Law Intellectual Property Trademark infringement and passing off Development Team Role Name Affiliation Principal Investigator Professor (Dr.) Ranbir Singh Vice Chancellor, National Law University, Delhi Paper Coordinator Mr. Yogesh Pai Assistant Professor of Law, National Law University, Delhi Content Writer (CW) Mr. Aditya Gupta Advocate, Delhi High Court Content Reviewer (CR) Mr. Yogesh Pai Assistant Professor of Law, National Law University, Delhi
Subject name Module Detail Law Paper name Module name/ Title Module Id Intellectual Property Trademark infringement and passing off Law/IP/#36 Pre- requisites Basic legal knowledge about intellectual propertytrademarks; conditions for registration; limitation; defences Objectives 1. To conceptually understand the nature of trademark infringement 2. To specifically look into the provisions trademarks act, 1999 3. To understand the nature of trademark infringement through case-law jurisprudence Key words Trademarks, infringement, similarity, likelihood of confusion; passing-off 2
1 Introduction The modules on trademark law that you have read so far have dealt with the subject matter of trademark protection and the limits on the rights conferred on trademark owners. This module will more specifically define the boundaries of the rights conferred by trademark law both under statute and under common law. We will study the different tests for trademark infringement as have been identified by the Courts over the years, the test for passing off and the practical difference between the two. Learning Outcome: 1. To clearly outline the concepts of trademark infringement and passing off. 2. To examine the rights conferred under the statute as well as common law. 3. To understand comprehensively the test laid down for infringement of a trademark. 4. To evaluate the rule of anti-dissection. 5. To study comparatively what constitutes infringement and what does not constitute infringement. 2 Rights conferred under the statute as well as common law A well recognized legal principle is that oncethe Parliament has codified the law in a particular domain by statute, common law rights in that domain cease to exist. An exception to this principle can be found in trademark law that expressly recognizes the co-existence of common law rights and statutory rights. In this regard, reference may be had to Section 27(2) of the Trademarks Act, 1999. As per that section, the rights granted by the Trademarks Act do not affect the rights of action against any person for passing of goods/ services as the goods/ services of another person. In other words, the owner of a mark may exercise rights under two heads: (i) (ii) Statutory rights for infringement of a registered trademark Common law rights for passing off with respect to an unregistered mark Therefore, even if the trademark is not registered, the owner of the mark is not rendered remediless and can file an action for passing off. 3
3 Rights conferred by registration The rights conferred by a registration are codified in Section 28 of the Act. According to Section 28(1) of the Act, the registration of a trademark gives to the registered proprietor of the trademark the following rights: (i) (ii) The exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and The exclusive right to obtain relief in respect of infringement of trademark. Let s take an example: Let s say the company McDonalds obtains a registration for the trademark McSwirl with respect to food items. Firstly, McDonalds gets the exclusive right to use the trademark McSwirl with respect to food items i.e. no other person can use the same or deceptively similar trademark with respect tofood items. Secondly, if a person uses the trademark McSwirl for food items, then McDonaldshas the right to file a suit for infringement and obtain relief for infringement of trademark. 4 The test for infringement of trademark The hallmark of a trademark infringement action is consumer confusion. A person is said to have infringed a registered trademark if she uses a mark in the course of trade such that it is likely to cause confusion in the minds of the consumer. The confusion may be caused for one of the following reasons: a. Use of a mark that is identical to the registered trade mark for goods which are similar to the goods or services covered by such registered trademark; or b. Use of a mark that is similar to the registered trade mark with respect to identical or similar goods or services covered by such registered trade mark; or c. Use of a mark that is identical to the registered trade mark with respect to goods or services covered by such registered trade mark. 4.1.From whose eyes should likelihood of confusion be judged? 4
