Category Archives: Trademark

Revised Guidelines for Examination of Computer-related Inventions (CRIs)

On 30th June 2017, the Office of the Controller General of Patents, Designs, and Trade Marks (CGPDTM) published Revised Guidelines for Examination of Computer-related Inventions (CRIs) that are applicable with immediate effect. The revised guidelines have replaced the Guidelines for Examination of CRIs, published on 19th February, 2016. The revised guidelines are short and precise as compared with the previous versions and have relaxed the criteria for patentability of the CRIs.

The heart of the 2016 guidelines was a three stage test to examine a CRI application, according to which the Examiners may:

  • Properly construe the claim and identify the actual contribution
  • If the contribution lies only in mathematical method, business method or algorithm, deny the claim
  • If the contribution lies in the field of computer programme, check whether it is claimed in conjunction with a novel hardware and proceed to other steps to determine patentability with respect to the invention. The computer programme in itself is never patentable. If the contribution lies solely in the computer programme, deny the claim. If the contribution lies in both the computer programme as well as hardware, proceed to other steps of patentability.

Therefore, the requirement of a novel hardware was apparent under the three step test laid in 2016 guideline. The revised guidelines have however done away with this test. The revised guidelines focus on substance over form and states:

If, in substance, claims in any form such as method/process, apparatus/system/device, computer program product/ computer readable medium belong to the said excluded categories, they would not be patentable. Even when the issue is related to hardware/software relation, the expression of the functionality as a method is to be judged on its substance. It is well-established that, in patentability cases, the focus should be on the underlying substance of the invention, not the particular form in which it is claimed. The Patents Act clearly excludes computer programmes per se and the exclusion should not be allowed to be avoided merely by camouflaging the substance of the claim by its wording.

The revised guidelines further discuss determination of excluded subject matter relating to CRIs. According to the revised guidelines, it is important to ascertain from the nature of the claimed CRI whether it is of a technical nature involving technical advancement as compared to the existing knowledge or having economic significance or both, and is not subject to exclusion under Section 3 of the Patents Act.

Further, the sub-section 3(k) excludes mathematical methods or business methods or computer programme per se or algorithms from patentability. Computer programmes are often claimed in the form of algorithms as method claims or system claims with some means indicating the functions of flow charts or process steps. It is well-established that, while establishing patentability, the focus should be on the underlying substance of the invention and not on the particular form in which it is claimed.

What is important is to judge the substance of claims taking whole of the claim together. If any claim in any form such as method/process, apparatus/system/device, computer program product/ computer readable medium falls under the said excluded categories, such a claim would not be patentable. However, if in substance, the claim, taken as whole, does not fall in any of the excluded categories, the patent should not be denied.           

Hence, along with determining the merit of invention as envisaged under Sections 2(1) (j), (ja) and (ac), the examiner should also determine whether or not they are patentable inventions under Section 3 of the Act.

Thus, it can be inferred that the revised guidelines focus on substance over form instead of novel hardware requirement. That is, while examining an application its substance is considered and a claim is taken as whole, if it does not fall in any of the excluded categories, the Examiner can proceed with other steps to determine patentability with respect to the invention.

Various stake holders associated with the software industry and Associated Chambers of Commerce & Industry of India (ASSOCHAM) have been lobbying for such a change. ASSOCHAM trough a communication to the Prime Minister’s Office, urged the Prime Minister to bring out appropriate amendments to the 2016 guidelines and simplify the criteria in pursuance of becoming a leading global player in areas of research and development (R&D) and software products.

In the view of the foregoing, it can be concluded that as the CGPDTM has done away with the requirement of novel hardware, the patentability criteria is eased out. This not only facilitates the patentability of CRIs but also attracts big software MNCs and startups to invest in the area of development of software technologies.

About the Author: Ms. Prigya Arora, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at prigya@iiprd.com

Google AdWords Giving a Good Wallop to Trademark Law

Introduction

In this era of globalization, we use Internet on a regular basis in our daily lives. People are continuously trying to gain more profits and for this they sometimes adopt illegal practices for promotion of their goods and services. These practices include unauthorized use of a registered name or mark owned by their competitor. This misuse leads to infringement of rights of legitimate owner of the name or mark. A specific kind of software is generally used by search engines, called spider or crawler to gather information of web pages available on the Internet. In order to attract customers towards their websites, owners are continuously making use of “Google AdWords”, “Meta-Tags”, “Hyper- Linking”, “Deep- Linking”, etc.

The present article outlines relation between “Use of Google AdWords” and “Trademark Infringement”. Basically, Google AdWords are keywords to search for a particular category of goods and/or services required by a person. When a person types a particular keyword on a search engine, the search engine matches the keyword entered by the person with the Google AdWords of various web-pages, and accordingly displays the most prominent results. By using the competitors name and/or mark with various permutations and combinations, search engine results are effortlessly manipulated to lure the visitors to one’s website. Google AdWords are used to set the web links in a prioritized manner based on the queries of user. They act as a code for providing information about the web page, which helps in diverting Internet traffic to their websites, causing considerable commercial loss to the legitimate registered owner.

 

What is a Google Ad-Word?

Google AdWord is a successful and client capturing advertisement option that is also a misleading source with respect to the Trade Mark rights of a trademark owner. Google AdWords are basically keywords that are used by an advertiser of certain goods and services to advertise their products, wherein when a specified keyword is searched for, the search engine shows the advertisements/websites of various advertisers. Hence, in this way, Google AdWords are used to divert Internet traffic towards a particular advertisement/website. The keywords used, generally denote someone’s area of business. It is an intelligent system that highlights ads/website depending on the keyword search. Its use is very simple and Google is paid by the website owner for each and every click on their website. AdWords is a paid referencing service started by Google for business promotion.

 

Misuse of Google AdWords leads to Trade Mark Infringement

This is a very important question as to how the use of Google AdWords may lead to Trade Mark infringement. If a person selects any word to be used as an AdWord, which is either similar or identical to a third party’s trademark, does the person infringe the rights of the trademark owner?  It was held in the very famous Consim- Google AdWords controversy[1] that if these AdWords are used by the person which is similar or identical to the third party’s trademark, then this amount to diluting/tarnishing the goodwill or reputation of the third party as this creates confusion in the mind of the customers of the person whose trademark is allegedly infringed. Therefore, this should not be allowed and becomes a case of trademark infringement.

Let us understand this with the help of an illustration: Suppose ‘A’ is the registered trademark owner of certain brand. Now ‘B’ is using AdWords which is in competition to the business owned by ‘A’, and uses Trade Mark of A as one of the paid keywords in the Google Adwords. ‘B’ is therefore diverting the internet traffic towards his own advertisement by using Trade Mark of A such that when users search for A, advertisement of B would also be shown, thereby causing damage to the goodwill/reputation owned by ‘A’, which is not allowed under Trade Marks Law. Hence, selection of Google AdWords becomes very relevant in the eyes of Trademark Law.

A case, Matrix Cellular (International) Services Limited v TSIM Communication Services Private Limitedand IP Attorneys, which represents the plaintiff in the Delhi High Court, wherein the Plaintiff, Matrix Cellular (International) Services Limited, is the proprietor/ owner of the trademark MATRIX since 1995 in respect of ‘International roaming Sim cards’. The defendant is accused of dishonestly using plaintiff’s trade mark i.e. MATRIX as Google AdWords to divert the users to their website by creating a confusion in their minds. The Court recognized that the defendant has engaged in dishonestly using Plaintiff’s trademark to gain profits and the same has resulted in infringement of Plaintiff’s trademark, as a result of which the Court was pleased to grant an interim injunction in the favor of the Plaintiff.

 

Exemplary Landmark Cases

  1. Consim Info Pvt. Ltd. vs. Google India Pvt. Ltd. & Ors. [2]

In this case, Appellant was a private limited company that provided online matrimonial services. In the course of its business, it had adopted several trademarks including Bharat Matrimony, Tamil Matrimony, Telugu Matrimony, Assamese Matrimony, etc. It had registered several domain names with these word marks. The respondents, Google India and its parent company were in the business of offering an advertisement program called AdWords. It generates ‘Sponsored Links’ on the right-hand side of any organic search results produced by Google, closely corresponding to the term searched for.

Google allows the Key Word to appear as a part of the advertisement as well. Therefore, the more the term is searched for, more the chances that it is a heavily demanded Key Word. The competitors would thus bid for the Key Words of other players in their business to catch the attention of user and thereby divert the business meant for such other players. The appellant filed a suit for permanent injunction restraining Google from infringing their trademarks by using them in the AdWords Program and Key Word suggestion Tool. It also restricted Google from passing off their services using the appellant’s trademarks and their closely resembling variants. The issue in question was whether such use of appellant’s trademark by Google’s Ad program amounted to trademark infringement.

Madras High Court thus concluded that the appellant had made a prima facie case and the balance of convenience lied in its favor and thus eventually granted an injunction.

