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A Convergence of Trade Names and Trade Marks: A Case Comment
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Finalising a name for a company is often a strenuous task, with personal preferences clashing with market perception analysis, existing brand names, statutory requirements, etc. Selecting a name for your product is generally further simplified when one believes in creating a brand of products under one company, thereby utilising the company’s name in the name of the product.
In most instances, where companies tend to use the same name for both their trade name as well as their trademark, the line tends to be blurred when it comes to an infringement action, as is the case in N Dinesh Kumar v. Shweta Khandelwal.[1]
To understand the question that arose in the suit, it would be wise to understand how the law views these two concepts differently.
The Distinction between Trade Name and Trademark
A trade name is quite simply the name the company trades in or does business in, and in most cases this is the corporate name of the company, whereas the trademark is how the company wishes to establish itself in the market as, and how it would like the consumer to identify its products as such. At times, the trade name can be incorporated within the trademark, but when companies look to diversify into different products, the trademark may exist de hors the trade name.
The more important distinction lies in how the law treats the two concepts, and that brings us to the Trademark Act, 1999 (“the Act”). Infringement actions for a registered trademark lie under Sections 29(1), 29(2) and 29(4), with sub-sections (1) and (2) pertaining to similar goods or services and sub-section (4) pertaining to dissimilar goods or services. The standards for evaluating an infringement action in such cases involves evaluating the similarity between the marks, as well as the similarity between the goods or services[2]. In the latter case, the evaluation utilizes the reputation that the registered trademark has garnered, as an evaluation of the similarity of goods or services would not render a result.
However, Section 29(5) is slightly more nuanced, in the sense that the range of infringement is narrower. A registered trademark is infringed when an unauthorized user uses the registered trademark as his trade name or part of his trade name, or as his business concern or part of his business concern. In such cases, the standard for evaluation of an infringement action involves identifying the part of the trade name containing the registered trademark, as well as that the infringer is dealing in the same goods or services that the mark is registered in[3].
The line of differentiation here is that there is no question about similarity or dissimilarity of goods or services. An action under Section 29(5) requires that the alleged infringer deals only in those goods or services for which the registered trademark is registered in.
The Facts of the Case
The facts of the Karnataka High Court decision merit a summary. The suit was filed by the Respondent, the proprietor of the mark Matru Ayurveda and trading as Matru Herbals, against the Appellant, the proprietor of the mark Matruveda and trading as Matruveda Herbals. The Respondent’s device, Matru Ayurveda (TM Appn. No. 3063975), has been registered in Class 3 for a number of herbal cosmetics, while the Appellant’s device, Matruveda (TM Appn. No. 3806687), has been registered in Class 5 for herbal supplements.
The suit at hand involved a claim that the trademark of the Appellant was so deceptively similar that despite having been established earlier, the sales of the Respondent have been impacted by the actions of the Appellant. The trial court, upon an application by the Respondent, granted an order of temporary injunction against the Appellant restraining the Appellant’s use of the mark from infringing the trademark of the Respondent, as well as quite curiously the trade name of the Respondent.
While the trade name may be included within the registered trademark, what Section 29(5) clearly talks about is infringement of a trademark by a trade name, and not the infringement of a trade name. In the present case, the Respondent’s claims have been focused on the loss of business owing to the products sold by the Appellant, and has never questioned the aspect of the Appellant trading in a name incorporating the trademark of the Respondent. Which is what the High Court took note of in its judgment.
The Holding of the High Court
The High Court took special notice of the portion of the judgement where the trial court states “On perusal of the tradename of the plaintiff and defendant, it appears that both the marks are phonetically and deceptively similar”, and pointed out that in this case, as the trade names are contained within the composite mark, the question falls to infringement of the trademark, which therefore involves the evaluation from the eyes of a ‘quintessential common man’ having the ‘wisdom of Solomon’ and the ‘trained eyes of Sherlock Holmes’.
The High Court also observed that where an element appears to be used by other proprietors dealing in other products in the market, the evaluation of the device marks must then turn to the unique features of the respective device marks, to ascertain whether those unique features then become deceptively similar, as purchasers would turn to those unique features to distinguish the mark from others. This principle is dependent on the existence of such a commonality in the market being proved to the satisfaction of the court. The Court thus set aside the order of temporary injunction and ordered a fresh hearing of the matter by the trial court.
Conclusion
What thus stands is but the foundation of device marks and their essential characteristics. As the courts have stated previously, device marks carry the weight of their registration in their appearance, as an average common man having an imperfect recollection looks to the overall design and scheme of the mark when differentiating between products.
The question of trade names thus does not arise when the action lies with respect to an infringement of the mark as a whole, and in this case, it would seem that the requirements of Section 29(5) are not attracted, owing to the registration of the marks in different classes, and dealing with different products.
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[1] M. F. A. No. 790/2021 (Kar)
Removal, Cancellation, Variation Or Rectification Of Registered Trademarks in India
Trademarks are not ‘revoked’ as such in India. Under the Act, the registered marks may be removed from the register, cancelled, or rectified in the Register. They can be done at the instance of the registered proprietor himself, the Registrar, or by a third party.
Who can file?
The recourse available to any aggrieved party, after the registration of trademark, in India is the rectification or cancellation of the trademark. Persons aggrieved here means persons who have an interest in the mark being removed, or whose interests will be damaged if the impugned mark is allowed to persist in the Register. Therefore, the person filing for such rectification or cancellation must have a substantial interest in seeking the cancellation of the trademark.
Authority:
The aggrieved person may file for rectification or cancellation before either the Registrar or the Appellate Board.
Grounds:
The grounds for seeking cancellation or rectification as given under the Act are as follows-
- Failure to observe a condition laid down as a pre-requisite to the registration of the mark
- The absence or omission of any entry from the Register
- The entry in the Register was made without sufficient cause
- There is an error or defect in any entry made in the Register
- The entry is wrongly remaining in the Register
- The trademark is registered as a result of fraud or misrepresentation
- The renewal fee has not been paid
- The trademark has not been used for more than 5 years
- The trademark is not in conformation with the grounds under Section 9 or 11 of the Trademarks Act,1999.
