The Ministry of Commerce and Industry notified the Trade marks (Holding Inquiry and Appeal) Rules, 2024 on 16th August 2024. Earlier, Rishabh, Praharsh and Swaraj had submitted comments on the Draft Rules, ( notified on 1st July 2024), and these comments can be found here.
The notified Rules do not seem to deviate from the Draft Rules in any significant manner. In fact, the only difference I could find between the two was the substitution of the words ‘as he thinks fit’ under Draft Rule 4(8) (regarding the penalty that the adjudicating officer can give) with the word “reasonable” in the notified Rules! Apart from that, the Rules follow the framework provided under the preceding Draft Rules.
To summarize, the Rules provide a mechanism to adjudicate any contravention of Section 107 of the Trade Marks Act, 1999 i.e. the offence of falsely representing a TM as registered. The punishment for the contravention of Sec. 107, as notified in the Jan Vishwas Act, 2023, is a “penalty of a sum equal to one half per cent of the total sales or turnover, as the case may be, in business or of the gross receipts in the profession, as computed in the audited accounts of such person, or a sum equal to five lakh rupees, whichever is less.”
As highlighted in these comments, the Rules suffer from various infirmities. One, it does not clarify whether the word ‘person’ under Rule 4(1) includes a company or not since a company can also commit an offence u/s. 107. Second, it does not provide any rationale for excluding the applicability of Bharatiya Sakshya Adhiniyam, 2023 when the Adjudicating Officer is considering the evidence adduced by the opposing party. Lastly, notices, appeals, and other communication under Rule 6 are supposed to be in electronic form. As the comments highlight, the same excludes a large population of the country which does not yet have access to the internet. For instance, what if the Adjudicating Officer under Rule 4(6) requires the attendance of a person to adduce evidence who does not yet have access to electronic devices? How to notify such persons? There are various other gaps in the Rules regarding non-filing of reply to show cause notice, deadline hearings, lack of clarity if there is an upper limit under Rule 7, or whether new evidence can be adduced in appeal.
Alas, these are the glaring gaps which will eventually fall upon the Courts to clarify. Although I could not find anything on whether public consultation were held for drafting the Rules, the Comments mention that there were “no public calls for stakeholder consultations for the drafting the Draft Rules.” Further, that there was “no information provided as to who drafted the Rules.”
The provisions relating to Trademark under the Jan Vishwas Act have come into effect on August 1 2024. It will have to be seen how the present rules work towards successfully achieving the purpose behind the Jan Vishwas Act i.e. decriminalising and rationalising offences to further enhance trust-based governance.