This article is written by Nidhe Sushrutha, pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from Lawsikho.com.

What is a trademark?

A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises5.

According to the Section 2(1)(m) of the Trade Mark Act, 1999: “mark” includes a device, brand, heading, label, ticket, name, signature, word, letters, numerals, shape of goods, packaging or combination of colours or any combination thereof.

Importance of trademark and its protection

Many establishments provide the same kind of goods and even though these players are in the same market and provide similar goods, they often differ in quality and other characteristics. It is in order to protect these unique characteristics of each player that the practice of using trademarks emerged. Trademarks help consumers recognise manufacturers and help manufacturers understand and meet consumer expectations. It therefore increases recognition of the manufacturer thereby attracting consumers and inspires trust in the consumer towards the manufacturer. It is for this reason that trademarks are legally protected, for in its absence, a competitor could guise their products to look like that of another establishment and thereby use the original manufacturer’s reputation for their own advantage and damage the reputation of the original manufacturer in the process.

The use of a mark by an unauthorised user, which is identical or confusingly similar to a registered trademark, is known as trademark infringement. In case of an unregistered trademark, there is no statutory protection under the Trade Mark Act, 1999. However, unregistered trademarks are protected by the common law concept of passing off.

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Registration of a trademark is not mandatory. When a dispute arises regarding the use of a mark, it is the first commercial user who has a claim over the subsequent registered user. However, according to Section 31 of the Trade Mark Act, 1999, the registration of the trademark shows that it is prima facie valid. The burden to prove first use is on the party asserting it.

Rights arising from registration of trademark

1. Exclusive right to use trademark for the designated goods or services.
2. Right to exclude others from using the mark.
3. Restriction of the exclusive right in the public interest.

Trademark infringement

Section 29 of the Trademarks Act, 1999 describes trademark infringement. According to it, “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 in relation to the 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”.

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From the definition above, four necessary elements can be identified:

1. The person in use of the mark must not have been the registered proprietor or a person permitted to use the mark by the registered proprietor;
2. The mark must have been in relation to the goods and services for the purpose of which the trademark is registered;
3. The mark must have been identical or deceptively similar to the registered mark; and
4. The use of the mark must be such that it could be perceived as being used as a trademark (for a commercial purpose).

The standard for trademark infringement is the “likelihood for confusion”6. Courts rely on consumer psychology for determining whether there has been an infringement and the following factors are taken into consideration:

1. Strength of the mark
2. Proximity of the goods
3. Similarity of the marks
4. Evidence of actual confusion
5. Similarity of marketing channels used
6. Degree of caution exercised by the typical purchaser
7. The defendant’s intent

Available Defences

• Fair Use

In order to plead this defence successfully, the accused infringer will have to prove that he had obtained the consent of the trademark owner or establish that he acted without any intention to defraud the consumers of the goods.

There are two types of fair use:

Descriptive fair use

This refers to a situation where a mark has been used in good faith, primarily for a descriptive purpose rather than in order to refer to a specific mark or product.

Nominative fair use

This refers to the situation where a mark is incorporated in order to refer to the registered proprietor’s product and not for the user’s product. This is justified where the use of the mark is necessary in order to facilitate identification of the product.

The application of this defence requires the following conditions to be satisfied:

1. The product or service is not identifiable without the mark,
2. The mark was used only to a reasonable extent to facilitate its identification,
3. The use does not falsely suggest endorsement or sponsorship by the trademark owner.

In neither of these cases would the court conclude of the defendant having infringed the plaintiff’s trademark.

• Prior Use

The rights of the prior user of the mark will override the subsequent user even if the subsequent user has registered the trademark. This allows a defendant to take up this defence where the defendant has been using the mark for a longer duration of time as compared to the registered user and has gained a reputation in the trade concerned.

In the case M/s R.J. Components and Shafts v. M/s Deepak Industries Ltd7, the plaintiff was the sole proprietor of the registered trademark NAW who was in the business of manufacturing and marketing of inter alia ‘gears’ being tractor parts. The mark was registered in 1983 and was still valid at the time this dispute took place. The defendant argued that the trademark was obtained by fraud for the plaintiff was aware that the trademark belonged to the defendant who was using the same mark uninterrupted with respect to gears being tractor parts since 1971 from their manufacturing unit M/s New Allenberry Works, Faridabad, the abbreviation of which was used as a trademark. The goods of the defendant were being supplied to various government departments and semi-government departments on contract basis in addition to sale to the general public, therefore the trademark had become distinctive and associated with the name of the defendant alone. Although the trademark was never registered by the defendant, the court held in their favour.

The defence of prior use may also be pleaded where the defendant has not renewed a previously registered trademark but has continued to conduct business under the same mark.

• No Confusion or Difference in Essential Features

The difference between the two trademarks in question is just as important as the similarities between them when deciding on infringement of trademark. With regard to the same, the court not only considers the phonetic similarity but also whether or not the two marks differ in their essential features.

