Are 3-D Trademarks different from Industrial Designs?

What is a Three Dimensional Trademark?

A Three Dimensional Trademark is a non-conventional Trademark which makes use of a Three dimensional shape of  product or its package/container to achieve distinction in the concerned jurisdictional marketplace. Hence, being clearly distinguished by shape or long time usage is the paramount requirement of the 3D Trademark. Examples of such 3D Trademarks are the contour of a Coca cola bottle, shape of the Zippo lighter, the 3D shape of the Super Cub Scooter of Honda or the toblerone packaging. 

3D Trademarks have gained prominence owing to producers wanting to be more distinctive and unique in the markets in which they compete. A 3D trademark is often called a non-conventional trademark since it cannot come under the category of normal 2D category of Trademark registration. To get a 3D Trademark registered  the requirements for a normal 2D trademark along with certain specifications must be satisfied. The shape in the 3D Trademark must be easily recognizable and must have acquired distinctive characteristics.

A producer filing for the registration of a 3D trademark must submit an accurate graphical representation of the 3D mark which can either be the shape, symbol, packaging or any other aspect of the product which must be accompanied with a proper description of the mark. A 3D trademark is to be registered as a mark under Section 2 (1)(m) of The Trade Marks Act, 1999. To provide more protection to non-conventional trademarks, the Manual of Trademarks, Practice and Procedure in 2015 was introduced. The Manual lists down the requirements to be fulfilled by the applicant in cases of non-traditional trademarks, including smell marks, colour marks et al, along with adhering to the requirements under Section 2(1)(zb)

What is Industrial Design?

According to the World Intellectual Property Organization, an industrial design constitutes the ornamental aspect of an article. An industrial design may consist of three dimensional features, such as the shape of an article, or two dimensional features, such as patterns, lines or color. In simple terms, an industrial design is a type of intellectual property which essentially protects the aspects of the product which enables its operation or functioning. The registration and protection of Industrial Designs in India is governed by the Designs Act, 2000. For an industrial design to be eligible for registration, it must satisfy the following criteria.

1. It should be novel and original.

2. It should be applied to a functional article.

3. It should be clearly visible in a finished article.

4. It should be non-obvious.

5. It shouldn’t be prior to registration or disclosure of the design.

The validity of a registered industrial design is for 15 years which can be subsequently renewed. A producer who has a particular industrial design for his product can file for the registration of the design in order to protect the essential features of the design from infringement. A registered industrial design prevents a third party from making and selling a copy of the design. Examples of famously protected industrial designs are the iPhone, iPad, Braun calculator and many others.

Differences between 3D Trademark and Industrial Design

A 3D trademark and an industrial design are sometimes seen to be the same thing given the similar meanings of both. The similarity between the two is that both intend to protect the product from third party infringement and provide a considerable economic and business value to the company. Let us look at the differences between a 3D trademark and an industrial design.

A 3D trademark is a sign of the distinctive characteristic of a product and is used to identify and protect the particular product from a pool of similar products. On the other hand, an industrial design pertains only to the appearance of the good. It refers to that particular aspect of the product which helps in the smooth functioning of the product.

A 3D trademark can often be used as the logo for the company and can go a long way in building loyalty and reputation for the company. On the other hand, an industrial design defines the build of a product which stands out for its novelty and uniqueness. For example, the bottle 3D trademark of Coca Cola is often used as its logo whereas the design of an iPhone is not used as a logo.

A 3D trademark can be a symbol or a word mark or a shape or anything that represents the product. On the other hand, an industrial design must represent the application or functioning of the product which must be designed by experts.

While a 3D trademark is protected and governed by the provisions of the Trademark Act, 1999, an industrial design is governed by the provisions of the Design Act, 2000.

Basis3D TrademarkIndustrial Design
What does it protect?Protects the distinctive characteristic of the productProtects the practical/application aspect of the product
Can it be used as a logo?YesNO
What does it represent?Represents the productRepresents the application of the product
Governing LegislationTrademark Act, 1999Design Act, 2000

It is important that a clear line of distinction is drawn between these essential intellectual properties since many of its aspects can overlap. Innovation determines the success or failure of a product in the market and it is imperative that innovation and uniqueness is protected and preserved under appropriate and well formulated legislations.

