Kerala and Karnataka Tussle Over the ‘KSRTC’ Mark: Registrability, Concurrent Use, and Infringement

KSRTC Logos used by Kerala and Karnataka (Image from here)

Recently, a rather dormant controversy has been refueled between the states of Karnataka and Kerala regarding the rights over the trademark ‘KSRTC’. This happened when a press statement was released by the office of Kerala Transport Minister Antony Raju stating that the Registrar of Trademarks had decided in their favour. Kerala RTC MD and Transport Secretary, Biju Prabhakar, also stated that this determination implies that Kerala has the exclusive right to use the mark ‘KSRTC’ and that “a notice will be sent to Karnataka soon”. These claims were denied by Karnataka SRTC stating that the “reports are factually incorrect as we have not received any such notice or order from the Central Trade Mark Registry as claimed until today.” It further said that the appeals challenging the registration of the KSRTC mark by Karnataka were still pending before the IPAB, and after the abolishment of IPAB, the High Court. Additionally, it stated that they will contemplate appropriate legal options once they receive any official communication from the Registry. In this post, I shall analyse this controversy surrounding the KSRTC mark.

Background

Both the states have been using the KSRTC mark for their respective State Road Transport Corporations for a long time. The controversy emerged when Karnataka applied for a registration for the mark and served a notice to Kerala in 2014 stating that they should not use the acronym. Subsequently, Kerala approached the Trade Mark Registry claiming rights over the mark as it was the prior user for the same. Upon a public search for the mark on the Trade Marks Registry, it appears that the mark has been registered in favour of both the states, in around 2017 for Karnataka and around 2019 for Kerala. The registration of neither of these marks appears to have been cancelled. Similarly, the rectification petition against Karnataka’s use of KSRTC appears to be currently pending. This implies that presently both the states can use the mark without any possible infringement claim by the other. Interestingly, even prior to the registration, Kerala RTC has invoked its trademark rights over KSRTC to muzzle criticism against it.

Registrability of the Mark

An interesting question in this discussion is to look at whether the mark could be registered by either of the states in the first place. This is because the mark in case of both states is merely an abbreviation of their corporation names which, in turn, are descriptive of their services. As the Delhi High Court has held in Superon Schweisstechnik India Ltd. v. Modi Hitech India Ltd., even the abbreviations of descriptive words are not prima facie entitled to protection. This was also iterated in the decision in S.B.L. Ltd. v. Himalaya Drug Co., where the court cited McCarthy’s observations that “[a]n abbreviation of a generic name which still conveys to the buyer the original generic connotation of the abbreviated name, is still, “generic”.” This proposition would mean that KSRTC, being merely an abbreviation of the descriptive trade name of the two corporations, should not be registrable. This, however, would change if the marks acquire a secondary meaning with respect to a particular type of use. In the instant case, it could possibly be said that the mark has obtained a secondary meaning with respect to both the corporations as people in the two states identify their respective state bus services as KSRTC. Accordingly, it can be said that the mark is arguably registrable by either of the state to begin with.

Concurrent Use

As the mark is registrable by both states, the question that then arises is whether it could be used simultaneously by both the states. Here, Section 12 of the Trade Marks Act, 1999 (the ‘Act’), must be considered as also highlighted by the Karnataka RTC Managing Director. This provision allows the Registrar to grant registration to identical marks to different proprietors for same or similar services in case of “honest concurrent use or of other special circumstances”. Applying this proposition in the instant scenario, if Karnataka, the later user, can be said to be an honest concurrent user or demonstrate special circumstances, it could be granted registration of the mark along with Kerala.

Honest Concurrent Use

The factors to be considered while determining honest concurrent use were summarized by the Bombay High Court in the case of Kores (India) Limited v. Khoday Eshwarsa and Son in context of the pari materia provision of the erstwhile Trade Mark Act. These factors were as follows:

“(1) The honesty of the concurrent use, (2) The quantum of concurrent use shown by the petitioners having regard to the duration, area and volume and trade and to goods concerned, (3) the degree of confusion likely to follow from the resemblance of the applicants’ mark and the opponents’ marks. (4) Whether any instance of confusion have in fact been proved, and (5) the relative inconvenience which would be caused to the parties and the amount of inconvenience which would result to the public if the applicants’ mark is registered.”

