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Trademark Squatting: A Foul Play

Article by Navantak Agarwal

In the recent past, it is apparent that the brands are proactively involved in the protection of their Intellectual Property Rights in order to standout in the commercial hub. However, certain reprobates driven with malicious intent attempts to meddle rights of honest users by virtue of squatting. In the words of World Intellectual Property Organisation (“WIPO”), Trademark squatting is defined as the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use. In such instances, the trademark squatters apply for the earlier adoption of the well-known marks before the products released in the market with an intent to sell it to the rightful owner at the hefty price. For instance, Apple Inc., had to pay a whopping US $ 60 million to settle a dispute involving its mark ‘IPAD’ with a Chinese company, Shenzen Proview Technology, which had registered the trademark IPAD in China in 2012. In most cases, the squatter does not intent to use the mark in relation to any legitimate business activities but to enforce their statutory rights against the true owner for trademark infringement or sell the mark back to the legitimate owner.

One such case emerged in the IP landscape is of Sony’s PS5 trademark, wherein the Sony attempted to file registration for its PS5 mark, however the same has already been registered by another Applicant named “Hitesh Aswani”. The mark “PS5” received an objection in their examination report by Registry which showcases another registration in the same name. The judicial authority relied on the precedents of trans border reputation of the well-known marks as laid down in the case of N.R. Dongre v. Whirlpool Corporation [1996 PTC (16) 476]. In the present case at hand, it may be argued that the PS5 mark has not been registered in India yet, however, its predecessors, PS3 and PS4 were quite popular. Hence, it can be said that Sony’s PlayStation Series has customers in the country, thus providing a substantial reason for its registration on the first to use basis. As of now, Hitesh Aswani has withdrawn the Application.

It can be said that such incidents pose a threat to the rightful owner causing significant damage to their established goodwill, hence there needs a formation of stringent laws to provide wider protection to the well-known marks.