Indian economy at eve of Independence was characterized as backward and stagnant
economy coupled with poor Infrastructure, low productivity and Industrial
failures. The Primary goal was to achieve self-sufficiency in matter of food
Though there were plans (not goals) to achieve structural
transformation and Industrial Policy of 1956 and Green revolution, 1960’s are
instances of same. The Principles of Comprehensive planning were adopted to
achieve aims of socialistic and capitalistic views.
Though the goals of
compressive planning seem to be a social distancing objective with regulated
economy and worst crunch of foreign reserves pushed India to expand its horizon
to the globe. This marked the beginning of market economy where demand and
supply forces determine the system.
Indian policies has always been uncertain of
exclusive capitalistic (market economy) or exclusive socialistic (regulated
economy). It has always remained a question of debate with regard to the
composition of mixed economy. One who favor the dominance of socialistic
features, argue for principle of socialist in preamble and concept of social
welfare state and substantive equality.
On the other hand one who favor the
dominance of capitalistic features, argue for private rights of business,
occupation & profession and liberal economy. The truth is that no country in
the world can claim itself to be exclusive socialistic and exclusive
capitalistic even though manifested as same. The only difference between India &
other countries is an expressive balance of mixed economy.
expressively guide itself with balancing features whereas the countries
impliedly perform the same as and when required. Pre 1991 LPG, Indian economy
was having a defensive approach and same is evident through policy of import
substitution. The policy of Import substitution focused on protecting the
domestic economy by restricting the imports. Post 1991 LPG, the import
substitution sustain with an amendment that result into promoting the domestic
economy with export promotion and same policy is still in subsistence. Post 1991
marked as structural transformation with objective of achieving growth with
Hence, it is submit that the Policy of ?????????? is a new version of Import
substitution with a tyndall effect which has scattered the lights of export
promotion with an objective to achieve self-sufficiency without expressly
compromising the imports in a short run, the result of which in long run
supposed to be uplifting of domestic economy.Global Trend
From the early days of the Silk Road to the creation of the General Agreement on
Tariffs and Trade (GATT),trade has played an important role in supporting
economic development. The General Agreement on Tariffs and Trade (GATT) traces
its origins to the 1944 Bretton Woods Conference, which laid the foundations for
the post-World War II. Though GATT was only a set of rules and multilateral
agreements and lacked institutional structure.
This is the primary reason for
the birth of World trade organization on January 1, 1995 to which India is a
founding member. The Policy of WTO is to favor the states having market economy
status. Thus, under the pressure / influence of same, Indian marked its economic
and legal reforms to which Trademarks act,1999 is a classic example.
History Of Trade Mark Law
The Anglo Indian trademark law had its origin dating back to 1266. It was also
called as Bakers marking law. The law required bakers to place a mark on the
loaves of bread that they sold, identifying the baker. Any bread offered for
sale unstamped was at once confiscated by officer of abundance and the offending
bake was mulcted in heavy damages.
The venetian law of 1474 is the first systematic Intellectual property law which
provides that “each person who will make in this city any new & indigenous
contrivance, (which is not made before in our dominion) then it would be
forbidden for any other to use it in any resemble form without consent and
license of author up to 10 years.1877-1940:
From 1858 onwards, Indian British system marked as CROWN RULE and the systematic
process of legislation initiated. E.g. The Indian contract act, 1872, Indian
penal code, 1860, Indian evidence act, 1872.
Britain parliament passed the English trademarks registration act, 1875 and
accordingly, Bombay mill owners association in 1877 made the first demand for
law on trademark in India.
Britain Parliament Introduced a bill in 1879 which referred to select committee
but lapsed. A Fresh bill re-introduced in 1880 but opinion gets divided. The
select committee favored adoption of a scheme for registration of Indian marks
in England. The suggestion met with severe opposition and the Bill was dropped.
In 1884, Britain Govt. of India denied for access to Paris convention. This put
Indian manufacturers and traders at a disadvantage in International arena. Thus,
Indian traders had to sell products outside Indian under foreign brand name to
which they had to pay them heavy royalty.
In 1905, the Association of chambers of commerce of U.K stated that – “There was
no valid why Indian empire should stand in Isolation from rest of the world in
this matter”. Commerce Industry in U.K wanted IP law in India because German,
Australian were selling their copied products in Indian market.
