This article has been written by Pranali Shetye pursuing a Diploma in Intellectual Property, Media and Entertainment Laws.

This article has been published by Sneha Mahawar.​​ 

Introduction

Initially, the manufacturers identified their products with certain symbols, marks, or devices so as to distinguish their goods from similar goods manufactured and marketed by others. Manufacturers also began to advertise their goods by using their trademarks on them. This built goodwill and the reputation of the trademark among consumers. The main function of a trademark is to identify and distinguish the goods of one manufacturer from those sold by competitors. A trademark indicates that all the goods bearing a particular trademark originate from a single source and are of the same quality. A trademark has greater importance in advertising and selling goods. All these functions of a trademark made it necessary to adopt trademark law.

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What is meant by a deadwood trademark

The purpose of trademark law is to protect the public from confusion and deception by identifying the source and origin of products and services distinguished from other similar products; and to protect trade, business, and goodwill attached to the trademarks of their owners. A trademark includes any word, name, symbol, configuration, device, shape of goods, packaging, combination of colours, or any combination thereof that one adopts and uses to identify and distinguish his goods from those of others. It is important to point out the requirement of a trademark that one adopts or uses to identify and distinguish his goods from those of others. It signifies that the use of a trademark in the course of trade and business by the owner is crucial. However, there are several instances where either the applicant does not timely respond to office actions, registered trademarks are not renewed, or non-use of trademarks. Such trademarks are termed dead or deadwood trademarks. The trademark registry no longer recognises abandoned trademarks, and as such, the trademark lacks protection under the trademark law.

Reasons for the death of the trademarks

The use of a trademark in the course of trade and business is of utmost importance. However, there are other reasons that might lead the trademark to die, such as-

  1. Abandonment of trademark- When the owner of the trademark discontinues the use of the trademark and does not intend to reuse it in the course of trade and business in the future. However, in a case where the owner has discontinued the use but can effectively demonstrate that he intends to use it in the future, he can continue to own such trademarks.
  2. Failure to respond- On the filing of an application for registration of a trademark, there are several questions asked regarding the registration. Failure on the part of the applicant to provide satisfactory answers or to reply to such an inquiry will be deemed an abandonment of the application.
  3. Lapse of registration– The trademark registration is valid for a term of ten years, which is to be renewed on the payment of fees. Certain jurisdiction requires the submission of documents evidencing the use and the intent of continuing the use of the mark with the trademark registry such as the United States Patent and Trademark Office (USPTO).
  4. Generic trademarks- Such trademarks with constant use become popular amongst the public that it assumes the meaning of particular goods or services. A trademark that was registered for its distinctive character is used by the public in a general sense to identify the goods or services and will no longer be associated with a specific brand or the registered owner of such trademark. In such a situation the trademark registry may decide to remove or cancel the generic trademark.
  5. Licensing and assignment of the trademark- The owner of a trademark often licences or assigns their trademark to a third party. In the case of licensing the owner of the trademark is required to ensure that the licensee is producing the goods or services as per the standards as that of the original goods or services provided by the owner. Similarly, the assignment of a trademark must be accompanied by the transfer of the right of sale of products or services with respect to which the trademark was registered. Transfer of mere trademark or failure to transfer the rights of sale will result in non-representation of the original products by the registered trademark. As the important requirement of the trademark law is a continuous active use of marks on goods or services during the course of business will result in the cancellation or removal of a trademark from the records of the registry.
  6. Opposition and cancellation- There are provisions to file opposition during the registration process of the trademark. It is to be noted that a trademark is a statutory right as such is subject to revocation. Hence, the application can be filed before the registry for cancellation of a registered trademark. Similarly, a trademark can also be revoked as a result of trademark litigation.

Consequences of dead or deadwood trademark

The non-use or abandonment of a trademark has consequences for the protection granted under the trademark law. Following are some of the consequences-

  • The owner will no longer seek action for trademark infringement under trademark law. However, one can take action for passing off under common law;
  • The cease-and-desist letter will lack force;
  • The holder of a trademark can no longer use the registered symbol; and
  • Competitors cannot be restrained from using similar trademarks in a different geographical area.

Provisions in the USA for the dead or deadwood trademark

For protection, every trademark must be in use or there must be an intent to put such a mark to use. To put it simply, a deadwood trademark refers to marks that are not actively used in any given jurisdiction. The term is pejorative and implies that such marks are useless and block the registration of new marks.