Licensing/Assignment of Trademark in India

Assignment/licensing of Trademark allows third parties to use the registered trademark and the rights associated with it. In exchange for “Royalty” Third party is authorized by the owner of registered Trademark to use that Trademark for a specific period of time.

In other words Trademark licensing refers to the moe of transfer of rights wherein the actual operator rights in the Trademark vests with the Trademark owner and only few stipulated rights associated with it i.e. right to use use the trademark only is given to the third party for a mutually agreed period of time.

Transfer/ Sale/ License/ Assignment of Trademark in India

Rights of a Trademark can be transferred to a third party by way of Trademark assignment and license.

Types of Trademark Assignment in India

Broadly there are two types of Trademark assignment in India-

  1. Exclusive Right- Trademark assignment gives exclusive right to one person to use the goods and services of the registered Trademark. It cannot be used by more than one individual as it would decisive or cause confusion.
  2. Non-exclusive License- It allows more latitude in the number of licenses granted while allowing the licensor to retain the rights to further develop and exploit its own intellectual Property.

How to license a Trademark in India

Trademark licensing in India is governed by the Trademarks Act, 1999. However, Trademark licensing is nowhere defined under the Act, the statutory provisions in the Act governing trademark licensing in India refers to the provision relating to “Registered Users”.

For Trademark assignment it is mandatory to have assignment deed or agreement between the parties to have executed the Trademark assignment in India, however it is advisable that the registered user agreement/ license agreement be registered with the registrar of Trademarks. The application for its recordal should be made within six months from the date of such agreement.

Procedure for Trademark licensing as per section 49 of the Trademarks Act, 1999.

Though recordal of the permitted license is voluntary, it is always advisable to get registered your assignment or incense agreement with the registrar of Trademarks to avoid any dispute in future arising out of it. An application for recordal of license agreement/ registered user agreement with the Trademarks registry can only be made with respect of registered Trademark and the application for recordal of the said license agreement should be made within six months from the date of such agreement.

For registering a person as a registered user/ license of a trademark, the registered proprietor/ licensor and the registered user/ licensee shall jointly apply in writing to the Registrar on form TM-U , along with-

  •  The agreement in writing or a duly authenticated copy of it, entered into between the registered proprietor/licensor and the proposed registered user/ licensee with respect to the permitted use of the said trademark.
  • An affidavit needs to be submitted living the particulars of the relationship between the licensor and licensee, control by the licensor over the permitted use, conditions and restrictions imposed and the mode and place of the permitted use and the should specify the in period for the permitted use.
  • A Power of Attorney signed in favour of agents.
  • Such further documents and evidence as required by the registrar or as may be prescribed.

Once the Registrar is satisfied with the application and the details he will register the proposed license in respect of the goods or services as to which he is satisfied. The entry in respect of the license shall be made in the register. Then the recordal will be published in the Trademark journal within two months from the date of registration. The registrar is obliged to issue a notice in prescribed manner of the registration of such licensee to other use or licensee. 

Variation or Cancellation of Registration as a Registered user

Trademarks may be licensed for a sefi or for all goods and services covered. Section 50 of the Trademarks Act provides for variation or cancellation of registration as a registered user. That if the licensee has not used the mark as per the terms and conditions of the agreement, or proprietor has failed to disclose any material fact for such registration, or that the stipulation in the agreement regarding the quality of products is not enforced, or that the cricumsatbces have changed from the date of registration etc, under the said condition a notice and opportunity of hearing is provided before cancellation of registration.

Rights of he Registered user/ Licensee

Following are the rights of the registered user/licensee-

  1. To initiate an infringement suit against the unauthorized person, registered user/ licensee can initiate it under his own name after taking permission or giving a one month of ror notice to the original registered proprietor of the Trademark. 
  2. A registered user/ licensee does not have a right of further assignment with respect to the trademark. 

