IMPACT AND COMPLIANCE OF TRIPS WITH INDIAN

TRADEMARK ACT.

LAW OF TRADEMARK AND DESIGN

ABSTRACT

The research article focuses on the impact of the Trade Related Aspects of Intellectual
Property Rights (TRIPS) Agreement on the Indian Trademark Law framework as well as the
compliance that has been followed since its ratification. The major emphasis is going to be on
a critical study of how the TRIPS agreement has affected the existing legal framework and
what have been the additional protections that were granted because of the same. Since its
inception, TRIPS has come under flak for its enforcement in developing countries and the
way it has changed the treatment of intellectual property by developing countries. India has
fully ratified the international agreement and to do so, had scrapped its initially existing
Trademarks and Merchandise Act, 1958. Majority of the provisions that had to be enacted
were protectionist in nature as TRIPS allowed for various penalties for infringement of one’s
right over a trademark. It also added to inclusion of various types of trademarks that did not
exist in the sphere before. The major question that this article shall deal with will revolve
around the controversies surrounding TRIPS as well. Comparison of the objectives provided
by TRIPS agreement with the socio economic background in India to implement it, as well as
the extent to which the current legislation with respect to Trademark Law resides solely on
the stated objectives shall be the primary area of research. TRIPS has, in the recent years
given a boost to IPR laws, but the question that shall be considered in this article, would be
about how much of the said boost has been beneficial to all the interacting public as well as
industries. The methodology that shall be followed would be qualitative and problem oriented
in nature.

INTRODUCTION

In the recent past, a large variety of international mechanisms have played an important role
in ensuring the growth and development of legal frameworks with respect to Intellectual
Property. For the better protection of Intellectual Property Rights, negotiation of various
international treaties and conventions are being done to extend cooperation between the
states. World Intellectual Property Organisation (WIPO) is the specialize agency of the
United Nations that helps to administer these international instruments. A wide range of
countries have also opted for stronger protection with respect to Intellectual Property Rights
by participating in several bilateral, regional and multilateral treaties. Many treaties, over this
course of time, for the purpose of protection of Trademark have emerged. The purpose of
these legal instruments that affect the Trademark law, have been ensuring better protection
for a different range and variety of marks, coordination and cooperation of laws and creating
and implementing an efficient for the filing of protection at a global level.

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) came into
force on 1 January 1995. The implementation for the same was to be within 6 years i.e. by
31st December 2000 for developed countries and for developing countries the same was to be
done within a 10 year period i.e. by 31st December 2004. India received the latter time
window, being a developing country. India had to comply to all the instruments and annexes
by the TRIPS agreement as it had been a member of WTO since 1 January 1995 and a
member of GATT since 8th July 1948. India had to hence, follow the wave of change that
happened in WTO regarding intellectual property regulations.

The TRIPS agreement stands for ‘Agreement On Trade-Related Aspects Of Intellectual

Property Rights’ which according to the treaty document was implemented to reduce
distortions and impediments to international trade, promote effective and adequate
protection of intellectual property rights, ensuring measures and procedures to enforce
intellectual property rights, prevention of barriers for enforcement, facilitating legitimate
trade etc. A lot of confusion has been given birth to over this issue since the inception of the
policy as it lacked basic principles and standards to govern intellectual property rights given
the existence of wide difference in national legal systems.

The TRIPS agreement provides flexibility to the member countries in 1st Article, wherein
they may implement laws beyond what is mentioned in the agreement as long as it is ensured
that contravention between the same does not happen. It also gives its members the right to
determine the appropriate way of implementation of the agreement within their own legal
framework. It is also communicates through the 2nd Article the fact that the obligations of
members from previously existing conventions will not be overshadowed, their effect would
remain in place. Article 7 states the major objectives of the agreement from the protection of
intellectual property rights to balance of rights etc.

The following paper will focus on the impact that TRIPS has had over the Trademark law in
India, with a major focus on TRIPS implementation and the objectives that it carries on
board.

TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS: HISTORY AND BACKGROUND

Intellectual property takes up a significant portion in international trade, in the form of goods
and services. A threat to international trade in this aspect is the inefficient and inadequate
protection granted by some countries to various forms of intellectual property. In such a
situation, it was felt necessary and appropriate to have a framework that stated protectionist
provisions for intellectual property in turn helping the international trade as well. Along with
the other agreements to come out of the Uruguay Round of GATT in 1986, the TRIPS
agreement was agreed upon at the meeting in Marrakesh, Morocco in April 1994 and came
into force as a part of WTO in January 1995. TRIPS is one of the most comprehensive
instrument at the moment with regards to intellectual property rights. It tends to stand out
amongst other international treaties for the mere reason that it covers all forms of Intellectual
property without separating industrial property and copyright, and for the reasons that it
provides detailed provisions regarding IPR enforcement. It provides a minimum level of
protection that all the member countries must enlist in their national statutes, which includes
India as well. Further protection is allowed by countries domestically as long as it does not
interfere with the provisions entailed in TRIPS.

