Legal framework

In India, trademarks are protected through a combination of both specific statutes (eg, the Trademarks Act 1999) and ancillary legislation incorporated under, for example, the Customs Act 1962 and the Companies Act 1956.

The Trademarks Act and related rules prescribe the procedure to be followed before the Trademarks Registry. In the case of civil proceedings initiated before the courts, the Code of Civil Procedure 1908 applies, while in the case of customs recordal, the Intellectual Property Rights (Imported Goods) Enforcement Rules 2007 apply. Where trademarks or names are used in a company name, the Companies Act applies, alongside the rules prescribed under it. Criminal enforcement cases are brought under the Penal Code 1860. In addition, there are government guidelines, as well as other guidelines from regulators such as the Advertising Council. In some cases, unique legislation, such as the Emblems and Names (Prevention of Improper Use) Act 1950, also apply.

The Indian courts have taken the lead in issuing landmark decisions on several issues, including recognition of trans-border reputation and goodwill, trademark violations in respect of unrelated goods, online counterfeiting and protection of celebrity rights.

Unregistered marks

In India, an unregistered trademark is entitled to protection under the tort of passing off. Section 27(2) of the Trademarks Act expressly provides for an action for passing off.

The plaintiff must prove that:

  • the trademarks are similar;
  • the defendant is deceptively passing off its goods as those of the plaintiff; and
  • there is bound to be confusion in the minds of consumers. The test to be applied is whether a person of average intelligence and of imperfect recollection would be confused.

While the Indian courts prefer evidence (eg, sales or advertisements) pertaining to India, they have come a long way in terms of recognising trans-border reputation and goodwill as a basis for enforcing rights.

Using a later mark and taking unfair advantage of an earlier mark give statutory recognition to the concept of trademark dilution.

In Bourjois Limited v Naunihal Singh (2013VAD(Delhi)311) the court, after applying the test of trade connection, held that the spa services provided by the defendant were closely related to the plaintiff’s cosmetic products. The defendant’s use of the identical mark BOUJRIS thus amounted to passing off its services as those of the plaintiff.

Registered marks

Sections 29 and 30 of the Trademarks Act clearly allow for an action based on infringement. Unlike passing off, in an infringement action there is hardly any burden on the plaintiff since entitlement is already established through registration. However, an infringement action does not lie against a prior user, implying that Indian courts attach a greater degree of importance to prior use (in many cases including prior international use) than to prior registration.

Procedures

Searches

Searches for identical marks, phonetic equivalents and device marks can be carried out in the Trademarks Registry’s online records.

The scope of searches has been broadened by the recent order of the Delhi High Court in Shree Nath v Allied Blenders and Distillers (MIPR2015(2)246), wherein the division bench formulated the ‘theory of synonyms’ for determining similarity between the trademarks OFFICER’S SPECIAL and OFFICER’S CHOICE. The court held that the rival marks were not identical, but were likely to cause deception as both convey the same meaning.

Examination

The registrar examines the mark and may communicate to the applicant any objections to it through a consolidated examination report. The applicant may then file a claim to contest or seek a hearing.

In Intellectual Property Attorneys Association v The Controller General of Patents, Designs and Trade Marks (WP(C) 3067/2016 and CM APPLs 12987-12988/2016) the Delhi High Court stayed the order of abandonment of applications issued by the Trademarks Registry in cases wherein no notice for seeking the applicant’s response was served on the applicant.

Opposition

Opposition can be filed within four months of the mark being published in the Trademark Journal. Anyone may oppose or object to a registration on the grounds of possible deception, confusion, dilution or descriptiveness.

Registration

If the mark is unopposed or the opposition dismissed, it proceeds to registration. The applicant may withdraw the application at any time during the opposition proceeding. Section 91 of the Trademarks Act provides for an appeal against an order or decision of the registrar to the IP Appellate Board (IPAB).

Rectification/cancellation

Once granted, a registration can be cancelled on the grounds that it was wrongly granted or remains on the register contrary to the law or due to a failure to observe certain limitations or conditions imposed thereon. A registered trademark can also be cancelled on the grounds of continuous non-use for five years and three months from date of grant of registration. A registered trademark can be cancelled by the registered owner on making an appropriate request to the relevant authority. The rectification action must be instituted by an aggrieved party. Partial cancellation for certain goods or services is possible. The petition can be filed with the Trademarks Registry or the IP Appellate Board.