In 1927, Commercial congress UK passed a resolution doubting efficacy of common
law for protecting trademark and were demanding for trademark law in India.
In 1935, Chief Justice of Patna High court endorsed the demand for trademark
legislation in India.
The delay of about 60 years in legislation and slow pace of Industrial
development appears to be largely responsible why Indian cannot boast of
Internationally famous trademarks. Also, during this period foreign trade marks
established strong foothold in India market making it difficult for Indian
brands to develop even within Indian market.1940-1958:
1940 act established trademark registry combined with patent office which by
1943 amendment separated to a separate registry.
In 1953, Government of India appointed a committee known as trademark enquiry
committee for reforms in trademark law. Justice N. Rajagopala Ayyangar of Madras
High court was appointed to examine the committee report.
In October 1955, Government of India asked Dr. Venkatesawaran, Officer on
special duty (trademark, patents & design) to draft a comprehensive law on basis
of Ayyangar report.
The Trade & Mercandise act, 1958 passed as act no. 17 of 1958 which brought in
force from 25th November 1959.1958-1999:
The Judgment of Calcutta High court in American Home v. Mac (Dristan case),
which made it almost impossible for foreign trademark to get registered in
India. The apex court overruled this judgment in 1985.
The necessity to amend the law also become important due to pressure and
influence of International events such as Indian becoming original member of WTO
in 1995 and Joining the Paris convention with effect from December 8, 1998.
Trademark: Insight Into Economy
Trademark rights are private and negative rights based on principle of national
treatment which has far reaching implications. The Indian government joined the
Madrid protocol, 1989 and on February 7, 2007 decided to accept this protocol.
Trademark amendment act of 2010 allows any person or enterprise to seek
registration in any of 84 member countries of Madrid protocol through a single
application. There are 3 dominant players in exploitation of Intellectual
- Intellectual property right holder
The system of exploitation has to be fair and reasonable to all the players. If
the subject matter of IPR has good demand in market and right holder do not
apply it then necessarily the pirates will produce parallel products and thus
grey market producers will supply the product to market.
The philosophy of IPR
is that one else can supply the market even in the dire need and anyone who
supplies it would commit Infringement. But the question is should the right
holder have the right to short supply or not to supply the market? These
questions have been raised with respect to medicines and drugs in pharmaceutical
sector but they are equally important in all sectors of various subject matters
covered by IPR as they are vital to Industry and economy.
Monopoly and Competition are two sides of IPR. An IPR must give way only if it
operates as monopoly and subject matter to be fairly allowed be used by other as
Each country has its own strength or weakness in relation to different types of
IPR. Increased protection to one form of IP may be advantages to domestic
enterprises or consumers whereas may not be useful if enhanced rights given to
other type of IP.
Example, U.S did not join Berne convention on Copyright till 1987 because
copyright protection was not advantageous in his country. Post 1987, U.S not
only joined the Berne convention but also become the vocal supporter of it
because of high copyright stakes in Hollywood Industry and software. Hence, U.S
diplomatically played comparative advantage.
Thus, to generate wealth for one’s country, it is imperative to analyze in what
particular field the country have potential of generating wealth. Worldwide
there is no well-known trademark of India. Even FMCG sector is dominated by
foreign trade mark. India will not be benefited if judiciary throw its weightage
in favor of foreign trade marks without keeping Interest of domestic market.
India’s Interest lies not in protecting Well known trademarks but in licensee
There is a need to have debate on whether rights granted are used to contribute
to the society. There is a need to appreciate the abuse of IPR together with
impact of IPR on development, growth, establishment and displacement of Industry
and most importantly the access to market.
Marketing or sales are ways to part a person from his money. Thus, trademark are
the most important player in this activity. Trademark deserve more attention
than patents or copyright. Even though trademarks are for limited duration as
compared to patents still they have much more value because trademark have a
direct impact on mind of its users. Patents have an impact limited to producers
only. Even copyright works and its contents are sold under trademark of
publishers. A patent would be fruitful only if it reaches the mass which is
through a reputed brand name/trade mark.
The market access, market power, ownership of Industry, displacement of local
industry are related to ability to sell which are achieved through Trademark
Competition Law: Cream Over Cake For IPR
In TRIPS, the competition law were designated to protect against abuse of IPR. However,
India has not successfully utilized the competition law to turn IPR to its
advantage. It is the policy of competition law and the public Interest that
anti-competitive agreements are to barred and declared void. Section 3(5) of
competition act is a root cause of abuse of IPR.
