Defence of Honest Concurrent Use vis-a-vis trademark protection: How much longer will this hold for brand proprietors?

By definition, whereby trademark is a discernible sign (comprising of a name, word, phrase, logo, symbol, design, et al or a combination of one or more of these elements), used primarily for the purposes of identifying the goods/services of one trader from those of others in the market; it can come as no less than a blow to trademark proprietors that an identical or similar mark can exist in respect of the same or similar goods or services.

Trademark litigation is rarely linear — and has a plethora of defences defendants can make use of to evade getting tangled in a trademark infringement battle. “Honest concurrent use”, as laid down under section 12 of the Trade Marks Act, 1999, is one of those grounds prescribed under which identical or similar marks by more than one proprietor and in relation to same or similar goods/services may be permitted registration by the Registrar, based upon his subjective discretion. The section also makes mention of “other special circumstances” in addition to the honest concurrent defense.

A plain, cursory reading of the law evidently hints that the Registrar is in no way obliged to register the disputed mark, and that much relies on how the applicant/defendant goes about proving honest and concurrent use of the contesting mark.

A Brief Background of the law of ‘Honest Concurrent Use’ and its Evolution

Two of the earliest cases (of the 1860s) in this context are known to have led to the emergence of the above rule, those being, Dent vs. Turpin and Southorn vs. Reynolds.

Subsequently, in the English case John Fitton & Co. [(1949) 66 RPC 110,112], five factors were laid down as conditions necessary to be fulfilled in order to lend credence to the honest concurrent user defense:

*The extent of use pertaining to the duration, quantity, area of the trade

* The degree of confusion likely to result from the resemblance of the marks, which is to a great extent indicative of the measure of public inconvenience

*The honesty of the concurrent use

* Whether there exists factual proof of such instances of confusion having occurred

*The relative inconvenience, which would be caused if the marks were registered, subject if necessary to any conditions and limitations.

Conversely, in India, the law of honest concurrent use was first laid down in Kores (India) Ltd. vs. M/s Khoday Eshwarsa and Son [(1984) Arb LR 213 (Bom)], whereby, upon a reading of corresponding section 12 (3) of the Trade and Merchandise Marks Act, 1958, five factors were laid down (similar to the ones detailed above) as being necessary for determining the registrability of a trademark.

These rules later went on to being discussed and applied in numerous cases for determining the validity of the defence of the honest concurrent use — those being — the 1997 case of S.Mehar Singh vs. M.L.Gupta & Co., and the landmark case of Champagne Moet & Chandon vs Union Of India & Ors. in 2011.

In recent times, the doctrine of honest concurrent use has been expounded on in other cases as well. For example, in the case of Dr. Reddy’s Laboratories Ltd. vs. Reddy Pharmaceuticals Ltd. (2004) where the dispute between the parties was with regard to the mark ‘Dr. Reddy’ reach a conclusion after the IPAB ordered for removal of ‘Reddy’ of the New-Delhi based respondent Reddy Pharmaceuticals Ltd.

This order was passed on the grounds that the mark ‘Reddy’ was bound to lead to material confusion and mislead consumers in the market, more so, since the latter company too dealt with marketing pharmaceutical drugs and medicinal formulations, an activity uncannily similar to that of the Hyderabad-based Reddy Laboratories. Further, in this regard, the defence of honest concurrent use too was struck down by the IPAB that noted that of the two parties, the applicant, Reddy Laboratories was the first to apply for the mark, and that the respondent could not justify use of the mark ‘Reddy’ despite being aware of the goodwill and reputation it had acquired over the years, thereby rendering its actions dishonest and deceptive. This aligns with the view taken in old English cases such as Parkington & Co Ltd’s Application [(1946) 63 RPC 171] and Cohen v Fidler & Co [(1916) 33 RPC 129].

Interestingly, the doctrine has come into the thick of discussion in recent cases like ITM Trust & Ors. vs. Educate India Society (2014) where registrability of the acronym ‘ITM’ was debated, with the same being dismissed on the ground that there seems to be no evidence of use of the acronym as a trademark since the date of prior use claimed, and that the defendant moved to register the mark only in 2010, much later than the plaintiff, which suggests the use could not have been “honest”. So the verdict lay in quite simple terms — acronyms can indeed be registered as trademarks, but do not ipso facto become so. They need to bear the characteristics of a mark/logo while being actively used as a trade mark to take advantage of this doctrine.

While most of the above mentioned cases spell more negatives than positives, it may be noted that the defence of honest concurrent use has indeed been permitted by the courts, as can be seen in the case of Goenka Institute of Education and Research vs. Anjani Kumar Goenka and Anr. (2009), with minor directions to the appellant party to insert the name of their trust (since the mark “Goenka” formed part of the said trust name) below the name of their school so as to facilitate a clear differentiation between the two marks. What went in the appellant’s favour in this case was also the fact that the party had started using the word “Goenka” around the same time as the other party, and was based in a location different than that of the respondent.

Same was the case for Satilila Charitable Society vs. Skyline Educational Institute, where the name ‘Skyline’ was permitted to be used with respect to an engineering institution of one party, despite the same name being used for a school run by the other party. This was primarily decided on public interest grounds, with the Court opining that students are sufficiently aware of the merits of educational institutions they would like to enrol in, and this was not likely to create any confusion among students.

Needless to mention, there are no clear parameters drawn while judging the stand taken by the Courts in this regard since most decisions seem to be have been taken on a case to case basis.

How effective, then, is the defense of Honest Concurrent Use in present times?

Truth be told, the defense has got diluted over time — primarily due to these reasons:

· The possibility of marks acquiring transnational reputation (as was recognized by the court in the Whirlpool case)

· The penetrative impact of technology and the media on the goodwill of the trademarked goods (Indian Shaving Products Ltd. vs. Gift Pack), which means brands are now more global than local

· Brand proprietors’ preference for fancy/coined trademarks and/or use of numerals in the mark, that leaves less room for confusion

· Increased diversification of well-known brands into related or disparate industries that leads courts to impose territorial limitation upon brands pleading the honest concurrent defence, thereby restricting their operations to a specific area (s). Some fine examples are those of the Vranjilal Manilal & Co vs. Bansal Tobacco Co. (2001) and A B Textiles vs Sony Corporation (2007).

· Lastly, India’s status as a member of the World Intellectual Property Organization (WIPO) that works to ensure owners of registered trademarks get to protect their marks even in member countries; making the application of this defence harder with time.

In the face of these factors it would be significantly harder for parties to apply the defence of honest concurrent use, typically because, this will require volumes of concrete evidence to be furnished in support of such “honest use”. And even then, the court is more likely to accept a ‘reasonably conscious innocent adoption’ of a mark as against ignorant or bad faith adoption of the same.

What therefore, remains to be done for fledgling businesses is a thorough trademark search, wide-ranging at best (online as well as offline), to ensure they are not about to adopt a mark already in use. For established businesses using their trademarks over a course of time without having registered it, it would be prudent to apply for registration at the earliest. At all times, it is necessary to keep multiple copies of relevant documents on the side — as this will act in establishing authenticity of adequate measures taken by the concerned party and prepare it for a win, in case of possible trademark litigation in future.

As rightly inferred, it can be seen that the best time to use the defence of honest concurrent times in present times — is none. Avoiding reliance on it will score better in your favor than making it the backbone of your ignorance.