It must also be noted that TRIPS is the probably the only international treaty to provide
minimum standard of protection for various intellectual properties. It is also one of the first
such treaties to provide for a detailed mandate prescribing civil, criminal and administrative
remedies and also the first international instrument that’s subject to binding enforceable
dispute settlement.

The focus of TRIPS agreement is mainly on the trade aspect and not on competition.
According to the preamble of the agreement, it is important that the intellectual property
rights are effectively and appropriately protected and endorsed to lessen the bottlenecks and
issues that the international trade arena currently faces. It has to be understood that any law
implemented must not be of such nature that it backfires the objective of the agreement and
ends up becoming a barrier to legitimate trade. IPR, although a private right in many forms,
has public policy objectives and hence the preamble recognizes it as so while also ensuring
that its developmental objectives are protected as well.

Further provisions are created with respect to providing appropriate standards and laying
down principles that can be followed concerning the scope and usage of IPR. The latter
provisions are then created with the objective of providing a dispute resolution mechanism
that would be expeditious in nature preventing lagging of cases ensuring appropriate
settlements between governments.

Hence, TRIPS carries out the twofold objective of a) ensuring and providing for minimum
standard of protection for intellectual property rights and b) establishing IPR as private rights,
while at the same time being consistent with WTO’s rationale.

Basic principle of national treatment to most favoured nation principle under the trips. The
principle of National Treatment can be defined as a rule of non-discrimination promising
foreign Intellectual Property owner that they will enjoy in a protecting country at least the
same treatment as the protecting country gives to its own nationals. TRIPs has extended the
protection given under the principle of National Treatment under the Paris Convention by
introducing the principle of the Most Favoured Nation.16According to the Most Favoured
Nation principle with regard to the protection of Intellectual Property, any advantage, favour,
privilege or immunity granted by a Member to the nationals of any other country shall be
accorded immediately and unconditionally to the nationals of all other Members.

Trademark protection in the trips agreement articles 15 to 21 of TRIPs lay down the rules for
protection of trademark. It is obligatory for the member state to enforce the principles
regarding conditions and content of protection of trademark as laid down in articles Art. 15. It
provides for simple definition of trademark stating that any sign or any combination signs,
capable of distinguishing the goods or services of one undertaking from those of other
undertaking, shall be capable of constituting a trademark. This definition very clearly
conveys that the agreements on TRIPs provides for both trademarks attached to goods as well
as service marks indicating services on the equal footing. It is very specifically provided
under the TRIPs that the signs that are not inherently capable of distinguishing the relevant
goods or services may be assessed on the condition of its distinctiveness acquired through
use. This in turn does not prevent the member state from denying registration of a trademark
on other grounds, provided that they do not derogate from the provision of the Paris
convention.

While appreciating the registration of a mark on its use the TRIPs agreement stipulates that
actual use of a trademark shall not be a condition for filing of an application for registration.
It further adds that an application shall not be refused solely on the ground that intended use
has not taken place before the expiry of a date of application. Further, it is provided18 that it
is obligatory for the member state to publish the trademark either before it is registered or
immediately after registration and to provide for reasonable opportunity for application of
opposition for cancellation of such trademark.

As provided under the TRIPs, 19the owners of registered trademarks have exclusive lights to
prevent third parties from using an identical or similar goods signs that are similar to those in
respect of which the trademark is registered where such use would cause confusion. When an
identical mark is used on goods and services that are identical, a likelihood of confusion shall
be presumed. TRIPs has strengthened the protection granted to the well-known marks.
Protection is provided to both service marks as well as trademark in terms of well-known
marks.

It is further provided that for determining whether a trademark is a well-known mark, the
knowledge of the trademark in the relevant sector of the public, including knowledge in the
member concerned, which has been obtained as a result of the promotion of the trademark,
shall be taken into consideration. The same article of Paris Convention shall apply to goods
or services which are not similar to these in respect which a trademark is registered. The term
of protection as prescribed under TRIPs is of minimum seven years which is renewable
indefinitely.

