Trademark valid only for personal use: High court curtails the right to license!

Introduction

Can a person, who uses his own name or surname as a trademark, be held liable for trademark infringement of a registered trademark?

Does the law prohibit a bonafide user from using his own name for his business?

Does the law allow use of a trade mark only for personal use and not for granting licenses?

In order to deal with such issues, the Indian Trademarks act provides an exception to the rule of trademark infringement in case of bonafide users of a registered trademark. Section 35 of the Indian Trademarks Act, 1999 disentitles a proprietor of a registered trademark to interfere with any bona fide use by a person of his own name.

Bonafide is a Latin phrase meaning “in good faith”. Bona fide use in the context of section 35 of the trademarks Act means the honest use by a person of his own name without any intention to deceive anybody or without any intention to make use of the goodwill which has been acquired by another trader.

Relying on Section 35 of the Trade Marks Act, the Courts have held on various occasions that even a registered user or a registered trademark proprietor cannot interfere with the bona fide use by a person of his own name. The Hon’ble Supreme Court in variouscases has held thatBonafide use of surname is a fundamental right and will not amount to trademark infringement.

Judicial Analysis of Section 35 of The Trademarks Act

Section 35 of the Indian Trademarks Act, 1999 states that- “Nothing in this Act shall entitle the proprietor or a registered user of a registered trade mark to interfere with any bonafide use by a person of his own name or that of his place of business, or of the name, or of the name of the place of business, or any of his predecessors in business, or the use by any person of any bonafide description of the character or quality of his goods or services.”

The usage of one’s name or surname in the course of trade cannot be restricted even by a registered proprietor, provided the use is in a bonafide manner. Courts in different parts of our country have been protecting the honest rights of people to use their own name, surnames or full names for their businesses even if those names have been already registered by any other entity.

In the case of Precious Jewels v. Varun Gems^[1], the Supreme Court of India upheld the provisions of section 35 of Trademark Act, 1999. In this case, earlier in the Delhi High Court, the proprietors of the registered trademark ‘RAKYAN’ had obtained injunction orders against another business entity which was using the mark ‘Neena and Ravi Rakyan’ in respect of a jewellery business. On appeal, the Supreme Court considered the facts of the case and noted that in light of the provisions of section 35 of the Trademarks Act, the injunction order was unjust since the defendants carried on business in their own name and this amounted to bonafide use. There was also no similarity in the hoardings of the respective shops except the use of the name “RAKYAN”. Hence, the interim injunction order passed by the Delhi High Court was set aside.

Similarly, in the case of Somashekar D Patil vs Shri. D.S. Patil^[2], the Karnataka High Court held that the proprietor of a registered trade mark is not entitled to interfere with bonafide use by a person of his own name or that of his place of business. The High Court observed that it is the fundamental right of any citizen to carry out trade, business, etc. under Article 19(1)(g) of the Constitution of India but this fundamental right is subject to reasonable restrictions and also various statutes of States and Centre. The Court in this case held that the defendant had used the surname ‘Patil’ as a bona fide user on the basis of his family name, which is commonly used in the area where the family came from. It was held that just because the surname of the appellant is ‘Patil’, that itself is not a ground to injunct the defendant from using the word ‘Patil’ in his trademark. The Court held that it is a fundamental right of the person to use the surname which has been in use since ages.

It was held that Section 35 of the Trade Marks Act enables the Defendant to make use of the word ‘Patil’ which is a bonafide use. Accordingly, the Court held that it was not a case of trademark infringement, but was a clear case of bonafide use of his name by the respondent.

The “Bonafide use Condition”-Exceptions to this exception

The usage of one’s surname in the course of trade cannot be restricted even by a registered proprietor, provided the use is in a bonafide manner. In order to deal with such cases, it must be objectively proved that the use of a registered trademark was not motivated by ill will and falls under the fair use principle. It is pertinent upon the defendant to show that the use of the registered trademark was purely for a bonafide purpose without impacting the goodwill or business of the trademark holder.

One such exception was recently dealt by the Delhi High Court in Anil Rathi v. Shri Sharma Steeltech^[3]. In this case, the court rejected the plea for using a surname in the course of trade, on the ground that the use was not in a bona fide manner. The plaintiffs and defendants were engaged in manufacturing of steel products and the Rathi Foundation was the registered proprietor of the trademark “RATHI”. The usage of the mark was regulated by an MoU and a Trust Deed amongst the members of the Rathi Family. What makes this case different is the existence of a family agreement regulating the use of the trademark in question wherein the defendant was a beneficiary under it.

One of the defendants issued licenses to third parties for the use of the ‘RATHI’ trademark which was ultra vires the MoU and Trust Deed. The court held that the defendant’s act of issuing licenses to third parties was clearly a case of Trademark Infringement and does not fall within the purview of Section 35. The defendant claimed that since his surname is ‘Rathi’, he has a right to use the mark under Section 35. It was pronounced that Section 35 cannot be invoked, as it is restricted to personal use of marks and does not extend to the grant of licenses. The use of the impugned mark by the defendant was found not to be in a bonafide manner as he not only granted licenses for its use, but the entities that it was granted to were engaged in an identical area of business as the Rathi family. This case brought further clarity with regard to the usage of surnames as trademarks in the course of trade.

In the case of Manju Monga vs Manju Mittal,^[4]The Delhi High Court reiterated that use of the trade name “Manju Cookery Classes” by the defendant clearly amounts to trademark infringement and cannot be protected by the virtue of Section 35 of Trademarks Act, 1999. The defendant’s intention of using the same name was not proved as a bonafide use and was motivated by ill will to tarnish the goodwill of plaintiff’s business.

Conclusion

Hence, by the virtue of Section 35 of the Trademarks Act, 1999, the legislature has intended to save the honest rights of people to use their own names without infringing the rights of the trademark holder. But it

can be conclusively held that bonafide use of a person’s name would not extend to granting licenses of the same to other entities when the mark is deceptively similar to the mark of the registered proprietor. Thus, in the light of the Anil Rathi Judgment, the law regarding bonafide use has been considerably settled with respect to use as well as grant of trademarks.

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[1] Precious Jewels v. Varun Gems 2014 (60) PTC 465 (SC); https://indiankanoon.org/doc/167202892/.

[2] Somashekar D Patil vs Shri. D.S. Patil 8 May,2018; https://indiankanoon.org/doc/26837526/.

[3] Anil Rathi v. Shri Sharma Steeltech on 15 September 2020; https://indiankanoon.org/doc/83444899/.

[4] Manju Monga vs Manju Mittal on 2 July, 2012; https://indiankanoon.org/doc/21923621/.