Vans v. FCB: Taking a Look at the Delhi High Court’s Restrictions on the Rights of Well Known Trademarks vis-a-vis Prior Use
SpicyIP
On May 2, the Delhi High Court restrained Vans Inc. from seeking rectification of FCB Garment Tex’s “IVANS” trademark. Inter alia, Vans Inc backed its arguments for rectification with its recent recognition as a well known trademark. On this, the Court expressly held that the recognition as a well known mark will not give Vans an automatic, unabridged right to apply for rectification of FCB’s trademark. Discussing what this observation could mean for trademark proprietors in future litigations, we are pleased to bring to you this short post by SpicyIP Intern Surabhi Katare. Surabhi is a recent graduate from Hidayatullah National Law University, Raipur. She is interested in IPR, media, and tech laws and wants to pursue a career in IP and allied areas. Her previous posts can be found here.
H/t to one of our anon readers for sharing this development with us in their comments here.
Vans v. FCB: Taking a Look at the Delhi High Court’s Restrictions on the Rights of Well Known Trademarks vis-a-vis Prior Use
By Surabhi Katare
Recognition of a trademark as ‘well-known’ departs from the traditional objective of trademark law, i.e. protection of consumers against confusion and deception, it rather focuses (also see here for an alternate paywalled article by Ms. Latha Nair) on preservation of the mark’s distinctiveness and reputation. For a well-known trademark, range of protection extends to dissimilar goods and services as well. The extended protection is susceptible to misuse if owners of well-known trademarks enforce their rights against bona fide users too.
Somewhat addressing this apprehension, the Delhi High Court, in Vans INC v. FCB on May 2, 2024 observed that the owner of well-known trademark does not have an absolute right to apply for rectification of all (allegedly similar) marks already in the Register. In this post, I have briefly discussed the judgement and analyzed what it could mean for the proprietors of well-known trademarks and other proprietors.
The petitioner, Vans Inc, USA, filed for registration of their mark- VANS in 1992, on a ‘proposed to be used basis’. The mark was published in 2005 and was registered in 2006. The petitioner then entered the Indian market in 2011. On February 19, 2024 the petitioner’s mark was declared to be a well-known mark. The respondent, FCB Garment Ltd. on the other hand, filed for the trademark IVANS in 2002, claiming use since 1999. The mark was published in 2006 and without opposition, was granted in 2007.
The Court analyzed the goods that the marks are used for, entry of both parties into the market, their long-standing use and concluded that it will not be sufficient to establish similarity of a mark with well-known trademark if the other mark was entered into the Register before well-known trademark. On this, the Court observed that “Issues of similarity cannot be seen in abstract and completely separate and severed from the more determinative issues such as actual prior market use, difference of goods, difference in the devices and labels used, different price points, etc.” The observation simply implies that similarity of two marks is not the sole criteria employed by the Courts and merely establishing similarity between the marks is not a guaranteed win in a trademark dispute. The Court, accordingly dismissed the rectification petitions.
Need for More Clarity?
The Court observed that a proprietor of well-known trademark does not get an “automatic, unabridged and unmitigated right” to file rectification applications. In light of the facts of the present case, the Court observed that the declaration of petitioner’s mark ‘VANS’ as a well-known trademark may not be relevant. The Court reasoned that such recognition does not suddenly take away respondent’s rights from his mark considering respondent’s prior use, non-deceptiveness due to difference in price range.
In my opinion, the Court does not take away a proprietor's right to protection of their well-known mark but has cautioned against blindly filing rectification applications for the sole factor that one’s own trademark has been declared to be well-known. However, if such is the case, the Court should have laid down some conditions/parameters/factors to be fulfilled/considered by such proprietors. Presently, it may seem like whether the courts shall accept rectification petitions or not shall be the discretion of the Court, making the ruling vague. A little more was asked from this judgement, i.e. some conditions/parameters/factors
Restricted Rights
Despite its lacking in specificity of when the rectification petitions shall be accepted, the ruling may restrict the ability of proprietors of well-known trademarks to file rectification applications. It emphasizes the need for proprietors of well-known trademark to approach rectification applications with caution and strategic foresight. They can no longer rely solely on declaration of their mark as a well-known trademark to assert their rights.
Moreover, the proprietors of well-known trademarks shall encounter increased levels of scrutiny when rectification is sought. The burden of proof may be heavier and such proprietors need to present more cogent evidence to prove confusion, deception and damage to their own trademark. The proprietors may need to prove tangibly the impact of existence of other trademarks on the Register and consumer confusion. Notably, in my opinion, establishing confusion, deception, damage etc. will not ipso facto (by the very fact) supersede prior use by another proprietor as per Section 34 of the Act. This provision mandates that the rights of a trademark proprietor cannot prevent a prior user from using the impugned mark. The Supreme Court in Neon Labs v. Medical Technologies have recognized this ‘first user’ rule as a “seminal part of the Act”. Therefore, I understand that prior use of another’s trademark will significantly affect the decision of the courts in such cases.
What Does the Ruling Mean for Other Proprietors?
As evident, the beneficiaries of the observation are prior registered trademark proprietors against whom such rectifications are filed. Like the present case, it may be the case of many proprietors that their marks are registered prior and independent to similar well-known marks. Thus, removal from Register merely upon a similar trademark being recognized as a well-known mark years after the registration of the impugned mark would be unjust and unfair. The present ruling comes to the rescue of such trademarks.
The Court has strived to strike the delicate balance between enforcement of well-known trademarks and protection of prior registered marks and has clarified that even though well-known trademarks hold significant sway, such marks are not supreme.