Category Archives: Trademark

Principles of Passing off In Trademarks: Wockhardt Limited Vs. Torrent Pharmaceuticals Ltd.

Background

Torrent Pharmaceuticals Ltd. (Plaintiff/ Respondent) owned a trademark a trade mark called “CHYMORAL” and “CHYMORAL FORTE”, which is a drug administered post-surgically for swellings that may arise and/or wounds that may arise. They filed a suit for infringement and an interlocutory application for passing-off against the rival, Wockhardt Limited (Defendant/ Appellants) for violating its trademark rights by use of the mark “CHYMTRAL FORTE”. Single Judge Bench of Bombay High Court refused to grant the interim injunction for passing-off in favor of Torrent and against Wockhardt. The said order was challenged before the Division Bench, the same was set aside and Torrent was granted interim injunction for passing-off. The said Order of Bombay High Court was appealed, by Wockhardt, in Supreme Court.

Classical Trinity of Passing Off

  • There 3-elements which are to be satisfied to prove a case of passing off are: a) Goodwill and Reputation; b) Misrepresentation by the Defendant; and c) likelihood of damages.
  • The Court held “that though passing off is, in essence, an action based on deceit, fraud is not a necessary element of a right of action, and that the defendant’s state of mind is wholly irrelevant to the existence of a cause of action for passing off, if otherwise the defendant has imitated or adopted the Plaintiff’s mark”. Likelihood of damages is sufficient. The bench quoted the judgment in Laxmikant V. Patel vs. Chetanbhai Shah.

Acquiescence and Delay: Not the same

  • The Court refused the Single Judge’s injunction refusal ground of acquiescence and stated that “We do not think that because the appellants stepped in the year 2014 with notice of the first respondent’s registration and use of the mark that means the appellant-plaintiff has acquiesced in the same. That is not a positive act and which is required to deny the relief on the ground of acquiescence.” Reference was made to the SC judgment in M/s Power Control Appliances and Ors. vs. Sumeet Machines Pvt. Ltd.
  • “Acquiescence is a species of estoppel and therefore both a rule of evidence and a rule in equity. It is an estoppel in pais: a party is prevented by his own conduct from enforcing a right to the detriment of another who justifiably acted on such conduct.”
  • With respect to the point of acquiescence, the Division Bench held that ‘Delay is not to be confused with acquiescence. The latter implies knowledge, and where “knowledge of the defendant’s mark and product is shown and coupled with a long period of inaction against the alleged invasion of an exclusivity claim”, it is not enough to say that “there is no positive act”, as acquiescence explicit consent rather than silent.

Verdict

The Supreme Court bench upheld the law laid down in Laxmikant V. Patel vs. Chetanbhai Shah regarding passing off, dismissed the appeal in favor of Torrent Pharmaceuticals Ltd. and upheld the order of Divison Bench of Bombay High Court.

Author: Ms. Vatsala Singh, Litigation Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at vatsala@khuranaandkhurana.com.

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Too General To Be Trademark-Able: A “Cocky” Debate

There have been plethora of cases in India and abroad that discuss the menace caused due to monopolization of general English terms in course of business. The argument given by the proprietors is that to get a trademark over a name, it is important that the name is arbitrary and it does not describe the product that is being sold under it. While the importance of getting protection over one’s intellectual property is stressed upon, the bigger problem here lies with the concept of owning a name that everyone knows and uses in their day-to-day life. “Trademark Overreach or Trademark Abuse” refers to this practice of using and monopolizing general words as brand names. This article analyses the predicament of dominating general words for business purposes while highlighting upon the recent ‘COCKY’ controversy.

The COCKYGATE:

After Penelope Ward and Vi Keeland’s book ‘The Cocky Bastard’ became a major hit in 2015, number of romance novelists titling their books ‘Cocky’ was on the increase. The word is adored by these novelists for its implication to alpha-male heroes and for its under-playing potential. On 17th April 2018, the United State Patents and Trademark Office (USPTO) invited litigation when it granted a troublesome trademark on the general English word “COCKY”. Crux of the matter is that, self-published author Faleena Hopkins had filed for registration of trademark on the word “Cocky” in relation to a series of downloadable e-books in the field on romance, ‘Cocker Brothers of Atlanta’. The 19 book series is about Cocker brothers where each book features the word ‘Cocky’ in the title (books in the series can be viewed here Cocker Brothers Series). Adding fuel to the fire, Ms. Hopkins also wrote out to other authors to cease and desist from using the word in their book titles. Many authors like Jamila Jasper, Bianca Somberland have received notices from Ms. Hopkins stating that they should change the name of their books or else face legal actions. She also filed a complaint against these authors with Amazon as a consequence of which Amazon took down their books from sale. The matter came to light last week when many authors resorted to social media to write about the letters received from Ms. Hopkins with #COCKYGATE. The actions of Ms. Hopkins had led to an outcry in the romance writers’ community.

A petition to cancel the registration of ‘Cocky’ has been filed in the USPTO which has been signed by 17,000 people so far. The writers have claimed that romance novels usually involve alpha-male protagonists who are frequently described in the titles with this word. They also claimed that such generic terms cannot be trademarked. In her defense, Ms. Hopkins claims that ‘COCKY’ is an essential part of the titles of her books, hence, require protection. She said that she is received letters from the readers who lost their money thinking they bought her series. She stated that she is trying to protect the interests of such innocent buyers.

Analysis:

As stated earlier, general terms are not trademark-able. General terms refer to the terms or words that we use regularly in our day-to-day affairs or which are words of common tongue. General term is a term which ideally should not become the exclusive property of a single firm but at the same time it maybe a term which describes the source of a product or service provided under it; therefore, must not be appropriated by the rivals to use freely. Such terms cannot be trademarked unless they have attained a secondary meaning. A trademark claim may be overreaching if a mark similar to the registered mark comprised of a general term is separately registered and used in relation to a different class of goods. The court must not deny the defendants from using the general trademarked term unless it has acquired secondary distinctiveness.

