Trademark Dilution and Indian Courts

A trademark is a distinctive design, sign, picture, logo, emblem or wording affixed to a particular good for sale to identify the manufacturer as the source of the product and to distinguish them from goods sold or made by others. [1]

These trademarks once registered can be legally used by the manufacturer of the goods and becomes his proprietary right and also a legal right to sue the infringer. Thus trademarks that are registered have more legal rights.

DEFINITIONS:

MARK:

Includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colors or any combination thereof; [2]

COLLECTIVE MARK:

Means a trade mark distinguishing the goods or services of members of an association of persons (not being. a partnership within the meaning of the Indian Partnership Act, 1932) which is the proprietor of the mark from those of others; [3]

TRADE MARK:

Means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colors; [4]

TRADE MARK DILUTION:

But often it is seen that in a competitive market, and with the growing globalization, there seems to take place what is known as trade mark dilution. Hence, a manufacturer might produce and sell some other good/goods or similar good/goods in the name of another registered trademark user’s good/goods.

In the recent decision, the High court tried to trace the meaning and the ambit of the term dilution of the trademark in the Indian context. But it did not reach any conclusion on its own. The concept of dilution was first thought of by Frank I Scheckter. Judge Learned Hand’s famous opinion in Yale Electric Corp. v. Robertson, 26 F.2d 972 (2d Cir. 1928)  [5] which approved injunctive relief against a defendants use of a mark similar to that of the plaintiff in connection with unrelated goods states the concept of trademark dilution. Hence the High court has to base its opinion on the term on the basis of the preposition decided from the above mentioned case.

The old law in India, i.e. The Trade and Merchandise Marks Act, 1958, did not deal with the Dilution of the trademark and it had always sort the aid of the international standards to sort out any differences arising out of the similarity in the marks. The sole purpose was to save the reputed marks from any dilution in the minds of the public at large.

The act as such does not deal with the term but however section 29(4) throws bait to the parliament to infer that “a standard can be inferred by the plaintiff to establish dilution of its trademark, in relation to dissimilar goods or products.

The likelihood test does not confer any distinction solely on “DILUTION” nor does it specifically incorporated to enforce anything that is envisaged in section 29(4).

Sec 29(1)(2)

Infringement of Trade Mark occurs only when the impugned mark is deceptively similar or identical to the registered trade mark. Hence the importance is placed on the “similarity of the mark”

Sec 29(4)

This section posits similarity in goods that are not related to each other.

Thus,

“Dilution” form of infringement under Section 29(4) is a wider trademark protection without as it is in respect of dissimilar or unrelated goods and services.

The plaintiff has to establish, under Section 29 (4) apart from the similarity of the two marks or the similarity

(i) Has a reputation in India;

(ii) The use of the mark without due cause

(iii) The use amounts to taking unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

Under section 29(4), it is important that trademark infringement is not established even if both the marks are identical. In contrast, Section 29 (3) read with Section 29 (2) (c) enact that if it is established that the impugned marks identity with the registered trade mark and the identity of the goods on services covered by such registered trade mark is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark, the court shall presume that it is likely to cause confusion on the part of the public.

There has been quite a long debate on the trademark dilution standards form the point of view of unfair competition, especially in relation to U.K, US and European courts. In relation to this, the US courts had split opinion on the view whether the owners have to prove actual dilution or a likelihood dilution and the court held that actual dilution has to be proved and also there is no need for direct evidences here and circumstantial evidences will suffice.

Hence a case of trademark dilution has to satisfy the following criteria:

Has the owner’s trade mark gained reputation?

Is the trade mark so similar and identical it is likely to cause confusion in the minds of the public?

Even if they are not deceptively similar, does their use create such confusion?

In Adidas-Salomon AG v Fitnessworld Trading Ltd [2004] Ch 120 [6]

Held;

It is not necessary to establish confusion to establish an infringement in the trademark. The plaintiff has to show that there has been a similarity in the usage of the impugned trademark. Thus the court will be satisfied if all the tests of likelihood are satisfied in toto. Or else, the court will take in to concern in favor of the registered trademark and disregard the one affecting the market competition. Thus the national court must be satisfied in every case that the use of the contested sign is without due cause; and that it takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark.