  1. Rescuecom Corp. v. Google Inc. [3]

This is a very interesting case where the main question before the court was whether the use of trademark as keywords amount to Trademark infringement. The US Court of Appeal held that the use of trademark as keywords can be equated to the use of trademark as Meta –Tags. Therefore, Google was held liable for using the trademarked words in its Keyword Suggestion Tool. [4]

Conclusion

Thus, summarizing, use of Trademarks as a Google AdWords can be allowed if it comes under fair use, otherwise the same is restricted. Google is everywhere and it is estimated that approximately 80-85% of the world’s population uses it. If a person wants to mislead someone from the actual website of the proprietor to the impugned one it is the best platform available. Thus, customers are lured and are often misguided by the person violating by increasing the traffic and demand towards his/their website. The use of such Google AdWords is entirely dependent upon the facts and circumstances of case. Google AdWords being special keywords are embedded in web-pages and are often used by search engines in deciding the relevant websites to show in a search result. Therefore, the unfair and illegal use of the Google AdWords with respect to the Trade Marks leads to the Trademark infringement and irreparable damage to the legitimate owner. Choice of keywords becomes very important in this regard otherwise it would lead to infringement of other person’s rights. The concept of Google AdWords in relation to Intellectual Property should be understood and their misuse should be prevented.

About the Author: Ms. Yogita Agrawal, Legal Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at abhijeet@khuranaandkhurana.com

 

References

  1. Consim Info Pvt. Ltd. vs. Google India Pvt. Ltd. & Ors. 2013 54 PTC 578 (Mad).
  2. 2013 54 PTC 578 (Mad).
  3. 562 F.3d 123 (2nd Cir. 2009).
  4. Mattel Inc. and Others vs. Jayant Agarwalla and Others 2008 (38) PTC 416; Samsung Electronics Company Limited & Anr. vs. Kapil Wadhwa & Ors. C.S. (OS) No.1155/2011.

Meta-tagging vis-à-vis Trade Mark Misuse: An overview

Introduction:

For most of our questions, we rely on the internet for answers. While the debate on the reliability of information received on the internet continues, an equally enthralling race of which website will be the first to grab a searching consumer’s attention has begun.  With companies and organizations willing to pay a leg and an arm to ensure maximum footfalls on their websites, it is not surprising that such organizations are searching for loopholes to find ways to manipulate the search results on search engines. Website owners attract unwarranted attention to their website by making dubious use of Meta-tagging, framing, linking, deep linking. This article aims to introduce the concept of meta-tagging and provide an overview of the legal jurisprudence pertaining to unfair use of meta-tags with respect to Trade Marks.

What is a meta-tag?

Webpage are written in mark up languages, usually HTML (Hyper Text Markup Language). HTML uses syntax of tags and mark ups to display data and to send signals across to the web operators to ensure correct outputs. While most tags have visual and aesthetic functions, a tag category named meta-tags allow hidden commenting with regard to the description of the said website, enabling the search engines to pull out relevant websites in reference to the key words searched by the end user.

With an option to doctor the HTML source code in such a manner that it will result in favorable SEO (Search Engine Optimization), any web designer may insert the trademarks or misleading meta-tag descriptions that are similar or deceptively identical to that of his/her competitor so as to enable the search engine to pop out his/her website as well when an unaware user searches for the competitor. In 1997[1], for the first time, under the Lanham Act [U.S. Trademark Act], a law firm dealing with domain name disputes sued a defendant whose meta-tags contained the terms ‘oppedahl’ and ‘larson’, the registered trademark of the law firm, so as to divert traffic that would gain them domain name registrations and web hosting clients. The Court restrained them from using the said terms without authorization as it resulted to unfair use under the Lanham Act.

Though the Indian law does not explicitly define ‘meta-tags’ in any statute so far, in 2014[2], a Single Judge Bench at the Bombay High Court, while addressing a domain name infringement of the plaintiff’s domain name “Shadi.com” by the defendants’ “ShadiHiShadi.com”, used meta-tags to identify malafide intention. The Hon’ble Court found that the defendant was using “Shadi.com”, which was the Plaintiff’s domain name, in their meta-tags to divert traffic and for the first time defined meta-tags as follows:

11. … Meta tags are special lines of code embedded in web pages. All HTML (hyper text markup language), used in coding web pages, uses tags. Meta tags are a special type of tag. They do not affect page display. Instead, they provide additional information: the author of the web page, the frequency of updation, a general description of the contents, keywords, copyright notices and so on. They provide structured data (actually, meta-data) about the web page in question. Meta tags are always used in web-pages ‘<head>…</head>’ section, before the display section that begins with the tag ‘<body>…</body>’.

Liability of misleading meta-tags

The question of whether ignorance of facts claimed by the defendants alleging cluelessness with regard to the insertion of such misleading meta-tags can be used as a defense has not yet surfaced in the Indian jurisprudence, the Belgian Courts, however, have taken a strong stand and made precedents indicating that the owner of the websites is to take the sole responsibility for the content on the website and the source code of the websites.  In a Belgian case[3], it was held that the Defendant alleged that since the meta-tags and its contents are deliverables of the web designer to the defendant, the defendant was not the appropriate authority to decide the contents of the meta-tags; the Belgian Courts firmly held that even so, the website owner is the sole proprietor of the website and besides, the contract executed between the website owner and the web designer exempted the latter from any liability related to the contents of such meta-tags.

In another Belgian case[4], further reiterating and reaffirming the previous judgment, the Court held that it the sole responsibility of the website owner to verify the contents of the source code and not of the administrator of the search engine, thus negating the Defendant’s contention that the administration of the search engine had not updated his database, thus resulting in misleading meta-tags.

Doctrine of Initial Interest Confusion

On the premise of meta-tagging creating confusion in the minds of the unaware consumer, when a consumer searches for a product or service online, it is an undisputed fact that the trademark laws that must guard unaware consumers from being duped by competitor websites who use misleading meta-tagging.

The doctrine of Initial Interest Confusion allows the plaintiff to be granted remedies for infringement even if the alleged infringement causes temporary confusion in the minds of the consumer, even if it is prior to any purchase of such goods or service. This doctrine was first applied in the case of Grotrian v Steinway & Sons[5], where the Court believed that the advertisements in the name of “Steinway” would mislead the consumer into “an initial interest, a potential Steinway buyer may satisfy himself that the less expensive Grotrian-Steinweg is at least as good, if not better, than a Steinway” but perhaps considering the consumer demographic of piano purchaser who may be more careful with their purchases thus, not resulting in any major financial losses for the plaintiff. Re-applying the principle of Initial Interest Confusion, Judge L. F. MacMahon, in the case of Mobil Oil Corporation, v. Pegasus Petroleum Corporation[6] where Mobil was the registered holder of the mark “Pegasis” and the logo mark of the Greek God Pegasis while Pegasis Petroleum’s logo did not resemble Mobil’s logo mark or word mark in any way, however, the Court concluded that Pegasis Petroleum was misleading potential customer in initial interest and hence, constitutes sufficient trademark injury.

Applying the principle of initial interest doctrine for the first time in meta-tags in the case of Brookfield Communications, Inc. v. West Coast Entertainment Corporation[7], the plaintiff, a registered proprietor of “Moviebuff” and defendant who used the same mark as description in their meta-tag, thus deceptively resulting both the plaintiff’s and the defendant’s links to popped up in the search result, creating initial confusion in the minds of the consumers only for them to find themselves browsing through the defendant’s websites which was distinctively different from that of the plaintiff, amounted to trademark infringement under this doctrine.

In another interesting case[8], in an appeal for a dismissed suit, the United States Court of Appeal for the Ninth Circuit (the Ninth Circuit) accepted the appellant’s contention that even though the consumers were aware that they were not  buying services from the appellant’s services, selling banner ads with appellant’s trademarks “playboy” and “playmate” still amounted to trademark infringement under this doctrine as the respondent was still feeding on the appellant’s good will to increase their sales.

Thus, it can be concluded that commercially using another’s trademark as a meta-tag seldom amounts to fair use. While the distinction between fair use and unfair use of meta-tags is often circumstantial and tricky, it is can be safely deduced that commercial gain, whether in the form of footfalls, good will or actual sale by the use of trademarks or deceptively similar trademarks in meta-tags or ads, as in the case of People Interactive (I) Pvt. Ltd. v. Gaurav Jerry & ors[9], still amounts to infringement.

Fair use in meta-tags

An Exception to the doctrine of initial interest confusion is the use of trademarks that may actually be descriptive of the service or goods provided by the website owner, which will amount to fair use of such terms or words for the purpose of a meta-tag. In the case of Playboy Enterprises, Inc. v. Welles[10], the defendant, Miss Welles, was a former playmate and hence use of the terms “playboy”, “playmate of the year” and “playmate of the month” among other terms in the meta-tags of her website did not amount to infringement as such use was permitted on the ground that the terms were descriptive of the kind of service her website provided and for describing herself.

