Amending the Madrid System by Protocol and Know Its Objectives and Features

Reason for amending the Madrid system by protocol:

Although the Madrid system has been intensively used by trademark owners of the member countries for more than a century now, the number of member countries has remained relatively low and has also remained geographically limited. Several states have considered a number of features of the Madrid system as obstacles to their accession to the same and have not joined the system.

The following are those five features:

First and foremost step is to obtain the basic registration of the mark at the national level in the country of the origin which is a prerequisite to international registration. In some countries, trademark examination takes a long time and trademark registration is not easily and rapidly obtained.

Second step is that the designated office has to examine the mark within the constraint period of one year and issue a notice of refusal by giving all the grounds for refusal.

The third thing is that the uniform fee paid for the designation of a country, some countries are getting high level of national fees but under the Madrid system such a country would receive the fees comparatively less than the national system.

Fourth, the fact that the international registration remains linked to the basic registration during five years and must be cancelled if the basic registration is cancelled operates as an obstacle. This is considered, in some countries, as being too strict since the grounds under which the mark is cancelled in the country of origin may not exist in each of the designated countries.

And fifthly, the regulations implementing the agreement provide for a single working language i.e., French.

Understanding the features of protocol:

Firstly the obligations and methods of the mechanism of the international registration of marks under the Madrid protocol are noted. Then the amendments in the 1999 act of India and how the system would operate for Indians applying for international registration of the marks are explained and how the Indian law would operate for these applicants who designate India as a country of protection.

Before the idea of a protocol to the Madrid agreement was launched, various attempts had been made to create a completely new system for the international registration of marks. All these attempts proved to be unsuccessful. In the meantime, the country-members of the European community had started work on the establishment of what is now called the Community of Trademark System (CTM).

The future existence of the European community trademark registration system was of direct concern to the system established by the Madrid agreement and protocol. The desirability of establishing links between the Madrid registration system and the future European community registration system was recognised in the 1980s.

It led to the setting up of a special committee titled working group on links between the Madrid agreement and the proposal community trademark. “The objectives of that committee developed and led to the establishment of a protocol relating to the Madrid agreement which was adopted in Madrid in 1989″.

In June 1989, the diplomatic conference for the conclusion of a protocol relating to the Madrid agreement concerning the international registration of marks, convened and organised by WIPO, was held in Madrid. The diplomatic conference unanimously adopted on 27 June, 1989, the protocol relating to the Madrid agreement concerning the international registration of marks. There are 90 members of the Madrid protocol as on 8 July, 2013 including India.

Objectives of protocol:

The objectives of the Madrid protocol are two-fold. First is to attract into the Madrid system, new member states, in particular those member states of the European community which are not yet party to the Madrid agreement as also countries like japan and the United States of America. And secondly, the Madrid protocol has the aim of creating links between the Madrid system and the community trademark system of the European community.

Innovations introduced by the Madrid protocol:

Major innovation been introduced by the Madrid protocol in the Madrid system.

International application is purely based on the regional or national application:

As per the Madrid agreement, the international application must be based on the national registration in the country of origin. This first innovation removes a decisive obstacle to accession to the system by several countries. The obstacle lies in the fact that obtaining of a national registration as prescribed by the agreement frequently takes much time, especially in countries that have a full examination system. The inconvenience in particular is that whenever the basic registration is obtained after six months from the date of filing of the national application, the right of priority of six months under the Paris convention is lost. This inconvenience has been removed by the Madrid protocol.

Dilution of deadline:

Whereas, under the Madrid agreement, any notification of refusal by the office of a designated country must be sent to the WIPO within a time limit of one year, the Madrid protocol, while keeping that deadline as the basic deadline, provides for exemption that are intended to allow accession to the protocol by the states which consider one year period as too short a time for their office to communicate even provisional refusals.

Under article 5(2)(b) of the protocol, any contracting party can make a declaration to the effect that the one-year time limit is replaced by 18 months; India has exercised the option of 18 months. Such declaration may also specify that, if a refusal results from an opposition to the granting of protection, the refusal may be notified by the office of that contracting party even after the expiry of the 18 months’ time limit.

Where a contracting party has made the latter declaration, the possibility for the office of such a contracting party of notifying a refusal after the expiry of the 18-month time limit, with respect to a given international registration, is subject to the fulfilment of the following conditions:

The office must, before the expiry of the 18-month time limit, inform the international bureau of the possibility that oppositions may be filed after the expiry of the 18-month time limit, and

The notification of the refusal based on an opposition must be made within a time-limit of not more than seven months from the date on which the opposition period begins; if the opposition period expires before this time limit of seven months, the notification must be made within a time limit of one month from the expiry of the opposition period.

How to Raise a Trademark Objection

Registering a trademark may not be enough – protect your brand from infringers

A trademark serves as a unique identity which imparts a personality to a product or service. It can range from a slogan, logo, graphic, color combination, sound, smell, taste or even an individual’s name.

After the few basic steps of application, the applied trademark needs to be approved by the trademark offices in India. Usually a product can start using TM mark after initial approval which is given in upto 3 days. TM sign shows that the application for trademark registration for that particular product/ brand trademark registration is under review. Entire registration process takes upto 2 years for completion. Subsequently a TM sign can be changed to R sign.

