Our readers may be aware of Section 12 in the Trademark Act 1999 which allows the registration of identical or similar trademarks by more than one proprietor in case of honest concurrent use of some special circumstances. A few months ago, the provision was in the headlines saying that honest concurrent use (“HCU”) is not a defence to a trademark infringement claim. It came from the Delhi High Court’s (DHC) order in Kei Industries v Raman Kwatra (KEI-1), which came to that conclusion by relying upon a Supreme Court case Power Control v Sumeet Machines. But, as the DHC also noted, Sumeet Machines involved an honest concurrent claim in a copyright infringement claim and not in a trademark infringement claim, which the Court denied. Recently, in Abdul Rasul v Regal Footwear, the Bombay High Court (BHC), relying on the KEI-1 case, held that HCU is not a defense in a trademark infringement claim. But then came Raman Kwatra v. Kei Industries (KEI-2) from DHC which overruled KEI-1.
So, the question remains: whether Honest Concurrent Use can be a defense against trademark infringement claims. Eashan Ghosh makes some strong arguments for HCU being a principle here and here. In this post, I extend it by highlighting HCU’s history arguing that HCU is a principle of trademark law and not just a provision limited to Section 12. Once it is understood as such, its applicability does not remain limited to a singular provision regarding registration. Rather, it can be invoked as an active defense against an infringement suit. Please note that the post does not delve into the facts and other issues of the cases in detail but only focuses on the understanding of HCU.
Facts in brief – In the Abdul Rasul case, the plaintiff claimed the infringement and passing off of its registered trademark “REGAL” used for footwear retail. It claimed to have used the mark since 1954. Conversely, the defendant claimed the adoption of the mark “Regal Footwear”/”Regal” in 1963, however, was not able to prove it. Thus, the plaintiff was granted the injunction. In the KEI cases, KEI Industries claimed the adoption of the mark KEI in 1968 for manufacturing, marketing and selling wires and cables. Whereas the other party i.e. Raman Kwatra et al. claimed that they adopted the mark in 1966. KEI-1 held that both parties traded in similar goods/services, whereas KEI-2 overruled it. Thus, the injunction was set aside.
Honest Concurrent Use: A Principle or a Provision?
While KEI-2 overruled KEI-1, it did not examine the issue of HCU in detail. However, it made an interesting remark in para 49, noting that “Section 12 … would follow that where special circumstances exist that warrant grant of registration of identical or similar trademarks in respect of similar goods and services, the person claiming entitlement to such registration may also be entitled to resist a restraining order for use of such trademark.” Meaning that, Section 12 can be a defense in “special circumstances.” While I agree with the court’s ruling about HCU being a defense, I would argue that it doesn’t come from the special circumstances under Section 12. The provision carves an exception regarding the registration of similar/identical marks with no direct relation to infringement. Thus, a special circumstance in the provision seems to be only related to the “Registration” of a mark, which is to be decided by the Registrar. For the power under Section 12, one can rely on Cadila Healthcare Ltd. v Diat Foods where DHC held that the court has power under Section 12 akin to the registrar. However, how the Court related “special circumstances” with “infringement” remains unclear to me.
My argument is that to regard HCU as a defense, it should be understood as a principle that, besides Section 12, can be argued to exist in various other provisions of the Act, such as Section 30(1)(a) protecting honest practice, Section 34 saving prior users, and Section 35 protecting bona fide use.
Reliance can be placed on Lowenbrau Ag v Jagpin Breweries (2009), where the DHC noted that “Concurrent and honest user was a valid defence against an action for infringement under the Trade Mark and Merchandise Marks Act, 1958 … Even otherwise Sections 9(1), 30(1) and(2) and 35 of the Act do recognise honest concurrent use and on the conditions mentioned therein being satisfied, defend a suit for infringement. Honest and concurrent user is always recognised as a defence to action alleging infringement.”
The history of the principle as explicated below further lends support to this proposition of HCU being a principle.