An unregistered user of Trademark however has no right to initiate an infringement suit under his name. It is advisable for licensee to cite the proprietor of the trademark as co defendant in such proceedings. If the proprietor is added as a co-defendant by the registered user, he shall not be entitled for any costs, unless he appears and takes part in the proceedings.

For Trademark assignment or license of Trademark Contact BIAT Legal LLP for best legal assistance.

Legal Compliances for Start-ups in India

India is the largest start-ups ecosystem in the world with a large majority of startups emerging in the market. Startups are started by passionate entrepreneurs who are focused on building unique solutions to deliver complete customer satisfaction. But with the increasing complexity in the technology sectors it is always important to have a strong legal base to survive in the market. Before setting up a startup, having thorough knowledge about legal compliance is always beneficial. Startups should be aware of the legal requirements of a startup and being compliant with all applicable laws and regulations is mandatory. Legal compliance and regulations are essential for the growth of any startup and it is important to follow them indefatigably.

Eligibility criteria for start-ups

Although there is no properly defined definition of a startup that has been provided under Indian laws, however Government of India under their startup scheme have defined star up as-

An entity shall be considered as a startup if it satisfies all the following conditions-

  • If it is incorporated as a company i.e. a Private Limited Company, Partnership Firm, Limited Liability Company (LLP) or a One Person Company. Provided that such an entity is not formed by splitting up or reconstruction of a business already in existence.
  • That it should not have completed its 10 years of incorporation.
  • Its turnover should not exceed more than INR 100 Crores
  • It must satisfy its working towards innovation, Development and improvement of existing products/ processes and services. It is a scalable business model with a high potential of employment generation or health creation.

Legal Aspects and Compliance that Every Startup should know and follow

The primary goal of any startup is on how to maximise their profits. While thinking of maximizing profits companies tend to ignore legal requirements which may affect their business in a longer run. Following are the documentation and formalities to be followed by a startup to become legally complaint:

  1. Incorporation Related Compliance

Each structure has its own set of rules and regulations which decides the tax requirement for a company, licenses requirement of a company etc. for instance Sole proprietorship does not require any registration, in partnership firm registration is optional, however in Private Limited Company and in LLPs registration is mandatory.

Companies have different registration requirements and they will be registered as per the Companies Act, 2013 in case of a Private, Public Limited Company, not for profit ad One person company, in case of a Partnership Firm Indian Partnership Act, 1932 is applied and for LLPs Limited Liability Partnership Act, 2008 is applied.

Several companies opt their companies to register under different government schemes and laws to avail the benefits and concessions provided under the law. Companies depending on the nature of the business may be registered under MSME Act, the GST Act or under the startup India scheme.

  1. Applying for Business Licenses

Obtaining a license is an integral part of any business. Startups may require different licenses depending on the size of the business. The common license that is applied for business is shop and establishment license, Trademark License, environmental, FSSAI License, labour and employment laws and import and export laws, FDI Policy, FEMA, SBI/RBI regulations in India impact the procurement of license.

  1. Documents Requirements

Many organizations do not pay much attention to the documentation and end up in the plethora of legal complications faced by them in future. That is why some basic documentation is necessary while registering of the company and they are as follows-

  • Drafting of Incorporation Agreement such as founder’s agreement, shareholder’s agreement, MOA, AOA for registration of your company.
  • Agreement such as Non-Disclosure Agreement (NDA), confidentiality agreement, Memorandum of Association (MOU)
  • Work agreement such as employment agreement, lease/rent agreement, service agreement, consultancy agreements and others.
  • Technical agreements
  • Company policies such as Technology Assistance agreement, Licensing and Assignment agreement, Outsourcing and hosting agreements and otters.
  • Registration of Intellectual Property Rights such as copyrights, Trademark, Design, Patents etc. in India and cross borders. Licensing And assignment agreement related to their Intellectual Property.
  1. Company Law Based Compliances

There are certain mandatory compliances for companies registered under Companies Act, 2013 such as-

  • Annual General meeting should be conducted after every 15 months.
  • Board meeting shall take place within 30 days of the incorporation of the company. Apart from that 4 board meetings should take place in a financial year.
  • Forms such as ADT-1, MGT-7, AOC-4 are to be submitted annually.
  1. Taxation Based Compliance

There is Income Tax return compliance which includes Tax audit report, TDS returns, assessment of tax liability and there is GST return filing compliance. Apart from the legal compliance, startups can avail various rebates available to new companies in India.