In the unusual case of Hindustan Unilever Limited v M/s Three-N-Products (P) Ltd (Order 117/2012), the IPAB ordered in a rectification petition that the trademark AYUR – which had been on the Trademarks Register for 25 years – be struck off the register on the grounds that AYUR is a generic term that cannot be monopolised. In deciding the petition, the IPAB considered the fact that the mark AYUR was contested in several oppositions.

Enforcement

Emerging trends

Damages and other reliefs: Previously, the only remedies available in an action for infringement or passing off was an injunction (interim or final) and, in some cases, damages and/or costs, delivery of infringing stock of goods and/or rendition of accounts.

In many cases an injunction is the most appropriate remedy. For example, in Bata India Ltd v AM Turaz (2013(53) PTC536 (Del)) the apex court held that the lyrics of a song containing the names of large corporations – including the Bata Group, Tata Group and Reliance Group – were per se defamatory to their corporate brands. The court further ordered that plays of the song include a disclaimer that the names mentioned are mere examples and that no injury or disrespect is intended to a particular brand or person.

In some cases, the plaintiff may also seek an order for a court commissioner to visit the defendant’s premises to:

  • search and seize any infringing goods in the defendant’s possession; and
  • seal the defendant’s premises (Anton Piller injunction).

Another relief is an order to freeze the defendant’s assets or books of accounts pending adjudication (Mareva injunction).

The courts have taken an aggressive stance against infringement by awarding damages, particularly in cases relating to the violation of well-known trademarks. Leading cases on damages in India include the following:

  • Disney Enterprises Inc v Bharti (2013 (54) PTC 372 Del) – compensatory damages of Rs200,000 and punitive damages of Rs300,000 were awarded against the defendant.
  • Cartier International AG v Gaurav Bhatia (226(2016)DLT662) – the Delhi High Court granted the highest ever punitive damages, totalling Rs10 million, for the infringement of trademarks and selling of counterfeit luxury brands online.
  • Philip Morris Products SA v Sameer (Bombay) (2014(58)PTC317(Del)) and Philip Morris Products SA v Singh (Kolkata) (209(2014)DLT1) – the court granted nominal damages and costs to the plaintiff in consideration of the profile of the defendant. However, this was one of the rare instances in which the court has granted damages in a preliminary judgment.

Customs actions: The government has recognised the need for IP rights protection at its borders as a key defence against infringement. Under the Intellectual Property Rights (Imported Goods) Enforcement Rules, rights holders may register their IP rights with Customs to safeguard themselves against imports of counterfeits.

John Doe orders: The judiciary’s approach to counterfeiting shows an increasing trend of granting John Doe orders if a strong prima facie case is established. In Louis Vuitton Mattetier v Aggarwal (CS (OS) 2296/2011) the Delhi High Court issued a John Doe order along with an Anton Piller order. The order enabled the plaintiff to execute several raids over a one-month period in a New Delhi market in order to trace counterfeit Louis Vuitton goods and thereafter implead each party dealing in such counterfeits as defendants in the suit.

Counterfeit purchase undertakings: Counterfeit purchase undertakings are increasingly used to reduce costs, avoid litigation and ensure certainty. The rights holder’s lawyers or representatives personally confront a counterfeiter and serve a cease and desist letter upon a retailer selling counterfeit goods. The retailer must agree to comply with the undertaking or risk legal action.

Plea bargaining: There is a growing trend for settling IP infringement matters by way of plea bargaining. In State v Prakash (FIR 189/05 (Del)), a case involving steel buckets bearing the mark TATA, the court settled the matter by way of a plea bargain, following which the accused parties paid a fine of $222 each.

Unique orders: In Luxottica SRL v Munny (CS (OS) 1846/2009) the court disposed of the case following an agreement between the parties that instead of damages, the defendants would donate a specified amount to charity and 500 pairs of unbranded glasses to the visually disabled.

In SRF Foundation v Shri Ram Education Trust ((2016)182PLR3) the division bench of the Delhi High Court recognised the doctrine of shared goodwill and common family legacy in the field of trademark litigation. The parties were given concurrent rights to use their family name “Shri Ram” in respect of their schools.

Cross-border reputation: The courts have also recognised that a mark can acquire reputation or goodwill without actual use in India. In Jolen Inc v Jain (MIPR 2010 (2) 176) the Delhi High Court applied the principle of cross-border reputation (established in NR Dongre v Whirlpool Corporation (AIR 1995 Delhi 300)) to recognise the plaintiffs’ right over the JOLEN mark owing to its prior adoption outside India and its international reputation and goodwill.