Another exception to the doctrine is the use of trademarks in meta-tags so as to attract customers to view the opinion of a certain product or service so expressed. This exception was precedented in the case of Bally Total Fitness v. Faber[11] where the defendant maintained a sub-domain called “Bally Sucks” and justified this use of the trademark “Bally” as a consumer criticism acknowledging the use of the registered trademark to attract customers so that one searches for the term ‘Bally’ on the search engine, both the plaintiff and defendant’s site would be pop up and an average user shall have the option to obtain complete information about ‘Bally’ including the opinion of others on ‘Bally’ and removing the said meta-tags would alienate the user from complete and total information regarding the mark “Bally”. Comparative statements in meta-tags also categorizes as fair use of trademarks in meta-tags[12]

Thus, summarizing, use of trademarks in meta-tags purely for describing goods or services of the said website or as ensuring opinions have been reached or even as to compare competitive brands may be allowed under fair use, however, such use is strictly circumstantial and depends largely on the facts of the case.

Conclusion

The use and misuse of intellectual property on the internet is still a new terrain that needs to be discovered for our legal system. To add to this, while our nation neither recognizes net neutrality as an unfettered right nor complete and absolute intellectual property rights, thus, leading misleading meta-tags to be a huge grey area where every verdict will be based on circumstances than concrete laws and predetermined principles. India has long started recognizing the malpractices in the use of meta-tags and search engines that amount to malicious corruption of search results for the end user but we, as a nation, do not have any concrete laws in place to regulate the use of such tags except a few precedents[13] to formulate basic rules to be abided. The need for statutory laws to address cyber security for intellectual property is being felt now more than ever with the government preferring e-commerce over off-line retail and the netizens have no choice now but to wait and watch for some provisions to be made.

Amruta Mahuli, Legal Associate at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at mumbai@khuranaandkhurana.com

[1] Oppedahl & Larson v. Advanced Concepts, Civ. No. 97-Z-1592 (D.C. Colo., July 23, 1997)

[2] People Interactive (I) Pvt. Ltd. v. Gaurav Jerry & ors., NMS (L) NO. 1504 of 2014 in SUIT (L) NO. 622 OF 2014

[3] Belgacom v. Intouch, 15 October 1999, (translation in) Computerrecht, 2000, Nr. 5, 245-247

[4] NV Resiplast v. BVBA Resin, 4 February 2002

[5] Grotrian v Steinway & Sons, 365 F. Supp. 707 (1973)

[6] Mobil Oil Corporation, v. Pegasus Petroleum Corporation, 818 F.2d 254 (2d Cir. 1987)

[7] Brookfield Communications, Inc. v. West Coast Entertainment Corporation 174 F.3d 1036 (9th Cir. 1999)

[8] Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004)

[9] Ibid. 2

[10] Playboy Enterprises, Inc. v. Welles , 7 F.Supp.2d 1098 (S.D. Cal. 1998)

[11] Bally Total Fitness v. Faber, 29 F.Supp.2d 1161 (C.D. Cal. 1998)

[12] FS 2434/97, Hillerod fodgeret, November 17, 1997.

[13] Mattel, Inc. and Others vs. Jayant Agarwalla and Others, 2008 (38) PTC 416; Consim Info Pvt. Ltd. Vs. Google India Pvt. Ltd. & Ors, 2013(54)PTC578(Mad); Samsung Electronics Company Limited & Anr. vs. Kapil Wadhwa & Ors., C.S. (OS). No.1155/2011

Cartier International AG and Ors.  Vs.  Gaurav Bhatia and Ors.

Citation: 226 (2016) DLT 662

Introduction

As per a study conducted in 2016 by OECD (Organisation Economic Cooperation and Development) and the European Union’s Intellectual Property Office, India ranks amongst the top five exporters of counterfeit products. Inspite of the legislative authorities providing stringent anti-counterfeit laws that award both civil and criminal remedies to the wronged, there still exist rampant export of fake goods and parallel exports that have caused grave losses in terms of goodwill and revenue to number of companies in various industries.

In the present case, Plaintiff filed an injunctive suit against the Defendants who was the proprietor of several e-commerce websites that dealt in trading of international luxury products.

Parties

  1. Plaintiff No. 1, Cartier International A.G., is the proprietor of the trademark CARTIER since 1847. The trademark CARTIER has also been recognized as a well known mark under section 2(zg) of the Trademarks Act, 1999.
  1. Plaintiff No. 2, Officine Panerai AG, is the proprietor of the trademark PANERAI since 1860.
  1. Plaintiff No. 3, Richemont International S.A., is the proprietor of the trademarks VACHERON CONSTANTIN and JAEGER LECOULTRE. Plaintiff No. 3 has been engaged in manufacture and sale of watches under the trademark VACHERON CONSTANTIN since 1819 and under the trademark JAEGER LECOULTRE since 1903.
  1. The Plaintiffs are part of Richemont Group. Plaintiff Nos. 2 and 3 deal in watches and other horological and chronometric instruments while plaintiff No. 1 deals in jewellery, writing instruments and leather goods as well.
  1. Defendant No. 4 is a company trading under the name and style of Digaaz e-Commerce Pvt. Ltd. and that defendant Nos. 1 to 3 are the directors thereof.

Brief facts

  1. The defendants operate an e-commerce website http://www.digaaz.com, where they offer lifestyle and fashion products for sale. The defendants have been found to be offering for sale and supplying huge quantities of counterfeit products bearing trademarks and logos of various luxury brands including the plaintiffs on their website http://www.digaaz.com.
  1. Many customers have already been cheated by the defendants who have purchased large quantities of counterfeit products, including those bearing the plaintiffs’ trademarks. Subsequently, complaints were lodged in the Cyber Cell. The matter was still pending against them and was at the stage of filing charge sheet.
  1. The plaintiffs came to know in February, 2014 that the defendants were selling and supplying counterfeit products of various luxury brands including those of the plaintiffs on their website http://www.digaaz.com and issued cease and desist notices to them on 20th February, 2014, which were left unanswered.
  1. The volume of counterfeit goods sold by the defendants demonstrates that the defendants were seasoned infringers and counterfeiters with a regular supply of counterfeit goods. Many of the right holders of these brands had instituted proceedings against the defendants before this Court and have obtained orders restraining the defendants from selling counterfeit products bearing their respective trademarks and logos.
  1. The Chandigarh Cyber Cell’s investigation and raid confirm that the defendants were offering for sale of counterfeit products including those bearing the suit trademarks on the impugned websites http://www.digaaz.com, http://www.watchcartz.com and http://www.luxecart.com. The Cyber Cell also confirmed that the defendants procure the counterfeit products from New Delhi, Ludhiana and Chandigarh at throw away prices and sell these at exorbitant rates cheating both customers and brand owners and making enormous illegal profits in the process.
  1. On 8th October, 2014 defendant Nos.1 and 2 were arrested by the Cyber Cell and were remanded in judicial custody for 14 days. The matter is still pending against them and is at the stage of filing charge sheet.
  1. The plaintiffs ultimately filed the present suit seeking permanent injunction restraining infringement of trademark, passing off and damages.

Issue

Whether Plaintiffs are entitled for permanent injunction against Defendants as prayed for?

Applicable laws/rule

Trade Marks Act, 1999

Section 135- Reliefs in suits for infringement or for passing off include temporary and permanent injunction on court‘s terms and at the option of the plaintiff, either damages or an account of profits, together with or without any order for the delivery-up of the infringing labels and marks for destruction or erasure.

Decision of the Court

  1. While holding that there is a prima facie case of infringement, the court delved into the issue of damages and punitive damages.
  1. In terms of Section 135 of the Trade Marks Act, 1999, the plaintiffs in the instant suit opted for damages and the computation thereof was accepted by the court.
  1. The Court held that defendants have deliberately stayed away from the present proceedings with the result that an enquiry into their accounts for determination of damages could not take place. The Hon‘ble Court observed that allowing such conduct would give arise to situation where defendant who appears in Court and submits its account books would be liable for damages, while party who chooses to stay away from proceedings would escape the liability on account of failure of the availability of books of account.
  1. The Hon‘ble Court observed that this Court has in previous instances granted exemplary and punitive damages and referred to the case of Time Incorporated v. Lokesh Srivastava & Anr., (citation) where Justice R.C. Chopra observed that “time has come when the Courts dealing in actions for infringement of trademarks, copyrights, patents etc., should not only grant compensatory damages but also award punitive damages with a view to discourage and dishearten law breakers who indulge in violation with impunity out of lust for money, so that they realise that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them.”
  1. The Hon‘ble Court further referred to the case of Microsoft Corporation v. Rajendra Pawar & Anr.,2008 (36) PTC 697 (Del.) in which it was stated that: “Perhaps it has now become a trend of sorts, especially in matters pertaining to passing off, for the defending party to evade court proceedings in a systematic attempt to jettison the relief sought by the plaintiff. Such flagrancy of the Defendant’s conduct is strictly deprecatory, and those who recklessly indulge in such shenanigans must do so at their peril, for it is now an inherited wisdom that evasion of court proceedings does not de facto tantamount to escape from liability. Judicial process has its own way of bringing to tasks such erring parties whilst at the same time ensuring that the aggrieved party who has knocked the doors of the court in anticipation of justice is afforded with adequate relief, both in law and in equity. It is here that the concept of awarding punitive damages comes into perspective.
  1. In light of the above approaches of concurrent Benches, the Court in Cartier passed a decree of permanent injunction against the Defendant and proceeded to order the Defendants to furnish books of accounts to the Plaintiffs to compute exact damages. The Hon‘ble Court finally ordered punitive damages of Rs. 1 crore to be paid to the Plaintiffs, along with the costs.

