Penalty for Applying False Trademark – Trademark Registration in Cochin
Penalty for Applying False Trademark – Trademark Registration in Cochin
This Article provides penalty for applying false trademark, trade description, etc. This Article corresponds to section 78 of the existing Act but removes the distinction between offences in relation to “drugs” or “food” on the one hand and other categories of goods on the other and seeks to enhance the punishment uniformly irrespective of the nature of the goods. As in many cases, a trademark label is registered separately as a trade mark under the Trade and Merchandise Marks Act, 1958 and as copyright under the Copyright Act, 1957, the penal provisions are sought to be harmonized between the two laws, Accordingly, in clause 103, it is proposed that penalty for applying false trade mark or false trade description, etc. as enumerated in clause 103 is to be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees. However, a provision has been made empowering the court, for adequate and special reasons to be mentioned in the judgment, to impose a sentence lower than the special reasons to be mentioned in the judgment, to impose a sentence lower than the normal punishment with penalty specified in this clause.
Comments.-The section corresponds to section 78 of the 1958 Act, but removes the distinction which existed in the 1958 Act between offences in relation to “drugs” or “food” on the one hand and other categories of goods on the other and seeks to enhance the punishment with penalty uniformly irrespective of the nature of the goods. As in many cases, a trademark label is registered separately as a trade mark under the Trade and Merchandise Marks Act, 1958 and as copyright under the Copyright Act, 1957, the penal provisions are harmonized between the two laws. Section 103 lists various offences and prescribes the penalty therefor. The following offences are penalty with imprisonment and with fine and the person who-
(a) Falsifies any trademark;
(b) Falsely applies to goods or services any trade mark; or
(c) Makes, disposes of, or has in his possession, any die, block, machine, plate or other instrument for the purpose of falsifying or of being used for falsifying a trade mark; or
(d) Applies any trade description to goods or services; or
(e) Applies to any goods to which an indication of the country or place in which they were made or produced or the name and address of the manufacturer or person for whom the goods are manufactured is required to be applied under section 139, a false indication of such address; or (f) tampers with, alters or effaces an indication of origin which has been applied to any goods to which it is required to be applied under section 139; or
(g) Causes any of the things above mentioned to be done are liable for the offence.
For the circumstances when a person falsifies any trade mark’ or said to “falsely apply to goods or services any trademark“, see notes under section 102.
“Making or possession of instrument for falsifying trade mark”
Section 103(c) renders a person liable for a criminal offence who makes, disposes of, or has in his possession any die, block, machine, plate or other instrument for the purpose of falsifying or of being used for falsifying a trademark.
“Applies any false trade description'”
The expressions ‘trade description” and “false trade description” are defined in section 2(1)(za) and 2()(i) respectively.
“Trade description” means any description, statement or other indication, direct or indirect,-
(i) As to the number, quantity, measure, gauge or weight of any goods, or
(ii) As to the standard of quality of any goods or services according to a classification commonly used or recognized in the trade; or
(iii) As to fitness for the purpose, strength, performance or behavior of any goods, being “drug” as defined in the Drugs and Cosmetics Act, 1940 (23 of 1940), or “food” as defined in the Prevention of Food Adulteration Act, 1954 (37 of 1954); or
(iv) As to the place or country in which or the time at which any goods or services were made, produced or provided, as the case may be; or
(v) As to the name and address or other indication of the identity of the manufacturer or of the person for whom the goods are manufactured or services are provided; or
(vi) As to the mode of manufacture or producing any goods or providing services; or
(vii) As to the material of which any goods are composed; or
(vii) As to any goods being the subject of an existing patent, privilege or copyright,
(a) Any description as to the use of any trademark which according to the custom of the trade is commonly taken to be an indication of any of the above matters;
(b) The description as to any imported goods contained in any bill of entry or shipping bill;
(c) Any other description which is likely to be misunderstood or mistaken for 2 or any of the said matters
A false trade description means –
- a trade description which is untrue or misleading in a material respect as regards the goods or services to which it is applied; or
- Any alteration of a trade description as regards the goods or services to which it is applied, whether by way of addition, effacement or otherwise, where that alterations make the description untrue or misleading in material respect; or
III. Any trade description which denotes or implies that there are contained, as regards the goods to which it is applied, more yards or meters than there are contained therein standard yards or standard meters; or
- Any marks or arrangement or combination thereof when applied-
(a) To goods in such a manner as to be likely to lead persons to believe that the goods are the manufacture or merchandise of some person other than the person whose merchandise or manufacture them really are;
(b) In relation to services in such a manner as to be likely to lead persons to believe that the services are provided or rendered by some person other than the person whose services they really are;, or
- any false name or initials of a person applied to goods or services in such manner as if such name or initials were a trade description in any case where the name or initials-
(a) Is or are not a trademark or part of a trade mark, and
(b) Is or are identical with or deceptively similar to the name or initials or a person carrying on business in connection with goods or services of the same description or both and who has not authorized the use of such name or initials; and
(c) Is or are either the names or initials of a fictitious person or some person not bona fide carrying on business in connection with such goods or services,
And the fact that a trade description is a trade mark or part of a trade mark shall not prevent such trade description being a false trade description within the meaning of the Act.
