By - King Stubb & Kasiva on February 22, 2024
The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has proposed amendments to the Trade Marks Rules, 2017, through the Draft Trade Marks (1st Amendment) Rules, 2024[1], in accordance with Section 157 of the Trade Marks Act, 1999[2]. These amendments aim to refine the adjudication process and address legal complexities, enhancing trademark governance effectiveness.
The Jan Vishwas Act, 2023, seeks to amend several Acts under Central Ministries and Departments, focusing on decriminalizing major violations. Its objective is to create a more hassle-free environment for both citizens and businesses across the nation. Additionally, it introduces changes to the Trade Marks Act, 1999, specifically altering the criminal penalty outlined in Section 107[3] to a civil penalty.
The Draft Rules were released on January 10, 2024, inviting comments within 30 days. However, this timeframe seems inadequate compared to other similar processes, such as those conducted by the Ministry of Labour and Employment and the Ministry of Health and Family Welfare, which allowed 45 days for feedback. To ensure meaningful participation and uphold democratic principles, a more reasonable timeframe for public engagement should be considered.
Concerningly, there have not been any public calls for stakeholder consultations regarding the drafting of these Proposed Rules. Moreover, there was no disclosed information about who drafted these Rules. This lack of transparency goes against democratic principles like due process and openness, as emphasized by the Supreme Court in Global Energy Ltd. v. Central Electricity Regulatory Commission[4].
The importance of inclusive stakeholder consultations is evident both domestically, as seen with the Telecom Regulatory Authority of India, and internationally. While there was an open comment period, it is crucial to engage a diverse range of stakeholders, including smaller businesses and public interest groups, for a comprehensive perspective.
1. Introduction of new Definitions:
The draft rules introduce new definitions aimed at simplifying the adjudication process. These include definitions for “complainant,” “adjudicating officer,” and “appellate authority.”
It is suggested that the definition of “complainant” in Proposed Rule 2(aa) be expanded beyond just an “aggrieved” individual to encompass “any person.” This recommendation aligns with the mechanism allowing “any person” to file a pre-grant opposition, enhancing transparency and accountability in trademark enforcement.
Proposed Rule 105G (2) requires the “Appellant” to inform the “other party” of any submissions or applications. However, it is unclear who constitutes the “other party,” necessitating clarification to ensure all relevant parties are informed.
The term “summary proceedings” in Proposed Rule 105D may create confusion as it implies expeditious adjudication while the procedure outlined suggests otherwise. It is recommended to amend the title to “Proceedings when a case is made out” for clarity.
The draft rules lack specificity regarding the qualifications of Adjudicating Officers appointed under Proposed Rule 105B. It is recommended to specify the designation or qualification required for these officers.
While the Registrar appoints the Adjudicating Officer, clarity is needed on who constitutes the “Central Government” responsible for appointing the Appellate Authority under Proposed Rule 105E.
Proposed Rule 105A allows “any person” to file a complaint, but the term “complainant” under Proposed Rule 2(aa) is defined as an “aggrieved person.” This discrepancy should be addressed by amending the definition to align with the operating clause. Such flexibility will encourage public participation in trademark enforcement.
2. Limited Scope of Penalties:
According to Proposed Rule 105A, the role of the Adjudicating Officer is limited to offences committed by a “person” falling under Section 107. This may exclude offences committed by a “Company,” as specified under Section 114[1].
For example, Section 107 of the Act imposes punishment against a person for falsely representing a trademark as registered. However, in cases where the accused entity is a company, the complaint would ideally be filed under both Section 107 and Section 114 to address the specific liability of the company.
3. Summary Proceedings
If a prima facie case is not made out, the Adjudicating Officer has the power to promptly dismiss it without further consideration.
4. Introduction of Compensation Provision:
Proposed Rule 105D(4) outlines the possibility of awarding “compensation” by the Adjudicating Officer.
The Proposed Rule 105D(c)(2) outlines the method for determining the amount of “compensation” under the Act. However, the Rules fail to specify the source of authority for the Adjudicating Officer to grant compensation. Concerns arise regarding mechanism justification, as the Trademarks Act mandates penalties or imprisonment for violators under Chapter XII, without explicitly mentioning compensation.
The lack of clarity on the authority to award compensation may potentially violate the doctrine of ultra vires, which prohibits delegated legislation from superseding substantive provisions of the Parent Act.
In Kerala State Electricity Board v. Thomas Joseph[2], the Supreme Court clarified that courts have a duty to ensure all authorities remain within the confines of the law to prevent ultra vires actions.
5. Ensuring Clarity in Deadlines and Procedures for Submissions under the Proposed Rules:
Proposed Rule 105C (1) lacks clarity regarding the commencement date for the one-month period for passing a speaking order.
Uncertainty in Proposed Rule 105D about how to determine the starting point for the one-month period to commence proceedings.
Ambiguity in serving notices and complaints within proposed timelines can cause disruptions.
The 15-day period in Rule 105D(b) for a written statement might be insufficient.
Inconsistency in terminology regarding extensions in Proposed Rule 105G (1).
Absence of a clear definition for “endorsement” in Proposed Rule 105F (1), causing confusion.
Uncertainty regarding whether the speaking order under Proposed Rule 105D(2)(d)(1) applies only to extension requests.
Clarity is needed on when service via registered post is acceptable under exceptional circumstances.
Clarification is required on whether the complainant should be granted an opportunity to be heard before a prima facie finding is made.
Proposed Form TM-OPP lacks sections for submissions.
Lack of guidance on how to obtain a certified copy as per Proposed Rule 105E (2).
Proposed Rule 105D(a) does not include provisions for informing alleged violators about the allegations.
The proposed Rule assigns the same sub-rule number to different terms, leading to confusion.
The Draft Trade Marks (1st Amendment) Rules, 2024, represent a commendable effort to modernize and streamline the adjudication process. These amendments, while addressing procedural lacunae and enhancing clarity, underscore the government’s commitment to fostering a conducive environment for intellectual property protection and promoting innovation and entrepreneurship.
These proposed amendments, if implemented effectively, have the potential to bolster India’s trademark regime and ensure equitable outcomes for all stakeholders involved. However, addressing the mentioned drawbacks and engaging in constructive consultations are essential for a balanced and inclusive trademark governance framework.
By upholding the principles of fairness and justice, India’s trademark regime can foster an environment that nurtures innovation, creativity, and equitable competition.
[1] https://ksandk.com/wp-content/uploads/2024/02/English-Draft_TM_Rules-1.pdf
[2] https://indiankanoon.org/doc/1717121/
[3] https://indiankanoon.org/doc/1289320/.
[4] https://indiankanoon.org/doc/1695291/.
[5] https://indiankanoon.org/doc/292232/#:~:text=(1)%20If%20the%20person%20committing,to%20be%20proceeded%20against%20and.
