Offences and Penalties (Sections 101–121)

The civil remedies under the Trade Marks Act, 1999 — injunction, damages, account of profits, delivery-up — are the principal route through which proprietors enforce their rights. But Chapter XII of the Act (Sections 101 to 121) supplies a parallel criminal regime. The chapter codifies a set of offences directed at the falsification of trade marks and trade descriptions, prescribes minimum and maximum punishments, and equips law-enforcement officers with powers of search and seizure. The criminal track exists because, in many cases — particularly mass-market counterfeiting of branded goods — civil remedies alone are inadequate to deter the conduct or compensate the public. The Trade Marks Act, 1999 carries forward the criminal regime that had been part of Indian trademark law since the 1958 Act, with significant amendments to harden the penalties and bring the offences in line with TRIPS-mandated criminal-enforcement standards.

The criminal regime sits alongside the broader scheme of trade mark protection. Where the conduct of an infringer also amounts to a counterfeiting offence, both routes are available and may be pursued simultaneously — the civil suit for injunction and damages and the criminal complaint for prosecution. The criminal provisions are also independent of registration. Falsification of any trade mark — registered or not — is an offence, and the Section 27(1) bar on infringement actions for unregistered marks does not extend to the criminal prosecution of counterfeiters. The result is that the criminal regime operates as a public-interest enforcement mechanism that protects the consuming public against deceptive goods regardless of the proprietor's registration position.

Statutory architecture — the Chapter XII scheme

Chapter XII of the Trade Marks Act, 1999 contains Sections 101 to 121. The scheme is best understood as a sequence of three blocks. The first block (Sections 101 to 102) defines the prohibited conduct — what it means to falsify a trade mark, falsely apply a trade mark, and make false trade descriptions. The second block (Sections 103 to 109) prescribes the punishments — for applying a false trade mark, for selling goods to which a false trade mark or false trade description is applied, for falsely representing a trade mark as registered, for improperly describing a place of business as connected with the Trade Marks Office, and for falsifying entries in the register. The third block (Sections 115 to 121) supplies the procedural and enforcement infrastructure — the cognizable nature of certain offences, the powers of search and seizure, the position of company directors, the punishment of abetment, and the costs and forfeiture rules.

The architecture is consistent with the broader pattern of intellectual-property criminal enforcement in India: a clearly defined set of conduct, a graduated punishment scheme with minimum and maximum terms, search-and-seizure powers exercisable by police officers of a specified rank, and ancillary provisions to address corporate liability and to allow forfeiture of the offending goods. The chapter is closely tied to the substantive infringement provisions in Section 29 — infringement of registered trademark: the same conduct that constitutes infringement may also constitute a Chapter XII offence, but the criminal route requires proof of falsification with the requisite mental element.

Section 101 — meaning of "falsifying" and "falsely applying" a trade mark

Section 101 is the definitional anchor for the criminal regime. It tells us what it means to falsify a trade mark and to falsely apply a trade mark to goods or services. A person falsifies a trade mark when, without the assent of the proprietor, he either (a) makes that trade mark or a deceptively similar mark, or (b) falsifies any genuine trade mark — whether by alteration, addition, effacement or otherwise. The conduct includes both the creation of a counterfeit mark from scratch and the doctoring of a genuine mark.

A person falsely applies a trade mark to goods or services when, without the assent of the proprietor, he applies the trade mark or a deceptively similar mark to those goods or services, or to any package containing such goods, or to any other thing for the purpose of indicating the goods. The actus reus is the act of application — affixing the mark, embossing it, embroidering it, printing it on packaging, or any other physical association of the mark with the goods or with material intended to identify the goods. The conduct is criminal whether the trade mark is registered or unregistered. The Act protects the trade mark itself, not merely the registered proprietor's interest. The breadth of the definition draws on the wide statutory meaning of "mark" set out in the Section 2 definitions of trade mark, mark and service, including device, label, packaging and combinations of colours.