- The mark was not registered or used in good faith.
There are a few specific grounds mentioned in the Act for both certificate marks and collective marks. Certification marks are those which are capable of distinguishing them from other similar goods and services in aspects such as quality, place of manufacture, etc. In the case of certification marks, the grounds are as follows-
1.The proprietor is no longer in the position to certify those goods and services.
2. The proprietor did not observe the provisions meant to be observed by him.
3. It is in public interest to either cancel the mark, or vary it to meet certain conditions.
Collective marks are the trademarks which identify the goods as originating from an association of persons, such association not being a partnership firm. In the case of collective marks, they are as follows-
- The manner in which the mark was used misled the public
- The proprietor has failed to observe the regulations in using the mark.
Procedure:
Application: The application must be made in Form TM-O, and this application must contain the extent of interest of the applicant, the facts upon which his case rests, and the relief which he seeks. The application and statement are usually left at the Trademark Registry, and it becomes the duty of the Registrar to ensure that the registered proprietor gets a copy of both, within a period of one month. The application must be verified by the applicant or his duly authorized agent.
Counterstatement: Within three months of receiving the application and statement, the registered proprietor must file a counterstatement. If such a counterstatement is filed, then the Registrar must serve a copy of the same to the applicant. If no counterstatement is filed by the registered proprietor, within the three month time period, then the applicant may proceed to file evidence in support of his application, in the form of an affidavit. A copy of this will be given to the registered proprietor.
Evidence: If the evidence is filed by the applicant, then the registered proprietor will have two months from the date he receives a copy of the affidavit to file evidence in his favor. He may choose not to do so. The applicant is then given another opportunity to file more evidence in his favor, within a month of receiving the copy of the registered proprietor’s affidavits, and no more evidence may be allowed to be filed by either side after this.
Hearing: The matter then goes for hearing. Before this, if any documents are in any language other than Hindi or English, an attested translation of those documents in either of the mentioned languages must be present. A notice is sent out by the Registrar and the hearing will be at least a month away from the date of issue of notice. A party may request for adjournment by way of a Form TM-M, with the prescribed fee, and no party can be granted more than two adjournments, each not exceeding 30 days. The Registrar considers the written submissions in addition to all the evidence he is presented with. His order as to cancellation, rectification or denial of the application for the same is then communicated to both the parties.
Any third-party alleging interest may file an application under Form TM-O to intervene.We hope this article was a useful read.
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WhiteHatJr’s Magical Rabbit: A Perverse Application of Trademark Law
WhiteHatJr’s issues began when Pradeep Poonia began posting tweets and videos on his YouTube channel criticizing both the teaching methods as well as the advertising claims made by WhiteHatJr as being misleading. Aniruddha Malpani posted tweets on similar grounds.
Prior to the institution of the cases and the grant of the ad-interim injunctions, WhiteHatJr targeted Pradeep Poonia’s videos on YouTube under his three accounts: WhiteHatSr, Safed Topi Sr 2 and Pradeep Poonia 3.0. WhiteHat even went after 12-year-old Jihan Haria’s video on YouTube roasting their advertisement, but this copyright “strike” was eventually reversed. Pradeep Poonia’s first two accounts however received multiple strikes, and the third account hangs on its last strike open.
Coming to the crux of the matter, the Delhi High Court however, in both cases, seems to have taken an overall view of the content posted by the defendants, and has evaluated its orders on the basis of the defamatory nature of the content to pass the interim injunctions. Independent IPR enthusiasts and observers therefore have little to peruse and abstract from these decisions as of now, especially since these cases involve the internet’s primary tenet of free speech and fair criticism and the use of Intellectual Property to shut down criticism.
At this stage, it would be prudent to examine the established strongholds of fair comment that IP already provides for, and in this case, what copyright and trademark allow for. Copyright law is fairly certain in its defense of fair comment, for Section 52 (1)(a) of the Copyright Act, 1957 explicitly allows for the reproduction of a work for the purposes of criticism or review. The author therefore fails to see any ground for the copyright strikes against both Pradeep Poonia’s videos as well as Jihan Haria’s videos, and YouTube India would do well to update their copyright infringement systems to sidestep such infructuous claims.
Moving further to trademark law, this is a concept that is fairly new to trademark law in India, witnessed specifically by the lack of a provision speaking to the issue in the Trademark Act, 1999 as well as noticeably few judicial precedents. However, while trademark law does place boundaries on what is considered infringement (under Section 30), it can be argued that it protects fair comment by way of normative fair use under Section 30 (2)(d). Nominative fair use basically allows the use of another’s trademark to refer to the owner’s goods and services. Such use however must comply with three conditions:
- The product or service in question is not readily identifiable without the use of the mark
- Only so much of the mark is used as is reasonably necessary to identify the product or service
- Using the mark does not create an inference of sponsorship or endorsement[1]
Regarding nominative fair use, the Delhi High Court initially dealt with the matter in Hawkins Cookers Ltd. v. Murugan Enterprises. The Single Judge Bench had held that as long as the use was bona fide, was reasonably necessary to show that the goods were adaptable to the proprietor’s products, and did not deceive the public as to the origin of the goods, there was no infringement of the proprietor’s mark. The Division Bench overruled the decision of the Single Judge Bench on merits, holding that the defendant’s use of the plaintiff’s mark was above what was necessary, given the emphasis on the use of the mark “Hawkins” in a red colour font. However, the Court did note that the Single Judge’s appreciation of the law was correct.
The Madras High Court also had the opportunity to deliberate on nominative fair use, in Consim Info Pvt Ltd. v. Google India Pvt. Ltd., and reaffirmed the three factors for nominative fair use stated above. The Court however noted that the respondent’s AdWords policy was discriminative towards the trademarks of the appellant, and therefore as such a policy would cause confusion in the mind of the public as to the appellant’s mark, the Court held such use to be infringing.