HISTORICAL BACKGROUND OF DEVELOPMENT OF INDIAN TRADEMARK LAW:

Establishments of India trademark law are to be found in essential law structure, rising out of
United Kingdom (UK). In mid nineteenth century, domain of essential law courts and
chancery courts in England was disengaged. Suits for orders for trademark encroachment
were archived in chancery courts, which considered these suits to be exercises in trickery. In
particular, proof of fake point was important for irritated gathering to be met all requirements
for request.
It was in 1838 that 'movement in deception' formed into current going off exercises. Couple
of years later, chancery courts in England further refined thoughts of trademark, considering
them to be property and seeing that man who attaches trademark to his items secures benefit
in engraving. Subsequently, courts oversaw certification to proprietorship and fulfilment in
trademark, practically as they finished for property. Essential trademark establishment, UK
Trademark Registration Act, showed up in 1875 and brought enlistment of trademarks into
British legitimate structure. The act made it necessary getting enlistment to be met with all
requirements for easing for infringement.

The Trademarks Act, 1940 was first institution to permit statutory affirmation to trademarks
and exhibited approach for enlistment. Pretty much two decades later, Trade and
Merchandise Act, 1958 supplanted 1940 order. At present, Trademarks Act, suspects official
cautioning after standards are’re-bound'. Statute sees that enlistment itself does not make
trademark, and that trademark exists unreservedly of enrolment, which just oversees further
security under statute. Fundamental law rights are left totally unaffected. Thus, need of
allotment and use of trademark is superior to anything need in enrolment.

The Acts of 1940, 1958 and Trade Marks Act 1999 have all treasured acquisition such that
nothing in these Acts 'may be considered to affect advantages of activity against any
individual for going off things are also guaranteed because Act evidently communicates that
'Nothing in this Act' may qualifies selected proprietor for 'interfere with or control usage' of
trademark by prior customer. In going off action, annoyed party's benefit is free of statutory
right to trademark. Selection under statute does not introduce any new right to engraving
ensured, or any more essential rights than what starting now existed at ordinary law, and at
worth, without enlistment.

In this way now In India, trademarks are ensured under Trademarks Act, 1999. Trademark
law fundamentally fulfils two key needs:

1) It shields individuals by and large from disorder and duplicity by perceiving wellspring of
start of particular things as perceived from other similar things; and

2) It secures trademark proprietor's trade and business and moreover goodwill which is added
to his trademark.

IMPACT OF THE TRIPS AGREEMENT ON TRADE MARK LAW

TRIPS Agreement focuses on the promotion and protection of the intellectual property rights
by ensuring that they are effectively and efficiently carried out. It also keeps note of the fact
that these measures themselves don’t end up being an impediment to the trade of IPR. For the
same it ensures that the member countries have strong legal structures to implement the
agreement with all the terms and conditions, while also ensuring maximum benefit. India
enacted the Trade Marks Act 1999, repealing the old Trade and Merchandise Mark Act, 1958
for the purpose of fulfilling its duties as a member of GATT/TRIPS agreement, and as a
move for ratifying the same. It has to be considered that the repealing of the whole old act
was a necessary reprieve in the face of the fact that it was not compatible for the up and
coming trading and commercial practices. The increasing global economy finds itself in need
for new and reformed act that can easily accommodate changes which the old act was not
found to do. The change in the provisions would make it easier for the new market entrants
and the players to exercise their right to appropriate extent as well as encouraging more
towards the field.

Among the variety of changes that the new act brought over the old one, it also provided for
the registration of service mark. The system for the registration of the service marks had been
introduced, where earlier it was merely protected in the act of passing off. The major reason
for doing so had been because of the new entrants in the market in the form of several
corporations and trade service providers. It was insisted by the TRIPS agreement to member
countries to make explicit provisions for protection of service marks, which had turned out to
be harmful o the country’s socio-economic growth. The new act brought the registration of
collective marks as a reprieve wherein it provides remedies against infringement to
authorised users of the trademark, or the plaintiff who represents the authorised user.

To fall in accordance with the TRIPS agreement, and to fulfil the necessary obligations, it is
mandatory for member countries to set up judicial authorities that give the final
administrative decision, this decision also takes away the right of the aggrieved to file appeal
in the Supreme Court of India. Another change brought by the new act was the increase of the
duration of registration which had increased form the 7 years offered earlier to 10 years. It
also gave the right to successively renew the trademark after the completion of the mentioned
10 years. This move was done to relieve the workload of the office bearers in charge of the
trademark registration.
A big change brought on by the new act was in form of the period of imprisonment which
was consequently increased to a maximum period of 5 years for application of false
trademark and false trade description of any specific goods or services. The minimum
imprisonment that has been prescribed is six months which can be increase to 3 years and the
minimum fine has been described to an amount of at least fifty thousand rupees which can be
consequently increased to two lakh rupees. Penalty with respect to different types of offences
have all been increased form the existing standard that it was at.

