By Arpit Kalra and Shilpi Sinha
A trade mark is a mark used in relation to goods for the purpose of indicating a connection in the course of trade between the goods and its source. A trade mark is entitled to protection, even if it is a common term, provided that it has assumed a secondary meaning which identifies it with a particular product being from a particular source. In India, Section 47 of the Indian Trade Marks Act provides for complete or partial removal (cancellation/rectification) of a trade mark from the Register on grounds of non-use.
A trade mark may be removed from the Register in respect of any of the goods for which it is registered on the ground that up to a date three months before the date of application, a continuous period of five years from the date on which the trademark is actually entered in the Register, or longer had elapsed during which the trademark was registered and during which there was no bona fide use of the mark by the proprietor. In several cases, a registration has even been limited by striking out goods for which the proprietor has not used the mark within the stipulated period of time.
Where a strong prima facie case as to non-use of the mark in connection with the concerned goods over the requisite period has been established by the petitioner, the onus of proving actual user shifts to the respondent.
In the Indian case of Vishnudas v. The Vazir Sultan Tobacco Co. Ltd., relating to the popular trademark ‘Charminar’ for cigarettes, the Supreme Court held that one entity cannot be granted monopoly over a broad range of goods, when they cover distinct articles capable of being differentiated from each other by consumers. In this case, the appellant was allowed to succeed in rectifying the respondent’s prior existing registration for the trademark ‘Charminar’, inter alia to restrict the classification of goods covered thereunder to be limited only to ‘cigarettes’, as the same had been applied in respect of the goods: “Manufactured tobacco” under Class 34, which covered a very wide range of tobacco products, all of which are ordinarily discernible from each other by tobacco consumers, who are well aware of which exact product they want at any particular instance. Since ‘Charminar’ has always been used solely in respect of cigarettes, and not for any other tobacco products, and the respondent had also not submitted any evidence depicting any interest in diversifying their product line under the said brand name, the Apex Court held that they cannot preclude other honest and bona fide adopters from adopting and using the name ‘Charminar’ in respect of completely different and distinguishable tobacco products (in this case namely, zarda and quiwam (snuff)). Moreover, ‘Charminar’, not being an inventive word, but derived from one of India’s most notable historical monuments, further can be adopted by any well-meaning Indian citizen in respect of their business. Therefore, despite having a prior well-known registration in respect of the trademark ‘Charminar’, the respondents in the cited case were still liable to have the classification of goods thereunder rectified and limited solely to ‘cigarettes’ owing to adducing of evidence by the appellants in favour of non-use of the mark in respect of any other goods covered by the original broad specification of ‘Manufactured tobacco’ by the respondents, and further having regard to the specific inclinations and knowledge of tobacco products by tobacco consumers.
Trademark Cancellations by the Beijing Court
In six recent cases before the Beijing IP Court in China in September 2021, mala fide methods were adopted with respect to non-use cancellation through the falsification of evidence. The Court punished the concerned litigants by cancelling six trade marks on the grounds of falsification of evidence in the concerned appeal decisions.
Brief Background of the Six Cases
To understand and analyze the rationale behind the imposition of fines and cancellation of the trade marks in the six respective cases adjudicated upon, their facts may be briefly summarized as below:
Case 1: Jingzhixingchu 2015-1165
In the first case of non-use cancellation adjudicated upon by the Court, test reports, advertisements, and certificates submitted as evidence were found to be falsified. It was observed by the court that the original test reports and licenses and those submitted as copies were inconsistent as the trade mark JIAJIA and its Chinese characters were found to be different. In lieu of the same, a fine of CNY 10,000 (US $1,550) was imposed on bot parties involved.
Case 2: Jing73xingchu 2020-14664
In the second case of non-use cancellation adjudicated upon by the Court, the mark produced before the court via pictures and that on the packaging of the commodities was inconsistent in nature. Further, the invoices with respect to the mark Ancient Tea Horse Road in Chinese were found to be inconsistent as well. The Court cancelled the trade mark and fined CNY 30,000 (US $4,650) in the case.
Case 3: Jing73xingchu 2020-13177
In the third case of non-use cancellation adjudicated with respect to the mark Green Forest Hut (in Chinese), submitted invoices were found to be inconsistent with National Tax Records and hence, the trade mark was cancelled and a fine of CNY 10,000 (US $1,550) was imposed.
Case 4: Jing73xingchu 2020-13083
In the fourth case of non-use cancellation, invoices were submitted for the mark ITSTYLE with respect to beauty masks and lotions, but the tax authorities indicated indoor slippers and electric horns as the goods concerned. A fine of CNY 10,000 (US $1,550) was imposed.
