(1) Save as provided in sub-section (2), nothing in this Act shall authorise the registration of two or more persons who use a trade mark independently, or propose so to use it, as joint proprietors thereof.
(2) Where the relations between two or more persons interested in a trade mark are such that no one of them is entitled as between himself and the other or others of them to use it except---
a. On behalf of both or all of them; or
b. In relation to an article or service with which both or all of them are connected in the course of trade,
those persons may be registered as joint proprietors of the trade mark, and this Act shall have effect in relation to any rights to the use of the trade mark vested in those persons as if those rights had been vested in a single person.
Interpretation:
This section corresponds with Section 24 of The Trade And Merchandise Marks Act, 1958 which provides that two or more persons may be registered as joint proprietors of a trade mark.
Sub-section (1) prohibits in express terms that “noting in this Act shall authorise the registration of two or more persons who use a trademark independently, or propose so to use it, as joint proprietors thereof.
The sub-section (2) (a) applies in the cases where the persons are entitled to use the marks as partner’s and on behalf of all the partners. The Sub-clause (a) covers the cases of co-partnership and sub-clause (b) covers the cases of joint adventure which is not a partnership. However it is very difficult to assess the situations and facts falling with the preview of sub-section 2(b).
- In chain stores where the same articles pass from the manufacturers to the consumers through different sources, such intermediary may consider/engage himself in a joint venture and show that the goods upon which the mark is to be placed are to pass through all of them and as such they have common interest due to which the quality control will remain intact.
- It is not necessary for an applicant to show that the mark was devised by him in order to entitle him to be registered as a joint proprietor with a person who had adopted and used that mark.
Cases:
(1) Power Control Appliances v. Sumeet Machines Pvt. Ltd. 1994 AIR SCW 2760; (1994) 2 SCJ 644: 1994 (2) SSC 448 --It is settled principle of law relating to trademark that there can be one mark, one source and one proprietor. It cannot have two origins. Therefore when the defendant had proclaimed himself as a rival of the plaintiff and as owner, it is not permissible in law. It cannot be used in rivalry and in competition with each other. (it – jointly owned trademarks)
(2) In re Palmolive [(1932) 49 RPC 269, 278] – it was said that before a mark can be registered in the joint names of a manufacturer and a merchant or selector on the ground that they are engaged in a joint adventure, it must be shown that all the goods upon which the mark is to be placed are to pass through the hands of both the parties. For examples, if the joint proprietors were sharing the profits, all of them would be connected in the course of trade with the trade mark.
(3) Elliot Optical Company Ltd.’s [Application (1952) 69 RPC 169] – in Case where the several years have passed and the goods were manufactured and sold under the mark partly by the applicants direct to some consumers and partly by the opponent’s, it was held that joint grant was rightly refused.
(4) Naanmlooze Klene & Co., [appln., (1923) 40 RPC 103] – the foreign company made an application to register a mark in respect of food stuffs and food ingredients. The application was opposed by the company’s sole agent on the ground that the mark was suggested by him and the company was instructed to manufacture goods under the mark solely for him. Held: the fact indicated a joint venture and the mark should be registered in joint names.
(5) Jones TM (1886) 53 LT (NS)1: Rights of the parties on termination of joint venture --by the very nature of the condition imposed under section 24, the termination of the joint venture would imply that none of them will be entitled to use the mark independently or to remain as joint proprietors. It has been held that when a manufacturer, shipping agent and importer have adopted a combination indicative of the interest of each, no one of them could claim to be entitled exclusively as against the others to that design, when the adventure is put an end to.
(6) Gudakhu Star & Label Trade Mark [1990 PTC 216]; Addanki Narayanappa v. Bhaskara Krishnappa [AIR 1966 SC 1300: (1966) 1 SCWR 934] -- Partnership firm is not legal entity and therefore the names of all the partners must appear in the application, making them joint applicants. As per the provisions of the Indian Partnerships Act, 1932 partners use the mark on behalf of one another of an artistic label. But when he allows the label to be used as a trade mark of the firm, the trade mark becomes the property of the firm. The registration in respect of the jointly owned trademarks is granted by the Registrar on submission of proof of relevant agreements specifying the joint adventure. It is possible for the Registrar to impose suitable conditions while granting the application.
On cessation of the joint venture, the parties will have to have independent marks to distinguish their own trade and business, if any. The new trade marks will have to be sufficiently distinct and different from the mark used by them earlier during the existence of the joint venture arrangement to obviate any confusion or deception in the minds of the public. In other words, on the termination of joint venture no one party is entitled to register the mark in his own name but the joint registered proprietor can assign the mark.
The parties may bring to the notice of the Registrar the termination of the arrangement, so as to enable him to rectify the register in respect of the registered trade mark under section 57 of the Act.
(7) Ramappa v. Monapa [AIR 1957 Mad: ILR (1957) Mad 206] – the Madras High Court has held that where the application for rectification of the Registrar was made on the basis that the registration of the mark was obtained by fraud, and it is found that the allegations are correct, the court must direct the entry to be expunged from the register and the order of joint registration should be annulled.
Appropriate office for making an Application for Registration:
Rule 4 (a) (iii) – in the case of jointly registered proprietors, the principal place of business in India of the proprietor whose name is entered first in the register as having such place of business in India at such date is situate;
On scrutiny of the above provision, I imagine as to “WHY any exclusive retailer / dealer / franchisee can’t make joint claim for ownership or claim territorial use of the trade mark / trade name since they are connected in the course of the trade, trading goods exclusively for one manufacturer, there is common venture, they spend substantial amount on local advertisements; they spends considerable time and efforts in marketing and popularizing the trade mark”.
However usually there are restrictive covenants in the agreement which binds the exclusive dealers retailers/chain stores/franchisees.
What would happen if there are no agreement with the dealers/retailers or no restrictive covenant? Their claim will succeed? ………
What would be the first step to challenge ownership of the trade mark?
Obviously, challenging the registration of the trade mark by filing rectification petition before the Registrar of Trade Mark to claim territorial exclusive use based on reputation.
What would such claimant do if the original registered proprietor issues notice or files suit for infringement?
1 --- If only notice is issued by Registered Proprietor -- First, Civil Suit will be filed for relief of injuction against the proprietor for groundless threat of legal prosecution u/s 142 and then rectification petition will be filed challenging the validity of Registration to claim joint ownership.
2 -- If suit is filed -- The infringement claim may be contested on ground that there is no infringement (as of now held by several courts in India) in selling the lawfully acquired goods.
Prevention is better than cure! -- Brand / trade marks owners should ensure that appropriate agreement are entered with dealers/stockiest for use of mark or simply authorise the use of trade mark by licensing so that the license can be withdrawn at any point of dispute or for violations of the terms of use or if there is any such claim. In India, use of trade mark under license (permitted use) amounts to use made by original proprietor u/s. 48(2) of the Trade Mark Act 1999, registered proprietor of trade mark should use this provision in restrictive sense to claim use made by dealer/licensee so as to restrict them from claiming right over the trade mark based on reputation, goodwill and use of the mark.
The above issue may be faced by multinationals and retail ventures companies who may compete with the local dealers and try to overshadow them or control dealers volumes by booking them under infringement provisions since the owners will not be in position to do much in other way due to the existance of Competition Law.
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