An important reason to file a Trademark, infringement by partner

Trademark registration is essential in partnership companies.
Trademark registration is essential in partnership companies. Trademark infringement by partner

Trademark is a statutory right. It is a well-known fact that it is called as an intellectual property right, often called as an intangible asset. Means an asset which has no valuation, but it has potential to be evaluated.

Medium and Large companies know well about the trademarks and they must be having registered trademarks, they might have renewed at least 1 or 2 times, within last 30 years. But, for small size companies and start-ups allocating time and funds for IP asset creation is still far from the reality.

There are 3 reasons, even well-established companies, who are doing very good in business but still not have acquired or filed any of the following Trademark, Copyright & Patent.

First reason, lack of knowledge of the concepts or the organisation does not have in-house resources to guide them for taking up such tasks and creating IP assets.

The second reason, lack of funds to support such IP creation activities and allocation of the budget is always troublesome.

Finally, even if there are resources about the subject knowledge and have the money to create an IP creation, but laziness and no precaution. This kind of reluctance may become harmful, affecting your peace of mind.  Your business will have to contest to uphold the statutory rights, a right may be existing, but not yet registered. It is highly possible that apart from non-registration of existing intangible assets, the future conflicts may lead high possibility of diluting own brands by someone, to infringers, especially infringers are known persons, grown up in your shadow, an unethical competitor could be your blood relative or any other legal heir, an associate, agent/dealer/distributor.

More than any other reason, infringers grow from existing business associations, most cases the present partners or current partners, who may cause a lot of harm to the business at a certain part of the business growth.

In most trademark dispute cases, the present or past partner is the opposite party, either one of them files a suit and seeks an injunction or faces a suit for injunction. The partnership firms in general, breakup for some reasons, and that is were the root for brand dilution begins.

Injunctions on two accounts. If the plaintiff has a registered a trademark then it is Infringement under the Trademark Act. If the trademark is not registered then under the passing-off action is instituted under common law.

It is observed from some cases that mostly, plaintiff has a trademark application and still not registered, and the other also made an application but the trademark is similar with little changes in the mark, with visual and phonetical similarity.

So, it is advisable that filing a trademark is mandatory in the beginning stage of the business itself. So then the registered rights would protect the leaving partners or ex-partners from making similar or deceptive trademark applications.  It is a fact that most trademark disputes are between the known persons, relatives, or among family members under trademark transfer disputes.

The author is an Advocate and IP Attorney based in Chennai.