Conclusion

This Judgment was much appreciated for the high punitive damages that were ordered. This judgment poses as a strong precedent for trademark infringement and anti-counterfeit cases. On analysing the judgment, it can be concluded that the following factors among other things were taken into consideration while granting punitive damages to the Plaintiffs: the Defendants’ absence in the proceeding, thus implying their complete dismissal and total disregard for the rule of law; the fraudulent techniques implemented by the Defendants to attract affluent consumers who would have otherwise been the Plaintiffs’ consumers and, blatant trademark infringement and sale of counterfeit products.

 

About the Author:  Nadine Kolliyi, Legal Intern at Khurana & Khurana, Advocates and IP Attorneys and Amruta Mahuli, Legal Associate at Khurana & Khurana, Advocates and IP Attorneys who can be reached at mumbai@khuranaandkhurana.com.

Trademark Infringements: The big problems faced by foreign brands in Nepal

The government of Nepal is notorious for policy and procedural time wasting as far as providing services to businesses is concerned. The same has resulted in problems for businesses and industries to continue operating in Nepal. Among the several problems faced by them trademarks infringement of reputed foreign brands and multinational brands has become a major issue in recent years.

Going by the data of the Department of Industry (DoI), the government body falling under the Ministry of Industry which looks after the registration of industrial and intellectual property, 546 complaints of trademark violations has been registered till June 15, 2016 with most of the cases currently in the court. According to DoI, 90 disputes have so far been settled.

None the less, the sources reveal that the number of such cases can be as high as 1,200 with some of the cases continuing to go undecided for more than 15 years. Some of the trademark disputes include cases of Panparag, Dhara Oil, Rajanighandha, Havells, Pepsico and Kansai Nerolac, many of these are currently in court. Looking at these disputes it is clearly evident that most of the trademark infringement cases are of top Indian brands. Sources say that, these disputes have increased since 2003 after Nepal joined as a member of the World Trade Organisation (WTO). Experts point out that there is absence of proper policies and laws is the reason for the increasing number of trademark infringement cases.

As the current Design and Trade Mark Act, 2022 lacks clarity on security and registration of trademarks, among other things, the counterfeiting and theft of trademarks of globally recognized brands is on the rise, the experts say.

According to the Act, the ownership and rights are only established after the registration of trademarks in Nepal. “Using this provision, local companies here are registering and holding the trademarks of MNCs,” the expert says. According to the experts, this trend has been on the rise over the last decade.  There are several instances of registration of copied trademarks of Multi National Companies. When the true owners of the trademarks arrive in Nepal, they discover that their trademarks are already registered here by someone else.

The reasons for it are:

The wrong practice regarding the registration of duplicate or copied trademarks happens for several reasons. “The Market value of trademarks is the prime reason. A well recognized and established brand earns reputation and goodwill among the customers globally,” says the expert. This culture is increasing as the people involved are getting financial benifits. Those people who have got registered trademarks of foreign companies can bargain the ownership of the brands in Nepal.

Similarly, it is quite easy for the people involved in effortlessly accessing the already been established market by global reputed brands. The consumers usually do not purchase items or goods by going into the brand details. They are satisfied by buying items which look similar to original brands. “Many goods & items of globall brands are available in the local market without the registration of trademarks,” the expert says. Don’t care attitude of the true owners is also another reason for the increase in trademark infringement cases as they don’t register their trademarks in Nepal in time. The negligence of Department of Industry is also resulting in infringement of trademarks. “The department officials register the globally recognised trademarks without proper investigation of the ownership,”.

The Legal Weaknesses

The weak legal provision in Nepal is giving a fertile arena for malpractice regarding the trademarks registration. According to the Patent, Design and Trade Mark Act of 2022 counterfeiting and using of already registered trademarks is illegal. But, the law is weak when it is about punishment. According to the existing legal provisions, DoI can fine up to Rs 100,000 and seize related items from those people which are involved in trademark violations. “However, there are few instances in the past where people were punished for such deeds,” expert says, adding, “A well known case is the infringement of trademark of Goldstar brand shoes when the involved people were slapped with hard punishments.”

Inability to Reform Existing Law

The reason for trademark disputes directly relates to inability of Nepal in the formulation of policies with respect to the Paris Convention for the Protection of Industrial Property. In 2001, Nepal became a signatory of the landmark global deal. It constitutes definite provisions for protection of trademarks.  Even the international treaty was signed fifteen years back, the existing Act has not yet been amended or reformulated inline by the government.

The central agenda of this International treaty was the provision of protection to trademarks and services in Nepal. The popular trademarks are protected under the article 6bis of the treaty  without having to register in the signatory countries. Irrespective of this, the famous trademarks are suffering, due to the lack of appropriate legal provisions. On this, Senior Advocate, Sushil Kumar Pant argued that  “It clearly shows that our government and lawmakers either do not know the importance of these international treaties or are totally ignoring the significance of the conventions signed by the country,” at the law firm Jurist and Company. He also pointed out that the reasons for this are corrupt practices and dishonesty prevailing in the bureaucratic and political levels which hinders the formulation of policies to implement such essential international conventions.

Nepal has been given extension thrice for the implementation of the convention but it has already missed it twice. It missed the first deadline in 2006 thereafter it was provided the extension for the duration of 2007-2015. Again after missing it, now the country is provided with the extension upto 2021 for updating and reformulating its existing law.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

Trade Mark Filing in Vietnam

Vietnam became a member of the TRIPS agreement on January 11th, 2007. Vietnam has a commendable intellectual property (IP) framework which includes several multilateral agreements and other relevant bilateral trade agreements. Having regard to the pace and growth of local and global economy, Vietnam enacted the Law on Intellectual Property Rights in 2005. The law provides protection to major IP rights in Vietnam: industrial property rights which include Patents, Design and Trade Marks; Copyright and rights in plant varieties. In addition to Intellectual Property Law of 2005, there exist other laws that govern other issues related to IPR, such as the 2004 Law on Competition and the 2005 Civil Code, along with precedents, circulars and notifications by respective authorities guiding IPR implementation in Vietnam.

INTELLECTUAL PROPERTY LAW, 2005

TRADE MARK FILING PROCEDURE:

2

Step 1: Filing:

  • Who may apply: Article 87 and 89:
  • Individuals
  • Organizations
  • Foreign nationals residing permanently
  • Foreign organizations having a production or trading establishment
  • Non-resident foreign nationals or organizations not having a production or trading establishment shall apply through a lawful representative.
  • Documents required: Article 105:
  • .Documents, samples, information identifying the mark claimed for protection in a mark registration application shall include:
  1. a) Samples of the mark and list of goods or services bearing the mark;
  2. b) Rules on using collective mark or Rules on using certification mark.
  • Description of sample in order to clarify its elements and meaning.
  • Filing Date: Article 108:
  • All applications shall be received by the State administrative authority.
  • The filing date shall be the one on which the application is received by the state administrative authority.
  • First to file: Article 90:
  • Where two or more applications are filed by several people to register the marks identical with or confusingly similar to each other, in respect of identical or similar goods or services, protection may only be granted to the valid application with the earliest date of priority or filing date among the applications that satisfy all the requirements.
  • Filing fees:
  • Fee for application filed in paper form without digital database of the whole content of the application: 180 thousand VND
  • Fee for application filed in paper form with digital database of the whole content of the application: 150 thousand VND
  • Fee for application filed online: 100 thousand VND
  • Additional fee for each product/service in excess of six: 30 thousand VND.

Step 2: Examination:

  • The application shall be examined within 1 month from the filing date (Article 119).
  • Formal Examination: Article 109:
  • To verify the formal validity of the application, an examination process shall be conducted.
  • Invalidity in the following circumstances:
  • The applicant does not fulfil the requirements of formality;
  • The subject matter of the application is not eligible for protection;
  • The applicant does not have the right to registration;
  • The application was filed in contrary to the mode of filing;
  • The applicant fails to pay the fees and charges.

Step 3: Acceptance/ Refusal:

  • The application for registration may be accepted with or without amendments.
  • Until the notice of refusal by the State administrative authority, the applicant shall have the following rights:
  • To make amendment or supplement to the application;
  • To divide the application;
  • To request for recording changes in name or address of the applicant;
  • To request for recording changes in the applicant as a result of assignment under the contract, as a result of inheritance, bequest, or under a decision of an authority;
  • Any amendment or supplement to an industrial property registration application must not expand the scope of the subject matter disclosed or specified in the application and must not change the substance of the subject matter claimed for registration in the application and shall ensure the unity of the application.
  • Fee for amending applications, including for request of supplement, separation, assignment, change (per each amendment/ application): 120 thousand VND.
  • Refusal: Article 117:

Refusal to register an application may be on the following grounds:

  • The subject matter claimed in the application does not fulfil the protection requirements;
  • The application satisfies all the conditions for the issue of a protection title but is not the application with the earliest filing date or priority date as in the case referred to in Article 90.1 of this Law.
  • The application falls within the cases referred to in Article 90.1 of this Law but a consensus of all the applicants is not reached.
  • The State administrative authority shall serve a notice of an intended refusal to grant a Protection Title, in which the reasons are clearly stated with a set time limit for the applicant to oppose to such intended refusal.
  • The State administrative authority shall serve a notice of the refusal to grant a Protection Title if the applicant has no objection or has unjustifiable objection to such intended refusal.

