Guest Post: Inherent Conflict of the Draft TM Rules with Parent Act

We are happy to bring you a guest post from Jasneet Kaur. Jasneet is an independent legal practitioner with extensive experience in trade mark law, having worked with the IPR divisions of two leading law firms in Delhi. In this post she points out some conflicts in the newly issued Draft Rules (that we had blogged about here) and suggests some ways to resolve these conflicts.

Inherent Conflict of the Draft TM Rules with Parent Act

Jasneet Kaur

Difficult choices of a businessmanThis post comes in addition to the previous one in context of the draft Trade Mark Rules proposed by the Central Government, which detailed, inter alia, the economic changes proposed, preparing us for a prospective, oppressive hit on the budget in seeking trade mark registration in India. This post is, solely reflective of certain crucial legalities lacking in the draft Rules. Therefore, I will directly allude to certain specific provisions in the draft Rules which may warrant re-consideration.

Rule 127: Registrar enjoys wider discretion in determination / de-listing of “well-known marks”:

Under proposed Rule 127(4), the Registrar has been granted the discretion to ‘remove’ a trade mark from the list of well-known marks provided for under proposed Rule 127(1), ‘at any time’, if found to have been ‘erroneously or inadvertently’ included in the said list. The draft Rule 127(4) is one which confers upon the Registrar wide discretionary powers having serious implications on the rights and interests of the concerned proprietor. However, the problem with the proposed provision commences where the said provision ends, lacking any mention of the most vital aspect which is ordinarily expected to follow such a provision, being ‘manner of exercise of discretion‘.

Rule 127, therefore, in itself raises certain questions qua the exercise of discretionary power of the Registrar under the draft Rule, namely:

  • Whether the Registrar can exercise the power of de-listing a trade mark without even complying with the principles of natural justice and equity, which mandate, inter alia, reasons to be recorded in writing and grant of opportunity of hearing to the concerned party whose rights and interests are bound to be adversely affected?
  • Whether the Rules can confer upon a quasi-judicial authority such discretionary powers which do not originally find sanction from the statute from which the Rules themselves emerge?
  • In furtherance of the second question raised herein, whether the Rules can surpass the Trade Marks Act, 1999 by conferring upon the Registrar, the power to stipulate criteria with regard to determination of the well-known status of a trade mark, considering such criteria stands critically defined under the Trade Marks Act, 1999, particularly under sub-clauses (6), (7), (8) and (9) of Section 11?

In relation to question (iii) raised hereinabove, and in order to avoid any conspicuous conflict with the statute, the proposed sub-clause (4) of Rule 127 may be amended / modified to provide for the determination of the status of a ‘well-known’ mark in terms of the criteria laid down under sub-clauses (6), (7), (8) and (9) of Section 11 of the Trade Marks Act, 1999, in order to eradicate the obscurity surrounding the draft Rule since the Registrar cannot be empowered to ‘stipulate criteria’ beyond the realm of the statute. In relation to questions (i) and (ii), undoubtedly, sub-clause (4) of Rule 127 requires re-consideration in order to safeguard the rights and interests of the proprietor concerned, by providing for a proper procedure involving grant of hearing and passing of a reasoned order by the Registrar, while exercising his discretionary power. A procedure for advertising well-known status of a trade mark upon examination of evidence, followed by opposition (if any) and finalisation by making a record in the list as such, may also be considered as a reasonable alternative; for the purpose of balancing the nature and scope of powers which the Registrar may exercise under the proposed Rule, thereby nullifying any scope for an arbitrary exercise of discretion.

Rule 108: Re-Classification conflict with Section 60:

The existing Rule 101 provides for advertisement and opposition, if any, in relation to re-classification of goods and/or services of a registered trade mark, whereby the proposed amendment to the goods and/or services for reclassification is advertised in the Trade Mark Journal to invite any opposition from third parties, whose rights and interests are likely to be affected. Thereafter, it lays down the procedure for opposition and record of such an amendment in the Register (in case of dismissal of opposition / absence of any opposition). The intention behind thrusting a mere re-classification amendment through the lengthy process of publication and opposition has been eloquently specified in the existing Rule 101(4), bearing explicit reference to Section 60 of the Trade Marks Act, 1999; according to which, there is an express bar (“Registrar shall not”) on making such an amendment which has the effect of adding substantially to the quantity of goods and/or services and prejudicing the rights of any third person. It is noteworthy that Section 60 (2) itself provides for publication of such an amendment so as to provide an opportunity of opposition to any third person aggrieved. The draft Rule 108, which proposes to repeal the existing Rule 101, propagates an outright reversal of the entire process of record of re-classification; whereby, the amendment is first accepted by the Registrar and subsequently published in the Journal, ultimately proceeding to record in the Register, while doing away with the process of opposition by an affected third party, which is not in harmony with the substantive provision of law from which the draft Rule is drawing its power but rather, in sheer contravention of Section 60 of the Trade Marks Act, 1999.

Rule 35: Provision for expediting application process, except without laying down a time-frame:

The draft Rule 35 proposes to repeal the existing Rule 38, which provides for expediting only the examination process; whereas, the draft Rule provides for expediting the registration process of a pending application, upon receipt of the official filing number. Although the draft Rule 35 retains the existing time-frame for commencing the examination process within three months from the date of receipt of such request for expediting registration, the ‘modalities’ for expediting the subsequent process are left to the Registrar’s discretion, or rather, charity. Such an ambivalent provision is bound to raise grave concerns in the mind of the applicant, who is paying a whopping fees of five times the filing amount, qua the exact time-frame within which the application process is expected to be concluded in an expeditious manner.

The draft provisions highlighted in the foregoing paragraphs are merely a few illustrations of a larger attempt to introduce progressive yet paradoxical reforms relating to trade mark registration in India and hence, seriously beckon ironing out of the nebulous creases in the wrinkled draft provisions.

P.S. Image from here.

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