India: Trademark Infringements In India

Last Updated: 18 August 2016
Article by STA Law Firm

Think about a company. It has spent a lot of money. First, in making a one-of-a kind product, and then in advertising it to the world. The product becomes a hit, taking the company to greater and greater heights. It spreads like wildfire. But one day, the company realizes that another company is using a deceptively similar name and logo to advertise their own products. That company is basking in the other's glory. It is, therefore, essential to prevent the unauthorized use of any brand logo or any sign in order to protect the underlying interests of its proprietor.

India is home to numerous domestic corporations and has continued to be a haven for investors and foreign companies due to its large consumer market. The status quo of the intellectual property law of a country is a crucial factor that motivates foreign companies to invest in domestic markets. The law governing trademarks in India has developed at a rapid pace in the past few decades. The registration, enforcement and infringement of trademarks in India is governed by the Trade Marks Act, 1999 [the Act]. Section 2 (zb) of the Act has defined trademark as a mark which can be represented graphically and can distinguish the goods and services of one person from that of another and can include the shape of goods, their packaging and any combination of colours.

Evolution of Trademark Law in India

Earlier, the difficulties faced by entrepreneurs in India ranged from filing of an application for the registration of a trademark, to the obtaining of an injunction in case of an infringement. At the beginning of the twentieth century, trademarks were registered by obtaining a declaration of ownership of the mark under the Indian Registration Act 1908. This was done due to the lack of a specific statute to govern the matters regarding trademarks. These shortcomings were overcome with the enforcement of the Trademark Act 1940, which corresponded with the English trademark law. India saw a tremendous growth in trade and commerce post-independence. The demand for a more effective statute to respond to the increased use of deceitful marks on merchandise paved way for the Trademark and Merchandise Act, 1958. This statute provided for the registration of trademarks and established a higher degree of protection against trademark infringement. Under this act, registration of a trademark gave proprietors the legal right over the trademark.

In the early 1990s, an economic liberation was initiated in India with the objective of transforming the economy into a market-oriented economy by expanding the role of private and foreign investors. Reduction in import tariffs and the deregulation of markets, gave rise to higher foreign investment. Names and insignia of brands gained colossal value with the globalization of trade and the entry of foreign companies. Subsequently, India joined the World Trade Organisation and became a member state to the Agreement on Trade-Related Aspects of Intellectual Property Rights [TRIPS]. Thereafter, the government identified the need for a trademark law which would be in compliance with the provisions of TRIPS. Hence, the Trade Marks Act 1999 was enacted. All trademark related issues in India are presently governed by the Act and the Trademark Rules, 2002.

The fruit of one's labour shall not be enjoyed by another

Proprietors, who have registered their trademarks under the Act, are given with the exclusive right to use their trademarks in relation to the goods or services for which it has been registered. Suppose company 'A' launched electronic goods under the registered brand name and logo 'X' and subsequently company 'B' launched a range of kitchen appliances under the same brand name and logo 'X'. Company 'B' has used the trademark without the authorization of its registered proprietor. Therefore, trademark rights of company 'A' would be said to have been infringed by company 'B' in accordance with sections 29 and 30 of the Act.

But what if the brand name and logo 'X' of company A was not registered? Then company 'A' would not be permitted to file a suit for trademark infringement under the Act. However, a common law suit of tort may be instituted against company 'B' for passing off their goods as the goods of company 'A'.

The infringing mark should be identical or deceptively similar to the registered trademark in order to establish a trademark infringement suit. The Act provides civil and criminal remedies against the parties who use their trademark without authorization. According to section 134(2) of the Act, the proprietor of the trademark can file a trademark infringement suit in a court of competent jurisdiction, at his place of residence or business. The suit would have to be instituted within three (3) years from the time of gaining knowledge about the infringement. However, infringement cases usually consist of a series of acts and transactions. For example, each sale of an infringed product by a company would be considered as a separate transaction. Therefore, the courts have taken the view that a suit can be filed within three (3) years of each act of infringement.