Trademark Registration provides a statutory protection against any type of infringement due to unauthorized usage of the trademark. Trademark Objection can be raised if your prerogative over the owned trademark is violated by a third party. Even if the trademark is not registered, its illegal duplication gives the right to the owner to take the infringer to the court of law. Using a deceptively similar mark as the existing registered trademark, deliberately done to misguide the general public is counted under infringement. There are two types of remedies available for trademark violation:

An action of Infringement: This course of action is taken when the trademark is registered. It is a statuary action wherein the plaintiff has to prove that the infringing mark is a deceptive imitation of the trademark. No further proof is required as the registration of trademark has already been registered by the Government of India under Trademark Act 1999. It needs to be noted that court protects the prior consistent user of the trademark over the registered trademark proprietor based on the common law principles.
Action of Passing off: This procedure is followed when the trademark is unregistered. It is a common law remedy. Passing off action allows the trademark owner to take action against the infringer for passing off goods or services in the name of another person. Here it is imperative to prove in the court that the infringement of the mark is leading to the damages of goodwill or causing monetary loss to the plaintiff. Action of passing off is unaffected by registration or unregistration of the trademark.

Remedies for infringement action and action of passing off:

Remedy for action of infringement or passing off, govt. can grant relief of permanent or temporary injunction, banning the infringer to stop the usage of trademark. Alternately the court can order a monetary compensation against the damage for loss of business or/ and confiscation /destruction of infringing merchandise.

Proving “Bad Faith” in Trademark Proceedings

In July 2016, the Delhi High Court restrained two Indian auto-spare parts manufacturers from using Toyota’s trademark TOYOTA, the Toyota Device Mark, TOYOTA INNOVA and/or any other identical name on their products as well as passing off their goods under the trademark/name PRIUS on the grounds of bad faith.

As per the Honourable Court’s observation, the defendants’ adoption and usage of the mark PRIUS was found to be “blatantly dishonest”, “unauthorized and unlawful” amounting to dilution and passing off of the plaintiff’s reputed trademark.

Way back in 2001 famous Punjabi pop star Daler Mehndi had challenged registration of the domain name (dalermehndi.net) before the Delhi High Court and had succeeded. In recent times, many domain names have come under the umbrella of controversy on the basis of bad faith alone owing to their deceptive similarity to existing distinct, well-known marks. Some examples are that of domain names”Marutisuzuki.com” (which is eerily similar to Maruti Suzuki), and “Newsony.com” which could easily pass off as “sony.com”.

From refusing registration of ‘MAGGI’ and ‘VOLVO’ for kitchen utensils, electric and electronic appliances respectively, to restraining defendants from using the PANADOL mark despite the brand’s products being unavailable in India, Indian courts have, on many instances, acknowledged bad faith as a valid ground in trademark proceedings, though the cases are few in number.

So what exactly is bad faith in trademark proceedings?

No proper definition as such has been coined for the phrase “bad faith” but it generally occurs when one party purposely adopts and uses another’s trademark (usually a well-known one) and cash in on the good will associated with the latter’s mark.

The court in Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd [(1999) RPC 367 at 379]did attempt to define the same though and laid down that, “Bad faith includes dishonesty and behaviour which falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined”.

The Delhi High Court in Manish Vij vs. Indira Chugh very succinctly defined it as something that does not merely imply bad judgment but “the conscious doing of a wrong with a dishonest purpose.”

Under The Trade Marks Act, 1999 “bad faith” finds a small mention under section 11(10) (ii) as qualifying as one of the relative grounds for refusal of registration.

The onus of proving bad faith in trademark infringement proceedings usually lies with the opponent, and to succeed in such a case it is necessary that the alleged infringer’s intent to deceive be proved.

Some of the actions that constitute bad faith in trademark applications are as follows:

· Hastily applying for registration of a trademark already in use by another party (but not registered) through unfair or illegal means

· Getting a large number of trademarks registered or seeking registration on an intent-to-use basis with no bonafide intention of actually using them (absence of legitimate interest)

This includes – transferring or licensing the trademark at a high price (as happened in the domain name dispute over http://www.arunjaitley.com where defendants refused to transfer the domain name and instead asked Mr.Jaitley to purchase it at inflated rates)

slapping trademark infringement cases against the party that uses them and making false claims of losses to intimidate them, etc.

· Obtaining registration by deceptive means (such as using a false date of first use)

· Copying, imitating or translating a well-known mark, whether or not registered in the home country

· Selling of counterfeit products by the applicant and other similar fraudulent activities.

Bad faith is usually determined on the basis of the date of filing the impugned application for the trademark; later evidence is entertained only if it substantially supports the case and is visibly persuasive. Usually all applications are first presumed to be filed in good faith, hence, cogent evidence is needed to make out a case of bad faith, and this must be proven on the balance of probabilities by the alleging party.

This is a tricky ground to cover since the test for determining bad faith also involves weighing various subjective and objective elements such as:

· The applicant’s mental state at the time of filing

· Whether he had knowledge of the other party using the mark in business for a length of time

· His real intention in making the application -to block/drive the third party away from the market or to genuinely use the mark

· The degree of distinctiveness of the third-party’s mark and the extent to which it was known in the market at the date of the contested application

· Other surrounding factors such as nature of the trade/business in which both parties dealt in, the degree of similarity between the trade marks, etc. need to be taken into account.

Standards for proving bad faith are not unreasonably high, yet there is a requirement that such applications must look unscrupulous and fraudulent at the outset, to persons “adopting proper standards” mostly relevant to the particular industry in question.