In a recent case, R K Dewan & Co was successful in obtaining an order of permanent injunction for Lavasa Corporation (Plaintiff), thereby restraining a company known as Lavasa Visuals Private Limited (Defendant) from using the mark “Lavasa” as a part of its corporate name. One of the main contentions of Lavasa Corporation was that “Lavasa” is a coined word without a dictionary meaning associated with it and moreover, the Defendant could not justify why it had adopted the term “Lavasa”. On the basis of this, Lavasa Corporation argued that the Defendant’s adoption of the mark “Lavasa” was dishonest and the Defendant’s only intention was to ride upon the goodwill built up by the Lavasa Corporation in its mark “Lavasa”. This judgment is noteworthy for two reasons. Firstly, the Hon’ble Court passed the permanent injunction order against the defendant in a period of just 6 months and secondly, R. K. Dewan & Co., through its contentions regarding extensive use, publicity, enforcement and popularity of the mark “Lavasa” was able to convince the Hon’ble Court to grant the status of a ‘well-known mark’ to “Lavasa”.
The importance of well-known trademarks or famous trademarks has been globally recognized by lawmakers and has been codified and enacted, however, the special protection that has been accorded to well-known trademarks is still relatively unknown in various trade circles, including amongst owners of such well-known trademarks and of course infringers who believe they can get away by relying on the territorial nature of trademarks
Need for definitive protection of well-known trademarks:
Trademark law is a means to an end; the means being formulation of a public policy for clear identification of the origin of goods/services and the end being consumer protection and prevention of confusion. A mark similar to a famous trademark, when applied to non-competing goods/services, is bound to mislead unsuspecting consumers to believe that the two classes of goods/services have a common origin, thus defeating the very purpose of trademark law i.e. identification of origin. To overcome such an undesirable situation, the concept of well-known Trademarks has evolved from an unwritten principle of common law and has found its way into statutes governing trademark law.
In Jurisprudence, three indispensible elements are required to constitute a wrong or a crime: intention, motive and damage caused to a victim. Now let us dissect imitation of a trademark in general and imitation of a well-known trademark, when such imitation is used in respect of non-competing goods/services.
- Imitation of a trademark in general: In case a person adopts a mark similar to an existing, but a relatively unknown mark and applies it to non-competing goods/services, there could be two possibilities for adoption of such a mark. Firstly, he could have adopted such mark not knowing that such a mark is being used by another in respect of dissimilar goods/services. Secondly, if such person was aware of the existence of a similar mark, he could have adopted it because of the catchy nature of the mark. His motive in this case would be merely promotion of his goods/services owing to the catchiness of the earlier mark and not exploitation of the goodwill accrued to such a mark, since goodwill is not associated with a relatively unknown mark. Similarly, adoption of a similar mark in respect of non-competing goods/services will not damage the goodwill of the earlier mark, since there wouldn’t be any. Hence, damage caused to the proprietor of the earlier mark would be insignificant.
- Imitation of a well-known trademark: When a person adopts a mark similar to a well-known trademark, his intention of doing so and the motive behind it is quite clear. Since the infringed mark is well-known, the person subsequently adopting a similar mark would in all probability be aware of the existence of the well-known mark. His intention behind adopting such a mark would be to ride upon the goodwill accrued to the well-known mark and to pass off his goods and services as goods sold or services provided by the proprietor of the well-known mark. The motive, in a nutshell, would be success of his business under the pretext of being another’s business. Moreover, adoption of a mark similar to a well-known mark will dilute the goodwill of the well-known trademark, thus causing significant damage to its proprietor.
Traces of recognition of the concept before enactment as legal provisions:
Although the inclusion of statutory provisions pertaining to well-known trademarks in India is rather recent, the practice of shielding certain popular marks irrespective of elements like registration or territorial and geographical restrictions has been prevalent for a while now. In the past, Indian Courts have recognized trans-border reputation and have accorded protection to famous trademarks. The dearth of explicit statutory provisions for safeguarding well-known trademarks was dealt with by broadening the horizon of the law of passing off.
The afore stated phenomenon is well illustrated in the following lines taken from the judgment delivered by Justice M Narain in 1993 in the famous case of Daimler Benz Akietgesellschaft v. Hybo Hindustan “There are names and marks which have become household words. ‘Benz’ as a name of a car would be known to every family that has ever used a quality car. Nobody can plead in India, where ‘Mercedes Benz’ cars are seen on roads, that he is unaware of the word‘Benz’ as used with reference to cars or trucks.”
Genesis of codification:
The international legal framework pertaining to protection of well-known trademarks was first enshrined in the Paris Convention for the Protection of Industrial Property. Under Article 6bis of the Convention, where a trademark is well-known in a territory for certain goods/services (irrespective of registration), an application for registration of a similar mark for similar goods/services should be rejected on proof of likelihood of confusion. Article 16(3) of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) states that in relation to registered marks, Article 6bis should apply to non-similar goods or services, provided that use of the subsequent mark indicates a connection to the owner of the well-known mark and that the interests of the owner of the well-known mark are likely to be damaged.
Statutory provisions under the Indian Trademark Act:
The Trademarks Act, 1999 was enacted in India in order to harmonize the trademark law in accordance with the TRIPs agreement. Among several noteworthy changes was the differentiation between well-known trademarks and trademarks in general. The new act defined well-known Trademarks under Section 2(1)(zg) as a mark that has become well-known to a substantial segment of the public which uses such goods or receives such services, such that use of the mark in relation to other goods and services is likely to be taken to indicate a connection between those goods or services and the mark owner.
Sections 11(6) and 11(7) of the Trademarks Act, non-exhaustively list out the following factors that should be taken into consideration while determining if a trademark is well-known:
(1) the degree of familiarity of the alleged well-known mark in the relevant section of the public;
(2) the duration and geographical extent of use of that trademark;
(3) promotion of the trademark including advertising or publicity;
(4) past instances of successful enforcement of the rights in that trademark;
(5) the number of actual or potential consumers of the goods or services;
(6) the number of persons involved in the channels of distribution;
(7) the business circle dealing with the goods/services and devices to which the trademark applies
Section 29(4) provides that a registered trademark is also infringed by misuse of a mark that is used in relation to non-competing goods or services.
In the past, Indian courts have been conservative in their approach and have constantly relied upon the circulation of magazines, journals and the extent of Indian travelers going abroad while passing judgements in cases related to trans-border reputation. But, more recently, the courts have given weightage to factors like development of international communication and speed and efficiency of modern technology. Cases illustrating the above phenomenon include Indian Shaving Products vs Gift Pack and Allergan Inc vs Milmet Oftho Industries. In these cases, in spite of the Plaintiffs not carrying on their business in India, the trade circles in India were well aware of the trans-border reputation of the said marks. The courts relied on this reputation and passed injunction orders against the defendants concerned.
Indian law concerning trademarks does not permit a blatant and slavish imitation of a well-known international mark. The trade mark of a business builds up goodwill through good conduct, professional ethics and unparalleled business performance. Since goodwill is an intangible asset it is not easy to identify when it comes into existence. A product and its trade name surpass the physical boundaries of a geographical region and acquire a trans-border or extra-territorial reputation not merely through import of goods but also through advertisement and publicity
Courts have time and again held that the goodwill/reputation these days is not limited to a particular country because nowadays trade is widely spread all over the world and the goods/services are freely available in other countries. Commercial publicity of an international brand in magazines available in or brought to India also contribute to building up the reputation of that brand.