Secondary Distinctiveness: An American Overview:

Federal Trademark Act, 1946 popularly known as the ‘Lanham Act’ governs the trademark law in the United States.  The act allows the owners of trademarks and service marks to register them on Principal Register. The refusal of registration is constrained to certain grounds enumerated in Section 2(a), (b), (c), (d) and (e) which includes grounds like mark being deceptively similar to another mark already registered, consists of immoral, deceptive or scandalous matter etc. This section is the American counterpart of Section 9 of the Indian Trademark Act, 1999, however, Section 2(f) of the Lanham Act provides an exception to refusal of registration on grounds of section 2(a), (b), (c), (d) and (e) (3), (e) (5). It states that “nothing herein shall prevent the registration of a mark used by the applicant that has become distinctive of the applicant’s goods in commerce”, thus, in US too, a general term can acquire protection only if the term has acquired a secondary meaning.

The Judicial outlook on this matter in United States is also in consonance with what the Act most states. Commonly descriptive terms or general terms used by the public or other businesses to describe a particular good cannot be trademarked unless it has acquired a distinctive meaning, in the sense that the public associates the term to a particular product of a particular company. Yet, there have been cases like the CITI Bank’s matter against AT&T over the term “THANK YOU”. The court sided with the defendants and stated that the term had achieved no secondary meaning, hence, CITI Bank cannot monopolize it.

Secondary Distinctiveness: Indian Perspective:

Section 9 of the Trademark Act, 1999 lays down the grounds for absolute refusal of registration of trademark and includes that a mark that is descriptive of the goods and services purported to be sold under it cannot be registered. It also bars registration of marks which have become customary in the current language or in bona fide and established practices of trade, however, the section gives an important exemption to the marks that have acquired distinctive character as a result of their use maybe registered. The exemption gives birth to the idea of ‘secondary distinctiveness’ which relates to the situation where certain terms acquiring a secondary meaning because of its use in the common parlance; such terms may be trademarked.

Examples of trademark overreach in India are many ranging from Ultratech’s claim over the term ‘Ultra’, or Reebok’s claim over the phrase ‘I am what I am’. In all these cases, the court ratio emphasized on the fact that a general term can be granted protection if and only if it is proven that the term has acquired distinctiveness and that public relate to the term by this secondary meaning rather than a definite meaning.

Conclusion:

In the present case also, the USPTO must take into consideration the genericness of the term ‘Cocky’ and the manner in which it is used by romance novelists in their titles. Generic terms should not be allowed to be trademarked unless there is proof of its acquired distinctiveness. The evidence of secondary distinctiveness must be made mandatory for those seeking to register generic terms as trademarks. Further while entertaining infringement suits involving such generic terms the Courts should be cautious to identify if the claim is bona fide; meaning, the generic term trademarked by the Plaintiff has attained a distinctive character and the public at large associates such term with the products of the Plaintiff.

Author: Aishwarya M. Pande, 5th Year, BA LLB (IPR Hons.), Institute of Law, Nirma University, Ahmedabad, Legal Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

References:

[1] Trademark Registration no. 5447836 granted by USPTO

[2] http://tsdr.uspto.gov/#caseNumber=5447836&caseSearchType=US_APPLICATI

ON&caseType=DEFAULT&searchType=statusSearch

[3] Section 2, Federal Trademarks Act, 1946

[4] Section 9, Indian Trademarks Act, 1999

[5] https://timesofindia.indiatimes.com/life-style/books/features/romance-novelist-trademarks-word-cocky-stirs-up-controversy/articleshow/64108602.cms

[6] https://www.vox.com/culture/2018/5/15/17339578/cockygate-explained-romance-publishing-faleena-hopkins

[7] http://www.victoriastrauss.com/2018/05/09/trademark-shenanigans-weighing-in-on-cockygate/

[8]http://www.cbc.ca/radio/asithappens/as-it-happens-wednesday-edition-1.4665345/romance-writer-renames-book-after-author-trademarks-cocky-1.4665355

[9] James M. Treece and David Stephenson, ‘Another look at descriptive and generic terms in American Trademark Law.’,  66 Trademark Rep. pp 452,453

[10] Ultratech Cement Ltd. v. Dalmia Cement Bharat Ltd., (2015) 2 Mah LJ 354 (Bom)

[11] Reebok India Co. v. Gomzi Active, MANU/KA/0781/2006

Fashion And Trademarks: The Clothing Controversy

Much like the trends on a ramp evolve every season, in the same way legal strategies of the industry’s leading fashion brands, fashion-houses and designers are in flux. Fashion is something to which each one of us relates. It is a part of everyone’s daily life; be it in the form of apparels or shoes we wear or a new hairstyle we adorn or the exotic jewelry we flash.  Fashion industry is one of the most popular and profit-making industry in any country and yet is also one of the most vulnerable. The vulnerability of fashion emerges from the lack of protection to original ideas and works in terms of Intellectual Property. As a result, many fashion houses are often seen suing for the infringement of their designs. This article depicts the tendencies witnessed in affording IP protection to fashion while focusing upon the recent case of Burberry v. Target.

The War of Brands

On 2nd May 2018, one of America’s largest big-box retailers Target was slapped with an 8 million dollar trademark infringement and counterfeiting lawsuit that a British luxury brand Burberry filed in a New York Federal Court. The allegations against Target are that, it has been selling products having ‘blatant reproductions’ and bearing unauthorized copies of Burberry’s world famous ‘checks’ trademark. The infringement is alleged to be of continuing nature as Target has been involved in the act for over a year and continues to do so despite of numerous cease and desist letters being sent. Target was selling products including eye wear, water bottles and luggage, since early last year, bearing the trademarked pattern of the plaintiff. Burberry sent the retail giant a cease and desist letter alerting them about Burberry’s exclusive rights in said check pattern. A few months after receiving this letter, Target, being explicitly aware of Burberry’s special rights chose to ignore them and began offering a number of scarves on sale, all of which bore Burberry’s legally protected trademark. Burberry claims that Target purposely intended to continue selling infringing merchandise even after receiving the cease and desist letter which demonstrates the ill-intention on part of Target and its utter disregard to the intellectual property rights of Burberry. The motive behind Target’s actions in selling infringed merchandise was to misappropriate the colossal goodwill of Burberry and therefore be unjustly enriched from the enormous profits earned. The design in question is produced below for convenience:                     Burberry_scarves

