This article is written by Adithya Prasad, pursuing a Diploma in International Business Law from LawSikho.
Table of Contents
Introduction
What do you get when you have one giant meets another aspirant, we get the suit filed by Decathlon Sports India for “irreparable” damage caused by an NRC based store Pentathlon. A perfect David and Goliath story? Well, things aren’t always that simple.
Decathlon, a French sport goods giant that has firmly established itself in India as the largest sports goods’ providers in March 2021 filed a case for trademark infringement. A company based out of NRC, one pentathlon has, under the eyes of the decathlon, copied and infringed various trademarks that are held by the prior. The two company heads making a statement to defend their point, saw their councils appear Infront of the district court, Ghaziabad.
Before we dive deep into the relevance of the case, we must first understand what the concept of trade infringement is, and why it is so important for people to protect such trademarks.
Trademark refers to a recognizable insignia, phrase, word, symbol or anything else that gives the objective person, a reference or that denotes a specific product and legally differentiates it from all other products of its kind. A trademark identifies a product as belonging to a specific company and recognizes the company’s ownership of the brand.
With such trademarks established all over the world, we must understand the concept of trademark infringement to better understand how entities keep their trademarks safe from impersonators.
What is trademark infringement?
Trade infringement may occur when a person (i.e., the person causing the infringement), uses an already registered trademark that is identical or confusingly similar to the registered trademark. Concerning products or services which are of an identical or similar nature, which must be the products or services that are registered.
“The owner of such a registered trademark may commence legal proceedings against the infringer.”
Trademark infringement is an infringement of exclusive rights attaching to a trademark without the authorization of the trademark owner or any licensee. The occurrence of a trademark infringement is usually when a person, who with or without prior knowledge uses something distinctly similar or identical to something that is already registered.
By individualizing a product or idea, a trademark allows customers and people alike to help find the person or enterprise that is responsible. The customer often tends to become loyal to a brand. For example, how people trust a trademark like a google for any question of which one may think. Trademarks also help business generate revenue in many ways. Some companies even outright sell their trademarks to other businesses for huge sums of money.
Now considering the nature of trademark, infringement can happen more often than one can fathom. This is often because of the sheer volume of ideas and brands that get their trademark. Therefore, it becomes pertinent to understand the remedies available to one, in the event of an infringement case.
The two basic types of remedies available for the owner of a trademark.
- The action for “passing off” for an unregistered trademark.
- The action to file an infringement suit for the registered trademark.
The action for one infringement suit is a statutory remedy while the Act of “passing off” is a remedy by common law.
The principle underlying the action for passing off under Section 27(2) and Section 106 of the Trade and Merchandise Act, 1958 is that no person is entitled to hold on their business in such how on cause the assumption that they are carrying on the business of another person or to steer to believe that they are carrying on or has been any reference to the business carried on by another person.
India when first introduced, in the year of 1940 – The trade and merchandise Act 1940, which was later replaced with the trademark Act of 1958 post which it became the trademarks Act 1999. According to the latest incarnation of the Act,
“Trademark means a mark capable of being represented graphically and that which is capable of distinguishing any good or type of service from other goods and services. This even includes the shape of goods, packaging down to the combination of colours used for such goods and services.
Section 29 enshrined under the Trademarks Act, 1999 reads-
“A registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trademark concerning goods or services in respect of which the trademark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trademark.”
The interpretation of Section 29 is such.
- The concept of deceptively similar must be taken into consideration by the court under the objective test, i.e., that if the average Joe can draw a similarity or even confuse themselves between the two brands.
- This similarity can come from any aspect of the trademark, from colours and font size to the packaging of the goods or service that is the principle of that brand.
- The court must, through the proceeding, be satisfied that there is a sort of similarity; in such circumstances, section 29 can be deployed in the interest of justice and equity.
It must also be noted that a trademark also functions as an excellent marketing tool that advertises the product or services whilst protecting the interests of the creator. This also helps protect the user or the purchaser from any deceptive goods or services offered or rendered in the market by helping them distinguish even by small elements such as colour and letters. Many of us have seen such products as ADIDAS and ABIBAS or in another incarnation the famous brand has taken.
