Introduction to trademark infringement

What is the utility of a trademark? It is the value of a brand, a name that may resonate with people and is associated with a certain reputation and credibility that businesses strive hard to protect at all costs. That recognition is linked to the loyalty of the clientele and is therefore an asset for the company- it might include design and packaging as well, depending on the circumstances of the case.

Trademark is a necessary factor that is inevitably taken into account whenever one makes a decision to purchase a product because the trademark is believed to be a marker for the quality that brand espouses. Quality is of utmost priority to a customer.

When it comes to the food industry, quality is even more crucial since it includes hygiene- since health and safety is something that no one likes to compromise with, and the priority given to health will only increase in a Post COVID-19 world. A company that has proven itself to be reliable to customers has won their trust and confidence and can afford to increase prices for their profit margin without a substantial loss of customers. This unwavering faith in the quality of the products by a brand is actually the intangible asset of goodwill.

For instance, many people would prefer an expensive pizza from a dominos rather than a cheap pizza from a local restaurant because they believe that this brand would be maintaining standard quality. Intellectual property rights help ensure that the brand value generated over the years is reserved and is not accessible for the competition to misuse. An example to understand this is the dispute between Corn Products Refining Co. vs. Shangrila Food Products[1], where the question of law was whether the registration of trademark could be rejected simply because it was too similar to the petitioner's trademark, which had been registered long ago.

The court decided that the similarity between the petitioner's trademark and the trademark that the respondent intended to register was indisputably similar. Therefore it could lead to confusion for the common public as they would struggle to differentiate between the two. Thus, the registration for the trademark as refused to the respondent under Section 8(a) of the Act[2].

The reason, why a trademark is usually infringed, is to defraud customers by creating confusion in their minds in order to ruin the public perception of the competitor or to use their name to boost your own sales and benefit from the image they have worked hard to build over the years. As per Section 28 of the Trademark Act[3], the purpose of registration is to grant an exclusive right to the person who has registered the trademark, to the exclusion of all other individuals. Therefore, if another company tries to copy that trademark, he will have a cause of action against them under section 29 of the Act. This can be elucidated with the example of a case – Pidilite Industries Pvt. Ltd. vs. Mittees Corporation And Anr.[4]

Fevicol has been in existence since 1960, and it had its trademark registered in the same year. The parent company, known as Pidlilite, had spent a generous amount of funds on marketing and promotions of the brand, which boosted its sale exponentially. However, a similar product soon came into competition with them and it was named Trevicol. This led to Pidilite taking the proprietors of trevicol to court. The following were the considerations of the judges before reaching a decision-

Use of the trademark Trevicol began in 1985. This suit was documented in 1987. The two prefixes were different, but the suffix was common. Still, when said together, the two sounded deceptively similar and were likely to cause confusion in the minds of an average customer.

When deciding upon the similarity between product names, the court has to analyze what degree of similarity is acceptable, and at what point does it become deceptive?

The font used and the color was also alike. The organization names - Pidilite and Mitees, were placed in indistinguishable settings. The Fevicol mark has two elephants pulling separated a circle, while in Trevicol there were two ships instead of the elephants. The buyers of both these items were mostly from fields of woodworkers, contractual workers, carpenters, etc who may not necessarily have literacy and education required to distinguish between the two brand names and would mistake one for the other based on how it looks similar.

Keeping this in mind, the judgment was pronounced that the two names were misleadingly alike, both in terms of the sound and in how they looked. The shade pattern and the design of the packaging were practically indistinguishable, and it would likely lead to confusion for the customers. Therefore, Fevicol won the case with Trevicol was told to shut down.

Another instance to be considered is that of the dispute between Zara restaurant and the Zara fashion brand[5]. One is a notable retail clothing company, with a global outreach through a chain of stores throughout the world and the other is an individual outlet in Delhi. Would any customer mistake one for the other? Would having the same name as an international brand give undue leverage to the restaurant? The Delhi court was of this opinion and the judgment was passed in favor of the Zara brand. The restaurant was compelled to change its name, and it did so to The Tapas Bar.