Although the scarves produced by Target are of inferior quality yet they are on the surface indistinguishable from the genuine Burberry scarves. The items sold by Target were not approved by Burberry and such a reproduction of the check print of Target’s items could cause confusion in the minds of the consumers and would lead them to believe that those items are sponsored by Burberry. Burberry claims that Target’s history of collaborating with popular brands and fashion designers to promote and sell Target’s exclusive products further enlarges the scope of consumer confusion. It is stated that the classic cashmere scarf of Burberry sells for $430 which Target is selling for $12.99 (Check it out here Target and here Burberry).

Burberry is seeking $2 million for every instance of infringement along with damages to the full extent possible.

Analysis

The first and the most quintessential question which arises here relates to the scope of IP protection in the fashion industry. Fashion brands are not immune to counterfeiting. It is easier for the counterfeiters to copy fashion products and clothing because they are relatively simpler to manufacture as compared to the hi-tech devices. Also, they can be sold with a high mark-up owing to the reputation or goodwill associated with a well-known brand. With the increasing awareness of intellectual property in the fashion world more and more stake-holders are seeking trademarks and other IP protections for their creations. According to the Trademark Industry Report 2017 prepared by Trademark Now, Clothing, Apparel and Luxury Goods industries were under Trademark Spotlight in 2016 with more than 6400 applications being filed around the globe.    In order to avoid the menace of counterfeiting, where the counterfeit product incorporates a well-known brand name, trademark enforcement is the best and most effective tool. Fashion brands register their house brand name and key sub-brands.  Some of the leading luxury brands have been vigilant to safeguard their shape, color, patterns, cuts, style etc. For example, Christian Louboutin has trademarked red soles of their shoes. He has also sued Zara for infringement.

Indian Perspective

Fashion industry is one of the fastest growing industries in India especially after some Indian designers have earned respect and recognition of other nations.  However, the growing fame comes with certain vulnerability erupting from the scope of infringement by other domestic or even international designers. Fashion fraternity of India is slowly getting the hang of intellectual property protection for their creation.  In comparison to other countries especially USA, France, Spain and London, India is lagging behind in granting protection to fashion designers. Many designers are still unaware of their IP rights to guard their brands and creations from reproductions, printing, publishing, distribution of prints that are colorable imitations etc.

Conclusion

With the growing awareness of importance of IP in the fashion world, there is a serious need to re-evaluate the spectrum of protection that is granted to the fashion industry. Fashion designers should go forward and enhance their knowledge of Intellectual Property Rights and should try to find out most suitable safeguard for their products. The Burberry case is the classic example of how far the fashion industry has come with respect to recognizing their rights and enforcing them at all costs and at all levels. It would be interesting to find out the outcome of this case as it could be a game-changer in the fashion-industry.

Author: Aishwarya Pande , Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at swapnils@khuranaandkhurana.com.

[1] Burberry Limited (UK) et al v. Target Corporation et al, 1:2018-cv-03946 (SDNY)

[2]http://www.thefashionlaw.com/home/burberry-slaps-target-with-multi-million-dollar-counterfeiting-lawsuit

[3]http://www.worldtrademarkreview.com/blog/detail.aspx?g=7fe051f2-eba0-423c-b1b0-ef80109587f3

[4]http://www.fortune.com/2018/05/11/burberry-suing-target-trademark-infringement-check-print/

[5]https://www.iipta.com/ip-assets-fashion-industry/

[6]http://www.thefashionlaw.com/home/the-state-of-trademark-protection-in-fashion-and-luxury

[7]https://www.trademarknow.com/trademark-industry-report

[8]http://www.worldtrademarkreview.com/Intelligence/Anti-counterfeiting/2015/Industry-insight/IP-enforcement-in-the-fashion-industry

Trademark Squatting: A Threat To MNCs

With the evolution of Globalization and the increasing presence of multi-national corporations like Amazon and Apple Inc. amongst others, enforcing Global Intellectual Property (“IP”) Rights becomes indispensible. As a result of this, business owners need to be conscious of ways to ensure that their IP, especially trademarks is protected globally. In 2012, Apple faced an issue with its Trademark registrations due to Trademark Squatting and had to pay a hefty amount of  $60 million to the owner of the ‘iPad’ Trademark in China. A possible dispute of the same nature could arise in India with respect to Amazon. Amazon[1] has introduced Prime, Echo and Prime Music in India is not able to proceed further with the registration at the Indian trademark office. It has applied for these trademarks under class 9, which is primarily related to computers, software and electronics.

To provide a better understanding of the menace that Trademark Squatting is, The World Intellectual Property Organisation (“WIPO”) defines Trademark Piracy (Squatting) as “the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use.[2]. It occurs when a person in a foreign country registers a trademark that has already been registered by its true owner in its original country. There have been various instances of the same due to which the original companies are not able to register their trademarks and has to pay a very heavy price to such companies to stop the use of the trademarks.

Interestingly, trademark squatting is a niche area in trademark disputes. It has been seen that generally registration is a major roadblock for foreign companies as once they gain worldwide goodwill, a number of local infringers try to register their trademarks in order to sell their products and make huge profits. With respect to the general rule, the exclusive rights of a trademark owner is territorial in nature and therefore laws relating Trademark varies from one territory to another. Trademark squatters take advantage of such different law enforcement, which becomes a hurdle when companies become multi-nationals.

