This article is written by Preeti Pallavi Jena, from the school of law, KIIT University, Odisha. This article talks about the trademark, its essentials, infringements, penalties for such infringements.
India, being a developing country, has a mixed market. There may be many industries in India that operate under the concept of the free market. Thus, competition in the market is fierce. Any enterprise aiming to thrive in such a market has to have brand recognition and brand value. The very first step to achieve this is by having a trademark. Let us think about the company. It has invested a lot of capital in making a unique product and advertising it to the world. In the due course, the product becomes successful and takes the company to greater heights. But one day, the company notices another enterprise using a deceptively similar logo and name for the advertisement of their own products.
The enterprise is using the proprietor company’s glory to make a fortune of its own. For such a kind of misuse of one’s trademark, it is essential to prevent the unauthorized use of any brand name or logo, which will in turn protect the best interests of the owner of the trademark.
India houses countless domestic companies and is continuing to act as a beacon for foreign investors and enterprises due to its large consumer base. Thus, the present state of affairs of the intellectual property laws in India plays a decisive factor that encourages foreign MNCs and investors to invest in in-house companies. The importance of having a law that governs trademarks has escalated significantly in the past decade. Hence, the government identified the need of having a law to govern trademarks that must comply with the Trade-Related Aspects of Intellectual Property [TRIPS] and formulated the Trade Marks Act, 1999 which was passed to govern the registration, enforcement, and infringement of trademarks.
It is a mark that is capable of being represented graphically and it should be capable of distinguishing the goods or services of one person from those of others. It also may include the shape of goods, their packaging and the combination of colors. A trademark in India can be registered even before it has actually been used in India. Once the trademark is registered it will be valid for a period of 10 years.
After that, the registration expires and you have to renew it for your benefit and once you renew it, it will be again valid for a period of 10 more years from the date it has been renewed. Any individual or legal entity or any person who is claiming to be a trademark owner can apply for the application of trademark. Around 18 to 24 months are required for completing the requirements of the registry. Trademark is more consumer-centric than purchase centric. Consumer-centric basically prevents the likelihood of confusion. Example: if the same type of product is created by another person then the consumer will be affected not the purchaser.
It is the major element that gives identity to trademarks. A trademark is required to be capable of distinguishing the goods or services of one person from those of others. This distinctiveness is in the nature of confusing and deceptive similarity.
It is a test used during the examination process to determine whether a trademark conflicts with another, earlier work. It creates a livelihood of confusion. There is no actual damage caused.
Example: There were 2 types of products X and Y. being in confusion I chose X and brought X only. This is confusing.
A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that the other mark will likely deceive or cause confusion. Actual damage has been caused in this case. It means that you are purchasing something else thinking it to be something else. Example: There were 2 types of products X and Y. after seeing clearly I was thinking to buy Y and took X thinking it to be Y.
A register will require graphical representation for a record that will be maintained by the register only and there should be a potential trademark owner.
The designer of the trademark logo is not the owner, whereas, the person who uses the trademark is to be called the trademark owner. When your logo is recognized by the public like the logo of McDonald’s, Mercedes Benz, Rolex watches, etc, that logo will become the trademark. Once you start advertising your logo in front of the people, it will be trademarked as per the law but you have to register it so that no one else can have a right to it and you will not be facing any problem in the future. This registration needs to be done in the trademark office.
Doctrine of dilution
This concept has been brought from the United States, it is not an Indian concept. It is a concept of giving the owner of a famous trademark a right to forbid others from using that mark in a way that would lessen its uniqueness. Trademark dilution involves the unauthorized use of another’s trademark on products that don’t compete with and have little connection with trademark owners. Example: A famous trademark used by one company to refer to hair care products might be diluted if another company began to use a similar mark to refer to breakfast cereals. This dilution is of two types:
- Tarnishing; and
Infringement means that there is a violation of the law. This can occur in many situations. When there is harm to someone else’s right it is referred to as infringement caused. Example: When you break any traffic signal rules, when you smoke in a prohibited area. These will amount to infringement.
Trademark infringement means the unauthorized use of a mark is deceptively similar to the trademark that is registered. Here, deceptively similar means that when a layman observes or looks at a mark, it confuses the origin of the goods and services. This trademark infringement has been defined under Section 29 of the Trademarks Act, 1999.