Step 4: Publication:

  • Article 110: An industrial property registration application which has been accepted as being valid by the State administrative authority shall be published in the Industrial Property Official Gazette.
  • Fee for publication of application, including application for amendment, supplement, separation, assignment (each application): 120 VND.
  • The application for registration shall be examined as to its substance within 6 months from the date of its publication.
  • Charge for substantive examination of application (for each group of six products/services) – without information searching charge: 300 thousand VND.

Step 5: Protection Title:

  • Article 93 stipulates the validity of the protection titles:
  • It is valid throughout the territory of Vietnam.
  • The registration of marks shall be valid up to 10 years from the date of filing. Their validity commences on the date of grant of protection.
  • It can be renewed indefinitely for consecutive terms of 10 years.
  • Rights accruing after registration: Article 123:
  • To use or permit others to use the industrial property object in accordance with Article 124 and Chapter X of the law (Transfer of rights: Assignment and Licensing):
  • Affixing the protected mark to goods, packages of goods, means of business or supplying services and communicating papers in business activities;
  • Circulating, or offering, advertising, storing for sale of, goods bearing the protected mark;
  • Importing goods or services bearing the protected mark.
  • The use of a trade name means the conduct of any acts for commercial purposes by using it to name oneself in business activities, expressing it in transaction documents, shop-signs, products, goods, and packages of goods and means of service and advertisements.
  • To prohibit others from using the industrial property object in accordance with Article 125 (Right to prohibit others from using industrial property objects);
  • To dispose of the industrial property object in accordance with Chapter X of this Law (Transfer of rights: Assignment and Licensing).
  • Fee for granting a Certificate for trademark registration: 120 thousand VND.

FEW IMPORTANT PROVISIONS PERTAINING TO TRADE MARK:

TRADEMARKS:

Article 4: Interpretation of terminologies:

  • Trademark is any sign used to distinguish goods or services of different organizations and individuals.
  • Trade name is a designation of an organization or individual used in business to distinguish the business entity bearing such designation from other business entities acting in the same field and area of business. The area of business stipulated in this paragraph shall be the geographical area where business entity has business partners, clients or reputation.

PART III of the law provides industrial property rights.

Section 4 dictates the protection requirements for marks. The concerned provisions are as under:

Article 72. General requirements for marks eligible for protection:

This Article stipulates the basic prerequisites of a mark to be able to seek protection:

A mark shall be eligible for protection if it meets the following conditions:

  1. Visible sign – form – letters, words, pictures, figures – including three-dimensional figures or a combination thereof, represented in one or more colors;
  2. Capable of distinguishing goods or services of the mark owner from those of others.

Article 73. Signs not protected as marks:

This Article provides for the exceptions. It states that the following signs shall not be protected as marks:

  1. Signs identical with or confusingly similar to the national flags, national emblems;
  2. Signs identical with or confusingly similar to emblems, flags, armorial bearings, abbreviations, full names of State agencies, political organizations, socio-political organizations, socio-political professional organizations, social organizations or socio-professional organizations of Vietnam or international organizations, unless permitted by such agencies or organizations;
  3. Signs identical with or confusingly similar to real names, alias, pen names or images of leaders, national heroes or famous persons of Vietnam or foreign countries;
  4. Signs identical with or confusingly similar to certification seals, control seals, warranty seals of international organizations which require that their signs must not be used, except where such seals are registered as certification marks by those organizations;
  5. Signs liable to mislead, confuse or deceive consumers as to the origin, functional parameters, intended purposes, quality, value or other characteristics of the goods or services.

Article 74. Distinctiveness of marks:

The most important characteristic of a mark is its distinctiveness or uniqueness. The IP law of Vietnam has one whole Article dedicated to the meaning of the term, and its limitations. Since the exceptions are clearly stated, no chance is left to vagueness or ambiguity.

  1. A mark shall be considered as distinctive if it consists of one or several easily noticeable and memorable elements, or of many elements forming an easily noticeable and memorable combination, and is not those signs provided for in paragraph 2 of this Article.
  2. A mark shall not be considered as distinctive if it is signs falling under one of the following cases:

a) Simple devices and geometric figures; numerals, letters, or words of uncommon languages, except for signs having been widely used and recognized as a mark;

b) Signs, symbols, pictures or common names in any language of goods or services that have been widely and often used and are common knowledge;

c) Signs indicating the time, place, method of production, kind, quantity, quality, property, composition, intended purpose, value or other characteristics, which is descriptive of the goods or services, except for signs having acquired distinctiveness through use before the filing of mark registration applications;

d) Signs describing the legal status and activity field of businesses;

dd) Signs indicating the geographical origin of the goods or services, except for signs having been widely used and recognized as a mark or signs registered as collective marks or certification marks as provided for in this Law;

e) Signs not being integrated signs which are identical with or confusingly similar to a registered mark in respect of identical or similar goods or services on the basis of a registration application having earlier filing date or earlier priority date, as applicable including applications filed under international treaties to which the Socialist Republic of Vietnam is party;

g) Signs identical with or confusingly similar to another person’s mark having been widely used and recognized in respect of the similar or identical goods/services as before the filing date or the date of priority, as the case may be;

h) Signs identical with or confusingly similar to another person’s mark already registered in respect of identical or similar goods or services the Mark registration Certificate of which has been terminated for no more than 5 years, except where the ground for such termination is non-use of the mark as provided for in subparagraph d paragraph 1 Article 95 of this Law;

i) Signs identical with or confusingly similar to another registered person’s mark recognized as well-known in respect of the goods or services that are identical with or similar to those bearing the well-known mark; or in respect of dissimilar goods/services if the use of such marks may prejudice the distinctiveness of the well-known mark or the registration of such signs is aimed at taking advantage of goodwill of the well-known mark;

k) Signs identical with or similar to another person’s trade name having been used if the use of such signs is likely to cause confusion to consumers as to the source of goods or services;

l) Signs identical with or similar to a geographical indication being protected if the use of such signs is likely to cause mislead consumers as to the geographical origin of goods;

m) Signs identical with or containing geographical indications or being translated from the meaning or transcription of the geographical indication being protected with respect to wines or spirits if such signs have been registered for use with respect to wines and spirits not originating from the geographical area bearing such geographical indication;

n) Signs identical with or insignificantly different from another person’s industrial design having been protected on the basis of an industrial design registration application with filing date or priority date earlier than those of the mark registration application.

Section 5: This section stipulates the protection requirements for trade names:

Article 76. General requirements for trade names eligible for protection

A trade name shall be eligible for protection if it is capable of distinguishing the business entity bearing such trade name from other business entities acting in the same field and locality of business.

Article 77. Subject matters not protected as trade names

Designations of State agencies, political organizations, socio-political organizations, social organizations, socio-professional organizations or those entities who are not engaged in business activities shall not be protected as trade names.

Article 78. Distinctiveness of trade names

Similar to marks, conditions for distinctiveness have been laid down for trade names as well.  A trade name shall be considered as distinctiveness if it meets the following conditions:

  1. To consist of a proper name, except where it has been widely known as a result of use;
  2. Not to be identical with or confusingly similar to a trade name having been used earlier by another person in the same field and locality of business;
  3. Not to be identical with or confusingly similar to another’s mark or a geographical indication having been protected before the date it is used.

Trademark Law Bangladesh: An Abridgment

Bangladesh is a signatory to the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement under the World Trade Organization (WTO), which came into force in 1995. TRIPS aim at harmonizing the intellectual property laws with most of the world. Hence, all the signatories of the agreement have a uniform IP law subject to minor modifications as allowed by the agreement. Bangladesh being in its transitional period complies with TRIPS to a larger extent (not fully compliant with international IP regime) and still in its process of harmonizing with TRIPS policy. Let’s take a sneak peek into the functionality of IP laws in Bangladesh in relation to the various sections prominently referred to from The Trademark Act, 2009:

The Trademarks Act, 2009:

Meaning of Trademark:

A trademark is any symbol, word, number, phrase, design, or any combination thereof which is used to identify the source of goods or services. The Trademarks Act, 2009 defines the term in Section 2(8). It provides for the following classification of marks:

  • Registered Trademark
  • Mark
  • Certification Trademark

A trademark is:

  • a registered trademark or a mark used in relation to goods so as to indicate a connection in the course of trade between the goods and the person having the right as proprietor to use the mark;
  • a mark used in relation to a service so that it leads to the indication that the person has the right to use the mark in the course of trade as a proprietor;
  • a mark used or proposed to be used (in future) in relation to any service or goods indicating a connection, between the goods and the person having the right, either as proprietor or as registered user (permitted user), to use the mark.

