With the increase in global competition and vagaries in the existing market structure, businesses are constantly vying against each other, obfuscating from all moral and ethical practices. Taking advantage of this, small businesses that are willing to unfurl their goals in large, are now veering towards an unethical exercise of trademark infringement, where they are illegally engaging themselves in unauthorized use of a trademark or a service mark.

Riding on the crest of successfully established companies, these small businesses are honing an atmosphere of deception, confusion and are casting profound wreckage on the products manufactured by those companies. The repercussions of the same can be manifold and pernicious.

Over the past few years, the unscrupulous exercise of trademark infringement has been on a startling surge and the courts are constantly striving to reduce these incorrigible exercises. A registered trademark is a symbol, word, or combination that represents a company or a product and differentiates it in the market.

However, when a person or a company who is not authorized by the owner of the registered trademark, uses and violates that trademark, constitutes a situation of trademark infringement. A legal panacea to the breach of the trademark is available with the proprietor of the registered trademark, who can take legal action against the delinquent person or a business.

The primary function of the trademark is to distinguish the goods or services of one undertaking from those of other undertakings and hence to maintain the essence of its purposes, it is important to assuage the malpractices hovering in its domain. This research attempts to discern the conscienceless exercise of trademark infringement and endeavors to analyze its repercussions on the companies/business affected and concludes with gauging solutions to recuperate the impacted business/owner.

How does trademark infringement impact businesses with a registered trademark?

Trademark infringement, as unruly as it may sound, can also emanate deleterious effects for both the businesses with a registered trademark and the society at large, in multifarious ways. The purpose of a trademark is to isolate the distinctiveness of a product or service from that of the others, and when it is being violated by illegal infringements, it can be searingly deceptive and misleading.

A business that has established a good reputation because of its goods and services which imbibes a trademark associated with those goods and services, will have its reputation tarnished if another company uses that trademark in a way that sways away from the customers of businesses owing to that trademark or by manufacturing low-quality products, that will slander the reputation of those established businesses. [1]

The harm caused by trademark infringement is realized by several courts in many landmark cases. For instance, in an infamous case of Pappan Enters. v. Hardee's Food Sys, it was held that - "once the likelihood of confusion caused by trademark infringement has been established, the inescapable conclusion is that there was also irreparable injury." [2]

Calling trademark infringement damage as irreparable, the court significantly portends to insurmountable wreckage caused to the reputation of a company, leading to a huge loss of customers, in turn slashing its marketing objectives and capitalization. To recover from reputational damage, may take a spate of years or could permanently crack the edifices of that business.

Furthermore, in McDonald's Corp. v. Robertson, it was found that:
Holding the damage to reputation and loss of customers caused by the unauthorized distribution of inferior products presents incalculable damages and thus irreparable harm.

The judgment furthers the belief of irreparable harm to a business and recognizes that reputational damages for a company cast a spell on its growth and stymies its perseverance to regain its foothold in the capital firmament.

Thus, it can be said that lost sales and monetary impairments are the main damages for a company whose reputation has been tainted. In addition to this, harm can also be caused to the consumers, as they are exposed to goods of depleted quality, extending a perilous situation in society. [3]

Many theories abnegate the irreparable harm notion pronounced by the courts in the following cases, however, the issue renders moot. Whether irreparable or reparable, reputational damage is difficult to retrieve and causes serious ignominy to an established industry.

How can trademark infringement be receded?

World Intellectual Property Indicators Report stipulates that in the year 2018-19, eight of the 10 companies experienced trademark infringement. [4]Reckoning the percentages, it can be stated that, approximately 74.02% surge has been witnessed in the cases relating with trademark infringement, in the years 2018-20 from in and around the world. In addition, forty percent of respondents said they had experienced 1-10 cases of infringement, while 22% experienced 11-20.[5]

The plausible explanation for this upsurge can be directly linked to the overgrowing competition in the market globally. In spite, of maliciously carved out intentions of small businesses, another reason that could be a probable cause for the mounting of cases can be the copious amount of registration of trademarks by companies. [6]

To explain this point, the increasing number of trademarks being registered and the fact that businesses often fail to carry out the requisite clearance searches and checks before launching a new brand or applying to register that new brand as a trademark, leads to trademark infringement.[7] When a higher number of trademarks are registered, the possibility of accidentally infringing an existing mark will also increase.