In Las Vegas Sands Corp v Bhasin Infotech and Infrastructure Pvt Ltd (2012VIIAD(Delhi)362) the court recognised the trans-border reputation of the plaintiff’s trademarks VENETIAN and VENEZIA with respect to its hotels and services in Las Vegas and Macau. In support of this finding, the court relied on documents (eg, magazines, travel guides and websites) in circulation in India as well as the large number of visitors from India who had availed of the plaintiff’s services.

Restraints even where products are restricted: The court in Playboy International Incorporated v Malik (2001 PTC 328 (Del)) concluded that the PLAYBOY mark had become exclusively associated with the plaintiff due to extensive use all over the world, even though the products sold under this mark were banned in India.

Parallel imports: The judiciary’s attempts to combat parallel importation are commendable. In Philip Morris Products SA v Sameer (Bombay) (2014 (58)PTC317(Del)) and Philip Morris Products SA v Singh (Kolkata) (209(2014)DLT1) the court – while upholding the principle of national exhaustion as laid down in Samsung Electronic Co Ltd v Lalani (CS (OS) 1600/2006) – held that in order to claim protection under the normal rules of parallel importation, the importer/defendant must prove that the initial purchase of the trademarked goods was legal and that the goods were “lawfully acquired”. Indian courts prefer evidence such as bills of lading, invoices, receipts of payment of import duty, excise duty, import licences and sales tax certificates in deciding whether the goods were lawfully acquired.

Three-dimensional, shape, sound and texture marks: These marks are registrable and enforceable. In Ferrero SPA v MAA Distribution (India) Pvt Ltd (2010 (44) PTC 717 (Del)) the Delhi High Court restrained the defendants from marketing and selling chocolates and confectionery in order to protect the device, shape and distinctive wrapping of the plaintiff’s FERRERO ROCHER mark. Further, in Ferrero SPA v Dugar (2013 (55) PTC 277 (Del)) the court granted an injunction on the grounds that the continued marketing and sale of the defendant’s product would result in continued infringement of both the registered trademark and trade dress of the plaintiffs’ products. In India, the Yahoo! yodel and the ICICI tune are protected as sound marks.

Trade dress: The test of deceptive similarity applies in a passing off action regarding the trade dress of the product. The party claiming the passing off of trade dress must prove that the trade dress has acquired secondary meaning or goodwill or a reputation in the market in relation to the trade dress.

In Skechers USA INC v Pure Play Sports (IA 6279/2016 in CS(COMM) 573/2016, Delhi High Court) the casual slip-on style of shoes was protected as trade dress and the defendants were restrained from using strikingly similar trade dress.

Gesture/motion marks: Protection has been granted in India in relation to gesture or motion marks that have become distinctive through use.

Well-known marks: The Trademarks Act clearly stipulates grounds under which a mark may be considered well known.

In recent years both the Indian courts and the Trademark Registry have held an increasing number of marks (eg, TOSHIBA, TATA, FORD, ICICI and LOUIS VUITTON) to be well known in India. Consequently, these have been granted protection against use for unrelated goods.

In Toyota v Mangal (CS (OS) 2490/2009, order dated July 8 2016) the Delhi High Court gave a mark well-known status after analysing its trans-border reputation. After extensive arguments, the court held that PRIUS’s global reputation as the world’ first hybrid car had spilled over into India, so much so that it was a well-known mark. A critical point of distinction in this decision was that it held the PRIUS mark to be well known despite it not being registered in India. This case was also remarkable because the court applied the concept of judicial notice, which is rare in trademark law.

The Trademarks Registry has issued a (non-exhaustive) list of well-known trademarks based on judicial pronouncements.

Celebrity rights: Celebrities’ personality and name rights are protected under the laws of passing off. In DM Entertainment Pvt Ltd v Baby Gift House (MANU/DE/2043/2010) the court restrained the defendant from selling lookalike dolls of pop icon Daler Mehendi and held that unauthorised commercial use of the personal identity of a celebrity is a clear invasion of the celebrity’s exclusive right to commercialise his or her personality and images.

Fictional characters’ names: IP rights pertaining to fictional characters were recognised in Sholay media and entertainment Pvt Ltd v Sanghavi (2016IIAD (Delhi)286), wherein the defendants were restrained from using the SHOLAY, GABBAR and GABBAR SINGH trademarks, as such use amounted to infringement of the plaintiffs’ registered trademarks.

