Trademark Infringement and Remedies

A trademark is an instrument using which a business can set itself apart from its competitors. Indicating the goods and services offered by the business, a trademark can be any word, phrase, logo, symbol, combination of colours etc. These, individually or as a medley with the other factors mentioned can institute a trademark for a business. However, it must be kept in mind that a trademark has to be a visual representation. Trademarks are influential in tracing the source from which a product is being manufactured and sold in the market. Most importantly, it helps a business establish itself as a brand.

Like most other instruments of economic upliftment, trademarks are capable of being infringed. An infringement refers to any kind of act that is unauthorized, in violation or in breach of some code of conduct. Likewise, in India, trademark infringement refers to the use of a trademark that is deemed unlawful and unauthorized. This unauthorized use is generally executed to make economic gains using the brand or business of another through the trademark which is imitated in such a manner that it holds the potential to deceive people about its authenticity. The law relating to trademarks in India, their regulation, their infringement and procedure to attain relief for the same is contained in the Trademarks Act, 1999, Section 29 of the act defines and offers a broad base covering the methods through which trademarks can be infringed starting with using an infringing trademark for mere trade to gaining economic benefit stemming from the infringing trademark through advertising.

PASSING OFF OF A TRADEMARK

Passing off of a trademark is a situation when an unregistered trademark is duplicated by an unscrupulous business person and is creating a kind of deception in the market that affects the reputation or goodwill of the business, that may cause someone to believe that the goods or services are those of another and is available to unregistered trade mark rights of a person, company, or entity, etc. Originally, the rule of passing off of a trademark only applied to products that an individual may misrepresent the commodities of others, which was then expanded to cover goods, businesses, and services. The definition of passing off of a trademark was later broadened to cover professions and non-trade activities. The passing off of a trademark also refers to unfair business and unfair competition in which one person’s activities undermine the goodwill of another person or group of people. The fundamental question in passing off legislation is whether a person’s activities are meant to deceive the public or to create confusion between parties. Even though it is nowhere expressly mentioned in the Trade Marks Act 1999, but sections 27, 134 (1) (c), 135 of The Trade Marks Act, 1999 may be referred for matters related to passing off action.

TRADEMARK DILUTION VERSUS TRADEMARK INFRINGEMENT

The concept of trademark dilution originated in England.  However, Francis Schecter advanced the notion that earned him the title of “Father of Trademark Dilution.”  A paradigm shift occurred in understanding the goal of providing trade mark protection. The function of a trademark is not only to identify the origin of the items, but also to protect the proprietors from misleading use of their reputation. The term trade mark dilution has nowhere been expressly used in the Trade Marks Act, 1999. However, it enumerates the following circumstances that may dilute an existing trade mark:

1. If a mark is identical or similar to an existing registered trade mark,
2. If a mark is used in relation to goods or services not similar to the one carried out by the registered trade mark.
3. If a registered trade mark has reputation in India and using it causes unfair advantage or is detrimental to the distinctive character or reputation of the registered trade mark.

Trademark infringement, unlike trademark dilution, is not a Common Law remedy. With the rising internationalisation of trade and commerce, as well as the rapid growth of information technology services, brands are expanding outside their individual national borders. These well-known trade marks must be safeguarded. Trade mark dilution tries to correct such situations and safeguard ‘well-known’ trade names from being distorted. If a trade mark is ‘well recognised,’ an organisation cannot be permitted to use it even if it is used for a substantially different company.

LEGAL PROVISIONS AND PENALTY

As mentioned earlier, section 29 of the Trademarks Act, 1999 lays down an extensive definition of the offence of trademark infringement in India. Infringement of trademarks can be categorized into civil wrongs or criminal offences depending on the gravity of the situation and weighing supplementary offences committed alongside infringing the trademark, if any. It is to be noted that the offence of trademark infringement is a litigious one, meaning that the offence can be tried and adjudged in Court. Section 134 of the same Act delegates authority to those judicial bodies that can adjudge cases of trademark infringement or passing-off in India. According to said section, the bodies having the appropriate authority to adjudge cases relating to trademark infringement in India are any Court that is not inferior to the District Court. Trademark infringement in India can be penalised with imprisonment between 6 months to three years supplemented by fines ranging between Rs. 50,000 and Rs. 2 lakhs. These penalties are contained in Section 103 and 104 of the Trademarks Act, 1999.

REMEDIES GRANTED FOR INFRINGEMENT

Legal Remedies available for trademark infringement are largely divided into civil remedies and criminal remedies, let us have a brief understanding of the remedies.

Civil Remedies

• Damages: The proprietor may claim damages for the losses suffered by him as a result of the infringement. This remedy allows recovery of the amount of both the actual losses suffered by the plaintiff and the expected losses that the plaintiff may suffer in the future.
• Accounts of Profit: The profits accrued by infringing a trade mark must be compensated to the original proprietor of the registered trade mark.
• Anton Piller Orders: An Anton Piller Order is the most lethal weapon that the court of law may provide the plaintiff as a measure of last resort. It allows the plaintiff to enter the premises of the defendant to inspect for infringing material. These orders issued by the Court are meant to search the property of the defendant to acquire evidence of trademark infringement and prevent the destruction of said evidence. Such an order is always granted ex- parte.
• John Doe Orders: A John Doe order is a form of pre-infringement injunction designed to protect the intellectual property rights of the author. It is a sort of legal order that allows a person or entity to sue an unknown party or parties. This form of order is frequently utilised when the identity of the person or entity being sued is unknown at the time of the legal action. A John Doe order is generally issued by the Court to grant relief in cases of trademark infringement where the identity of the infringer or infringers is unknown. John Doe orders are also meted out to prevent a delay in rewarding justice to the plaintiff and since the identity of the defendant is unknown, the Court moves on with the suit by naming the defendant as John Doe.