Way back in the year 1962, the Supreme Court 1 clarified that the likelihood of confusion must be judged from the eyes of an unwary consumer with average intelligence and imperfect recollection. It is important to recognize that consumers do remember each and every element of a trademark and do not determine the etymological meaning of marks at the time of purchasing goods or availing services. Thus, even if a critical comparison of the two names may disclose some points of difference, but an unwary purchaser of average intelligence and imperfect recollection may still be deceived by the overall similarity of the two names since an unwary consumer is merely has a somewhat vague recollection that he had purchased similar goods on a previous occasion with a similar name. An interesting question that arises in this context is this:does the test of unwary purchaser of average intelligence and imperfect recollection also apply to purchasers of more expensive goods or goods that are bought after much consideration and thought? For instance, can it be said a consumer who purchases real estate property running into several crores of rupees will be confused by a wrongful use of a trademark? Does such a consumer make enough enquiries to ensure that the goods/ services originate from the rightful proprietor? Courts have held that where the goods are expensive articles that are bought generally by literate persons, this fact must be considered. 2 Similarly, where doctors, who are literate persons, prescribe medicines the likelihood of confusion is considered to be lesser 3. 4.2. How should trademarks be compared in a trademark infringement action? The rules for comparison of marks in a trademark infringement action have evolved based on an understanding on the way in which consumers interact with trademarks. In a recent decision, the Judge culled out the following principles regarding memory associations made by trademarks which are informative 4 : i. Even when all or most brands are present at the point of choice (e.g. at a supermarket) consumers still retrieve information from memory and only notice specific brands, as evidenced by the short amount of time taken to choose brands despite wide ranges on offer. Therefore the issue of retrieval of brand name information from memory is still relevant in that context. 1 Amritdhara Pharmacy versus Satyadeo Gupta, AIR 1963 SC 449 2 Pianotist Application, (1906) 23 RPC 774 at 777 3 Cadila Healthcare Limited versus Cadila Pharmaceuticals Limited, (2001)5 SCC 73 4 M/s South India Beverages Pvt. Ltd. versus General Mills Marketing Inc. & Anr., decision dated September 11, 2014 passed by the Hon ble High Court of Delhi in FAO(OS) 389/2014 5
ii. iii. iv. The brand itself is not a memory target but a cue that might facilitate recall or reference of previously learned brand associations. A paramount factor influencing a consumer s choice of brand is his memory of previous exposures of the brand. Distinctive brand names and packaging are highly conducive to mental associations and serve as pathways to facilitate a much more accurate recall by a consumer. It enables finer retrieval of the experience. Studies reveal that extrinsic brand cues might actually enhance the memorability of prior experiences with specific brands, thereby facilitating accurate quality discrimination and improving consumer welfare. Thus, the development of such brand value in the form of a mark containing names, patterns, etc. which would often be a direct reflection of an enterprise s goodwill and market reputation was accorded protection in the form of their registration as trademark. v. A similar mark causes a slow decline in the accuracy of a consumer s memory-based judgments and therefore, the Trademarks Act seeks to put a check on such practises. It also assumes significance that the learning process of a consumer is the result of a consumption experience thattakes place over a period of time (and is thus sequential ) as opposed to simultaneous. There may be vast spells between consumption that may naturally give impetus to confusion. vi. Confusion of very satisfactory consumption experiences with less satisfying experience may lead to a reduction in repeated purchase and dilution of brand equity. Based on this understanding of memory associations with trademarks, the following rules have emerged from case law regarding the method of comparison of the marks in trademark infringement actions: 1) Side by side comparison is inappropriate: The test of comparison of the marks side by side is not a sound one. This is because a purchaser seldom has the two marks side by side before him when he makes a purchase. The eye and the mind is not an accurate recorder of visual detail and marks are remembered by general impression or by some significant detail rather 6
than by any photographic recollection of the whole 5. Simply put, meticulous comparison is not the correct way 6. 2) Visual and phonetic similarity between the two marks must be seen: The following oft quoted passage from an old English case on overall visual and phonetic similarity is instructive: You must take the two words. You must Judge them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact you must consider all the surrounding circumstances and you must further consider what is likely to happen if each of those trademarks is used in a normal way as a trade mark for the goods of the respective owners of the marks. 