, the court has allowed the Royal Orchid Hotels to continue using the mark on its
existing hotel properties. The High Court order follows a suit (Kamat Hotels (India) Limited
versus Royal Orchid Hotels Limited & Anr. Notice of Motion No. 2552 of 2008 in Suit No.
2224 of 2008; High Court of Bombay)filed by Mumbai based Kamat Hotels (India) Ltd
(plaintiff) against Royal Orchid Hotels (defendant) alleging infringement and passing off its
trademark "The Orchid". Kamat Hotels is the owner of the registered trademark "The
Orchid" used upon and in relation to its five star hotel continuously, as claimed, since 1997.

The Dispute
The dispute hinges on the grounds of infringement, deceptive similarity, prior use and
acquiescence or delay in bringing the suit. The Royal Orchid Hotels view the dispute more
serious on the issue that who has used the mark first as prior user and honest and concurrent
user are good defences to a suit based on action for infringement of the registered mark. The
defence of prior use is given under Section 34 of the Trade Marks Act 1999 (the Act

Court's Finding
Who has first used the mark/word is often a disputed question of fact. The extent, quantum
and nature of the use of the mark, claiming and justifying prior user right, is a mixed question
of law and facts.

The distinguishing or essential feature of the mark of Kamat Hotels is the word "Orchid"
together with the device of the flower. The Royal Orchid Hotels also employs the same word
- Orchid - with the device of a flower as the distinguishing feature. Prima facie, the mark of
the Royal Orchid Hotels is an infringing mark therefore it becomes imperative in this
situation to evaluate prima facie whether the conditions, as required by section 34, exist in
order to protect the vested right, which the Royal Orchid Hotels claims in the use of the mark.

The defence under sec 34 of the Act, if allowed has the effect of diluting the protection
granted to a registered mark. Therefore establishment of requirements under sec 34
necessitates cogent materials indicating prior use. There has to be a forceful demonstration of
the mark being used in connection with the goods and services for which the registered mark
is also being used. Documents showing mere change in name to bring on record the
impugned mark by the defendant or attaining proprietorship of the mark "The Orchid" by
taking the hotel on lease were not considered by the Court as clear and cogent documentary
material establishing prima facie use, much less a continuous use prior to the date of the
plaintiff's commencement of the use of the mark. Disclosure of sales figures, in the opinion of
the court, is a cogent material to establish a continuous course of use of the mark "Orchid"
prior to the date on which the plaintiff commenced use of the mark. Therefore seeking to
establish a continuous prior user will require the evidence to be considered in the context of
nature of the product, type of sales, territory within which it is sold and the scale of
production of the goods/services. The reason is that the statutory presumption under section
28 of the Act loses its significance once prior user under section 34 is established.

The Court prima facie arrived at the conclusion that Kamat Hotels is the proprietor of the
mark "Orchid" coupled with the device of a flower and that the Royal Orchid Hotel's use of
its mark infringes Kamat Hotel's mark. Further, the Court held categorically that Royal
Orchid Hotel's failure in showing any, even prima facie, cogent material supporting
continuous use of the mark "Orchid" prior to Kamat Hotel's use is an unsuccessful attempt to
establish defence under sec 34 of the Act. However, the Court, led by the consideration
weighing in this case that Royal Orchid Hotels had already commenced business by the date
on which the proceedings were instituted, moulded the relief in terms of injunction granted
not operational in respect of the hotels and business already commenced prior to the date of
the order. The interlocutory injunction restrained the Royal Orchid Hotels from any
infringing activity in respect of any new hotel or line of business.

The Court was guided by the principle that in determining upon the grant of an injunction, a
court can and should make a distinction between situations where business has already
commenced and business is yet to commence. Also, in the face of a rectification proceedings
brought by Royal Orchid Hotels, the balance of convenience required moulding the relief in
such a manner that Royal Orchid Hotels remains protected against damage to the existing
business while it is prevented to infringe the registered mark of Kamat Hotel.

Actual use on goods and services;

When there is no actual use on goods or their sale, any promotional material can be construed
as use. In Hardie Trading v Addison Paint and Chemicals (2003), the Supreme Court
analysed the aspect of “usage” under the act and stated that “to the use of a mark in relation
to goods, shall be construed as a reference to the use of the mark upon, or in any physical or
in any other relation whatsoever, to such goods” and thereby held that use may be other than
physical and it should not be merely limited to physical use on the goods or to sale of goods
bearing the trademark;

Genuine Use
i. The launch and sale of the goods/services. There is no minimum number of goods that
have to be sold to constitute genuine use; rather it is whether the activity under the
mark is likely to preserve or create market share.
ii. Preparation to put goods/services on the market, such as advertising campaigns.
iii. Use of a trademark in an organisation's relations with the public (e.g. announcing
forthcoming events).

