Trademark Registration: Dealing With Tricky Situations

It takes just three days to apply for a trademark, but only two years later will it actually be registered – that too only if all goes well. You might blame this squarely on a bureaucratic system, which surely has severe problems. But if you have a problem with regard to a logo or name you’ve trademarked, you’ll quickly come to appreciate at least some, if not all, of its methods.

Trademark
Trademark

For example, let’s say another business operating in the same area as you wishes to trademark a word that is similar to a word you’ve registered. The Trade Marks Registry will not only meticulously check whether the word should be approved at all, it even allots a full four months to anyone who would wish to oppose its approval (by the way, 90% of their files are now digitised). Even if you do not spot it during these four months, you may still challenge it in court.

The system moves slow, but it works for all.

Trademark disputes, though, can be highly controversial, for reasons we’ll go through as this article progresses. As an entrepreneur, how these are to be dealt with will be very good to know, because of how valuable a trademark can be to your business (if you’re not convinced, just ask your VC).

Here are three tricky situations that can arise over a trademark and how the registry or courts are likely to view them.

Another entity applies for/registers a similar trademark.

It’s entirely possible for another entity to apply for or register a trademark that’s similar to yours. If the application is already approved, the matter will be decided in court; if it is yet to be approved, you must oppose the application within four months from its advertisement in the Trade Marks Journal.

But before we go that far, let’s understand how the matter will be made.

So while the law does not itself define what similar means, it is implied that it includes any trademark that is likely to cause confusion. Therefore, two small brands that operate in entirely different sectors may trademark the same name, but a small brand may not share a name with a well-known brand even if they do not operate in the same sector (you cannot start a business named McDonald’s, even if you’re selling shoes, not food). So while there are no strict rules regarding it, the matter will be decided based on the following factors:

  1. How closely the two marks resemble each other (phonetically or visually), so having a composite mark (where the word is within the logo) does not always work.
  2. The popularity of one of the brands also matters, as some brands are so well-known that any word confusingly similar to them are likely to deceive consumers.
  3. The class of buyers and the place at which the products/services are sold also matter. This is because they might be sold at the same establishments or targeted at the same kind of people. A brand of popcorn may have nothing to do with a brand of cinema halls, but they are likely to cause confusion.

A trademark you’ve not registered is taken by another entity

It happens often to start-ups, doesn’t it? Entrepreneurs are often so caught up in their work that they forget to register their trademark. In the meanwhile, if another party registers the brand name, the start-up will need to put in a lot of effort and resources to ensure it does not lose its rights to the name.

Now, how should you approach this problem? Why should you have any rights to the name at all, now that someone else has registered it? Well, because there is no real need to register a trademark. The moment you start using it, it’s yours. Therefore, if you can prove to the court that you’ve done business under the name before the other entity, the court will consider it.

However, a lot depends on the scope of your business. Let’s take an example. Let’s say you began using the brand name Monster Cars to sell second-hand SUVs in Karnataka in 2012, with plans to take it nationwide by 2015. You were too busy to trademark the name, but in 2013 found out that another company called Monster Motors, selling car parts across the nation via Flipkart or Amazon, has trademarked the name. In this case, since you can only prove to have done business in the used car industry in Karnataka, you may only get the trademark for Monster Cars in that single state despite your bigger plans, while Monster Motors will have the opportunity to get broader coverage.

Therefore, the court’s most important consideration is whether or not you have conducted business under that particular name in an area. You shouldn’t take this lightly at all. Even a big brand like Pinterest managed to lose trademark rights in Europe after another brand named Premium Interest beat it to registration.

Dealing with cybersquatting

Once a larger problem than it is today, cybersquatting is the practice of a party buying a domain name purely for the purpose of generating profit. So let’s say you own a business that is successful under a .com domain, but you do not buy all the other possible combinations (.biz, .in, .co.uk, etc.) and words that sound like your trademarked name. A large number of people have made it their business to buy up all these domains and then harass upcoming businesses into paying huge sums of money for them. Often, companies agree to pay up, rather than be forced into a legal battle, but this does not have to be the case.

You would need to resolve such issues using either the Uniform Domain Name Resolution Policy (UDRP) or go to court (after serving a legal notice), if you choose not to pay. The UDRP takes cases much more seriously if the domain name is trademarked. Courts would also take it seriously, but require you to also prove bad faith (that the name was registered with the sole purpose of selling the name back to you).

Trademark matters are usually tricky because of the high level of subjectivity and the endless possible combinations. Though often unnecessary, a business is often better off safe than sorry.

[This article is by Vakilsearch.com, which works with start-ups to facilitate a wide range of legal services, including trademark registration.]

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