Customers purchase expensive and high-quality ice cream from London Dairy[6], while customers go to Londonderry for low priced confectionery items. The words London Dairy and Londonderry sound identical, and therefore, at first glance, one may predict this to be decided in the same way as the Zara brand case.

However, in an unexpected turn of events, the high court in Bombay announced that there was no basis for a dispute in this situation, given that besides the sound of the name, everything else about the brand was significantly different. The court believed that it is improbable for people to get confused between the two. Given the absence of similarities, the matter was decided in favor of the defendant Londonderry. The Bombay High Court did not believe this was a case of misrepresentation or deceit.

Brief History of Trademark law in India

The first statute law on trademarks in India was The Trademark Act 1940. Before this Act came into existence, common law was the source of governing trademarks. The procedure for gaining a registration was by announcing ownership under the Indian Registration Act, 1908. This procedure was revised by the Trade Marks Amendment Act 1943. In the beginning, trademark registration was within the ambit of the patent office but was afterward segregated into a different category of its own.

The next amendment to follow was the Trademark Act of 1946. It was later replaced by the Trademark Act of 1958 which came into effect on 25th November 1959. This was amended by a new Trademark Act 1999. Before the Trademark Act of 1999 came into existence, there was no clarity on the concept of using acquiescence by the defendant to absolve himself of the potential infringement.

The Supreme Court shed light on this through the case of Ramdev Food Products Ltd. Vs. Arvind Rambhai Patel[7]. Acquiescence would apply where the plaintiffs permitted others to profit with their trademark by being inactive as it contradicts their claim of having exclusive rights to the same. The vision behind the 1999 Act was to enhance the laws of trademark to make an accessory for a growing economy. The purpose of the same was to bring advancements in the field of trade and commerce. This was approved by the president as well as both the houses and finally known as the Trademarks Act 1999.

The Trademark Rules 2002 were brought to power on 15th September 2003, and they have regulated the Trademark Act 1999. It is essential to note that now the laws of Indian Trademark are entirely suitable and cooperative with the international standards dictated by The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In a couple of decades, we have seen a rapid stage of globalization, which has been embraced by most countries.

This has led to an expansion in trade across borders. One of the downsides to this has been an infringement of trademarks of multinational corporations across the globe. In order to combat such wrongs, policies, and initiatives like the Berne Convention and the Rome convention came into being.

Intellectual property laws are territorial in form, but there is a minimum standard set, and countries are expected to abide by it. India is compliant with the metric for intellectual property law set by the World Trade Organization. India became a member of WTO on 1st January 1995 and signed General Agreement on Tariffs and Trade on 8th July 1948. However, the TRIPs agreement was not binding for India before 2005. India had been granted a ten-year duration to slowly modify all the national laws and policies of intellectual property in order to make them in accordance with TRIPs.

Although there is no uniform law on intellectual property that is applicable globally, TRIPs does function as a primary guideline to structure domestic laws for all the member nations of the World Trade Organization.

Comparative Analysis between Indian and American Law

Every nation has its own approach when it comes to trademark protection. In India, we are governed by the Trademarks Act 1999[8] and its equivalent in the The United States of America is the Lanham (Trade Mark) Act, 1946[9], which includes the federal statute of trademark law. This paper attempts to comparatively analyze certain differences between American and Indian trademark law.[10]

Is registration necessary?

Indian law imbibes the notion of 'First to Use,' which essentially means that the first use can take place anywhere in the world, accompanied by a trans-border reputation of the mark in India. Even if it is not present in the Indian market, the fact that it exists and is being used is sufficient.

For instance, even though Playboy magazines are banned in India, due to its marketing internationally, it claims to have the mark for the term Playboy in India as well, based on its goodwill and reputation. However, in America, use of the mark in business is required either within the country itself or in business between America and another country, for rights to be established in the mark[11].

