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Infringement and Passing Off in Trademark

Infringement of Trademark
Section 29, is defined as the use of a mark, by an unauthorized or authorized person or a person who is not the registered proprietor, which is identical or deceptively similar to the trademark to the goods or services of which the trademark is registered. In simple words, it is defined as the violation of exclusive rights that are attached to a registered trademark without the permission of the registered owner or licensee.

They may take an undue advantage of enjoying the hard:earned reputation of the registered trademark. To have a successful claim against a person's infringement of a trademark, to prove that the infringing trademark is deceptively similar or identical to the registered trademark.

Considered As Infringing
  1. If the disputed mark is identical or very similar to the trademark that's already registered, and it's used for similar things.
  2. If people might get confused and think that the new mark is somehow connected to the old registered one.
  3. If the registered trademark is being used as part of a business name for products or services that it's officially registered for.
  4. If someone uses the trademark in a way that's unfair, dishonest, or damages the reputation of the original trademark.
  5. If the registered trademark is used on packaging, labels, or business documents without permission from the owner.

Types of Trademark Infringement

Direct Infringement

Direct infringement is defined by Section 29 of the Act:
  1. Use By an Unauthorised Person: This means that violation of a trademark only happens when the mark is used by a person who is not authorized by the holder of the registered trademark.
  2. Identical or Deceptively Similar: The trademark used by the unauthorized person needs to either be identical to that of the registered trademark or deceptively similar to it. As long as there is a chance of misrecognition of the marks, it is enough to prove infringement.
  3. Registered Trademark: The Act only extends protection to trademarks that have been registered with the trademark registry of India. In the case of breach of an unregistered mark, the common law of passing off is used to settle disputes.
  4. Class of Goods or Services: For the infringement of the trademark, the unauthorized use of the mark has to be used for the spread of goods or services that fall under the same class of the registered trademark.

Indirect Infringement

No provision in the Act deals with indirect infringement specifically. This does not mean that there is no liability for indirect infringement. The principle and application of indirect infringement arise from the universal law principle. It holds accountable not only the principal infringer but also anyone who abets or induces that direct offender to infringe. There are two types:
  1. Vicarious Liability: Section 114, if a company commits an offense, then the whole company will be liable. Therefore, not only the principal infringer but, every person responsible for the company will be liable for indirect infringement, except for a person who acted in good faith and without knowledge of the infringement. The elements of vicarious liability are �
    1. When the person can control the activities of the principal infringer
    2. When the person knows of the infringement and contributes to it
    3. When the person may derive financial gains from the infringement
    The only exception to vicarious liability of a company for infringement is when the company has acted in good faith and had no idea about the infringement.
  2. Contributory Infringement: There are only three basic elements:
  3. When the person knows of the infringement
  4. When the person materially contributes to the direct infringement
  5. When the person induces the principal infringer to commit infringement

In the case of contributory infringement, there is no exception as there exists no chance of the contributory infringer acting in good faith.

Exception: Not Amount to Infringement
Section 30 lays down certain conditions wherein a trademark cannot be said to have been infringed. Such conditions can be used by the alleged infringer as defenses in suits for infringement of trademark and hence escape his liability. These conditions include:
  1. When any person makes use of a trademark by honest practices in industrial or commercial matters;
  2. When such use is not in pursuit of taking undue advantage or proves to be detrimental to the distinctive character or repute of the trademark.
  3. Whenever any trademark is used to indicate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or rendering of services, or any other characteristics of goods or services.
  4. There are certain cases where registered trademarks are subjected to certain conditions and limitations. Whenever the alleged infringement is under the ambit of those limitations, then it does not constitute to be an infringement of trademarks.
  5. Whenever the infringed use of a trademark is in the continuance of the permitted use by the original proprietor who has subsequently not removed or obliterated it, in such cases the use cannot be said to be an infringement.
  6. Use of a trademark in relation to parts and accessories
  7. Use of trademarks identical or similar to each other.