The Delhi High Court again, in the case of Prius Auto Industries Ltd. v. Toyota Jidosha Kabushiki Kaisha, dealt with nominative fair use, and while the Single Judge Bench had set aside the injunction restraining the defendants from using the plaintiff’s marks, the Division Bench had, with the parties’ consent, restrained the defendant from using the plaintiff’s marks except for identifying their compatibility with the plaintiff’s cars, that the words “TOYOTA” and “INNOVA” were not written in the same font, and that the words ‘Genuine Accessories’ were used only in relation to the defendant’s name. On a final appeal to the Supreme Court, however, no mention of the nominative fair use doctrine was made, and the issue was determined solely on the basis that the plaintiff (Toyota) had not evidenced sufficient proof of the existence of goodwill over the use of the mark “Prius” in India, and hence, by the territoriality principle, the defendants were not liable for infringement. The decision of the Division Bench regarding the use of the marks “TOYOTA” however were upheld.
Another question that arises is with regards to the manner of infringement. Section 29 of the Trademark Act, 1999 primarily deals with the infringement of the mark by usage in the course of trade, and to determine such usage, circumstances are listed under sub-section (6). The peculiarity here is that none of the circumstances mentioned under (6) provide that the mark is used for criticism. It is therefore hard to see suitable grounds for WhiteHatJr to sustain an action of trademark infringement on the grounds of criticism. The issue of disparagement does not arise, on the basis that neither of the defendants are making such criticism while simultaneously engaging in comparative advertisement. Although Aniruddha may be an investor in other edtech start-ups, she is not criticizing WhiteHatJr while also promoting any of her investments.
In conclusion, there does not appear to be satisfactory grounds for WhiteHatJr to have instituted an action of trademark infringement and disparagement against Pradeep Poonia and Aniruddha Malpani. These actions, quite literally, appear to be a rabbit pulled out of WhiteHatJr’s magician’s hat. The worrisome quandary we now find ourselves in is the overextended use of YouTube’s copyright infringement ‘three strikes’ policy. As on yesterday, December 13, 2020, YouTuber Samuel Miller posted a video wherein he described an instance where he was contacted via Instagram by a person claiming (very unsuccessfully) to be the CEO of WhiteHatJr and threatened to file a copyright infringement claim against Samuel’s video criticizing WhiteHatJr if he failed to transmit 1 bitcoin to the assailant’s address. WhiteHat’s actions to stifle criticism seem to have spurred a new form of ‘copyright trolls’ (the author has very liberally adapted the term ‘patent troll’ to the present context) who threaten to take down videos and ransom the creator’s content to avoid their channel being permanently blocked by YouTube.
It remains to be seen what the courts will tend to make of such criticism in the future. A rather foreboding indicator of what we may see in the future was witnessed in the Pradeep Poonia case, where the Court, in its injunction, prohibited the defendant from using the term WhiteHatSr and WhiteHatPoonia, on the grounds that such names were infringing and would lead to confusion in the minds of the public. What one may hope would constitute fair parody in the means towards criticism has been severely hampered by this decision, and it would appear that a rather unfair boundary has been placed on free speech and fair comment.
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[1] Fair Use of Trademarks (Intended for a non-legal audience), January 31, 2016 https://www.inta.org/fact-sheets/fair-use-of-trademarks-intended-for-a-non-legal-audience/#:~:text=Nominative%20fair%20use%20permits%20use,services%20associated%20with%20the%20mark.&text=Here%2C%20the%20trademark%20is%20used,not%20imply%20sponsorship%20or%20endorsement.
Mountain Dew Trademark – A conflict of Prior use and Trans-border reputation
Syed Ghaziuddin had set up a packaged drinking water plant (Magfast Beverages) in the late 90s and named his products "Mountain Dew” to indicate something pure, emanating from natural sources. The business soon gained popularity and received various quality and standard certifications.
In 2003, PepsiCo approached the Delhi High Court, accusing Magfast of infringement. Magfast filed a suit[1] against PepsiCo, for passing off, before the Hyderabad City Civil Court.
Magfast’s main grounds for contention were that PepsiCo had not used its mark in India before 2003 and that PepsiCo sold its bottled water as not as ‘Mountain Dew’ but rather, as ‘AQUAFINA’.
PepsiCo claimed that it had been selling flavoured soda under “Mountain Dew” since 1940 and had become popular throughout the world, and had registered the trademarks in 100 countries, including India dating back to 1985.
The Hyderabad Civil Court had poured over various documents highlighting the plaintiff’s use of the mark since 2000 and therefore, referring to the Supreme Court’s decision in Syed Monideen v. Sulochana Bai[2] which recognised the common law principle of priority in adoption prevailing over registration, ruled in favour of Magfast.
We anticipate that PepsiCo will challenge this decision in the High Court. However, in the meanwhile, there are a few questions of law that are left to be answered.
It becomes imperative to note that the Court did not, in its ruling, make any reference any Section 34 of the Trade Marks Act 1999, which embodies the rule about Prior use and provides that the registered user of a trade mark cannot prevent any other user from the using an identical or similar mark, where the said other user has been continuously using the mark prior to either the use of the first-mentioned trade mark or the date of registration of the first-mentioned trade mark, whichever is earlier. Magfast’s claim of prior use should therefore have been backed by its continuous use of the mark before the registration of PepsiCo’s trademark in 1985, however, as per Magfast’s own submissions to the Court regarding the use of their mark, it is proven that their use of the mark could be traced only as far back as 2000, by which time, Mountain Dew was a popular drink worldwide. This hints at the possibility that Magfast’s adoption of a mark, which had an international repute, was not entirely bona fide.
This brings us to another issue that was not broached by the Hyderabad High Court – transborder reputation.
The doctrine puts forth that when a mark’s reputation has transcended geographical barriers to spill over into Indian market and becomes recognised by the consumers despite lack of actual use of the mark in that territory, such mark becomes entitled to protection from those who seek illicitly benefit from such reputation[3].
Since these issues are yet to be delved into, we can only wait and see how the Courts play out this conflict of prior use and cross-border reputation.
