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Economic Dimensions in Trademark Law: Evolution through Judicial Pronouncement

Written by: Mahesh Bissa - Final Year, LL.B. (Hons.) - National Law University, Jodhpur
Trademarks Laws
Legal Service
  • The foundations of the Trademarks Act are based on the safeguarding of the economic rights of the owners of the trademark and also to protect the common man to not to fall a prey to those who use deceptive practices in this trade. The purpose is to protect commercial goodwill, to ensure that people's business reputations are not exploited. Since business goodwill is an asset, therefore it is a property which the law protects against encroachment.

    Economic Dimensions in the Trademarks Law

    The Trademarks Act basically deals with the protection of economic interests against economic offences. The provisions under the Act deal with the offences such as passing off, infringement, deceptively similarity and the likes. It is well known that trademark can be registered or non-registered In case of the violation of the registered trademark; a suit for infringement will lie. Similarly, in case of a non-registered trademark the action for passing off shall be maintainable. All such offences have been discussed subsequently in required details with the help of case laws.

    Cases Relating to Economic Aspects of the Trademark Law

    Passing Off

    In the case of Weston Electronics v. Rajesh and Co.1 , plaintiff co. manufactured electronic goods and sold them under the registered trademark of Weston. Defendant was passing off its goods as those of the plaintiff. Held, use of trademark ¡§Weston¡¨ by the defendant is likely to result in defendant's goods being passed off as those of the plaintiff and at least the possibility of confusion resulting in the minds of unwary purchasers with imperfect money cannot be ruled out. Thus there is clear offence of passing off against the defendants. Similarly, in the case of Smithkline Beecham v.Hindustan Lever ltd 2 , it was held that mere publication of an advertisement in a journal cannot establish a trans-border reputation. Such reputation if any is confined to a particular class of people, i.e., the person subscribing to the said specialized journals and the same can't be said to be extended to the general consumers. Thus any adverse effect on the firm in such a case can't be amounted to the offence of "passing off". The English Law has a similar opinion. It is evident from the case of Reckitt and colman v.Borden where the plaintiff sold lemon juice in a yellow plastic lemon shaped container. Jiff was embossed on the side and printed on a neck label. There were strong evidence that the purchasing public would think that they were buying a Jiff lemon if confronted by the defendant's lemon juice in a similar packaging. It was held that the defendant's proposed get up would amount to a threat of passing off against which an injunction should be granted. Also the court's opinion in the case of Gillette Company is mentionable. In the case of Gillete UK ltd. v. Edenwest ltd.4-the plaintiffs manufactured and sold a disposable razor blade called Gillette G-II. The defendants purchased and resold counterfeit Gillette G-II blades without realizing that they were not genuine products. The plaintiffs sued for passing off and seeking an injunction. The defendant contended that it never tried to harm the plaintiffs economic interests and were unaware of the fact that the blades were counterfeit. It was held that the defendant's innocence on such a claim couldn't protect them against a suit for "passing off" so as to affect the economic interests of the plaintiffs.


    With regard to infringement of trademarks, a lot of cases have been filed in various courts in various parts of the world. In recent times, special courts have been constituted for the same purpose and even they are flooded now with cases. Some of the recent most and important case are discussed here.

    In the case of Panacea Biotec ltd. v. Recon ltd5. the plaintiff manufactured nimesulide tablets under the brand name nimulid. Within a short span, the trademark acquired a good prestige in the market. Now the defendants started manufacturing drugs under the name remulid. The plaintiff sought interim injunction against the defendants as their act was adversely affecting their economic interests and that too, unlawfully. Held-the trademark of the medicine in question is a pointer to the drug from which it is manufactured. When a name is derived from the name of the principal ingredient, no distinctiveness or exclusiveness can be claimed by trader in respect of the part of the name taken by him for his trademark.

    The English jury has also given important judgments on this issue. In the case of Philips electronics v. Remington products6, Philips owned a registered Trademark for a device called Philishave. It was a unique three-headed rotary shaver, which it had manufactured and sold for many years. Now when the defendant brought its product Remington DT55, a three headed razor in the market, plaintiffs alleged the infringement of their trademark and further claimed that it is violative of the article 6-bis of the Paris convention on trademarks. It was held that the three-headed shaver was incapable of distinguishing the goods of Philips from others and was devoid of distinct character. So the act of the defendants cannot be said as an infringement, amounting to hampering the economic interests of the plaintiffs.