In the case S.M. Dyechem Ltd. v. Cadbury (India) Ltd.8, the plaintiff was using the trademark PIKNIK since 1989 which was registered in Class 29 (preserved, dried and cooked fruits and vegetables), Class 30 (confectionery and chocolates) and Class 32 (beverages and mineral water). The defendant was using the trademark PICNIC for chocolates which was registered in 1977 in class 30, which expired after 7 years and was not renewed. “Cadbury’s PICNIC” and/or “PICNIC” and/or the label was registered in 110 countries and enjoyed trans-border reputation and goodwill.

It was in this case that the Supreme Court laid down that, in deciding a case of trademark infringement, the court must also look into the differences in the essential features and laid down the following test:

1. Is there any special aspect of the common features which has been copied?
2. Whether the dissimilarity of the part or parts is enough to mark the whole thing dissimilar?
3. Whether when there are common elements, should one not pay more regard to the parts which are not common, while at the same time not disregarding the common parts?
4. What is the first impression?

Applying this test in the case, it was held that the two marks were different in essential features and would not be a cause for confusion. Therefore, no cost was awarded.

If in a given case, the essential features have been copied, the intention to deceive or to cause confusion is not relevant9 and the infringing party would be held liable by the court.

• Marks Used in Different Market

The difference in the market in which the mark is used may be a difference in the geographical location or the difference in the class of goods and services. However, this defence is not considered to be a good one since it could hinder the plans of the trademark owner to expand into a market of different products or to different geographical locations.

In the case of Milmet Oftho Industries and Ors. v. Allergan Inc10, both parties were pharmaceutical companies, both of whom produced an eye care product under the name “OCUFLOX”. The defendant argued that they had prior use of this mark globally and they first used the mark in September 1992. The plaintiff was producing this product in India alone. The Supreme Court held that issues may occur between the use of the mark by one entity in India and another overseas, especially considering that the mark is the same for a similar drug and that the defendant not using the mark in India is irrelevant since they were first in the world market.

A ratio was also laid down in this case that held that multinational companies have no right to claim exclusivity of the trademark if they do not enter or intend in a reasonable time to enter into business in India. This was applied in the following case of Munish Kumar Singla Trading (Chakshu Food Products) v. Jollibee Foods Corporation11.

In this case, the defendant was in the business of fast food and was based on the Philippines. They had registered the mark “Jollibee” with an image of a bee in India in 2005 but had not commenced business in India even after 12 years in 2017. The plaintiff was in the business of selling packaged spices and proposed for registration a mark with “Chakshu” with a similar image of a bee as the defendant. The court, applying the above ratio, decided in favour of the plaintiff.

The difference between the two cases is that, in the case against Allergan Inc., the dictate laid down in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.12 was applied, which stated that “in respect of medicinal products it was held that exacting judicial scrutiny is required if there was a possibility of confusion over marks on medicinal products because the potential harm may be far more dire than that in confusion over ordinary consumer products.”

In addition to the geographical market, the defendant can also argue the difference in the class of products being produced. For instance if Time Incorporated is using the mark “TIME” for their magazine, the mark “TIME” may also be used by another with respect to production of watches. In such a case, the producer of watches under the mark “TIME” can plead the defence of difference in the market successfully.

• Non-use of the Mark by the Registered Proprietor

Unused trademarks serve no economic purpose and act as an artificial barrier to the registration of new mark13. A period of time after registration is allowed before which the obligation to use comes into effect. The trademark may also be used by a third party with the consent of the owner through a license or a formalised agreement from the registered proprietor. The principal consequence of unjustified non-use of the trademark is that the registration is open to cancellation at the request of a person with a legitimate interest. Burden of proving non-use is on the interested party, not on the trademark owner. Therefore, if a defendant is to plead this defence he would have the burden of proving the same. Non-use of the trademark can be justified in case of force majeure or any circumstance which is not due to fault or negligence of the proprietor of the mark.

In the case of Munish Kumar Singla Trading (Chakshu Food Products) v. Jollibee Foods Corporation which was discussed above, the defendant had not been using the trademark registered by them even after twelve years of registration. This is also a case of unjustified non-use of trademark.

• Delay and Acquiescence

In the case where there has been a delay in bringing action of the infringement by the plaintiff it is often ruled that the plaintiff has waived his rights as the trademark owner and implicitly or explicitly permitted use of its mark by the subsequent user. Acquiescence would amount to waiver, if not abandonment, of their rights.

The case Khoday India Ltd v. The Scotch Whisky Association and ors.14 becomes relevant with respect to this defence. The Plaintiff manufactured whiskey under the mark PETER SCOT since 1968. The defendant found out about the plaintiff’s use of such a mark in 1974 and filed for rectification in 1986 because of two factors, one being the presence of the term Scot in the PETER SCOT mark, and second because of the presence of the slogan on the Whiskey bottle under the mark, which they alleged that had persuaded customers to think that PETER SCOT brand Whiskey was also a Scotch Whiskey. Khoday pleaded the defence of delay and acquiescence which was ruled in their favour. The High Court stated that acquiescence, in order to be a ground to deny rectification, must be of such character as to establish gross negligence on the part of the applicant or deliberate inaction which had regulated in the appellant incurring substantial expenditure or being misled into the belief that the respondents though entitled to, had deliberately refrained from taking any action and were unmindful of the use of the mark by the person in whose name it was registered.