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Contemplating effectiveness of proposed amendments to Drugs and Cosmetics Rules in tackling the menace of deceptively similar trademarks
The problems faced by brand owners and consumers who deal with trademarks that are identical or deceptively similar are well known. In most such cases, consumers may be end up buying one product thinking its another, leading to inconvenience. However, when such confusions occur in pharmaceutical products, it may not just be a matter of inconvenience, but could have far reaching consequences. This very problem of pharmaceutical products marketed under trademarks that are confusingly similar is sought to be addressed in India by an amendment proposed to the Drugs and Cosmetics Rules, 1945.
The proposed amendment may be attributed to the directions given by the High Court of Delhi in a suit between Curewell Drugs & Pharmaceuticals and Ridley Life Science, although Indian courts have dealt with many cases involving drugs bearing confusingly similar names. The draft proposes to introduce the below recited rules to address the issue of drugs bearing confusingly similar names.
“In case the applicant intends to market the drug under a brand name or trade name, the applicant shall furnish an undertaking to the licensing authority that such or similar brand name or trade name is not already in existence so that the brand name or the trade name to be used by the applicant shall not lead to any confusion or deception in the market.”
It is pertinent to note that, Section 17B of the Drugs and Cosmetics Act, 1940 empowers the drug licence granting authority, Drug Controller General of India (DCGI), to raise objections in case of drugs bearing confusingly similar brand names, which is also pointed out by the Court. In view of said section, it is not clear how the proposed amendment to the Rules further empower DGCI to proactively tackle the problem.
One may argue that it is not the lack of provisions in appropriate statutes to deal with the problem, rather it is the lack of procedures and infrastructure to effectively implement the provisions, that has led to the problem not be effectively addressed. The Court in fact recognises this and has issued directions for consideration by the authorities to tackle the problem effectively. The directions are listed below.
- Creation of a secured platform, to be under the supervision of the DCGI, which is accessible to all State FDAs, both for access of data and for uploading of data.
- Creation of a “master electronic database” of all the approved brand names for manufacture and sale of drugs issued both by the DCGI and the State FDAs and making the same available to all state FDAs and Drug controllers through a secured platform. The list to be maintained and made available both brand wise and manufacturer wise, on the secured platform.
- List of registered trade marks under Class 5 for pharmaceutical and medicinal preparations be obtained from the Controller General of Patents, Trade marks and designs and be made available to the approving authorities at the Central level and State level.
- Access to the data be given to Drug Inspectors/Drug Controllers across the country;
- Drug Inspectors/Drug Controllers to conduct regular and periodic inspections as per the Act and the Rules to ensure that the drugs that are being manufactured in a particular unit are duly licensed for. The reports of the said inspections to be submitted through the secured platform;
- Periodic and regular reports of drug inspectors should be compulsorily submitted to the respective licensing authorities on the secured platform and a mechanism be set up for review of the said reports at the State level;
- Periodic meetings ought to be held at the central level, to review the status of manufacture and sale of drugs across the country, under the aegis of the DCGI;
- Strict action in accordance with law ought to be taken against those manufacturers who manufacture drugs without licences, who indulge in adulteration or contamination of drugs etc. A periodic report as to the number of actions taken, ought to be uploaded on the secured platform of the DCGI.
Implementing procedures and developing technology platforms in line with the directions above is certainly the way forward if the authorities wish to tackle the problem proactively and effectively. We certainly hope that such long-term solutions, though time consuming and resource intensive, are implemented, given the serious consequence that may result from the problem of drugs being marked under deceptively similar trademarks.
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Burger King Corporation vs Techchand Shewakramani & Ors
The plaintiff (Burger King) is a US based Company while the defendants (Techchand Shewakramani) are based in Mumbai.
The Plaintiff sought permanent injunction against the defendants with respect to their trademarks “Burger King” and “Hungry Jacks” in the Delhi High Court.
The Defendants filed the present application praying for the rejection of the plaint on the grounds of lack of cause of action and lack of territorial jurisdiction.
The defendants contended that the Delhi High Court did not have the jurisdiction to entertain the suit, given Section 134 (2) of the Trade Marks Act which reads as follows:
“Suit for infringement, etc., to be instituted before District Court.—
(1) No suit—
(a) for the infringement of a registered trade mark; or
(b) relating to any right in a registered trade mark; or
(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff’s trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.
(2) For the purpose of clauses (a) and (b) of sub-section (1), a “District Court having jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain. Explanation.—For the purposes of sub-section (2), “person” includes the registered proprietor and the registered user.” (emphasis added)
The plaintiffs have not only invoked section 134 of the Trade Marks Act, but have also relied on Section 20 of the Civil Procedure Code.
“Section 20: Other suits to be instituted where defendants reside or cause of action arises.
Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.”
On examining various precedents on the issue, the Court has concluded that either Section 20 of CPC or Section 134 of Trademarks Act can be invoked when it comes to deciding the jurisdiction for initiating a trademark infringement suit. In other words, the referred section of both the statutes don’t override each other, instead they complement each other, thereby allowing the plaintiff to explore multiple options while deciding on the court in which the suit may be filed. Similarly, the CPC provision can also be invoked for initiating copyright infringement suits.
We hope this article was a useful read. The judgment can be downloaded here.
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Glenmark Pharmaceuticals Ltd. Vs Galpha Laboratories Ltd. & Ors
In an unprecedented order, the Bombay High Court has imposed that the infringing party to a suit, i.e., Galpha Laboratories Ltd., pay a sum of Rs. 1.5 Crores as cost.
The Court came to this conclusion after noting that Galpha Laboratories was a habitual offender and they had had multiple suits of infringement against them. Added is the fact that in 2017, the Central Drugs Standard Control Organization (CDSCO) had published a list of drugs which were “Not of Standard Quality/Spurious/Adulterated/Misbranded”. Five products on that list belonged to Galpha Labs. In this light, the Court observed that Galpha had no respect for the law and was a repeat offender.
The court noted that the present case was a perfect example wherein pharmaceutical companies had their judgment clouded by profits and turnovers which resulted in acts that were detrimental to the public health/good.
Thus, when the Court imposed the heavy damages, it noted that had Galpha Labs been penalised heavily in its earlier acts of infringement, it would have acted as a dissuasive measure for future acts.
This order of the Court highlights the seriousness of the Judiciary with respect to the protection of Intellectual Property, and the gradual development from penalty to punitive justice.