A trademark is generally used to identify the source for goods or services. Bangladesh has adopted the 9th Edition of NICE classification of goods and services. Hence, there are total 45 classes of goods and services, out of which 1-34 are goods, and 35-45 are services.

Procedure for Registration:

There are various steps involved in the procedure for registration:

Step 1: FILING OF APPLICATION – SECTION 15

  • Any person claiming to be the proprietor can file an application for registration of a mark used or proposed to be used.
  • The person(s) shall file separate application for each class of goods or services.
  • The application must be filed at the Head office or any branch of the Trademark Registry having territorial jurisdiction over the principal place of business. If the person does not carry on business in Bangladesh, the application must be filed in the office having territorial jurisdiction over the place mentioned in the address for service in Bangladesh.
  • Requirements:
  • Name of the Applicant(s)
  • Address and Nationality
  • Specification of goods
  • Fees: 3500 taka
  • Form- “TM-1”.

Step 2: ACCEPTANCE – SECTION 15

  • The Registrar may accept the application absolutely and go ahead with further process.
  • He may refuse to accept the application recording the grounds of refusal.
  • He may conditionally accept the application, i.e. subject to amendments, modifications, conditions or limitations.

Step 3: ADVERTISEMENT – SECTION 17

  • After the conditional or absolute acceptance of the application, the Registrar may advertise the application in the prescribed manner along with the prescribed fees.
  • If there are any corrections in the application under Section 19, it will be advertised again after such correction to the satisfaction of the Registrar.
  • Form- “TM-9”
  • Fees- 1000 taka.

Step 4: OPPOSITION – SECTION 18

  • Within 2 months from the date of advertisement of the application, any person may oppose the same by serving due notice to the Registrar via form TM-5 along with the prescribed fees (2000 taka).
  • He shall, within 1 month from the date of receipt of the notice, serve a copy of the same to the applicant.
  • Thereafter, the applicant shall file a counter within 2 months from the date of receipt of such notice to him via form TM-6 and the prescribed fees (1500 taka). If a counter is not filed, the application shall be deemed to have been abandoned.
  • The Registrar shall serve a copy of such counter to the opponent.
  • All the evidences upon which the applicant and opponent rely shall be submitted in the prescribed time and manner to the Registrar, and they shall be granted an opportunity of being heard if so desired upon application via form TM-7 or TM-23 along with prescribed fees (1000 taka).
  • The Registrar, after following due process of opposition shall decide whether to accept, conditionally accept, or reject the application.
  • Notwithstanding anything contained in the Act, the opposition proceedings must be wound up/ concluded in 120 working days.

Step 5: REGISTRATION – SECTION 20

  • If the application is accepted or not opposed or the notice period of opposition has expired, or it has been opposed and the decision is in favour of the applicant, the trademark shall be registered by the Registrar.
  • The applicant shall be issued a certificate of registration with the seal of the trademark registry.
  • Such certificate shall be issued within 150 working days from the date of filing of application.
  • The duration of the trademark shall be of 7 years, and can be renewed by paying the prescribed fees, from time to time.
  • The Registrar may renew the registration of the trademark for 10 years from the date of expiration of original registration or the last renewed registration on application by the applicant.

It takes around 24-36 months to get a trademark registered in Bangladesh in a smooth case.

Workflow:

1

Rights conferred by Registration:

Registration of a trademark confers the following rights under Section 25:

  • Exclusive right to use the trademark in relation to those goods and services for which it has been registered.
  • Obtain relief against infringement of the same in accordance with the Act.

It also provides that no person except the registered proprietor/ owner of the trademark shall use the same in respect of the goods and services for which it is registered under the Act, without the consent of the registered owner.

The Act, just like Indian law, also incorporates the common law remedy of “Passing Off’ in its Section 24. It provides that no infringement action be instituted for an unregistered Trade Mark. Secondly, nothing in the Act shall be deemed to affect the right of action against any person for passing off goods or services of another person and any other related remedies.

Infringement:

Section 26 deals with the Infringement of Trademarks. Usage by a person other than a registered proprietor of the identical or similar trademarks, the Trade Mark deemed to be infringed. On the other hand, Section 27 deals with the acts that do not amount to infringement. Lawful user, permitted use, etc. are provided in the section.

Assignment and Transmission:

The Act, in Chapter V, comprehensively provides for assignment and transmission of a registered trademark by the registered proprietor, with or without the goodwill (Section 34).  An unregistered trademark shall not be assignable or transmissible except along with the goodwill of the business concerned (Sec 35) under certain circumstances provided in the same section, it can be assigned or transmitted without the goodwill. Moreover, Section 38 incorporates assignment and transmission otherwise than in connection with the goodwill with conditions of fulfillment attached.

Offences and Penalty:

Section 71 firstly discloses the meaning of applying trademarks and trade descriptions, and secondly Section 72 mentions the circumstances when the Trade Marks are falsified or falsely applied. The penalties under the Act are as under:

  • Section 73: Penalty for falsifying or falsely applying Trademark: Imprisonment may extend to 2 years, but not less than 6 months, and/or fine which may extend to 2 lac taka, but not less than 50 thousand taka. For a second or subsequent conviction, the imprisonment would range from a minimum of 1 year to 3 years, and/or fine extendable up to 3 lac taka, but not less than 1 lac taka.
  • Section 74: Penalty for selling goods to which a false trademark or trade description is applied: Imprisonment for a term up to 2 years, and/or fine. For a second or subsequent conviction, imprisonment for a term up to 3 years, and/or fine.
  • Section 76: Penalty for falsely representing a trademark as registered: Imprisonment for a term up to 1 year, but not less than 6 months, and/or fine up to 1 lac, but not less than 50 thousand taka.
  • Section 77: Penalty of improperly describing a place of business as connected with the Trademarks office: Imprisonment for a term which may extend to 1 year but not less than 6 months, and/or with fine which may extend to 1 lac taka but not less than 50 thousand taka.
  • Section 78: Penalty for falsification of entries in the Register: Imprisonment for a term which may extend to 1 year but not less than 6 months, and/or fine, which may extend to taka 1 lac (84,600 INR approx.) but not less than 50 thousand taka.

Liability of online market portals vis-à-vis trademark infringement in the cyberspace

With the emergence of globalization and sharp advancement of technologies, our society and its knowledge making has also changed steadily. The scope and range of knowledge has expanded and is only a click away, due to the expansion of digital connectivity. However with every pro come the cons. Infringements of copyrighted works are considered as big threats hampering the growth of the Internet, e-commerce and digital economy. The amendment to the Information Technology act 2000, in the year 2009 did gave a fillip to IPR issues in cyber law, however one of the major issue that is still untouched is the issue of secondary liability for trademark infringement on 3rd parties involved in some manner in the sale, advertising, shipment or other activities relating to the goods/services in cyberspace.

Before dealing with the Indian Scenario, it would indeed be pertinent to deal with the international perspective of labiality of operators of online market portals vis-à-vis trademark infringement in cyberspace.

Before proceeding further it is significant to know the concept of secondary liability. The concept of secondary liability is a common principle of law of torts, which arises when a party materially contributes to, enables, induces, or is otherwise responsible for directly or contributory-infringing acts carried out by another party. It is wellspring of unfair competition law. There are two kinds of secondary liability:

  1. Vicarious liability: It is a stricter liability amongst the two as the law of tortimposes responsibility upon one person for the failure of another, with whom the person has a special relationship, to exercise such care, as a reasonably prudent person would use under similar circumstance.[1]
  2. Contributory liability: It is a tortious liability for soliciting and aiding and abetting, the infringement, i.e. if a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, then the manufacturer is liable for contributory liability[2].

While the concept of Vicarious Liability comes into picture when:

  • The third party has the right and ability to control the actions of the direct infringer; and
  • The third party derives a direct financial benefit from the infringement.

The notion of Contributory liability comes when:

  • The defendant knows of the infringement; and
  • The defendant materially contributes to the infringement.[3]

One of the earliest cases, which dealt with this principle, was the case of Kalem Co. v. Harper Brothers[4], while the landmark case that dealt with Secondary Liability in Trademarks was Inwood Laboratories v. Ives Laboratories[5]

While in India we still haven’t got the opportunity to give a verdict on the issue, but the judgments of Court of Justice of the European Union[6] and US Federal Court[7] comes as a guiding force on the subject.

L’Oréal v. eBay International AG[8]

Facts:

  • The proceedings was between L’Oréal SA and its subsidiaries Lancôme parfums et beauté & Cie SNC, Laboratoire Garnier & Cie, on one hand, while eBay Inc. and subsidiaries on the other regarding the sale of L’Oréal products on the online marketplace operated by eBay without L’Oréal’s consent.
  • L’Oréal was a manufacturer and supplier of perfumes, cosmetics and hair-care products, which operate a closed selective distribution network, in which authorised distributors are restrained from supplying products to other distributors. On the other hand eBay operates an electronic marketplace, which provides platform to sellers to set up online shops on eBay sites. Thereafter eBay facilitate prospective buyers to bid for items offered by sellers.
  • On 22 May 2007, L’Oréal communicated its apprehensions to eBay about the widespread incidence selling of counterfeit goods on the site. And soon a trademark infringement case was filed against eBay.
  • The Court of Justice of emphasized and considered whether the display of the sign (which is identical to the registered mark), in the sponsored link, constitute “use” of L’oreal’s trademarks ‘in the course of trade’. Or whether eBay could claim immunity from secondary liability under provisions of the EU E-commerce Directive.

