Trade Mark Litigation in India – Law & Procedure

The first and the foremost point to be noted for protection of a trademark in India is that the “Registration” of a trademark under the (Indian) Trade Marks Act, 1999 is not a  condition precedent for seeking protection in  India.  Accordingly,  both registered as well as unregistered trademarks are protectable in India by way of infringement or passing off action in the court of law.


Acquisition of right in a trademark in India

In India, Right in a trademark may be acquired in any of the following ways:-

  • Registration
  • First Adoption and Long, Continuous, honest, bonafide, uninterrupted use
  • Assignment of a registered or unregistered trademark.


Threats to a trademark in India

Usually  following  threats  may  be  anticipated  in  case  of  a registered as well as unregistered Trade Mark in India:

  • In case of a registered trademark:
    • Cancellation of Registration
       
  • During the course of registration:
    • Opposition
       
  • Litigation:-

a.   Infringement action in case of a registered trademark.

b.   Passing off action in case of an unregistered trademark.

It is important to note that registration of a trademark does not preclude litigation for passing off action. A trademark may remain challengeable despite registration on various grounds which may include:

  • Prior Adoption and Use (Milmet Oftho Industries and Ors Vs. Allergan Inc. (2004)12SCC624)·    
      
  • Prior Registration
     
  • Confusion in the market (Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Ltd. (2001)5SCC73)
     
  • Likelihood of deception in the mind of the purchasing public and trade (Parle Products (P) Ltd. vs. J.P. and Co., Mysore AIR1972SC1359)
     
  • Allied and cognate goods (H.M. Saraiya Ors. Vs. Ajanta India Ltd. and Anr [1994]1SCR708)
     
  • Counter of sale
     
  • Manufacturing potential

In any litigation relating to trademark, the size and volume of the business of the parties to the litigation is considered to be immaterial.

Consideration before adoption, use or acquisition of a trademark

Generally, a good registrable and protectable Trade Mark in India should have the following qualifications, i.e. the trademark should not

  • refer to character or quality of goods be a geographical name,
  • conflict with other existing registered trademarks.
  • conflict with any pre-existing registered or unregistered trademarks in the market.

Concept of law of “Passing off” in India

The law of passing off can be summarised in one short general proposition-no man may “pass off” his goods as those of another. Further, in the absence of registration of a trademark or the same being under challenge, in India, the law of passing off has to be resorted to for resolving various aspects related to violation of any trademark. It is for this reason, generally, it is a practice in India to file a composite suit for infringement as well as passing off, as the registrations are invariably challenged during the course of the proceedings of an infringement suit.

 

Passing off is a common law right, based on the principles of natural justice, which protects goodwill and reputation of a person and prevents the dishonest or improper use of a goodwill by a third person in a trademark.  The term passing off has not been defined under the Trade Marks Act, 1999, and same is primarily based on “judge-made” law of equity.

 

While analyzing a  legal proposition as to  the validitylongevity  and  legality of  a trademark and its ownership, one has to look at the law relating to infringement as well as passing off.

It is further important to note that in case of a litigation pertaining to a trademark the statutory right as well as the common law right becomes important. At times the common law rights may prevail over the rights acquired by registration of a trademark.

Indian law of passing off is primarily based on following principles:-

  • First Adoption
  • Honest and Bonafide “Prior Adoption” and user.
  • Long, Continuous, open, concurrent, honest and uninterrupted user.

It may be noted that for establishing a case for passing off, a plaintiff may be required to prove:

  • Goodwill and reputation; Deception; and
  • Damage or likelihood of damage to the Plaintiff (Beiersdorf A.G. v. Ajay Sukhwani and Anr. 156(2009)DLT83).
  • Proof of actual damages is not necessary.

It is reiterated that even an unregistered trademark can seek protection of passing off under the Trade Marks Act, 1999 (Section 27 (2) of the Trade Marks Act, 1999). 

Law of Infringement of Trade Marks in India

In India the registration of trade mark under the Trade Marks Act, 1999 confers a statutory right of exclusive use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief of infringement of trade mark in the manner provided under the Trade Marks, Act, 1999 (Section 28 (1) of the Trade Marks Act, 1999).

It is pertinent to mention herein that even after registration of trade mark under the Trade Marks Act, 1999 a trade mark can still be rectified and/ or cancelled on an application made by an aggrieved person in the prescribed manner to the Intellectual Property Board (IPAB) (Section 57 of the Trade Marks Act, 1999)(An Appellate Authority under the Act) or the Registrar of Trade Marks. 

Difference between Law on Passing off and Law on Infringement in India

The difference between the concept of passing off and infringement has been clearly set out in the Indian case of Rob Mathys India Pvt. Ltd.v. Synthes Ag Chur (MANU/DE/0308/1997).