Trademark Squatting is largely seen in China.[3] It follows a ‘first to file’ system as opposed to the ‘first to use’ system. In a ‘first to use’ system the first user of the Trademark obtains the exclusive right, whereas, in a ‘first to file’ system, the first person registering it gets the right to the Trademark. Thus, the country doesn’t require any proof of actual use or intent to use the trademark in any application. Hence, firms anticipating expansion into other countries, particularly China, should apply for registration at the earliest. In addition to thisbrands should register their trademarks in the respective transliterations as well.

In 2016, Michael Jordan, the basket ball star, received a favorable verdict from the Supreme Court of China, that arose out of the legal battle against Qiaodan Sports, a Chinese sportswear company using the Chinese transliteration of Jordan’s name as its trademark. A similar case occurred with Viagra, wherein the transliteration of Viagra in China was “Weige” and was registered in China. Thus, despite several lawsuits, Pfizer has failed to gain ownership of the Chinese trademark, Weige, and has been unable to force Vietnam and others to stop using the trademark.

In spite of the existence of various Conventions aiming towards the protection of trademarks that are “well-known” such as the Paris Convention[4], The TRIPS Agreement[5], The Madrid Protocol as well as the WIPO Joint Recommendation Concerning Well Known Marks[6], these are not enough to counter this problem. India, in its Trademarks Act has provided for protection of foreign trademarks with respect to the “Trans-border Reputation” principle.

It was a principle followed in India that the reputation of a good should benefit its owner even in a foreign land where the goods are not being sold.[7] However, the landmark judgment of Toyota case[8] modified this principle and held that trans-border reputation can only be considered if there are customers of the claimant’s product in the claimed jurisdiction and that such customers exists before the infringer’s activity was established.

The problem of squatting needs to be tackled at an institutional level, both domestically as well as Internationally. Further, with regard to dispute resolution[9], although WIPO has a mechanism but it rests on consent from both parties that is more than often not accepted by the squatters as they prefer their home countries. Another problem which may arise is when firms register their trademarks in China but face problem while expanding their services due registering in only particular classes of trademarks.

Business leaders need to identify the right strategies to protect their Trademark before entering the markets internationally. International registration of Trademarks is still not a prevalent practice. Further, China should introduce multiple class registrations and to first to use policies. These policies are also practiced in the United States as well as in India. The best way to challenge trademark squatting is to assert the filing that is done with bad-faith. Bad faith filing generally refers to “an intentional dishonest act by not fulfilling legal or contractual obligations, misleading another, entering into an agreement without the intention or means to fulfill it, or violating basic standards of honesty in dealing with others.”[10] However, this can be costly to prove due to the extensive procedure and expansive needs of evidence to support claims. Bilateral and multilateral treaties between states may also help to ensure that Trademarks registered in one jurisdiction are protected in others. Undoubtedly, it is a multifaceted issue that must be solved at every level

Author: Ruchika Srivastava, Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References:

[1] https://timesofindia.indiatimes.com/companies/amazons-prime-echo-hit-trademark-hurdles/articleshow/63650805.cms

[2]  World Intellectual Property Organization, WIPO Intellectual Property Handbook, 90 (2008).

[3] http://articles.latimes.com/2012/mar/28/business/la-fi-china-trademark-squatting-20120328

[4]The Paris Convention for the Protection of Industrial Property, 1883.

[5] Agreement on Trade Related Aspects of Intellectual Property Rights, 1995.

[6] World Intellectual. Property. Organisation, Joint Recommendation Concerning Provisions On the Protection of Well-Known Marks, Sept. 20-29, 1999

[7]MilmetOftho Industries &Ors. v. Allergen Inc. (2004) 12 SCC 624

[8] Toyota Jidosha Kabushiki Kaisha v. M/S Prius Auto Industries Ltd. & Ors,  AIR 2018  SC 167

[9]World Intellectual Property Organisation, Alternate Dispute Resolution

[10]  http://dictionary.law.com/Default.aspx?selected=21

IPL (Indian Premier League) And IPR (Intellectual Property Rights)

People of India see cricket not only as the most popular sport in India but also they follow it as a religion which accounts for such great success of IPL tournaments in India. There is a lot of money invested and involved in organizing IPL and the role played by IPR in making it a success across the world can’t be ignored but certainly Indians don’t give much heed to the Intellectual Property Rights[1] whose omnipresence can be noticed all over the field whether it is brand name, team name, team logo, slogans, tag-lines used/advertised by various IPL teams important role in increasing the popularity of a team. These trademarks are registered and protected under Trademarks act, 1999. Today it is universally accepted fact that the trademarks play more important role as compared to the dogmatic view that trademarks are just symbols to distinguish goods belonging to a person from another person, TM has now evolved as an agent of creating good will of the particular brand and contribute greatly in a brand’s business by helping them in establishing their brand value[2]. Trademarks are well thought of artistic symbols which are developed after rigorous analysis of the psychological effect it would have on people’s minds.

Many such trademarks can be seen in merchandise of various teams such as t-shirts, caps, shoes, etc. But as these merchandise are produced to promote a particular team, the sponsors supporting them and to make a good business out of it for which these are sold at high prices which can be afforded by only very few people. Taking advantage of this gap between a major portion of population, their desire to wear the merchandise of their favorite team or players and weak enforcement of TM laws in the country, many people get into business of producing and selling such fake copies (nearly perfect visual imitation) of these merchandises. The TM owners also don’t make much effort to stop such practices, the reason could be that they are confident of the fact that their target population would only purchase the official merchandise and even if some people wear fake t-shirts it will also in a way increase the popularity of the particular team amongst people.

Street vendors selling (fake) T-shirts of these teams can be commonly seen on the streets of India. While a purchaser won’t get confused about the originality of the t-shirts and most of the times he will be sure about the absence of any kind of relationship between the T-shirts being sold to them and the official teams (Although the reason for purchasing them would be their visual similarity to the official merchandise) but there is a great ‘likelihood of confusion’ regarding its association with the TM owner, to a third person that can certainly have an adverse effect on a person’s choice to buy the original stuff.

