In Part I of this three-part guest post tracing the birth and early life of the Indian Trade Marks Register, Aparajita discussed the first phase of legislative activity. In Part II (here) and Part III (below) of the post, she examines the change in commercial opinion from ‘no registration’ to ‘pro registration’.
The Grand Old Indian Trademarks Register: Episode 3 (1920-1940)
A country with strong commercial interests like India somehow managed without registered trademarks till 1940. As discussed in Part I and Part II of this post (here and here), the proposal for registration based rights tempted the commercial community at first, but was later discouraged. However, by 1920s, commercial opinion bounced back in favour of registered trademarks. The reasons for this change in opinion is unclear as the report of the Select Committee that considered the Trade Marks Bill in 1939 does not appear to be available online, nor it is with the TMR nor with the Lok Sabha digital library. The change may, however, be inferred from certain changes in the commercial landscape.
By 1939, the cloth and cotton markets were no longer dominated by British goods. The annual reports of the Millowners Association, Bombay show that these markets were now dominated by Indian and Japanese goods. The start of the second world also led to a speculative rise in demand for goods. The abnormal demand due to war, led to an increase in deliveries from mills to go-downs. It was in this setting that the Trade Marks Bill for the establishment of a comprehensive trademark registration system was discussed once again in 1940.
The reported increase in Indian manufacture was repeatedly highlighted in the Council of State debates on the Trade Marks Bill in 1940. It was observed that the Indian economy in 1940 consisted of two subsets. One, the ‘old village economy’ and the other, large scale industries. In the village economy, makers of goods were in direct contact with consumers and relied on personal contact to market and sell goods. Trademarks were less important in this economy. Large scale industries, on the other hand, were unable to personally contact consumers and therefore a gap emerged between makers of goods and consumers. Trademarks were valuable to large scale manufacturers as they were substitutes for personal contact. Trademarks would also satisfy consumers that a particular product was of a particular make and standard and consumers would ‘refuse all substitutes’.
With the increase in manufacture and a growing customer base, emerging large-scale enterprises had succeeded in creating a reputation in the market. Consequently, trademarks of established enterprises became reputed through use. It appears from the discussions on this bill that unpleasantness between traders over use of similar trademarks was on the rise. So much so, trademark suits originally filed in subordinate courts were being transferred to high courts on the grounds that such cases were of ‘great general importance to the manufacturing community’. For instance, such a transfer happened in the case of The Swadeshi Mills Co. v. Juggi Lala in 1926. The plaintiff, Swadeshi Mills, had established their business in 1900. Their business had grown and by 1922 the value of goods manufactured by them was over rupees 800 lakhs. The plaintiff alleged that the defendant’s use of a similar lotus trademark ate into 9% of their profits. Apparently, the sale of the plaintiff’s goods (with the lotus trademark) steadily rose till 1924. From 1924 the plaintiff observed a sharp decline in the sale of their goods (from rupees 58 lakhs to just 37 lakhs). Around the same time, they realized that the defendant had entered their market with a similar trademark selling similar goods. In a short period of three years, the defendant is said to have sold goods worth rupees 32 lakhs.
With markets being cut and possible profits being eaten, the established commercial community appears to have changed their opinion on the requirement of registered trademarks. The debates before the Council of State throw light on the fact that there was growing uncertainty on ownership of trademarks. The discussions also highlight that the absence of a centralized and consolidated list of trademarks created an information gap which increased disputes. A registration system was now believed to be the solution – to establish certainty, reduce disputes and cheapen litigation.
By this time, some of the concerns that were initially raised regarding a consolidated government register also seem to have been addressed. To protect the interests of Indian enterprises and avoid disputes concerning conflicting foreign marks, the 1940 Act provided a head-start period of six months for Indian trademarks to be registered. After which, the government was empowered to make reciprocal arrangements with countries for registration of foreign trademarks, on a case to case basis. To address complexities specific to trademarks used in the cotton and cloth markets, the Act proposed special provisions for textile marks. Given a high concentration of mills in Bombay, a branch office was established in Bombay for administrative convenience (the main office being in Calcutta). Concerns regarding the status of unregistered trademarks were also addressed by recognizing common law rights.
After many long years and much debate, the first, comprehensive law that established a nation-wide system of trade mark registration came into being in 1940. From receiving around three thousand trademarks applications in 1956, the Trade Marks Registry received more than three lakh trademark applications in 2018-2019. Faith in this institution has surely increased over time.