7 3) Expansion of the test to similarity of ideas: In the early years of the development of Indian trademark law, the focus was on the visual, structural and phonetic similarity of the two trademarks. Over the years, as Courts have better understood the way in which consumers interact with trademarks, the test has expanded to similarity in the idea of the two trademarks. This expansion is owing to the recognition of the fact that while a side by side comparison of the two marks may reveal many visual or phonetic differences, the ideas that the two marks convey may be the same and a consumer cannot be expected to recall the exact visual or phonetic details while consuming goods. An oft cited example of is that of a mark represented as a football game. Another mark may show the players in a different dress and in different positions and may thus convey the same impression/ idea of a football game leading to consumer confusion. 8 In other words, the first impression conveyed by a mark is the correct test 9. 5 Walter Bushnell Pvt. Ltd. And Ors. versus Miracle Life Sciences and Anr., decision by the Hon ble High Court of Delhi dated May 26, 2014 in CS(OS) No.220/2013 6 United Biotech Pvt. Ltd. vs Orchid Chemicals & Pharmaceuticals Ltd., (2012) 5 PTC 433 (DB) 7 (1906) 23 R. P. C. 774, 777 8 Barker s case(1885) 53 LT 23cf Kerly s Law of Trademarks and Tradenames, Thomson Sweet and Maxwell (14 th ed.) 9 United Biotech Pvt. Ltd. vs Orchid Chemicals & Pharmaceuticals Ltd., (2012) 5 PTC 433 (DB) 7
4) The rule of anti dissection: A composite mark is one that has both distinctive parts (over which the trademark owner has rights) and non distinctive parts (which are not exclusive to the trademark owner since they are common to the trade or descriptive etc.). The anti dissection rule mandates that the Courts whilst dealing with cases of trademark infringement involving composite marks, must consider the composite marks in their entirety as an indivisible whole rather than truncating or dissecting them into its component parts and make comparison with the corresponding parts of a rival mark to determine the likelihood of confusion 10. 5) Copying of essential features is relevant: The Defendant must have copied the essential features of the Plaintiff s registered trademark. 6) No amount of added matter can be considered:in an infringement action, once the Defendant uses the mark as a source indicator, no amount of added matter intended to show the true origin of the goods can affect the conclusion of infringement 11. Thus, Courts have rejected the argument that addition of a distinctive prefix or suffix or differences in packaging by the Defendant will be sufficient to dispel consumer confusion 12. One of the reasons given for this position is that even where such added matter is included, consumers can be still led to believe that the Defendant is associated with the Plaintiff or is in some way sponsored by the Plaintiff even if the added matter makes it clear that they are not the same entity. This association between the Plaintiff and Defendants is considered as a sufficient injury to constitute trademark infringement. A few examples of trademarks that have been held to be confusingly similar are as under: i. AMRITDHARA and LAKSHMANDHARA 13 ii. GLUCOVITA and GLUVITA 14 iii. RASMOLA and HAJMOLA 15 iv. SPOXIN and SUPAXIN 16 10 M/s South India Beverages Pvt. Ltd. versus General Mills Marketing Inc. & Anr., decision dated September 11, 2014 passed by the Hon ble High Court of Delhi in FAO(OS) 389/2014 11 Ruston & Hornsby Ltd versus The Zamindara Engineering Co., AIR 1970 SC1649 12 Laxmikant V. Patel versus Chetanbhat Shah & Anr., 2002 (24) PTC 1 (SC) 13 Amritdhara Pharmacy versus Satyadeo Gupta, AIR 1963 SC 449 14 Corn Products Refining Co. versus Shangrila Food Products Ltd., AIR 1960 SC 142 15 Shri Pankaj Goel versus Dabur India Ltd., 2008 (38) PTC 49 (Del)(DB) 8
v. COLLECTOR S CHOICE and OFFICER S CHOICE 17 vi. ZEGNA (pronounced as ZENYA) and JENYA 18 vii. HAAGEN DAAZ AND D DAAZS 19 viii. RYSTA and ARISTOC 20 A few examples of trademarks that have been held not to be confusingly similar are as under: i. OFFICER S FAVOURITE and OFFICER S CHOICE 21 ii. PIQUANT and PICOT 22 iii. PRIMASPORT and PRIMARK 23 iv. TEMOGET and TEMOKEM 24 4.3.Other considerations while determining trademark infringement 4.3.1. The class of consumers In a trademark infringement action, the identity or similarity of the class of consumers may also be a relevant consideration for determining the likelihood of confusion. It is often argued that if the class of consumers of the Plaintiffs goods/ services is completely different from the class of consumers of the Defendants goods/ services, there is no likelihood of confusion and thus no trademark infringement. While this argument has been successful in a few cases, Courts are increasingly giving less weightage to this difference in class of consumers caused by a difference in the price of the goods of the parties. For instance, in a recent case 25 involving the trademark HAAGEN DAAZ for ice creams, the Defendants who were using the mark D DAAZS argued that the 16 Medley Laboratories Pvt. Ltd. and Anr. versus Alkem Laboratories Ltd., 2002 (25) PTC 593 (Bom.)(DB) 17 M/s Allied Blenders & Distillers Pvt. Ltd. versus Shree Nath Heritage Liquor Pvt. Ltd., order dated July 1, 2014 passed by the High Court of Delhi in CS(OS) 2589 of 2013 18 Consitex SA versus Kamini Jain and Ors., order dated July 18, 2011 passed by the High Court of Delhi in CS(OS) No. 629 of 2011 19 M/s South India Beverages Pvt. Ltd. versus General Mills Marketing Inc. & Anr., decision dated September 11, 2014 passed by the Hon ble High Court of Delhi in FAO(OS) 389/2014 20 Aristoc versus Rysta, (1945) 62 RPC 65 (HL) 21 BDA Breweries and Distilleries Ltd. versu Sree Durga Distillery, 2002 (25) PTC 704 22 Picot versus Goya, [1967] RPC 573 23 Primasport TM application, 1992 FSR 515 24 Schering Corporation & Ors. versus Alkem Laboratories Ltd., 2010 (42) PTC 772 (Del.)(DB) 25 M/s South India Beverages Pvt. Ltd. versus General Mills Marketing Inc. & Anr., decision dated September 11, 2014 passed by the Hon ble High Court of Delhi in FAO(OS) 389/2014 9