In practice, to be effective evidence of use of a trademark the following should be illustrated:

 1. The goods and/or services for which the mark has been used - this can take the form
of a list of items which utilise the mark in their branding, together with information on
the length of time and geographical scope of use.
2. The sales achieved in relation to these goods and/or services - this should be detailed,
and will ideally include the turnover achieved for each relevant product within the
India.
3. Copies of sales records for the relevant goods/services - for example, invoices and
similar financial documents. These can be redacted to preserve commercially
sensitive information.
4. Information on how the mark is used - for example, details of the form it takes (e.g.
on packaging, labels, in advertising etc.). Examples of these should then be provided,
such as screenshots of adverts on the internet and photographs of packaging on
products in store.

In order to overcome office objections raised under Section 9(1) the applicant may submit the
mark has acquired a distinctive character by virtue of its prior use The use of trademark must
be established by adequate evidence. Under section 129 of the Act, ‘in any proceeding before
the Registrar, evidence shall be given by affidavit. But the Registrar may, if he thinks fit, take
oral evidence in lieu of, or in addition to, such evidence by affidavit’.

Rule 116 prescribes the manner in which the affidavits are to be executed. The requirements
for securing protection under the proviso to section 9(1), as expressed in Duckham & Co’s
Trade Mark Application, [(2004) RPC 28] are as follows: a) the mark must have been used
by an undertaking as a means of identifying the trade origin of the goods; b) the effect of this
use is that the relevant public(or a significant proportion thereof) have come to rely upon the
mark, in the course of trade, as a means of identifying the trade origin of the goods; c) if the
mark is but one of a number used by the undertaking to identify the trade origin of the goods,
the competent authority must be satisfied that the mark applied for has, by itself, come to
foster a concrete expectation amongst the relevant public that goods bearing that mark
originate from, or under the control of, a single undertaking.”

A descriptive trade mark may be entitled to protection if it has assumed a secondary meaning
which identifies it with a particular product or as being from a particular source
[2005(30)PTC(SC)1] Acquired distinctiveness cannot therefore be shown to exist solely by
reference to general, abstract data such as pre-determined percentages of recognition by the
relevant class of persons. Instead the views of an average consumer must also be taken into
account

In Windsurfing Chiemsee (C108&109/97) [1999] ETMR 585 the court observed that: “If
the competent authority finds that a significant proportion of the relevant class of persons
identify goods as originating from a particular undertaking because of the trade mark, it must
hold the requirement for registering the mark to be satisfied.” Having established that the
mark has been used as a trade mark (including use as a secondary trade mark) the next thing
is to assess the extent and effect of the use. In this regard, ECJ provided guidance as follows:
“In assessing the distinctive character of a mark in respect of which registration has been
applied for, the following may also be taken into account: i. the market share held by the
mark; ii. how intensive, geographically widespread and long-standing the use of the mark has
been; iii. the amount invested by the undertaking in promoting the mark; iv. the proportion of
the relevant class of persons who, because of the mark, v. identify goods as originating from
a particular undertaking; vi. statements from chambers of commerce and industry or other
trade and professional associations”.

In the affidavit submitted as evidence of use the trademark, specific statement should be there
as to the use of the mark in relation to specific goods or services, when it first commenced
and the annual turnover based on use of the mark in relation to specific goods or services.
Page | 83 The use of trademark must be before the date of filing. Any use after that date
should not be taken into account. If there have been gaps in the use, it will be necessary to
consider how this affects the reputation of the mark applied for. For example, a strawberry
grower may not be able to demonstrate sales throughout the year, but if he sells his
strawberries for two months of the year every year for ten years, that is likely to be sufficient
to illustrate continuous use, given the seasonal nature of his product. Another trader might
sell goods under a certain mark for twelve years, but there may be a two year gap leading up
to the date of the application in which few or no sales took place.

Before a judgement can be made about accepting or refusing the mark, it would be necessary
to look at all the surrounding facts to see what effect that gap had. If sales weren’t
particularly strong beforehand, the reputation of the mark may have been severely
diminished. If, on the other hand, sales were very good both before and after, it may be that
the gap would have no negative effects on the reputation at all. Annual Turnover figures
should be given for the sales of goods/rendering of services under the mark starting from year
of first use to the date of making affidavit. In case of figures are not available for earlier
years, the deponent should make statement to this effect. If the period of use is shorter, the
turn over for the period in question should be considerable, having regard to the nature of
goods. The greater the turnover, the more likely it is for the mark to be accepted. Turnover,
advertising and period of use are considered together - massive turnover and/or advertising
could compensate for a short period of use. The words "acquired a distinctive character as a
result of the use made of it" therefore mean the use made of the mark in relation to the
goods/services for which it is proposed to be registered

Trademark protection in India requires owners to continuously use their trademarks by

maximising their promotion and advertisement through all platforms. Such continuous use of
trademarks also helps in protecting trademarks in order to ensure easier enforcement against
infringement and counterfeiting.