Legal Provision Relating to Trademark Infringement

Trade Mark[1]

A trademark or trade mark is one of the elements of Intellectual Property Right and is represented by the symbol ™ or ® or mark is a distinctive sign or indicator of some kind which is used by an individual, business organization or other legal entity to identify uniquely the source of its products and/or services to consumers, and to distinguish its products or services from those of other entities. A trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements. There is also a range of non-conventional trademarks comprising marks which do not fall into these standard categories.

Intellectual property right protection provides a person who performs human intellectual creative activities with the right to exclusively use such creation in a variety of areas. Goods, which are made by using the result of human intellectual creative activities without prior consent from the right holder and which ignore such rights, are called counterfeits and pirated goods. Infringement means the creation of counterfeits and pirated goods and the usage of such creation without prior consent. For such infringement, the prohibition of usage and claim for damages may be sought by the right holder[2].

Infringement of trademark is damage of the exclusive rights granted to the registered proprietor of the trademark to use the same. A trademark is said to be infringed by a person, who, not being a legitimate user, uses an identical/ similar/ deceptively similar mark to the registered trademark without the authorization of the registered proprietor of the trademark. However, it is pertinent to note that the Indian trademark law shields the vested rights of a prior user against a registered proprietor which is based on common law principles[3].

Passing off is a common law tort used to implement unregistered trademark rights. Passing off basically occurs where the reputation in the trademark of party A is taken by party B, such that party B misrepresents as being the owner of the trademark or having some affiliation/nexus with party A, thereby damaging the goodwill of party A. For an action of passing off, registration of a trademark is irrelevant[4].

Registration of a trademark is not a pre-requisite in command to sustain a civil or criminal action against violation of trademarks in India. In India, a joint civil action for infringement of trademark and passing off can be initiated.

Significantly, infringement of a trademark is a cognizable offence and criminal proceedings can be initiated against the infringers. Such enforcement instruments are expected to boost the protection of marks in India and reduce infringement and contravention of trademarks.

Trade mark Law in India[5]–

The Indian law of trademarks is enshrined the new Trade Marks Act, 1999 came into force with effect from September 15, 2003. The old Trade and Merchandise Marks Act, 1958 was repealed at the same time. The new Trademarks Act of 1999 is in line with the WTO references and is in conventionality with the TRIPS Agreement to which India is a signatory.

Under Trade Marks Act, 1999 both civil and criminal remedies are available for taking action against infringement of your client’s trademark.

The Act provides that no action can be taken for infringement of an unregistered trademark in India. However, registration of a trademark does not affect any rights acquired under common law by the use of such mark. Therefore, in case of an unregistered trade mark, common law rights have been protected whereby the proprietor of a trade mark, whether registered or unregistered, may sue for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff’s trade mark, in the appropriate Court in India. Further it has to be established that the acts, actual or threatened, of the defendant are such that they are likely to result in passing off the goods of the defendant as the goods of the plaintiff.

Who can sue for infringement?

The plaintiff in an infringement suit may be either:

1. The proprietor of the registered trade mark of his legal successor.
2. A registered user of a trade mark subject to a prior notice to the registered proprietor and consequent failure of the registered proprietor to take any action against the infringer.
3. An application for registration of a trade mark, he can file an infringement suit to protect his right to continue with the suit which will sustain only if his trade mark is registered before the hearing of the suit.
4. Legal hairs of the deceased proprietor of a trade mark.
5. Any one of the joint proprietors of a trade mark.
6. A foreigner proprietor of a trade mark registered in India when infringement occurs in India.

Who can be sued?

• The infringer who directly by his action causes infringement or who uses or who uses or contemplates or threatens to use a trade mark infringing the plaintiff’s right.
• The agents of infringers.
• Director and promoters of a limited company cannot be joined as co-defendants unless they have personally committed or directed infringing acts.

In India, trademark rights may be acquired through:

• Use in relation to goods or services;
• Registration; or
• Assignment/transmission.

The meaning of the term ‘use’ in relation to trademarks has been developed through case law.

In Hardie Trading Ltd v Addisons Paint & Chemicals Ltd[6]  the Supreme Court held that “‘use’ of a trademark is not limited to use on goods sold. It also extends to advertisements”. Further, in Dongre v Whirlpool Corporation[7] the court held that the actual presence of the goods or the actual use of the mark in India is not mandatory and it would suffice if reputation and goodwill in respect of the mark have accrued in India through advertising or other means. Enforcement of trademark rights The Trademarks Act 1999 provides rights holders with both civil and criminal remedies against infringement or unauthorized use of a mark. Other remedies are available to rights holders under the Customs Act 1962, which deals with import/export of goods and confiscation of infringing materials by the relevant authorities.

