Deciphering Trademark

Rong Thai International Group, a Thailand based manufacturer and distributor of footwear, initiated legal proceedings against ENA Footwear Pvt. Ltd.

Facts:

Rong Thai International Group, a Thailand based manufacturer and distributor of footwear, initiated legal proceedings against ENA Footwear Pvt. Ltd. The case revolves around the cancellation of the trademark ‘baoji’ owned by ENA Footwear due to alleged non-usage. Rong Thai filed a lawsuit, presenting an investigation report and market research findings asserting that ENA Footwear had not genuinely utilized the ‘baoji’ mark. In response to the same, ENA Footwear provided sales invoices from 2012 to 2022 to demonstrate extensive usage of the mark. The case centres on the application of Section 47(1)(b) of the Trade Marks Act, 1999, allowing the removal of a trademark from the Official Register on part of the non-usage by the proprietor of the mark.

Judgment:

The Court, while analysing the requirements set out under Section 47(1)(b) of the Trade Marks Act, 1999, ruled in favour of the Respondents, while observing that the Petitioner has failed to substantiate its claim of a complete absence of the impugned mark. The presented sales invoices were, however, acknowledged by the Court as compelling evidence of bona fide use. Statutorily, Section 47(1)(b) allows the removal of a trademark if not used bona fidely for a continuous period of five years, specifically focusing on the last five years preceding the three months before the cancellation application. Given ENA Footwear’s demonstration of use during this crucial period, the Court dismissed the petition of removal based on non-use by Rong Thai which was based on a single self-sourced investigation report.

Analysis:

  • The Court clarified the five-year term by illustrating it with an example that A trademark is registered and entered into the register on 1st January 2020. The initial five years, which serve as a grace period during which the trademark cannot be challenged for non-use, extends until 1st January 2025. Thus, accounting for the three-month buffer period as envisaged in the provision, an application seeking removal of the trademark for non-use becomes viable from 1st March 2025 onwards. Now, let us assume an application for rectification was filed on 1st June 2035. In this scenario, the last relevant date for assessing non-use would be three months before this application date, which falls on 1st March 2035. Consequently, to determine whether the trademark ought to be removed from the register, we must assess whether there has been non-use for any continuous period of recent five years or more preceding 1st March 2035.”
  • The said illustration categorically emphasises upon the set assessment of non-usage which is required to be considered while denoting the recent and current status of the trademark. Also, the considerable focus point is on the period of the last three months before the filing of a cancellation application. This approach of evaluation of the specified time frame of three months clearly guarantees that the appraisal of the trademark’s usage is based on its recent use, rather than relying on historical non-use, which might have lost relevance.
  • Importantly, the burden of proof lies with the party seeking removal, emphasizing the need to substantiate claims of non-use. This judgment adheres to the principle that the removal of a mark due to non-use demands explicit and unequivocal evidence of abandonment, a threshold not met in the present case.
Concluding notes:

This decision establishes a precedent through an intricate interpretation of Section 47(1)(b), highlighting the significance of recent trademark utilization in ascertaining the validity on the register.

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