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Your Company Name Is Your Brand!

Published on Mon, Jun 22,2015 | 18:31, Updated at Mon, Jun 22 at 18:31Source : Moneycontrol.com 

By: Deepak Vaid, Senior Associate – IP, Surana & Surana International Attorneys

Is Trademark registration applicable only for products and brands?
Is it applicable to the Company name also?
Why should I protect my Company name under the Trademarks Act?
Isn’t registration under Companies Act sufficient to protect the Company name?

These are few typical questions that clients ask, when they are advised to protect their company names under the Trademarks Act.

An interesting topic yet an ignored area for many entrepreneurs, family owned businesses, MSME’s, and corporate houses (in few cases).

We have come across cases where families have been doing business under their Company or partnership firm name for decades without seeking trademark registration. Suddenly one fine day they come across another entity with the same firm name, doing the same business and catering to the same clients/ customers (OMG!). And they don’t know what to do.

In one of the cases, client was rather surprised to receive a cheque from his customer for goods not supplied by them. While money coming in is good, on enquiry they were informed that the goods were actually supplied by another firm with the same name. A clear case of mistaken identity!!

Many who have a private limited company incorporated under the Companies Act ask that since they have the company name registered under one statute (Company law), why is there a necessity to register it under an another statue (Trademark law).  They say that in case any other company is incorporated under the company law, the legal recourse is well defined in the Company law.   But what if the company name is misused by a partnership or proprietary firm (of course without the suffix “Ltd” or “Pvt. Ltd”), or a product/ brand name? Does the company law provide recourse for such misuse?  The answer is a clear NO.

In legal sense, while the above instances may be contested under common law as a ‘passing off’ action, there are certain benefits which the proprietor can seek by registering the firm/ company name under the Trademarks Act.

To understand the benefits let’s go with the basics first –

The Trademarks Act, 1999 defines a “Trademark” as a mark capable of distinguishing the goods/ services of one person from those of other’s. “Mark” includes a name. Thus company name can be registered under the Act.  The Act further states that a trademark shall not be registered if its use in India is liable to be prevented by virtue of any law (which can include Company law) particularly the law of passing off.

The new Companies Act, 2013, vide Section 4(3) read with Company Incorporation Rule 8(2)a(ii)), states that a company shall not be registered with a name which includes the name of a registered or a pending trademark.

Though both laws complement each other in protecting the interests of the respective registered names/ marks, a legal recourse for misuse of a company name/mark can only be taken under the Trademarks Act. Hence registration of company name under the Trademark law gives the company a handle to exclusively use the name as well as to restrict any kind of misuse of its name by third parties.

A company name (including the company logo) is the corporate identity of a business and most importantly, represents the reputation and goodwill of the company earned over years’ of hard work.  By virtue of Trademark registration, the company gets statutory protection of its name.  Benefits of securing Trademark registration are as follows:

1.    It gives monopoly right to use the mark in relation to all relevant goods and services under which the mark and the logo is registered.
2.    It protects the reputation and goodwill of the company by preventing unauthorized use of the company’s mark by others.
3.    It ensures statutory protection to enforce legal rights against infringement by third parties.
4.    It reduces the risk of adverse effect on your business via a highjack – just because the Company has not resorted to registration under the Trademarks law, a new entrant in similar business can obtain trademark registration of same name/mark and harm your business, reputation and goodwill.
5.    It also gives the comfort and benefit of taking appropriate criminal and/or civil infringement action within the jurisdiction of court where the company has place of business, irrespective of the place of business of the infringer/violator. For example, if the company is in Chennai, even if a violation takes place in Kolkata, the company will be entitled to take infringement action before the Courts in Chennai itself.
In case where mark is not registered under the Trademarks Act, the company is still entitled to take legal recourse but under common law by way of a passing?off action.  Such action should be taken within the jurisdiction of court where the violation has occurred or where the violator has place of business. Hence in the above referred example, the company will need to take action before the Courts in Kolkata only and not in Chennai.
6.    Registration of trademark also gives the benefit of restricting others from incorporating any company containing similar trademark - Section 4(3) read with Company Incorporation rule 8(2)a(ii).
7.    Registration further gives the benefit of claiming right over the name/brand in respect of website/domain squatting/misuse cases, before national and international domain dispute redressal forums, like NIXI, WIPO, etc.

In case the name is not registered under the Trademarks Act, the violator gets an easy excuse of not knowing about the company and its business and thus may plead honest and concurrent use. Under that pretext, the violator may also plead that he adopted the mark after taking the due precaution of checking the trademark office records and not finding any similar mark already registered.  Further due to non?registration of trademark, company may not be able to prove its proprietary right before national and international domain dispute redressal forums in case of website/ domain squatting.  Therefore, trademark registration becomes an important statutory instrument to secure exclusive rights over the name/mark and thereby securing your commercial interests.

Protection of company name under the Trademarks Act has been laid down in many cases.  In Citigroup Inc. vs. Citicorp Business and Finance Pvt. Ltd., the Delhi High Court directed Citicorp Business and Finance Pvt. Ltd. to change their corporate name from Citicorp to some other name which may not be similar to CITI trademark.  In the case of Dunlop Pneumatic Tyre Co. Ltd. vs. Dunlop Lubricant Co., though Dunlop Pneumatic was using the trademark Dunlop in respect of tyres and Dunlop Lubricant was using in respect of oils and lubricants, the latter were restrained from using Dunlop for its products as well as for its business name.  In a landmark judgment of Future Logistics Pvt. Ltd. vs. Future Logistics Solutions Pvt. Ltd. (Future Group) by the Madras High Court, Future Group was restrained from using the name “Future Logistics” as a corporate/ company name for logistics business. This was based on other party’s prior adoption and prior incorporation of the company with same name “Future Logistics”.

Thus it is imperative that businesses, irrespective of their size, stature or nature of business, must protect their company name under the Trademarks Act.  After all, your company name is your Brand.

Knowledge Partner: yellowbox.pro

 
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