In the case of Yahoo!, Inc. V. Akash Arora & Anr
The Hon’ble court held that the use of names that are identical and phonetically similar creates the high possibility of internet users being confused and deceived. The court also has the opinion that the disclaimer used by the defendants of the case, to avoid the above situation would not prove satisfactory due to the nature of the internet. Despite the word being a dictionary word, the unique nature it has acquired was through the plaintiff.
Background of the case
Decathlon sports India filed a trademark infringement suit in March 2021, against Pentathlon sports, Nrc. Decathlon believed that pentathlon sports had illegally infringed a registered trademark and their tagline for products with the former.
Decathlon also claimed that Pentathlon is using the reputation of the former for the sale of its goods in the market. Decathlon has stated that,
“Illegal and mala fide acts of inter alia of infringement of the registered trademark of the Plaintiff No I (Decathlon), selling substandard products in the market and passing them off as goods/ products of the Plaintiffs (Decathlon).”
The issues observed in this case fall under section 29 of the Trademarks Act, which deal with the identity created by a trademark or brand. The law in operation clearly enumerates what are the district features that award novelty to a certain trademark. Such characteristics that are relevant to the case are:
- The colours and fonts used, which include size, gradients, and other aesthetic features.
- Quotes, one liner, statements and other such phrases that embody a unique nature of the trademark holder.
- Packaging which includes style, colour, contents used and descriptions of such content.
A summary of Decathlon’s accusations is:
- The colour scheme and font style used is similar to that of Decathlon.
- In its trademark, Pentathlon has also italicised “A” in the name of Pentathlon just like in the Decathlon trademark.
- The tagline used by Pentathlon’s “Sports for Everyone- Everyone for Sports” is the same as Decathlon’s tagline “Sports for All- All for Sports”.
- The concept of Pentathlon is identical to that of the Decathlon.
- Pentathlon Sports, which already has three retail stores, in the NCR region, has caused Plaintiffs “irreparable loss”.
Founder and owner of Pentathlon TNM Vijay Kumar Rana refuted all the allegations posed by Decathlon by saying that they will defend the trademark on the following grounds:
- There is a difference in font and the colour scheme used in both logos.
- In Decathlon both ‘C’ and ‘A’ are in cursive and are adjoined, on the other hand, Pentathlon only has ‘A’ in cursive.
- Decathlon’s does not have a tennis ball iconography as is present in Pentathlon’s logo in place of ‘O’, which prominently differentiates between both the logos.
- There is the necessary differentiation in the tagline due to the use of ‘Everyone’ instead of ‘All’.
- Pentathlon sells products of brands such as Yonex, Wilson, Head, Nike, and Indian ones such as Cosco and Nivea, alongside self-branded cricket accessories while Decathlon mostly sells their brands which can be found only in Decathlon.
When seeing the claims made by either parties and their respective logo and trademark submissions, it is clear that there is an uncanny similarity between both the inception and delivery of both trademarks. The law does recognize the concept of ‘significant difference’, however, its application remains the main question before the court of law.
Issues
- Is there any resemblance between the logos of Decathlon and Pentathlon that indicates trademark infringement?
- At which point does creative freedom differ from trademark infringement?
When considering the claims made by the parties, there does seem to be a reasonable similarity between the two-brand logos. They may not be outright identical, but the courts must also look at the meaning and image that such logos create and add to the brand of the company. The law has always believed in the concept of spirit.
As explained in the Yahoo case, the court believed that a mere notice is not enough to deter the objective person from drawing a similarity. Therefore, it becomes important for such instances to not affect the trademark owner.
The law does provide for a reasonable amount of difference that can be created, to prove that the brand or work in question is not the same but an entirely new concept. The courts observe the doctrine of normative fair use, where the use of any registered trademark by any person is concerning certain goods which are adapted, to portray the goods sold under that particular trademark. This is covered under Section 30(2)(d) of the Act.
This doctrine can only be applied when the following conditions are met:
- The product or service in question must not be readily identifiable without that particular trademark.
- Only much of the mark or marks can be used that is reasonably necessary to identify that particular product.
