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“Trademark” refers to such identification symbols or marks which are characterized by their graphical representation. According to Section 2(zb) of the Trade Marks Act,1999 (hereinafter as TMA, 1999), the expression “Trademark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours.

Family-owned trademarks are used by individuals to represent their family run business and are owned by each member of the family. These kinds of trademarks have significant importance in the Indian context owing to generational businesses running in India with regards to the Hindu Undivided Family and others. 

This type of trademark grants parallel rights for use, allowing each heir to benefit from the shared goodwill and legacy of the family. However, conflicts can arise when the business is divided among multiple heirs, leading to disputes regarding trademark infringement and ownership.

Traditionally, courts have recognized that all members of a family have a legal right to use inherited trademarks, and no single heir has exclusive use of the mark unless specified otherwise (e.g. in a will). In cases of family trademark disputes, courts may decide to divide the use of the trademark among the parties based on specific areas or industries, or may divide the business into segments for distribution among the parties. The Madras High Court In the case of Narasus's Coffee Company v. Narasu's Roller Flour Mill (2016 SCC Online Mad 22818); it was held that in cases of trademark disputes between families, the court will treat it as a family dispute instead of a trademark dispute simpliciter.

Landmark Cases:

In the case concerning Parle Products Pvt. Ltd. vs. Parle Agro Private Limited (2008 SCC Online Bom 1219); the Bombay High Court ruled that the defendant, Parle Agro Private Limited, could continue to use the "Parle" trademark for confectionary goods. The plaintiff, Parle Products Pvt. Ltd., had argued that the defendant's use of the trademark in conjunction with its product identification marks, such as "Buttercup" and "Mintrox," would deceive the public about the origin of the products. The court found that there was no agreement between the parties prohibiting either group from conducting business in the other's area, and that the plaintiff had not disputed the defendant's right to sell confectionery goods. It was further observed by the court that:- 

“a partner or employee who has left a well-known firm and set up a similar business of his own is entitled to advertise his former connection, but must take care to do it so as not to suggest that the connection is still existing between them and him, or that they have ceased to carry on business and he is their successor. This shows that otherwise than in a case of intended misdirection, an erstwhile partner or employee can even advertise his former connection taking care to show that it is only history and that there is no current agency or branch of the other business firm.”

In the case of Shri Ram Education Trust vs. SRF Foundation & Ors, (2016 Online Del 472); the plaintiff claimed sole ownership of the 'SHRI RAM' trademark, which he claimed to have first used in 1988. However, during the hearing, it was revealed that the trademark had actually been first used by the plaintiff's grandfather to brand premier educational institutions such as Lady Shri Ram College and Shri Ram College of Commerce. As both parties were members of the same family, the Delhi High Court held that they had equal rights to use the family trademark and that one member could not claim exclusive ownership unless something to the contrary is shown. The court viewed the matter as a family dispute and stated that mere prior adoption by one heir would not exclude other heirs from using the same mark.

Also, in the case of Rajni Dua & Ors. Vs. Bhushan Kumar & Ors, ((1999) 1 ICC 733 (Del); Delhi High Court held that 

“I am of the considered view that the arrangement which had been going on during the lifetime of late Mr. Gulshan Kumar and which has been again reiterated in the notes prepared in the hand writing of defendant 1 and plaintiff No. 2 and later on given a concrete shape in the form of family arrangement must continue.”

Furthermore, in Haldiram Bhujiawala and Ors vs. Anand Kumar Deepak Kumar and Ors, ((2000) 3 SCC Online Del 4194); a dissolution deed granted the father of the plaintiffs the exclusive right to use the Haldiram Bhujiyawala trademark for the entire country (excluding West Bengal), while the mother of the defendants had the right to use the same trademark in West Bengal for the same business of selling namkeen and sweets. This arrangement was later solidified through a will. When the defendants opened a shop under the trademark in Delhi, the Supreme Court ruled that the action was "absolutely wrong on their part."

In the case of Vimi Verma vs. Sanjay Verma & Ors, (2013 SCC Online Del 4194); the Delhi High Court upheld the terms of a memorandum of understanding that outlined the division of four family trademarks among separate family members. The court held that “both parties have to comply the terms of the MoU wherein both parties are allowed to use the trademarks, labels with their names and or style of writing in the following manner:

a) Trade marks "Simpex" and "Simpex-pro" or any other similar or sounding similar or imitation of these trademarks will exclusively belong to Group 2 family sub group of Mr. Pankaj Verma, his spouse, children and HUF of Mr. Pankaj Verma.

b) Trade marks "Prolite" and "Profit" and brand label "VS" or any other similar or sounding similar or imitation of these trade marks or brand label will exclusively belong to Group 1 family sub group of Mr. Sanjay Verma, his spouse, children, and HUF of Mr. Sanjay Verma.”

Exclusivity and Assignment of Trademark under an agreement or Memorandum of Understanding (MoU)

For the purpose of avoiding disputes with respect to trademark there certain  agreements or terms of understanding which can be entered upon by both the parties. In 2006, Reliance Industries, a well-known family business in India, underwent a division between brothers Anil Ambani and Mukesh Ambani. As part of this division, they entered into a Trademark Management Agreement that outlined the terms under which they could use the Reliance name and logo. The agreement stated that rights to the trademark for any business not reserved under any agreement would belong to the party that first started that business. This proactive step can save time, effort, and cost in the event of a division of a family business and the associated trademark.

Conclusion:

As discussed, It is generally not possible to claim sole ownership of family trademarks. To avoid legal disputes and allow for co-existence, it may be advisable for family members to enter into a non-compete agreement that allows them to use the family trademark simultaneously for different products or services. This can help prevent conflicts among the family members.

References:

https://www.mondaq.com/india/trademark/1251014/inheritance-and-division-of-a-family-owned-trademark

https://www.barandbench.com/law-firms/view-point/inheritance-and-division-of-a-family-owned-trademark

https://blog.ipleaders.in/family-owned-trademarks-after-the-split-a-shared-dilemma/

https://selvams.com/blog/ownership-family-trademarks/