In the case of Arun Chopra v. Kaka-Ka Dhaba Pvt. Ltd[12]. and Ors, the question of law to be decided by the court was whether the term Kake can be considered as the intellectual property of an individual, given that it is a common word in the Punjabi language. Is it fair to have a monopoly on making certain terms your trademark or a part of it? The dispute was between a hotel known as Kake Da Hotel and a set of eateries that went by the name of KakekaDhaba, Kaka-Ka Restaurant and Kaka-Ka Garden. The court passed an interim order to prevent any new restaurant from coming up with the term kake in the title, while the matter is still undecided. As of now, the eateries using the term 'Kake ka' are permitted to function.

Mechanism for Registration

Trademark rights in India can be procured through registration. A trademark may be enlisted, even for a mark that has not been utilized so far, i.e. on a "proposed to be used" premise. In addition, an amendment can only take place if a third party raises any objection. Registered trademark owners are not required to prove that their marks are in use in order, n a regular basis, to maintain their registrations. However in America, unlike India, registration can be obtained only when the mark has been used in U.S. interstate commerce or in trade between a foreign country and the United States.[13]

Third party action

In India, cancellation actions often fail, even before the assessment of the actual use of the challenged mark, for the sheer reason that those who are seeking the cancellation have a mala fide intent. As seen in the case of Gupta v. Liberty Footwear[14], The Intellectual Property Appellate Board stated that that the blatant adoption by a third party of a mark that is deceivingly similar to an invented mark on the register qualifies that party to seek its removal. It essentially implied that a mark consisting of an invented word could not form the subject matter of a cancellation application, particularly when the party seeking cancellation has adopted a similar mark with dishonest intent.[15]

What constitutes Use?

Indian courts have interpreted "use" with a wide understanding. The Supreme Court of India stated that "use" may be "non-physical" but must be "material," that is, meaningful, in the case of Hardie Trading v. Addison Paints[16]. There is no minimum requirement of quantity that needs to be met when it comes to use of a trademark.

To this effect, the Supreme Court of India held that, in case of a government prohibition regarding which products could not be imported into the country anymore, a single occasion of an advertisement by Toshiba[17] in India, accompanied with its international prominence, registrations for the Toshiba brand and marketing, protected the corporation's trademark from cancellation.

In the United States, the owner of a well known brand has grounds for seeking dilution if other companies try to corrupt his trademark through unauthorized use. In India, the principle of dilution has been upheld as witnessed in the numerous cases of companies like Mercedes-Benz, Apple, Hyundai and Cartier where these multinational corporations have successfully sued against users of identical or similar marks in relation to dissimilar goods, in India.[18]

To elucidate with an example, we can take the case of Daimler Benz Aktiegesellschaft vs. Hybo Hindustan[19]. In this case, a shop selling undergarments used the term 'Benz' in the title of the brand along with a logo that was deceptively similar to the logo created and used by the car company. The court held that this was unfair to the car company as it was a degrading utilization of another company's trademark, which could impact that company in a negative fashion.

Opposition
India allows only a four month period within which opposition against a trademark can be filed from the date of advertisement or re-advertisement in the Trademark Journal. The U.S. allows an opposition to be filed within 30 days from the date of publication in the Gazette which can be stretched to a maximum of 180 days.[20]

Enforcement
In both the countries, proceedings are conducted before the registrar and although are the same as in the court of law, involve much less time. Appeals are filed with the IPAB, which comprises of a technical member and a judicial member.

One of the few differences between the U.S. and Indian Trademark Law is the structure of the enforcement organization. While the U.S. has a Principal Register and Supplemental Register, India has a Registrar of Trademarks who controls the General Patent of Designs and Trademarks and the Trademark Registry and is assisted by the Joint Registrar, Deputy Registrars, Assistant Registrars and Examiners of Trademarks.[21]

"Incontestability" also differs in the context of both countries. In the U.S. under Section 33(a) of the Lanham Act[22], the registrant obtains the exclusive right to use the Trademark for the identified goods or services once the trademark has been registered for at least five years and the registrant has fulfilled the formalities listed in the Act. In India, merely registration of the trademark suffices for prima facie evidence of validity.[23]

Remedies for infringement:

In the U.S., under the Lanham Act[24], trademark infringement does not involve criminal remedies, while Indian law allows for criminal remedies. False trademarks and trade description are punishable with imprisonment for six months to three years and a fine between INR 50000-200000. The Act[25] also provides for imprisonment for three years and/or a fine in case of disguise of an unregistered trademark as registered.[26]

Secondary Use
To understand the meaning of 'Secondary Use' and the significance it might play in deciding trademark matters, we have an Indian case and an American case.

