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Acquiescence as a Defence in Trademark

By Piyush Joshi, Associate, New Delhi Office

When faced with a claim of trademark infringement, a defendant might avoid or minimize its liability if it can safely establish the equitable defense of acquiescence. A defensive claim of acquiescence may be available where the trademark owner has affirmatively represented to the plaintiff / world at large that the mark in issue was in fact in use by it and that it has relied on that representation to plaintiff’s prejudice. In general, this type of defense requires that a defendant satisfies three elements, namely: (1) it received ‘assurances’ from the plaintiff that the defendant could use the mark; (2) it has relied on such assurances; and (3) it would experience undue prejudice if it now had to cease using the mark. Although “acquiescence” has been held to be a complete defense for use of the trade mark against the proprietor of the trade mark, yet until the enactment of Trade Marks Act, 1999 the defense of “acquiescence” was not clearly laid down under the Trade Mark Law in India. # As such, Indian judiciary had to playa pivotal role in providingdefense of “acquiescence” against the registered proprietor of the trade mark. Thus in Moolji Sicca & Co. v. Ramjan Ali Calcutta High Court (AIR 1930 Cal 678)Kolkata High Court laid down the principle that, to set up the defense of “acquiescence” against the proprietor of the prior trade mark, the other user must prove that the proprietor of the prior trade mark was not only aware of the use of his trade mark by the other but also encouraged the other user by not objecting to the use of his trade mark by him. In the case cited above, Ld. Judge quoted in his judgment the observation made by Lord Justice Cotton in Proctor v. Bennis 36 Ch. Div.760 in the context of the defense of “acquiescence” which reads as follows:

#Section 46 & 56 read with Rule 94 of the Trade & Merchandise Marks Act, 1958 merely provided for removal of the registered trademark on the ground of non-use for a continuous period of 5 years and 1 month.

“It is necessary that the person who alleges this laying by should have been acting in ignorance of the title of the other man, and that the other man should have known that ignorance and notmentioned his own title.”

On this basis the defense would be made out where the proprietor of the prior trade mark has taken no action for a continuous period of five years in the use of that mark when he was aware of that use. A number of points in the limitation require some consideration. Firstly, in the context acquiescence appears to require no more than mere inaction with actual knowledge of the use by the other. Secondly, if bad faith is shown then it seems the limitation is not applicable in terms either of preventing an attack on the later registration or opposing its use. The pronouncement on the issue by the Hon’ble Supreme Court of India being the decision reported as Khoday India Ltd. Vs. Scotch Whisky Asson. &Ors.(Appeal (civil) 4179 of 2008).It has been categorically held here that where acquiescence is established or there is an inordinate delay in bringing an action for infringement of a trade-mark or passing off, the discretionary relief of injunction may be denied.In M/s. Power Control Appliances and Others v. Sumeet Machines Pvt. Ltd.,(1994 SCR (1) 708) Supreme Court held: “Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts, not merely silence or inaction such as is involved in laches.”

Conclusion:

It has been observed that injunctions or damages were refused to the claimant on the ground of delay amounting to acquiescence, but it is not easy to see on what principle, nor how this could be right in actions for infringement. If the plaintiff stood by knowingly and let the defendants build up an important trade until it had become necessary to crush it, then the plaintiffs would be stopped by their acquiescence. If the acquiescence in the infringement amounts to consent, it will be a complete defense as was laid down in the Judgments mentioned herein above. However, as pronounced in Re Swarn Singh Case, it was further held that a plaintiff may lose its statutory right if it delaysaction beyond the period of five years in exercising its rights. It would however be more appropriate to state that the plaintiff’s right in rem gets diluted against the defendant on account of plaintiff’s own inaction for the said period.

Under the new Trade Marks Act, 1999 the defense of acquiescence has specifically been provided in Section 33 where the proprietor of an earlier trade mark has acquiesced and taken no action for a continuous period of five years in the use of that latter mark by the defendant, when he was first aware of that use by the said defendant. On account of this acquiescence, the proprietor of the earlier registered trade mark shall NOT be entitled –

to apply for a declaration that the registration of the latter trade mark is invalid.
to oppose the use of the latter trade mark in relation to the goods or services for which the earlier mark has been in use.

In any case, the above mentioned section 33 provides for an exception to the above, where the latter mark was not applied in good faith.

In the case of Eveready Industries India Ltd vs Sanjay Chaddha & Anr [MANU/DE/3507/2010], the New Delhi HC held on 31st August, 2016 that “the information about the registration of the trade mark EVEREADY came to the knowledge of the plaintiff company by March, 2000. This Suit, however, has been filed on 3rd August, 2009. This total inaction on the part of the plaintiff for more than 9 years amounts to not only latches, but also condoning the use of the trade mark EVEREADY by the defendants and acquiescing in the use of the said trade mark by them. Plaintiff is not entitled to ad-interim injunction.”

Disclaimer: The views and opinions expressed in this article are derived from very limited and open source information. These should not be treated as an advice and are only for information. The client/ user may or may not utilize the same subject to their prudent discretion.