Section 102 — false trade descriptions

Section 102 extends the criminal regime to false trade descriptions. A trade description is broadly defined elsewhere in the Act to include any description, statement or other indication regarding the goods — their number, quantity, measure, gauge, weight, place or country of origin, mode of manufacture or producing, the material of which they are composed, the fitness for purpose, strength, performance, behaviour, accuracy, or any other characteristic. A false trade description is a trade description which is untrue or misleading in a material respect, or which conveys a false indication concerning the goods.

Section 102 makes it an offence to apply a false trade description to goods, or to any package containing goods, or to any indication of the kind referred to. The provision is the trade-description analogue of the trade-mark falsification offence in Section 101. Together they cover the principal forms of consumer deception relating to the identity, source and characteristics of branded goods. The provision also dovetails with the substantive rules on limitations on the effect of a registered trade mark under Section 30, since legitimate descriptive uses are protected on the civil side and lie outside the criminal regime.

Section 103 — penalty for applying false trade marks and trade descriptions

Section 103 is the principal substantive penal provision. It punishes any person who (a) falsifies any trade mark, (b) falsely applies to goods or services any trade mark, (c) makes, disposes of, or has in his possession, any die, block, machine, plate or other instrument for the purpose of falsifying or being used for falsifying a trade mark, (d) applies any false trade description to goods or services, (e) applies to any goods to which an indication of the country or place in which they were made or produced or the name and address of the manufacturer or person for whom the goods are manufactured is required by Section 139 to be applied, a false indication of such country, place, name or address, (f) tampers with, alters or effaces an indication of origin which has been applied to any goods to which it is required to be applied under Section 139, or (g) causes any of the things above-mentioned to be done.

The punishment is imprisonment for a term not less than six months but which may extend to three years, and with fine not less than fifty thousand rupees but which may extend to two lakh rupees. The Court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than six months or a fine of less than fifty thousand rupees. The minimum punishment is therefore the default, and a sub-minimum sentence requires reasoned judicial justification on the record.

Section 104 — penalty for selling goods or providing services to which false trade mark or false trade description is applied

Section 104 punishes the downstream actor in the counterfeit supply chain. Any person who sells, lets for hire, or exposes for sale, or hires or has in his possession for sale, goods or things, or provides or hires services, to which any false trade mark or false trade description is applied, or which, being required under Section 139 to have applied to them an indication of the country or place in which they were made or produced or the name and address of the manufacturer, are without the indication so required, commits an offence under Section 104.

The punishment mirrors Section 103 — imprisonment for a term not less than six months but which may extend to three years, and with fine not less than fifty thousand rupees but which may extend to two lakh rupees, with the same proviso allowing the court to award a lesser sentence for adequate and special reasons to be recorded. The provision is significant because it brings the retailer, the wholesaler, the storage agent and the seller within the criminal net — the proprietor does not have to identify the counterfeit manufacturer to prosecute the conduct. Anyone in the chain who deals with the counterfeit goods is exposed. The downstream reach of Section 104 is what makes the criminal regime a powerful complement to the opposition route under Section 21, where the proprietor can only block registration but not the immediate sale of counterfeit goods.

Section 104 supplies a statutory defence, however. The accused may prove (a) that, having taken all reasonable precautions against committing an offence against the section, he had at the time of the commission of the alleged offence no reason to suspect the genuineness of the trade mark or trade description, or that any offence had been committed in respect of the goods, and (b) that, on demand by or on behalf of the prosecutor, he gave all the information in his power with respect to the persons from whom he obtained the goods or things, or that the offence was otherwise committed without his knowledge.

Section 105 — enhanced penalty on second or subsequent conviction

Section 105 is the recidivist provision. Whoever, having already been convicted of an offence under Section 103 or Section 104, is again convicted of any such offence, shall be punishable for the second and for every subsequent offence with imprisonment for a term not less than one year but which may extend to three years, and with fine not less than one lakh rupees but which may extend to two lakh rupees. The court retains the discretion to impose a sub-minimum sentence for adequate and special reasons to be mentioned in the judgment.