One such example is; when the company did not even have a single store opened in the city, t-shirts with a perfect imitation of ‘ed-hardy logo’ were easily found hanging on the street vendors’ shops[3], the people were actually turned off due to this fact and many decided not to purchase the original apparel from the store when later the official stores were opened in the city, the same also has been depicted in a movie scene in ‘chance pe dance’ where school kids are shown raising doubts regarding the originality of ed-hardy t-shirt worn by Shahid.

These practices fall under the concept of ‘passing off’[4] which is free riding on someone else’s goodwill by misrepresenting one’s goods as that of others. This also leads to dilution of the original mark as it reduces its distinctiveness.

In the arsenal vs Mathew heed[5], selling unofficial memorabilia and souvenirs carrying the TM of Arsenal football club for over 30 years was held by the ‘England and Wales Court of Appeal’ to infringe the trademark rights of the TM owner. The question before the court was ‘whether trade mark use was necessary for infringement of a trade mark?’ Which the court answered in negative and held that The use of the Arsenal Marks on the goods in question would jeopardize the ability of the trade marks to guarantee origin.”

The above mentioned judgment if followed in India would result into a harsh blow upon every such person who in some manner is involved in producing, distributing or selling such unofficial merchandise but as a matter of fact India has not seen a single case on such subject matter. Since, section 29(2)(c) clearly lays down that, “a registered TM is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which because of its identity with the registered TM and the identity of the goods or services covered by such registered TM is likely to cause confusion on the part of public, or which is likely to have an association with the registered trade mark.”

“Sub-section (3) of the same section also says that in any case falling under cause (c) of sub-section (2), the court shall presume that it is likely to cause confusion on the part of the public.” Therefore it can be anticipated that if such case arises in future, the Indian courts are likely to follow the judgment of their foreign counterpart. But since the Indian courts can’t take suo moto action against such practices, nothing much is likely to happen in this regard anytime soon.

Author: Koonal Tanwar,  LL.M., NALSAR University of Law, Hyderabad  intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References:

[1] http://www.rediff.com/business/report/counterfeit-tales-dont-buy-a-fake-online/20180127.htm

[2] Frank I. Schechter, ‘The Rational Basis of Trademark Protection’, Harvard Law Review, Vol. 40, No. 6 (Apr., 1927), pp. 813-833

[3] http://www.dnaindia.com/business/special-is-india-ready-for-luxury-1239076

[4]http://www.rslr.in/uploads/3/2/0/5/32050109/trademark_infringement_and_passing_off.pdf

[5] ARSENAL FOOTBALL CLUB PLC Vs.MATTHEW REED [2003] EWC A C iv 696

Online Disputes and Forum Jurisdiction

The Delhi high court on 3rd January, 2018 in Impresario Entertainment & Hospitality Pvt. Ltd. vs S&D Hospitality[1], took a different view with respect to the Internet jurisdiction[2].

In the above case, plaintiff sought permanent injunction against the defendants who was running a restaurant at Hyderabad, under  the impugned trademarks ‘SOCIAL’ and ‘STONE WATER’ and its services were available through Zomato. The court held that the plaintiff would have to produce material prima facie to show that some commercial transaction using the website was entered into by the Defendant through the app- ZOMATO, within the forum state and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state.

Defendants contended that this Court has no territorial jurisdiction to entertain the present suit  as the defendant neither has his registered office within the jurisdiction of the said Court nor carries on any business within the jurisdiction of this Court. Mere existence of a website without proof of ‘the effect’ does not clothe this Court with territorial jurisdiction to entertain the present suit. Returning the plaint, the court held that a mere hosting of a website that is  accessible by anyone within the jurisdiction of the court is not sufficient for this purpose[3].

Convinced with the Defendant’s contention, the Court Further relied on Banyan Tree Holding (P) Limited v. A. Murali Reddy and Anr[4] which held that a passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction. The Hon’ble Court also observed that for the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injury on the plaintiffs business, goodwill or reputation within the forum state as a result of the Defendant’s website being accessed in the forum state would have to be shown.

Earlier, the stance of the court was a bit different  in the case of World Wrestling Entertainment v. M/S Reshma Collection & Ors[5]– The Delhi High court had held that the mere website of the party referring to various goods  is not an offer but an invitation to an offer, just as a menu in a restaurant. The invitation, only if accepted by a customer in Delhi, becomes an offer made by the customer in Delhi for purchasing the goods “advertised” on the website of the appellant/plaintiff. Further, it held that mere accessibility of website in a forum state which ‘solicits’ its business, through which Defendant’s goods and services are sold, is enough to raise cause of action and in determining the personal jurisdiction in Delhi.

Legal Provisions in Regard to Jurisdiction

The Code of Civil Procedure, 1908 contains the provisions under section 20 with respect to institution of the suits where defendant resides or cause of action arises . It reads as : Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction –

  • The defendant, or each of the defendants where there are more than one, at the time of the commencement of the Suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
  • any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or 
  • the cause of action, wholly or in part, arises.”

[Explanation]: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Section 62 [6] provides that every suit or other civil proceeding in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction.

 Learned author Mulla in the Code of Civil Procedure, 18th Edn., has observed that under clauses (a) to (c) of section 20, plaintiff has a choice of forum to institute a suit. The intention behind Explanation to section 20 of the Code of Civil Procedure is that once the corporation has a subordinate office in the place where the cause of action arises wholly or in part, it cannot be heard to say that it cannot be sued there because it did not carry on business at that place. The linking of the place with the cause of 12 action in the Explanation where subordinate office of the corporation is situated is reflective of the intention of the Legislature and such a place has to be the place of the filing of the suit and not the principal place of business. Ordinarily the suit has to be filed at the place where there is principal place of business of the corporation.

The Indian Courts have always followed the parent legislation – Civil Procedure Code, 1908 and have  constantly tried to harmonize the technological advancement with the statute. Therefore, in the following caselaws, the courts have explained Section 20 of the CPC with reference to IPR and internet jurisdiction.

