Protecting The Cover, Not The Book Understanding The Principle Of Trademark Dilution From Case Laws

 

INTRODUCTION

Good Biscuits & Bad Biscuits

Suppose that you enjoy cookies from brand A, for instance. Since they taste delicious, you purchase them. Now that company D is aware of the popularity of brand A's biscuits, it develops a product with packaging and a design like that of brand A. Because they resemble each other, you (along with many other people) end up purchasing the counterfeit goods, thinking they are from brand A.

Here, two very important things occur. First, the employment of two markings, one of which is confusingly identical to the other, deceives you (and others). Second, because brand B is leveraging the popularity and reputation of brand A's mark, brand A loses a sizeable portion of its revenues.

The intent of The Trademarks Act, 1999 [hereinafter referred to as "the Act"] is to safeguard traders and consumers from dishonest trademark adoption by third parties with the goal of profiting from the associated reputation and goodwill created by the trademark. As a result, this unfair action requires statutory protection. For the record, this may also occur with regards to rice, gemstones, sherbet, blades, vehicles, news, tractors, and occasionally even shopping centres! There are several examples of the deceit that has been criticised and goods linked to such deception, placing the customer at undue risk.

 A Car & a Thermos

Let's now think about a somewhat different circumstance. Everyone is aware of the "Mercedes" brand and that they are a motor car company. Let's imagine that during your shopping trip you stumble across a vendor selling expensive flasks (or any other product) with the Mercedes label and emblem. Would anyone believe that Mercedes produced these flasks is the question. Naturally, there would be no legislative recourse if they didn't. Nevertheless, what happens if they do? Can a company seek legal redress for trademark infringement on unrelated goods?

Without a doubt, the answer is yes.

THEORY OF TRADEMARK DILUTION: Section 29(4), THE TRADEMARKS ACT, 1999

A Brief Summary

Section 29(4) of the Act provides the remedies for infringement claims involving identical marks used in connection with unrelated products. It is often referred to as the Trademark Dilution Hypothesis in common usage. The Kodak doctrine, which alludes to the British case where the use of the KODAK brand, well-known for its photogenic cameras, was prohibited on different or non-competing items, bicycles, is another name for this in worldwide literature.

Frank I. Schechter introduced the Trademark Dilution Hypothesis for the first time in 1927. He pointed out that situations in which the items were dissimilar were not taken into account by the court when determining whether a trademark was being violated. The courts would occasionally issue rulings that offered redress in such circumstances, but this did not frequently occur as a matter of principle and the arbitrary nature of the application of the aforementioned criteria was acknowledged by the courts.

Hence, the court's perspective in trademark infringement cases back then might be summed up as follows: If he doesn't carry on a commerce in iron but does so in linen and stamps a lion on his linen, it is still against the law for someone else to do the same with iron.

According to Schechter, a trademark's purpose has clearly evolved and now calls for stronger legislative protection. According to him, a trademark frequently serves as the most effective agent for the formation of good will since it really sells the goods, therefore its purpose is not limited to serving as a symbol of good will. Because the main goal of the trademark is the preservation of the distinctiveness or personality, the legislative protection given to the mark should go beyond the matter of deception and include preventing individuals from destroying its originality and uniqueness.

More specifically, it is the distinctiveness that the mark has created and the fact that consumers now exclusively connect certain categories of goods with the registered mark as a result of that distinctiveness. The best example of this can be found in the case of Marvel Tea Estate India Ltd. v. P.M. Batra (Prop) M/S Gurukirpa Traders, in which the Delhi High Court stated that it was prima facie established that the trademark "MARVEL" had acquired a unique name in the market and as a result, it was satisfied that it came within the meaning of Section 29. (4).

Basis of Dilution

In the case of DLF Limited vs. Sohum Shoppe Limited and Ors. The High court of Delhi provided a substantial explanation of the theory behind this doctrine. It stated that if one person blurs the sharp focus that a mark creates to denote a significant source, another will do the same, and this will continue to the point where the cumulative injury would be significant.