  1. Labour Law Compliance

After starting of a startup they have to comply with labour laws, which includes payment of wages etc. the laws which are applicable are-

  1. The employee State Insurance Act, 1948- this act makes it mandatory for some establishments to get themselves registered.
  2. Employee Provident Fund Scheme, 1952- This act makes companies contribute toward the provident fund of the employees.
  3. Maternity Benefit Act, 1961- It gives benefit to the employees of the company
  4. Payment of wages 1936/ Minimum wages Act, 1948- it is given to maintain the basic wage of the labour.
  5. The Industrial disputes act 1947- This act has been enacted for the investigation and settlement of Industrial disputes in any industrial establishments.
  6. Trade Union Act, 1926- This is an Act to provide for the registration and regulation of Trade Unions.

Conclusion

It is important for every organization to adhere to the legal compliances with the applicable laws as it will help your organization to run smoothly.

Contact BIAT Legal LLP for the best legal assistance.

Trademark Squatting: A threat to MNCs

With the presence of global entities in India like Apple, Amazon Etc Intellectual property rights of these entities in India becomes indispensable. As a result of this, business owners are required to be conscious of ways that their IP rights, specially Trademark, is protected globally. In 2012 Apple faced an issue with its Trademark registration due to Trademark squatting and ended up paying a hefty penalty of $60 million to the owner of “IPad” Trademark in China. Amazon could also face such litigation in India as they introduced Prime, Echo and Prime Music in India but have not taken Trademark protection of it in the office of Intellectual property rights under the particular classes. They have taken registration of these brand names in class 9 which is about computers and electronic devices. 

To understand Trademark squatting in a better way WIPO (World Intellectual Property Organization) defines Trademark Piracy (Trademark squatting) as “the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use”. This happens when a foreign company wants to register their brand name in the country and they are not able to register their rand name as that brand name already exists in that country, then original company is not able to register their brand name and end up paying heavy price to such company to stop the usage of that brand name. 

We can see that Trademark squatting is a niche area in Trademark disputes. For MNCs we can see that once MNCs have gained popularity and goodwill worldwide then local infringers try to register their trademarks in order to sell their products and to make huge profits out of it. With respect to the general rule, the exclusive right of the trademark owner is territorial in nature and therefore laws relating to trademarks vary from country to country. Trademark squatters take advantage of such law enforcement, which becomes a hurdle when companies become multinational.

Trademark squatting is largely seen in China as their “First to file” method is applied and not “First to us” method. In First to use Trademark the first user of the Trademark obtains the exclusive right  whereas in “First to File” system, the applicant who applies frst for the Trademark registration will get the protection. Therefore, it is always advisable for firms who are anticipating expansion into other countries, especially China, to file for the Trademark registration in that country.

In 2016, a famous basketball star received a favourable verdict from the Supreme Court of China, the legal battle was against Qiaodan Sports, a Chinese Sportswear company using the chinese brand transliteration of Jordan’s name as its Trademark. 

In Spite of various conventions including Paris Convention, TRIPS Agreement, Madrid Protocol as well as WIPO joint recommendation concerning well known marks, these are not enough to counter this problem. In India Protection of foreign Trademarks with respect to the trans-border reputation principle are provided under Trademark Act.

The principle that is followed in India says that the reputation of the good should benefit its owner even in a foreign land where the goods are not being sold. However, in the landmark judgment of Toyota case modified this principle and said that trans-border reputation can only be considered if there are customers of the claimant’s product in the claimed jurisdiction and that such customer’s exist before the infringer activity was established.

