Trademark Litigation: Threats, Grounds and Defences

In the Indian, trademarks can be defended through trademark litigation before the Courts on grounds passing-off action under the Common Law, or infringement under the Trademarks Ac, 1999, or both through a composite suit.

Although registering a trademark creates an important layer of protection, it’s important to understand that registration of the mark under the Indian Trademarks Act is not the only condition for seeking protection of the trademark in India.

This article covers the following aspects of trademark litigation: 

  • Importance of Trademark Protection
  • Acquisition of right in a trademark in India
  • Threats to a trademark in India
  • Grounds challenging ownership of a mark
  • Law of Infringement in India 
  • Remedies for Infringement
  • Action of Passing-off
  • Defences available in case of an infringement or passing off action

Importance of Trademark Protection

A trademark is a valuable asset as it serves as a means to identify the source of your goods and services to the public, guarantees quality and also acts as a mode of advertising your brand.

That’s why trademark litigation can get really ‘messy’ because the other owner (registered or unregistered) not only claims that you are infringing his rights but can also seek pecuniary damages, compensation and criminal prosecution. 

Acquiring Rights of Trademarks

In an event that two people both claim ownership of the mark, then, who would be infringing whom?

To decipher who holds the rights, it’s necessary to know how the rights to trademarks are acquired.

The rights of ownership can be claimed in the following ways:

  • Trademark registration
  • Proof of first use (must be continuous, uninterrupted and honest)
  • Assignment of a mark

Understanding the Threats to a Trademark

Threats of a trademark include any acts or situation that questions the ownership of the mark. These are the following ways in which the rights of an owner can be threatened.

  1. Cancellation or abandonment of a registration due to interrupted use of non-renewal
  2. Trademark opposition
  3. Due to trademark litigation:
  • Infringement of a registered trademark
  • A passing-off action of an unregistered mark

Before Trademark Litigation: Prevention Better Than Cure

To avoid trademark litigation, the business takes several proactive steps to avoid infringement claims and Passing-off suits.

Avoiding charges begins even before you use (and register) your own trademark. It’s important to conduct a comprehensive trademark search, before settling on your own mark.

The goal here is to avoid the threats of claims on your mark by another owner. Therefore, to protect your mark, you need to understand how to select a unique mark. A mark should:

  1. Act as an identifier. It should not describe the products and services.
  2. Not contain nouns since the mark would tend to become common. This increases the chances of the mark becoming genericized.
  3. Be distinctive and can’t be substantially similar to any other mark.
  4. Must be designed and intended to be used as a trademark.
  5. Not contain geographical indicators, unless it qualifies for protection under the GI Registry
  6. Not be in conflict with other registered or unregistered marks.

Grounds Challenging Ownership of a Trademark

Trademark registration does not exempt a mark from litigation for infringement or passing-off. Both registered and unregistered trademarks can be challenged by another owner on grounds such as:

  1. Prior use of the trademark and adoption of the mark
  2. Earlier registration
  3. Deception – confusion in the minds of the purchasing customers
  4. Non-distinctiveness that causes doubts of the origin
  5. Related marks or similar sounding marks (cognate marks)

Infringement of Trademarks under the Indian Laws

 

When a mark is registered under the Indian Trademarks Act, 1999, the owner is conferred with a statutory right. This gives him exclusive use of the mark to use with his goods and services for the class of goods and services in which the mark was registered.

Relief of Infringement

The statutory rights also include the right of the owner to seek relief in case his trademark has been infringed. These remedies are mentioned in the Act under section 28 (1).

What is Trademark Infringement?

Infringement amounts to any use of the mark that violates the rights granted by the Act to a registered owner of a mark, with respect to the goods and/or services for which the mark was registered.

What amounts to Infringement? 

A mark that is merely deceptively similar will not constitute an infringement. The Act has clearly defined conditions that constitute infringement. Infringement is a situation where:

  1. The ‘questionable’ mark is identical, similar or deceptively similar to a registered mark
  2. A person is using a mark without authorisation or licenses
  3. The ‘infringing trademark’ is used continuously in relation to trade of a class of goods and/or services for which the owner holds a mark. If the class of goods and services is not the same, it will not constitute an infringement.  
  4. The infringing mark must be expressed in a tangible form or must be graphically represented. Mere oral use will not constitute an infringement.
  5. It’s proved that the infringing mark has been adopted or altered from an existing registered trademark.

