Old tactics but New game – Trademark Bullying

David_Goliath_Trademark BullyingFrom the newspapers to our daily lives and our secret fears – it’s all about being intimidated by the big guy. Most of us believe (or is it just me?) that they can be overpowering because they are they and we are we. I can’t begin to fathom how it must be out there for the new entrepreneurs in the competitive market. The big sharks are waiting to swallow them and they tread carefully hoping to survive the competition. The David-Goliath battle in not new to any filed and it is no exception in the world of trademarks.

Not so surprisingly, the USPTO has a definition even for the phrase trademark bullying. It’s defined as, “the practice of a trademark holder using litigation tactics in an attempt to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark holder.”

So basically, it is a situation where a trademark holder goes over and beyond the scope of rights given to him under the law and uses litigation tactics to do so. Though there is no express mention of the dominant position of such holder, I doubt there is room for any further interpretation.

However, I’m of the opinion that the trend is slowly changing and that smaller companies are becoming smarter and know exactly how to enforce their rights without being pushed under pressure by any corporation, however big. The first example that comes to my mind was the little known Taiwan-based company Proview Technology that made a successful attempt locking horns with Apple in China for over the trademark iPad because they had previously registered it. It caused major losses to Apple and even affected their sales in China during the proceedings and thereafter the Court ruled in favour of the Chinese company and halted sales of iPad in two cities. At a later stage, they came to a settlement which cost Apple about 60 million dollars.

There have been quite a few cases in India as well where Courts have ruled in favour of the smaller companies. The case of Crystal Knitters and Swarovski has been in discussed in detail over here.  The Intellectual Property Appellate board seems to taking ‘trademark bullying’ rather seriously and has passed another order in favour of David, an Erode-based manufacturer against a US-based Jones Investment Inc. of Delaware.

Though the order is not yet on IPAB, from what I’ve read the facts are quite simple. The appellant is a world-renowned brand marketing a wide range of goods across 35 countries. Their claim was based on prior usage and international repute. However, Vishnupriya Hosiery Mills refuted the claim stating that they had been using the brand since 1993 and that since the appellant’s brand wasn’t sold in India, there could be no claim of trans-border reputation.

While ruling, Chairman KN Basha also made a noteworthy observation that the appellants in the process of registration had only made an application on ‘proposed to be used’ basis and though at a later stage in Court they asserted that they were using the brand since 1996 they failed to establish the same. The Court tried to send across a strong message to MNCs by unequivocally stating that they should not try to throttle any Indian company which is genuinely carrying out its business if they have no intentions of selling products in the Indian market.

From the above, I’d like to make two observations – one being that a new entrant in the market should be clear on how he proposes to make an application to the registry i.e. by claiming usage or on a proposed to be used basis because establishing that at a later stage in litigation might become difficult and other that the concept of trademark bullying seems to have caught up in India and the Court aren’t shying away from shooing away big brands from India in order to protect the genuine local brands.

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