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Food brands in India abandoning registered rights to avoid “trademark tax”; expert decries short-sighted reaction
Reports have emerged of a number of food traders in India giving up their registered trademarks to avoid a newly implemented 5% goods and services tax. One senior IP expert confirmed to World Trademark Review that this new tax affects both domestic and international companies, but accused companies giving up trademark registrations as taking a “myopic outlook” as the benefits of a trademark far outweigh a 5% tax outlay.
A seven-year legal battle between Toyota and owners of the Indian trademark PRIUS has come to an end, with the Japanese automaker claiming victory. The Delhi High Court ruled that Toyota’s trademark rights had been infringed in spite of the defendants’ ownership of the PRIUS mark in India. This should boost the confidence of owners of globally recognised brands looking to do business in the country.
In the wake of recent scandals involving the brands Maggi and Amrapali, Indian politicians are considering the introduction of harsh penalties for celebrities who endorse products and services that are deemed to be detrimental to consumer interests. If realised on the statute books, the proposals could have a significant impact on advertising and trademark strategies on the subcontinent.
India’s trademark office has revealed the abandonment of tens of thousands of trademark applications. The move, which was followed by reports that a large number of files had been abandoned incorrectly, caused concern in the trademark community, with INTA urging the reversal of the abandonment orders with immediate effect. Today the office announced that affected applicants have until April 30 to evidence that an application has been erroneously treated as abandoned.
A group of creditors of India’s defunct Kingfisher Airlines is auctioning off several of the carrier’s trademarks in an effort to recoup at least some of the more than Rs70 billion (approximately $1.06 billion) owed to them. It remains to be seen whether these brand assets will generate enough interest among third parties to make a significant inroad into the sums owed. However, the fallout could negatively impact the brand valuation industry in India.
World Trademark Review is pleased to announce the publication of the second edition of India: Managing the IP Lifecycle.
The headline in last Sunday’s Times of India certainly caught our attention: “Verdict in trademark row delivered 6 years after the order is reserved”. The story had a hapless American company waiting a whopping six years for a ruling (unfavourable, as it turned out) from India’s Intellectual Property Appellate Board, then, incensed by the delay, appealing to the High Court in Madras, alleging anti-foreign bias. But all is not as reported.
India's Department of Industrial Policy & Promotion has clarified the government’s position with regard to foreign single-brand retailers’ sale of ‘sub-brands’. Brand owners expanding their presence in India after the relaxation of foreign direct investment rules should review their trademark strategies to ensure they have adequate protection in place to meet this requirement.
A recent report estimates that the $13.4 billion Indian franchising industry could grow almost fourfold by 2017. The findings suggest vast opportunities for brand owners to take a stake in the country’s booming consumer market but trademark counsel will have to be vigilant to ensure that brands are protected when entering into franchise relationships.
News from India last week suggested that IKEA’s plans to open its first stores in the country could be hampered by issues surrounding its trademarks. Retailers about to enter the Indian market in light of the country’s relaxation of foreign direct investment rules should make sure their trademark rights are secure.
Last week, the Indian parliament voted to approve foreign direct investment in multi-brand retail in the country, almost one year on since the limit on FDI in single-brand retail was removed. This potentially opens up major opportunities for leading retail chains such as Tesco, Wal-Mart and Carrefour but stringent limitations and a mixed political reaction to the changes may result in a cautious approach from brand owners.
The Associated Chambers of Commerce and Industry of India has proposed the establishment of a National Intellectual Property Right Strategy Authority. The authority would be tasked with increasing the number of trademark filings. Crucial to success will be ensuring that resources are directed towards the efficient handling of an upswing in applications.
WTR has previously reported on the decision of the Indian government to raise the limit on foreign direct investment (FDI) in single-brand retail to 100%, under which any foreign brand looking to take advantage of the new rules must source at least 30% of goods from local SMEs. Six months on, issues have been raised by trademark owners - not least the difficulties of quality control and monitoring mark usage by local partner companies.
Skoda has been banned from using the car model name ‘Monte Carlo’ in India following allegations of infringement by a local fashion brand. The dispute underscores the crucial importance of thorough trademark searches in all jurisdictions and the growing vigilance of domestic brands in protecting their rights against multinational corporations.
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