Honest and Concurrent Use under Trademark Laws

You may have come across businesses having similar names in your locality. These businesses may be functioning for a long period and may be co-existing without necessarily interfering with each other’s businesses. We know that a trademark is given to unique names or logos. If so, does the use of similar names amount to trademark infringement? On the face of it, yes. But apparently, the answer may vary under different circumstances. Then, what allows these businesses to run without facing any legal issues?

The major objective of a trademark is distinguishing one service or good from another. If a layman can distinguish two businesses having similar names, there may be no conflict. It is always advised that before registering any trademark, it is pertinent to undertake a comprehensive trademark search using professionals skilled at the task. However, these searches may overlook unregistered marks or goods/services from other classes. In such situations, if the trademark user proves that he was using his mark honestly, in good faith, there would be no infringement. This is termed as the ‘doctrine of honest and concurrent use’ in common law jurisdictions.

This doctrine considers the nature and length of use, the geographical area of trade, the likelihood of consumer confusion and the honesty of the adoption and subsequent use of the mark. These factors are applied depending on the facts of the case. However, a long period of concurrent use may help to overcome opposition and allow the two marks to coexist. In most cases, established businesses enter into a trademark coexistence agreement, when they want to use similar marks.

One such agreement was entered into by Apple Corps, the record label owned by the Beatles, and Apple Computers in 1991. Both the companies agreed to use the mark in different classes. According to the agreement, Apple Computer would have the exclusive right to use its Apple marks "on or in connection with electronic goods, computer software, data processing and data transmission services"; while Apple Corps would have the exclusive right to use its own Apple trademarks "on or in connection with any current or future creative work whose principle content was music and/or musical performances, regardless of the means by which those works were recorded, or communicated, whether tangible or intangible." Despite an agreement in place, Apple Corps sued Apple Computers in 2003 for launching the iPod and the iTunes software and music store. The Court held that there had been no breach of the agreement as the Apple Computers logo had been used in connection with the software and not with the music provided by the service. (See Apple Corps Ltd v. Apple Computer Inc (2004) EWHC 768)

In India, Section 12 of the Trademarks Act, 1999 allows registration of identical or similar marks in the case of honest concurrent use. The Registrar may permit this under special circumstances by imposing certain conditions and limitations for such registration. The Delhi High Court in M/S Turning Point vs Turning Point Institute Private Limited (2017), citing Kanshiram Surinder Kumar v. M/s. Thakurdas Deomal Rohira, (1977) 79 Bom LR 61, clarified the circumstances where the section may be applicable. The Court stated as follows:

“Honest and concurrent user may be a defence in cases where the goods are not identical, or the marks are not identical, i.e., in cases in which there is no scope of confusion as to the source of the goods or services of the two parties being the same. But it cannot be a defence where, as in the present case, the marks are identical and the services for which they are used are also identical.”

Hence, honest and concurrent use is a valid defence depending on the facts of each case. It is always advised to conduct a thorough trademark search on all possible platforms to avoid expensive litigation. Another solution may be a coexistence agreement wherein the two enterprises delineate their respective areas of business and agree to stick to those parameters. The real challenge, however, lies in anticipating the future development of each company’s activities. Where would each company like to see itself in ten or twenty years? Will their respective expansion risk converge on each other’s territories?

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References:

1. IP and Business: Trademark Coexistence, Issue 6/2006, WIPO Magazine. See here.

2. Apple Corps Ltd v. Apple Computer Inc (2004) EWHC 768.

3. M/S Turning Point vs Turning Point Institute Private Limited (2017) See here.

4. Kanshiram Surinder Kumar v. M/s. Thakurdas Deomal Rohira, (1977) 79 Bom LR 61.