Trademark law protects marks that identify the uniqueness of goods or services. A trademark helps consumers recognise that a particular product comes from a particular business. In India, trademarks are governed mainly by the Trade Marks Act, 1999. One of the most important questions in trademark disputes is: who has the better right over a mark - the person who applied first or the person who used the mark first in the market?

This issue was recently discussed in the matter of Parle Products Private Limited v. Registrar of Trade Marks & Anr., decided by the Delhi High Court. The case concerned the trademark “20-20” for the goods applied in Class 30, which is the class related to food products such as biscuits and confectionery. Parle Products claimed that they were the prior users of the mark “20-20” and had built goodwill in the market through continued use. However, the respondent argued that they had applied for registration of the same mark prior in point of time vis-à-vis the first date of use of the mark by Parle, even though its application was filed on a “proposed to be used” basis. The Delhi High Court ultimately dismissed Parle’s appeal and upheld the registration in favour of the respondent.

Parle Products Private Limited is a well-known brand dealing in biscuits, cookies, confectionery, snacks, bakery products and other food items. Parle claimed that they adopted the marks “20-20,” “TWENTY-20,” and “T20” in 2007. They filed an application for registration of the mark “20-20” on October 4, 2007. Parle also stated that they launched products under the “20-20” mark around 2007–2008 and later obtained registration certificates for its marks in 2017.

However, respondent no. 2 had filed an application for registration of the identical mark “20-20” in Class 30 on 27 September 2007, a few days before Parle’s application. This application was filed on a “proposed to be used” basis, meaning respondent no. 2 had not yet started using the mark in the market but had an intent to use it in future.

The dispute arose when respondent no. 2’s application was advertised in the Trade Marks Journal in 2020. Parle filed an opposition against that application. The Registrar of Trade Marks dismissed Parle’s opposition and allowed respondent no. 2’s application based on earlier filing date. Parle then filed an appeal under Section 91 of the Trade Marks Act, 1999 against the said order before the Delhi High Court.

The main issue before the Delhi High Court was:

Whether Parle, being the first actual user of the mark “20-20” in the market, could defeat the claim of respondent no. 2, who had filed the trademark application earlier on a “proposed to be used” basis.

This question required the Court to examine the relationship between prior use, prior application, proposed use, and registration rights under Indian trademark law.

Parle argued that the Registrar had wrongly given importance only to the fact that respondent no. 2 had filed its application a few days earlier. According to Parle, trademark law is not only about filing dates. It is also about actual use, goodwill and reputation in the market.

Parle submitted that they have been continuously using the mark “20-20” from 2008–2009 onwards. It relied on invoices from 2009 to show actual commercial use. Parle argued that respondent no. 2 had not used the mark at all and therefore could not claim a stronger right merely because it filed the application earlier.

Parle relied heavily on the Supreme Court judgment in Neon Laboratories Ltd. v. Medical Technologies Ltd. 2016 (2) SCC 672. In that case, the Supreme Court had discussed the importance of “first in the market” principle. Parle argued that even if one party is an earlier applicant, the party that actually uses it on the goods first and builds goodwill should receive protection.

Parle also referred to Section 34 of the Trade Marks Act, 1999. Section 34 protects a prior user of a trademark from being restrained by a registered proprietor if the prior user has continuously used the mark from an earlier date. Parle argued that this section shows the importance of the actual use in trademark laws.

Further, Parle argued that respondent no. 2’s long non-use of mark showed abandonment or lack of interest in the mark. According to Parle, trademark rights cannot be kept alive forever by simply filing an application and not using the mark commercially. Parle also argued that since their own mark had acquired goodwill, allowing respondent no. 2 to register the same mark would create confusion among consumers.

Respondent no. 2 argued that they were the prior applicant of the mark because their application was filed on 27 September 2007, while Parle’s application was filed later on 4 October 2007. Both applications were filed on a “proposed to be used” basis. Therefore, on the dates of application, neither party had actually started using the mark.

Respondent no. 2 also argued that Parle knew about its earlier application because it was cited as a conflicting mark in the examination report issued to Parle’s application. Despite this knowledge, Parle went ahead and used the mark. The Court noted that Parle, therefore, had knowledge of respondent no. 2’s earlier application at least since July 2008.

Another important argument was that Parle had earlier told the Trade Marks Registry that the mark was visually, phonetically and conceptually different from the cited marks. Respondent no. 2 argued that Parle could not later take the opposite stand and say that respondent no. 2’s mark was identical or confusingly similar. This is based on the principle that a party cannot approbate and reprobate, meaning they cannot take two contradictory positions as per their convenience.

The Delhi High Court first identified the facts and noted that respondent no. 2 was the prior applicant for the identical trademark “20-20” in Class 30. Its application was filed before Parle’s application. The Court also noted that both parties had applied their marks on a “proposed to be used” basis.

The Court observed that Parle had not produced evidence to show use of the mark before 27 September 2007, which was the date of Respondent No. 2’s application. Parle’s evidence of use was from 2009 onwards. Therefore, Parle’s use was subsequent to respondent no. 2’s date of application.

The Court distinguished Neon Laboratories case by stating that Neon Laboratories was mainly a case concerning passing off. Passing off is based on goodwill and actual market reputation, but in the present case, respondent no. 2 had not yet started using the mark in the market. Therefore, there was no question of respondent no. 2 passing off its goods as those of Parle. The Court held that the principle in Neon Laboratories could not be applied directly to this case.

Further, the Court gave importance to Section 18 of the Trade Marks Act which allows a person to apply for registration of a trademark that is either already used or proposed to be used. This means actual use is not always necessary before applying for registration of a mark. A person who genuinely intends to use a mark can apply for registration even before commencing its use.

The Court also relied on the principle that where two parties apply for the same mark on a proposed-use basis, the date of application becomes very important. If the earlier applicant has pursued the application diligently, the later user cannot defeat the earlier applicant merely by starting use during the period when the earlier application is pending.

The Delhi High Court, therefore, held that Parle’s arguments had no merit and dismissed their appeal. It accepted that respondent no. 2 had been vigilant in pursuing its application from 2007 until registration. The Court also held that Parle’s later commercial use and later registration could not prevent respondent no. 2 from asserting its rights as the prior applicant.

This decision of the Delhi High Court is very important as it explains the balance between prior use and prior application in trademark law.

The Court made it very clear that when two parties apply for the same mark on a “proposed to be used” basis, the party who applied it first gets a stronger protection.

This case also shows that the Neon Laboratories “first in the market” rule cannot be applied in every situation. It mainly applies to passing off cases and that in cases like the present one, Section 18 of the Trade Marks Act became more important.

In simple words, prior use is important, but an earlier genuine trademark application also has strong value. Businesses should always do a proper trademark search before using a mark.

About the authors: Zeeshan A Khan is a Partner and Visheshta Kalra is a Associate at Luthra and Luthra Law Offices India.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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