Having said that, the questions stand aloft as to how the unprincipled exercise of trademark infringement by companies can be allayed. Of course, after being demystified with the infringement, the impacted company needs to approach the legal entities to represent their case in a lawsuit for their enforcement of the rights infringed. Legal action can endow a legal remedy in the form of monetary compensation, or a court-ordered injunction and can order forfeiture or destruction of the infringing goods.

In addition to the available legal remedies, it becomes incumbent upon the companies with a registered trademark to adopt the practice of Trademark monitoring.[8] Most often, companies producing or manufacturing a good or service become remiss in their approach to identify counterfeited products manufactured in their names which ultimately leads to reputational damage at the later stages. A conscious and proactive business is often necessary to avert the infringement and hence, it is important that the trademark monitoring must be effectuated to ensure due diligence and to prevent severe reputational damages.

Also, several studies have observed that improvements in technology can also reduce trademark infringements[9]. Often glitches are made during the registration of a trademark, which can confuse further increasing the chances of trademark infringements.

For instance, a company that has a particular logo C and another company that has a logo as an inverted D undergo registration for trademarks, however, due to inadequate technology and bugs therewith, the parallel line constituting D is removed from the logo of the other company, both logos are thus similar, resulting in an inevitable trademark infringement. Hence, ensuring a technology that is in the state of the art, must be preferred.

While there are recourses available to the companies, it is important to inculcate ethical marketing practices, to ensure the interests of businesses in every possible way.

Conclusion:
When globalization is rife, the owners of the businesses must be prudent and must protect the goodwill of their brands, and must be prompt in their actions to report any decadence. Registration of trademarks acts as a bulwark for the corrupted businesses and stymies with their agenda of infringements.

Ethical trade practices must be the state of the art and nations across the world must thrive to inculcate policies that deter piracies and passing offs. The consortium of pertinent legislation and policies along with ethical business practice will put a stall on the unprincipled trademark infringement by perfidious businesses.

End-Notes:

1. The Harm Caused by Trademark Infringement & Available Remedies, Aaron Hall Attorney https://aaronhall.com/minneapolis-intellectual-property-attorneys-the-harm-caused-by-trademark-infringement-and-the-remedies/
2. Rebecca Tushnet , "What's the Harm of Trademark Infringement?" , Georgetown University Law Center, (2015) https://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=2798&context=facpub
3. Mitratech Holdings, Inc, "Reputational Damage: 3 Worst Cases & 11 Next Steps for Protecting Your Brand & Company", JdSupra , (March 20, 2019) https://www.jdsupra.com/legalnews/reputational-damage-3-worst-cases-11-90321/
4. World Intellectual Property Indicators Report: Trademark and Industrial Design Filing Activity Rose in 2019; Patent Applications Marked Rare Decline, WIPO, ( December 7, 2020 ) https://www.wipo.int/pressroom/en/articles/2020/article_0027.html
5. Trademark infringement is on the rise , Clarivate , (JANUARY 30, 2019) https://clarivate.com/news/trademark-infringement-is-on-the-rise/
6. Esther Kirwan, Trade mark infringement on the rise - how to avoid accidental infringement and prevent misuse of your brands, Clarion, (May 3rd , 2019) https://www.clarionsolicitors.com/articles/trade-mark-infringement-on-the-rise-how-to-avoid-accidental-infringement-and-prevent-misuse-of-your-brands
7. Ibid.
8. Joe Runge, Esq , How to Protect Against Trademark Infringement , LegalZoom , (June 08, 2021) https://www.legalzoom.com/articles/how-to-protect-against-trademark-infringement
9. Trademark infringement rising year-on-year, says CompuMark report, Clarivate , (JANUARY 14, 2020) , https://clarivate.com/compumark/news/trademark-infringement-rising-year-on-year-says-compumark-report/
   
   
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