Unregistered Trademark Case Study

15 U.S.C. § 1125(a) creates a civil cause of action for claims of false designation of origin and false advertising. This provides federal protection for unregistered marks. Marks not registered with the United States Patent and Trademark Office (USPTO) may be protected at the state level by common law or statutes associated with unfair competition. Most states have adopted either the Uniform Deceptive Trade Practices Act or the Model Trademark Bill.

If you do not register your trademark, you will have legal rights only within the geographic areas where you operate. This means you may be able to stop a subsequent user of the mark, even if it is a bigger company, from using the mark in your geographic area only. You can claim trademark rights in your unregistered trademark as long as it is distinctive and identifies or distinguishes your products or services. A trade name for your business is not the same as an unregistered trademark and is not given the same protections under federal trademark law.

Although the range of protection is limited to the region where you use your unregistered trademark, you can protect an unregistered but valid trademark from infringement and dilution under common law. This means you can send a cease and desist letter to try to stop someone from using the trademark without your license.

If you want to bring a lawsuit, however, you will have to prove that your mark is a valid trademark, usually only in state or local courts. You can bring the lawsuit in federal court only if the infringer lives in a different state and the amount in controversy is more than $75,000, or if your case depends on interpreting the Lanham Act or other federal law.

Being the first person to file an application to register a trademark does not guarantee that you will get priority over the trademark. Instead, the date on which a mark was first used determines the right of priority to the mark. This means that you can get trademark rights limited by territory even if you are a tiny, lesser-known business with an unregistered trademark. However, the filing date of a registration is considered constructive use of a mark, and it gives priority over a later date of actual common law use in commerce if the registration application results in a registration.

Benefits of Registering a Trademark

The laws surrounding unregistered marks are derived from principles of unfair competition or unfair business. Specifically, it is considered unfair for somebody to trade on the goodwill you have built up around a mark in order to sell competing goods or services. A famous unregistered trademark can be protected from dilution.

However, there are numerous advantages to registering a trademark that you have used in interstate commerce. These advantages include the right to bring a lawsuit against an infringer in federal court, incontestable status after five years of registration, presumption of ownership, enhanced remedies, and constructive notice of ownership to others around the nation. Incontestability can be helpful because it means that a trademark can no longer be attacked for simply being descriptive, even if it is merely descriptive.

Registration can be a great help when fighting someone for a domain name. Moreover, a small business can become large through online sales. Registration of a trademark can be valuable later, even if its value is not immediately apparent to a small business. A trademark is a form of intellectual property, and as such, it is considered an asset that adds value to a business.

Rights Of A Registered Proprietor

Registration of a trade mark confers the following rights on the registered proprietor:-

  • The exclusive right to use the trade mark in relation to the goods or services in respect of which the mark is registered.
  • The right to obtain relief in respect of infringement of the trade mark.

There are two types of remedies are available to the owner of a trademark for unauthorized use of its trade mark by a third party i.e. an action for passing off in the case of an unregistered trademark and an action for infringement in case of a registered trademark. An infringement action is a statutory remedy and an action for passing off is a common law remedy.

Infringement

Trademark infringement is a violation of the exclusive rights attaching to a registered trademark without the authorization of the trademark owner or licensee. Infringement may occur when the infringer, uses a trademark which is identical or confusingly similar to a registered trademark owned by another person, in relation to products or services which are identical or similar to the products or services which the registration covers. The owner of such registered trademark may commence legal proceedings against the infringer.

Passing Off

Passing off occurs in the case of unregistered Brand Names. Here, the owner or to say Brand holder has the preferred right over the Brand owing to long and continuous use though the Brand being unregistered (under the Trademark Act), an action of Infringement cannot be initiated. A Passing Off action can be brought in by the original owner or user of a Brand against another person, who in the course of trade, misrepresents to its prospective or ultimate customers about its goods or services in a manner so as to show that they are connected to the goods or services of the original owner and this is done in a calculated fashion to injure the business or goodwill of the original owner or to earn benefit at the cost of the original owner. It is also important that actual deception and actual damage has to be proved for any relief of passing off. It has been settled in catena of authorities that essential characteristics of a passing off action are as follows:

  • Misrepresentation
  • Made by a person in the course of Trade Mark
  • To prospective customers of his or ultimate consumers of goods or services supplied by him
  • Which is calculated to injure the business or goodwill of another trade
  • Which causes actual damage to a business or goodwill of the trade by whom, the action is brought or we'll probably do so.

Jurisdiction

One of the most important practical benefit given under Section 134 of the Trade Marks Act, 1999 is that a suit for infringement can also be instituted before a District Court / High Court (enjoying Ordinary Original Civil jurisdiction such as High Court of New Delhi, Mumbai, Kolkata or Chennai), within the local limits of whose jurisdiction, at the time of the institution of the suit, the person instituting the suit, actually and voluntarily resides or carries on business or personally work for gain. The person includes the registered proprietor and the registered user. On the other hand the suit for passing off can only be instituted before a District Court, within the local limits of whose jurisdiction The Defendant is residing, working for gain or carrying on its business; or the cause of action has arisen.

Remedies

In case of infringement / passing off trademark, a criminal complaint can also be filed. The Courts can grant injunction and direct the custom authorities to withhold the infringing material / its shipment or prevent its disposal in any other manner, to protect the interest of the owners of intellectual property rights. This legal proposition can be enforced with / without involving the concerned authorities as a party in the suit.

The relief which a court may usually grant in a suit for infringement or passing off includes permanent and interim injunction, damages or account of profits, delivery of the infringing goods for destruction and cost of the legal proceedings. The order of interim injunction may be passed ex parte or after notice. The Interim relief's in the suit may also include order for:

  1. Appointment of a local commissioner, for search, seizure and preservation of infringing goods, account books and preparation of inventory, etc.
  2. Restraining the infringer from disposing of or dealing with the assets in a manner which may adversely affect plaintiff's ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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