Summary: The Jan Vishwas Act, 2023, which took effect on August 1, 2024, introduced key amendments to the Trademarks Act, 1999, decriminalizing minor offenses and increasing penalties. The Act aims to reduce compliance burdens, simplify procedures, and enhance ease of doing business. Previously, certain minor trademark offenses could lead to imprisonment, but under the new amendments, jail terms have been replaced with monetary fines. This includes offenses like falsely representing a trademark as registered, where imprisonment has been removed, and a penalty equal to 0.5% of total sales or a maximum of ₹5 lakh now applies. Additionally, the penalties for non-compliance, such as import violations, have been increased from ₹500 to ₹10,000. The amendments also streamline the trademark registration process, introducing provisions for faster examination and registration. New sections empower officers to hold inquiries and impose penalties, while providing an appellate mechanism for disputes. Overall, these changes foster a more business-friendly environment by removing harsh penalties for minor infractions and expediting trademark procedures, benefiting businesses, trademark proprietors, and the government in promoting ease of doing business.
The provisions related to Intellectual Property Laws of the Jan Vishwas (Amendment of Provisions) Act, 2023 has come into force on 1 August 2024. This Act has amended 42 Central Acts including 4 Intellectual property laws namely, Trademarks Act, 1999, The Patent Act, 1970, The Copyright Act, 1957 and The Geographical Indications of Goods (Registration and Protection) Act, 1999. The Jan Vishwas (Amendment of Provisions) Act, 2023 has brought about significant changes to the Trademarks Act, 1999, aiming to simplify procedures, reduce compliance burdens, and promote ease of doing business. The changes in Trademark Act, 1999 by this aforementioned Act are in the form of Omissions of few sections, amendment in few sections and insertion of new provisions in the form of new sections, sub-sections and clauses. Effects of Jan Vishwas (Amendment of Provisions) Act, 2023 can be assessed under the following heads: –
- Decriminalization of Minor Offenses
- Increased Penalties
- Streamlined Processes
Decriminalization of Minor Offenses
Previously, certain minor offenses related to trademarks could lead to imprisonment. The amendments have decriminalized these offenses, replacing jail terms with monetary penalties. This change reduces the legal risks for businesses and individuals, making it less intimidating to navigate trademark laws. For example, minor procedural lapses that previously could have led to criminal charges now result in fines instead. Now no one could be put behind bars for 2 years for alleged offense of showing association with Trademarks Office or for false entry in Trademark register. Such minor offenses are deleted from the TM Act. Now by amendment through Jan Vishwas Act one is also saved from 3 years of imprisonment for falsely representing a Trademark as Registered, person will be fined only.
Increased Penalties
While minor offenses have been decriminalized, the Act has increased the monetary penalties for various trademark-related offenses. This ensures that the penalties are more proportionate to the severity of the offense and act as a deterrent against violations. For instance, if someone uses a trademark without authorization, the financial consequences are now more significant, encouraging better compliance. Now after Jan Vishwas Act penalty for non- compliance to section 140(3) of the TM Act, has been substantially increased from Rs. 500 to Rs. 10000.
Streamlined Processes
The amendments aim to make the trademark registration process faster and more efficient. This includes reducing the time taken for examination and registration of trademarks. By simplifying procedures and cutting down on bureaucratic red tape, businesses can secure their trademarks more quickly. This is particularly beneficial for startups and small businesses that need to protect their brand identity promptly. Jan Vishwas Act, provided insertion of 3 items in the Trademark Act as well in the form of “Authorization of Officers to hold inquiries and levy fines under the provisions of TM Act”, “provision of Appeal in a given time frame” and “manner and form to prefer appeals”.
Aforementioned Act opens with the line, “An Act to amend certain enactments for decriminalizing and rationalizing offences to further enhance trust-based governance for ease of living and doing business”. This Act in the first line only clears the legislative intent of the law that, to build trust among stakeholders and common man, legislature by its power of statesmanship trying to build a favorable environment for businesses to grow and for common man to prosper and lead a fulfilling life. To that effect, this Act omitted a few sections from the Trademark Act, 1999. Omitted sections are section 106, 108 and section 109. Aforementioned sections respectively dealt with, (1) Penalty for removing piece goods, etc., contrary to section 81, (2) Penalty for improperly describing a place of business as connected with the Trademarks Office and (3) Penalty for falsification of entries in the register.
Section 106 of the Trademarks Act, 1999 covered the penalty for removing or attempting to remove, selling, or exposing for sale, or having in possession for sale, piece goods, cotton yarn, or cotton thread that is not marked as required by section 81. The penalty for this offense was “Forfeiture of the piece goods, yarn, thread, and packing to the government” and the imposition of fine on the person which may extend up to one thousand rupees. Section 108 of the Trade Marks Act, addressed the misuse of words that could mislead people into believing that a business is officially connected with the Trade Marks Office. Specifically, it states that if any person uses such misleading words in their place of business, documents, or otherwise, they can be punished with imprisonment for up to two years, a fine, or both. Section 109 of the Trademarks Act was designed to prevent and penalize the falsification of entries in the trademark register. Such offender was punishable with imprisonment for a term which may extend to two years, or with fine, or with both. After deletion of above three sections no person shall be imprisoned or penalized for those minor offences.
The IP community’s focus is now mainly on two amended sections and three other inserted sections in the Trademark Act, 1999. Amended section 107 earlier provided for 3 years of imprisonment or with fine, or with both for falsely representing a trademark as registered. Now this section 107 under subsection 2 provides for a penalty of a sum equal to 0.5% of the total sales or turnover of the business or gross receipts in profession or a sum equal to 5 lakh rupees, whichever is less. By deleting the imprisonment term of 3 years, the Government has tried to rationalize the punishment for the offense of falseful representation of Trademark. Earlier under section 140(3) of the TM Act, where the Imported goods are alleged to be bearing false Trademarks, Importer was required to comply within 14 days and provide the information of the consignor to the Commissioner of Customs. If Importer or his Agent fails to comply with the section, he was liable to be punished with a fine which may extend to five hundred rupees. Now after amendment, Importer or his Agent for the same non- compliance shall be liable to a penalty of ten thousand rupees. By amending section 140 of the TM Act, the Government has rationalized the penalty amount.
Newly inserted section 112A empowers the Registrar of the Trademark to authorize an officer to be adjudicating officer for holding an inquiry and imposing penalty under the provisions of this Act. And newly inserted section 112B provides for Appellate authority and time frame to appeal for the person aggrieved by an order under section 112B. For any imposed penalty or coercive measure ordered under section 112B, aggrieved person may appeal to the appellate authority, who shall be an officer at least one rank above the adjudicating officer, within a period of sixty days from the date of receipt of the order. Two clauses too were inserted by this amendment in the section 157(2) of TM Act by adding clauses (xxxiiia) and (xxxiiib) providing respectively “the manner of holding inquiry & imposing penalty under section 112A” and “the form and manner of preferring appeal under sub-section (2) of section 112B”.
It is yet to be seen how this Amendment in Trademark law in particular and IP laws in general are going to benefit the Businesses, Brand owners, Proprietors of trademarks, common consumers and Government in realizing its goal of achieving “Ease of doing Business”.
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