• Parody

It was held by the Delhi High Court in Tata Sons Ltd v. Greenpeace International and Greenpeace India15 that reasonable comment, ridicule or parody of a registered trademark can be made if the intention of the maker is to draw attention to some activity of the owner of the trademark. Where the use is not completely for a commercial purpose, the court allows parody. This emerged because the courts gave more importance to the freedom of speech and expression as against trademark law.

In this case, the defendant opposed the industrial activities of Tata in the establishment of the Dhamra port, which, according to the defendants, has an adverse impact on the breeding of the injured species, Olive Ridley Sea Turtles. To create awareness for the same, they launched a game based on Pacman, titled ‘Turtles v. Tata’, where the turtles are portrayed as escaping the Tata logo. The plaintiff had filed a case for unauthorised use of their trademark and for the damage to reputation thereby caused and sought for a temporary injunction against the game. The defence in this case brought forth three arguments; first that the game was a nonviolent campaign against the plaintiff’s project, second that trademark law was inapplicable due to non-commercial usage, and third that awarding an injunction order without actual proof of defamation would amount to abuse of the process of law to suppress fair criticism. The court held that in balancing free speech and intellectual property rights, several factors would weigh in favour of freedom of speech when the expression is primarily communicative rather than commercial, and when the context and impact of the speech suggests parodic usage.

• Invalidity of Registered Mark

In a case of trademark infringement, the defendant may argue that the registered mark of the plaintiff itself is invalid. Such a defence would succeed where the defence is able to establish that the registration has taken place in such a way that it creates an unfair advantage in favour of the plaintiff.

The Supreme Court held in Vishnudas Trading as Vishnudas Kishandas v. Vazir Sultan Tobacco Ltd., Hyderabad and Ors.16 that a manufacturer who deals in only one or more articles which fall under a broad classification of goods and services, without bona fide intention to use the mark in relation to all those goods and services, should not be allowed to enjoy monopoly over the entire category of goods or services. Therefore, in such a case, the court may partially cancel registration as such an effort is not justified by any legitimate interest of the proprietor.

Remedies for trademark infringement

1. Injunction by prohibition of use of the infringing mark.
2. Injunction by cancellation of the registration, if the mark has been registered.
3. Damages (may include punitive damages) or account of profits.
4. Costs towards legal fees.

In order for a court to award compensatory as well as punitive damages, proof of deception and intention of the infringer to infringe the plaintiff’s trademark must be established17.

References

1. The Trade Mark Act, 1999
2. Tata Sons Limited v. Greenpeace International, Global Freedom of Expression, Columbia University https://globalfreedomofexpression.columbia.edu/cases/tata-sons-limited-v-greenpeace-international/
3. A.V. Thacker, P. Pradad, “India: Trade Marks 2020”, ICLG, 2020 https://iclg.com/practice-areas/trade-marks-laws-and-regulations/india
4. R. Kathuria, “India: Invalidity of a Registered Trademark: Uniformity in Indian and European Perspectives”, Mondaq, 2020 https://www.mondaq.com/india/trademark/879970/invalidity-of-a-registered-trademark-uniformity-in-indian-and-european-perspectives
5. Trademarks, WIPO https://www.wipo.int/trademarks/en/
6. Overview of Trademark Law, Harvard https://cyber.harvard.edu/metaschool/fisher/domain/tm.htm#7
7. M/s R.J. Components and Shafts v. M/s Deepak Industries Ltd
8. S.M. Dyechem Ltd. v. Cadbury (India) Ltd. AIR 2000 SC 2114
9. Suvrashis Sarkar, Dr. Stephen D’Silva, “Trademark Infringement – A Case Study from Indian FMCG Sector”, Indian Journal of Applied Research, Vol. 3, Issue 10, Oct 2013
10. Milmet Oftho Industries and ors. v. Allergan Inc  (2004) 12 SCC 624
11. Munish Kumar Singla Trading (Chakshu Food Products) v. Jollibee Foods Corporation  2017(72) PTC 608 (Delhi)
12. Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. 2001 PTC 300 SC
13. Introduction to Trademark Law and Practice: the Basic Concepts, Chapter 5: Use of the Mark, WIPO 1993
14. Khoday India Ltd v. The Scotch Whisky Association and ors. 2008 (37) PTC 413 (SC)
15. Tata Sons Ltd v. Greenpeace International and Greenpeace India 2011 (45) PTC 275 (Del)
16. Vishnudas Trading as Vishnudas Kishandas v. Vazir Sultan Tobacco Co. Ltd., Hyderabad and Ors. AIR 1996 SC 2275
17. Time Incorporated v. Lokesh Srivastava and Anr 2005 (30) PTC 3 (del)

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