AN INSIGHT INTO THE INDIAN FRAMEWORK THAT GRANTS WELL-KNOWN STATUS TO MARKS
-AAK
ABSTRACT
Consistent and equitable enforcement of trademark rights is pivotal for an economy in fostering innovation, safeguarding consumer interests, and enabling businesses to reap the benefits of their intangible assets; especially for a country like India whose economic influence continues to expand globally. However, its present state of jurisprudence is inconsistent as to the protection that should be granted for trademarked names across multiple goods and services, or the correct interpretation of the law that governs said matter. This article examines the current unclear state of Indian trademark precedents with regard to section 29 of the Trademarks Act and calls for the reform of certain legal ambiguities to ensure that the legal framework remains adaptable to emerging commercial trends. It begins by highlighting the impugned provisions under current law and the inherent trademark tension between granting exclusive protection and preserving fair competition in the marketplace. It argues that courts must adopt a balanced approach wherein it limits absolute cross-category protection for only the most famous and distinctive marks as overly broad trademark rights can unduly restrict businesses from using common language or stifle necessary competition. The article then advocates for clearer judicial guidance on the evidentiary thresholds for determining when a mark has achieved widespread recognition or “well-known” status. Finally, the article calls for reform to ensure India’s trademark regime remains responsive to the rapidly changing trade complexities. It urges policymakers and the judiciary to closely examine how virtual marketplaces and evolving consumer behaviour patterns would impact fundamental trademark principles.
Keywords: Trade mark, Infringement, Section 29, Test for Confusion, Deceptive Similarity
NOW IS THE WINTER OF OUR DISCONTENT
Infringement of a registered trademark may seem like the most legally frowned upon practice given the regulatory framework granting perpetual rights and the strict enforcement mechanism which is in place to protect those rights against any conceivable similarity in commercial use. Especially with the global rise in recognising unconventional marks such as colour of the shoe’s sole, dimensions of a lighter, or brand slogans which can easily be attributed as common slang; one would be forgiven to believe that trademark registration can protect the proprietor extensively from anything and everything. However, within its grand framework, the law does provide considerable relief with regard to the brand’s name itself, its public likeness, and the sector in which it is used thus creating a necessary grey area for infringement to be assessed based on the facts of each case. Section 29 of the Trademarks Act[1] (hereinafter referred to as “the Act”) provides the requisite legislation for cases of trademark infringement in India wherein a collective reading of sub-sections (1), (2), and (5) would show that there is no room for use of a similar mark within an identical line of goods or services in which the original mark by the proprietor has been registered. Legal scholars at large have further backed this position by sharing their opinions on the need for protecting the unique identity of a mark from even outside the caveat of identical products or services as it could irreparably harm the business’ established reputation; a sound idea which had been codified in sub-section (4) but only grants general protection to well-known marks from any commercial use/ exploitation.
A lacuna which can be singled out from a reading of the statutory provisions and the judiciary’s interpretation of legislative intent is the protection granted to lesser-known registered marks which do not have a generic/ descriptive name for their line of goods or services, and the alleged infringement of mark occurs in a different commercial field. It is this legal grey area around the naming and commercial use of a mark that raises inevitable questions about the extent of trademark naming protection in India on which the judiciary is yet to opine in a conclusive manner. Can somebody use a registered mark to sell something in a totally different field; a field which those companies may never venture into? How well known does a trademark have to be for any action to constitute irreparable harm or commercial exploitation of a recognised brand? Or can a registered name which is generic for a particular line of products be used in an unrelated commercial field to exploit the goodwill of a brand in the generic field? The answer may seem like an obvious yes as infringement in any field would still dwindle the commercial use of the prior mark while also diminishing its value in the established field/s, however, when looked at from an overarching chronic view of recognising unnecessary or exploitative generic names, monopolistic naming tendencies, frivolous legal claims and overlapping online domain rights, the solution is a lot more challenging than initially conceptualised. In this paper, we are going to dive into the questions supra with the aim of encouraging discussion on a vital discourse that is still pending finality in the Indian context.
TO BE OR NOT TO BE AN INFRINGEMENT?