Benefits of an Effective Judicial System

The case of Cadbury India Limited and Ors. V Neeraj Food Products [142 (2007) DLT 724], gave the Indian courts an opportunity to look into circumstances when the trademark of a party is deceptively similar to that of another. The plaintiff was into the business of production and manufacture of confectionary and chocolate products and they were the registered proprietor of the trademark 'Gems' among various other trademarks. The plaintiff claimed that the chocolate products introduced by the defendant under the trademark 'JAMES BOND' was similar in shape, size and packaging, to their own chocolate products. Hence, the plaintiff filed an application under order 39 rule 1 and 2 of the Civil Procedure Code, 1908, to restrain the defendant company from using the trademarks 'JAMES' or 'JAMES BOND', or any other trademark which was deceptively similar to 'Gems'. The court observed that the packaging of the defendant's products were so similar to the packaging of the plaintiff's products that they were likely to deceive unaware purchasers. The court took the view that the trademark of the defendant was deceptively or confusingly similar to the plaintiff's registered trademark. The court allowed the application of the plaintiff and restrained the defendant from using their trademarks or any other trademarks that would be deceptively similar to the plaintiff's trademark. The court took a steady view on the situations in which products or marks of one proprietor were deceptively similar to that of another. This case helped in strengthening the reliance placed on Indian courts by the registered proprietors of trademarks.

The 2009 judgment of the Delhi High Court in the case of Clinique Laboratories LLC and Anr. V Gufic Limited and Anr. [I.A. No. 15425/2008, I.A. No. 217/2009 and I.A. No. 2769/2009 in CS (OS) No. 2607/2008] further cemented the rights of the proprietors of registered trademarks. The plaintiff was the registered proprietor of the trademark 'CLINIQUE', whereas the defendant was the registered proprietor of the trademark 'CLINIQ'. The plaintiff filed a rectification application to the Registrar of Trademarks in order to cancel the trademark of the defendant. Subsequently, the plaintiff filed for an injunction to restrain the defendants from passing off their goods as the goods of the plaintiff. The plaintiff contented that their goods were superior and more expensive than that of the defendant and even cited advertisements of their product in leading magazines. The contentions of the defendants regarding the incapability of a person to sue the proprietor of a registered trademark, and the large number of people who use the word 'clinique', did not impress the court. The court observed that a suit for trademark infringement is maintainable even if the defendant is also the proprietor of a registered trademark. Therefore, the court granted an interim injunction in favour of the plaintiff until the rectification application was disposed of by the Registrar of Trademarks.

In the infamous case of The Coca Cola Company V Bisleri International Private Limited and Ors. [I.A. No. 2861/2009, I.A. No. 12490/2008, I.A. No. 13904/2008 and I.A. No. 13905/2008 in CS (OS) No. 2166/2008], an issue arose as to whether the plaintiff had the right to register the trademark 'MAAZA' outside India. The defendants had sold their trademark rights, formulation rights, know-how and goodwill of some of their soft drink products, including 'MAAZA', to the plaintiff through an agreement. In 2008, the defendants learned that the plaintiff had filed for the registration of the trademark 'MAAZA' in Turkey. Subsequently, they sent a legal notice to the plaintiff repudiating the agreement between the parties which ceased the plaintiff from manufacturing the soft drink or using its trademarks. The defendants had also stated about their intention to use the trademark and the product in India. Thereafter, the plaintiff claimed for permanent injunction and damages against the infringement of its trademark. The defendants contended that 'MAAZA' was sold to the plaintiff for distribution and sale within India. Whereas, the plaintiff claimed that they were the absolute owners of the formulation and know-how. After hearing the detailed contentions and arguments of the parties, the High Court of Delhi held that the plaintiff was the registered owner of the trademark 'MAAZA' and granted an injunction in favour of the plaintiff. This judgment gained fame in the public eye due to the prompt and precise judgment by the Indian judiciary.

Amelioration

The Act has provided for various civil and criminal remedies to relieve a registered proprietor from the loss incurred due to trademark infringement. Under section 135 of the Act, the court may grant any of the following relief to the party whose trademark rights have been infringed:

  • damages or an account of profits together;
  • delivery of infringing labels or marks for destruction;
  • Injunction- ex parte or interlocutory injunction for discovering documents, preserving the infringed goods or restraining the defendant from disposing of his assets in a manner which would adversely affect the plaintiff in recovering damages from the defendant.

Whereas, sections 103 and 104 of the Act state that, a person who infringes a trademark, would be punishable with imprisonment for a minimum term of six (6) months but may be extended up to three (3) years. A fine ranging from INR 50,000 to INR 200,000 shall also be imposed on the infringing party.

Conclusion

Proprietors should be well aware of their rights in order to safeguard their trademarks. With the modern day globalization, it has become essential for entrepreneurs to protect the goodwill of their brands. The Act provides high degree of protection against infringement of a registered trademark. Hence, proprietors are advised to register their trademarks so as to avail the remedies that have been laid down in the Act.

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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