A sign, logo, mark that can be used to differentiate the goods or services of one company from those of other companies is referred to as a Trademark. When an organization or business registers its trademark, under Trademarks Act 1999 in

accordance with Section 28, it gains the exclusive right to prohibit any other business from using the trademark for a term of 10 years.  When a trademark is registered, the owner can stop others from using the same or similar trademark. However, it is possible for a business to register a mark without being aware of a previous user of a similar mark; in such circumstances, the law merely grants priority to the earlier user and here comes the concept of prior use. According to prior use, priority in registration is subordinated to priority in usage.

This gives the impression that the rights of an earlier user are more significant than the rights of the owner of a registered brand. The ‘previous/prior use’ theory is addressed in the Trade Marks Act, 1999, in Section 34 which acts as an exception to Section 28. To put it in a simpler way, Section 34 of the Trademark Act 1999, stipulates that a registered user cannot prevent a third party from making use of his or her registered brand if the third party has been making consistent use of the trademark from an earlier date/prior date.

This provision safeguards the legitimate interests of third parties who use trademarks that are identical to or confusingly similar to those of registered trademark owners.

Essentials of Section 34 Trademark Act 1999 –

In the dispute between Kamat Hotels (India) Ltd. and Royal Orchid Hotels Ltd. the court reaffirmed the principles of prior use. The following is a list of the requirements that need to be met in order for prior usage to be considered against a trademark that has been registered in India:

1. The trademark and the subsequently registered mark may be identical or similar.
2. The trademark must be applied to the same category of goods as the mark that was subsequently registered. If it falls under a different category, further rules would need to be applied, such as the need that the mark be well-known in India and that its use be harmful to the prior user’s goodwill.
3. The prior use must involve a brand registered on Indian territory. A trademark registered in India cannot be invalidated by prior usage in other countries.
4. The trademark must be used consistently. In other words, it shouldn’t be a short-term use. It is crucial that the trademark has some reputation and link with the owner.
5. The trademark must have been in use prior to the date of registration or the usage of the trademark whose registration is being challenged.

Judicial View points and Analysis

In one case the Supreme Court of India had ruled that if a subsequent user registers his trademark, the prior user would still possess actual ownership rights over them and that the rights of the prior user cannot be interfered with or disturbed by the subsequent registered user.

The impact of the term “use” is tremendously significant in Section 34, which defines “usage” as continuing, consistent behavior. When permitted, the protection afforded to a prior user under Section 34 of the law has the consequence of diminishing the guarantee provided by a registered mark. As a result, Section 34’s qualifications necessitate the submission of pertinent materials demonstrating prior use. Regarding the commodities and businesses for which the registered mark is also used, there must be clear evidence of the mark’s application.

In M/S S. Narendra Kumar & Co. vs. Everest Beverages and Foods the court reaffirmed that an interim injunction can be granted even if the prior user fails to provide concrete evidence of earlier use. the Delhi High Court ruled that the prior user has established use of the mark anterior to the date of registration.

In the classical decision of Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. and Ors, the Supreme Court of India ruled that prior use cannot be asserted if it did not occur in the same region as the Defendant and the jurisdiction of the passing off action. Having been the first to adopt and utilize the mark PRIUS in 1997, Toyota sued Prius Auto Industries Ltd. for trademark infringement in the aforementioned case. Nevertheless, evidence presented by Toyota showed that the company did not begin using the mark PRIUS in India until 2010, well after Prius Auto Industries had begun doing so in 2006. Hence, the Court ruled that Prius Auto Industries had unrestricted use of the PRIUS trademark in India.

In order to protect the rights of the trademark user, it is highly advised to keep accurate records of all trademark usage dating back to the first time the trademark was used in connection with products or services.

Conclusion

Under the Trademarks Act of 1999, prior users are shielded from passing off. To exercise this right, it must be proven that there is a general likeness between the two marks and that this similarity is likely to generate confusion in the public’s thinking, which ultimately results in harm or loss to the prior user. Therefore, it is advised that businesses seeking to register their mark conduct a search for any already-registered, confusingly similar marks. As a result, the need for previous use under Section 34 of the Act may be invoked as a crucial defense in infringement claims.

References –

1. Kamat Hotels (India) Ltd. vs. Royal Orchid Hotels Ltd. & Anr. (2018) 1 SCC 728
2. S. Syed Mohideen v. P. Sulochana Bai, 2015 (2) RCR (Civil) 810
3. M/S S. Narendra Kumar & Co. vs Everest Beverages and Foods IA No.2463/2008 in CS (OS) 355/2008 (u/O 39 R 1 & 2 CPC)
4. SC -2018 (73) PTC 1

Bibliography –

1. Law of Trademark and Passing off by P. Narayan
2. Research Paper – 2022 IJCRT | Volume 10, Issue 6 June 2022 | ISSN: 2320-2882 by Vikas Kumar and Bhaskar Singh