Indian Performing Rights Society Ltd. v. Sanjay Dalia & Anr The Supreme Court of India interpreted section 62 of the Copyright Act, 1957 and section 134(2) of the Trade Marks Act, 1999 with regard to the place where the plaintiff can institute a suit. Wherein it observed that “The very intendment of the insertion of provision in the Copyright Act and Trade Marks Act is the convenience of the plaintiff. The rule of convenience of the parties has been given a statutory expression in section 20 of the CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties.”

Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. on 23 November, 2009– The division bench of the Delhi High Court held that “Under clauses (a) to (c) of section 20 CPC, a plaintiff has a choice of forum and cannot be compelled to go to a place of business or residence of the defendant and can file a suit where the cause of action arises.”

In Icon Health And Fitness, Inc vs Sheriff Usman And Anr. – the Delhi High Court assumed jurisdiction under Clauses (a) and (b), stating that the defendants ‘carried on business’ in Delhi. The entirety of the Court’s reasoning for the above is contained in two sentences – “Though the defendants are not residing in Delhi, however, the defendants are offering their fitness apps and brands through App Store, Google Play Store and e-commerce portals like http://www.amazon.in which can be accessed and operated from all over the country, including from Delhi. Thus, it can be said that the defendants are carrying on business or working for gain at Delhi and this Court has territorial jurisdiction to try and decide the present suit as per section 20 of the CPC, 1908

Conclusion

At the outset, the Court does not subscribe to the view that mere accessibility of the Defendants website in Delhi would enable this Court to exercise jurisdiction. However, a passive website, with no intention to specifically target audiences in the forum State where the host of the website is located, cannot vest the forum court with jurisdiction.[7] The Court in Impresario Entertainment & Hospitality Pvt. Ltd. vs S & D Hospitality, took a very balanced stand and logically differentiated the concept of ‘mere presence of website’ and ‘targeting the forum state’. Thus, it is appreciated that the Court is not rigid and is flexible in providing a reasonable and tenable judgments by considering different facts and circumstances. Hence, it can be seen that the Indian Judiciary is swiftly moving towards a new jurisprudence on internet jurisdiction, in accordance to section 20 of CPC.

Author: Mr. Himanshu, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at   anirudh@khuranaandkhurana.com.

References:

[1] Decided on: 3rd January, 2018 ; CS(COMM) 111/2017

[2] The Code of Civil Procedure, 1908, S-20 (c) – Other suits to be instituted where defendants reside or cause of action arises.

[3] Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414

[4] CS (OS) No. 894/2008

[5] https://indiankanoon.org/doc/71641182/

[6] The Copyright Act, 1957, Section-62-Jurisdiction of court over matters arising under this chapter.

[7] Banyan Tree Holding (P) Ltd

A Reminder for Online Retailers

Here’s one case that involves an online retailing businesses that is having a link with Trade mark Law – Jadebay Ltd and others v Clarke-Coles Ltd (t/a Feel Good UK) [2017] EWHC 1400 (IPEC).

However, overlooking the customary practice of online retailing methods, the Intellectual Property Enterprise Court followed the theoretical root of the Trade mark laws and over-turned such practices by upholding that‘re-use of a third party’s Amazon listing without consent to sell the same goods may, on appropriate facts, amount to trade mark infringement or passing off.

The factual matrix of this case lies as below:

In this matter there were two claimant, the first one was the statutory and common law owner of the Trade mark ‘Design Elements’ for the purpose of  “flagpoles plastic storage box garden furniture”, while the second Claimant was the sole licensee since 2011 to sell the products of the first claimant.  These products were also sold through online shopping portal namely – www.amazon.co.uk, via three listings created by the second claimant.

Usually, the common practice while listing products for sale on Amazon or any such kind of online portals are that each new listing is given a Unique Amazon Identification Number (ASIN). It is pertinent to note that an Amazon listing created by one party can be used by multiple sellers selling common product. Amazon then tends to promote the cheapest of the offerings by selecting them as the default seller, allowing consumers to review each listing in more detail.

Thus, in this case, the issue arose when the defendant listed its product under the listing created by the claimants, with a low price due to which they appeared as the default seller, attracting majority of sales from the said listing.

Interesting fact about this case is, that the claimants sued the defendants for trade mark infringement and passing off and did not even involve Amazon, who encourages sellers to use pre-existing generic ASINs where possible.

Arguments

The claimant focussed on the basic concept of rights of trademark. Firstly, the owner of the trademark has the right to prevent the third party from commercially using any sign (without the permission of the TM owner) that is ‘identical to the trade mark in respect of goods or services which are identical to those for which the mark is registered (double identity) (section 10 (1), Trade Marks Act 1994) (TMA) (section 10(1))’ or ‘ by such use of trademark that causes a likelihood of confusion or association on the part of the public (section 10(2)(b), TMA) (section 10(2)(b)).”

Secondly, the law of passing off a trade mark, which is considered as an element of Tort, the essential feature that is considered to attract this tort is the goodwill attached to the trade mark, such misrepresentation leads to likelihood of confusion among consumers due to which the claimant suffer damage as mention in the case of Reckitt & Coleman Products Ltd v Borden Inc [1990] RPC 341.

However, the defendant relied on the generality of the Amazon listing number. They claimed that since the listing was generic and did not refer to a specific brand, it could list its product under the same listing and that the brands of the competing products were significantly different as the defendant’s brand was “Feel Good UK”.

However, the claimant argued that due to the use of the same listing number namely “20ft aluminium flagpole “by Design Elements”, any consumer can link the defendant’s product as that of the claimant’s product.The defendants should have sold their products through another Unique Identity ASIN number.

The question was not whether the Defendant attached the sign or trade mark to the product or packaging itself, but whether the use of the listing in this way infringed (and/or passed off) the Claimants’ rights.

Judgement

The Intellectual Property Enterprise Court  accepted the claimant’s argument and  further observed that by having the same listing number and linking one’s goods to a competitor’s branded product listing would undoubtedly cause a misrepresentation and confusion among the consumers leading to Trademark infringement and passing off.