Ownership changes and rights transfers

A trademark, either registered or unregistered, can be assigned. There are certain restrictions on assignment and transmission in order to prevent the creation of multiple exclusive rights. The courts have recognised the ability of plaintiffs to enforce rights in the absence of a recordal of assignments and devolution of title based on the execution of title documents.

In Sun Pharmaceuticals Industries Ltd v Cipla Ltd (2009 (39) PTC 347 (Del)) the court ruled that where a trademark has been assigned, the fact that it is pending registration will not preclude the claimant from bringing an action for either passing off or infringement.

A person entitled to a registered trademark by assignment or transmission is merely required to apply to the registrar in order to be registered as the mark owner. The applicant must prove its title only where there is reasonable doubt about the veracity of a statement or document.

In UTO Nederland BV v Tilaknagar Industries Ltd (2012 (49) PTC 249 (Bom)) the court held a trademark licence to be invalid on the grounds that the clauses of the licence agreement implied an absence of quality control provisions.

Related rights

A single object may enjoy multiple IP rights protection – namely, as a trade secret, copyright, patent and/or trademark. The copyright and trademark regimes may both apply to the same item, while design and trademark registrations may both be obtained for the same sign.

Online issues

The ‘.in’ Domain Name Dispute Resolution Policy (.inDRP) sets out the terms and conditions applying to disputes between the registrant of an ‘.in’ domain name and a complainant.

In order to protect a domain name under the law of passing off, it is essential that the second-level domain name is not a generic word, but rather an invented or coined word. In Plus Inc v Consim Info Private Limited (2010 (42) PTC 507 (Bom)) the court denied protection under the law of passing off to a registered domain name, owing to its descriptive nature.

In Christian Louboutin Sas v Bajaj (CS(OS) 2995/2014) the court restrained the defendant from using the plaintiff’s well-known trademark on its commercial website after considering the proposition that the normal rules of parallel importation do not extend to the Internet due to considerations such as the anonymity and ubiquity of the Internet, and that the availability of counterfeit goods outside the exclusive channels may affect the aura of prestige surrounding the plaintiff’s luxury goods.

In Shreya Singhal v Union of India (AIR2015SC1523) the court assessed the constitutional validity of the safe harbour for intermediaries and held that notice to an online marketplace to take down content must be given pursuant to a court order.

All in all, the legal framework for trademarks in India seems well balanced, notwithstanding some procedural delays.

This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.

Anand and Anand

B – 41, Nizamuddin East

New Delhi 110 013

India

Tel +91 120 405 9300

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Safir Anand

Senior partner

safir@anandandanand.com

Safir Anand studied at Delhi University (BA in economics, 1992) and the Shriram College of Commerce, and obtained his law degree from Delhi University in 1995. His practice areas include trademarks, contractual law, franchising and licensing, character merchandising, advertising and labelling law, IP audits, IP issues in mergers and acquisitions and due diligence.

Mr Anand is senior partner and head of the trademarks, entertainment and contractual IP practices of the firm. He advises several Fortune 500 companies and acts for over 6,000 clients. He is a regular speaker at conferences and a member of several international organisations. Recent articles include “Key licensing issues in India” and “Legal issues in advertising: major implications for IP rights”, both published in IAM.

Madhu Rewari

Partner

madhu@anandandanand.com

Madhu Rewari joined Anand and Anand in 2006 and primarily handles traditional trademark work, including oppositions, evidence, cease and desist notices and counterstatements. She also renders opinions on trademark law to various industries, with an emphasis on pharmaceutical, banking and finance and retail.

Ms Rewari’s specialist area is trademark searches, and she provides commercial, practical advice on the extent to which a brand is available for use, using an in-depth and analytical approach to the availability and registrability of a brand. Her practice also includes protecting IP rights at Customs and she has been involved in training Indian customs officials around the country. She has attended many hearings at the Trademarks Registry in relation to the prosecution of trademark applications.

Revanta Mathur

Partner

revanta@anandandanand.com

Revanta Mathur has nearly 10 years’ experience as a trademark practitioner and specialist with Anand and Anand. He manages substantial trademark portfolios for clients in India and works closely with the firm’s network of international contacts. Mr Mathur works with a variety of industries, including the automotive, fashion, alcohol and food and beverage industries. He has advised companies on adopting, protecting, growing and sustaining their brands. He drafts trademark applications, trademark infringement opinions, trademark prosecution, oppositions and rectification petitions. Mr Mathur also presents application, opposition, assignment and rectification cases at hearings before the Trademarks Office and the IP Appellate Board.