India: Guide to the Law of Trade Marks in India

Registration of a trade mark under the (Indian) Trade Marks Act, 1999 is not a condition precedent for seeking protection in India.

Acquisition of Right in a Trade Mark in India

Right in a trade mark can be acquired in any of the following ways:-

• Registration
• First Adoption and Long, Continuous, honest, bonafide, uninterrupted use
• Assignment of a registered or unregistered trade mark.

Threats to a Trademark in India

Usually following threats may be anticipated in case of a registered as well as unregistered Trade Mark in India:

• In case of a registered trade mark Cancellation of Registration
• During the course of registration; Opposition
• Litigation :-
  
  
  1. Infringement action in case of a registered trade mark.
  2. Passing off action in case of an unregistered trade mark.

It is important to note that registration of a trade mark does not preclude litigation for passing off, and the trade mark remains challengeable despite registration on various grounds which may include:

• Prior Adoption and Use¹
• Prior Registration
• Confusion in the market²
• Likelihood of deception in the mind of the purchasing public and trade³
• Allied and cognate goods⁴
• Counter of sale
• Manufacturing potential

In any litigation relating to trade mark the size and volume of the business of the defending party will be immaterial.

Law of "Passing off" in India

The law of "Passing off" can be summarised in a general proposition that no man may "pass off" his goods as those of another.

"Passing off" is a common law right, based on the principles of natural justice, which protects goodwill and reputation of a person and prevents dishonest or improper use of goodwill by a third person in the trade mark. The term "Passing off" has not been defined under the (Indian) Trade Marks Act, 1999, and same is primarily based on "judge made" law.

It is important to note that in case of a litigation pertaining to a trade mark the statutory right as well as the common law right become important. At times the common law rights may prevail over the rights acquired by registration of a trade mark. Indian law of passing off is primarily based on following principles:-

• First Adoption
• Honest and Bonafide Adoption and user.
• Long, Continuous, open, concurrent, honest and uninterrupted user.

It is important to note that for establishing a case for passing of, a plaintiff may be required to prove:

• goodwill,
• deception by a third person and
• damage or possible damage to the Plaintiff.⁵

It is reiterated that even an unregistered trade mark can seek protection of passing off under the Trade Marks Act, 1999.⁶

Law of Infringement of Trade Marks in India

In India the registration of trade mark under the Trade Marks Act, 1999 confers a statutory right of exclusive use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in case of infringement of trade mark in the manner provided under the Trade Marks, Act, 1999.⁷

It is pertinent to mention herein that even after registration of trade mark under the Trade Marks Act, 1999 a trade mark can still be rectified and/ or cancelled on an application made by an aggrieved person in the prescribed manner to the Intellectual Property Board (IPAB)⁸ (An Appellate Authority under the Act) or the Registrar of Trade Marks.

Difference Between Law on Passing off and Law on Infringement in India

The difference between the concept of passing off and infringement has been clearly set out in the case of

Rob Mathys India Pvt. Ltd.v. Synthes Ag Chur .⁹

• Firstly, nature of remedy in two types of actions is different.
  
  
  1. a An action for passing off is Common Law remedy, based on principles of natural justice (i.e. First Adopter and User will survive in case of conflict);
     
     
  while
  
  
  2. an infringement action is a statutory remedy (which is based on a right granted or created by virtue of registration under the Trade Marks Act, 1999).
• Secondly,
  
  
  1. Issue in a passing off action is: "Is the defendant selling goods in the market so marked as to be designed or calculated to lead purchaser to believe that they are the plaintiff's goods?
  2. The issue in an infringement action, on the other hand will be: "Is the defendant using a mark which is the same as or which is colourable imitation of the plaintiff's registered trade mark?
• Thirdly,
  
  
  1. in an infringement action, the statutory protection is absolute in the sense that once a mark is shown to offend, there being imitation phonetically, visually or otherwise to lead the purchaser to believe and purchase goods of another as that of plaintiff, no further evidence of violation of plaintiff's statutory right is necessary.
  2. But in a passing off action, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff.

