India: Nominative Fair Use Of A Trademark (June 2017)

INTRODUCTION

A trademark is an exclusive property of the owner and any use without the permission of the owner by a third party is an infringement of the rights of the trademark owner. The nominative fair use is an exception to the right of exclusive use of the trademark under the Trademark Act, 1999. The Courts around the world has acknowledged the nominative fair use defense in the infringement cases. The Indian Courts have also acknowledged the defense of Nominative fair use in cases of Infringement which is specifically allowed under the Trademark Act, 1999.

In today competitive business environment there are certain cases where a mechanical device, which is an accessory to a final product, is required to be introduced in the market in way that the user should know that the device is to be used for the final branded product. Further there are certain services which are provided for the specific products and to introduce the services in the market it is required to use the brand of a third party product for which the service is provided. In these types of cases the registered trademark of a proprietor is used by third party in order identify the product of registered trademark's proprietor in which the product of the third party is to be used. For example a mechanic use the trademark of the Hero Company in order to identify that he specialized in repair of Hero Company's vehicle.

ORIGIN OF THE DOCTRINE:

The nominative use doctrine was first introduced in case of New Kids on the Block v. News America Publishing, Inc¹ by the U.S. Court of Appeals for the Ninth Circuit. In this case the defendant has used the name of famous singer for a survey. The singer has filed a suit of infringement against the newspaper. The court had examined a "New Kids on the Block survey" performed by the defendant, and found that there was no way to ask people their opinion of the band without using its name.

Similarly, in case of Playboy Enterprises, Inc. v. Welles², where Playboy Playmate Terri Welles used the trademark "Playmate of the Year" as metatags on her website was sued by the owner of the trademark for infringement. The court held that the defendant in order to identify that she has been given the title "Playmate of the Year" by the trademark holder has to use the trademark on her website.

In a recent decision The Century 21 Real Estate v. Lendingtree, Inc.³ the third circuit court in USA held that

"many factors traditionally considered in a likelihood of confusion analysis were irrelevant in cases of nominative fair use and that only four factors needed to be considered:

1. degree of consumer care;
2. length of time defendant has used plaintiff's mark without evidence of actual confusion;
3. intent of the defendant in adopting the mark; and
4. evidence of actual confusion.

After weighing these factors it was then necessary to consider whether the defendant's use is nominative fair use, by examining:

1. whether the "use of plaintiff's mark is necessary to describe both plaintiff's product or service and defendant's product or service," thus scrutinizing defendant's need to use plaintiff's mark to describe its own products;
2. whether defendant uses "only so much of the plaintiff's mark ... as is necessary to describe plaintiff's products or services; " and
3. whether "defendant's conduct or language reflects the true and accurate relationship between plaintiff and defendant's products or services," because the defendant may have a relationship with plaintiff that may be inaccurately portrayed by defendant's use of plaintiff's marks.

These are the important factors in order to consider a use of a registered trademark by a third party as a nominative fair use. The theory of the nominative fair use has to be used with the utmost precaution in order to differentiate the cases from the one where the registered trademark is used only to take unfair advantage of established reputation of the same.

INDIAN LEGAL SCENARIO:

Under Section 30 (2)(d) of the Trademark Act, 1999 it is provided that a nominative fair use of a trademark by a third party is not an infringement of a registered trademark. Section 30 (2)(d) provides that:

As per this section, a use will not be considered as infringement, if the use of the registered trademark is reasonably necessary in relation to genuine spare parts or accessories adapted to form part of the defendant good and neither the purpose nor the effect of the use of the mark is to cause any confusion as to trade origin. If a particular piece of machinery or some other manufacture or goods have become known with the consent of the proprietor under the name of the trademark of which the owner or maker of the goods is the proprietor, then it is not an infringement of the trademark so to describe the goods or the particular piece of machinery, no it is an offence so to describe the goods which are adopted to form part of or to be accessory to the other goods in respect of which the name has become recognized as the name of the particular proprietor's goods⁴.

In case of Consim Info Pvt. Ltd., represented by its Director and Chief Executive Officer Mr. Janakiraman Murugavel Vs. Google India Pvt. Ltd. and Ors⁵ while referring the cases of New Kids on the Block v. News Am. Publ'g Inc., 971 F.2d 302, 308 (9th Cir. 1992); Caims v. Franklin Mint Co. 292 F.3d 1139, 1153-55 (9th Cir. 2002) the Hon'ble High Court of Chennai held that:

"A use is considered to be a permitted nominative fair use, if it meets three requirements, viz.,

1. the product or service in question must be one not readily identifiable without use of the trademark;
2. only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and
3. the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

So in order to consider a use of a registered trademark by a third party to be a nominative fair use, the user has to established the fact that the his use of the registered trademark was necessary in order to identify his product. The nominative fair use defense is considered to be a fair use in cases where a trademark is used in order to refer a trademark owner or its goods or services for purposes of reporting in a news article, commentary on the Television or radio, in cases of a healthy criticism, and parody, as well as in cases of comparative advertising.

CONCLUSION:

Even though it is very difficult to establish all the ingredient mention above by a user but the courts have to be very strict in order to allow the relief of nominative fair use. The trademark which is an identity of a business should not be allowed to be used by anybody and everybody. The labour, time, money and effort put in by the owner of the trademark in making the same distinctive should be given consideration while considering the relief of nominative fair use.

Footnotes

1. 971 F.2d 302 (9th Cir. 1992).

2. 279 F.3d 796 (9th Cir. 2002).

3. 425 F.3d 211 (3rd Cir. 2005)

4. Bismag Ltd v Amblins Ltd (1940) 57 RPC 209

5. (2010(6) CTC813)

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.