Civil Remedy for Infringement of trademanrk

Depending upon whether a trademark is registered, pending registration or unregistered, civil proceedings can be initiated either under the tort of passing off or for statutory infringement under the Trademarks Act. Civil proceedings in India are governed by the Code of Civil Procedure 1908. The general rule is that a suit can be filed in a court:

• Where either the defendant or one of the defendants resides or carries on business or personally works for gain; or
• Where the cause of action arises, wholly or in part.

Under the old Trademarks & Merchandise Marks Act 1958, the appropriate court for a suit was determined by the location of the defendant. However, Section 134(2) of the 1999 act allows a rights holder to file a suit for trademark infringement in the court where the registered proprietor resides or carries on business or personally works for gain.

 A court can grant the following relief under a civil suit:

• Injunctions[8];
• Damages or accounts for profits; and
• Delivery up of the infringing labels and marks.

Indian courts regularly grant Anton Piller[9], John Doe and, occasionally, Mareva injunctions[10], and may appoint court commissioners to inspect a defendant’s premises, as well as seize and seal infringing goods.

When considering applications for ex parte, interim orders, Indian courts are guided by:

• The balance of convenience;
• Whether the plaintiff will suffer irreparable harm should the order not be issued; and
• Whether there exists a prima facie case.

In Wander Ltd v Antox India Pvt Ltd[11], the Supreme Court observed that: “The object is to protect the plaintiff against injury by violation of his rights for which it could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in its favour at the trial.”

In the same case the court further observed that: “The need for such protection must be weighed against the corresponding need for the defendant to be protected against injury resulting from its having been prevented from exercising its own legal rights for which it could not be adequately compensated. The court must weigh one need against another and determine where the balance of convenience lies.”

In Patel v Shah[12]  the Supreme Court made the following observations with regard to actions for passing off:

• It is usual, rather than essential, to seek a temporary injunction;
• Proof of actual damage is not essential, likelihood of damage is sufficient; and
• An absolute injunction can be issued restraining the defendant from using or carrying on business under the plaintiff’s distinctive trademark.

Limitation/delay

Since passing off or trademark infringement usually involves a series of acts, each infringing act provides a fresh cause of action. Thus, the general rule of limitation, which provides that a complaint must be filed within three years of the date upon which the cause of action first arose, does not apply in such cases. However, prompt action by rights holders will help to establish the seriousness of a claim in the eyes of the court.

In Midas Hygiene Industries P Ltd v Bhatia[13], the Supreme Court held that: “…in cases of infringement either of trademark or of copyright normally an injunction must follow. Mere delay in bringing the 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 itself was dishonest

Damages Accounts of Profits:-

The plaintiff if an action for infringement may be granted either damages or an account of profits but not both. In an account of profit the infringer is required to give up ill-gotten gains in favour of the plaintiff whose right he has infringed.

In case of damages the defendants has to compensate the plaintiff. The damages may even be more than monetary profits reaped by the defendants by the misuse of the plaintiff mark.
The quantum of damages awarded is determined by the quantum of loss actually sustained by the plaintiff which was the natural and direct consequence of the unlawful acts of the defendants. Speculative and unproven damages are also not considered and determining the quantum of damages.

In calculating the amount of profits, the damages suffered by the plaintiff is immaterial. The accounts of profit, is made on the basis of actual profit, the defendants has made out of the sale of infringing goods

Judicial Interpretation

Cases of Trade Mark Violation in India-

Trade mark infringement especially among the corporate classes in India is rising on an alarming rate. Few of the notable cases have been described in brief.

 1. Pantaloon dragged to court by Shoppers’ Stop and Lifestyle; Westside also contemplates similar action, (July 14th, 2008)[14].

 Shoppers’ Stop and Lifestyle have dragged their rival Pantaloon to court as they were miffed with an advertisement issued by the flagship company of Kishore Biyani owned Future Group that offered 10% extra discount to their loyal customers vide an advertisement issued in The Times of India, New Delhi, dated 28th June, 2008. The complainant retailers have accused Pantaloon of trademark violations and unfair business practices, says a Live Mint report. All the three parties operate department store format store chains in lifestyle segment.

Even Westside has taken objection to the ad saying, “We have sent a notice to them to which they have not responded,” said Smeeta Neogi, Head (Marketing) Westside.