It should be clarified that the law only envisages protection of a trademark against any commercial exploitation that may occur to infringe on a mark’s unique identity or at the very least result in the dilution of its goodwill. Therefore, any act that could be construed as fair use like parodies, criticisms, or comments, would not be penalized as an infringement unless mala fide commercial exploitation can be specifically proved. Moreover, the trademarked name or logo allegedly exploited must have some unique character that distinguishes the brand from others in the marketplace vis a vis it cannot be a generic term or a commonly used descriptor for the product/ service engaged in which again brings the name itself under the ambit of fair use[2]. The satisfaction of these basic tenets then brings into question the applicability of existing laws and common principles that administer the functioning of this intellectual property. As mentioned prior, section 29 of the Act covers the ambit of infringement chief among which will be sub-sections (4) and (5) in this topic as they mainly cover infringement with regard to the naming of a business. Sub-section (5) is specific in its text as it categorically penalizes the use of a similar name, even partially, as infringement when the infringing business deals with the same goods or services in respect of which the trademark is registered. The satisfaction of both conditions, i.e., use of a trademark in another business’s name and the business dealing in the same field of goods or services would definitively constitute the use as an infringement of the proprietor’s trademark. On the other hand, sub-section (4) is much more general in its applicability as it grants universal protection to well-known trademarks provided that the use of the mark without due cause takes unfair advantage of its distinctive character or reputation. The provision serves as a protective shield akin to the common law principle of “passing off” by safeguarding renowned marks against any unauthorized exploitation which may capitalize on their established reputation or unique character, even if the infringing use is in an unrelated field of business. Its only other requisite is that the mark should have a pre-existing reputation in India, unlike other jurisdictions which do not necessarily require the brand to be reputed or famous in their country as well. These provisions broadly define the boundaries within which trademark owners can assert their rights to prevent dilution of their brand’s distinctive identity and are the guides used by courts along with common law principles to adjudicate the trademark matters appearing before them.
The aforementioned passing off check is an international principle for assessing a mark’s similarity to the mark of the original proprietor and is a common sight in trademark cases for its utility to establish mala fide use, if any. While the statutes grant solid codified rights and structured remedial procedures to ‘registered’ proprietors that satisfy all conditions laid down under the Act, this principle provides overarching protection to any mark purely based on its use in the market. If the use of a similar mark by another party is found to cause confusion or deception in the minds of consumers and succeeds in passing off as a renowned name brand (unregistered included), then the courts can step in to prevent such passing off because it would naturally lead to an unfair advantage for the infringing party. It not only protects the rights of unregistered marks from wrongful exploitation but further solidifies the rights of registered proprietors by expanding the scope of their trademark protection. A likelihood of confusion test is used to evaluate the same principle. This test refers to the simple act of looking at both marks while keeping overarching factors like the nature of their respective businesses, target consumers, trade channels, etc., in the back of mind and determining whether the alleged infringer is likely to cause confusion amongst consumers thereafter mislead them into believing that the reputed mark is the actual brand behind the infringing products or services. It is a crucial component for trademark protection that allows judges to pragmatically tackle hard cases in a reasoned manner provided they adhere to certain established norms laid down before.
PROTECT ALL, RECOGNISE A FEW, DON’T PROVIDE FOR EVERYONE
The dichotomy of protecting a mark from any remote exploitation while it, in a manner of speaking, exploits the market itself by withholding others from using linguistic or visual characters for their business is brought to the forefront when discussing cross-border protection. After all the purpose of trademarks is to grant exclusivity for a distinct identity created that allows an owner to monopolise upon their image of quality and prevents any unfair competition in the marketplace. This protective monopoly enables the owner to stop the operations of an alleged infringer in its entirety with their warranted legal rights. It thereby also enables said owner to claim protection against any upcoming competition in the garb of preventing unfair trade practices. Wrongful use of cross-border protected terms/ designs could not only shut down a few innocent business operations but encourage a confined trade environment that prevents innovation and development instead of promoting it. While giant conglomerates would be able to contest such false allegations without much hindrance to their daily operation, it would be detrimental to the growth of small or medium-scale enterprises (SMEs) even if they are ultimately able to prove their innocence in a fair trial. There are definite instances where this exclusivity has been misused by owners for frivolous reasons and it won’t be stopped if strict protection is loosely granted to renowned entities. Legal scholars contend that the primary objective is to create a monopoly only for the intended category of goods or services which enables the holder to capitalize exponentially upon its intended purpose without hindering trade in general. Even the renowned mark’s reputation should be restricted to a particular territory, category of goods or services, segment of the population, linguistic section of the public, or a limited combination of multiple. Had this not been the case then most words would eventually become monopolized across all products and services which would contradict the entire utility of trademark law. In most cases where absolute protection has been granted beyond the goods and services dealt in, the reputed brand has been able to separate itself from the competition in a noticeable way vis a vis the mark or name has been exceptionally distinctive in its creativity, either invented or derived from surnames, or it is a globally recognised mark operating across various product categories. Thus, it is only in exceptional cases that a mark should receive cross-border protection across all product categories.