According to the TRIPS agreement, “any sign or combination of signs” can be registered as
an appropriate trademark although the condition imposed on them is that they be visually
distinguishable and appreciable. The biggest change that was brought on with the advent of
The Trademarks Act, 1999 as opposed to the old act was the addition of certain more types of
trademarks which could now be registered. These trademarks can be all clubbed under the
title of unconventional trademarks.

The reason unconventional trademarks have received the wide recognition that they have at
the moment was due to various international instruments such as Trademark Law Treaty,
TRIPS etc and due to the fact that most people were able to recognize the trademarks they
had seen by its shape, colour or other such factors which were visual in nature. The
requirements for a trademark to be considered as unconventional are mostly that they should
be inherently distinctive, with the following also kept in mind

 They should be able to being graphically represented

 They should be easily distinguishable from other goods of similar type.

Unconventional trademarks are variety in nature, the ones added to the current legislation is
as follows:

 Sound Marks – It is the registration of specific musical notes as trademark

representation for a product. The registration for this becomes tricky as it is not easily
graphically shown. Famous sounds such as that of the Yahoo! yodel or the opening of
Metro-Goldwyn-Mayer’s roaring lion are distinguishable trademarks and are hence
easily registered.
 Colour Marks – Here, registration of specific colours as being representative of a
brand is registered. A special colour combination that is used to accommodate a
specific brand and which ends up being its identity is registrable now under the
 current act. Prominent example of the same can be the Cadbury wrapper colour of a
particular shade of purple although single colour cannot be registered but colour
combinations can be.
 Shape Marks – The shape of a certain product can be registered as a trademark given
that the shape must not give the product any functional value. It should only bear
representation to the product, like that of the coca-cola bottle, whose distinctive bottle
shape is an identity itself.
 Smell Marks – These refer to the olfactory identity that some products create for their
brands. The first brand to register so was Sumitomo Rubber for vehicular tyres.
Although India doesn’t necessarily allow for the registration of the same, it has kept
the arena open.
 Moving Image – Here, it is required that the single image be submitted for
registration. This is an area where ambiguity is there from the law, although India has
provided permission to a few companies to register the same as their trademarks.

IMPACT OF TRIPS ON DEVELOPING COUNTRIES

TRIPS had ensured that there were certain changes that were to be implemented by all the
countries, even developed. Some adjustments to accommodate and comply with the
agreements was required even of the developed countries, specifically with respect to laws
regulating existing IPR legislations, these changes were done mostly in a manner so as to
complement the existing law and improve its effectiveness if it lacked. The negotiation of
agreement in these countries was done in manner to ensure protection as well as enhance
existing legislations, other than the same, no other substantial changes were demanded off of
them.

In the case of developing countries, a complete polar opposite effect was noticed. The
implementation of TRIPS had considerable implications which were way well within reason.
As most of the developing countries have weaker systems it is needlessly accepted that the
agreement was not as economically favourable to them as it must have been to the countries
with stronger IPR laws, having the capability to properly infuse them. Countries with
stronger industrial research and development benefitted better from these policies than those
countries with weaker economies. A substantial difference must exist in the law that is
imposed on developing countries as compared to the developing countries while
implementing such policies as it’s obvious that weaker economies would end up with bigger
issues from the protectionist policies rather than benefit from them.

TRIPS has come under considerable flak from various sources for the very reason that there
is a range of difference even in the manner that various developing countries operate
industrial research and development, some countries are able to provide better investment for
it whereas many others are not. What ends being the biggest limitation of this instrument is
the fact that in many countries specifically the least developed countries (LDCs) such
measures cannot be implemented without having the economy foster the growth of the
industry itself first. With India, there has been more than most range of complaints raised
over the manner in which such policies have, for years seemed to only benefit the developed
players in the market, giving their industry the boost that is needed while putting the markets
of developing and least developed countries at peril as they flail to reach the position the
others currently enjoy.

CONCLUSION

The above paper spans out the introduction of TRIPS as an instrument of importance which
has, since its inception changed the way intellectual property has been viewed in most
countries. With it respectively the importance and value of IPR has seen a considerable
increase. In India, specifically with respect to trademark laws, it is quite visible that the
advent of TRIPS ensured a staggering change of policies and laws. In a crux it has mostly
been a positive change as different types of trademarks have now been made registrable,
which makes it easier for companies to try out and innovate their brand identity.

Trademark law has also seen a considerable improvement and increase in its utilization. The
protectionist measure introduced by the TRIPS agreement ensures that there are strict laws
available because of which adequate protection can be extended to holders of the right. It still
remains a point of contention though, that the implementation of TRIPS is beneficial to what
extent for countries developing and in the early stages of intellectual property
experimentation, does it provide appropriate protection to the developing countries or does it
provide help to the developed countries by helping them expand their base.