The purpose of punitive remedies/justice is that the offender should pay for his crimes in a manner that is proportionate to the offence.
Galpha Laboratories had amassed huge profits through repeated infringement of popular brands of medical goods. Despite various courts orders, they were audacious enough to continue with the acts because the fines/penalties imposed by the courts were a mere slap on the wrist as compared to the “illegal” profits they were making by duping the general public.
The present judgment hereby comes with a hope that pharmaceutical companies would think twice about branding spurious goods under infringing trademarks. The damages imposed upon the infringer is an actual deterrent factor not just for the infringer in the present case but for other companies engaging in such acts.
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Deceptively Similar Marks: Registration Allowed If Services/Goods are Different Although Within the Same Class
Brief Facts of the Case
Karnataka Co-Operative Milk Producers Federation Ltd. (KMF), has been producing and selling milk and milk products, since 1985, under their mark ‘NANDINI’ which had been registered under Class 29 and Class 30.
M/S. Nandhini Deluxe is in the business of running restaurants since 1989 under the name ‘NANDHINI’ and had applied for the registration of the same.
The Deputy Registrar of Trade Marks had the application submitted by the restaurant chain and allowed for the registration for their mark ‘NANDHINI’ as well. The Intellectual Property Appellate Board (IPAB), however, set aside Deputy Registrar’s order, and the High Court confirmed the IPAB’s decision on the following grounds:
- The mark ‘NANDINI’ (KMF) had acquired a distinctive character and was a well-known mark;
- Products sold under the infringing mark ‘NANDHINI’ (Restaurant) were of the same classes as those under ‘NANDINI’ (KMF).
- The use of the infringing mark is different only in one alphabet but with no difference in spelling or pronunciation in the local language and would very likely to cause confusion in the minds of public if allowed to be registered for the commodities falling in the same class;
In 2015, the proprietors of ‘NANDHINI’ (Restaurant) appealed to the Supreme Court against the decision of the High Court.
Arguments by the Parties:
Proprietors of ‘NANDINI’ i.e. KMF objected to the use of the mark ‘NANDHINI’ by the Appellants (Restaurant) on the grounds that:
- It was deceptively similar to the mark of the respondent and was likely to deceive the public or cause confusion.
- KMF had long and sustained use by the ‘NANDINI’ and had acquired a distinctive character and was well-known to the public.
- The public associates ‘NANDINI’ with ‘NANDHINI’ because of phonetic similarity.
- ‘NANDHINI’ was adopted by the restaurant chain to ride on the goodwill of trade mark ‘NANDINI’ (KMF).
Proprietors of ‘NANDHINI’ Deluxe objected that:
- It was running the business of restaurant since 1989 and KMF had started using mark ‘NANDINI’ since the year 1985 only for milk and milk products and not for other products.
- Goods and services of ‘NANDHINI DELUXE’ were totally different from that of the KMF and, therefore, there was no likelihood of confusion or deception among the public.
- The monopoly under a Trademark only extends to the goods which are falling in a particular class and not the entire class of goods and the trade mark which is similar in nature can be registered for the goods which are falling within the same class but are not identical to those of the previously registered mark.
Court’s Ruling:
The Hon’ble Supreme Court granted the registration of the mark ‘NANDHINI’ by the restaurant on the condition that registration will not be given to them for milk and milk products.
The court relied on the following reasoning to determine whether a similar trade mark in respect of similar goods would cause deception and confusion in the minds of the users:
- While the goods of both parties fall under the same classes (i.e. 29 & 30), the goods of the parties differ from each other.
One (NANDINI) was concerned with the production of only milk and milk products while the other (NANDHINI) dealt in fish, meat, poultry and game, meat extracts, preserved, dried and cooked fruits and vegetables, edible oils and fats, salad dressings, preserves etc. Furthermore, ‘NANDHINI’ had also relinquished its claim for milk and milk products.
- The nature and style of the business of the appellant restaurant and the respondent federation were altogether different. One (NANDINI) was a manufacturer of dairy products while the other (NANDHINI) ran a full-scale restaurant business.
- There’s mere phonetic similarity as far as the word marks are concerned (i.e. NANDHINI/NANDINI). However, the trade mark with logo adopted by both parties are different.
The restaurant chain uses the word ‘NANDHINI DELUXE’ which is followed by the tagline ‘the real spice of life’ and a device of a lamp accompanying these words.
On the other hand, the milk federation only uses the word ‘NANDINI’ beneath a ‘Cow’ logo and is encircled by egg shape circle.
- There is a difference in not just the visual appearance but even in their products. The manner of business is different. All of these factors make it difficult to imagine that an ordinary man would associate the goods of the Restaurant as that of the Milk Federation.
- The restaurant had applied the trademark ‘NANDHINI’ in respect of goods which are used in the products/services of restaurant business. Said items do not strictly belong to Class 29 or 30. Other items necessary to run their business or render their services include stationery, furniture, utensils and crockery all of which do not fall under class 29 or class 30.
To quote the SC:
“One other significant factor which is lost sight of by the IPAB as well as the High Court is that the appellant is operating a restaurant under the trademark ‘NANDHINI’ and it had applied the trademark in respect of goods like coffee, tea, cocoa, sugar, rice, rapioca, sago, artificial coffee, flour and preparations made from cereals, bread, pastry, spices, bill books, visiting cards, meat, fish, poultry and game; meat extracts; preserved, dried and cooked fruits and vegetables; jellies, jams, fruit sauces, etc. which are used in the products/services of restaurant business. The aforesaid items do not belong to Class 29 or 30. Likewise, stationery items used by the appellant in the aid of its restaurant services are relatable to Class 16. In these circumstances, there was hardly any question of confusion or deception.”
Thus, the goods that are dealt with under the name ‘NANDHINI’ aren’t strictly under class 29 & 30. The milk and milk products, which are sold by the respondent under the trade mark of ‘NANDINI’, fall under Class 29 and Class 30 as per classification under Schedule IV to the Trade Marks Rules, 2002.
- "Nandini/Nandhini” is a generic name, representing a goddess and a cow in Hindu mythology, and it is not an invented or coined word attributed to one party.