The term “reputation” was aptly defined in the case of General Motors Corp v Yplon SA [1999] All ER (EC) 865 [7]

“If a reasonable buyer is not at all likely to think of the senior user’s trademark in his or her own mind, even subtly or subliminally, then there can be no dilution. That is, how can there be any whittling away if the buyer, upon seeing defendant’s mark, would never, even unconsciously, think of the plaintiff’s mark? So the dilution theory presumes some kind of mental association in the reasonable buyer’s mind between the two parties and the mark”. [8]

Held that in order to satisfy the court of Law, to have a reputation a trade mark had to satisfy knowledge threshold.

Knowledge threshold simply the degree of knowledge must be considered to decide the reputation of the earlier trademark. That is the public must be well aware of the earlier trademark that is in use in the market.

While considering this, the court has to consider some relevant facts of the case also, in relation to the market share of trademark, the intensity, the geographical extent and duration of its use and the size if the investment made by the company in promoting it.

In U.S, the federal court has to consider the following points before determining the dilution. They are as follows:

(i) The degree of similarity between the mark or trade name and the famous mark.

(ii) The degree of inherent or acquired distinctiveness of the famous mark.

(iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.

(iv) The degree of recognition of the famous mark.

(v) Whether the user of the mark or trade name intended to create an association with the famous mark.

(vi) Any actual association between the mark or trade name and the famous mark.

ROLE IN INDIA

Basically trademark is an extended branch of infringement. The difference is the goods are different and if the trademarked goods are used by an unauthorised person, and then there occurs dilution.

Generally infringement occurs when two goods are one and the same. This term was first used by the German court wherein the manufacturer of a mouthwash “Odol” was able to obtain cancellation of the same mark being used in relation to a railroad and steel company. Thus no relief were given if the parties were dealing with two different goods. But however the Bombay High Court relaxed this opinion in the well known case of Kirloskar Diesel Recon (P) Ltd vs Kirloskar Proprietary Ltd [AIR 1996 Bombay 149. [9]

Similarly the high court in the Daimler Benz Aktiegesellschft and Anr. V. Hybo Hindustan [AIR 1994 Delhi 236] [10] case while issuing an injunction against the defendant the Court held that by using the trademark “BENZ” for underwear as against the usage of the plaintiff’s for the cars, it would be like discriminating the usage of the pre acquired trademark by the plaintiffs.

But interestingly, the Indian judiciary views that passing off and dilutions are one and the same. In another famous case of Bata India Ltd vs M/s. Pyare Lal & Co. Meerut City and Ors. – AIR 1985 Allahabad 242 [11] . In this case the plaintiff being a shoe manufacture had filed a suit against the defendant for passing off. Although the defendants were dealing with a totally different manufacturing product, it was pertinent to pass injunction against the defendants for passing off, as there was some element of diminishment in the trademark acquired by the plaintiff.

Yet another case in the Delhi court that laid importance on the above mentioned terms was the case of Ford Motor Company VS C. R. Borman (MIPR 2008 (3) 418) [12] . In this case the question was whether the use of the trade mark in relation to footwear by the defendant amounts to infringing the plaintiff’s rights in the well known trademark FORD used in relation to the automobiles. The court held that although the case is about goods not being similar, it does amount to infringing of the plaintiff’s rights to their well established trademark rights. Thus for proving passing of the goods need not be of same class, even two different class products with the same trademark amounts to tarnishing the well acquired trademark.

And also the Indian law does not recognise the trademark dilution in virtue of the Section 29 of the trademark act. Thus the act only specifically talks about infringement in relation to the goods that are similar or not similar. However, the paradox of Indian courts is that in practice the concept is referred to in matters not of dilution but in relation to the common law action of passing off. It has often been held by Indian courts that even when a mark is well-known in India, the use of the same for different goods cannot be restricted.

CONCLUSION

The term infringement and dilution are used liberally in the Indian market. They give a lot of importance to the well known acquired trademark. It might restrict the domain of honest users and expose several businesses to actions for dilution. Therefore, under Indian law, it is still essential to establish actual or perceived likelihood of confusion among consumers as to the origin of the goods. While differences in products are considered by the courts in granting relief in passing off and infringement cases, the question of confusion reigns supreme in consideration of Indian courts.