Trademark rights extinguish when the trademark is not used for a consecutive term of three years. Deadwood trademarks are an issue before the USPTO. In order to deal with the issue of the deadwood trademark, the US Trademark Modernization Act of 2020 (TMA) was enacted on December 20, 2020. Individuals, businesses, and the USPTO are empowered to take action for the removal of unused registered trademarks from the trademark register. This will further accelerate the efficient processing of the registration process by the USPTO.

Owners of registered trademarks must regularly prove that they’re using the trademark in commerce with all of the goods or services listed in the registration.

The new procedures incorporated in the efficient functioning of the USPTO and accurate maintenance of the records are as follows –

Letter of protest

A third party may file a letter of protest against an application for trademark registration at any time before publication. A third party is permitted to submit evidence relevant to a ground for refusal in an examination prior to registration. Evidence supporting any ground for potential refusal of the application may be submitted by the party along with the letter of protest.

Ex-parte re-examination

Any party may request cancellation of some or all of the goods or services in a use-based registration on the basis that the trademark was not in use in commerce with those goods or services on or before a particular relevant date. Any party is permitted to place a request within the initial five years of the trademark’s registration.

Ex-parte expungement

Any party may request cancellation of some or all of the goods or services in registration because the registrant never used the trademark in commerce with those goods or services. Expungement is available for registration based on use in commerce, a foreign registration, or the Madrid Protocol. The request must be made within the third and tenth years from the date of registration.

Just like cybersquatting, there are instances where the squatters register trademarks to block registration by the true owners and to profit from such marks. Similarly, the counterfeiters register trademarks that are deceptively similar, lack distinctive character, deceive, or cause confusion amongst the public to promote their illicit activities. Such instances can be curbed with the implementation of the process of re-examination and expungement.

The Trademark Act of 1999

In India, trademarks are governed by the Trademark Act of 1999. The Trademark Act provides for the registration of the trademark, which confers monopoly rights over the use of the mark on the registered proprietor. A registered trademark, unless used in relation to goods or services has no meaning. Non-use of a trademark leads to its death.

Section 28 of the Trademark Act deals with the exclusive rights conferred upon registration.  The registration of a trademark bestows exclusive rights on the registered proprietor to use the trademark in relation to the goods or services for which the trademark is registered. The registered proprietor is also entitled to seek relief in respect of trademark infringement. However, it must be noted that the exclusive right to use a trademark is subject to any conditions and limitations to which the registration is subject.

The Trademark Act provides for the removal or cancellation of a trademark for non-use or abandonment.

Section 47 of the Trademark Act provides for the removal of registered trademarks.  It states that any aggrieved person can request cancellation of a registered trademark if the owner of the trademark registered the mark of identity without the bona fide intention to use it, has not used the trademark for 3 months before the date of application for registration, or has not used it for 5 years from the exact date of registration. Section 47 of the Trademark Act, 1999 corresponds to Section 46 of the Trade and Merchandise Marks Act, 1958. It provides for the removal of a trademark from the register on the grounds of non-use. A trademark not used within five years of its registration is liable for removal either completely or in relation to those goods or services for which the mark has not been actively used. A request for the removal of a trademark may be refused on the basis of a demonstration of bona fide use of the trademark for goods or services of the same description or associated goods or services.

The Indian economy is witnessing high growth and is estimated to increase exponentially in the coming years. Several new businesses are incorporated, further accelerating the competition in the market. Realising the potential of a trademark, businesses are taking steps to register their trademark and enforce against infringement. As a result, the rate of trademark registration will be higher. It must be considered that not all trademarks will be utilised in the course of trade and business. There will be instances of unsuccessful products and services that will lead to the non-usage of the registered trademarks. Piling such abandoned or unused trademarks in the registers of the trademark registry will block the registration of new marks. The presence of such marks in the trademark register will act as grounds for the refusal of applications for the registration of marks. Provision for the removal of unused or abandoned trademarks and effective monitoring of such marks will declutter the register, making room for new marks.

Conclusion

It is a known fact that trademarks are territorial. Today, businesses have a multinational presence and, as such, register trademarks to seek protection in such jurisdictions. At the same time, the fame of successful businesses reaches all corners of the world in no time, which results in demand for the products and services of such brands. The expansion of business also promotes the registration of trademarks in multiple territories. In order to promote healthy competition in the global economy, it is crucial for all jurisdictional registries to maintain accurate records. Hence, it is of utmost importance to eliminate deadwood or fraudulent trademarks from the records of the trademark registry. At the same time, businesses must be proactive in protecting their trademarks. The trademark owners must ensure that their trademarks are in active use in order to avoid their death and removal from the records of the registry. 

References

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