Here, the use of the mark by Karnataka is arguably honest since it is an abbreviation of its name which, in turn, is in line with the common manner in which road transport corporations have been named in several states such as RSRTC or the UPSRTC. The KSRTC mark has also been concurrently used by the two states for several decades including with even the buses of both states travelling through the other. There has not been any proven instance of confusion due to the concurrent use of the mark and no particular inconvenience will be faced by either the parties or the public by a concurrent registration. The public would instead face greater inconvenience if concurrent use is not allowed given their familiarity with associating the mark with Karnataka SRTC buses.

The likely confusion caused by the concurrent use could be seen in context of the factors laid down by the Supreme Court in Cadila Healthcare with respect to likelihood of confusion. Here, both the marks have the same nature, are identical, and are used for the same nature of services. The class of purchasers for both services is diverse, covering a wide spectrum of education levels and degrees of care exercised. There, however, remains considerable difference as far as other factors are concerned. The Karnataka SRTC is arguably better performing than its Kerala counterpart. The purchasing of tickets for the services of the two corporations would also have minimal confusion. While the full name of the corporation is mentioned on the website in online purchase, for offline purchase there are very limited circumstances where both the services cover same routes due to their state-specific focus. This is also relevant in context of the final element of surrounding circumstances. Due to limited overlap of services, the possibility of confusion is low. Moreover, buses of both corporations carry their respective identifications in the number plates, dissipating any fears of confusion. Accordingly, the degree of confusion is low and all factors of honest concurrent use are satisfied.

Other Special Circumstances

In case the honest concurrent use exception is held to be not applicable, the Registrar still has the option of permitting the registration by invoking the element of ‘other special circumstances’. While it is an undefined discretionary power given to the Registrar, the Supreme Court in London Rubber Co. Ltd. v. Durex Products, had considered, inter alia, the mark being the name of the company and large duration of use as relevant factors while deciding on other special circumstances. In the instant scenario as well, KSRTC is merely an abbreviation of the name of the corporation and has been in use for several decades. This, coupled with low likely confusion and public interest concerns, makes a strong case for warranting concurrent registration of the mark.

It is probably an ideal case for concurrent use. The essence of trademark law is to grant limited monopoly over marks to reduce search costs for the consumers. In case of standard transport services provided by a government entity, with minimal possibility of confusion, a trademark monopoly to one state over the KSRTC mark would heavily imbalance the delicate cost-benefit balance struck by trademarks. The concurrent use exception is in place to remedy this very market failure, and it would be rather ridiculous if concurrent use is not permitted here.

Infringement

In case concurrent registration is not granted under Section 12, it must be determined whether the use of the KSRTC mark by Karnataka would amount to infringement. In the absence of likelihood of confusion and due to the similarity of services, the only applicable provision is Section 29(5) of the Act which prohibits use of a registered mark as a trade name for “services in respect of which the trade mark is registered.” These elements are satisfied by Karnataka’s use of the KSRTC mark. However, Section 30(2)(a) of the Act states that a registered mark is not infringed where the use is, inter alia, to indicate the kind, intended purpose, and geographical origin of the concerned services. This defence of descriptive fair use might also apply in the present scenario as arguably the use of this mark by Karnataka describes the intended purpose (transportation services), kind (by road), and geographical origin (Karnataka) of the services that it provides. In such a scenario, it could possibly be concluded that even despite the registration of the mark by Kerala, Karnataka’s use of the KSRTC mark will not amount to infringement.

Conclusion

Notably, while the above arguments have been made from the perspective of Karnataka defending any infringement claim, they are equally applicable to Kerala if it were to be the other way round along with the additional ground of Kerala being the prior user. That being said, there appear to be strong reasons that should permit use of the KSRTC mark by both Kerala and Karnataka. A quibble between the two states on this issue appears surprising and the supposed gains by either of the state by having the other state restricted from using the KSRTC mark appear unclear. This was also highlighted by the Karnataka Deputy Chief Minister and Transport Minister Laxman Savadi who termed it to be an unnecessary controversy and stated, “The service of the people is important for the two corporations. Karnataka or Kerala are working towards the interests and service of the public without resorting to profit or competition. Thus no state should make this matter a matter of prestige.” While it is the correct sentiment, it is surprising for Karnataka to be adopting this stance when it was the one who started the controversy in the first place by insisting on an exclusive use. This reformed stance only appears to be an outcome of Kerala also securing registration for the KSRTC mark.

Source: https://spicyip.com/2021/06/kerala-and-karnataka-tussle-over-the-ksrtc-mark-registrability-concurrent-use-and-infringement.html