India: Breeding The Trade With Hybrid Trademarks

Introduction

The liberalization of the economy has opened the doors for the foreign enterprises to exploit the Indian markets. The collaboration of various foreign enterprises with the Indian counterparts has started working on various business projects which are named after the initials of the both Indian as well as foreign enterprises. This unique way of representing new business with the initials of two business enterprises have introduced a new kind of trademarks and same is known as Hybrid trademarks.

Legally speaking, the term hybrid trademark does not have any mention in Trade Marks Act 1999 but literally speaking it means a combination of two or more brands to come up as a single brand for the purpose of promoting their legal partnership or business. There are various paradigms of popular hybrid trademarks in India like Maruti-suzuki, Lehar-Pepsi, Kawasaki-bajaj etc and even internationally like Sony-Ericsson, Arcelor- Mittal etc.

Rationale behind Hybrid Trademarks

In past, India had a closed economy where trade by foreign firms in India was restricted but after the globalization of the economy, the doors for the foreign firms opened for trade. In the beginning, the foreign firms were apprehensive to bring the entire setup to India for manufacturing of products so they formulated a new modus operandi to do trade in India. Instead of bringing entire setup for manufacturing, they collaborate with the Indian firms and brought only technology and Knowhow. They used the Indian manufacturing units for manufacturing other products. They also merged their names and come up with hybrid trademark some of which are quite popular and doing the trade till now.

Hybrid trademarks have played a very significant part in brand recognition across the globe. In a world of open economy, the trans-border reputation will add another dimension to a brand. The collaboration with the local brands will ease the entry in local market for a foreign brand. Several foreign firms initially collaborated with the local firms and later on started their individual ventures. We can sight the example of 'Honda' which started its business of motor-vehicles in collaboration with 'hero' and now it has started its own brand in motor-vehicles individually and doing well on individual front also.

Legal use of two different trademarks

The term hybrid trademark used here is not to be confused by those trademarks which are invented from taking the parts of two well known trademarks in order to take advantage of their established reputations without the permission of the owner. The use of two trademarks without the permission of the trademark owner would be termed as the infringement and would be prosecuted under section 29 of the Trade Marks Act, 1999. The hybrid trademarks are the creation of two entities in conformity of the terms and condition of their collaboration agreement. It is a genuine use of their already established trademark and the new identity created by the collaboration of two enterprises will have separated distinctivity from the already established reputation of the collaborators previous trademarks. For example identity of Hero-Honda a well known collaboration between Indian and Japanese brand, even though both companies have their distinctive identity in their respective countries but the goodwill of the brand Hero-Honda have separate identity of its own in the Indian market.

Advantages of hybrid trademarks

There are various advantages attached to a hybrid trademarks.

  • Readymade distinctiveness : hybrid trademarks such as Lehar-Pepsi, Maruti-Suzuki have ready made distinctiveness or they are inherently distinctive. These marks do not have to acquire distinctiveness by the means of use or promotion. Even though they have been promoted but that is only for the purpose of recognition in between customers. The distinctiveness inherent in these trademarks is just because of the sheer fact that they are a combination of two brands and does not have any meaning attached to it. It is only to show the collaboration of two brands.
  • Easy recognition : hybrid trade marks just because of the fact that they are combination of two brands (sometimes two well known brands) are easily recognizable brands. It does not take much of an effort to get recognition. Collaboration with an Indian brand (most of the time known brand) is an easy way to have a recognition in the market because local people already recognize local brand. Similarly, even in the local spheres, there are certain smaller firms which are highly concentrated within the industry. These small firms can negotiate with the dominant firms in the market and by the way of a joint venture, can come out with a hybrid trademark to surge its individual brand recognition. When compared to a new trademark the hybrid trademark has quality of getting recognition easily.
  • Cost efficient : with the advantage of readymade distinctiveness the hybrid trademarks are also cost effective. The cost of promoting a hybrid trademark is low as compared to a normal trademark because most of the collaborating brand has some recognition in the market which will provide them a readymade platform to work on and that will help in saving the cost of promotion on a large scale.
  • Minimum risk of infringement : hybrid trademarks are created due to collaboration of two known business entities and more often than not people recognized their individual status as well. Further the entities have their own market resources which always keep a watch on the use or misuse of their Intellectual Property and these market resources get multiplied when two entities join forces hence enforcement of the rights also have additional teeth. The misuse of the trademark is kept in check due to the severe enforcement techniques used by both enterprises in collaboration. Therefore the risk of infringement of the trademark is checked at the initial stages of misuse of trademark and the higher litigation cost is kept in check.

Disadvantages of hybrid trademarks

  • Dilution of individual image : excessive usage of hybrid trademarks can sometime lead to the dilution of image of individual Indian brand. The people start recognizing the hybrid brand and the individual Indian brand looses its importance, which in future can create problem for the Indian brand if it starts some new venture individually. People tend to presume that the same has also been started by the two collaborating brands.
  • Dispute of credits : Both collaborating parties tend to take credit of the success if the brand does well whereas they shift the burden of failure on each other. In both the cases of success and failure the dispute arises and which in turn lead to the failure of the brand in long run.
  • Dispute related to use : the hybrid trademarks can also be prone to the disputes related to the use of the mark. Sometimes the collaborating brands indulge in the dispute of over-using the trademark and sometime for under use. The agreement for the collaboration take cares all the term and condition of the use but even then dispute arises between the brands regarding use of the mark.

Conclusion

When we talk about trademarks, 'Hybrid trademark' is not a recognized phenomenon in the literal sense but it has quite an importance in the field of trans-border business ventures. Hybrid trademarks helped in bridging the gap between a domestic and international market. The advantage of having a hybrid trademark helps a foreign brand to have an easy access in the local market and tend to provide a readymade platform to the foreign brands. This is not only popular in India but also in the foreign market. It provides a readymade distinction with easy recognition and cost effectiveness. A hybrid trademark is a commodity which has international prospects because it is more often than not is a collaboration of two known entities and can be useful in more than one country. The advantages of having a hybrid brand are far greater than compared to disadvantages.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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