Imagine waking up one morning and realizing that your company name-one you spent years cultivating—was registered by some individual and that they are charging you money to use it. This is not something out of an intrigue novel-this is reality in the form of trademark squatting, and it is an increasingly looming challenge facing Indian startups and businesses operating in the global arena.

What is Trademark Squatting?

Trademark squatting is when an individual or organization illegally registers an existing or foreign marketable mark without any intention to utilize the same but merely intends to make money by selling or eventually licensing it back to the mark owner in the future. It is a kind of legal extortion whereby squatters take advantage of well-known brand names, particularly those venturing into new territories like India without having registered their trademarks there.
  Legal Landscape of India
India addresses the squatting on trademarks through the Trade Marks Act, 1999. The Act does not directly refer to "squatting" anywhere in it; however, several provisions are framed to counter the same:

• Section 9 – Absolute Grounds for Refusal
  Prohibits the registration of marks that lack distinctiveness or are confusingly/deceptively similar to prior marks.
• Section 11 – Grounds of Refusal Relating to the
  Prevents existing trademarks from being registered identically or similarly if likely to confuse.
• Section 18 and Section 47 – Bad Faith and Non-Use
  Permits opposition or rectification if the trademark has been registered in bad faith. A mark can be revoked if it is not used within five years (Section 47).
• Well-Known Marks Protection (Section 11(6) to 11(9))
  Indian law protects well-known trademarks regardless of their unregistered status in India.
   

• Real-Life Examples:
  • Nokia vs. Movie producer:
    The Bollywood producer got "Nokia" registered for his forthcoming film. Nokia opposed the mark and won by establishing its global reputation.
  • Yahoo! Inc. v. Akash Arora (1999):
    The Delhi High Court prohibited the defendant from using the domain name "Yahoo India!", despite there being no registered trademark of Yahoo in India. The court applied the principle of passing off and trans-border reputation.
     
• Why is Trademark Squatting on the Increase?
  • Legal Awareness and Globalisation:
    Most Indian businesses venture overseas without protecting their marks overseas and, therefore are vulnerable to being victimized by squatters.

Also Read:

• Cybersquatting: An In-Depth Overview
• Cyber squatting and Trade issues: Domain Dispute Resolution
• A Case Study Of Trademark Squatting
• Cyber Squatting- Clear and Present Danger
• Cybersquatting And Domain Name Dispute In The Law Of Trademarks With Special Reference To USA And India: A Comparative Study
• Namesake Cyber-Squatting, An IPR Evil