It is important to note that generally First Adoption and user is treated as superior to the Registration.

Defences Available in Case of an Infringement or Passing Off

Following defences may be available against an infringement or passing off action to a Defendant:

• Delay and Laches
• Acquiescence
• Honest and Bonafide
• • Adoption, and
  • Use.
• Difference in goods and services
• Difference in Counter of sale
• Class of Purchasers
• Nature of the Product
• Pricing
• Absence of the element of confusion or deception.

Law of Delay and Laches in IP Litigation

It may be noted that mere delay in initiating an action against the infringement and passing off a trade mark does not disentitle an aggrieved person from any relief. Delay alone may not be sufficient to deny relief, unless it has caused prejudice to the defendant who in view of the delay has come nurture a belief that the plaintiff has consciously given up his rights to claim infringement or passing off.¹⁰

In an infringement of trade mark, delay by itself may not be a ground for refusing to issue injunction as has been observed by Lahoti, J. in Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia and Ors.¹¹ in the following terms:

Law of Acquiescence in IP Litigation

It may be further noted that the concept of acquiescence is recognised under the Section 33 of the Trade Marks Act, 1999 meaning thereby that when the proprietor of an earlier trademark cannot contest the validity of registration or the use of a subsequent trade mark, if he has acquiesced in the use of the subsequent trade mark for a continuous period of 5 years.

In Power Control Appliances and Ors. v. Sumeet Machines Pvt. Ltd.¹² the Supreme Court has stated that:

Furthermore in Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai Patel and Ors¹³ the Supreme Court has observed that 'acquiescence' is a facet of delay, when a party allows the other to invade his right and spend money and the conduct of the party is such that it is inconsistent with the claim for exclusive rights for trademark, trade name. Mere silence or inaction does not amount to acquiescence. Action and conduct of both parties have to be examined to determine whether it would be unjust and unequitable to injunct the defendants on the ground of delay. Lapse of time unless compounded with other factors is normally is not taken as a bar to grant of injunction.¹⁴

Law of Allied and Cognate Goods, Trade Channel, Counter of Sale in Trademark Litigation in India

In India it may also noted that a product bearing a similar/deceptively similar trade mark cannot be sold if the goods to be sold fall in the category of allied or cognate goods or where the nature of the goods are similar or where the trade channels and/or counter of sale used for selling the products are same or similar.

In the matter of H.M. Saraiya Ors. Vs. Ajanta India Ltd. and Anr,¹⁵ the Bombay High Court while relying on various judgments of the Hon'ble Supreme Court on allied and cognate goods observed that

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Law of Comparative Advertising In India

Advertising which is no more than a commercial transaction is nonetheless dissemination of information regarding the product advertised. Public at large is benefited by the information made available through these advertisements. The Indian Courts in various judicial pronouncements have observed that Comparative advertising is a part of human nature. Some of the most effective advertising is comparative, but it is not without risks. Effective advertising delivers a message that is remembered. It can change the way the world views a product or service and can generate sales.

On the basis of the law laid down by the Supreme Court of India in the case of Tata Press Ltd. Vs. MTNL & Ors. [(1995) 5 SCC 139], it is amply clear that:

1. An advertisement is commercial speech and is protected by Article 19(1) (a) of the Constitution.
2. An advertisement must not be false, misleading, unfair or deceptive.
3. Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact but only as glorifying one's product.

A mere comparison of products or services by the advertiser does not amount to disparagement of products or services of the competitor. "Comparative advertising" by means of using others products is permissible in India, however while doing so the advertiser cannot disparage the goods or services of the other. Any such act disparaging or denigrating the goods or services of another constitutes an act of product disparagement.

In India, there is no codified law to restrain companies from indulging in false publicity campaign. The Law relating to "disparagement" in India has mainly evolved through judicial pronouncements in the recent past.

