With globalization,more and more organizations are associating themselves with various external identifications, like names, tags, symbols, etc. It is seen that the company’s reputation or its ‘image’ rests in such external manifestation. In a world ofextreme competition, it is not uncommon for organizations to secure (legally) what’s theirs, like tangible assets, innovations, etc. Following this,it was observed that such protection was required for even the ‘symbols’ representing the organization and/or its image – Trademarks.
The earliest signs of what could be regarded as ‘Trademarks’ might have been the time when people couldn’t read. They used symbols and diagrams as a mode of communication. Even then the herders used to brandcattle (and other animals) to identify to whom the cattle belonged to. Further with the oncoming development in areas of commerce and artistry, we could see the Roman’s (and Greek too) use of ‘Potter marks’. One of the landmark examples of the use of ‘Trademark symbols’ was ‘Barber’s Pole’. It was used to depict the location of the business. England in its medieval timesrequired the swords castto be branded with the seal of the manufacturer so that in case it turns out defective the creator could be punished. The14thand 15thCentury saw the amalgamation of merchants and traders into groups or guilds of Trade.
Significant development ofTrademarks as a law took place around the 1600s. In 1617, in a landmark but controversial case before the courts of England Southern v. How, Judge Doddridge, recalled a dicta established in an older case – ‘nobody has any right to represent his goods as the goods of somebody else’ and ‘nobody has the right to pass off his goods as the goods of somebody else’.Thereaftersuch matters were regarded as the disputableand the court recognized these as principles of law.
Till the formulation of Trademarks as statutory laws, they remained under the purview of common law. With the recognition of their growing importance, it was seen that there was a need for their registration and protection (against infringement), which lead to the first statutory enactment pertaining to intellectual property in Britain in 1875 – ‘The British Trademark Act of 1875’. The first of many acts, it provided for the registration of trademarks condition on the criterion – ‘whether the Trademark distinguished the goods of the Trader or not.’ With registration followed ownership and then protection. Later in 1883, this act was substituted with the ‘Patents, Design and Trademark Act, 1883.’ For the first time,the law provided for the registration of ‘fancy word & brands’ as ‘Trademarks’. The act saw two further re-enactments in the future (one in 1905 and the other in 1938) to finally become the ‘The Trademark Act, 1938.’
Under the colonial rule,India borrowed from the British Trademark Act, 1938 and formulated the first law on the subject-matter of Trademarks – TheTrademark Act, 1940. With independence,India crafted its own native law based on the Trademark act of 1940 – ‘Trade & Merchandise Mark Act of 1958‘. This act was later named the ‘Trademark Act, 1999’ enforceable from 30th December1999. Independent India molded the Trade & Merchandise Mark Act, 1958. The Act is now operative as ‘Trademark Act, 1999‘ which came into force with effect from 30th day of December 1999.
Functions of Trademarks:
The functions of Trademark vary based on its use. In the past years,a significant growth in the use of Trademarks has been observed. The academicians in trademark law have viewed the uses of Trademarks from two different approaches – the ‘Traditional Approach’ & the ‘Modern Approach’. As according to the traditional approach the function of trademarks is to ‘indicate the origin of the goods and/or service’. On the other hand, according to the modern approach, Trademarks act as a ‘guarantee ofquality’.But with increasing use of technology in commerce and business, more and more uses of Trademarks have been necessitated. The functions so emerged are:
- A Badge of Origin.
This has been regarded as the primary and central function of ‘Trademarks’. Other functions have simply branched out from this. This was first established in the European Court in the famed canon casein 1998. This decision was thereafter reaffirmed in the case of Arsenal v. Reed. Thisfunction plays an important role because ofit –
- Differentiates the ‘trademarked good’ from other products in the market.
- Guarantee as to the identity of origin secures the interests of both the manufacturer and the consumer.
- It protects the owner’s mark by preventing the use of any other mark that may be identical or similar to the ‘Trademarked good’, such that the misuse impedes (or even if it unjustly enriches the infringer) the position or reputation of the owner.
- It protects the consumer interests as it assists in ‘product differentiation’ in the market without giving any scope for confusion among identical goods, thereby making the purchasemuch easier.
An important case pertaining to the ‘badge of origin in trademark’ is Danjaq LLC V OHIM. The judgment held that the function of Trademark is not only just to spot the origin of goods and services, but such origin is of a commercial character, to qualify as Trademark.
