LIMITS ON EFFECT OF REGISTERED TRADEMARK
With the increase of competition in the market, it has become very important for all traders and businessmen to come up with new innovations and ideas. When you Trademark your brand, it is protected from any infringement, and if the product becomes popular and is recognised in the market, it gets easier for the owners to sustain longer in the market.
All types of use of trade mark which are fair and honest would not constitute infringement. Sec 30 of the 1999 Trade Mark Act specifically exclude certain act as not constituting an infringement and broadly corresponds to section 30 of the 1958 Act. The law is amplified by section 30(1), which is a new provision and provides for a balance between enlarged provisions of section 29 and the use of honest practices.
Section 30(1), 1999 Trademark Act, lays down that there will be no infringement if the use of the mark is in accordance with “honest practices in industrial or commercial matters and is not such as to take unfair advantage or to be detrimental to the distinctive character or repute of a trade mark.” It appears that the ‘honest practices exception’ of section 30 would cure any inadvertent action of a person which might come in conflict with various clauses of section 29.
In Hawkins Cookers Limited v Murugan Enterprises, which involved the use of the registered trademark ‘Hawkins’ on gaskets by the defendant, the court held that the use of the trademark by the defendant in relation to refills, spare parts and accessories adapted for use in or with the goods of the proprietor might not amount to infringement if the defendant establishes: the use of the mark is reasonably necessary for describing that the article is adapted for the use with the plaintiff’s goods, that the use was bona fide and that the effect of the use complained of is not likely to deceive the public as to the trade origin. The court thus held that the original defendant, while writing- ‘Suitable for Hawkins Pressure Cookers’, had given undue importance to the word ‘HAWKINS’ by printing it in a distinct red colour and thus a case, where the condition of ‘honest use’ is satisfied. It is not a case where there is the dilution of the value of the trademark of the plaintiff by unfair advantage being taken of its distinctive character or repute by the defendant. The use is more in the nature of the intending purpose of the product marketed by the defendant.
And therefore, since the use of the defendant is only indicative of its purpose and is not being used as a trademark, there cannot be a question of the defendant infringing the trademark of the plaintiff.
The Delhi High Court, in the landmark judgement Prius Auto Limited v Toyota Jidosha Kabushiki Kaisha, dealt with the nominative fair use defence against unauthorized use of the plaintiff’s trademark ‘TOYOTA’; the Division bench restrained the defendant from using the plaintiff’s registered mark, except for the purpose of identifying that the defendant’s products can be used in the cars.
Section 30(3)-(4) recognizes the principle of “national exhaustion of rights” by preventing the trademark owner from prohibiting, on the grounds of trademark rights, the marketing of goods in any geographical area within India once the goods are under the registered trade mark are lawfully acquired by a person. However, where there exist legitimate reasons for the proprietor to oppose further dealings in the goods where the conditions of goods are changed or impaired after they have been put on the market, the provision will not apply.
Over a period of time, the Indian Courts have reinforced that the defence of ‘nominative fair use is an exception to trademark infringement and therefore is limited in its applicability. It is aimed at protecting the rights and interests of the brand owner.
Conclusion: Section 30 of the Trade Mark Act, 1999 limits the effect of a registered trademark and enumerates certain acts that do not constitute infringement. These acts are also used as a defence in suits for infringement of trademarks, and an infringer may escape his liability if his use of the registered trademark falls within the ambit of the section.