Section 49 of Trademark Act lets the trademark owner allow another person or company to use the trademark under specific conditions. This keeps the reputation of the brand safe. It is especially useful for things like franchises, distribution deals or partnerships where the owner wants to share the trademark but still oversee its use. By requiring a joint application and a detailed affidavit, Section 49 balances business flexibility with protections against misuse or weakening of the trademark. A registered user under Section 49 of Trademark Act, 1999 is different from a permitted user, who can use the mark without formal registration but has fewer legal rights. This difference matters for lawyers because it affects things like who can sue for trademark infringement. This article explains Section 49’s rules, steps, importance, and court rulings to help legal professionals understand trademark licensing.
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What is Section 49 of TradeMark Act?
Section 49 of Trademark Act is called “Registration as registered user” and has five parts that explain how to register and what it means. Here’s a simple breakdown.
Part 1: Application Rules
This part says the trademark owner and the person who wants to use the trademark must apply together in writing to the Registrar using the right form. The application needs:
A written agreement between the owner and the user, explaining how the trademark can be used.
An affidavit from the owner (or someone they authorize) that includes:
-Details about the relationship between the owner and the user, including how much control the owner has over the trademark’s use.
-Whether the user will be the only registered user.
-Which goods or services the trademark covers.
-Any rules about how the trademark can be used, like specific features, places, or methods.
-How long the user can use the trademark, if there’s a time limit.
Any extra documents or proof the Registrar asks for or that the rules require.
This makes the process clear and stops “trafficking,” where trademarks are licensed without caring about quality.
Part 2: Registrar’s Role
If the application meets all requirements, the Registrar of Trademarks approves the user for the listed goods or services. The Registrar checks carefully to ensure the trademark stays strong.
Part 3: Notifying Other Users
The Registrar must tell any other registered users of the trademark about the new registration. This avoids confusion or conflicts.
Part 4: Start Date and Duration
The registration starts on the application date. If filed on time, it lasts as long as the rules or agreement say.
Part 5: Following Rules
The process follows the Trademarks Rules, 2017, which list forms (like TM-U), fees, and deadlines.
These rules in Section 49 highlight the need for quality control. If the owner doesn’t oversee the trademark properly, it could be canceled under related rules like Section 50.
Know Who can Register Geographical Indication.
Steps to Register Under Section 49 of Trademark Act
Registering a user under Section 49 of Trademark Act follows a clear process to meet legal requirements. This process, guided by Section 49, usually takes 6 to 12 months, depending on any objections. Lawyers recommend strong quality control terms in agreements to avoid problems:
Make an Agreement: The owner and the user create a licensing agreement that lists how the trademark will be used, quality standards and control measures.
File Application: Submit Form TM-U to the Trademark Registry with the agreement, affidavit, and other documents. The fee is set, like INR 3,000 for e-filing.
Registrar’s Review: The Registrar checks the application to ensure it’s complete, confirms the relationship and control level, and makes sure the trademark won’t mislead anyone. They may ask for more proof.
Advertisement and Opposition: The rules may require publishing the application in the Trade Marks Journal, where others can object within a set time.
Registration and Certificate: If there are no problems, the Registrar adds the user to the Register and issues a certificate. Other users get a notice.
Renewal or Cancellation: The registration can be renewed or canceled under Section 50 if the trademark isn’t used or the agreement is broken.
This table given below sums up the requirements for quick reference when drafting applications:
Requirement | Description | Relevant Part |
Joint Application | Owner and user apply together on Form TM-U. | 49(1) |
Licensing Agreement | Written document with details of allowed use and terms. | 49(1)(a) |
Affidavit by Owner | Explains relationship, control, goods/services, restrictions, and duration. | 49(1)(b) |
Additional Evidence | Any documents the Registrar asks for or rules require. | 49(1)(c) |
Registrar’s Approval | Checks compliance before registering the user. | 49(2) |
Notice to Others | Tells other registered users about the new registration. | 49(3) |
Effective Date | Starts on application date; lasts as per rules or agreement. | 49(4) |
Importance of Section 49 of Trademark Act
Section 49 is key for trademark licensing and offers several benefits. Section 49 creates a system where trademarks can be used for business while staying legally protected:
Stronger Enforcement: Registered users can sue for Trademark infringement under Section 52, which permitted users without registration can’t do. This makes registration valuable for protection.
Quality Control: It requires owners to monitor how the trademark is used, preventing “naked licensing” where there’s no oversight, which could make the trademark invalid. This keeps the brand trustworthy.
Business Growth: Owners can license their trademark to new markets or products without managing everything themselves, earning money through royalties.
Legal Guidance: For lawyers, understanding Section 49 helps advise clients on licensing deals, ensuring they follow rules to avoid disputes. It also connects to competition law to prevent unfair practices in agreements.
Case Laws on Section 49 of Trademark Act
Indian courts have explained Section 49 in several cases, focusing on quality control and proper use. These judgements guides in drafting agreements with clear control measures to follow Section 49:
In Gujarat Bottling Co. Ltd. v. Coca Cola Co. (1995), the Supreme Court said licensing without control could be seen as trafficking, which could cancel the trademark. Though decided before 1999, it shapes how Section 49 is understood.
In Cycle Corporation of India Ltd. v. T.I. Raleigh Industries Pvt. Ltd. (1996), the court said the affidavit under Section 49(1)(b) must show real control, not just empty promises.
In Hardie Trading Ltd. v. Addisons Paint & Chemicals Ltd. (2003), the Supreme Court ruled that not registering a user under Section 49 doesn’t make the license invalid but limits the user’s rights, showing registration’s value.
In cases about naked licensing, like Rob Mathys India Pvt. Ltd. v. Synthes Ag Chur (1997), the Delhi High Court canceled a trademark for lack of quality control, emphasizing Section 49’s requirements.
Summary
Section 49 of Trademark Act, 1999 allows a trademark owner to let another person or company use their trademark while maintaining control over its quality. It is useful for franchises or partnerships since it ensures that the brand’s reputation stays intact. The owner and user must apply together along with submitting an agreement and affidavit detailing usage rules. The Registrar reviews this to prevent misuse. Registered users gain legal rights like suing for infringement, unlike unregistered "permitted users". This process supports business growth while protecting the trademark, with strict quality control to avoid cancellation.
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Section 49 of Trademark Act: FAQs
Q1. What is Section 49 of the Trademarks Act?
Section 49 allows a trademark owner to register another person as a "registered user" to use the mark under a formal agreement with quality control.
Q2. What is Section 48 of the Trademark Act?
Section 48 states that a registered trademark's use by its owner or registered user is valid and protects against infringement claims.
Q3. What are the 4 types of trademarks?
The four types are product marks, service marks, collective marks, and certification marks.
Q4. What is the difference between registered user and permitted user?
A registered user is formally registered under Section 49 with legal rights to sue for infringement, while a permitted user uses the mark without registration and lacks those rights.
Q5. What is the penalty for trademark offence?
Trademark offences, like counterfeiting, can lead to imprisonment up to 7 years, a fine, or both under Section 103.