Conclusion

The present case has shown the online businesses a reality that the presence of Trade mark law is every where. It is another reminder that these businesses should consider their online marketing very carefully. Attaching products to an existing Amazon listing when the products are clearly not the same could potentially be an infringing act.  Moreover, as per the Objective of Trade Mark law, that is to avoid confusion in the market place, the decision of the court was not strange and perhaps was very apt.

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

References:

[1] https://www.lexology.com/library/detail.aspx?g=55745fd6-0397-4222-9d31-a3b3a8447e19

[2] https://www.rpc.co.uk/perspectives/ip/flagging-the-risk-of-a-new-type-of-trade-mark-infringement

Appointment of Chairman of the Intellectual Property Appellate Board

IPAB is one of the most important IP tribunals in the country and was established by the Central Government by notifying in the Official Gazette on 15.07.2003. IPAB is an administrative body that has appellate jurisdiction over the decisions of the Controller of Patents, Registrar under the Trade Marks Act, 1999, and the Geographical Indications. However, IPAB has no statutory powers for trial infringement proceedings.

After the retirement of the Chairman of IPAB, K.N Basha on 13th May 2016, IPAB was run by only one member i.e. Mr.  Sanjeev Kumar Chaswal (Technical Member of Trade Mark) leaving behind other two posts vacant namely Vice-Chairman and Technical Member (Patents). This situation left IPAB almost non-functional for an year, leading to backlog of almost about 50,000 applications, due to which India was put under Priority watch list by US. Trade Representative.

As a result of which writ petitions were filed in Delhi as well as in Chennai, in order to fill up the vacant seats so as to make IPAB functional. This resulted in an expedited appointment of the Chairman, however, other positions are yet to be appointed. Therefore, through the Notice dated 1st January 2018 issued by IPAB (here) in accordance to the order dated 29.12.2017 of Ministry of Commerce and Industry (Department of Industrial Policy and Promotion), Shri Justice Manmohan Singh has been appointed as the Chairman of the said Board.

Justice Manmohan Singh is a well renowned persona in the field of IPR, who practiced the over 10 years and served as the Additional Judge of High Court of Delhi from 11th April, 2008- 21.09.2016.

As to who appointed the present Chairman and the constitutionality thereof are still contentious issues as the Madras High Court had upheld that the selection committee for appointing members of IPAB, shall have a predominant role of the Judiciary rather than of the Executive. Further, pointed that while appointing the ‘chairperson’, the recommendation of the Chief justice of India must be given ‘due consideration’. The concerned High Court,  elaborately explained and also struck down various parts of Section 85[1] of the Trade Mark Act, 1999 in order to upheld the ‘Doctrine of Separation of Power’[2], thereby making the IPAB, a constitutionally valid Judicial body.

However, it is alleged that this appointment has been made under Tribunal, Appellate and other Authorities (Qualifications, Experience and other conditions of Service of Members) Rules, 2017. The said Act provides for composition of the selection committee that consists of Chief Justice of India or his nominee, two secretaries to the Government of India and two experts nominated by the Central Government, leading to greater dominance of Executive rather than judiciary in the appointment procedure of the Chairperson. This blatantly violates the judgement of the Madras High Court as mentioned earlier.

Moreover, let’s wait whether the said appointment of Justice Manmohan Singh will be challenged on the ground of constitutionality or not, keeping in mind the rulings held by the Hon’ble High Court of Madras.

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

References: 

[1] Qualifications for appointment as Chairman, Vice-Chairman, or other Members.

[2]Shamnad Basheer vs Union Of India on 10 March, 2015, W.P.No.1256 of 2011; The petition challenged the constitutional validity of the eligibility criteria, appointment of the members of IPAB

Louboutin’s ‘Red Sole’ Declared as a Well-Known Trademark by Delhi HC

The news of famous French fashion designer Christian Louboutin’s ‘red sole’ shoes with their sky heel stiletto and iconic red sole often regarded as the fashion statement has recently been in the limelight for being declared as a well-known trademark by Justice Mukta Gupta, Delhi High Court, but very few know the story behind the iconic red sole until now. After dissecting Christian Louboutin’s Rizzoli book, it was discovered that while starting off his career as a landscape gardener, it was actually the nail polish that gave Louboutin his inspiration. The renowned reputation of the ‘RED SOLE’ trademark has not been hidden from anyone and is spilled over into India from various countries around the world and consumers are well aware of this goodwill and reputation.

The luxury shoe brand had recently moved the High Court seeking a permanent injunction to restrain the traders, i.e. ‘Kamal Family Footwear’ and ‘Adra Steps’ in Delhi’s Karol Bagh from manufacturing and selling or in any manner, the shoes using his trademarked sole or the design which is deceptively similar or identical to his distinctive design as shown below.

shoe

The Court observed that the Christian Louboutin’s red sole has been a well-known luxury brand with presence in over 60 countries including India and has been using its ‘red sole’ trademark extensively and continuously since 1992.

In the suit which proceeded ex parte, Justice Mukta Gupta observed as follows: “The plaintiff’s trademark is internationally recognizable and has extensive usage in India. The ‘RED SOLE’ trademark also enjoys trans-border reputation in India by virtue of a variety of factors including tourist travel, in-flight magazines, Internet and broadcasting of various films and television programmes…….”

The Court referred to Hindustan Unilever Limited Vs. Reckitt Benckiser India Limited and finally directed two footwear traders to pay compensation of Rs. 10 lakh to the luxury brand owner for infringing the trademark for over a year and a half and decreed the suit by permanently injuncting the defendants from manufacturing, selling, marketing and advertising foot-wears with the trademark ‘RedSole.’

Author: Rashi Gahlaut,  Trademark Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at  rashi@khuranaandkhurana.com.

Source: 

[1] hfttp://lobis.nic.in/ddir/dhc/MUG/judgement/12-12-2017/MUG12122017SC7142016.pd

Trade Mark Infringement-Toyoto Jidosha Kabushiki Kaisha. vs. M/S Prius Auto Industries Ltd. and Ors.