price of their ice creams for much lesser than that of the Plaintiffs and thus there is no likelihood of confusion. The Court held that since the consumers of the ice creams were little children who would be confused by the Defendants use of a deceptively similar trademark notwithstanding the difference in the price of the goods. This position of law has even been adopted with respect to real estate products and hotels, wherein Courts have cited the possibility of booking hotels online as reason enough for confusion to occur irrespective of the difference in price between the Plaintiff s and Defendants services 26. 4.3.2. Actual confusion or deception need not be proven It is not necessary for the plaintiff to adduce evidence of actual deception in order to prove the case of infringement and the mere likelihood of confusion is required to be shown. However, where instances of actual confusion do exist, they can add significant strength to a Plaintiff s case to not only show likelihood of confusion but also that the reputation associate with the Plaintiff s trademarks. Further, where the marks are identical and are used with respect to identical goods or services, likelihood of confusion is presumed. 4.4.What kinds of uses of the mark can be considered as infringement? As you will notice from the module on the limitations of a trademark, certain kinds of uses of a trademark such as descriptive uses are not considered to be infringement of a trademark. The Act also specifies the different kinds of uses that are considered use of the registered trademark so as to amount to trademark infringement. The following acts constitute use of the trademark: 1) Use of the trademark as a trade name or part of a trade name or as the name of a business concern 2) Affixation of the trademark to the goods or the packaging thereof; 3) Offering or exposing goods for sale puts them on the market, or stocking them for those purposes or offering or supplying services under the registered trade mark: 4) Importing or exporting goods under the mark; or 5) Using the mark on business papers or in advertising; 4.5. Use which denudes distinctiveness 26 Aman Resorts Limited v. Mr. Deepak Narula and Anr., 2011 (45) PTC 329 (Del). 10
Section 29(4) of the Act also recognizes that a trademark may be infringed even where the Defendants goods are not covered by the Plaintiff s registration, provided that the registered trade mark has a reputation in India and the use ofthe mark without due cause takes unfair advantage of or is detrimental to, the distinctive characteror repute of the registered trade mark. You will study more about this concept in the module relating to well known trademarks. 5 The law relating to passing off As explained above, an owner of a mark can also exercise common law rights in a trademark. A person is said to impinge on another s common law rights in a mark if the former passes off his goods and services as originating from the latter. The law relating to this tort passing off - was succinctly explained by the Supreme Court in the case of Laxmikant V. Patel vs. Chetanbhat Shah and Another 27, and an oft cited passage of the case is extracted hereunder under: A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in[to] believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury. The Supreme Court went on to explain the rationale behind the legal doctrine: The legal and economic basis of this tort is to provide protection for the right of property which exists not in a particular name, mark or style but in an established business, commercial or professional reputation or goodwill. So to sell merchandise or carry on business under such a name, mark, description, or otherwise in such a 27 (2002) 3 SCC 65 11