- The person must not do anything in conjunction with the mark or anything that would Act as a sponsorship or endorsement by the proprietor of the trademark.
One can say that some causes of infringement such as goods of common nature between the two brands and the quote with a similar meaning can come under the ambit of normative fairness and can be considered as a valid defence against any infringement.
The courts must therefore observe on a case to case basis, whether there is an infringement or is it the operation of the business that calls for such infringement.
Judgement
The hearing of the case began on march 22, 2021, at the district court in Ghaziabad and is yet to complete.
Analysis & Prospect
Since the case is yet to complete, we may prospect on the rulings of the court with precedence in the matter.
As discussed earlier, in the case of Yahoo!, Inc. V. Akash Arora & Anr
The court held that similarity must be judged on the objective test, i.e., how an average joe sees the trademark in question. In this case, despite having similar trademarks between the two parties. the average joe cannot be expected to draw that distinction during his visit and that mere existence of a disclaimer cannot function as a deterrent for drawing difference between the two. The name itself possessed a uniqueness that was associated with Yahoo!, the plaintiff.
In our case, we see that the two companies have a similar tagline and font used in their brand name, despite having a small difference mentioned by the parties in their claims. An objective test reveals that there is an underlying similarity between the two logos which is a large contention in this case. However, seeing the case discussed above, it is very evident that the court may go in favour of Decathlon due to underlying similarities and what the brand entails with the logo.
In the case of Monetary Overseas v. Montari Industries Ltd.
Where it was held that “When a defendant does business under a reputation which is sufficiently on the brink of the name under which the plaintiff is trading which the name has acquired a reputation and therefore the public at large is probably going to be misled that the defendant’s business is that the business of the plaintiff, or maybe a branch or department of the plaintiff, the defendant is responsible for an action in passing off.”
In the case of DM entertainment V. Baby Gift House and Ors.
A famous Punjabi artist at the time of the case, popular amongst the Punjabi pop circle in India. The plaintiff, incorporated in 1996, was managing the artist at the time. The defendant, to cash in on the popularity of the artist, sold miniature dolls of the artist, therefore, exploiting the trademark and brand that the artist thereby the plaintiff owned and represented. A suit for permanent injunction was filed and passed by the court for the defendants’ blatant infringement on the right to publicity owned by the artist.
If the contention of underlying similarity can be seen between the two parties, it is more than clear that the defendant may have tried to cash in the similarity that catches the eye of consumers. However, it remains unclear what path the court will take.
Another case that we can consider with the current case is –
Coca Cola Company V. Bisleri International Pvt. Ltd.
The defendant, Bisleri through a master agreement, sold and assigned the trademark of MAAZA including the formulation rights, intellectual property rights and goodwill for India with respect to a mango fruit drink known as MAAZA to Coca Cola.
In 2008, the defendant company filed for registration of the mark MAAZA in Turkey and started shipping fruit drinks under the name MAAZA. The plaintiff, Coca Cola filed for permanent injunction and damages for infringement of trademark and passing off.
The court ruled in favour of Plaintiff by passing an interim order of injunction against the defendant. A trademark represents a unique symbol or word(s) that represent a brand, idea, business, product, or service. The court also was in the opinion that brands form the basis of every business from the root. It is not fair to say that a mere similarity in a brand justifies the novelty of an idea. When considering the objectivity test, we must understand that people associate with things that are already known to them, therefore the element of similarity must be so that the average joe cannot associate the brand they are witnessing to another established brand.
Conclusion
In the light of the concepts and cases discussed, it is fair to say that the case may be ruled in favour of Decathlon. Despite there being some differences, it cannot be said that the element of similarity is completely lost. The sections concerned speak about the need for the understanding of a common person. The law views trademarks as personified versions of the company entirely, therefore the law stresses on the concept that such infringements can only be determined if the objective person can:
- Confuse themselves between the two trademarks.
- Draws a conclusion from noticeable similarities that one trademark is another.
- Or believes that there is some similarity that is shared between the trademarks.
The court, when applying the objective test will notice great similarities that add to the brand of decathlon to the general public. As it was understood from the cases above, a trademark is –
“A brand is the personification of the novelty a business possesses”.
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