This article is written by Jubal Raj Stephan, pursuing a Certificate Course in Intellectual Property Law and Prosecution from LawSikho.

“The giving of reasons is one of the fundamentals of good administration.” – Lord Denning

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Introduction

The Intellectual Property Attorneys Association v. Controller General of Patents, Designs, Trade Marks & Anr., 2019 decision from the Delhi High Court shines a beacon of hope for the Trademark Registry, helping it achieve more transparency. The decision achieves the same by requiring that the trade mark registrar gives reasoning to every rejection and conditional acceptance of a trade mark application as provided under section 18(5) of the Trade Marks Act, 1999. 

The Indian Trade Mark registry is known for being non transparent and slow. This is exemplified by cases such as when a Trade Mark application was filed and accepted within 72 hours while an average Trade Mark application even under the expedited process would normally take a year, indicating deep-seated corruption. There was also the more recent conviction of a Trade Mark registry official in a graft case in 2016. Further large backlogs are held by the registry with at least 100,000 opposition cases pending as of 2016, and the abandonment of 1.95 lakh Trade mark applications at various stages of processing in various departments of the Trade Mark office. Such events destroy the hope that IP stakeholders have placed in the Indian Trade Mark registry, thus to retain the hope immediate reforms to make the Trade Mark registry more transparent are required. This case is a step towards such reform.

Process for rejection or conditional acceptance of trademark application

Section 18 of the Trade Marks Act, 1999 (Henceforth: “The Act”) lays down the general provisions regarding a trademark application review process and sub-section 5 provides specifically for the procedure to followed by the registrar while deciding to refuse or conditionally accept a trade mark application. It requires that “Registrar shall record in writing the grounds for such refusal or conditional acceptance and the materials used by him in arriving at his decision.” Rule 36 of the Trade Mark Rules, 2017 (Henceforth: “The Rules”) further lays out the process by which by the Trade Mark Registrar makes decisions under Section 18 of the Act.

A two-tier review process is established under Rule 36 for Trade mark applications made either under the regular process (Rule 33) or under the expedited process (Rule 34). First the trade mark registrar will have to communicate the decision to the applicant in writing, then if the applicant intends to appeal the decision, within 30 days of receiving the decision the applicant must apply in Form TM-M requiring the registrar to disclose in writing the grounds of and the materials used to arrive at the decision. Only then would the grounds and the materials used by the registrar to reach the decision will be communicated to the applicant.

Petitioner’s Contention

The Petitioner is an association of IP practising attorneys of India who have filed a writ petition before the Delhi High Court against the non-speaking orders (orders without grounds being recorded) from the Registrar of Trade Marks, asking such orders to be corrected by providing the grounds of the order to the petitioner. The Petitioner contended that Section 18(5) of the Trade Marks Act mandated the Registrar to record in writing the grounds on which the refusal or conditional acceptance of a Trade Mark Application is based on. The Petitioners further claimed that the rule 36 of the Trade Mark Rules is violative of the Section 18(5) of the Act as far as it allows the registrar to give an order without providing the grounds for a rejection or a conditional acceptance. 

Respondent’s Contention

The Trade mark registry in its defence stated that they had to comply with rule 36 of the rules which requires the Trade mark registrar to give reasoning for rejection only when the applicant intends to appeal the decision and has made the filing and submission of a separate form ‘TM-M’ within 30 days of receiving the order.

The Decision

The single bench presided by Justice JR Midha held that the rule 36 is arbitrary, unreasonable, and inconsistent with the mandatory statutory provision of Section 18(5) of the Act to the extent rule 36 allowed for the communication of a refusal or conditional acceptance by the Trade Mark registrar of a trade mark application without providing the grounds for the same. ordered that the Trade mark registrar to must record the grounds for refusal or conditional acceptance and send the order containing the same to the applicant.

How the decision leads to greater transparency

This decision prima facie provides two benefits to trademark applicants:

Firstly, it reduces one step in the appeal process, the two-tier process for reviewing trade mark applications is no longer required as the reasoning behind the order is to be provided with the order. Thus, applicants are no longer required to fill a separate form to know the reasoning behind the Registrar’s decision and directly decide whether to appeal or not. 

Secondly, it saves the time wasted in making a new application and waiting for the registrar to send the grounds for the decision to the applicant.

The power of a reasoned order cannot be underestimated. A reasoned order serves as a check on the arbitrary exercise of administrative power. Publicly articulating the reasoning process upon which a decision is based, forces the registrar to work out all the factors which are present in a case and serves as a substantial check on the abuse of power.

The Calcutta, Madras, Andhra Pradesh High Courts have held the law which failed to require a speaking order as an unreasonable restriction on the free exercise of fundamental rights under article 19 of the Indian Constitution. In the Anumathi Sadhukhan v A.K. Chatterjee AIR (1951) Cal 90 the ability of the government to renew a licence or suspension or cancellation of a rice mill’s licence already issued “without assigning any reasons” as violative of right to trade and business guaranteed under Article 19(1)(g) of the Constitution. Thus, this order which eliminates an unreasonable restriction on obtaining a Trade Mark may be seen as expanding the scope of interpretation of one’s fundamental rights under Article 19(1)(g).