  • Firstly, nature of remedy in two types of actions is different.
    • An action for passing off is Common Law remedy, based on principles of natural justice (i.e. First         Adopter  and  User  will  survive  in  case  of conflict);

                   while

  • An infringement action is a    statutory remedy (which is based       on      a right granted or created          by       virtue of registration   under the         Trade Marks Act, 1999).
  • Secondly,
    • Issue in a passing off action is: "Is the defendant selling goods in the market so marked as to be designed or calculated to lead purchaser to believe that they are the plaintiff's goods?
    • The  issue  in  an  infringement  actionon  the  other  hand  will  be:  "Is  the defendant using a mark which is the same as or which is colourable imitation of the plaintiff's registered trade mark?
  • Thirdly,
    • In an infringement action, the statutory protection is absolute in the sense that once a mark is shown to offend, there being imitation phonetically, visually or otherwise to lead the purchaser to believe and purchase goods of another as that of plaintiff, no further evidence of violation of plaintiff’s statutory right is necessary.
       
    • But in a passing off action, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff.

It  is  important  to  note  that  first  Adoption  and  User  is  treated  as  superior  to  the Registration in India, and the volume or quantum of business is treated as an irrelevant considerations in defending the suit.

Defenses available in case of an infringement or passing off action

In any litigation relating to infringement or passing off action, the following defenses may be available against an infringement or passing off action to a Defendant:

  • Delay and Laches
  • Acquiescence
  • Honest and BonafideAdoption, and Use.
  • Difference in goods and services Difference in Counter of sale Class of Purchasers
  • Nature of the Product
  • Pricing
  • Absence of the element of confusion or deception.

 

Concept of Delay and Laches in IP litigation in India

Delay in initiating an action against the infringement and passing off a trade mark does not disentitle an aggrieved person from any relief. Delay alone may not be sufficient to deny relief, unless it has caused prejudice to the defendant who in view of the delay has

come nurture a belief that the plaintiff has consciously given up his rights to claim infringement or passing off (Beiersdorf A.G. v. Ajay Sukhwani and Anr. 156(2009)DLT83).

In an infringement of trade mark, delay by itself may not be a ground for refusing to issue injunction as has been observed by Lahoti, J. in Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia and Ors (2004(28)PTC121(SC). in the following terms:

“The law on the subject is well settled. In cases of infringement either of trade mark or of copyright, normally an injunction must follow. Mere delay in bringing action is not sufficient  to  defeat  grant  of  injunction  in  such  cases.  The  grant  of  injunction  also becomes necessary if it prima facie appears that the adoption of the mark was itself dishonest.”

Concept of Acquiescence in IP litigation in India

It may be further noted that the concept of acquiescence is recognised under the Section 33 of the Trade Marks Act, 1999 meaning thereby that when the proprietor of an earlier trademark cannot contest the validity of registration or the use of a subsequent trade mark, if he has acquiesced in the use of the subsequent trade mark for a continuous period of 5 years.

In Power Control Appliances and Ors. v. Sumeet Machines Pvt. Ltd [1994]1SCR708, the Supreme  Court of India has stated that:

Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches.

Furthermore in Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai Patel and Ors (AIR 2006 SC 3304)the Supreme Court has observed that 'acquiescence' is a facet of delay, when a party allows the other to invade his right and spend money and the conduct of the party is such that it is inconsistent with the claim for exclusive rights for trademark, trade name. Mere silence or inaction does not amount to acquiescence. Action and conduct of both parties have to be examined to determine whether it would be unjust and unequitable to injunct the defendants on the ground of delay. Lapse of time unless compounded with other factors is normally is not taken as a bar to grant of injunction.
 

Concept of Allied and Cognate Goods, Trade Channel, Counter of sale in IP litigation in India

In India, a product bearing a similar/deceptively similar trade mark cannot be sold if the goods to be sold fall in the category of allied or cognate goods or where the nature of the goods are similar or where the trade channels and/or counter of sale used for selling the products are same or similar.

In the matter of H.M. Saraiya Ors. Vs. Ajanta India Ltd. and Anr. (2006(33)PTC4(Bom)),the Bombay High Court while relying on various judgments of the Hon’ble Supreme Court on allied and cognate goods observed that

“The test whether or not goods or services are "of the same description" would seem to be supplied by the question

a)       Are the two sets so commonly dealt in by the same trader that his customers, knowing his mark in connection with one set and seeing it used in relation to the other,

b)      would be likely to suppose that it was so used also to indicate that they were his? The matter should be looked at from a business and commercial point of view. 

The Court further approved the following principle in deciding whether goods are goods of the same description into three classes-

  • the nature and composition of the goods;
  • the respective uses of the articles;
  • the trade channels through which the commodities respectively are bought and sold.