Remedies for Infringement under Trademarks Act, 1999

The Act provides for both civil and criminal actions against infringement. Both these actions can be initiated simultaneously, and are not dependent on each other.

Administrative Remedies

The object of the Trademarks Act is to protect the rights of the mark owners and also provide the necessary services to avoid litigation as a result of the infringement.

A trademark opposition is a remedy available against infringement, even before a mark is registered.

 

Trademark Opposition

When a trademark application is accepted by the Trademarks Officer, it is published and advertised in the Trademarks Journal for a period of 4 months.

This is an opportunity for any party to come forward with valid claims against registering the trademark.

If these claims are legitimate, the trademark application is rejected.

Civil Remedies

When instances of infringement occur within the jurisdiction of a Court (not lower than a district court), the Court can be moved to pass the following orders:

  1. Interlocutory Injunction: Asking the court to order the infringers to stop any use of the mark that amounts to infringement.
  2. Anton Pillar Order: The Court’s permission can be sought to enter the infringer’s premises and take evidence documents and articles constituting infringement. This is done when there is a danger that the evidence of infringement can be destroyed.
  3. Damages: This involves seeking pecuniary remedies and financial relief. The court can order the infringers to pay the rightful owner amounts of money for loss of profits, statutory damages and conversion damages.

Criminal Proceedings

Under Section 103 and 104 of the Trademarks Act, the complainant can move the court to order criminal punishments against the infringer. This includes:

  • Imprisonment of a term between 6 months to 3 years
  • Payment of a fine of between Rs 50,000 to 2,00,000

The Onus to Prove Infringement

A trademark registration will not stop or prove infringement.

It is the sole responsibility of the owners of the mark to identify infringement and also prove that essential features of his mark were infringed upon.

If an owner of a mark is aware of infringement and yet doesn’t contend it, then this acquiescence and delay in taking legal action can be questioned by the Court when he decides to challenge the infringing mark later.

Cancellation of Similar Registered Marks

Under Section 57 of the Act, any person who is aggrieved by the registered trademark can file an application to the Intellectual Property Board (IPAB) for the cancellation (or rectification) of a registered mark.

Action of Passing-Off

The basic principle of the law of passing-off is:

No one can ‘pass-off’ the goods and services of another as his own.

Principle of Passing-off

The action of passing-off is defined under the common law in India. Here is a look at the key features of a passing-off action.

  • This is the only relief available to infringement of unregistered trademarks.
  • Based on the principle of Natural Justice
  • The criminal relief for the same is available under the Indian Penal Code.
  • The purpose is to protect the reputation and goodwill of the mark owner and prevent dishonest use.

Composite Suit of Infringement

In India, in an instance of infringement, a composite suit is filed for both infringement under the Trademarks Act and passing-off under the Indian Penal Code. This is because:

  • The validity of the trademark registration is almost always challenged in an infringement suit. 
  • To check the validity and legality of an unregistered or registered mark, passing-off must also be looked into.
  • In certain instances, the law of passing-off holds more weight than rights under the Trademarks Act.

Claim of Passing-off

A registered and unregistered owner of a mark can initiate of passing-off if he has:

  • Proof of first use
  • Has a bona fide evidence of prior adoption
  • Continuous and uninterrupted use as a trademark

Defences Available Against Trademark Infringement

In case the owner of a mark faces an infringement, passing-off or composite suit, then the following legal defences can be adopted to safeguard his interest in the mark. He can build a good defence against the claims of the plaintiff if he can prove at least one of the following:

  • A difference in the class of goods and services
  • Unrelated target audience who are the customers
  • The absence of deception or the similarity of the mark
  • The mark does not cause confusion in identifying goods and services
  • Honest use of the mark
  • Prior use or adoption 
  • Delay by the plaintiff in initiating action due to prejudice against the defendant
  • Acquiescence by the plaintiff for not contesting the validity of the mark for a continuous period of more 5 or more years.  

Conclusion

The best way to protect your trademark is to create one that is unique, making it easier to defend and protect. When choosing a trademark, think about the strength of the trademark. For instance, a descriptive mark is the weakest, whereas unrelated words and unique names make it the strongest. It’s always best to consult a professional and conduct a trademark comprehensive search before you actually use and register your mark.


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