In the Indian case of Aggarwal Sweet Palace And Ors. vs. Assistant Registrar Of Trade[27], The issue here was whether the application can be refused on the ground of section 9 and 11 of the act[28]. For the application of section 9[29], the main criterion that needs to be considered is that the one who contest for the mark should be using it consistently from the date so claimed another critical factor that needs to be considered is that whether the name has attained a secondary meaning.

One needs to be in the market for a substantial duration to obtain a secondary meaning. Thus the first condition needs to be satisfied in order to look at whether the name has attained a secondary and distinct meaning or not. Trademark can only be granted if there is a secondary meaning, and a set of specific factors is used to determine whether or not the same has been retained.

Time is a major factor. The second essential factor is the consideration of a hypothetical situation where if another person uses the same name, then how would that affect the business of the person who has been using it from before. In this case, it was held that sufficient proof was submitted to show the name was being used since a very long time, and there was no evidence to show the contestant party uses Agarwal as a common place word in the ordinary course of business. Therefore Trademark was granted.

In the American case of Two Pesos Inc vs. Taco Cabana[30], the dispute arose on the grounds of infringement of the trade dress under Section 43(a) of the Lanham Act[31]. Tacos Cabana claimed that Tacos Pesos had entirely lifted the design and ambiance of the former. The question of law that presented itself was whether this trade dress had acquired any secondary meaning and whether secondary meaning is at all the criteria for a feature to be recognized as inherently unique. Ultimately, it was held that establishing a secondary meaning is not a requirement when the trade dress is unique, and therefore it was considered an infringement. In America,

besides having the opportunity to trademark the name of a restaurant or a food item, one can also trademark the styling and structure of the food item as well. The industry term for this is 'trade dress'. In order to trademark this, one has to establish that the feature to be trademarked is a feature not based in utility but some degree of artistic or creative expression. It needs to have achieved a 'secondary meaning' as it is an identity marker for consumers, given how deeply it is associated with the brand itself.

To elucidate this with an example, we can look at how food configurations such as Hershey's bar, Milano Cookies and Carvel's Fudgie the Whale are trademarked. Interestingly, Jell-O, and Popsicles, both of which are America's most popular desserts are also trademarked. A company known as Brandt's Fruit Trees owns the trademark to Pink Lady Apples.

Conclusion
In today's world of rapidly changing times and the trends of globalization occurring at lightning speed, it is all the more essential to develop a hard-line stance to differentiate between 'inspiration' and infringement. Intellectual property law does precisely that, in the interest of preserving originality and creativity of artistic expression.

End-Notes:

1. AIR1960SC142
2. The Trade Marks Act, 1999
3. The Trade Marks Act, 1999
4. AIR 1989 Delhi 157
5. MANU/DE/1602/2015
6. MANU/MH/0508/2016
7. [AIR 2006 SC 3304]
8. The Trademark Act, 1999
9. The Trademark Act of 1946
10. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016) Supra, note 3
11. Ibid
12. 2019 (77) PTC268 (Del)
13. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016, Supra, note 3
14. MIPR2008(3)227
15. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016, Supra, note 3
16. AIR2003SC3377
17. MANU/SC/2223/2008
18. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016, Supra, note 3
19. AIR1994Delhi239
20. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016, Supra, note 3
21. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016, Supra, note 3
22. The Trademark Act of 1946
23. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016, Supra, note 3
24. The Trademark Act of 1946
25. The Trademark Act, 1999
26. https://www.mondaq.com/india/trademark/516816/indian-trademark-law-comparative-analysis-with-europe-and-us, 2016, Supra, note 3
27. 2005(30)PTC336(IPAB)
28. The Trademark Act, 1999
29. The Trademark Act, 1999
30. 505 U.S. 763(1992)
31. The Trademark Act of 1946