Judgment:

  • The role of online marketplace operator cannot be assessed under Directive 89/104 or Regulation No 40/94, but must be examined under rule and laws set out under Directive 2000/31 (Section 4 of Chapter II)(‘liability of intermediary service providers’) along with Articles 12 to 15 of that directive.
  • In order for an Internet service provider to fall within the scope of Article 14 of Directive 2000/31, it is essential that the provider be an intermediary provider within the meaning intended by the legislature in the context of Section 4 of Chapter II of that directive.
  • It was held by the Court of Justice that eBay has not used the registered trademark ‘L’oreal’s’ in its own commercial communications, but has simply displayed the sign or selected keywords corresponding to L’Oréal trade marks on Google search engine in order to offer sale to prospective buyers. In that context the operator of the online marketplace was just acting as an advertiser. However the court held that the proprietor of a trade mark is entitled to prevent an online marketplace operator from advertising his trademark as the goods offered on sale through advertisement does not enable reasonably well-informed and reasonably observant internet users, and makes it difficult for prospective buyers to ascertain whether the goods concerned originate from the proprietor of the trade mark or from an undertaking economically linked to that proprietor or, on the contrary, originate from a third party.
  • The court while assessing what construes ‘active role’ under Article 14 under Directive 2000/31 stated that “the operator plays such a role when it provides assistance which entails, in particular, optimizing the presentation of the offers for sale in question or promoting them.” Therefore the court held that the defendant did not play any active role in the same regard, however the court stated that if the operator of the internet market was aware of facts and circumstances that there unlawful offer of sale were being executed at his portal and still did not take any step to prevent the same then he is exempted to take any exemption from the liability.
  • Due to the s reasons stated above the court granted injunction in favor of L’Oréal.

Tiffany (NJ) Inc. v. eBay, Inc.[9]

Facts:

  • In 2002 eBay had implemented a “fraud engine,” which is principally dedicated to ferreting out illegal listings, including counterfeit listings. The fraud engine incorporated Tiffany-specific filters too. A page named, “About Me” was also maintained by Tiffany and not eBay. The headline of the page was “BUYER BEWARE,” & the page began: “Most of the purported TIFFANY & CO. silver jewelry and packaging available on eBay is counterfeit.”
  • In 2004 Tiffany & Co sent a number of notices to eBay stating to remove counterfeit products of the brand and by 2005 Tiffany & Co. filed injunction suit in the district court in order to shut down the legitimate secondary market dealing in Tiffany goods.

Judgment:

  • The District court rejected the allegations of Tiffany that eBay had directly infringement its trademark. Rather the court said that eBay’s was protected by the doctrine of nominative fair use[10]. As a result, an appeal came before the circuit judge.
  • The bench relied on the two-prong test while awarding its judgment:
  1. Whether the plaintiff’s mark is entitled to protection, and
  2. Whether the defendant’s use of the mark is likely to cause consumers confusion as to the origin or sponsorship of the defendant’s goods.

The court discussed the case under 4 heads:

  1. Direct Trademark Infringement
  2. Contributory Trademark Infringement
  3. Trademark Dilution
  4. False Advertising
  • Direct Trademark Infringement: The bench observed “defendant may lawfully use a plaintiff’s trademark where doing so is necessary to describe the plaintiff’s product and does not imply a false affiliation or endorsement by the plaintiff of the defendant.” The court also observed that eBay promptly removed all listings that Tiffany challenged as counterfeit and took affirmative steps to identify and remove illegitimate Tiffany goods. As a result the court observed that eBay’s use of Tiffany’s mark in the described manner did not constitute direct trademark infringement.
  • Contributory Trademark Infringement: The court rejected to apply Inwood test[11] as it observed that eBay clearly possessed generalized knowledge as to counterfeiting on its website which makes it insufficient to impose any penalty on the issue. The court also observed that it was the duty of the plaintiff to establish the ‘knowledge’ of contributory infringement. The court agreed with the decision of the district court that eBay was not willfully blind[12] to the counterfeit sales of Tiffany.
  • Trademark Dilution[13]: The court rejected Tiffany’s dilution by blurring claim on the ground that “eBay never used the TIFFANY Marks in an effort to create an association with its own product, but instead, used the marks directly to advertise and identify the availability of authentic Tiffany merchandise on the eBay website.”
  • False Advertising: The court of appeal rejected the argument that eBay advertised the sale of Tiffany goods on its website, and because many of those goods were in fact counterfeit, eBay should be liable for false advertising and that the advertisements at issue were not literally false because authentic Tiffany merchandise were also sold on eBay’s website, even if counterfeit Tiffany products are sold there, too.
  • In conclusion the court approved with the district court’s judgment that eBay’s use of Tiffany’s mark on its website and in sponsored links was lawful and that eBay as an operator of online market was not liable for any trademark infringement.

 

Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc[14]

Facts:

  • Vuitton filed trademark and copyright infringement against the defendant, Akanoc on the context that the defendant sold counterfeit replica LV goods. The plaintiff had earlier too given several notices to the defendant him to remove the infringing products.
  • The suit was assessed under 4 heads:
  1. Contributory trademark infringement,
  2. Vicarious trademark infringement,
  3. Contributory copyright infringement, and
  4. Vicarious copyright infringement.

Judgment:

  • The court while relying on the case of Applied Info. Sciences Corp. v. eBay, Inc.[15] held that in order to establish direct infringement of a trademark, a plaintiff must show:
  1. Ownership of a valid trademark, and
  2. A likelihood of confusion resulting from a defendant’s alleged infringing use.

The court while discussing the case held that third parties have infringed Plaintiff’s copyrights and trademarks.

  • While deciding the issue of Contributory Trademark Infringement the court replied their judgement on the test of Inwood Lab[16]. The court found that the defendant had actual or constructive knowledge knowledge of trademark infringement of the rightful proprietor Louis The court observed that the defendant had the ability to terminate websites by unplugging an entire server or disable individual IP addresses and thereby remove websites using their servers. As a result the court observed that the defendants knew third parties were infringing Plaintiffs trademarks and remained wilfully blind despite his ability to terminate its services to those third parties.
  • While deciding the issue of vicarious liability it was important that the direct and second infringer shared some relation[17] amongst each other. The Defendant Chen stated in his declaration that he have never known any operators of websites as he does not directly deal with infringing website operators.
  • As a result the jury granted injunction in favour of plaintiff and awarded $10,500,000 for contributory trademark infringement/counterfeiting against each of the defendants making it a total of $31,500,000 as damages.

Conclusion

While deciding the liability of trademark infringement 3rd parties on the virtual market it is significant and vital to know the Inwood Lab test. If someone directly “monitors and control” the instrumentality of infringement, then such person would be held liable for such trademark infringement. While discussing landmark cases of different countries it is pertinent to note that different courts held totally an unlike and distinctive opinion while the dealing with the same issue or subject in hand.

Where while examining the Tiffany case on one hand, the court emphasized on the importance and significance of actual and constructive knowledge of an breach, on the part of the secondary infringer in order to establish a contributory trademark liability on the part of operators online marketplaces, there on the other hand, the judgment of CJEU in L’Oréal v. eBay International AG, the court gave stricter ruling while assessing the liability of the online market operators. The court in the case of L’Oréal held that the proprietor of a trademark registered in a Member State had the right to prevent offers for sale or advertising even online of good associated with his registered trademark.

The court in the case of Tiffany (NJ) Inc. V. eBay the court have stressed the ‘control‘ element an operator posses on the part of the secondary infringer and held that the defendant did not have any direct control on the infringing goods, hence was liable to be set free without and damages. The Court in the case of L’Oréal giving a firmer judgment said eBay’s advertisements created an evident association between the registered trademarked goods and online market site, which eventually created an adverse effect on the registered trademark. The court also held the advertisements eBay had not only contravened the interests of fair trading but had also violated consumer protection rules laid down by Directive 2000/31 Article 6.

The jury in Louis Vuitton Malletier case gave a much firmer, securer and accurate judgment stating that the defendant not only provided its services to the infringing party but also had a direct control and monitoring of the instrumentality used by a third party to infringe. The court siad in order the prove an infringement case against an online market operator it was imperative to show that contributory infringer was assisted with actual or constructive knowledge of trademark infringement. While passing a deterrent judgment, the court awarded statutory damages of $31,500,000 in favour of the plaintiff for contributory trademark infringement.

Convenient for international courts, they have appropriate legislations and directives that would help them deal with the subject. The Indian courts have yet to address the issue critically and bridge this important gap of liability of 3rd part in a trademark infringement in the cyberspace. Fortunately the international courts have critically analyzed the subject and have set an enlightening, fitting and instructive path for Indian courts.