There can be a direct infringement of a trademark and also an indirect infringement of the trademark. Direct infringement happens when there is some identical or deceptively similar trademark, it happens in the case of a registered trademark and also if such trademark is used by an unauthorized person and indirect trademark takes place in case of vicarious liability and contributory infringement. The trademark act, 1999 takes care of the registration process, the infringements that take place, also protect and give penalties regarding the infringements.
When does trademark infringement happen
Trademark infringement takes place when a person uses the trademark of another person which creates consumer confusion because it is either identical or deceptively similar in nature in respect to product and services.
Penalties for trademark infringement
In our country, infringement of trademarks is considered a cognizable offence. This happens as per the principle of passing off. In these infringements, the court gives punishments which are imprisonment for a period of 6 months and it can also extend to 3 years. It also makes a person pay Rs. 50,000 which will extend to 2 lakh. There are many remedies for these trademarks. Those are injunctions that can either be temporary or permanent, damages, accounts of profits, cost of the proceedings happening, and many more.
Max Healthcare Institute Ltd v. Sahrudya Healthcare Pvt. Ltd 2016
The decision of this case was made in the Delhi High Court. The plaintiff Max Healthcare restricted the sahrudaya healthcare from using hospitals and providing services in the name of maxcure hospital or any mark which is similar to the mark of the ‘MAX Hospital’ that was of the plaintiff’s. The plaintiff had registered his logo and it contained the terms like ‘Max Hospital’, ‘Max Health Care’.
From all these, the plaintiff said that the word MAX is associated with him. The defendant uses such words that are deceptively similar and that infringes the plaintiff’s rights on its registered mark. But the high court rejected it by saying that the plaintiff cannot sue a party for using the words forming from the part of its logo mark.
The defendant here argued that:
- He was not using the prominent word rather he was using it in a combination, with some changes and his own creativity like ‘Maxcure hospital’ or ‘Maxkure’.
- He said his logo was different from the logo of the plaintiff and it cannot create any confusion among people.
- He also argued that the plaintiff registered for only logo marks, hence as per Section 17 of the Trademarks Act 1999, registration of a trademark gives rights of a mark as a whole not partial. Here, the plaintiff did not have the rights to the words which are formed from the part of the registered trademarks. The rights will extend only to the logo mark as a whole not partly.
The Delhi High Court held that the defendants are restricted from using the marks of ‘Maxcure hospital’ or any other mark which is similar or deceptively similar to the plaintiff’s mark. The court provided a month which is 30 days time period to the defendant for making the necessary changes to its name. The court also said that, if there is a deceptive similarity then the owner of a logo mark which is registered can sue another party for using a wordmark for infringement.
But in this case, the court said that the plaintiff could not sue a party for using the part of its logo marks for infringement. Since the word of the plaintiff was prominent and the same was used by the defendant. Hence it amounts to infringement of the trademark. The court here said that the marks ‘Maxcure hospital’ or ‘Maxkure’ was deceptively similar to the plaintiff’s logo mark which is ‘Max Healthcare’, ‘Max Hospital’, ‘Max Clinic’ etc.
The court said that, as far as hospitals, patients will not notice the logo and will see the name only. Hence, the argument which was made by the defendant that the logo was quite different and will not be considered and hence was rejected. The court held that infringement can also take place if a part of a mark is copied, but that part has to be that much famous and it should be creating some shot of consumer confusion.
Hence, from the above-discussed cases, we learned that a registered trademark is the sole property of the holding company. Often a fortune is spent upon making a desirable product and its advertisement. As a result, the trademark of that product becomes popular and becomes a stamp of authenticity and quality. Protecting the trademark is not only beneficial for the proprietor but also adds a benefit for the public against fraudulent companies posing their product as something better. The Trade Mark Act assures the owner certain rights and protects those rights against infringement. Infringement based on even a single word in the trademark can cause deceptive similarity between the products and this could cause the holding company to lose its hard-earned reputation.
Hence, such cases can be considered as an infringement. Although the action against trademark infringement has been considered a legal right under the very act, the act only defines the action against infringement. This act merely lays down a set of procedures to be followed when such a case appears. The major part of the article containing the principles and grounds of action have been inherited from the common law, from where the Act has been adopted. Hence, the government could work on a remedy to help with the difficulties faced by the court in the case where a decision has to be made for or against an Act of infringement under the Trade Marks Act due to its origins rooted in the common law.
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