Section 3(5) in the Competition Act, 2002
Nothing contained in this section shall restrict:
- the right of any person to restrain any infringement of, or to impose
reasonable conditions, as may be necessary for protecting any of his rights
which have been or may be conferred upon him under:
- the Copyright Act, 1957 (14 of 1957);
- the Patents Act, 1970 (39 of 1970);
- the Trade and Merchandise Marks Act, 1958 (43 of 1958) or the Trade
Marks Act, 1999 (47 of 1999);
- the Geographical Indications of Goods (Registration and Protection) Act,
1999 (48 of 1999);
- the Designs Act, 2000 (16 of 2000);
- the Semi-conductor Integrated Circuits Layout-Design Act, 2000 (37 of
- the right of any person to export goods from India to the extent to
which the agreement relates exclusively to the production, supply,
distribution or control of goods or provision of services for such export.
Section 33(3) of MRPT act was somewhat similar to Section 3(5) of competition
act. But the purpose of competition act is to strengthen the competition and
remove the difficulties experienced in MRTP act. The use of “as may be
necessary” suggest that all steps or conditions or clays secured by IP right
holder would be considered as reasonable because agreement would couch the
conditions in the language in a manner which would establish necessity condition
to protection IP rights.
On face of it, Section 3(5) looks perfectly fine. Necessarily, IP right holders
should have a right to restrain Infringements and should be in a position to
protect IP. There is nothing wrong in permitting them to impose reasonable
conditions as necessary for protection of IPR. But these rights are already
granted to right holders under respective IP legislations. Section 3(5) does not
make the protection against Infringement any stronger for right holder.
All forms of IP have the potential to raise competition law problem. There is a
dichotomy between IPR and competition law here former endangers the competition
while latter engender the competition. There is a need to appreciate the
existence of a right and its exercise but if during exercise of such a right any
anti-competitive practice is visible to the detriment of consumer Interest or
Public Interest then it must be dealt with by competition law. Thus, tool of IPR
cannot/should not become a reason to justify anti-competitive agreements.
Self Sufficiency- A Social Distancing?
The original goal of LPG policy was to Promote the domestic economy with export
promotion through dominance of market economy over regulated economy. It is
important to note that
Indian traders failed to have a well-known reputed trademark due to 2 major
- No legislation for 60 years (1877-1940)
- Dominance of Foreign trade mark in Indian market during this course
These uncontrollable reasons prevent small & medium Indian traders have a fame &
reputed trade mark worldwide. Noting these lacunas, 1991 LPG was Introduced to
assist the domestic economy and to make these domestic traders self-sufficient.
However, the practice to achieve this aim was somewhat contrary owing to
influence of WTO TRIPS & Paris convention.
At one hand, India wanted to achieve self-sufficiency and help domestic traders
reputed globally and on other hand, the trademark law of 1999 giving excessive
special rights to foreign trade marks. India under the pressure of world
diplomacy enacted laws and policy which result into giving excessive benefit to
the foreign trade marks through statutory rights, and special relief against
anti-competitive agreements which squarely failed the aim of self-sufficiency.
All these chocolates have spoon feed the giants and prevented domestic players
to have their stake and thus in this way special focus required in trademark
The views and opinions expressed in this article are those of the authors and do
not necessarily reflect the official policy or position of any agency of the
Indian government. Examples of analysis performed within this article are only
examples. They should not be utilized in real-world analytic products as they
are based only on very limited and dated open source information. Assumptions
made within the analysis are not reflective of the position of any Indian
Written By: Shubham Budhiraja
- Ventakteswaran, 1937
- Courtney Terral, CJ , Patna High Court in the foreword to a book by S.
Venkateswaran on the Law of Trade and Merchandise marks in India, Madras,
Madras law journal office,1937
, Company Secretary & Final Year Law
Student, Law Center-II, Faculty Of Law, University Of Delhi.
The author is a Practicing company secretary and founder of Budhiraja & co. He is a Final Year Law student at faculty of law, University of Delhi besides associated as Para Legal volunteer with Delhi State Legal Service authority and core member of moot court society of its college.
, Ph no: +919654055315