A Brief History of HCU
Though with some contentions, the underlying principle of HCU is said to have originated in Dent v Turpin (1861) which held that two users of a mark derived from a common predecessor had a separate right to obtain an injunction against a third person using the mark. Then, in Southorn v Reynolds (1865) a similar conclusion was drawn by relying upon the Dent case. While these cases do not involve a “concurrent use,” the principle involved is the same, i.e., whether two persons can own similar/identical marks and injunct each other. Interestingly, at that time, it was understood more in the sense of equity. (See this 1865 commentary, pages 59-77, made available by UNH Law’s IPMall).
Notably, these are pre-registration cases as the registration system came in the UK in 1875 and the U.S. brought it in 1870. This means that the idea of an “honest concurrent use” (if not with the same wording) had existed before, through different names, and is not strictly limited to registration. In the 1972 GE Trade mark case, Lord Diplock discussed the evolution of the principle:
“In the early 19th century trade was still largely local; marks which were identical or which closely resembled one another might have been innocently adopted by traders in different localities. In these their respective products were not sold in competition with one another and accordingly no question of deception of the public could then arise. With the rapid improvement of communications, however, in the first half of the 19th century markets expanded; products of two traders who used similar marks upon their goods could thus come to be on sale to the same potential purchasers with the consequent risk of their being misled as to the origin of the goods . . . To meet this kind of situation the doctrine of honest concurrent user was evolved.”
In India, the principle can be traced to the Indian Merchandise Marks Act, of 1889 which contained a pertinent provision, though with a different name “Unintentional Contravention of the Law relating to Marks and Descriptions.” Then, Trademark Act 1940 was enacted which contained a provision with the wording “honest and concurrent use” in Section 10(2); then came the Trade and Merchandise Marks Act 1958 which contained Section 12(3) with HCU wording. Thereafter, Trademark Act 1999 came with Section 12 with HCU wording. While the wording of honest concurrent use has only existed in one provision since 1940, the underlying principle has existed in other provisions focusing on the good faith or intention behind adopting a mark. The following cases further endorse this view.
For e.g. in Kanshiram v Surinder (1977), BHC ruled that “[honest concurrent user] is possible in cases in which there is some scope for bona fide thinking on the part of a trader that the other trader is not the proprietor of the trade mark, but it is impossible where, as in the present case, the mark is identical and the goods on which it is used are also identical.”
Then, in Hindustan Pencils Pvt. Ltd. v India Stationery (1989), DHC noted that “where defendant, in good faith, and without any prior notice of plaintiffs rights, selected a mark confusingly similar to plaintiffs mark, plaintiffs delay Constituting laces; would bar the issuance of an injunction as well as the granting of damages and profits.”
A more interesting description of how the plea of HCU works exists in Karnataka HC’s 1959 ruling in D. Adinarayana Setty v Brooke Bond where it noted that:
“what is commonly described as a plea of honest and concurrent user in an action for infringement really connotes that the defendant contends that on the strength of honest and concurrent user he is entitled to get his mark also registered under the provisions of law. It is only upon the registration that the plea becomes a complete and absolute plea and not before. When, therefore, an unregistered proprietor, if such an expression is permissible, raises a plea of honest and concurrent user in a suit for infringement at the instance of a registered proprietor, the proper thing for the defendant to do to prove the bona fides of his claim is to make an application for registration on the strength of honest and concurrent user and simultaneously ask the Court to stay further proceedings in the suit.”
In sum, reading HCU as a provision instead of a principle can invisibilize the broader idea of honesty or fairness in trademark law that goes hand in hand with the rights of proprietors and the public interest. The following two pieces, written over 10 years ago, also make a claim about the contraction of HCU. However, much has changed after that. It will be interesting empirical research to do, exposing the buried historical premises that slyly shape our legal thinking around trademarks law.
- Vivek Kumar Choudhary, Protection of Well Known Trademarks and Weakening of Honest Concurrent User Defense (9 pages).
- Phillip Johnson, The Rise and Fall of Honest Concurrent Use (20 pages; paywalled)