Watch out with TM | to India Enterprise Law Journal

Businesses need to be careful when using trademark symbols as misuse can lead to legal trouble, writes Shreekanth Katti

T.The marketing, trade, and business development departments of companies work hard to create brand names to make their products and service offerings more distinguishable and engaging, thereby increasing sales. These brand names are sometimes chosen by companies without realizing that they may need to be registered to prevent others from using them and to ensure that the company itself does not infringe on a similar trademark that is already registered.

There may be situations where it is necessary to use a brand name or trademark without waiting for the trademark to be registered in all countries where the company does business or while an application for registration is pending. In such situations the symbols “TM” and “®” are used to indicate the status of the brand.

When the TM symbol is used, it means that the application to register the trademark has been submitted or the right to the trademark is claimed but not yet registered. When “®” is used, it means that the trademark has already been registered and has ownership and legal title to it.

In relation to the Indian legal framework for trademarks, the 1999 Trademark Act does not provide comprehensive coverage for the use of the TM and ® symbols, but only makes a presumption related to a misrepresented trademark being registered. If the use of “registered” or any other term, symbol or mark relating to registration is contemplated, the mark is deemed to have been registered in India under the Trademarks Act of 1999. It should be noted that the Trademarks Act of 1999 is not limited to the use of ® to indicate registration status, but allows any other expression, symbol or mark for that purpose.

Make a claim

As previously mentioned, the use of such symbols is generally viewed as a statement of claims by the owner in relation to a particular mark and also intends to let the rest of the world know that the owner has certain rights in the mark and may be entitled to adversely use them, take appropriate action. It seems that the use of these symbols and their recognition is not widely accepted or recognized in each country and so there seems to be a lot of confusion.

However, it can be said that while the use of these symbols is not required by law, there are certain advantages to using them. In the USA, it has been determined that the use of the ® trademark is a presumption that other persons are constructively informed about the registration of the trademark and that it is not necessary to prove actual knowledge of such a registration. The use of the ® trademark in the USA also becomes important for the granting of monetary damages in breach of contract cases.

While the enforcement aspects of using the TM and ® symbols are part of the story, technical, business, and practical challenges arise from such use, and using such symbols is not as straightforward as it seems. From a business perspective, a company’s marketing team will claim that the use of symbols like TM and ® matters because using these symbols in cross-border marketing makes the company and players in the new market seriously consider them.

However, due to business needs and the fact that a trademark is time-consuming to register, it is possible that a company may not be able to file the application in all of the countries it has entered. It may also happen that the company has registered the trademark in some countries, has applied for registration in other countries, and has not yet registered in some other countries. Wherever submitted or registered, the company intends to use either TM or ® for the business reasons stated above.

Beyond the borders

The mark or mark is used in a variety of ways, including on the company’s products, packaging or literature, signage, etc. Basically, a mark must be used in the country in which it is registered. In other words, material containing a trademark may not be used in any country other than the country in which it is registered.

However, sometimes the distribution of promotional material cannot be practically controlled geographically. For example, if promotional materials have a TM or ® symbol that is either based on a pending registration or registered in a single jurisdiction such as India, it is difficult to restrict the distribution of the promotional material to just India and worldwide business scenario tends to be in too spread in other countries. This can lead to a misrepresentation of the symbol used in the trademark and in certain jurisdictions it can even be considered misleading and a criminal offense.

Various legal systems have criminal penalties for such inappropriate, misrepresented, or misleading information. The US Patent and Trademark Office’s (USPTO) Trademark Examination Manual provides that improper use of the Federal Registration Symbol ® that is deliberate to mislead or mislead the public or the USPTO is fraud.

Under the Indian Trademarks Act of 1999, misrepresentation of a registered trademark is punishable by a prison term of up to three years and / or a fine. In the UK it is a criminal offense to misrepresent that a trademark is registered or misrepresent the goods or services for which a trademark is registered knowing that the representation is wrong.

Similarly, countries such as Japan, South Korea, Russia and Egypt have imprisonment in the event of such misuse. Therefore, if promotional material with TM or ® is used in a single jurisdiction due to its status, difficulties may arise if such material is used in a different jurisdiction, which could have serious consequences for misrepresentation.

It can be argued that only deliberate misrepresentation should be punished as this is criminal in nature. In fact, the 1999 Trademark Act provides that Section 107, which penalizes counterfeiting a trademark as registered, will not be invoked where a statement or assurance can be given that the mark is registered without implying that it is registered in India is.

According to the USPTO’s trademark manual above, only improper use that is intentional and intended to be fraudulent is considered fraud. The U.S. Trademark Trial and Appeal Board found in North Atlantic Operating Co., Inc. et al. DRL Enterprises Inc. found that the “Applicant knowingly and intentionally used the ® symbol in connection with the term … to mislead or mislead consumers or to believe others in the industry that the trademark was registered.

Prove your innocence

However, whether or not such an act is intended must be proven with the necessary evidence or documents. Therefore, the company cannot avoid appearing in front of the competent authority and proving that the act was unintentional. A lot can happen while a company is trying to prove its innocence, including but not limited to reputational damage and adverse business effects.

It is advisable to be careful if material containing these symbols is not distributed in a country where the status is inappropriate, as the practical scenarios tend to say otherwise, and such distribution in general does not can be controlled.

One solution to overcoming this unintentional act could be to use the ® or TM symbol with an asterisk – “*” – and add a footnote to it indicating the countries where the trademark is registered or pending ( or the right is claimed). In this way, the company can avoid allegations of misrepresentation in the use of the symbol. However, using one more symbol of the star may add further confusion and the possibility cannot be excluded that people may not refer to the fine print in the footnote.

Another solution could be to use country-specific symbols to identify the registry. While this seems like a logical solution to avoiding misrepresentation, a robust system must be put in place to distribute such country-specific symbols. However, with these two solutions, the main reason for using such symbols, that is, the impression in the new market that the company wants to do some serious business, is defeated.

According to the author, the use and handling of the use of symbols TM or ® is complicated. There may be several practical difficulties in handling the material containing trademarks based on registration in one or more jurisdictions. This can also pose legal problems and lead to misrepresentations that result in criminal penalties and unjustified processes. Therefore, companies must be extremely careful and exercise all kinds of care before resorting to the use of these symbols.

Shreekanth Katti is Associate General Manager, Legal at Syngene International. Harry Jose, General Manager – Advertising at Syngene, also contributed to this article.

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