Law & Practice

INDIA: Trademarks as Company Names—New Rules

Published: September 8, 2021

Mohan Dewan RK Dewan & Co Mumbai, India INTA Bulletins Committee—Asia-Pacific Subcommittee

Verifier

Ashwin Julka

Ashwin Julka Remfry & Sagar Gurgaon, India INTA Bulletins Committee—Asia-Pacific Subcommittee

In India, the use of a registered trademark by a third party as a company name amounts to infringement of the registered trademark. Despite legal measures in place to enforce this rule, infringing companies often fail to change their names or take appropriate action when ordered to do so. To rectify this situation, the Central Government (the federal government of India) introduced the Companies (Incorporation) Fifth Amendment Rules, 2021, effective September 1, 2021.

Under Section 29(5) of the Indian Trade Marks Act, 1999, use of a registered trademark as a corporate or business name amounts to infringement of the registered trademark. Section 16 of the Indian Companies Act, 2013, deals with rectification of the company name. It empowers the Central Government to order a company to change its name in case such name is identical to, or too closely resembles, a trademark registered under the Trade Marks Act, 1999.

In such instances, the trademark owner is required to file a complaint with the Ministry of Corporate Affairs, along with evidence of such infringement within three years from the date of incorporation of the impugned company. After verifying the facts of the case, the Regional Director of the Ministry of Corporate Affairs will send an order directing the company to change its name within three months of such direction. In accordance with the Indian Companies Act, a penalty can be imposed for failure to comply with the order.

However, to address the frequency in which infringing companies have failed to take appropriate action and change their names, the Central Government introduced the Companies (Incorporation) Fifth Amendment Rules, 2021 (Rules). Under these Rules, if a company fails to change its name within three months of the Regional Director’s order, the Regional Director has the authority to independently change the name of the company without input from the company itself. Following this, the Registrar of Companies will make an entry of the new name in the Register of Companies and issue a fresh certificate of incorporation through Form No. INC-11C (a new form added to the Companies Act, 2013, under the aforesaid Rules).

A specific format has been prescribed for company names to be changed upon non-compliance and the new name will comprise four consecutive elements: (1) the ORDNC itself (the Order of Regional Director Not Complied); (2) the year that the direction was passed; (3) the company’s registration number; and (4) the company’s existing Corporate Identity Number (CIN), a 21-digit alpha-numeric number. For example: ORDNC-2021-56789-QWER 1234 ASDF 5678 ZXCV9.

The new Rules are expected to strengthen the position of trademark owners seeking to stop infringement of their registered trademarks by third parties using such marks in their company names.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

© 2021 International Trademark Association

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