Introduction
A ‘Trademark troll’ is defined as any individual or entity which engages in pre-emptive and frivolous trademark registrations. Herein trademarks are registered by trolls in bad faith before the original brand owner does, without the intention of using the mark. Trademark trolls register marks belonging to well-known brands that have registered their marks in other countries and are planning to use it in the troll’s country in the future. Once registered, these trolls use it as a means to gain unfair profits from the original trademark owner by initiating infringement lawsuits or pursuing negotiations for licenses to use the mark. Though trolling has becoming rampant there is no law in India that makes “trademark trolling” per se illegal.
First-to-Use v. First-to-File Registration Systems
Countries adopt either a “first to file” or a “first to use” registration system. ‘Use requirement’ countries are those jurisdictions where trademark registration is provided on the basis of prior commercial usage of the mark. Whereas, ‘file requirement’ countries refer to jurisdictions where registration is provided upon following due procedure i.e. applicants are under no obligation to demonstrate prior usage of their mark before registering the mark.
Trademark trolling is more common in ‘first to file’ countries wherein the first entity to register a trademark becomes its lawful owner, despite current usage by another owner. For instance, China which follows the first-to-file trademark registration system is infamous for trademark trolling activities where Chinese locals have time and again registered marks belonging to internationally well-known brands. Brands like Apple have had to pay extravagant sums of money to these trolls to retrieve the right to use their own ‘iPad’ mark in China, facing huge losses in the process.
In contrast, the United States follows a ‘first-to-use’ registration system wherein prior commercial usage is a pre-condition for registration and documents indicating the date of first use need to be provided as per Section 45 of the Lanham Act. There are also provisions for abandonment and cancellation of registrations in case of non-use of the mark for 3 consecutive years. These procedural safeguards act as deterrents to these trolls from filing frivolous registrations of marks in bad faith.
The Case in India
In India though the ‘first to use’ system is followed, trademark applications can also be filed on a ‘proposed to be used’ basis without showing any prior usage of the mark. Therefore, a troll who has applied for the mark first will be given priority over the subsequent application filed by owners who have actually used the mark in other countries.
Such registration is liable to be cancelled only when it is challenged on ground of non-usage for a continuous period of 5 years as per Section 47 of the Trademarks Act, 1999. However, when brands file for cancellation of the trolls registration based on non-usage, the trolls begin to use the mark during the pendency of the cancellation action. Thus the trolls have misused this provision by using the mark within the 5 year limit making it difficult for actual owners to cancel the marks registered by the trolls.
Trademark trolling in India include the case of H&M; Hennes & Mauritz Ab & Anr v. HM Megabrands Pvt. Ltd. & Ors. Here, H&M, a Swedish fashion giant, sued HM Megabrands for trademark infringement. The Delhi High Court in this case issued an injunction against the defendants from using the mark ‘HM Megabrands’ as such usage would cause enormous damage and economic losses to the well-known H&M brand of the Plaintiffs.
A more recent example of trademark trolling in India is the case of Sony PS-5, where an individual based out of Delhi succeeded in registering the mark PS-5 belonging to the famous brand Sony before they could register their PS-5 mark in India. This is a classic case of trademark trolling as the troll filed for registration in October 2019, a few months after Sony announced the launch of its PS-5. The troll later withdrew the application without securing the trademarks rights; this shows that there was malicious intention behind such registration in order to gain unfair profits from Sony.
Conclusion
By taking some advance precautions brands can minimize the adverse effects caused by trademark trolls. Brands should think globally when it comes to protecting their intellectual property rights. Some steps which can be adopted include:
- Brands which plan to expand their business internationally should file trademark applications at the earliest in all countries in which such brand expansion is likely in the future
- Keep a record of prior usage of the mark such as maintaining invoices and other commercial documents which indicate the mark and the dates therein. This would constitute as prior user evidence in case of trademark trolling litigations.
- Perform a comprehensive search for possible trolls and maintain a Trademark watch over Journals before brand expansion to other countries. This helps the brand owners to fight off the trademark trolls at the initial stages only.
Author: Neha Uppin, Legal Intern at PA Legal.
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