The escalation reflects Parliament's view that repeat counterfeiting offenders have demonstrated a sustained intention to deceive and merit a higher minimum sentence. The provision applies regardless of whether the second offence relates to the same trade mark, the same trader or the same goods as the first conviction. The recidivist scheme runs in tandem with the special protections accorded to collective marks and certification marks under Sections 61 to 78, where repeated misuse of a certification mark may trigger both Section 105 enhancement and proceedings before the certification authority.

Section 107 — penalty for falsely representing a trade mark as registered

Section 107 punishes the misrepresentation of registration status. Whoever makes any representation with respect to a mark not being a registered trade mark to the effect that it is a registered trade mark, or with respect to a part of a registered trade mark not being a part separately registered as a trade mark to the effect that it is so registered, or to the effect that the registration of a trade mark gives an exclusive right to the use thereof in any circumstances in which, having regard to limitations entered on the register, the registration does not give that right, commits an offence and is punishable with imprisonment for a term which may extend to three years, or with fine, or with both.

The provision is the criminal counterpart of Section 158 — the section that explains what counts as a representation that a mark is registered. The use of the symbol "®" or the words "Registered Trade Mark" without the underlying registration is the standard fact pattern. The offence protects the integrity of the register and the consuming public against false claims of statutory protection. The Section 107 offence does not require any consumer to have been deceived in fact; the misrepresentation is itself the offence. The mental element required is knowledge that the representation is false — innocent error is not enough but is also unlikely to be encountered in the typical fact pattern.

Section 108 — improper description of place of business as connected with the Trade Marks Office

Section 108 is a narrow but commercially significant offence. If any person uses on his place of business, or on any document issued by him, or otherwise, words which would reasonably lead to the belief that his place of business is, or is officially connected with, the Trade Marks Office, he is punishable with imprisonment for a term which may extend to two years, or with fine, or with both. The section protects the public against impostor agents who represent themselves as having an official connection with the Trade Marks Registry. It is the institutional analogue of Section 107: where Section 107 protects against false claims of registration, Section 108 protects against false claims of official affiliation.

Section 109 — falsification of entries in the register

Section 109 punishes the corruption of the register itself. Any person who makes or causes to be made a false entry in the register kept under the Act, or a writing falsely purporting to be a copy of an entry in the register, or produces or tenders or causes to be produced or tendered in evidence any such writing knowing the entry or writing to be false, commits an offence and is punishable with imprisonment for a term which may extend to two years, or with fine, or with both. The offence reaches both the active falsification of an entry and the use of a false entry in evidence — the two principal ways in which the integrity of the register can be compromised.

Section 115 — offence cognizable; rank of investigating officer; opinion of Registrar

Section 115 is the procedural core of the Chapter XII enforcement scheme. It deals with three connected questions: which offences are cognizable, which police officer can investigate, and what role the Registrar plays in the investigation.

Sub-section (1) makes the offences punishable under Section 103, Section 104 or Section 105 cognizable. Section 154 of the Code of Criminal Procedure (now the Bharatiya Nagarik Suraksha Sanhita, 2023, where applicable) consequently empowers a police officer to investigate without the order of a Magistrate. The cognizable status reflects the seriousness with which Parliament treats counterfeiting offences and aligns Indian law with the TRIPS requirement that criminal procedures and penalties be applied at least in cases of wilful trade-mark counterfeiting on a commercial scale.

Sub-section (3) provides that no police officer below the rank of Deputy Superintendent of Police, or equivalent, shall investigate any offence punishable under Section 103, 104 or 105. The seniority requirement is a safeguard against frivolous or vindictive prosecution and ensures that a senior officer applies his mind to the case before search and seizure powers are exercised.