Case 5: Jing73xingchu 2021-8597
In the fifth case adjudicated upon, falsified evidence and invoices were submitted with respect to the mark Mei Qi Lin (in Chinese) which were found to be inconsistent however, unlike the other suits, the company requested a withdrawal. However, despite the same, the court ruled that since fake evidence had already been submitted and was not withdrawn until it was pointed out, it would not affect the fact that a fine is to be imposed in respect of the same and hence, a penalty of CNY10,000 (US $1,550) was ordered.
Case 6: Jing73xingchu 2021-3275
In the sixth and final case, with respect to the mark BLACKDIAMOND, two contrary invoices with respect to the goods were submitted which were inconsistent with official records and hence, a fine of CNY 10,000 (US $1,550) was imposed.
|Breakup of the Fines imposed by the Beijing IP Court|
|Case||Fine Imposed by the Court|
|Case 1: Jingzhixingchu 2015-1165||CNY 10,000 (US $1,550)|
|Case 2: Jing73xingchu 2020-14664||CNY 30,000 (US $4,650)|
|Case 3: Jing73xingchu 2020-13177||CNY 10,000 (US $1,550)|
|Case 4: Jing73xingchu 2020-13083||CNY 10,000 (US $1,550)|
|Case 5: Jing73xingchu 2021-8597||CNY 10,000 (US $1,550)|
|Case 6: Jing73xingchu 2021-3275||CNY 10,000 (US $1,550)|
As discussed earlier, trademark law protects designations of commercial sources, which are typically words or images. In the present six cases, the matters being dealt with were with respect to the non-use cancellation of trade marks and the fabrication of evidence with respect to the same. The biggest defect with respect to the process of cancellation of non-use trade marks is that the process is devoid of cross-examination and as a result, in many cases, defective evidence may go unidentified.
The problem of trademark dilution has increased recently due to a surge of fraudulent applications originating in China. This is leading to an increase in bad faith trade marks finding their way onto the Register. Bad faith includes dishonesty and behavior which falls short of the standards of acceptable commercial behavior observed by reasonable and experienced men in the particular area being examined. Forging evidence for the purpose of trade mark cancellation falls under the ambit of the same and constitutes conscious wrong-doing with a dishonest purpose.
This is particularly a persistent problem seen in China, being a ‘first to file’ jurisdiction; i.e. a State wherein the first applicant for a trademark can trump the rights of a prior user of the same. Additionally, no statutory safe-guards against the occurrence as seen in the above-mentioned six cases exist as of date. Further, since the fabrication of evidence with respect to Trade Mark applications is an administrative offense, no criminal action can be taken in this regard, leading to a maximum imposition of a fine, which is not a deterrent in nature.
Presently, no mandates or provisions for curbing applications for registrations of trademarks, ostensibly in bad faith, exist in the statutes of China, India, the USA, or the UK, as the same may be said to be essentially a subjective concept, difficult to pinpoint and legislate against. However, the concept of ‘bad faith’ or ensuring that there is bona fide intent while dealing with trademarks and registration or cancellation of the same has been given recognition through precedents of the adjudicating courts.
In conclusion, if the six recent cases before the Beijing IP Court in China in September 2021, in which mala fide methods were adopted with respect to non-use cancellation through the falsification of evidence are examined, the Court was able to punish the concerned litigants by canceling six trade marks whilst imposing fines or penalties. However, if similar scenarios arise in China again, or alternatively in India, the USA or the UK, the question remains as to whether the courts will be able to deal with a larger magnitude of such cases, or with more damages, in the absence of any codified legislation to deal with the same. Unless the present lacunas in the law are paid heed to, and a plausible solution devised, there will be no deterrence of similar cases in the near future.
 State of U.P. v. Ram Nath, (1972) 1 SCC 130.
 Godfrey Philips India Ltd. v. Girnar Food & Beverages (P) Ltd., (2004) 5 SCC 257.
 Section 47, Trade Marks Act, 1999, No. 47, Acts of Parliament, 1999.
 Section 47 (1) (b), Trade Marks Act, 1999.
 Suter, Hartmann and Rahtjen’s Composition Co Ld’s TM, (1902) 19 RPC 42.
 Dewar v Dewar, (1900) 17 RPC 341.
 Smith’s TM, (1927) 44 RPC 533 at pp 538, 539.
 JT 1996 (6) 366; 1996 SCALE (5)267.
 Device, No. 1486278.
 Device No. 3084001.
 Device No. 8403409.
 Device No. 9841494.
 Device No. 10048229.
 Device No. 4579231.
 Deven R. Desai, From Trademarks to Brands, 64 Fla. L. Rev. 981 (2012).
 See, e.g., Jacob Gershman, Flood of Trademark Applications from China Alarms U.S. Officials, Wall St. J. (May 5, 2018), https://www.wsj.com/articles/flood-of-trademark-applications-fromchinaalarms-u-s-officials-1525521600 (on file with the Columbia Law Review).
 Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd.,  RPC 367.
 Manish Vij vs. Indra Chugh, AIR 2002 Del 243.