Pantaloon’s ‘Central’ mall at Gurgaon had offered 30% discounts to its customers over the weekend. Loyalty card holders of competing retailers like Shopper’s Stop, Lifestyle and Westside, were lured by Pantaloon by offering an additional 10% discount on select brands of apparel. The advertisement asked such customers to: “Present your membership card to avail this offer.”

Loyalty cardholders are mainstay of business for most retailers. Shoppers’ Stop has a highly popular loyalty card programme branded “First Citizen.” According to analysts, more than two-thirds of Shoppers’ Stop’s apparel business is accounted for by its loyal customers.

“They (Pantaloon) are luring my customers by using my name in an unfair manner,” said Sandeep Mittal, the lawyer representing for both the petitioners.

The Honourable Delhi high court has issued an injunction restraining Pantaloon from using names of its rivals in the ads until the next hearing in the matter fixed for 31st July.

Taking potshots at these competitors is not new for Pantaloon. Last year, its Big Bazaar chain had put up hoardings, asking customers to “Keep West-aSide,” “Shoppers! Stop” and “Change Your Lifestyle. Make a Smart Choice.”

2.   Amul wins trade mark case in Gujarat High Court, (Sep 24, 2007)[15]

Amul has won the trade mark case in Gujarat High Court and no one else can use it.

The Kaira District Co-operative Milk Producers? Union Ltd. and GCMMF had filed trade mark infringement cases, against two local shop owners ? Amul Chasmaghar and its partners and Amul Cut Piece Stores in the District Court, Anand.

The District Court, Anand passed an order dated 25 April 2007, ruling that it was a clear case of infringement and restrained the two from using the Amul trademark.

 Amul Chasmaghar had challenged this interim injunction in the Gujarat High Court. The Gujarat High Court ruled the decision in favor of Amul, terming the order passed by the trial court as true, correct, legal and in consonance with the facts of the case, as well as in accordance with the provisions of the Trade Marks Act 1999.

3. Trade Marks Disputes Involving Pharmaceuticals Industry in India-

A.  Beecham Group Plc. V. S.R.K. Pharmaceuticals[16]

The appellant was using the mark ‘AMOXIL’ in India since 1990. This mark was registered in India in 1972 in Class 5 in respect of Pharmaceutical goods. The respondent started using the mark ‘LYMOXYL’ in India from 1985. The respondent filed the application for registration of the mark in 1987 in India in the same class with respect to similar goods.

The appellant brought an action against the respondent stating that the mark is deceptively similar. The only difference between the two marks is in the prefix ‘LY’ and ‘M’. The rival marks are phonetically and deceptively similar and the goods are pharmaceutical goods under Sec. 12(1) of the Act.

The Intellectual Property Appellate Board (IPAB) held that the respondent dishonestly adopted the mark by copying it from the appellant who had got the mark registered long ago. Hence the respondent cannot claim honest concurrent use, by virtue of earlier use. The Appellate Board delivered a judgment prohibiting registration of the Trade Mark ‘LYMOXYL’.

B.  Ranbaxy Laboratories Limited v. Anand Prasad & 4 Others[17]

The appellant was the registered proprietor of the mark ‘FORTWIN’ and had been using the mark since 1975. The respondent applied for registration of the mark ‘OSTWIN’. Both the marks related to pharmaceutical compositions in respect of treatment of bones.

The appellant brought an action against the respondent stating that the mark is deceptively similar. The IPAB held that the prefixes are ‘FORT’ and ‘OST’ while both the marks end with the suffix ‘WIN’. It was further held that since the rival goods are also pharmaceutical goods it might lead to serious consequences due to deception or confusion in the minds of the public. Hence on the possibility of harm being caused to common person the appeal was allowed.

C.  Wyeth Holdings Corp. & Anr. v. Sun Pharmaceuticals Industries Ltd[18].

 In this case the plaintiff whose former name was American Cynamid Company and who was the proprietor of the trademark ‘PACITANE’ registered the mark in Class 5 of Pharma goods. The respondent was using the mark ‘PARKITANE’ with respect to similar goods. The plaintiffs filed a suit for infringement and passing off and sought various reliefs including interim injunction against the defendant for using the mark ‘PARKITANE’.

The Court held that in both the cases the goods are similar, being pharmaceutical preparations for treatment of Parkinson’s disease, the customers buying these goods are the same and the trade channels are the same. Since the defendants did not show any search of the Register before adopting the impugned mark, prima facie adoption of the mark was not honest. Further, the Court held that despite protests, if the defendants have chosen to continue to sell the products, it cannot be said to be acquiescence by the plaintiff. Therefore the Court held that injunction is to be granted in favour of the plaintiff.