Sub-section (4) requires the police officer, before making any search and seizure for offences under Section 103, 104 or 105 — except an offence relating to the falsification of a Registrar-determined indication of origin — to obtain the opinion of the Registrar on the facts involved in the offence and to abide by the opinion so obtained. This Registrar-opinion requirement is one of the most distinctive features of the Indian trademark criminal regime. It is intended to prevent the misuse of police powers in trade-mark matters by interposing the trademark expertise of the Registrar between the complaint and the search. The investigating officer must seek the Registrar's view on whether the trademark in question is in fact registered, what its features are, and whether the conduct alleged falls within the scope of Section 103 or Section 104. The opinion is binding on the investigating officer for the purposes of the search and seizure decision.

Sub-section (4) also enumerates the search and seizure powers themselves. The empowered police officer may search and seize without warrant the goods, die, block, machine, plate, other instruments or things involved in committing the offence, wherever found. All things so seized are required to be produced as soon as possible before a Judicial Magistrate of the First Class.

Sections 116 to 121 — corporate liability, abetment and ancillary provisions

Section 116 deals with the punishment of abetment in India of acts done out of India which would constitute offences if done in India. Section 117 deals with the punishment of accessories — anyone who knowingly assists in the commission of an offence under Chapter XII is liable to be punished as a principal.

Sections 118 and 119 deal with corporate liability. Where an offence under the Act is committed by a company, every person who at the time of the offence was in charge of, and was responsible to, the company for the conduct of its business — as well as the company itself — is deemed to be guilty of the offence. The director, manager, secretary or other officer of the company who can show that the offence was committed without his knowledge or that he exercised all due diligence to prevent its commission is exempted. Where the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, that officer is deemed to be guilty.

Sections 120 and 121 supply the rules on costs and forfeiture. The court trying an offence has power to direct that the offending goods be forfeited and destroyed or otherwise dealt with as the court thinks fit. The forfeiture provision complements the civil delivery-up remedy under Section 135 and ensures that the criminal track produces the same physical disposal of the offending goods.

The interaction with the Indian Penal Code

Before the 1958 Act, trade-mark counterfeiting was prosecuted under Sections 482 and 486 of the Indian Penal Code, 1860, which contained offences relating to property marks and to the use of false property marks. With the enactment of the 1958 Act, and now the 1999 Act, Chapter XII offences have largely supplanted the IPC provisions in the trade-mark context. The IPC concept of property mark — defined in Section 479 IPC as a mark used for denoting that a movable property belongs to a particular person — remains conceptually distinct from a trade mark. A trade mark indicates the origin or quality of the goods; a property mark indicates ownership. The Supreme Court in Sumat Prasad v. Sheojanan Prasad AIR 1972 SC 2488 explained the distinction at length and emphasised that the function of a trade mark is to give an indication of the origin of goods, whereas a property mark concerns the proprietor of the goods. The court convicted the accused for both using a false property mark and selling goods marked with a counterfeit property mark, even though the complaint had loosely referred to the conduct as counterfeiting of trade mark. The case is the textbook illustration of the trade-mark/property-mark divide and remains relevant for the analysis of overlapping offences.

Mens rea and the standard of proof

The Chapter XII offences are not strict-liability offences. The prosecution must establish the actus reus — the falsification, the false application, the sale of counterfeit goods — and the requisite mental element, which in most cases is knowledge that the trade mark or trade description is false. Section 104 supplies an explicit defence based on the absence of reason to suspect. Section 107 requires that the misrepresentation be made knowingly. The mental-element requirement aligns the criminal regime with the general principle that criminal liability depends on the conjunction of a guilty act and a guilty mind.

The standard of proof is the criminal standard — beyond reasonable doubt. The civil standard of preponderance of probabilities, which governs Section 29(4) dilution and the wider infringement regime, does not apply to Chapter XII prosecutions. The disjunction of standards is one reason why the criminal track is often more difficult to win than the civil track and why most proprietors prefer to pursue the civil suit as the primary route, treating the criminal complaint as either a parallel pressure or a fallback against unidentified counterfeiters.