    Deceptive Similarity
    When some product is launched in the market which has the same or closely similar trademark to any other well established product, some people tend to buy the new product. This is an economic offence and punishable. Some of the Indian and foreign cases are being discussed here to have the opinion of the judiciary on the issue. In the case of Hitachi ltd. v Ajay Kmar Agarwal7 the applicants who were the registered users of the trademark Hitachi filed suit against the defendants contending that the trademark Hitaishi was deceptively similar to that of Hitachi. The single judge bench held that because the later word is being used in devanagari script (Hindi), there is no case of deceptive similarity. But in appellate court it was held that on application of the rule of the ear, hitaishi seems to be deceptively similar to Hitachi. The ordinary Indian man pronounces the two words almost similarly and thus it is difficult for an ordinary man to precisely understand the phonetic impact. Thus the defendant's trademark is deceptively similar to that of the applicants. Similarly the case of Lakme ltd.v. Subhash Trading8 also deserves mention. In this case the plaintiff was the registered proprietor of the trademark "Lakme" in respect of cosmetics and perfumery.

    The defendant also adopted a trademark Lakeme in respect of nail enamel polish and cosmetics. Held- when both words are articulated it would be difficult for an ordinary person to distinguish between the two sounds. Applying the test of phonetic resemblance, there is a striking resemblance between the two words and there is a real danger and deception being caused by the two words in view of the affinity of these words. So injunction was granted against the defendants.

    In the much -celebrated case of Hindustan lever ltd. v. Susi chemicals pvt. Ltd,9 the plaintiffs since the year 1968 had been marketing detergent cakes under the name and trademark Rin which is registered. The wrapping of the cake is done in typical blue background red bold lettering with white shades. Majority of its customers from rural areas who don't understand English recognize the product by wrapper itself. It came to the knowledge of the plaintiffs that the defendants are manufacturing and selling a detergent cake with the brand name Step. The word Step is written in the same characteristic manner as that of Rin. Even the shape, size and weight of the defendant's products were same. The plaintiffs contented that it is harming their economic interests as their sales in the rural areas has fallen steeply. Held- a great confusion has been created in the market due to the deceptive act of the defendant plaintiffs economic interests are unlawfully harmed.

    Thus permanent injunction was granted against the defendant. But the court has rightly decided the case of Kellogg¡¦s cornflakes co. giving relief to the defendant. In the case of Kellogg's Company v. Pravin kr. Bhadabhai10, the appellant sold corn flakes in cartons having the name Kellogg's corn flakes. Later the defendants started manufacturing and selling corn flakes in the cartons on which it was written in bold letters Aims Aristo corn flakes. The court held that though the small red and green border was there in both types of cartons, but there was a clear demarcation in the way of writing of the words. When viewed as a whole one can see that the words Kellogg's and aims are prominently displayed on each and therefore there can be no confusion.

    The asset protected is the reputation of the plaintiff¡¦s business as in the relevant market. It is manifested in the various indica which lead the client or customer to associate the business with the plaintiff, such as,
    # Name of the business
    # The mark
    # The design
    # The make-up
    # The color of the plaintiff's goods
    # The distinctive characteristics of the services supplied by the plaintiff
    # Or the nature of his special processes.
    A trademark adds up to the goodwill of the firm or the organization. Though there are no specific provisions in the said act which are related to economy of trademarks, but a reasonable and prudent man can look deeply in the Act and find that the whole structure of the trademark law is based on economic principles. It is to safeguard the economic interests of the legal user of the trademark, and that is the need of the day.

    1 1995 PTR 70 (Del)
    2 2000 PTC 83 (Del)
    3 [1990] 1 WLR 491, HL
    4 [1994] RPC 279
    5 1996 PTR 209 (Del)
    6 [1998] RPC 283
    7 1995 PTR 122 (Del)
    8 1996 PTR 202 (Del)
    9 1997 PTR 41 (Del)
    10 1996 PTR 95 (Del)

    The author can be reached at:[email protected] / Print This Article

    Trademark Law Articles
    Registration of shape of goods as Design
    Trade Secrets & Competition Act: A bird’s eye view:
    Passing off under trademark
    Infringement of trademark and what constitutes honest practice in relation to trade and business
    Registration of Unconventional Trademarks
    Trade Mark Law in India and Its Violation
    Trans border reputation of Trade Marks
    Protecting Trade Marks
    Use of Trademark In Comparative Advertising
    Intellectual Property
    Section 25 of The Trade Marks Act, 1999

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