- Feature for distinguishing:
As an important feature, as well as pre-requisite for a Trademark, is to be distinctive. Accordingly,protection of the law is guaranteed as long as the distinctiveness subsists. This has been recognized by the court in the Hoffman La Roche & Cocase. The court held;
“The Essential function of the Trademark, which is to guarantee the identity of the origin of the Trademarked Product to the Consumer or ultimate user, by enabling him without any possibility of confusion to distinguish that product from products which have another origin“
- Guarantee product quality
Since the time of the Industrialrevolution,greater emphasis has been laid on the quality of goods being manufactured (from the angle of purchase). So accordingly the customers prefer those trademarks that are regarded for its quality. Therefore trademarks help the customers in making informed choices as to the quality of goods for sale through recognition with past use or experience. The Arsenal v. Reedcase is a landmarkto highlight that;
“the mark will not only classify the origin and identityof a distinguishing mark but also it will indicate its quality and repute.”
This product quality function has also been established in the European case; L’OrealBellure case.In this case,along with the quality feature, the court also identified three other functions of Trademarks – Communication Function, Advertisement Function, andInvestment Function.
- Advertising Function
After the Industrial Revolution, the importance ofAdvertisements hasincreased. They have been regarded to maintain the ‘reputation of the goods and services’. Trademarks facilitate in product promotion process. Advertisements help convey to the consumers ‘a degree of satisfaction forthe goods and services using the Trademark.
Through ADs, the owner can provide pertinent information to the customers. Trademarks tend to draw the attention of the customers, and along with advertisements,it reinforces the image of the product.
- Investment Function
In the landmark case of L’Oreal Bellure; the court of law identified the investment purpose of Trademarks. The proprietor of the trademark had made a considerableinvestment in the trademarks for perfumes. The proprietor was seeking to protect his trademark against cheap ‘smell-alikeproducts’.
The Trademark Law:
Indian Trademark Law(s):
In India,the latest law pertaining to Trademarks is the Trade Mark Act of 1999. As mentioned earlier it came after repealing the Indian Trade and Merchandise Marks Act of 1958. The reason for such change may be attributed to the then rising pressure from other countries, international organization, andtreaties, especially the TRIPS Agreement. The agreement provided for or rather demanded that the protection of trademarks in India should include; protection to ‘distinguishing marks’; ‘recognition of service marks’; ‘periodical renewal of registration’; ‘abolition of compulsory licensing of trademarks’, etc. 
Registration of Trademarks:
It is an important question that is to be dealt while addressing the topic of protection to Trademarks. As provided in the Trademarks Act, a proprietor of a Trademark (i.e. one who has entered his/her name in the register of Trademarks as forthe owner of the concerned Trademark) for the time so provided in the act can sue in case of infringement of Trademark that is registered. Such suit may proceed even if the so registered Trademark hasn’t been used. On the other hand,unregistered Trademarks lack enforceability. The section 27 of the act provides that;
“(1) No person shall be entitled to institute any proceeding to preventor to recover damages for, the infringement of an unregistered mark.
(2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof”.
Hence it is clear as to the position of law in the registration (or non-registration) of Trademarks in India. A little more about the rights of the proprietor will help us understand the infringement ofsuch Trademarks.
On registration,the owner or the proprietor of the mark is given the monopoly right on the control and use of themark. The nature of such right on the owner is exclusive. It is important to note that the registered trademark must only be used in relation to the products and services for which such mark was obtained. An important case law pertaining to the same is; NRDongre v. WhirlpoolCorporation, wherein the High Court of Delhi held that –
“according to the section 28 (1) of the Trademarks Act of 1999, registration of a Trademark gives the proprietor the exclusive right to use the same in relation to the goods in respect to which it has been registered”.
In the case of ‘Rana Steels v. Ran India Steels Ltd.’the High Court of Delhi reaffirmed the above position. It also provided that the purpose of registration of Trademark is also to obtain relief in the event of infringement of the concerned Trademark. More importantly, the case held that;
“Even the unregistered trademarks are protected bythe Act itself provides that an action of passing off remedy is available for the unregistered Trademark”.