The Registrar's role and the institutional design

The Registrar of Trade Marks plays an unusual role in the Chapter XII enforcement scheme. The Section 115(4) requirement of Registrar opinion before search and seizure is the most significant procedural feature of the criminal regime and one that is largely without parallel in the criminal-enforcement scheme of other intellectual-property statutes. The institutional design reflects two policy concerns. First, that trade-mark enforcement should be tied to the substantive trade-mark expertise of the Registrar, who is in the best position to determine whether a mark is registered, what its features are, and whether the alleged conduct falls within the scope of the offence. Second, that police search-and-seizure powers in commercial contexts should be exercised with restraint and only after specialist advice — to avoid the misuse of criminal process as a tool of commercial pressure.

The Registrar's opinion is not, however, an indictment or a finding of guilt. It is an administrative assessment of the trademark questions on which the police officer needs guidance before exercising search and seizure. The actual question of guilt remains for the trial court to decide. The institutional architecture ensures that the criminal regime operates as a serious deterrent against counterfeiting while remaining hedged against abuse.

Distinguishing offences from cognate civil heads

Falsification offence (Section 103) vs civil infringement (Section 29). Civil infringement requires the use of a registered mark by a person other than the proprietor in the course of trade. The criminal offence requires the falsification or false application of a trade mark — registered or not — without the proprietor's assent. The civil action is open only to the registered proprietor; the criminal complaint can be initiated by any person aware of the offence. Civil relief is injunction and damages; criminal punishment is imprisonment and fine. The two routes can be pursued simultaneously.

Sale of counterfeit goods (Section 104) vs Section 30(2)(d) defence. The Section 30(2)(d) defence in civil cases — use of a trade mark for the purpose of indicating compatibility with the proprietor's goods — has no analogue in the criminal regime. A defendant who sells counterfeit goods cannot escape Section 104 liability by arguing that he was indicating compatibility; the conduct is the false application or sale of falsely-marked goods, not a referential use. The criminal regime is more rigid in this respect than the civil regime.

False representation of registration (Section 107) vs civil passing off. Section 107 prosecutes the false claim that an unregistered mark is registered. Civil passing off prosecutes the false representation that the defendant's goods are the plaintiff's. The two offences are conceptually distinct — Section 107 protects the integrity of the register; passing off under Sections 27, 134 and 135 protects the goodwill of the proprietor.

Practical and exam takeaways

For state judiciary mains, CLAT PG and SEBI Legal Officer papers, the Chapter XII regime is most often tested through:

1. The Section 103 punishment scheme — minimum six months' imprisonment, maximum three years; minimum fine fifty thousand rupees, maximum two lakh rupees; sub-minimum sentence permissible only for adequate and special reasons recorded in the judgment.
2. The Section 104 sale offence and its statutory defence — reasonable precautions, no reason to suspect, full disclosure of supplier on demand.
3. The Section 105 recidivist enhancement — minimum one year's imprisonment and minimum fine of one lakh rupees on second or subsequent conviction.
4. The Section 107 false-registration offence — punishable with up to three years' imprisonment, fine, or both, and triggered by the misuse of the ® symbol or the words "Registered Trade Mark".
5. The Section 115(1) cognizable status of Section 103, 104 and 105 offences and the Section 115(3) requirement that no police officer below the rank of Deputy Superintendent of Police investigate.
6. The Section 115(4) Registrar-opinion requirement before search and seizure — the distinctive institutional safeguard of the Indian trademark criminal regime.
7. The trade-mark/property-mark distinction in Sumat Prasad v. Sheojanan Prasad (AIR 1972 SC 2488) — trade marks indicate origin or quality; property marks indicate ownership of movable property.