Indian jurisprudence on “liability of online market portals vis-à-vis trademark infringement in the cyberspace” will be dealt by me in my next blog.

About the Author:

Ms. Shireen Shukla, a legal intern at Khurana & Khurana, Advocates and IP Attorneys articulates her finding on the International jurisprudence on the labiality of operators of online market portals vis-à-vis trademark infringement in cyberspace.

[1] The Free Dictionary: http://legal-dictionary.thefreedictionary.com/vicarious+liability

[2] Justice O’Connor, Justice Burger, Justice Brennan, Justice Blackmun, Justice Powell, Justice Stevens & Justice Marshal in Re: Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 102 S. Ct. 2182, 72 L. Ed. 2d 606 (1982)

[3] Michael J. McCue: Lewis Roca Rothgerber Christie: Secondary Liability for Trademark and Copyright Infringement; last visited as on 5th April, 2017 <https://www.lrrc.com/secondary-liability-for-trademark-and-copyright-infringement-02-05-2012&gt;

[4] 222 U.S. 55 (1911)

[5] 456 U.S. 844 (1982)

[6] L’Oréal v. eBay International AG

[7] Tiffany (NJ) Inc. v. eBay Inc. 600 F.3d 93 (2d Cir. 2010)

[8] C-324/09

[9] 600 F.3d 93 (2d Cir. 2010)

[10] “it allows the defendant to use a plaintiff’s trademark to identify the plaintiff’s goods so long as there is no likelihood of confusion about the source of the defendant’s product or the mark-holder’s sponsorship or affiliation.”

[11] i.e. if a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, then the manufacturer is liable for contributory liability

[12] Where a person suspects that users of its service are infringing a protected mark (suspects wrongdoing), and that he shields himself by deliberately failing to investigate by giving a blind view to the issue.

[13] The Federal laws of US allows the owner of a “famous mark” to enjoin a person from using “a mark or trade name in commerce that is likely to cause dilution by blurring or dilution.

[14] 658 F.3d 936 (9th Cir. 2011)

[15] 511 F.3d 966, 972 (9th Cir. 2007).

[16] The plaintiff must establish that the defendant:

  1. Intentionally induced the primary infringer to infringe, or
  2. Continued to supply an infringing product to an infringer with knowledge that the infringer is mislabeling the particular product supplied

[17] That the defendant and the infringer have an apparent or actual partnership, have authority to bind one another in transactions with third parties or exercise joint ownership or control over the infringing product.

Khurana & Khurana expands footprint in South East Asia

With business models over the world turning more idea-driven, Intellectual Property Rights (IPRs) are now one of the most valuable assets for any economy. With a significant increase in IPR related activities, South East Asia is developing as a key market for IP Protection and initiating Enforcement actions. Khurana & Khurana, Advocates and IP Attorneys (K&K) one of the leading IP and Commercial law firms in India is committed to provide high quality consistent End-to-End Legal Services in IP and Corporate Legal Matters, and with a belief that success comes only when one has a long-term perspective and high level of client orientation, we are expanding our footprints in South Asian countries (Bangladesh, Vietnam, Myanmar, Nepal) with our strong associations with an objective of being a single-point of contact for IP Prosecution Matters in South-East Asia.

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About K&K

Khurana & Khurana, Advocates and IP Attorneys (K&K) is more than a full-service Intellectual Property and Commercial Law firm.  K&K was formed with a very firm focus on providing end-to-end IP Prosecution/ Litigation and Commercial Law services in a manner that is Corporate Centric and follows stringent delivery practices that are consistent and are above-defined quality standards. K&K works closely with its sister concern IIPRD, both of which supplement each other in order to provide end-to-end IP Legal, Offshored IP Support, and Commercialization/Licensing services to over 3000 Corporates.

Our team of over 95 professionals spread across 6 Offices in India having high level of technical and legal competence, gives us the right competitive edge and positioning, as a law firm focused on creating immense IP value for our clients. K&K, through its experienced and qualified team of Attorneys/Practitioners, across Technology and Legal Domains, gives a rare synergy of legal opinion, out-of-box thinking for the protection of ideas/IP’s and entrepreneurial spirits to its client base. K&K is strongly ranked and recommended by Chambers and Partners, IAM, MIP, Legal 500, Asia IP, among other like agencies, and is an active member of INTA, APAA, AIPLA, LES, and AIPPI.

Fighting with Counterfeit Menace: Montblanc Simplo GmbH vs. Gaurav Bhatia & ors. CS(OS) 2563/2013: Granting Injunctive Relief

Introduction:

It always has been a well known fact that the markets in India are targeted by large number of counterfeit products/goods. Popular brands like LV, GUCCI, Burberry, Armani, Hermes inter alia; are frequently pirated in local commercial markets. Among others, the most popular counterfeit products in market include hardware, software, clothing, watches, writing instruments.

At that backdrop, Indian system is striving hard to deal with the menace caused by the counterfeit products in the market which not only endangers country’s reputation and goodwill but also affect country’s financial market. Indian judiciary has timely made its presence felt by passing landmark judgments with various issues Indian market is facing. Recently, Hon’ble Delhi Court passed orders in one such case which dealt with counterfeit issue.

Facts of the case:

Delhi High Court in its recent judgment dated January 04, 2017 in the matter of Montblanc Simplo GmbH vs.  Gaurav Bhatia & ors. CS (OS) 2563/2013, The Court has restrained an electronic commerce web portal functioning under the Trade name “www.DIGAA.com”. The Defendant’s impugned website was alleged dealing with the manufacturing, selling and advertising of counterfeit Montblanc products which are registered under the Trademark of the Plaitiffs.

Background of the case:

Plaintiff:

A German company incorporated under the laws of the country having its registered office at Hamburg. The registered company named “Montblanc Simplo GmbH” has its work engaged in the manufacturing, distribution and sales of pens & other writing instruments under the registered Trade name MONTBLANC MEISTERSTUCK,. The plaintiff’s company Trademark also include “The Star Device” which is a white stylized six pointed star with circular edges and the “The three ring Device” comprised of three metallic bands located close to the middle of body of pen cap. The plaintiff’s company claims its product registered under proprietors name within India as well as other countries across the world.

In July 2013, the plaintiff through its office in India came to know that the said defendant was selling counterfeit products on a lesser rate from original product of plaintiff. The defendant represented his product as original product of Plaintiff Company. Hence, the present suit was filed.

Submission by the parties:

Plaintiff’s Submission:

  • Plaintiff claimed that his company is losing reputation and trust of his clients because of defendant’s counterfeited products. Plaintiff claimed to be suffering loss and demanded damage worth INR 2,005,000.
  • Plaintiff stated the price of original MEISTERSTUCK CLASSIQUE is INR 30,000 whereas the defendants were selling similar counterfeit product for INR 6,860.
  • Plaintiff in his submission stated that they purchased writing instrument, namely, the MEISTERSTUCK CLASSIQUE from the website defendant was using to sell the products, which were being sold at a discounted price and falsely represented as a product of the plaintiff upon examination that the product was a counterfeit.
  • It was submitted by the plaintiff that the defendant’s product is of inferior quality; also the refill used in Defendants instrument was different than that of original product. Defendant’s instrument has a different color combination than that of plaintiff. Also, the tip of the refill of defendant’s writing instrument has a plastic ball which is different than that of plaintiff’s original product. The serial numbers on the product were also fabricated by the defendant.

The defendants after filing their Written Statement stopped appearing in court and the suit was preceded Ex-parte.

Observation by the Hon’ble court:

  • Court observed some of the consumers complaints filed against the defendant including one customer who purchased counterfeited product from defendant and suffered subsequently lodged a complaint before the cyber cell of Chandigarh Police under section 420 & 406 of Indian Penal Code and section 66A of Information Technology Act.
  • Plaintiff’s brand name MONTBLANC is a well-known mark having goodwill and reputation in its market. It is also proved that public identified plaintiff’s product from its trade dress which includes “The Star Device” and “The Three Ring Device”.
  • Plaintiff also proved on record its notice published in India, and related information from the defendant’s web portal displaying counterfeit products of the plaintiff’s Trademark, They also attached the invoice alongside of the purchased products and photographs of counterfeit products and their warranty card.
  • The court observed that the plaintiff had proved that the defendant was counterfeiting its goods and thereby, infringing its Trademark.

Held:

The Hon’ble Court, in view of the above case granted relief of permanent injunction against the Defendants as sought by the plaintiff  and also passed a restraining order against them to restrain them from Passing-off their counterfeit products as that of plaintiff’s. However, the claim for damages was rejected by the court on the ground that Plaintiffs have not produced sufficient evidence to show the extent of actual damage suffered by the company. Hence, the judgment was in the favor of the plaintiff. Pertinently, it is important to note that in order to claim damages proper and sufficient evidence must accompany to get monetary relief against damages suffered.

About the author: Mayank Srivastav, an intern at Khurana & Khurana, Advocates and IP Attorneys