The issuearising with Trademark:
Before delving into ‘what is Trademark Infringement’, let us first understand how Trademarks (the exploitation of which) can cause damage to a corporation owning it. When a registered trademark of a company is used by another company that is unauthorized to do so, then such company that is violating the lawis causing injury to the business of the company whose Trademark is registered. In the process,the company’s reputation and brand name are tarnished.
Companies that engage in the process of trademark infringement usually tend to do so because they can profit/benefit out of the Trademark of a brand already established in the market, without putting much effort or resources of their own. However,it is important here to note that these companies do not imitate the Trademark completely. They usually go for similar marks, because of which the problems arise. This problem has been categorized in the Indian Law under two headings; ‘Trademark Infringement’ and ‘Passing Off’.
Infringement of Trademarks:
As mentioned earlier laws pertaining to trademark were initially a part of common law. Later it came to be a ‘statutory law’. Therefore an ‘infringement of trademark’ is an invasion of the statutory rights. According to the Trademark Act, 1999 infringement of a Trademark has said to have been occurred, when any individual other than the proprietor of the trademark utilizes the mark with the intention to defraud in his business.
As highlighted before the mark that is claimed to infringe the registered Trademark must be identical or deceptively similar to the original mark and also must be in relation to the products and services towards which the original mark was registered. In simple words, the infringing mark must be put towards the propagation or sale of the same goods and services as the registered Trademark was put to. An important case to this note is the Ox-Cart Case–
“if the use of the mark in a manner not likely to indicate the trade origin, it may not attract the cause of action for infringement”.
Sections of the Act pertinent to the Infringement:
1) Section 29: Itdeals with the ‘infringement of trademarks’ and explains some ways by which infringement may take place.
2) Section 27 (1): It guarantees the proprietor of the registered trademark, to initiate legal proceedings for the prevention of infringement or recovery of damages for the same.
3) Section 28:In relation to section 27 of the act it holds that the ‘proprietor’ is the exclusive owner entitled to the relief awarded in case of infringement.
Essential Factors to Infringement of Trademarks:
There are four essential factors/issues pertaining to trademark that needs to be taken into consideration before assessing a case of the trademark. These factors have been explained below.
- Likelihood of Confusion.
As highlighted earlier, the traditional infringement of trademark occurs only when there is a possibility of confusion. The object here isto protect a mark that has after some effort hasobtained certain distinctiveness, as well as, assuring to the consumer a certain consistency in the nature of goods they seek. Therefore the fundamental principle here is thatwhere two marks are identical then it constitutes the primary evidence as to infringement due to confusion.
In the event where two marks aren’t identical but are similar, then the burden isupon the plaintiff to show before the court that the ‘similarity’ is close enough so as to create confusion in the minds of the buyer thereby misleading them – there must be a strong resemblance.
In the Baywatch Caseit was held;
“It is not sufficient if one mark merely leads to a likelihood of recall of the other mark.”
Reading in reference to section 11 of the Trademarks Act of 1999
The section 11 of the act, provides for the ‘relative grounds of refusal of registration’. This will help us in giving an understanding, as to the likelihood of confusion. The section holds that:
- Registering a mark that is an imitation or reproduction of a known trademark should not be permitted.
- Furthermore,subsection (2)(b) of the section provides that, in the scenario where there is a difference between the goods using the same trademark without a due cause would taking an unfair advantage of the original trademark should not be registered.
Hence from section 11 of the Act, two things can be ascertained. Firstly, the most fundamental criteria of the ‘infringement of trademark’ are the “similarity with the likelihood of confusion on the part of the public”. Secondly, the reputation of the original trademark is necessary as per the sub-section (2) to call for its infringement.
In the case of Montblanc n Simplo-GMBH v New Delhi Stationery Mart,Delhi High Court held that;
“since both the marks are used in respect to identical goods, this courtthen needs to determine whether the defendant’sadoption is likely to cause confusion in the minds of the public. It is not necessary to prove actual confusion or damage, it is sufficient if the likelihoodof confusion is established”.
