Using Surname: Determining the Bona Fide action

The use of a trademark that has the surname of the proprietor is very common. Various people use their surname in the course of trade while in business. In the recent case of Anil Rathi vs. Shri Sharma Steel tech, the Delhi High Court delves into a similar matter concerning the use of surnames in the course of trade. As per the provision in the trademark act, if there is a registered proprietor of a trademark, which is a surname, the usage of such mark cannot be restricted by the proprietor himself, if such use is done in the bona fide manner. The DHC in the present case dealt with the same exception interpreting the use as being bona fide.

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Facts

The plaintiff manufactures steel products under the name of ‘Rathi’ which is already the registered trademark whose proprietor is the Rathi Foundation. The plaintiff is the trustee in the same foundation. The Foundation consists of large numbers of Rathi families who are using the same mark which is regulated through MOU and a Dee. The case arises when one of the family members licenses the use of the mark Rathi to a third party. Seeing this the plaintiff who is the trustee of the foundation, filed the case against the defendant seeking ex-parte ad interim injunction restraining the impugned mark’s unauthorized use, as well to restrain the grant of licenses by the defendant.

Observation

Before getting on to the court’s observation, let us analyze what two sections of the Trademark Act speaks. Section 28 of the Act speaks about the right conferred by the registration. The registration of a trademark shall if valid, give to the registered proprietor of the trademark the exclusive right to the use of the trademark in relation to the goods or services. Whereas, Section 35 speaks says that “Nothing in this Act shall entitle the proprietor or a registered user of a registered trademark to interfere with any bona fide use by a person of his name or that of his place of business, or of the name, or of the name of the place of business, of any of his predecessors in business, or the use by any person of any bona fide description of the character or quality of his goods or services.”

Relying on the said provisions, the plaintiff contends its right as per Section 28, stating himself to be the registered proprietor, to have the right over the mark. Moreover, the license is done by the defendant is in contravention with the deed and MOU which regulates the use of the mark among the family member. The defendant rejected the claim stating that there is no exclusive ownership of the plaintiff over the mark. Against Section 35, the defendant contends that every member of the family has the exclusive right to use the said mark under section 35, and hence can license it as well since he is the family member. The court while observing the case delves into the family agreement and the usage of the surname in a course of trade. The main question that revolves around this case is whether the act of the defendant comes under the domain of a bona fide act.

The court stated that the term of the MOU provides that the registered proprietor of the mark will be the senior-most member of the family. Stating this, the court rejected the defendant’s contention that each member has a similar right and held that the plaintiff being the senior-most member entails the right over the mark and is competent to file the infringement proceedings. Similarly agreeing to what is contended by the plaintiff regarding the bona fide use of the mark, the court held that the defendant’s act of licensing the mark to the third party will not be treated as the bonafide action. The MoU and Trust Deed had been entered into not only to prevent exploitation by outsiders of the mark but also to establish a mechanism for use of the mark by the various member-factions of the family.

Author: Saransh Chaturvedi (an advocate) currently pursuing LLM from Rajiv Gandhi School of Intellectual Property Law (IIT Kharagpur).  In case of any queries please contact/write back to us at support@ipandlegalfilings.com.