Time for Considering Territoriality Principle over Universality Principle 

Courts are gradually shifting their focus to territorial nature of Trade Marks. The same was also quite evident in the Exide case, that has been discussed in the previous blog (here). However, no conclusion was drawn in the case due to ‘out of court settlement’. But, the Supreme Court of India in the instant Toyota case has left a landmark precedent of recent times and re-explained the character of Trademark law.

The case goes back to 2009[1], where Toyota, which is a car manufacturer, claimed that Prius Auto Industries that trades with auto parts and accessories, bore the Plaintiff’s registered ‘Toyota’, ‘Toyota Innova’, ‘Toyota Device’ and ‘Prius’ Trade Marks. The plaintiff approached the Trade Mark Registry for cancellation of registered mark of the defendants, and also filed the suit on the ground that the defendant was using their ‘well known mark’ without their consent, leading to an unfair advantage of their reputation and goodwill of the plaintiff. However, following the decade old practice, ‘global reputation and prior user was upheld’ by the Trial court and gave the judgment stating the Defendant liable for passing off of the Trade marks of the Plaintiff, thereby restraining them from using the said trade marks and imposing punitive damages of rupees ten lacks.

However, the Division Bench of the High Court of Delhi gave a very balanced view and held that the decision of Trial Court was acceptable as far as injunctions against the mark Toyota, Toyota Innova’ and ‘Toyota Device’ is concerned. Injunction against the use of Prius by the Defendant was not justified, as the Plaintiff has to give evidence for showing that there existed a cause of likelihood/actual confusion in the Indian market. Thus, this part of the judgement of the Trial Court was set aside. Therefore, the current case is an appeal filed by the Plaintiff before the Hon’ble Supreme Court which dealt with the question that ‘whether the defendant is liable of passing off due to the use of ‘PRIUS.’

The factual matrix lie in issue that revolves around the mark ‘Prius’. This was the  Mark under which the Plaintiff’s first commercial hybrid car was launched in Japan as well as in other countries since 1997. However, the Plaintiff did not get the Trade Mark “Prius” registered in India and its Prius car was introduced in India only in the year 2009, much later than the year when the Defendant got there Trade Mark ‘PRIUS’ registered in India in 2002.

The importance of the case pertains to the tussle between the two theories of Trade Mark Law. However, the true meaning of Trans-border reputation can very well be observed through this case.

Universality Principle on behalf of Appellant

The Appellantsmain argument was that their Trade Marks had acquired immense reputation and goodwill due to intense advertisement of the product worldwide through print media and internet that were even available in India. Reliance was even made on NR Dongre vs Whirlpool Corporation[2], where it was held that “wide advertisement of trade mark without existence if the goods in local market can well be considered as use of the Trade Mark in the local market”. Also the real test to determine the prior user is to establish that ‘who is the first in the market.’

Thus, the mark PRIUS was a well-known mark under section 2 (1) (zg) r/w Section 11(6) & 11(9) of the Act  as the mark PRIUS had acquired a great deal of goodwill in several other jurisdictions in the world much prior to Prius Auto’s use and registration in India.

Territoriality Doctrine on behalf of Respondent

The Hon’ble Court was convinced with the averments made by the Respondents that most of the courts globally has accepted ‘territorial doctrine over universality principle’, so as to establish the goodwill and reputation in a particular jurisdiction. Therefore, in order to follow the Territoriality Doctrine, one has to show adequate evidence that he has acquired the a substantial goodwill in India for its mark, relying on Starbucks v. British Sky Broadcasting, where the Court observed that:-

“No trader can complain of passing off as against him in any territory… in which he has no customers, nobody who is in trade relation with him.”

Therefore, prior use of the trade mark in one jurisdiction would not ipso facto entitle its owner or user to claim exclusive rights to the said trade mark in other jurisdiction as observed by Division Bench of Delhi Court.

Judgment

Thus, the Supreme Court held that “likelihood of confusion” would be a better test of proving a passing off action, which can only be established from evidentiary documents, which the Appellants failed to provide. In furtherance of this, the Supreme Court also insisted on the Trinity Test as laid down by Reckitt & Colman Products Ltd. v Borden Inc[3] :

  • The goods or services have acquired goodwill or reputation in the marketplace that distinguishes such goods or services from competitors;
  • The defendant misrepresents his goods or services, either intentionally or unintentionally, so that the public may have the impression that the offered goods or services are those of the claimant; and
  • The claimant may suffer damages because of the misrepresentation.

These seven years of clash between the Toyota and Prius automobile company came to an end and the Supreme Court concluded that trademark rights are territorial and not global, thus one has to prove that one has acquired its reputation and goodwill in a territory, only through actual evidence, thereby rejected the trade mark case brought by Toyoto jidosha kabushiki kaisha.

Analysis

The Hon’ble Supreme Court has reiterated the much-needed revision of foundational basis of Trade Mark law, which has also very well described and explained the two most important Doctrine of the Trade Mark law that helps in determining the right owners – Universality Principle and Territoriality Doctrine. Also, Division Bench of High Court has played a very significant role in highlighting the groundbreaking principle and it was very consistent with its view towards the territorial aspect of the Trade Mark law. (which can be seen Exide case). Moreover, the Court Aptly relied on Trans Tyres India Pvt. Ltd vs. Double Coin Holdings Ltd & Anr., which observed that Universality Doctrine (which posits that a mark signifies the same source all over the world) has not been accepted by the courts. Modern day trade; globalization have brought in multi-channel modes of sale in the market and therefore it is the territoriality Doctrine (trade mark being recognized as having a separate existence in each sovereign country) would hold the field.

Thus, it is time to also look into the territorial character of the Trade Mark above the rights of prior user and Trans-border reputation.

Sources:

[1]  http://supremecourt.gov.in/supremecourt/2017/9646/9646_2017_Judgement_14-Dec-2017.pdf

[2] 1996 (2) ARBLR 488 SC

[3] [1990] 1 WLR 491

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.