India: Deceptive Similarity – A Factor in Dilution of Trademark and Goodwill

Preface

A trademark is a visual symbol often created to distinguish ones own product in respect of visual appeal or efficacy from host of other identical and similar products to build up reputation and profits by skill, effort and enterprise in the course of time The whole concept of Trademark law is based upon business practice and competition. The Delhi High Court addressed this in ST. Ives Laboratories Inc. V. Indo Cosmesi Pvt. Ltd. 2005 (31) PTC 635 (Del) and Smithkline Beecham PLC & Another V. S.Venkataiah & Others 2005 (31) PTC 666 (Del).

ST. Ives Laboratories Inc., incorporated under the laws of the State of Delaware, United States of America is engaged in the business of manufacturing, distribution, sale and trade of cosmetic and toiletry products. To market and to give their products distinctiveness, the company conceived the trademark/word "ST.IVES" in the year 1978 and had been using it bonafidely, honestly, commercially, continuously and openly in course of the transaction of its goods. The Company is the owner of the trademark in the words per se and also owns the copyright in the artistic form of the depiction of the trademark. The said trademark was registered under the Indian Trade Mark Laws under Class3 in respect of cosmetics; hair care and skin care products in 1992. In 2003 the Company found out about the use of a similar mark and its use through the Trade Mark Journal No. 1301 (S) III dated 28^th August 2003, wherein Indo Cosmesi Pvt. Ltd., had made an application for registration of the trademark "MT.IVES" in respect of goods similar to the goods transacted by ST. Ives.

ST Ives served a legal notice upon the defendants to desist from using the deceptively similar trademark, as it would create confusion in the minds of the consumers leading to believe that the goods bearing the infringing mark are coming from the same source and concurrently it also launched an inquiry into the market to ascertain about the use of the impugned trademark and trade name. It was found out that the use of the trademark was very insignificant and whatever transactions were carried out, was done in a very secretive manner to capture the market of ST. Ives and in the long run frustrate its rights. Seeing no settlement coming through ST. Ives, in order to secure its rights, filed a suit under Sections 134 and 135 of the Trade Marks Act, 1999 praying for permanent injunction against infringing party using the impugned mark and passing off their goods as goods of the plaintiff. They averred that the defendants are habitual pirator and the modus operandi and intention of the defendants had always been to take advantage of the consumer base and support which plaintiff had so painstakingly built. Giving instances, the plaintiff informed the court that the defendants have also started using the trade name INDO being in violation of the trade name of M/s. Indola Cosmetics B.V who were compelled to file a suit against them.

The main grievance of the plaintiff was that that they have spent huge amounts in advertising and marketing and due to their consistent efforts, net sales of their products are on an upward swing from the last five years and all this would go in vain in the present scenario of adoption of the term that includes ‘user’, if any, as well as its threatened and contemplated user an identical / deceptively similar trade mark MT IVES in relation to the similar goods, by the defendant.

ST. Ives placed on record the copyright registration, trademark registration and details of all the countries all over the world where the trademark is registered and business is carried out. The literature, photographs of the goods produced by the defendants with their trade names, trademark and copyright were also placed on record.

In view of the above facts a decree for permanent injunction was adjudicated upon in favour of ST. Ives restraining the defendant from dealing in the same or allied goods and business under the impugned trademark MT IVES or any other trademark or label bearing the same or identical with or deceptively similar to the plaintiff’s said trademark ST. IVES and trade name bearing the mark/word ST. IVES.

The other case is also an example of how a deceptively similar trademark creates a probability of confusion regarding the source of the product in the minds of the consumers.

SmithKline Beecham is a company organized and existing under the laws of U.K. It is a well-known manufacturer of pharmaceutical products and has proprietary rights in respect of manufacture and sale of ‘CROCIN’ and ‘CROCIN PAIN RELIEF’ in the distinctive blue and red strip packaging. It acquired the brand ‘CROCIN’ from Duphar-Interfran Ltd. in 1996, which in turn had invented the word in 1963 and used it as their brand name for their paracetamol tablets. In 2005, the SmithKline Beecham was alerted of the sale of paracetamol tablets under the mark ‘NELCIN PLUS’ bearing a packaging almost identical to their brand being manufactured by Anros Pharma, which is a hundred percent subsidiary company of SmithKline Beecham. It was submitted that Anros Pharma has copied the product packaging and also adopted the NELCIN mark, which is deceptively similar to the well-known product CROCIN to pass off their goods as originating from the established source. The confusion or deception is bound to result as the packaging and the name used is more or less similar. Taking view of the above facts and evidences produced before the court a permanent injunction was decreed in favour of SmithKline Beecham and damages were also awarded towards loss of reputation and goodwill.

When similarity between two trademarks is as such to cause confusion and imperfect recollection in the mind of the consumer, the deceptively similar rival trademark succeeds and encashes upon the reputation and goodwill of the trademark holder. The deceptive nature of a rival trademark can be perceived either through sound or look that is ‘visually or phonetically’ and this is the benchmark in deciding cases on the question of likelihood of confusion between the marks. The mark, which creates the same psychological reaction and mental association in the minds of the consumers so as to lead them to believe that the particular good is coming from the same source when they buy goods under normal circumstances and conditions of the trade, is a deceptively similar mark.

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.