SCOPE OF ‘PERMITTED USE’ AND CONTRADICTION OF ‘QUALITY CONTROL

Section 2(1)(r) of the act, 1999 defines Permitted use which means the Trademark proprietor
allows the use of a registered trademark by a third person other than registered user with the
consent of proprietor in the written agreement. It has to be stipulated that both the registered and
unregistered user should manufacture the goods in accordance with specification and standard of
quality control prescribed from time to time by the registered proprietor. Under the definition of
permitted use there is no requirement of exercising quality control on the person permitting the
use of trademark. The old act does not provide separately for the quality control requirement
upon the licensor. After the enactment of the 1999 act, the act does not separately create any
obligation of maintaining the quality control upon the licensor, but according to section 51 (1)(d)
the registrar can cancel the license if quality control is not maintained. The Scope of quality
control varies according to the licensing contract, the goodwill and reputation and the economic
wants of the parties. The Indian Trademark Law does not allow the registered proprietor to
exercise naked Licensing and gives the registrar powers to change or cancel the registration of
persons as registered user. The Trademark act 1999, has omitted the provisions relating to
objection and prohibition of trafficking in trademark. It might become impossible to take legal
action against the licensing which is done without exercising the quality control by the
proprietor. This will affect the consumers as they will compromise with the quality of the
product as there is no speculation and check in quality of the product