- Deceptive Marks:
These are those marks that are likely to create confusion among the general public. The fundamental consideration or assumption to be made here is – the general public with average intelligence is confused so as to the source of the product. Thetest for determination of ‘deceptive marks’ is to ‘look for an overall similarity’.More clarity to this has been provided in the case H.C Dixon & Sons Ltd. v. Geo Richardson & Co. Ltd, wherein it was held;
“The expression “likely to deceive” is a question largely one of the firstimpression. It is not necessary to prove intention. It is sufficient if the Court comes to the conclusion it is likely to deceive and that conclusion must be based partly on evidence and partly upon the appeal to the eye of the judge”.
Furthermore in the case of Vikram Stores v. S.N. Perfumery Works; the Gujarat High Court provided for 3 types of ‘deception’ that may take place as understood in this Act;
- Deception as to goods
- Deception as to trade origin
- Deception as to trade connection
- Dilution of Trademark.
It is the weakening of the registered Trademark by the fall in its value. In the ultimateanalysis, whenever any other individual or corporation imitates the registered trademark of another then this ends up hurting the value of the original trademark.
The reason forthe same has been established by the Delhi High Court in the case law CatterpillarInc v. Mehtab Ahmed and Others;
“in case of the doctrineof dilution, there is a presumptionthat the relevant customer starts associating the mark or trademark with a new and different source. This affects the link between the mark of the prior user and its goods. That is, the link between the mark and the good is blurred. This is not a fair practice that is expected in trade and commerce”.
As evident from the judgment, ‘dilution’ is different from ‘traditional infringements’. While the laws against traditional infringement are meant to protect the consumers, dilution is meant for the protection of the proprietors. A claim in ‘dilution’ isn’t a result of infringement or deception; rather it is valued based on – ‘its value to the owner’, termed ‘commercial magnetism’
This is highly problematic because this not only affects the distinctiveness of the mark, it also impacts the positive value attached to it.
In the words of Lord Halsbury;
“Nobody has any right to represent his goods as the goods of somebody else”
The Doctrine of Passing Off wasformulated to prevent an individual to sell his good in the guise of it being another’s. Under the Indian Law section,27 of the Trademarks Act of 1999 provides for the action against a person passing offhis goods as those of another. During its inception,its recognition was limited to simply a representationof one’s good as another in one of the earliest case law – Singer Manufacturing Co. v. Loong. Today the protection extends to “non-trading activities or unfair trading which causes damage to the goodwill associated with another”. Under the purview of passing may be included misappropriating the claimant’s mark, business name, or the supply of own goods upon the plaintiff receiving an order. The foundation/basis for such protection being offered is quite similar to that of ‘trademark infringement protection’ – the loss of business and weakening of consumer base of the plaintiff. As established in the case; Harrods v. Harrods (Buenos Aires);
“The aim of Common Law in protecting through passing off is goodwill between the trader and customers which the mark helps to sustain; there is no property in the name as such”.
Hence it can be understood here that passing off isn’t a proprietary right. It is fully based on the reputation of the business and the goodwill of the company. It is pertinent here to note that, the future risk of causing injury can also constitute a valid basis for a suit for passing off.
In the matters concerning both ‘passing off’ as well as ‘trademarks’, it is important to refer to section3(a) of the Trademarks Act of 1999. It holds that registration of a trademark will not take place if its use is to be prevented by any law in place in India, especially the law concerning passing off.
Important things concerning a suit for passing off:
- Registration of Trademark is immaterial.
- Priority laid on the use of Trademarks
- Usually,parties in the sale of identical or same products, require the protection under passing off.
- The motiveof the defendantis immaterial.
- Only requires the establishment of reputation by the plaintiff.
- Misrepresentation and/or loss of goodwill are also essential factors to be taken into consideration.
Components of Passing off:
- In the case of Passing Off,no proof can be adduced for the same.
- It is enough for the appearance of one good is similar to the original good so as to cause confusion in the minds of the consumers.
- There is no need to mention of any act of deceit or deception in an action for passing off.
- Action for passing off is a common law remedy.
- The length of time in passing off is irrelevant. There is no minimum time period to be shown in a suit for passing off.
Remedies for TrademarkInfringement& Passing off:
‘Ubi Jus ibiRemedium’
– Where there is a right there is a remedy
In case of Infringement of a Trademark and/or Passing Off the law provides remedies to the proprietor of the registered Trademark. This may broadly be of two types;
- Civil Remedy,
- Criminal Remedy.
Under the Trademark Law in India registration of a Trademark isn’t a necessary pre-condition for pursuing a civil or criminal suit. In fact,both these suits are simultaneously available for the proprietor of the infringed trademark.