- Referring to the judgement in Vishnudas Trading As Vishnudas vs The Vazir Sultan Tobaccoco. Ltd. JT 1996 (6), 366 1996 SCALE (5)267, it is stated that the proprietor of a trade mark cannot enjoy monopoly over the entire class of goods especially if he is not using the said trade mark in respect of certain goods falling under the same class. Refusal under Section 11(2)(b) cannot be made because both the parties started using the marks within a span of 4 years of each other and both have built a considerable reputation with the state boundaries for themselves over the years.
Thus, on all these grounds, the Supreme Court laid down that the two marks are not deceptively similar.
Conclusion:
The Supreme Court thus allowed the mark ‘NANDHINI’ to be registered and used by the restaurant based on the ground that it (device/logo) is not deceptively similar to the mark ‘NANDINI’ (device/logo) used by the respondents.
On the face of it, this decision may seem logically sound because denying registration on grounds of mere phonetic similarity, when the marks are visually poles apart and the products under them are also different, would be a hindrance to a healthy competition.
However, it would also be pertinent to note that the court seems to have overlooked the fact that in this case, ordinary person would mean any person hailing from Karnataka or one who has lived here for a considerable amount of time. To anyone, from any other part of the country, these marks would most probably be similar and confusing.
The restaurant chain operated within Bangalore and no one outside Bangalore would have plausible reason to be aware of this chain. The Milk Federation sells its products within the region of Karnataka. Hence, any one residing here for a long time would not confuse them. But, to any ordinary person from outside the city or state limits, these marks would seem to be confusing or having the same origin.
To understand this conundrum better, we can look back at the case of London Dairy v Londonderry wherein the Bombay High Court ruled that mere phonetic similarity would not amount to infringement of any sort. One mark was famous for its ice cream products. The other for its boiled confectionary. Both were sweets, but one was not confused for the other because the former had built a reputation for itself nationally while the new one was distinctly viewed by the consumers as something different. The consumers were not confused because they could differentiate between the origin of the two marks and their underlying products.
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TRADE MARK DILUTION vis-à-vis THE JEEP-ROXOR DISPUTE
Jeep-Roxor Trade Dress Issue
Fiat Chrysler Automobiles (FCA) has moved the US International Trade Commission (USITC) against Mahindra & Mahindra to stop the sale of Mahindra’s Roxor ATV, alleging that Mahindra is violating the Trade Dress of the Jeep Brand. FCA has complained that the off-road Roxor’s design is similar to that of Jeep's traditional design. FCA has stated that due to the manufacture of Roxor in India and its assembly in the US, the cost of Roxor is low and thus resulting in the underselling of Jeep. The FCA also claims that the Roxor infringes some of the design elements from the Jeep brand, such as the “boxy body shape with flat-appearing vertical sides and rear body ending at about the same height as the hood,” and has produced the photographic evidence to suggest similarities between the Jeep and the Roxor.
FCA’s Allegations
The allegations made by FCA against Mahindra and Mahindra could be summed up as two major issues:
- Mahindra has infringed Jeep’s trade Dress
- Mahindra has diluted Jeep’s trade mark
To establish whether there’s any such infringement or dilution, it becomes imperative that we first understand the concept of Trade Dress and the concept of dilution.
-
What Is Trade Dress Infringement?
- What is a Trade Dress?
A Trade Dress is different from a Trade Mark[1]. Trade dress refers to the overall appearance of a product. It is an umbrella term and includes shape (Coca-Cola Bottles[2]), colour (Red Soles of Louis Vuitton Shoes[3]), design (Herme’s bag designs[4]), texture (use of braille markings on products), the packaging (Colgate’s Toothpaste Pack), labels (Levi’s Red Tabs on Jeans), presentation. It also encompasses the manner of promotion or advertisement including the use of distinctive graphics, configurations, and marketing strategies.
Courts have found a variety of trade dress to be distinctive – the bean shaped window used by Jelly Belly Candy Company, GOLDFISH’s fish-shaped crackers, Hershey's KISS chocolates, Taco Cabana’s restaurant décor, the number 007 as a reference to James Bond, etc. have all been held to be trade dresses, the infringement of which would result in legal action.
In the US, protection against trade dress infringement is provided for in the Lanham Trademark Act. Similar statutes and various common-law doctrines also provide protection to trade dress to ensure fair competition.
The law of trade dress generally serves four purposes[5]:
- to protect the economic, intellectual, and creative investments made by businesses in distinguishing their products.
- to preserve the good will and reputation that are often associated with the trade dress of a business and its merchandise.
- to promote clarity and stability in the marketplace by encouraging consumers to rely on a business's trade dress when evaluating the quality of a product.
- to increase competition by requiring businesses to associate their own trade dress with the value and quality of the goods they sell.
While it is advantageous for businesses to register their trademarks, service marks, and trade names with the government, trade dress has no formal registration requirements and receives legal protection simply by being distinct and non-functional.
- How to Prove Infringement of Trade Dress?
To establish a claim for trade dress infringement, a company must demonstrate the distinctiveness of its product's appearance. However, such a protection cannot be granted for any feature that is functional in nature. Goods that are packaged or promoted in an ordinary, unremarkable, or generic fashion normally receive no legal protection under the law of trade dress. Simultaneously, something as simple as a grille on the front end of the Jeep automobile may be considered sufficiently original if the manufacturer takes deliberate and tangible steps to promote that aspect of the vehicle over a long period of time or if the public associates that grille with FCA.
- Distinctiveness
While the Lanham Act does not mention the requirement of a showing of distinctiveness, courts have universally imposed that requirement. Thus, the plaintiff must show that consumers perceive the particular trade dress as identifying the source of a product. Even if a mark is found to be not inherently distinctive, it still can be said to be distinctive if it has acquired a secondary meaning. Thus, the mark should be such that the consumer has created an association between the trade dress and the source of the trade dress (the company).
