Trademark infringement

In this blog post, Soumya Deshawar, a student of University of Petroleum and Energy Studies, Dehradun, analyzes on Trademark Infringement in India. This blog post consists of the importance of trademark registration, and emphasizes mainly on the infringement of Trademarks in India, the available remedies, and the relief available for the same. It also provides the exception of Fair use doctrine and the penalties for the obvious infringement of trademark.

Introduction

A trademark is referred to a sign, design, or expression which is recognizable and identifies products or services that are of a particular source. The trademarks used to identify services are usually called service marks. A trademark owner may be an individual, business organization, or any other legal entity. It may be located on a package, a label, voucher, or on the product itself. Trademarks are being displayed on company buildings for the sake of corporate identity.

Importance Of Trademarks:

  • Trademarks play an essential role in protecting consumers and in promoting global economic growth.
  • Trademarks enable consumers to make quick, confident and safe purchasing decisions.
  • Trademarks promote freedom of choice.
  • Trademarks and related intellectual property encourage vibrant competition for the benefit of consumers, workers, brand owners and society at large.

A trademark is quite different from a copyright, patent or a geographical indication. Where copyright helps protecting an artistic or literary work which is original in nature, a patent helps protecting an invention, and a geographical indication is used for identifying goods having special characteristics originating from a definitive territory.

The registration of a trademark is not compulsory, but still it offers a better legal protection for infringement. Before making an application for registration it is advisable to make an inspection of the trademarks that have already been registered to ensure that such application of registration may not be denied due to the resemblance of a proposed mark to any existing mark or a prohibited one.

Reasons for the refusal of registration are as follows:

  • Marks, which are descriptive in nature, in relation to the applicant’s goods or services, or a part or feature of the same, may also be denied registration.
  • Marks comprising of geographic terms or common surnames may also be refused.
  • Marks may be refused for other relevant reasons as well.

The term of a trademark registration is ten years. The renewal of the same is possible for further period of 10 years. Unlike the rights granted in the case of patents, copyrights or industrial designs, the trademark rights can last indefinitely if the owner of a trademark continues to use the mark. However, if a registered trademark is not renewed after the period of ten years, it is liable to be removed from the register of trademarks, which is maintained by the registrar. Anyone who claims rights in a mark by registration can use the trademark or the service mark may use such designation to alert the public of his/her claim. The need to have a registration or a pending application is not necessary to use these designations. The registration symbol, ®, designates that the mark is registered. It cannot be used if the mark has not been registered.

Section 135 of the Trade Marks Act provides for both infringement as well as an action of passing off.

Trademark Infringement and Remedies

The infringement of a trademark involves violation of the exclusive rights that are attached to a registered trademark without any due permission of the trademark owner or the involved licensees, provided that such permission was granted within the scope of the license.

Infringement may occur when:

  • the infringer, uses a trademark that is identical to a registered trademark owned by another person
  • the infringer uses a trademark that is confusingly similar to such mark.

The owner of such a registered trademark may initiate legal proceedings against such an infringer.

No infringement proceedings can be brought for a mark which is not registered, as it can’t be infringed as such. The owner can instead commence proceedings under common law for an action of passing off or misrepresentation, or under the legislation that prohibits unfair business practices. The infringement of trade dress may also be actionable in some jurisdictions. To establish the infringement of a registered trademark, the establishment that the infringing mark is identical or deceptively similar to the registered mark is enough and there is no need of any further proof.

The following remedies are available to the owner of a trademark for an unauthorized use of its imitation by a third party:

  • An action for passing off in the case of an unregistered trademark and
  • An action for infringement in case of a registered trademark.

Both the above actions are quite different from each other. An infringement action is a statutory remedy, whereas an action for passing off is a remedy provided by the common law.

Note: In case of infringement / passing off of a trademark, even a criminal complaint can be filed. The offences under the Under the Provisions of the Trade Marks Act, 1999 Cognizable, and hence, the police has the power to register an FIR and prosecute the offenders directly.

Following are some of the civil remedies in Trademark:

  • Injunction/ stay against the use of the trademark
  • Damages can be claimed
  • Accounts and handing over of profits
  • Appointment of local commissioner by the court for custody/ sealing of infringing material / accounts
  • Application under order 39 rule 1 & 2 of the CPC for grant of temporary / ad interim ex-parte injunction

The Courts may grant injunction and also, may direct the relevant authorities to hold back the infringing material or its shipment, or it may suppress its disposal in any other manner so as to protect the interest of the owners of the relevant intellectual property rights.