In the Woolcombers of India Ltd. v Workers Union (1974) 3 SCC 318 the Supreme Court gave three reasons as to why it is essential for the orders of judicial and quasi-judicial authorities to give reasons for their orders:

First, a reasoned decision prevents the use of unconscious unfairness or arbitrary reasons in reaching the conclusions. Searching for reasons will put the authority on the alert and minimise the chances of unconscious impact of personal biases or unfairness in the conclusion. The authority will have to list reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations.

Second, reasoned orders fulfil the important judicial principle that “justice should not only be done but should also appear to be done.” Unreasoned orders that may be just may not appear to be just to everyone who reads them. Reasoned orders, on the other hand, will also have the appearance of justice.

Third, frequently an appeal is filed upon the decisions of judicial and quasi-judicial authorities such as the Trade mark registrar to the Supreme Court vide a Special Leave Petition granted under Article 136. Therefore, it ultimately suggests that, a judgment which does not disclose the reasons, will be of little assistance in any appeals and may result in an adverse decision.

Other Decisions increasing the transparency of Trade Mark Registry from the Delhi High Court

• Vijay Kumar Salwani vs. Union of India, 2019 – Hon’ble Justice JR Midha held that Section 25(3) of the Trade Marks Act, which requires the Trade mark registrar to notify the proprietor of the Trade Mark before removing the Trade Mark from the register is mandatory and the Trade Mark Registry is required to send a mandatory notice under Section 25(3) of the Trade Marks Act before removing a trade mark from register in case of expiration of registration.
• Registrar of Trade Marks vs Kapoor Saws Manufacturing Co & Ors (2015) and Registrar of Trade Marks vs Sonik Industries & Ors (2017) – Hon’ble Justice Endlaw reiterated Section 137 and 138, that in Trade Mark litigation it is not necessary to compel the Registrars to appear before the court as a witness and certified copies of records are enough as evidence. Furthermore, the court laid down detailed guidelines for establishment of nodal officers in each branch of the Registrar of Trademarks to receive applications for certified copies and to issue certified copies.

Conclusion

Though the Trade mark application process in India is filled with hurdles and problems at various steps of the process, current trends in judgements and administrative changes signal hope in the improvement of the process, resulting in the speedy processing of application and resolution of dispute. The Trademarks Registry has become more transparent in its functioning as a result of the digitisation of records, with most information now accessible online. Some considerable changes made are:

• Reducing the number of forms from 74 to 8;
• Unifying the application form for all types of trademark application;
• Providing fee concessions for start-ups, individuals, and small enterprises;
• Making use of video-conferencing to conduct hearings;
• Using email as a mode of service;
• Allowing expedited processing for the entire trademark prosecution procedure.

Nevertheless, various technical and procedural glitches still pose challenges to those working with the Trademarks Registry. Various other reforms have also been proposed such as the establishment of Trade Marks Automation System and the prohibition of the amendments seeking substantial alteration in the trademark application after the issuance of an examination report. These reforms will lead to an increase in the transparency of the Trade Mark Registry.

The decision in The Intellectual Property Attorneys Association v. Controller General of Patents, Designs, Trade Marks & Anr., 2019 by forcing the trade mark registrar to state a valid reasoning to every rejection and conditional acceptance of a trade mark application has made a substantial contribution in making the Trade Mark registry more robust and the Trade Mark application process more transparent.

References

1. https://www.mondaq.com/india/trademark/829456/trade-mark-registry-required-to-send-a-mandatory-notice-under-section-253-of-the-trade-marks-act-before-removing-a-trade-mark-from-the-register-delhi-high-court
2. https://www.mondaq.com/india/trademark/479774/reforms-at-the-indian-trade-mark-registry
3. https://www.mondaq.com/india/trademark/631104/delhi-high-court-issues-directions-to-the-trademarks-registry-for-time-bound-issuance-of-certified-copies
4. https://ipindia.gov.in/TM-Rules-2017.htm
5. http://www.ipaaindia.org/
6. https://www.mondaq.com/india/trademark/860078/mandatory-to-give-reasons-for-refusal-of-trade-mark-registration
7. http://164.100.69.66/jupload/dhc/JRM/judgement/21-10-2019/JRM16102019CW38512019.pdf
8. https://spicyip.com/2019/10/place-the-trade-marks-act-before-the-rules-del-hc-directs-registry-to-record-grounds-of-refusal-of-applications.html
9. https://legislative.gov.in/sites/default/files/A1999-47_0.pdf
10. https://www.mondaq.com/india/trademark/493564/abandonment-in-indian-trademark-office-list-of-events?type=mondaqai&score=66
11. https://www.worldtrademarkreview.com/governmentpolicy/ip-india-report-reveals-trademarks-registry-has-more-work-do
12. https://spicyip.com/2011/10/trademark-application-gets-filed.html
13. https://journals.sagepub.com/doi/abs/10.1177/2277401720150110

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