India: Unique Strength Of Indian Trademark Law

Last Updated: 22 April 2009
Article by Pravin Anand

It was in the mid 1980s that the Indian Trademark Law started to undergo significant changes. These changes were of several kinds and can be summarized as follows:-

a) The concept of trans border reputation which expanded the number of ways in which trademark rights can be created;

b) Better protection of well-known trade marks as a result of trans border reputation, particularly the expansion of the concept to goods different from those dealt in by the proprietor;

c) The coverage of newer torts without a formal legislation; and

d) The expansion of remedies from purely statutory to more socially acceptable ones.

A. TRANS BORDER REPUTATION

Before the mid 1980s, i.e. before Scotch Whisky Association vs Jagatjit Industries case, Indian courts recognized only two sources for the creation of trademark rights, registration and use. This led to a classical problem. How would you protect a well-known foreign trademark which had neither been used on a commercial scale in India nor was registered here from being usurped by a third party.

In England, in the Budweiser decision, the English courts declined to do this by striking a distinction between reputation and goodwill and holding that for a passing off action it was necessary to have a protectable goodwill; which meant doing of business in the open market in England. In the Budweiser case, an American company was unable to restrain a Czechoslovakian company from using the mark BUDWEISER because its products were not sold in the open market in England. It was not enough that the products were sold in the American military bases as that amounted to having a reputation but not a protectable goodwill.

The result was that a well-known trademark could not be protected in England.

Indian courts disagreed with the Budweiser decision and starting with the Scotch Whisky case, followed by decisions in Avis Rent A Car, 7 O'Clock, Yardley, K Mart, Apple Computers, Tiger Balm, Calvin Klein, Playboy, rendered a vast number of decisions that upheld this concept. Finally, in the Whirlpool case the Supreme Court confirmed the concept of trans border reputation which is now recognized as a part of the new Indian Trademark law.

The result is that if there is a foreign company whose trademark is known in India through spill over advertising, tourist travel, etc. then it can seek protect for its mark even though the mark is not commercially used in Indian nor registered here.

B. WELL-KNOWN TRADEMARKS

Partly as a result of the trans border concept and partly as a passionate reaction to dishonest trading, Indian courts protected well-known trademarks even beyond the proprietor's goods. Often, the protection extended to totally dissimilar goods as in the Benz case where the sale of underwear under the BENZ trademark was restrained, the Dunhill case in which the defendants' use of the mark for textile piece goods was restrained and the Volvo case where the court restrained the use of the mark for towels.

Another development was the protection of trade dress in cases such as the Glenfiddich whisky case (William Grant vs. McDowell & Co) where the court looked at elements of a trade dress and protected the plaintiff despite the fact that the competing word marks GLENFIDDICH and McDOWELL'S SINGLE MALT were totally different.

C. NEWER TORTS

The Yahoo! case was India's first domain name case where the defendant argued that there was a need of a legislative amendment to protect domain names or trademarks on the internet. The Indian courts disagreed and granted this protection despite the absence of specific legislation on the principles of infringing marks and passing off on the internet. Thereafter, the courts recognized the torts of meta tagging, hyper linking, framing, spamming and phishing in a large number of cases forming a mosaic of decisions to protect trademarks on the internet.

D. REMEDIES

Another significant development was the strengthening of remedies from the simple ex parte injunction to more complex remedies like grant of Anton Piller orders. An interesting extension was the John Doe type order granted in Taj Television v. Rajan Mandal where the intellectual property in issue was the broadcast reproduction rights of the Soccer World Cup 2002. The right had a life of one month (June 2002) and it was therefore important for the plaintiff to receive strong and immediate protection during this month. The plaintiff brought an action and the Delhi High Court granted a John Doe type order acting on which court commissioners searched and seized equipment at various cable operators' control rooms and as a result some 3500 licenses were signed up. The action was an immediate success in curbing what might have been a complete destruction of the plaintiff's intellectual property.

The Mareva injunctions freezing bank accounts of the defendant granted in cases of Philips and Tata, the Norwich Pharmacal order granted in Souza Cruz (a subsidiary of British American Tobacco) for "Hollywood" cigarettes directing excise and customs commissioners to disclose the defendants' export records and damages awards granted for the first time in the 'Time Magazine' case in 2005 spanned a range of remedies. In fact, in the Time case it was held that it was high time that Indian courts started granting punitive and exemplary damages apart from compensatory damages in order to shift the focus from an overburdened criminal justice delivery system to a civil system. From then to now, roughly 50 decisions of punitive and exemplary damages have been granted by the Delhi High Court alone to a large number of companies such as Microsoft, Adobe, Autodesk, Cartier, Hilton, etc.

Interestingly in the Amar Nath Sehgal vs Union of India case, damages were granted even against the Government of India for a moral rights violation underscoring the increasing willingness of the courts to make damages an acceptable outcome of litigation.

Over several cases, courts realized that not all defendants can afford to pay damages and took a softer approach in some of the cases. Thus, the courts have granted a variety of unusual orders such as the "spittoon" order granted in the Baba Zarda case where the defendant, a chewing tobacco manufacturer, had to install 150 spittoons in Osmania hospitals in Hyderabad, the Microsoft orders where the defendants had to work with the plaintiffs in anti counterfeiting campaigns including participation in seminars with a view to advocating the correct and legal use of software. In a case of The Polo/Ralph Lauren Company, the defendant had to undergo community service of 30 days in an old age home and his partner had to do the same in an orphanage and thereafter provide a report to the court of their having performed the service.

In short, it can be said that Indian courts have been extremely creative and innovative in designing new remedies to suit the complex social and economic environment of the country.

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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