In the present case, Jeep has acquired recognition for its overall appearance and the general reaction to Mahindra’s Roxor was to associate it with FCA’s Jeep[6]. The FCA owns all rights for Jeep Trade Dress and has standing to bring an action for trade dress infringement under the United States Lanham Act and additionally, has strong rights in its Jeep Design Marks based on use and recognition of them, under Section 43(a) of the United States Lanham Act. These factors will make it difficult for Mahindra to prove that they are not infringing upon Jeep’s trade dress.
- Functionality
The Lanham Act doesn’t provide for protection of a trade dress of a functional nature. If trademarks were allowed for the functional features of a product, then the owner of such a trademark would end up achieving a monopoly over these features regardless of whether they qualify as patents, thereby affecting competition.
In the case of Qualitex[7], the court says that a manufacturer could not use the shape (special illumination-enhancing shape) as a trademark because, after the patent expired, this would be a hindrance to competition.
A quick review of the jeep’s history[8] would highlight that the jeep was built in the manner in which it was to serve a functional purpose[9] – to serve the US Army. Mahindra might hold on to this straw to prove that the features are functional and hence not protectable as trade dress. The Roxor is an off-road vehicle and is therefore suitable rugged terrains which other vehicles might not be able to tread. But other features, such as the use of the grille and the boxy shape would be difficult to justify and thus this argument would be weak at best.
FCA has stated that Roxor dilutes its brand and has thereby sought an injunction against Mahindra. To determine whether there is a dilution of brand, we need to understand the concept of dilution.
-
What Is Trade Mark Dilution[10]?
- Dilution as a Concept
The Federal Trademark Dilution Act 1995 prohibits marks that dilute the distinctiveness of famous marks in the United States. Under this statute, the owner of a famous mark can stop others from commencing use of a mark in commerce which is likely to dilute his own famous mark, even in the absence of actual or likely confusion, competition or actual economic injury. The goods and services for which the mark will be used are irrelevant in determining likelihood of dilution.
To qualify as famous, a mark must be “widely recognized by the general consuming public of the United States, and must satisfy, inter alia, the duration, extent and geographic reach of advertising and publicity for the mark; the amount, volume and geographic extent of sales of goods or services offered under the mark; the extent of actual recognition of the mark; whether the mark is registered in the United States
There are 2 limitations to a mark being declared famous in the United States – Firstly, it must be distinctive (whether acquired or inherent). Secondly, fame in a limited geographic market in the United States or in a specialised market is insufficient.
There are two ways by which a famous mark can be said to be diluted: blurring and tarnishing.
- Blurring applies when a person uses a trademark in a manner which diminishes the uniqueness of a famous trademark. It is an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. To illustrate, if someone adopts the famous mark Sony to provide goods and services unrelated to electronics, such as shoes, then such a use may dilute or blur the distinctiveness of the Sony mark such that it becomes associated with additional sources instead of a single source.
- Tarnishing happens when the use of the mark is such that it would negatively impact the reputation of the famous mark. It is an association arising from the similarity between a mark or trade name and a famous mark that ends up harming the reputation of the famous mark. Thus, if someone adopts the tradename Patanjali to produce and sell liquor, the use may dilute the Patanjali mark by tarnishing the goodwill and reputation associated with the Patanjali mark. If the mark becomes associated in the eyes of consumers with liquor, the goodwill attached to the family-friendly, environmentally-positive brand will presumably be damaged.
In the present factual matrix, Mahindra has not made any use of Jeep’s brand name or trademark in any form whatsoever. So, the claim that Mahindra’s sale of Roxor dilutes the Jeep brand name is baseless and holds no ground. While the impression is that Roxor looks similar to Jeep, there seems to be no evidence to show that Roxor rides on the Jeep brand name or attempts to tarnish it negatively.
- Proving Dilution[11]
In March 2003, in a case[12] the US Supreme Court laid down that the federal dilution law, unlike traditional trademark law, was intended to protect the famous marks and not the consumers. It stated that to claim dilution, the owner of a famous mark must demonstrate that actual dilution, and not the likelihood of dilution, has occurred. Thus, dilution can only be proven by evidence of actual harm to the famous mark.
FCA claims that consumers will attribute any defects or negative impressions of the Roxor to FCA thereby harming FCA’s reputation and the intangible goodwill associated with its brand. It also claims that there is a substantial threat that consumers will perceive the Roxor as having quality issues, as not being as durable and off-road capable as expected for Jeep brand vehicles, or as simply not worth the price being charged for them. It must be noted that FCA does not provide any substantial evidence to show any such negative impact. Instead, they have stated what could bee termed as mere speculations as to dilution thus, not providing enough grounds for remedy.
- Remedies Against Dilution[13]
Generally, the only remedy available is an injunction against further dilution. However, if the plaintiff can prove that the defendant wilfully intended to ride on the reputation of the famous mark or to cause dilution of the famous mark, then other remedies such as attorney’s fees, damages, defendant’s profits would also be available.
Should the FCA, despite the odds, be able to prove that there’s any trademark dilution, the only remedy they could get is an order of injunction asking Mahindra to stop the sale of Roxor in the US. FCA’s sale of Jeep products has been on the decline before Roxor was even introduced to the market. Thus, any claim for damages should not be entertained.
- Exceptions to Dilution
The Act makes clear that certain actions will not deemed as dilution. Fair use (whether in advertisement or parody), non-commercial use, and all forms of news reporting and news commentary would not constitute dilution under the Act.
Mahindra need not claim any defence because prima facie, FCA does not have enough evidence to back their claim for Trademark dilution.
Conclusion
A careful perusal of the complaint made by FCA and a quick glance over Mahindra’s Roxor would show that, there is no trademark violation per se because the logos and the names of the vehicles are not similar at all. The word “Mahindra” is clearly and boldly visible on Roxor’s body. Thus, FCA’s claim of Trademark Infringement does not seem to hold good. And essentially, the Roxor and the Jeep have different specifications that end up causing a difference in how these two operate off road[14].
In the end, it boils down to infringement of Trade Dress. To determine whether the Roxor is an infringement of Jeep’s Trade Dress, the question that needs to be addressed is whether the Roxor looks so much like a Jeep that the public, instead of finding it similar, confuses it entirely with a Jeep model. And it would seem like Mahindra would have a tough time proving their case[15]. Thus, the test for likelihood of confusion[16] becomes important.