- Under Section 134: a suit against the Infringement/Passing off committed by the defendant against the proprietor of a Trademark, wherein the Trademark is closely identical or deceptively similar to the original mark, shall be instituted before a District Court hasthe jurisdiction to try it.
- Under Section 135 (1): the court may grant (upon the plaintiff’s request);
- An account of profits
- Along with (or without) delivery-up of the infringing mark(s) for erasure.
- Under Section 135 (2): the court may grant an Ex-parte or interlocutory injunction order, in accordance with Section 36-42 of the Specific Relief Act, 1963 and Section 151 of the Code of Civil Procedure, 1908for – preserving of infringing goods, documents, discovery of documents, restraining the defendant from disposing assets, adversely affection the plaintiff.
The procedurefollowed in a civil suit
- Filing of the suitbefore the district court under section 134 of Trademarks Act, 1999. Jurisdiction of the court will be based on where the causeof action has arisen.
- If the court deems fit the suit for action it can grant one or more of the 3 above mentioned damages.
- Remedies available in case of both Trademark infringement and passing off.
In case of Trademark Infringement or passing off, a criminal complaint may also be filed. It is deemed a cognizable offensewith the possibility of pursuing criminal proceedings against the infringer.
- Under Section 103: “Any person falsifies any trademark or falsely applies to goods or services any trade mark shall be punishable with imprisonment for a term which shall not be less than 6 months but which may extend to 3 years and with fine which shall not be less than Rs50,000 but which may extend to Rs2,00,000”.
- Under Section 104: “if any person who helped the accused by selling, providing or hiring services of the such good, possessing such goods for sale or any other possible way will be punished with imprisonment for a term which shall not be less than 6 months but which may extend to 6 years and with fine which shall not be less than Rs 50,000 but which may extend to Rs 2, 00,000”.
- Such person has taken all requisite precautions during the commission of said offense.
- Such person provides all information known to him concerning the person from whom such goods or services were received, to the prosecutor.
- Such person has acted innocently.
- Under Section 105:“if a person commits any of the offence provided in section 103 or 104 he shall be punishable for the second and for every subsequent offence, with imprisonment for a term which shall not be less than 1 year but which may extend to 3 years and with fine which shall not be less than Rs 1,00,000 but which may extend to Rs 2,00,000. Fines and imprisonment can be reduced if the courtthinks it fit”.
The procedurefollowed in a criminal suit:
- Filing of FIR under Section of 154 of Cr.P.C.
- In case the police officer refuses to do so, a complaint may be filed before the District Court Magistrate, under Section 156 (3) of Cr.P.C.
- Following this,an investigation will be instituted to search for and seize the good allegedly with an infringing Trademark.
- Proceedings may also be initiated against unknown persons, as under Section 93 and 94 of Cr.P.C.
Difference between Trademark and Passing off:
|Trademark Infringement||Passing Off|
|Statutory Remedy||Common Law Remedy|
|Registration of Trademark necessary||Registration of Trademark not necessary|
|Prosecution under Criminal Law easier||Prosecution under criminal Law relatively harder|
|Presumption of confusion among the public is the main criteria to be proven||Along with confusion among the public, deception of the public and injury to plaintiff’s goodwill has to be proven.|
|The suit can be initiated where the proprietor resides or carries on business (professional or personal)||The suit can be initiated only where the defendant resides or carries on business (professional or personal)|
So in the ultimateanalysis,it can be said that the fundamental premise behind trademark protection is that ‘no man is entitled to sell another’s mark under the guise that it belongs to him’. Both trademark infringement and passing off work towards achieving this objective but in their own domain and manner. While Trademark Infringement works for the protection of those Trademarks that have been registered as provided for in the act, passing off is intended to protect Trademarks absent registration under the law. Nevertheless both of these overlap in certain areas such as – ‘requiring creating confusion among public’ as a prerequisite to ascertainingliability, etc. Irrespective of the provisions of law the burden is upon the owner/proprietor of the Trademark to make himself aware of whether other individuals are selling goods and services identical to his, so as to cause a breachof the law. Ignorance in such matters will only lead to consequent losses.
Websites referred to:
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Image Source: Trademark Registration In Coimbatore