Don’t want to license me your Trademark? I’ll snatch it!

Imagine a situation where A licenses his trademark to a foreign business entity or a franchisee. After few years of mediocre business in country Zia, A decides to stop his operation in that country. After legally wrapping up his business with all his licensees and franchisees in Zia, he happily leaves. Later few years down the lane, he finds out that his trademark is still registered in Zia and is being used by one of his previous franchisees.

  What remedy does he have?

In the case of WUXE ZHANG & ANR vs. SUBHASH AGARWAL & ANR CS(OS) 1608/2010 a similar situation arose.

In this case, the Defendant, SUBHASH AGARWAL, had been the distributor of the Plaintiffs’ goods (mobile phones) and had been selling the Plaintiffs’ goods under the Plaintiffs’ trademark G’FIVE since 14th August 2009. The Plaintiff had begun using this mark since 1st September 2008. The Defendant adopted the trademark X’FIVE which was considered to be deceptively similar to the Plaintiffs’ mark and filed an application for registration of the same. This was considered as an act on the part of the Defendant to ride upon the good will of the Plaintiffs by adopting a deceptively similar mark. The Hon’ble Delhi High Court apart from granting a permanent injunction against the defendant also granted the complainant a compensation of Rs. 10 Lakh.

Use of Foreign mark in India

The question hence arises that if a foreign manufacturer sells its goods through its distributor in India, who is using the trademark in India? According to Indian trademark law, if the goods are imported and sold in India through a Distributor under the trademark of the Manufacturer, he would be deemed to be using the trademark and not the Distributor.

Conclusion

Hence if you are the manufacturer and wish to protect your trademark, you need to remember to

1. Register your trademark in your own name in the country you are exporting to.

2. Ensure that the branding is done in such a way that the product focuses on your mark.

3. The advertising and promotions be done in such a way so as to associate the brand with manufacturer.

4. Ensure that you affix your trademark on your product prior to dispatching them to the distributor.

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