Trademark

McCarthyism in Indian IP


Scared you, didn’t I?

With the title I mean. Triggering memories of an evil epoch in US history where fear reigned supreme. Where friends told on friends, to appease a blood thirsty committee trying to eradicate the curse of communism from a capitalistic America.

But this McCarthy is a far cry from the evil one. This is J Thomas McCarthy, an IP rock star who influenced the course of trademark law, not just in the US but in far flung shores such as India. In fact, I’d wager that our courts rely on him almost as frequently as US courts do. As an Indian attorney once told me: McCarthy has no clue that he’s an IP superstar in India!

The reason I now narrate all of this is in the context of a news item doing the rounds that the famed McCarthy Institute will now be housed out of the Golden Gate University.

 

But how did McCarthy become so popular in India? A commonwealth country that swore more allegiance to the British than the Americans. That is a story that needs some telling. While there were many factors at play, one in particular stands out. Involving as it does a young IP attorney out to make his mark in the world of IP. One who thirsted for more precision in the law than what UK judges offered in their jurisprudence. And chanced upon McCarthy who encapsulated IP nuggets in more precise pointers.

The Precision of Hindustan Pencils

This attorney began citing McCarthy extensively to an all too eager court in Delhi. Beginning with (as I understand) the Hindustan Pencils case (Hindustan Pencils Pvt Ltd vs India Stationery Products).

In this case, Hindustan Pencils (HP) sought to restrain India Stationery Products (ISP) from infringing its registered trademark (including device) ‘Nataraj’ by using it in respect of stationery pins and clips. While HP had a registered trademark, ISP registered a copyright over a substantially-similar device. Leading HP to seek a cancellation of the copyright in 1985, 3 years after it first came to know of the defendants’ adoption. Then, 3 years later (in 1988), HP sued the defendant for trademark infringement as well.

The Defendant (ISP) contended that since the suit was filed a good six years after HP first learnt of the defendant’s adoption, there was considerable delay and the plaintiff was not entitled to an injunction. The court however disagreed. In pertinent part, it held that mere delay is not sufficient (in and of itself) to provide a foolproof defence against infringement. Rather the delay must be “inordinate” and must have caused some prejudice to the defendant. To support its ruling, the court relied extensively on a host of case law and commentary from the UK and India (standard books on trademark law in use then such as Kerly on Trademarks etc). But what is interesting is that the court also begins to rely on McCarthy. See extract below:

“It would follow, logically, that delay by itself is not a sufficient defence to an action for interim injunction, but delay coupled with prejudice caused to the defendant would amount to ‘laches’.

As observed by MCCARTHY at page 383: “Laches=delay X prejudice. In this formula, it is the magnitude of the product of delay and prejudice which must be weighed, not the magnitude of solely the quantum of delay or prejudice alone. For example, in one case, a long delay coupled with even a slight amount of prejudice may suffice to prove an adequate defense of laches. Yet, in another case, a short delay coupled with a great amount of resulting prejudice to defendant may also suffice for laches”.

It has been emphasized that it is for the defendant to show that there has been prejudice caused by reason of the delay and that it would be unfair to injunct the defendant from carrying out its activities.”

Applying this principle to the facts at hand, the court held as below:

  1. There was no “inordinate” delay in this case, since 3 years prior to the filing of the trademark suit, the plaintiff had vociferously objected to the plaintiffs copyright registration (for the same device).
  2. Even assuming there was some delay, the defendant could not be said to be “prejudiced”, since it was clearly put on notice of the plaintiffs’ objections (through the challenge to its copyright registration). As the court rightly notes: “If the defendant continued to do business by using the impugned mark, it did so at its own peril.”
  3. The defendant was a “fraudulent” or dishonest adopter of a proprietary mark and therefore disentitled to the defence of delay/laches, which is essentially an equitable defence. In order to invoke “equity”, courts have continuously ruled that you must approach them with clean hands.
  4. As the court rightly notes: “It had been submitted that these was an inordinate delay on the part of the plaintiffs in filing the present suit. I have already held that inordinate delay would not defeat an action for the grant of a temporary injunction especially where the use by the defendant of the mark was fraudulent. In any case, in my opinion, the delay in the present case cannot be regarded as inordinate. Assuming for the sake of argument that, as contended by the defendants, the plaintiffs came to know about the user by the defendants of the infringing mark in March, 1982, it is not as if the plaintiffs slept over their rights for a number of years. It is to be seen that the plaintiff’s principal place of business is in Bombay while the defendant is a small businessman carrying on its business in Sadar Bazar, Delhi. The plaintiffs, in 1985, did file application for cancellation of the registration of copyright of the defendant. This amounted to first step being taken by it. The plaintiffs waited and within 3 years thereafter filed the present suit. The defendants must have known that it was adopting a mark which belongs to some one else. Any infringer who uses or adopts some one else’s mark must be aware of the consequences which may follow. The defendants ran the risk in using a mark which belonged to some one else. It continued its business uninterruptedly for a number of years before any action was taken by the plaintiffs against it. Any growth after notice is at the risk and peril of the defendant. The defendant certainly had notice of application of the copyright. The defendant should have been warned at that stage, that the plaintiff is not likely to accept the user of its mark by the defendant. If the defendant continued to do business by using the impugned mark, I did so at its own peril. The continued user cannot be set up as a defence under these circumstances.”

So there you have it. McCarthy’s influence shines though (at least a wee bit) in the above decision.

As I understand (and do correct me if I’m wrong), this is first time that an Indian court cites to McCarthy. Subsequently, we find a number of other references to McCarthy in court decisions. It would appear that our courts (and attorneys) took to McCarthy like a fish to water. For it was an easy read and you could easily spot the relevant case law that you wanted in support of the argument you were making.

Soon enough, McCarthy became a legal legend in India. But who was this IP attorney, who (allegedly) introduced our courts to McCarthy, you might ask?

None other than Pravin Anand, one of the leading lights in Indian IP today. One whom I tend to disagree with vociferously on most aspects of IP! But one for whom I continue to cherish the deepest respect. For his is one of the most creative IP minds ever.

Shamnad Basheer

Shamnad Basheer

Prof (Dr) Shamnad Basheer founded SpicyIP in 2005. He is currently the Honorary Research Chair of IP Law at Nirma University and a visiting professor of law at the National Law School (NLS), Bangalore. He is also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof Amartya Sen. Professional History: After graduating from the NLS, Bangalore Professor Basheer joinedAnand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Prof Basheer has published widely and his articles have won awards, including those instituted by ATRIP and the Stanford Technology Law Review. He is consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also serves on several government committees.

2 comments.

  1. Vaibhav

    Shamnad Sir, please do a post on the protests happening at different NLUs. HNLU is again on strike. How long can this go on? Sir, there is an indirect connection with IP law because corruption by VCs means that quality of IP education and research suffers in the long run.

    Reply

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