The earliest decision on disparagement in India was of the Calcutta High Court in Chloride Industries Ltd. v. The Standard Batteries Ltd. decided on 30-09-1994. It was an action brought forth by the manufacturers of Exide Battery against their competitor on the ground that the competitor indulged in disparagement. The Calcutta High Court held therein that if the goods are disparaged maliciously or with some other such intent to injure and not by way of fair trade rivalry, the same would be actionable. The principle laid down in the above mentioned case has been followed by various High Courts as well as the Supreme Court of India in deciding cases on the issue of disparagement.

Moving a step further, the Calcutta High Court in Reckitt & Colman of India Ltd v. M.P.Ramachandran and Ors. [1999 PTC (19) 741] has enunciated five guiding principles on the issue of disparagement which have set the trend in the direction that the law has taken in India. Almost all subsequent decisions on the issue of disparagement refer to the said decision. Five principles that were enunciated in the said decision are as follows:

1. A tradesman is entitled to declare his goods to be best in the world, even though the declaration is untrue.
2. He can also say that his goods are better than his competitors', even though such statement is untrue.
3. For the purpose of saying that his goods are the best in the world or his goods are better than his competitors' he can even compare the advantages of his goods over the goods of others.
4. He however, cannot, while saying that his goods are better than his competitors', say that his competitors' goods are bad. If he says so, he really slanders the goods of his competitors. In other words, he defames his competitors and their goods, which is not permissible.
5. If there is no defamation to the goods or to the manufacturer of such goods no action lies, but if there is such defamation an action lies and if an action lies for recovery of damages for defamation, then the Court is also competent to grant an order of injunction restraining repetition of such defamation.

The above five principles were cited with approval by the Delhi High Court in Reckitt & Colman of India Ltd v. Kiwi T.T.K. Ltd. [1996 (16) PTC 393] decided in the year 1996. However, the Delhi High Court in a recent decision (decided on 02.02.2010) in the case of Dabur India Limited Vs. Colortek Meghalaya Pvt. Ltd. and Godrej Sara-Lee [MIPR2010(1)195] relying on the principle laid down by the Supreme Court of India in Tata Press Ltd. Vs. MTNL & Ors., that false, misleading, unfair or deceptive advertising is not protected commercial speech has held that the propositions (a) and (b) above and the first part of proposition (c) as laid down in Reckitt & Colman of India Ltd v. M.P.Ramachandran and Ors (Supra) are not good law. The Delhi High Court in the same case upheld proposition (d) and (e).

It may thus be stated that in India the settled law on the subject appears to be that a manufacturer is entitled to make a statement that his goods are the best and also make some statements for puffing his goods and the same will not give a cause of action to other traders or manufacturers of similar goods to institute proceedings as there is no disparagement or defamation to the goods of the manufacturer so doing. However, a manufacturer is not entitled to say that his competitor's goods are bad so as to puff and promote his goods.

Footnotes

1. Milmet Oftho Industries and Ors Vs. Allergan Inc. (2004)12SCC624

2. Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Ltd. (2001)5SCC73

3. Parle Products (P) Ltd. vs. J.P. and Co., Mysore AIR1972SC1359

4. H.M. Saraiya Ors. Vs. Ajanta India Ltd. and Anr [1994]1SCR708

5. Beiersdorf A.G. v. Ajay Sukhwani and Anr. 156(2009)DLT83

6. Section 27 (2) of the Trade Marks Act, 1999

7. Section 28 (1) of the Trade Marks Act, 1999

8. Section 57 of the Trade Marks Act, 1999

9. MANU/DE/0308/1997

10. Beiersdorf A.G. v. Ajay Sukhwani and Anr. 156(2009)DLT83

11. 2004(28)PTC121(SC)

12. [1994]1SCR708

13. AIR2006SC3304

14. Beiersdorf A.G. v. Ajay Sukhwani and Anr. 156(2009)DLT83

15. 2006(33)PTC4(Bom)

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