The legislature while establishing the criteria for well-known marks had deemed it appropriate to consider various factors such as the target audience, relevant geographical area, and cultural norms, when assessing the reputation of such marks. If this were not the case then every trademark owner whose mark enjoys a reputation, however limited in scope and specific to certain goods or services, would be able to claim a monopoly for their name or design, across all 42 classes of goods and services listed in the Trade Mark Rules of 2017 (hereinafter referred to as “TM Rules”) if they please. Therefore, a saturated exploitation of commercial naming could not have been the legislature’s intention even if they drafted the broad regulations that allow for such transgressions to take place. The TM Rules read with the Act simply require the duration, extent, and geographical area of a “reputed mark in India’s” use; the same of its promotion; the duration and geographical area of its registration, if done; and the record of any enforcement of rights in that trademark; specifically the extent to which the trademark has been recognized as well-known by the Registrar or any court[3]. This subjective assessment due to its open-mindedness enables the previously mentioned scenario and also leads to the counter scenario wherein even less universally recognized marks could be protected from exploitation if other regional brands can demonstrate significant goodwill within their target consumer demographic. International icons that have cemented their reputation in multiple other markets may not be able to use their mark in an Indian region due to the existence of a similar mark for a different field.
Trademark law in India has undergone significant changes throughout the century to provide a nuanced yet intricate framework for efficiently governing trademarks domestically and safeguarding the rights of holders globally. There is no doubt that any binding decision made by the government on any of the above scenario/s shall have a significant impact on commerce throughout the country. The Indian marketplace is littered with a myriad of product lines each saturated by a multiplicity of brands for every price category owing to the nation’s large and culturally diverse population. This level of competition inadvertently incentivizes a business owner to either copy an existing reputed brand or choose a categorical generic mark with the hope of attracting more customers quickly to their business. Regardless of intent, the Indian market’s dynamics are such that the lines between inspiration and infringement often blur thereby mandating clarity in the remedies that are available for any disputes which will inevitably arise. This would require a clear understanding of established laws by the remedial authorities along with certain precedents that guide justices to appropriately tackle the dispute before them. Unfortunately, the same is not the case at present.
WE DON’T KNOW WHAT WE ARE, BUT MAY KNOW WHAT WE MAY BE
Stare decisis on the conundrum listed above is inconsistent with the Hon’ble Supreme Court yet to opine conclusively on the correct interpretation of sections 29(4) or (5), and the overarching implications it will have on the domestic markets. Till then, the High Courts have passed varied judgements on a case-by-case basis that deal factually with their respective matters while sharing their individual interpretations of the legislative intent behind these statutory provisions. The most binding precedent in this void would be the landmark judgement of Cipla Ltd vs Cipla Industries[4] wherein a full judge bench of the Hon’ble Bombay High Court had a literal interpretation of the text of the provision. The majority held that the language of 29(5) was formulated differently from its stipulated counterparts as the same was meant to be a special proviso that would supersede the other general exceptions if both the conditions outlined under it were fulfilled. It broke down the text’s language to determine that the legislature placed 2 conditions; the use of a registered mark in name, and business dealing in goods or services in respect of which the trademark is registered; both of which should be fulfilled for it to constitute an infringement that is adequate to invoke that statute. In its erudite opinion, the court sided with the respondent by concluding that sections 29(4) and 29(5) are completely distinct and independent provisions which have been implemented by the legislature to cater to different situations of infringement. 29(4) is meant to protect the reputation and goodwill of a well-known trademark from being unfairly exploited or diluted by the commercial use of a similar mark in relation to dissimilar goods or services. It is a broader provision that is brand-centred in its phrasing to prevent a well-known mark exploitation whereas section 29(5) is a provision meant to prevent any confusion or deception among the consumers by the use of an identical mark as a trade name or part of a trade name in respect of the same goods or services.
29(5) is a proviso created to immediately tackle such obvious infringements in similar goods and by its very textual nature is contingent on both of the conditions to be fulfilled for its statutory implementation; therefore, it is a totally separate and independent proviso to other sub-sections of section 29. A notion purportedly supported by factors around the statute’s introduction in the Act’s 2009 amendment; the court used this logic to hold that section 29(5) cannot be invoked in a case where a trade name or part of a trade name is used in relation to dissimilar goods or services as it would amount to expanding the scope of the provision beyond its intended purpose. While a decision of the full judge bench of any high court would normally lead to the finality of said topic as it is the binding precedent on every court across India (except the Supreme Court), the same interpretation has been discredited by some subsequent High Court decisions as erroneous. It is the complete opposite interpretation of the statute as was held in the prior landmark precedent set by the Hon’ble Delhi High Court years before, in 2013.
