IPAB reiterates 'first to market' test

In Jones Investment Co Inc v Vishnupriya Hosiery Mills (Order 24/2014) the Intellectual Property Appellate Board (IPAB) was asked to decide a case in which a multinational opposed registration of the JONES mark for apparel by an Indian company. The former claimed international and cross-border reputation for the JONES NEW YORK mark – even though the goods under the mark were not sold in India – while the latter claimed sales of goods under the JONES mark in India since 1993. The IPAB, applying the Supreme Court decision in Milmet Oftho Industries v Allergan Inc ([2004] 12 SCC 624), reiterated that the test is to establish who was the first to enter the market.

Facts
Nagarajn Srinivasan, trading as Vishnupriya Hosiery Mills, applied to register the JONES mark in Class 25 (clothing, footwear and headgear) on March 15 1994. On July 18 2001 Jones Investment Co Inc – registered owner of the JONES NEW YORK mark for goods including clothing for men, women and children, hosiery, footwear and leather goods – filed a notice of opposition against the registration of the JONES mark by Vishnupriya. The deputy registrar of trademarks considered the objections raised by Jones Investment and in a March 9 2010 order dismissed the notice of opposition and granted registration of Vishnupriya's JONES mark. The deputy registrar narrowed the issues to be determined to:

• whether Jones Investment's mark competed in India through use; and/or
• whether the international or cross-border reputation claimed by Jones Investment had spread into India as of the date of Vishnupriya's application. 

Based on the evidence adduced by both parties, the deputy registrar held that Jones Investment had failed to establish use of the mark in India as of the date of Vishnupriya's application.

Jones Investment appealed before the Intellectual Property Appeal Board (IPAB) on the grounds that:

• the deputy registrar did not take into consideration the registration of the JONES NEW YORK mark in 1977 in India; and
• Vishnupriya could not claim that its mark had a reputation among the public as it had not proven substantial sales of goods using the JONES mark.

IPAB order
On appeal before the IPAB, Jones Investment claimed that in issuing the notice of opposition, the deputy registrar had failed to take into consideration that it had registered the JONES NEW YORK mark in India in 1977 for goods in Class 25. It also contended that the evidence adduced by Vishnupriya showing annual sales figures of a few hundred thousand rupees did not amount to substantial sales of goods under the impugned mark. Thus, it claimed that Vishnupriya could not claim reputation among the public. Relying on the Supreme Court's decision in Milmet Oftho Industries, Vishnupriya contended that Jones Investment had no intention of introducing its products to India and thus should not be allowed to prevent Vishnupriya from selling its products under the JONES mark.

The IPAB, considering the evidence filed by both parties, held that although Jones Investment claimed to have been using the JONES NEW YORK mark since 1966, the evidence adduced showed use of the mark only from 1997. In contrast, the IPAB held that Vishnupriya's claim that it had been using the JONES mark since 1993 was substantiated by appropriate evidence. With regard to the international and cross-border reputation of Jones Investment's mark, the IPAB concurred with the deputy registrar's analysis that the appellant had not established use, sales under and reputation of the mark, particularly as of the date of Vishnupriya's application. The IPAB interpreted the concept of 'use of the mark' in India broadly. This interpretation was supported in the finding of the deputy registrar, with which the IPAB concurred, that evidence of reputation of the mark in India could be "any newspaper or magazine containing the advertisement of the opponent's [Jones Investment's] trade mark having circulation in India", and that such evidence may be considered "cogent and relevant evidence". Thus, use of the mark was not merely confined to sales of products in India under the mark, and reputation could be established by adducing evidence of the mark in newspaper and magazine advertisements with a circulation in India, even though the product bearing the mark was not sold in India.   

On the importance of the quantum of sales figures of Vishnupriya's goods to establish reputation, the IPAB upheld the deputy registrar's finding that once it had been established that Vishnupriya's mark was earlier in both adoption and use, the quantum of sales figures was immaterial.

The IPAB further held that the facts of Milmet Oftho Industries were applicable to the case at hand and concluded that multinational companies with no intention of introducing their product to India should not be permitted to stifle an Indian company which has genuinely adopted a mark and developed a product under such mark, and which was the first to enter the market. Effectively, the IPAB reiterated the test laid down by the Supreme Court that the issue to be resolved in such cases is which party was first to enter the market. Thus, the IPAB held that Vishnupriya had established prior adoption and use of the JONES mark in India by evidence that it was the first to enter the market, and thus was entitled to register the mark.

Comment
In both the case at hand and Milmet Oftho Industries the corresponding Indian marks were cleared for registration only because Jones Investment and Allergan did not provide evidence to show that they had an established reputation before the date of application for registration by the Indian companies. Thus, the true import of the Supreme Court judgment and the IPAB's order is that, in order to proceed against an Indian company using a similar mark, an international company must be able to adduce evidence of reputation acquired before adoption of the mark by the Indian company, and that such evidence of reputation in India need not be restricted to use of the mark on products for sale alone. In this context, 'use of the mark' includes the presence of the mark in the market in the form of advertisements in newspapers and magazines. This interpretation is in line with the Supreme Court decision in Milmet Oftho, where it was held that "the mere fact that the respondents have been using the mark in India would be irrelevant if they were first in the world market". Therefore, the test is merely who is first to enter the market; in determining whether an international company acquired a reputation before the adoption of a mark by an Indian company, actual sales of products under the mark by the international company in India are immaterial.