The Court further held that in case of pharmaceutical products, the test is of possibility of confusion and not probability of confusion. The plaintiffs have been in the field since 1950 and as such the balance of convenience is in their favour. The Court granted injunction in favour of the plaintiffs.

D.  Hoechst Aktiengesellschaft v. Artee Minerals & Anr[19].

The appellant was the registered proprietor of trademark ‘ARELON’. This mark was registered in class 5 with respect to pharmaceutical goods relating to preparation for killing weeds and destroying vermin. The respondent filed an application for registration of the mark ‘ARTEELON’ in the same class with respect to pharmaceutical goods.

The appellant opposed the application for registration of trade mark filed by the respondents on the ground that the registration of the impugned mark would be contrary to provisions of Sections 9, 11, 12(1) and 18 of the Trade and Merchandise Marks Act, 1958.

The IPAB held that the rival goods were same and the only difference was the letters ‘TE’. The Appellate Board further held that the possibility of confusion and deception is not ruled out and hence affirmed the order rejecting the application for registration filed by the respondent.

The IPAB further held that the benefit of use under Section 54 is given only in case of rectification proceedings when use of an associated trademark is deemed to be use of the registered trademark against which rectification proceedings are initiated for non-use of the mark.

Conclusion

In conclusion it can be drawn that Indian Trade Mark Law must me updated on frequently keeping in pace with the dynamic and new methods of Trade Mark infringement. Both Courts and Enforcement authorities must be well equipped and be trained for efficient disposal of cases relating to Intellectual Property.

Registration of a trademark is not a pre-requisite in order to sustain a civil or criminal action against violation of trademarks in India. In India, a combined civil action for infringement of trademark and passing off can be initiated.

Significantly, infringement of a trademark is a cognizable offence and criminal proceedings can be initiated against the infringers. Such enforcement mechanisms are expected to boost the protection of marks in India and reduce infringement and contravention of trademarks.

The relief which a court may usually grant in a suit for infringement or passing off includes permanent and interim injunction, damages or account of profits, delivery of the infringing goods for destruction and cost of the legal proceedings.

In rare cases, the court can double or treble the ultimate damages award (for example, when the other mark was a counterfeit of your registered mark, you are entitled to treble damages). In addition, in cases where the infringement was malicious, fraudulent, deliberate or willful, you can seek your attorneys’ fees associated with the trademark infringement litigation.

Finally, you can also request that the court order the other party to destroy its infringing materials or deliver them to you.

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[1]   http://www.articlesbase.com/intellectual-property-articles/trade-mark-law-in-india-its-violation-an-analytical-               

study-543492.html

[2]   http://www.meti.go.jp/policy/ipr/eng/infringe/about/index.html

[3]   “TRADEMARKS LAW IN INDIA – EVERYTHING YOU MUST KNOW” ­- Vijay Pal Dalmia, Advocate

[4]   Ibid.

[5]   http://www.articlesbase.com/intellectual-property-articles/trade-mark-law-in-india-its-violation-an-analytical-study-543492.html

[6]   (2003) 27 PTC 241 (SC)

[7]   (1996 (16) PTC 583)

[8]   An injunction is a judicial process or order restraining a person from continuing with wrongful act. the 

    general rules governing the grants of injunction are contained in section 36 to 42 of the Indian Specific Relief

    Act, 1963 and Order XXXIX Rules 1 & 2 and section 151 ( Inherent power of the Court) of the code of civil

    procedure, 1908

[9]   These are ex parte order to inspect defendant’s premises. A court may grant such an order to the plaintiff

    where there is a possibility of a defendants destroying or disposing of the incriminating material. Pass such an

   order if for inspection of the premises of the defendants.

[10]  In such an order the court has power to freeze defendant’s assets where there exists a probability of the assets

    being dissipated or canceled so as to make a judgment against him worthless and un-enforceable.

[11]   (1990 Supp (1) SCC 727)

[12]   (2002) 3 SCC 65

[13]   (2004) 3 SCC 90

[14]   http://www.articlesbase.com/intellectual-property-articles/trade-mark-law-in-india-its-violation-an- analytical-study-543492.html

[15]  Ibid, 15.

[16]   2004 (28) PTC391 (IPAB)

[17]   2004 (28) PTC 438 (IPAB)

[18]    2004 (28) PTC 423 (Bom)

[19]   2004 (28) PTC 470 (IPAB)