A harmonised reading of sub-section (5) with the other provisions of section 29 was preferred as the coherent lawmakers’ intent by Justice S. Muralidhar in the antecedent Bloomberg judgement[5]. The single-judge bench decided in favour of trademark protection across different fields stating that 29(5) should be read harmoniously with other sub-sections (1), (2), and (4) of the statute that also provides for the infringement of a mark through different means. The stipulated intent of the legislature was to make laws that work in tandem with each other to avoid any infringement of a brand’s image; a purpose which would be defeated if sub-section (5) is not read in harmony with other sub-sections, mainly (4). Reading the statute on its own merit would show that its conditional invocation could render the previous section otiose as it also tackles the infringement of a registered mark but on a broader scale. In his ratio decidendi, the justice stated the need for interpreting section 29(5) in an ancillary capacity so as not to limit the protection of other statutes because the former does not require the registered proprietor to show that any confusion is likely to result from the use by the infringer of the registered mark as part of its trade name; or that the mark has a distinctive character; or that any detriment is likely to be caused to the reputation of the mark; or that the infringer has taken unfair advantage of the mark. These distinctions should make it clear that the provision’s purpose was to offer better protection and not to shut the door of section 29(4) to a registered proprietor who is able to show that the registered mark enjoying a reputation in India has been used by the infringer as part of his corporate name but his business is in goods and services other than that for which the mark has been registered. In this way, it is possible to harmonise the various sub-sections of section 29 with none of them being rendered otiose. This antecedent was fairly recently supported by another single-judge bench but of the Hon’ble Madras High Court[6] in a 2019 injunction order which found that sub-clause (5) categorises infringement when a registered mark is used, as a trading name or part of the name, of the business concerned in respect of trademark; but sub-clause (4) of 29 makes it clear that there is an infringement of the registered trademark when the registered trade mark is used by any other persons in the course of trade.
LAW SHOULD BE WHAT THEY SEEM
From the above legal scenario, we can gather that there is a need for a definitive exemplar in establishing trademark infringement with regard to different commercial goods or services. The exploration of trademark infringement under the Indian legal framework, particularly through the lens of Sections 29(4) and (5) of the Trademarks Act of 1999, illuminates both the robust protections afforded to trademark owners and the intricate challenges that arise in applying these laws to the nuanced realities of commerce and industry. The divergent interpretations and applications of these provisions by various courts underscore the need for a more harmonized and predictable approach to trademark infringement, which respects the balance between protecting trademark rights and fostering an environment conducive to competition and innovation. Trademark precedents need to be certain across fields given their perpetual nature as per incuriam judgements could cause everlasting damage not only to individual brands but the commercial sector in its entirety. The Indian judiciary’s ongoing task is to refine and clarify the scope of trademark laws, an endeavour that demands careful consideration of evolving business practices and technological advancements.
As India continues to cement its position in the global economy; the clarity, consistency, and fairness in the enforcement of trademark laws will be paramount in safeguarding the interests of businesses and consumers alike. Future legal reforms should aim at closing the gaps identified in this discourse, addressing the grey areas in naming protections, maintaining consistency in binding decisions addressing said grey areas, and ensuring that the law keeps pace with the digital age. Additionally, there is a significant area for scholarly research and debate on how emerging trends in commerce, such as the rise of e-commerce and digital marketplaces, impact trademark law and its enforcement. Therefore, this article not only calls for an alignment in judicial precedents but also advocates for a legislative introspection to ensure that India’s trademark laws remain adept at navigating the complexities of the modern commercial landscape thereby upholding the principles of justice and economic advancement in tandem. The Indian market’s dynamics are such that the lines between inspiration and infringement often blur thereby mandating clarity in the remedies that are available for any disputes which will inevitably arise.
REFERENCES
[1] Trade Marks Act 1999, s. 29
[2] J R Kapoor v Micronix India, 1994 Supp (3) SCC 215
[3] Trade Mark Rules 2017, s. 11 and 124
[4] Cipla Ltd Mumbai v Cipla Industries Pvt Ltd Delhi & Anr, [2017] 2 Mah LJ
[5] Bloomberg Finance LP v Prafull Saklecha & Ors, [2014] 207 DLT 35 [42]-[51]
[6] Exxon Mobil Corporation v Exon Biosciences Pvt Ltd & Anr, [2019] CS 455 (MHC) [10]