Section 43(a) does not state in expressive terms as to in whom the likelihood of confusion must exist. As a rule, an appreciable number of ordinarily prudent purchasers of the products in question should have been misled or confused. However, section 43(a) does not always require that the likelihood of confusion be among the actual consumers or the potential consumers of a manufacturer or business. The Fourth Circuit Court has laid down that a trade dress infringement could be based on a likelihood of confusion among the general public if such public confusion will adversely affect the plaintiff’s reputation with all the parties it interacts with.[17]
The likelihood of confusion is determined on the basis of the overall visual impression of the parties’ products or services in terms of a number of factors[18] (such as strength of dress; proximity of goods; similarity of dresses; evidence of actual confusion; marketing channels used; type of goods and degree of care likely to be exercised by purchaser; defendant’s intent in selecting dress; and likelihood of expansion of product line). Confusion, however, must be likely among a substantial number of consumers. Only a few misled consumers are insufficient to maintain a cause of action.
The Second Circuit Court has also extended the likelihood of confusion to the general public based on an adverse impact on the trademark user’s reputation[19]. Actual confusion is not the standard for trade dress infringement; rather, it is enough to show that confusion is likely among consumers. This is different from trademark dilution where the plaintiff would require actual evidence to show harm caused by dilution. Thus, FCA could claim that Mahindra’s Roxor is likely to cause confusion amongst the general public with respect to its apparent counterpart Jeep. However, this could be a tall claim because while most magazine and journal reports point out to the similarity between the Roxor and the Jeep, none of them mention that the Roxor is being mistakenly confused for Jeep or vice versa. Additionally, FCA would have to prove that its goodwill/reputation suffers an adverse impact because of Roxor.
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[4] https://www.iptrademarkattorney.com/trade-dress-handbag-attorney-trademark-purse-hermes-birkin-bag-emperia/.
[6] https://www.slashgear.com/this-mahindra-roxor-is-a-modern-willys-with-just-one-downside-02521799/; https://autoweek.com/article/car-reviews/roxor-road-only; https://jalopnik.com/the-mahindra-roxor-is-a-reincarnated-willys-jeep-and-yo-1824020754; https://jalopnik.com/heres-how-similar-the-mahindra-roxor-is-to-an-old-jeep-1823474555; https://carbuzz.com/news/mahindra-roxor-is-one-bad-ass-mini-jeep-but-there-s-a-catch.
[10] http://www.worldtrademarkreview.com/Magazine/Issue/64/Country-Correspondents/Trademark-dilution-and-clearance.
[12] Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003).
[17] Communications Satellite Corp. v. Comcet, Inc., 429 F.2d 1245, 1251 (4th Cir. 1970).
[18] Adidas-Salomon AG v. Target Corp., 228 F. Supp. 2d 1192 (D. Or. 2002).
[19] Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 (2d Cir.1979).
Toyota Vs. Prius Auto – Analysis On Permeation Of Goodwill And Reputation Of Foreign Marks Into India And Passing Off Such Marks
The judgment of The Supreme Court of India in the matter of Toyota Jidosha Kabushiki Kaisha Vs. Prius Auto Industries Ltd. & Ors is worth bookmarking for IP practitioners in India. The tussle between Toyota and Prius Auto has been going on since the year 2009. The initial matter concerned several trademarks, viz., TOYOTA, TOYOTA INNOVA and TOYOTA (device mark) and PRIUS. While the judgement (largely in favour of Toyota) of the lower court concerning the first three listed marks are not appealed in The Supreme Court, the judgment, which was in favour of Prius Auto and others (“Defendants”), concerning PRIUS, was appealed. The Supreme Court held in favour of Defendants, Prius Auto and others.
By way of background, the Defendants had obtained registration of the mark, PRIUS, in the year 2002, and has been using the mark since 2001. Toyota (“Plaintiff”) on the other hand launched the world’s first commercial hybrid car called Prius in Japan in the year 1997. In India however, the car was released in the year 2009, and the Plaintiff applied (as “proposed to be used”) for registration of the PRIUS mark on December 03, 2009, and followed it up with institution of suit against the defendants on December 21, 2009.
In the appeal, the Supreme Court set out to determine whether the defendants, by using the mark, PRIUS, to market the automobile spare parts manufactured by them, are guilty of passing off their products as those of the plaintiff, thereby injuring the reputation of the plaintiff in the market.
In order to address the issue at hand, Division Bench of the High Court considered two largely differing doctrines that have an impact on scope of trademark protection, viz., Universality Doctrine and Territoriality Doctrine. Universality Doctrine posits that a mark signifies the same source all over the world. In contrast, Territoriality Doctrine posits that a mark has separate existence in each sovereign country. In other words, under the Territoriality Doctrine, prior use of the trade mark in one jurisdiction would not, by that very fact, entitle its owner or user to claim exclusive rights to said mark in another dominion. The Division Bench held that Territoriality Doctrine holds, and the Supreme Court concurred.
In view of territoriality principle, the court had to determine whether there has been a spill over (by the time the Defendants started using the mark) of the reputation and goodwill of the mark used by the claimant who has brought the passing off action. The court considered the evidence, dated prior to first use of the mark by Defendants, supplied by the Plaintiff to assert spilling over of the reputation and goodwill of the mark to India.
The court noted that the car itself was introduced in the Indian market in the year 2009-2010. Further, the advertisements in automobile magazines, international business magazines; availability of data in information-disseminating portals like Wikipedia and online Britannica dictionary and the information on the internet, even if accepted, would not be a safe basis to hold the existence of the necessary goodwill and reputation of the product in the Indian market at the relevant point of time, particularly having regard to the limited online exposure at that point of time, i.e., in the year 2001. In view of these observations, among others, the Supreme Court agreed with the conclusion of the Division Bench that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the Plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner. The Supreme court further held that if goodwill or reputation in the particular jurisdiction (India) is not established by the Plaintiff, no other issue really would need any further examination to determine the extent of the Plaintiff’s right in the action of passing off that it had brought against the Defendants.
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