In a decision delivered on 24th February, 2014, the Intellectual Property Appellate Board (IPAB) affirmed that a multinational company cannot claim infringement of trademark by a local Indian company purely based on international presence, unless they can expressly establish that their presence extends to India or precedes that of the Indian company.
The appellant in the case is Jones Investment Co, an American company which uses the trademark ‘Jones New York’ internationally in relation to apparel, hosiery, footwear, etc. The respondent is Vishnupriya Hosiery, a textile firm based in Erode, Tamil Nadu. The respondent sought to apply for a trademark for the name ‘Jones’ in relation to their textile products. This application was opposed by the appellants, and the Deputy Registrar of Trademarks dismissed the notice of the opposition on 9th March, 2010. This gave rise to the appeal.
The appellants had two contentions. Their first contention was that they had been using the trademark ‘Jones New York’ since 1966 and it had acquired international reputation. They had further registered the trademark in the year 1997. Therefore, they contended, the registration of trademark with respect to the same goods under the name ‘Jones’ by the respondent would cause confusion and would deceive the consumers.
Their second contention was that the respondent did not have “substantial sales” of their product as their profits only amounted to lakhs. Hence, the respondents cannot claim that they have a reputation that can rival that of the appellants.
The IPAB dismissed both these contentions of the appellants. With respect to the first contention regarding international presence, the IPAB relied on the Supreme Court decision Milmet Oftho Industries and Ors v. Allergan Inc. In Milmet, the Appellants were an Indian pharmaceutical company which sold the drug ‘Ocuflux’. The respondents, an international pharmaceutical company, sought to file a suit for passing off as they were also selling a drug under a similar name, in other countries. The Apex Court had held as follows-
“Multinational corporations, who have no intention of coming to India or introducing their product in India should not be allowed to throttle an Indian Company by not permitting it to sell a product in India, if the Indian Company has genuinely adopted the mark and developed the product and is first in the market”
The IPAB compared the facts of Milmet (supra) and the present case and concluded that this was also a similar situation where the appellant company had no sales whatsoever in India under the name ‘Jones New York’. Therefore, the appellant does not have any ground to ‘throttle’ the Indian business.
It must be noted that this argument only stands because the Appellants did not provide evidence to show that they had an established international reputation prior to 1997, and the respondents were able to prove that they had a presence in India since 1993. This is important because even Milmet (supra) held that had the international company acquired a reputation prior to the adoption of trademark by the Indian company, it would be immaterial whether the former had a presence in India and it could validly proceed against the Indian company. The operative test, therefore, is merely who is first in the market.
With respect to the second contention regarding quantum of sales, the IPAB held that quantum of sales is absolutely immaterial as long as the applicant company (respondent in this case) is able to discharge the burden that the registration of their trademark would not cause confusion in the minds of the consumers. Considering that the appellant company did not even have a presence in India, this argument of the appellant was absurd in the first place (as it seemed to imply that your ownership over intellectual property somehow solely depended on profits). The fact that the respondent company had a limited local presence as opposed to the appellant company’s international one (excluding India) only seems to strengthen the case of the respondents, as it goes on to show that the two firms operate in different markets, lowering the prospects of consumer deception. If the IPAB had held otherwise, it would have paved the way for big corporations to grow bigger at the cost of small firms such as Vishnupriya Hosiery.