manner as to mislead the public into believing that the merchandise or business is that of another person is a wrong actionable at the suit of that other person. This form of injury is commonly, though awkwardly, termed that of passing off ones goods or business as the goods or business of another and is the most important example of the wrong of injurious falsehood. The gist of the conception of passing off is that the goods are in effect telling a falsehood about themselves, are saying something about themselves which is calculated to mislead. The law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices, the benefit of the reputation already achieved by rival traders. 5.1 The elements of a passing off action In a landmark decision regarding the infringing use of a trademark as a domain name, the Supreme Court in the case of Satyam Infoway Ltd vs Siffynet Solutions Pvt. Ltd. held that the tort of passing off has the following three elements: 1. Firstly, the Plaintiff must establish distinctiveness/ reputation in the trademark. The action of passing off is normally available to the owner of a distinctive trademark and the person who, if the word or name is an invented one, invents and uses it. If two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed. It is not essential for the plaintiff to prove long user to establish reputation in a passing off action. It would depend upon the volume of sales and extent of advertisement. 2. The second element is misrepresentation. A plaintiff in a passing off action must prove misrepresentation by the defendant to the public. The word misrepresentation does not mean that the plaintiff has to prove any malafide intention on the part of the defendant. Ofcourse, if the misrepresentation is intentional, it might lead to an inference that the reputation of the plaintiff is such that it is worth the defendant's while to cash in on it. An innocent misrepresentation would be relevant only on the question of the ultimate relief that would be granted to plaintiff. What has to be established is the likelihood of confusion in the minds of the public, that the goods or services offered by the defendant are the goods or the services of the plaintiff. In assessing the likelihood of such confusion the courts must allow for the "imperfect recollection of a person of ordinary memory 3. The third element of a passing off action is lossor damage by the misrepresentation or the likelihood of it. 12
5.2 Deceptive similarity in a passing off action The Supreme Court in the landmark case of Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited 28 identified the following factors as relevant for deciding the question of deceptive similarity: a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works. b) The degree of resembleness between the marks, phonetically similar and hence similar in idea. c) The nature of the goods in respect of which they are used as trade marks. d) The similarity in the nature, character and performance of the goods of the rival traders. e) The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods. f) The mode of purchasing the goods or placing orders for the goods and g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks. The Supreme Court further clarified that the weightage to be given to each of the aforesaid factors depends upon facts of each case and the same weightage cannot be given to each factor in every case. 6 Difference between passing off and infringement A crucial difference between an infringement and a passing off action is that in an infringement action, the Plaintiff need not establish any goodwill or reputation in the trademark. In an infringement action, so long as the Defendant commenced use of the mark subsequent to the Plaintiff s registration of the mark, the Plaintiff may restrain the Defendant from using the mark irrespective of whether the trademark has been used by the Plaintiff or whether the Plaintiff has garnered reputation or goodwill under the mark. Another important difference between an infringement and a passing off action is that added matter or surrounding circumstances such as differences in packaging, get up and layout and trade dress may be relevant in a passing off action but these 28 (2001)5 SCC 73 13
considerations are irrelevant in an action for infringement as has been explained hereinabove. Points to Remember 1. Trademark law expressly recognizes the co-existence of common law rights and statutory rights. 2. Registration confers the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and the exclusive right to obtain relief in respect of infringement of trademark. 3. Visual and phonetic similarity between the two marks is an appropriate way to compare the two marks. 4. A mark is said to be deceptively similar if its application to goods or services is likely to cause confusion, that the goods originate from the registered trademark proprietor. 5. The rule of anti dissection: A composite mark is one that has both distinctive parts and non-distinctive parts. 6. It is not necessary for the plaintiff to adduce evidence of actual deception in order to prove the case of infringement and the mere likelihood of confusion is required to be shown. 7. Section 29(4) of the Act also recognizes that a trademark may be infringed even where the Defendants goods are not covered by the Plaintiff s registration, provided that the registered trade mark has a reputation in India. 8. Laxmikant V. Patel vs. Chetanbhat Shah and Another. 9. Satyam Infoway Ltd vs Siffynet Solutions Pvt. Ltd. 14
Self-check Exercises What kinds of uses of the mark can be considered as infringement? Explain the common law principle of passing-off with the help of decided case laws. Elucidate the principle of deceptive similarity enshrined in the doctrine of passing off. Explain the test laid down for determining infringement of trademark? 15
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