The rather exhaustive definitions make it clear that a “false trade description” would include any trade description which is untrue or misleading in a material respect providing as regards the goods to which it is applied.
The description may relate to quantity or quality of the goods as commonly used or recognized in the trade; or as to the fitness for purpose, performance or behavior of any goods or it may relate the place or time of production of the goods manufacture, as to the composition of the goods or a claim about existence of any patent right or copyright in respect of the goods. It may also relate to the description as to the name and address or other indication of the manufacturer or of the person for whom the goods are manufactured. See section 139 which empowers Central Government to issue notification, requiring goods to show indication of origin. See also section 121 which empowers Government to issue instructions as to permissible variations as regards number, quantity, measure, gauge or weight which are to be recognized by criminal courts as permissible in the case of any goods. The notification issued under the corresponding provision of the 1958 Act is in respect of cotton piece-goods, cotton yarns and thread. Special provisions relating to testing and marking of piece-goods and yarn have been omitted in the Trade Marks Rules, 2017.
Indications of source or origin
The Paris Convention contains in Articles 10 and 10bis provisions on the protection of indications of source. These provisions cover in general any direct or indirect use of a false indication of source of the goods or of the identity of the manufacturer etc. as well as any act of unfair competition by the use of indications which are liable to mislead the public the nature or the characteristics of the goods to which they are applied. India is a member of the Paris Convention. The Trade Marks Act, 1999 empowers the Central Government to issue a notification under section 139 requiring goods of any class specified therein to show indication of the country or place of origin.
Section 103, read with the definition of “false trade description”, would make it clear that any person who applies any false indication of source or origin to goods or services would be liable for criminal offence, as provided in section 103, unless he proves that he acted without intent to defraud or that his case is covered by the exception contained in section 139(5).
“Without intent to defraud”
To deceive is to induce a person to believe that a thing is true which is false and which the person practicing deceit knows or believes to be false. To defraud is to deprive by deceit; it is by deceit to induce a man to act to his injury. More tersely it may be put that to deceive is by falsehood to induce a state of mind; to defraud is by deceit to induce a course of action (BUCKLEY J.) London& Globe Finance Corporation Ltd. The words “without intent to defraud” apply to cases where a person uses a particular mark without any intent in so doing to induce a buyer to accept goods which might otherwise be rejected (MATHEW J.) Starey v. Chilworth Gunpowder Co. “It has been laid down that the intention to defraud may be constituted by the deliberate commission of the act of forging the trade mark. If any support for that proposition is required, it will be found in the judgment of the present Lord Chief justice of Slatcher v. George Mence Smiths. In the passage in the judgment which summarizes the conclusion of the court which can be found at 638, after reciting a number of previous authorities in which the same principle has been expressed, the learned Lord Chief Justice proceeds as follows: ‘In this state of the authorities it seems to us that we must construe the words ‘that otherwise he had acted innocently”-for this purpose those words can be considered as equivalent to the words “without intent to defraud”-as meaning that he had acted inadvertently under some mistake of fact. The fact that he had acted in good faith and had taken all precautions against committing an offence against the Act will not amount to proof that the defendant had otherwise acted innocently.
Sub-section (3) of section 115 explicitly enacts that the offence under section 103 is cognizable.
The person who has committed any of the offences mentioned in section 103 is punishable with imprisonment for a term which shall not be less than six months, but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees, unless he proves that he which may extend acted without intent to defraud. The Court may, however, impose a sentence of penalty of imprisonment for a term of less than six months or a fine of less than fifty thousand rupees, for adequate and special reasons to be mentioned in the judgment
In Abdul Sattar v. Badrinarayan, the court observed that “No protection can be afforded if persons are let off with light penalty for such offences. There may be cases when the offence is committed inadvertently in which kind of penalty a small fine may be justified. When, however, there is systematic policy of pursuing another in using his trade mark it becomes a different matter
See Pizza Hut International Lle v. Rakesh Saraiya, where the Court ordered the appellant be put to civil jail for one month and the restaurant run by her in name and logo “Pizza Ghar” be attached under Order XXXIX Rule 2-A of CPC for disobedience or breach of an ad interim injunction granted by the District Judge,Indore.
On appeal, it was contended that unless there was willful disobedience of the injunction order, appellant could not be convicted. Though it was held that the appellant had not followed the order in its pith and substance, the High Court of M.P. set aside the order of sentence observing that there has been no restaurant under name of “Pizza Hut” within Indore and no appreciable loss of custom has been established.
The onus is on the prosecution to establish an offence on the part of the accused and the defenses which are available penalty to the accused are:
- That the act complained of by the prosecution was done by him for and on behalf of the proprietor or with his assent; or without intent to defraud either the proprietor of the trade mark or the public,
- He may also set up the defense available under section 110 or sub-clause (c) of section 151, where the accused being a servant of a master acted in good faith in obedience to the instructions of the master.
- The prosecution has not established the proprietorship of the mark.
- The mark used by him is not deceptively similar to the complainant’s mark and as such is not likely to deceive, and that the differences between the trademarks are large and obvious.”
- Invalidity of the complainant’s mark under section 124(1).
- The prosecution of the offence is barred by limitation under section 118.
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