The two most common errors in exam answers are (a) treating the Chapter XII offences as available only against infringers of registered marks — they apply to the falsification of any trade mark, registered or not — and (b) overlooking the Section 115(4) Registrar-opinion requirement, which is the procedural gateway for any search and seizure under Section 103, 104 or 105. For the wider statutory and procedural setting, see also the chapters on well-known trademarks under Section 11(6) to 11(11), on the exclusive right under Section 28, on absolute grounds for refusal under Section 9, on relative grounds for refusal under Section 11, on the duration and renewal of registered marks under Section 25, and on the registration procedure under Sections 18 to 24.

Frequently asked questions

What is the punishment for applying a false trade mark under Section 103?

Section 103 punishes the falsification or false application of a trade mark with imprisonment for a term not less than six months but which may extend to three years, and with fine not less than fifty thousand rupees but which may extend to two lakh rupees. The minimum sentence is the default. The court may impose a lesser sentence only for adequate and special reasons to be mentioned in the judgment. The same punishment applies under Section 104 to anyone who sells, lets for hire, or has in his possession for sale, goods to which a false trade mark or false trade description is applied — bringing the retailer and wholesaler within the criminal net.

Is the offence of counterfeiting a trade mark cognizable?

Yes. Section 115(1) of the Trade Marks Act, 1999 makes the offences punishable under Sections 103, 104 and 105 cognizable. Consequently, the police can investigate without the order of a Magistrate and can arrest without warrant. Section 115(3) imposes an important safeguard — no police officer below the rank of Deputy Superintendent of Police, or equivalent, may investigate the offence. The seniority requirement is intended to prevent the misuse of police powers in commercial trade-mark matters and ensures that a senior officer applies his mind before search and seizure is conducted.

Why must a police officer obtain the Registrar's opinion before search and seizure?

Section 115(4) of the Trade Marks Act, 1999 requires the police officer to obtain the opinion of the Registrar of Trade Marks on the facts involved in the offence before conducting any search and seizure for offences under Section 103, 104 or 105 (other than an offence relating to a Registrar-determined indication of origin). The opinion is binding on the investigating officer for the purposes of the decision to search. The requirement injects trade-mark expertise into the criminal-enforcement process and is intended to prevent the misuse of criminal process as a tool of commercial pressure.

What is the difference between a trade mark and a property mark?

A trade mark indicates the origin or quality of goods — it tells the consumer where the goods come from and which trader stands behind them. A property mark, defined in Section 479 of the Indian Penal Code, 1860, denotes that a particular movable property belongs to a particular person — it indicates ownership. The Supreme Court in Sumat Prasad v. Sheojanan Prasad AIR 1972 SC 2488 explained the distinction in detail. The conceptual divide matters because counterfeiting of trade marks is now prosecuted under Chapter XII of the Trade Marks Act, 1999, while the IPC property-mark offences in Sections 482 and 486 continue to apply to misappropriation of ownership marks.

Can a retailer who unknowingly sells counterfeit goods be prosecuted under Section 104?

Section 104 punishes anyone who sells, lets for hire, exposes for sale or has in his possession for sale goods to which a false trade mark or false trade description is applied. But the section supplies a statutory defence. The accused may prove that, having taken all reasonable precautions against committing the offence, he had at the time no reason to suspect the genuineness of the trade mark or trade description, and that on demand by or on behalf of the prosecutor he gave all the information in his power with respect to the persons from whom he obtained the goods. A retailer who can establish reasonable precautions and full supplier disclosure can therefore avoid liability.

What is the enhanced punishment on a second conviction under Section 105?

Section 105 of the Trade Marks Act, 1999 prescribes an enhanced minimum on second or subsequent conviction. Whoever, having already been convicted of an offence under Section 103 or Section 104, is again convicted of any such offence, is punishable with imprisonment for a term not less than one year but which may extend to three years, and with fine not less than one lakh rupees but which may extend to two lakh rupees. The court retains the power to impose a sub-minimum sentence for adequate and special reasons recorded in the judgment. The recidivist enhancement applies regardless of whether the second offence relates to the same trade mark, the same trader or the same goods as the first conviction.