The public would therefore begin to mix up the defendant's and plaintiff's products, which would not only amount to taking unfair advantage of the goodwill created by the plaintiff's mark but also be harmful to the mark's distinctiveness or repute. To put it another way, a trade mark with a strong reputation is thought to be connected to a certain category of goods. Think of "Mercedes" with a car, "Puma" with shoes, or "Ambuja" with cement, as examples. Yet, if these trademarks are unjustly used in connection with things that they do not manufacture, it will damage their goodwill and image. In obviously, this is an unfair practice.

TEST TO CHECK FOR DILUTION:

The Delhi High Court in ITC v. Philip Morris Products SA and Ors provided a fuller explanation of the criteria provided under Section 29, paragraph 4 of the Act to determine if the applicability of the aforementioned concept. The following prerequisites must be met:

(1) The senior or injured mark has a reputation in India;

(2) The impugned mark is identical or similar to it;

(3) The use of the impugned mark is without justification; and

 (4) The use of the impugned mark (amounts to) taking unfair advantage of, or is harmful to, the distinctive character or reputation of the registered trademark.

The clauses listed in Section 29, subsection 4 are not disjunctive and must be interpreted together, which is crucial information to note at this point. The term "and" after each of the three phrases implies that the requirements stated in all three clauses must be met simultaneously in order for Section 29(4) to be applicable. Moreover, there is no assumption test, and each and every ingredient must be proven.

Meaning, thereby, for an infringement remedy to be sought under this section, all the three clauses mentioned within Section 29(4) have to be established.

DIFFERENCE BETWEEN 29(1)(2)(3) & 29(4)

Although while the relief provided by Sections 29(1), 29(2), and 29(3) is the same, there are changes in the requirements set forth for getting it.

The challenged mark should be used in relation to goods and services that are distinct from those for which the registered mark is registered, according to a prima facie reading of section 29(4). This sentence, which refers to the Theory of Trademark Dilution, is the core of Section 29(4) and also establishes the distinction between it and other sections.

The plaintiff can establish trademark infringement in situations covered by Section 29(1)(2)(3) by just demonstrating confusion between his mark and the challenged mark. When the disputed mark resembles the registered mark so closely that it is likely to mislead consumers and cause confusion, this is known as deception or misleading similarity.

Deceptive similarity occurs, for example, when the defendant employs a term, phrase, and combination of words, packaging, or even form in a misleading manner and the customer ultimately purchases the defendant's products as a result. (For an illustration, have a look at the excellent and poor biscuits section.) It's important to remember that the plaintiff and defendant must provide the same products and services in order to be eligible for relief under these laws.

On the other hand, Section 29(4) eliminates the misleading similarity test. Thus, the plaintiff cannot rely on the requirement of needing to demonstrate the possibility of confusion in order to establish trademark infringement in such circumstances. In other words, the identification or likeness requirement to establish infringement in such circumstances is raised—possibly even materially raised. In order to establish that the defendant's use of the word "Mercedes," for example, on its thermos, is diluting their mark to the point where people are purchasing "Mercedes" marked thermos, thinking that they are a creation of Mercedes, the plaintiff would need to demonstrate not only the requirements under Section 29(4). It would then be struck by Section 29(4).

CONCLUSION

What's in a name, anyway? The classic Shakespearean quotation is maybe the most often used literary argument against trademark law (a premier gem of irony, really). Nevertheless, as we've seen throughout this text, a trademark's defining characteristic is really found in its name. The name has several far-reaching consequences in addition to selling the goods. It increases consumer confidence in the truthfulness, potency, efficacy, and efficiency of the product.

Hence, it is inevitable that the reputation (or goodwill) of that brand will be tarnished when someone uses it on goods that are entirely unrelated to it. In order to protect the cover (soul) of the mark, it must be assured that when a mark is used in bad faith for goods that it does not represent, such violation is injuncted.

 

Apr 26, 2023