Passing Off in Trademark
Passing off occurs when the illegal use of a trademark or trade name in such a way that the public is misled into believing that the products or services supplied by one party are genuinely those of another. This misrepresentation can harm the goodwill and reputation of the legitimate owner of the trademark. While passing off is not defined under the Indian Trademarks Act 1999, Section 27 recognizes the common law rights of a Trademark owner wherein the owner can initiate legal proceedings against any person for passing off goods or services as the goods of another person or as services provided by another person.

Elements of Passing off
  • Misrepresentation
  • Made by a person in the course of trade
  • To prospective customers of his or her ultimate consumers of goods or services supplied by him
  • Which is calculated to injure the business or goodwill of another trader
  • Which causes actual damage to a business or goodwill of the trader by whom the action is brought

Legal Action and Remedies
Whenever a trademark is said to be infringed, both civil and criminal action can be brought about. The complaining party can file a criminal complaint. The Trademark Act, 1999 recognizes infringement of trademarks as a cognizable offense. Even the courts are empowered with the authority to Suo moto conduct raids and seizure operations. On the other hand, a civil action can also be brought about against such infringements. A suit can be initiated depending on whether the trademark is registered, pending, or unregistered. Since trademark infringement is a continuing offense, there is no limit on the time period for filing a suit.

Civil Remedies:
  1. Damages: The damages in the form of compensation are provided to the plaintiff or the owner of the registered trademark by the infringer.
  2. Accounts of Profit: Any profit gained by the infringer while using the trademark of another registered owner, all the profit or a certain amount of monetary compensation is delivered to the owner of the Trademark.
  3. Destruction of Goods: The court may issue an order of destruction or annihilation of all the goods or products manufactured using the infringed mark.
  4. Injunction: Injunction is an action that prohibits the unofficial or unauthorized use of a Trademark. The court grants protection by preventing the infringer from further using the infringed mark. The injunction order can be of four types:
    1. Anton Piller Order: It is an ex-parte order that is issued to inspect the premises of the defendant without giving any prior notice.
    2. Mareva Injunction: When the court prohibits defendants from using their assets within the court's jurisdiction until the conclusion of the trial.
    3. Temporary or Interlocutory Injunction: This entails the prohibition of an action by a party to a lawsuit until the case is resolved.
    4. Permanent or Perpetual Injunction: It is a court order requiring an individual or company to permanently refrain from engaging in specific activities.
  5. Cost of Proceeding: The court can order the defendant to bear the costs of proceedings of the plaintiff.
Criminal Remedies:
  • With a term that should not be less than 6 months and can be extended to 3 years;
  • With a fine that should not be less than ₹50,000 and can be extended to ₹2 lakh.
Case Laws:
  • Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., the Supreme Court, observed that public interest would support a lesser degree of proof showing confusing similarity in the case of trademark in respect of medicinal products as against other non:medicinal products.
  • The Coca:Cola Company v. Bisleri International Pvt. Ltd: The Delhi High Court found that the defendant was using the brand name MAAZA in a way that caused confusion with the plaintiff's company. The defendant used this trademark in both India and other countries. The plaintiff filed for a permanent injunction, claiming losses. The court ruled that the defendant had infringed on the plaintiff's trademark by using it too widely. As a result, the court issued a temporary injunction against the defendant.
  • Starbucks Corporation v. Sardarbuksh Coffee & Co.: Delhi:based coffee chain named Sardarbuksh emerged, using a logo and color strikingly similar to Starbucks. The Delhi High Court ruled in favor of Starbucks, finding a likelihood of confusion among consumers. Sardarbuksh was ordered to change its name and logo.
  • Zara Fashion Vs. Zara Food: In this case, renowned fashion brand ZARA filed a suit for infringement and passing of their well:known brand ZARA against a restaurant "ZARA TAPAS BAR". The Delhi High Court ruled out in favour of the renowned fashion brand ZARA, ordered the restaurant to change its name.

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