Guide to De-Mystifying Law of Trade Mark Litigation in India

Article by Vijay Pal Dalmia, Advocate, Partner & Head IP & IT Laws Practice Division, Vaish Associates Advocates

The first and the foremost point to be noted for protection of a trademark in India is that the "Registration" of a trade mark under the (Indian) Trade Marks Act, 1999 is not a condition precedent for seeking protection in India. Accordingly, both registered as well as unregistered trademarks are protectable in India by way of an infringement or passing off action in the court of law.

Acquisition of Right in a Trade Mark in India

In India, Right in a trade mark may 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 action. A trade mark may remain 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 parties to the litigation is considered to be immaterial.

Consideration Before Adoption, Use or Acquisition of a Trade Mark

Generally, a good registrable and protectable Trade Mark in India should have the following qualifications, i.e. the trade mark should not

refer to character or quality of goods
be a geographical name
conflict with other existing registered trade marks.
conflict with any pre existing registered or unregistered trade marks in the market.

Concept of Law of "Passing off" in India

The law of passing off can be summarised in one short general proposition-no man may "pass off" his goods as those of another. Further, in the absence of registration of a trade mark or the same being under challenge, in India the law of passing off has to be resorted to for resolving various aspects related to violation of any trade mark. It is for this reason, generally it is a practice in India to file a composite suit for infringement as well as passing off, as the registrations are invariably challenged during the course of the proceedings of an infringement suit.

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 a goodwill by a third person in a trade mark. The term passing off has not been defined under the Trade Marks Act, 1999, and same is primarily based on "judge made" law of equity.

While analysing a legal proposition as to the validity, longevity and legality of a trademark and its ownership, one has to look at the law relating to infringement as well as passing off.

It is further 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 "Prior Adoption" and user.
Long, Continuous, open, concurrent, honest and uninterrupted user.

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

Goodwill and reputation;
Deception; and
Damage or likelihood of damage to the Plaintiff⁵.
Proof of actual damages is not necessary.

It is reiterated that even an unregistered trade mark can seek protection of passing off under the Trade Marks Act, 1999⁶.

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 of infringement of trade mark in the manner provided under the Trade Marks, Act, 1999⁷.

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 Indian case of

Rob Mathys India Pvt. Ltd.v. Synthes Ag Chur⁹.

Firstly, nature of remedy in two types of actions is different.
1. 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
1. 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 first Adoption and User is treated as superior to the Registration in India, and the volume or quantum of business is treated as an irrelevant considerations in defending the suit.

Defences Available in Case of an Infringement or Passing Off Action

In any litigation relating to infringement or passing off action, the 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.

Concept of Delay and Laches in IP litigation in India

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 off¹⁰.

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 Ors¹¹. in the following terms:

"The law on the subject is well settled. In cases of infringement either of trade mark or of copyright, normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the mark was itself dishonest."

Concept of Acquiescence in IP Litigation in India

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. Ltd¹² the Supreme Court of India has stated that:

Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches.

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 injunction¹⁴.

Concept of Allied and Cognate Goods, Trade Channel, Counter of Sale in IP Litigation in India

In India, 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 Anr¹⁵., the Bombay High Court while relying on various judgments of the Hon'ble Supreme Court on allied and cognate goods observed that

"The test whether or not goods or services are "of the same description" would seem to be supplied by the question

Are the two sets so commonly dealt in by the same trader that his customers, knowing his mark in connection with one set and seeing it used in relation to the other,
would be likely to suppose that it was so used also to indicate that they were his?

The matter should be looked at from a business and commercial point of view.

The Court further approved the following principle in deciding whether goods are goods of the same description into three classes-

the nature and composition of the goods;
the respective uses of the articles;
the trade channels through which the commodities respectively are bought and sold."

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- (ANNEXURE-E)

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)

* Vijay Pal Dalmia, Advocate is a Partner of Vaish Associates Advocates, India and heads its Intellectual Property & Information Technology Laws Practice Division, with 25 years of experience at the High Court of Delhi and Supreme Court of India.

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.