Registration of “SWISS MILITARY” and the red-and-white cross as trademarks for Chinese-made goods; not by us, rules the Delhi High Court

Kat friend Latha Nair reports on an interesting decision from India on the registrability of two marks--SWISS MILITARY and design, and the word mark SWISS MILITARY.

In the case of Armasuisse v. The Trade Mark Registry & Ors, the Delhi High Court issued a common judgment in two appeals by Armasuisse from orders of the Indian Registrar of Trademarks (RoT), quashing the RoT’s orders. The orders of the RoT had rejected Armasuisse’s respective oppositions to the two marks of Promoshirt, SA (Promoshirt), in class 25, filed on an intent-to-use basis, below.

Armasuisse is the Swiss Federal Agency representing the military wing of the Swiss Government. Promoshirt, a Swiss company, sells “premium lifestyle products” under the mark “SWISS MILITARY”.

In the appeal, Armasuisse raised the following arguments:

• The goods under the offending marks were manufactured in China and not in Switzerland. Under section 2(1)(i)(I) of the Trade Marks Act, 1999 (the Act), untrue or misleading trade descriptions of the goods in any “material respect” are false trade descriptions. Hence, the use of 'SWISS MILITARY' and the red cross, a Swiss insignia by Promoshirt, were "false trade descriptions"; prohibited under 2(1)(i)(I);

• Promoshirt used images of the Alps mountains in its promotional material to convey an impression of a link with Switzerland;

• Section 9(1)(b) of the Act prohibits registration of marks that consist of indications designating the geographical origin of the goods. The marks are prohibited under this section as they bear indications (‘SWISS MILITARY’ and the red-and-white cross) designating Swiss origin. The Indian Trademark Manual prohibits the registration of names of large and well-known countries as trademarks;

• As the goods are Chinese-made, the public would be confused and deceived by the mark to believe that the goods have a Swiss origin, or that they bear an association with the Swiss Army. The marks, therefore, lack inherent registrability under Section 9(2)(a) of the Act; and

• The registration of these marks breaches Section 11(3)(a) of the Act, which precludes registration of a mark whose use is prohibited “by virtue of any law in particular the law of passing-off”. Besides passing-off, the marks, among others, breach the Paris Convention, the Geneva Conventions Act, 1960 (which prohibits the use of the Swiss insignia, the red and white cross) and the Swiss Federal Act on the Protection of Trade Marks and Indications of Source.

Promoshirt advanced the following defences:

• It is a prior user of the marks since 1989. Armasuisse’s applications are subsequent in time.

• The argument of "false trade description" must be examined from the perspective of an Indian consumer of average intelligence. Absent any actual instances of confusion, it is an unrealistic presumption that the consumers would assume the goods to have a Swiss origin. Besides, the goods do not indicate that these were manufactured in Switzerland.

• Section 9(1)(b) of the Act is applicable only to marks that consist exclusively of indications designating a geographical origin. The mark under challenge is a composite mark with a black-and-white cross and the words 'SWISS MILITARY'. Besides, there is no evidence on record that, in India, these marks designate the geographical origin of textiles.

• The use of the phrase “any law” in 11(3)(a) of the Act must be read contextually as it is subject to Section 11(5). 11(5) stipulates that registration of a trademark can be refused under Section 11(3) only if the proprietor of an earlier trademark raises an objection under 11(3). Since Armasuisse does not own any earlier trademark, it is not entitled to rely on Section 11(3)(a). “Any law” cannot be read as referring to any law in force in India or anywhere in the world. When read in the context of Section 11(5), it must be read as a law relating to IP.

Court’s opinion

The Court found the offending marks as false trade descriptions and hence inherently incapable of registration. While the RoT’s order was quashed based on this finding, the Court’s observations on the phrase “any law” in Section 11(3)(a) could limit the future ability of trademark opponents to rely on grounds other than those under the Act. More on this below.

False trade description

The Court noted that the RoT’s order does not address the issue of whether the challenged marks are prohibited as ‘false trade descriptions’ under Section 2(1)(i)(I) of the TM Act. The Court held that, if the country of manufacture – a material aspect regarding the goods - suggested by the mark is not the actual country of manufacture, the mark would be a "false trade description". Here, Chinese-made goods are suggested as “Swiss” by the trademark.

Section 9(1)(b)

The absolute ground under Section 9(1)(b) was found by the Court to be inapplicable. It noted that the word "designate" in 9(1)(b) denotes a positive act done with the intention to identify the geographical origin of the goods. The section is attracted only where the trademark consists exclusively of indications intended to identify the geographical origin of the goods. The court did not agree that the use of the white cross on a red background, or the 'SWISS MILITARY' logo, serves in trade to “designate” the geographical origin as Switzerland.

Section 9(2)(a)

The court held that the absolute ground under Section 9(2)(a) prohibited the registration of the offending marks. While the words 'SWISS MILITARY' by themselves or in conjunction with the red-and-white cross may not directly indicate a Swiss origin to the goods, any customer of average intelligence would attribute a Swiss origin to the mark due to the presence of the Swiss indicium, namely, the red-and-white cross.

The marks by their very nature, therefore, have the potential to deceive. The court found that Promoshirt’s use of the red-and-white cross with 'SWISS MILITARY' appeared to be a clear attempt to confuse the unwary purchaser into drawing an association with the Swiss military.

Section 11(3)(a)

The court’s findings under Section 11(3)(a) appear contradictory and confusing. or various reasons, it accepted Promoshirt’s contentions that the marks were not prohibited by the words “any law” in Section 11(3)(a).

First, Armasuisse was not the proprietor of an “earlier trademark” under the Act.

Second, Section 11(5) permits only proprietors of earlier trademarks to raise the ground of opposition under 11(3)(a).

Third, the court noted that section 11 offers only relative grounds. The legislative intent of the section is to balance a trademark applicant’s rights with the intellectual property rights of the proprietor of an earlier mark. The court thus observed that the words "any law" in 11(3)(a) cannot be understood to refer to any law that has nothing to do with the intellectual property rights of the proprietor of an earlier mark.

If that were so, the proscription would cease to be "relative" and would become "absolute" and would have to find a place in section 9 dealing with absolute grounds. However, in the subsequent paragraphs, the court appears to further limit the words, "intellectual property rights” when it held that, “holistically read, the Trademarks Act forms a composite and self-contained code, in the matter of registration”. It made a categoric observation that the RoT must therefore limit the considerations for registrability to the Act and not outside it.

Analysis

Currently, trademark opponents in India rely on grounds other than those under trademark law (laws on GIs, food safety, packaging, labelling, international treaties) by leveraging the words “any law” under Section 11(3)(a) of the Act. However, the court did not employ sound reasoning when it held that no prohibitions exist outside the Act against registration of a trademark.

Notably, the court seemed to have missed out Section 25 of the Indian Geographical Indications of Goods (Registration & Protection) Act, 1999, which prohibits registration of GIs as trademarks.

A tailpiece - the predecessor statutes of the Act had an absolute ground of rejection of a trademark based on “any law”.