The court may grant relief in the form of:

  • Permanent injunction
  • Temporary injunction
  • Interim injunction
  • Damages
  • Account of profits
  • Delivery of the infringing goods for destruction
  • Cost of the legal proceedings.

An ex parte decree may be passed in case of interim injunction, or it may also be passed after notice.

The Interim reliefs in the suit may also include order for:

  1. Appointment of a local commissioner, which is akin to an “Anton Pillar Order”, for search, seizure and preservation of infringing goods, account books and preparation of inventory, etc.
  2. Restraining the infringer from disposing of or dealing with the assets in a manner which may adversely affect plaintiff’s ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

 

 

Passing Off

Passing off is a system of rights that has been derived from the UK common law. It is based on a simple common sense logic that it should be offensive for a trader to misrepresent his services or goods as those of another, and as a result, deceive the customers for purchasing such goods or services when by drawing the image I their minds that they were purchasing the same those of another.

The system of passing off has been applied broadly to cover things of a great diversity such as the similarities between packaging of products; to protect product “trade dress”; and the unsanctioned use of a racing driver’s name to approve a radio newscast. It is totally discrete to, but often sits together with, the law of registered trademarks. Thus it is not mandatory for a trademark to be registered for a passing off action.

Usually, for passing off, there are three necessary elements.

  1. Firstly, it is essential to show that a trademark, trade dress or whatsoever thing has a status, or at least goodwill. This is why, passing off cannot be used to safeguard a mark which is new, with little status, or where no trade has taken place.
  2. Secondly, it is mandatory to show that a misrepresentation has arisen or is likely to arise. This necessitates that the trademark complained of must be adequately similar to the trademark of the applicant for a customer to be misled.
  3. Thirdly, there must be a probability of damage as a result of such deception.

The presence of these three elements must be proved by proof, so that an action of passing off carries a high evidential burden, but it nevertheless provides a possible remedy when, for example, there has been obvious copying of a trade-dress, when or a trademark has not been registered but has considerable use and a standard.

The practical consequences of the law of passing off

  • Just because a mark isn’t registered, doesn’t mean that a person won’t infringe it by using a similar mark.
  • If a person has not registered his/her trade mark and finds a challenger using a suspiciously similar mark, then, he/she may have the rights on which he/she can take action.

Fair Use

There are, circumstances when someone other than the trademark owner may use another party’s trademark as long as the use is considered a “fair use” and does not violate or infringe the rights of a trademark owner. In fact, most jurisdictions throughout the world recognize some type of “fair use” exception to trademark infringement.

Generally, the use of another person’s trademark is allow. That is, any use of a mark, that does not infringe a trademark right is considered as “fair use”. There are two types of situations for this condition:

  • Descriptive fair use and
  • Nominative fair use.

What common situations are considered fair use?

Using a geographical name relating to the user’s business location, even if that name is the same as or similar to another’s mark, generally is considered fair use. Under the fair use exception, a user generally is permitted to use descriptive indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, and time of production of the goods or of rendering of the service, main raw materials, functions, weight, or other characteristics of the goods or services. Of course, this type of fair use typically is subject to such use’s being in accordance with honest commercial practices that do not suggest association with the trademark owner and that do not depreciate the value of the goodwill in the mark.

Penalty for infringement of a trademark

The practice of applying for a false trademark, and then selling and providing services under the same is a punishable offense. Any policy officer can seize the objects/articles bearing deceptive trademarks or labels without any warrant. The Trademarks Act has elevated the penalty of such offenses; now the offenders are subject to a term of not less than six months up to a maximum of three years and are also liable to pay a fine of not less than fifty thousand which can extend to two lakhs.

Severe Penalties

In the case of severe violations — for example when a violator is using a trademark to sell counterfeit goods or blatantly violating trademark law — courts may issue criminal and civil penalties. Civil penalties may include compensating the trademark holder for lost profits or paying the trademark holder all profits obtained by the infringement. At the discretion of the court, the damages awarded to trademark holders can be tripled. Finally, counterfeiting trademarked goods can carry a felony charge under the United States Anti-counterfeiting Consumer Protection Act of 1996.

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