The Crossroad of India’s Trademark and Copyright Law

Mohan Dewan

The protections offered by India’s trademark law and copyright law serve different public policy goals. Trademark law is based on protecting goodwill, avoiding consumer confusion and identifying the source of origin of the goods or services in question. Whereas copyright law encourages authorship and creativity. Even though these areas are separate in theory, they often and inevitably come to a crossroad during their commercial use, especially when an artistic work is used as a logo or in a label which is applied to an article for sale.

In the early 80s, Intellectual Property (IP) law practitioners in India discovered the copyright registration process provided under the Copyright Act, 1957 (Copyright Act). Trademark labels could be registered under the category of artistic works which “substituted the protection” under the trademark law through this process, and also provided a semblance of ownership of the artistic work used as a trademark. As the artistic work which was used as a trademark label contained a mark that could be deceptively similar to a prior registered trademark, the application for the trademark label could possibly have been objected to by the Trademark Office. There were disputes in the courts, even Criminal Courts, where such copyright registration certificates were used against genuine trademark owner.

Increase in the number of such cases led to an amendment in the Trademark and Copyright Laws which, when read in consonance with each other, required:

1. applicants who sought to register their trademark labels under the copyright law needed to take a No Objection Certificate (NOC) from the Trademark Registry to do so; and
2. in criminal cases where the complainant alleged use of a false trademark, a police officer while acting on the same, is required to seek clearance from the Registrar of Trademarks before moving forward with a search and seizure.

Substituted Protection

Section 2(c) of the Copyright Act gives a very broad definition of “artistic works.” It includes not only fine arts but also commercial designs like labels, packaging, and decorative patterns, which allows brand owners to seek this substituted protection.

This strategy was a nifty way to deal with impediments of filing an application for registering a trademark. It became imperative to ensure that the mark applied for is unique, not descriptive and similar to other marks, which can at times become cumbersome leading to a longer time to acquire a trademark registration certificate. Acquiring a copyright registration on the other hand, is relatively easy as it had a lower threshold, as an applicant must only prove originality of their work leading to a faster and efficient way to acquire rights in an artistic label.

This strategy was useful even in enforcement of IP rights. For instance, the common law action of passing off was used to enforce rights in trademarks, especially for marks that were not registered, which required the assertor of such rights to provide a bundle of proof of goodwill, reputation, and consumer confusion. The Copyright Act on the other hand, made it easier to acquire both civil and criminal remedies in the form of police search and seizures by simply submitting a copyright registration certificate.

Rise of Conflict and Misuse of Procedure

The widespread use of substituted protection, led to systemic conflicts that often had to do with the possibility of unfair enrichment and complicated procedures.

In cases of trademark infringement or passing off, a defendant would produce their own certificate of copyright registration for the artistic label in question. The defendant would further claim that the plaintiff did not possess exclusive rights as the work was independently registered as a copyright by the defendant. This converted a simple trademark dispute into a complex conflict involving the validity and exclusivity of two different IP rights.

Competitors could even register a nearly similar artistic label and use the registration to initiate criminal proceedings against the original trademark owner. This use of copyright registration to file vexatious complaints, turned a legal right meant for authors into a weapon against genuine trademark owners, forcing them into a defensive legal battle.

Legislative Solution

The un-coordinated registration of artistic labels under the Copyright Act led to amendments in the Trade Marks Act, 1999 (Trademarks Act) and the Copyright Act in order to make the copyright and trademark systems work in harmony.

The Copyright (Amendment) Act, 1983, came up with a solution by adding a key provisio to Section 45(1) of the Copyright Act. Section 45 deals with the procedure to be followed to secure a copyright registration i.e., to make an application and payment as prescribed. However, Section 45(1) introduced a provisio into this process particularly for artistic work. It stated that if an artistic work is capable of being used with any goods or services, the application must explicitly state the same and be accompanied by a certificate from the Registrar of Trade Marks that states that at present there is no trade mark that has been registered nor is there an application that is similar to the artistic work.

A corresponding rule was incorporated under the Trade Mark Rules, 2017. Rule 22 provides that any person may request the Registrar to conduct a search and issue a certificate under Section 45(1) of the Copyright Act confirming that no identical or deceptively similar trademark is registered in relation to the artistic work in question.

Section 115(4) of the Trademarks Act casts a duty on a police officer investigating the use of a false trademark to seek the opinion of the Register of Trademarks on facts involved in the offence relating to the trademark.

These legislative measures were intended to create a systemic check and balance within the trademark and copyright institutions. By requiring a copyright applicant to seek an NOC from the Trademark Registry, the legislation sought to erase the problems arising from the “substituted protection” phenomenon.

Critical Analysis

The legislation’s intention behind making the amendments was to get rid of the procedural misuse of additional protection. However, the combination of trademark and copyright amendments raised concerns in their implementation.

First, the language of the provisio created a loophole. It reads that “no application has been made by, any person other than the applicant.” This language allows for a third-party to file an identical or deceptively similar trademark application in bad faith just to cause an obstacle in the registration process of a genuine owner of an artistic work. By making a trademark application in bad faith the amendment acts as an anti-competitive tool rather than a resourceful means to stop unscrupulous practices.

Second, the additional step of acquiring a NOC from the Trademarks Registry acts as an indirect aid to counterfeiters. If a genuine owner of an artistic work inadvertently fails to comply with the procedure established under the provisio such inadvertency may be used by counterfeiters to their aid, to quash criminal proceedings filed against them.

Detrimental Domino Effect

The insertion of the poriviso had a domino effect on the criminal remedies available under the Trademarks Act. In the case of Arun Kumar vs. State of Punjab and Another[1], the petitioner was prosecuted under Sections 63 and 65 of the Copyright Act and Sections 103 and 104 of the Trade Marks Act for manufacturing and selling counterfeit Puma apparel. A raid was conducted by the police inspector through which the counterfeit goods were seized, and the petitioner was arrested.

The petitioner filed an application before the Punjab High Court to quash the First Information Report (FIR) and challenged the legality of search and seizure. The High Court allowed the petition, quashed the proceedings by holding that, Section 115(4) of the Trade Marks Act was not followed to the teeth, which mandates investigations be conducted by an officer not below the rank of Deputy Superintendent of Police and obtaining the opinion of the Registrar of Trade Marks before initiating search and seizure. This failure to comply with the requirements of Section 115(4) provided a technical defence to the petitioner that the Punjab High Court was obligated to uphold.

In addition, the judgment includes the cryptic comment that “there could be thus, no Copyright in manufacture and sale of garments.” This presumably means that the use of artistic works when applied to a product of commerce cannot enjoy copyright thereby tossing out the entire process of copyright registration for artistic labels, and consequently, the entire concept of “substituted protection” discussed above.

Balancing Protection and Procedure

In my opinion, the legislative journey of amendments in copyright and trademark law is a classic case of how law evolves in response to market behaviour and unforeseen exploitation. The current rules have achieved their primary goal of co-ordination between trademark and copyright registration. However, they have created a complex and burdensome procedure that has slowed down legitimate actions.

Thus, the future legislative focus should be on refining the current framework: clarifying the scope of commercial use, and safeguarding the system against procedural abuse, while ensuring that law enforcement can efficiently utilize the statutory tools to fight the menace of counterfeiting.

[NB: Utilize means “make practical and effective use of.”]