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August 10, 2020

Is Acquiescence The Opposite Of Constant Vigilance?

Author: Aditi Roy Chowdhury

Introduction

With the advancement of internet around the world, international borders are constantly shrinking and access to goods, services and information globally is increasing exponentially. A consequence of the global village we all now live in is the rapid increase in piracy and counterfeit goods. Trademark owners must now exercise greater vigilance and invest substantial amount of time, money and energy in protecting their valuable intellectual property on an international scale. A delay in taking steps towards enforcement of their rights might not only result in monetary loss but also affect goodwill and reputation of the trademark owner. In such a situation, it is pertinent to understand the consequences of delay and whether delay by itself amounts to acquiescence of trademark rights.

What is the defense of acquiescence?

The Merriam-Webster dictionary defines the term acquiescence as “passive acceptance or submission”. With respect to the law of trademarks, acquiescence is a defense wherein one party has assented to use of a trademark, trade name, etc. by another party, thereby surrendering the right of exclusive use. In the Trade Marks Act, 1999 (the Act), the doctrine of acquiescence is dealt with under Section 33(1), which reads as-

Where the proprietor of an earlier trade mark has acquiesced for a continuous period of five years in the use of a registered trade mark, being aware of that use, he shall no longer be entitled on the basis of that earlier trade mark –

(a) to apply for a declaration that the registration of the later trade mark is invalid, or

(b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used, unless the registration of the later trade mark was not applied in good faith.

We can see from this provision that the essentials to claim a defense of acquiescence are: (1) that the mark must be registered; (2) the subsequent proprietor should have used the mark for continuous period of 5 years; (3) the earlier proprietor should be aware of such use and acquiesce to the same; and (4) the subsequent proprietor should have adopted the mark in good faith. If a subsequent proprietor can satisfy each of these criteria, the earlier proprietor will be precluded from enforcing its rights against the subsequent proprietor. This defense of acquiescence can be availed in opposition and rectification proceedings as well as in a civil suit. The question, however, arises as to what amounts to acquiescence and whether it is the same as mere delay or inaction.

Are delay and laches the same as acquiescence?

Delay and laches are equitable defenses, which can be broadly be defined as an unreasonable delay in pursuing a right or claim by one party in a way that prejudices the opposite party. There may be delay in approaching the Courts or Registrar, because the earlier proprietor may not be aware of the subsequent proprietor’s infringing use or the former may consider such infringement as not being serious enough to injure business and demand immediate action. Further, laches and delay, though often used together are not synonymous. The concept of laches was explained acutely by the Delhi High Court in the case of Cable News Network LP, LLLP (CNN) v. CAM News Network Limited [2008 (36) PTC 255 (Del)]. The Court in this case held that –

‘Mere passage of time cannot constitute latches, but if the passage of time can be shown to have lulled defendant into a false sense of security, and the defendant acts in reliance thereon, laches may, in the discretion of the trial court, be found’. It would follow, logically, that delay by itself not sufficient defense an action for interim injunction, but delay coupled with prejudice caused to the defendant would amount to laches.”

Therefore, if the earlier proprietor sleeps on its rights and takes no action against use of a mark, such that the subsequent proprietor acts upon it and it causes prejudice to the latter, the court can deny the request for equitable relief.

Acquiescence, on the other hand, implies consent by an earlier proprietor, expressly or impliedly. Delay is said to be only a facet of acquiescence. Delay by itself, however, may not be necessarily be a ground for the defense of acquiescence. The difference between these concepts can be understood with more clarity with the help of some judgments of the Indian judiciary.

Courts’ stance on acquiescence

The principle of acquiescence has undergone a lot of deliberation by the Indian Courts. It has been established now that delay or inaction alone is not sufficient to establish that the earlier proprietor has abandoned its rights. There needs to a positive act or encouragement which implies assent on part of the earlier proprietor. For instance, in the case of M/s. Power Control Appliances and Others v. Sumeet Machines Pvt. Ltd. [1995 (15) PTC 165 (SC)], the Apex Court all the way back in 1995 held that –

Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches.” (emphasis added)

In certain judgements, however, the line between acquiescence, delay and laches did seem to get a little blurry. For instance, in the case of Jolen Inc v Doctor & Company [2002 (25) PTC 29 (Del)] the Delhi High Court in 2002 held –

In trade mark cases the plea of acquiescence is therefore available only if the defendant succeeds in proving that the plaintiff has been not only standing by but also turning a blind eye for a substantial period. If the defendant succeeds in proving the aforesaid conduct of the plaintiff, then the plaintiff cannot be allowed to trample upon and crush the business or the trade set up by the defendant.

In 2014, the Bombay High Court took up the issue of acquiescence in Emcure Pharmaceuticals Ltd. v. Corona Remedies Pvt. Ltd. [2014 (60) PTC332 (Bom)]and held that –

A mere failure to sue without a positive act of encouragement is no defence and is no acquiescence.”

In other words, the court was of the opinion that acquiescence is not mere negligence or oversight as there must be an abandonment of the right to exclusivity.

In 2017, the Bombay High Court again elaborated the difference between acquiescence and delay vide its judgment in the case of Torrent Pharmaceuticals Limited v. Wockhardt Limited & Anr [2017 (70) PTC 215 (Bom)], wherein it held that –

“Delay is not to be confused with acquiescence. The latter implies knowledge, and where knowledge of the defendant’s mark and product is shown and this is coupled with a long period of inaction against the alleged invasion of a claim of exclusivity, it is no answer to say ‘there is no positive act’, for acquiescence is also not explicit consent, but is silent assent. Mere inaction is not acquiescence either, but prolonged inaction coupled with the knowledge of an invasion of that right might well be.”

Conclusion

While it is an established principle that ‘equity aids the vigilant and not those who slumber on their rights‘, it is not fair to expect trade mark owners to take action against all infringers everywhere, as soon they are discovered. The Courts have clarified that for the defense of acquiescence to be applicable, the subsequent proprietor has to show positive acts and encouragement, thereby establishing express or implied assent of use of the mark by the subsequent proprietor. Prolonged period of inaction, on the other hand, may attract the defense of delay and possibly laches if resultant prejudice to the subsequent proprietor can be proven.

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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