The problem of Trademark squatting should be tackled both domestically and internationally. Further with regard to the dispute resolution, although WIPO has regulation for it, it depends on both of the parties as squatters generally prefer their home country for dispute resolution.

Business leaders must make business plans and strategies to protect their trademark before entering the markets internationally. International registration of trademarks is still not a prevalent practice. First to use policies are also practiced in the United States of America as in India. The best way to stop Trademark squatting is to assert the filing that is done with bad faith. Bad faith filing generally refers to an intentional dishonest act by not fulfilling legal or contractual obligations, misleading another, entering into an agreement without the intention or means to fulfill it, or violating basic standards of honesty in dealing with others’ ‘. However these can be expensive and time taking to prove. Bilateral and multilateral treaties between the countries can also ensure protection of Trademark in one country as well as in the signing country. Undoubtedly, this is a multifaceted issue that needs to be solved at every level. 

To get protection from Trademark squatting, contact BIAT Legal LLP.

Ambush Marketing: A Growing Tactics in Today’s Time

Introduction

The term Ambush Marketing is the talk of the time across the world these days. It refers to a marketing strategy wherein rival companies associate themselves with a particular event which already has another official sponsor. The term ambush was first coined by the marketing strategist, Jerry Welsh from American Express company in the 1980s. The word “Ambush” has a dictionary meaning which means- an act or instance of attacking unexpectedly from a concealed position. It is thus a concept where advertisers engage themselves in a particular event for the promotion of their own goods and services by showcasing their creative ideas and efforts but without paying any kind of sponsorship fees to the organizers of that particular event.

Evolution of Ambush Marketing

The first case of Ambush Marketing was witnessed in 1984 Olympics when Kodak sponsored a TV broadcast of the games as well as the US track team even though Fuji Photo Film company of Japan was the official sponsor. In the same event Nike was also seen campaigning for its products even though the official sponsor was Converse. Thereafter, during the summer Olympics held in the year 1988 at South Korea, Kodak was the official sponsor of the games, however, Fujifilm sponsored the games through an internal committee in South Korea. Ambush marketing was first observed in Olympics games, however, it did reach other sports events also like FIFA world cup, Super Bowl, UEFA Championships, Cricket World cup, etc. The reason behind the rapid growth of Ambush Marketing cases is due to its time and cost effectiveness. The brand owners don’t have to follow-up time and again with the event organizers to associate themselves with the particular event and also don’t have to incur huge cost that has to be paid to the event organizers. Further, the Ambushers also save the money spent in promotion and publicity of the goods and services by way of Print and electronic media, digital marketing, advertisement, etc. They are free to explore their creativity without any kind of restrictions and in return also get the desired result they wish to acquire. Presently, Ambush Marketing is one of the important area to be taken into consideration for the infringement of Intellectual Property and yet there are majority of countries which do not have any specific law to stop such illegal practises. Ambush Marketing is not only a result of rivalry between the different brand owners but rather it is a smarter way to seek attention and acquire the goodwill for one’s brand/ products without spending the required amount on money to gain such huge popularity. As there does not exist any particular law to stop such practise, it is done on a large scale. The mega events like Olympics and World Cup rely majorly on the sponsorships collected from various brand owners and in return they are given exclusive rights and recognition to promote their brand. However, by way of Ambush Marketing, the brand owners who have not invested that huge amount, still get recognition and are able to promote their brand on such a large scale by way of their creative tactics.

Ambush Marketing in India

In India first case of Ambush marketing was witnessed in the year 1996 during the world cup, wherein Pepsi was seen campaigning with a Tagline “nothing Official About It” although the official sponsor for the tournament was Coca Cola. Since then there have been various instances, where such practice can be clearly seen. In Mumbai also Indian audiences have seen instances of Ambush Marketing through hoardings. It was when Jet Airways came up with a campaign saying “We’ve Changed” and on the other side, Kingfisher Airlines came up saying “We’ve Made Them Changed”. These two were further ambushed when Go airways came up with a hoarding mentioning that “We’ve Not Changed. We Are Still The Smartest Way To Fly”.

Contact BIAT Legal For any Trademark enquiries.