Injunctions: Section 135 of the Trademarks Act, 1999 talks about injunctions as a mode of relief for trademark infringement in India. This section lays down that the Court may grant an ex parte injunction or an interlocutory injunction in a trademark infringement or passing-off suit. An ex parte injunction is a form of injunction whereby the injunction is granted without giving notice to the defendant. An interlocutory injunction is an order given by the Court to halt any party from furthering any act while the case is still pending, i.e., until the final decision of the Court regarding the ongoing issue is given out. These are generally given out to further prevent the use of the infringing trademark on a temporary basis.

• Damages and Account of Profits: When the plaintiff successfully proves in court that the infringing actions of the defendant have caused economic losses to his business, then the Court may reward damages to him to make up for the losses incurred. Similarly, if it is concluded in the proceedings that the defendant’s actions not only caused economic losses for the plaintiff but were also profitable for himself, then the court may grant an order rewarding an account of profit to the plaintiff. This mainly denotes that the plaintiff shall be entitled to a part of the profits decided by the Court brought in by the infringing business of the defendant.
• Mareva Injunction: An order of Mareva Injunction is granted by the court to freeze the assets of the defendant to prevent him from disposing of his assets. An order by the court of law may turn redundant or inoperative if the defendant becomes successful in disposing of his assets.
• Interlocutory Injunction: An interlocutory injunction is an interim order restraining the defendant from doing something. It is a temporary measure adopted by the court till the court finally determines a suit. The prima facie case, balance of convenience, irreparable loss caused to the plaintiff are to be considered while granting this relief.
• Perpetual Injunction: A perpetual injunction is a permanent order to restrain the defendant from doing something. It is granted after the final determination of a suit.
• Alternative Dispute Resolution (ADR): Alternative Dispute Resolution has been gaining a lot of popularity in recent years given its speedy nature of redressal as compared to Indian Courts. A trademark infringement dispute may be settled outside the Court through arbitration or mediation on the mutual agreement of the parties.

Criminal Procedures

Apart from the numerous civil remedies available to the owner of a registered trade mark, there are several criminal remedies as well. For the use of fake trade marks or trade descriptions, the offender shall be imprisoned for a minimum of six months, which may be extended to three years, and fined not less than fifty thousand rupees, which may be increased to two lakh rupees. The same punishment is also applicable if any person sells, hires, possesses, any substance in which false trade mark or trade description is applied. Every subsequent conviction under section 103 or 104 will lead to imprisonment for a term not less than one year which may extend to three years and fine of at least one lakh rupees, which may extend to two lakh rupees.

Counterfeiting and Customs Rules:

The term ‘counterfeiting’ means copying or imitating something with the intention of deceiving. The adverse effects of counterfeiting are severe for the world economy. Counterfeiting undermines the creativity of the original creator and facilitates a parallel economy.

Legal provisions related to counterfeiting in India range from The Trade Mark Act 1999, the Designs Act 2000, the Geographical Indications Act 1999, the Indian penal Code 1860, the Drugs and Cosmetics Act 1940, the Food Safety and Standards Act 2006, the Prevention of Money Laundering Act 2002, the Customs Act 1962. Counterfeiting is a broader concept compared to Trade mark Infringement. Trade mark infringement seeks to protect only registered trade marks, but the term “counterfeiting” does not refer to a specific subject. It must be established that the usage is likely to create confusion and deception.

Counterfeiting is a separate offence in the United States under Trade Mark protection laws and is a criminal offense in the United Kingdom. While Other Intellectual Property infringement remedies are mostly civil in nature. ‘Counterfeiting’ is mostly carried out by organized crime groups and hence, requires deterrent actions. Because of the expanding and easier access to the Internet services, the sphere of ‘counterfeiting’ is expanding. The role of customs in closely coordinating with the Intellectual Property right holders is necessary in intercepting counterfeit goods from being imported into the Indian Territory. India is a signatory to Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) and hence, obligated to stop the import of infringing materials. The Customs Act, 1962 further stipulates the provisions regarding confiscation of any material that infringes the patent, copyright, trade mark, or any other intellectual property. The Intellectual Property Right holders may get their rights recorded with the Indian Customs Authorities for prompt seizure of any infringing goods. The Customs Authorities may initiate suo moto proceedings for seizure, confiscation, and denial of entry of imported products on the suspicion of Intellectual Property Right infringement; however, they mostly act on the behest of external inputs. The rights holders are notified about the seizure and they are made to identify whether the imported goods are counterfeits. Right of appealing the decision of the Customs is provided to the importer. The counterfeit goods are subsequently destroyed under the supervision of the Intellectual Property Right holders. Criminal actions may also be taken against the owner of the counterfeit substances. The goods (which should be trademarked, copyrighted, patented and design registered) must be recorded with the customs office. If any situation so arises where intel regarding the import of infringed goods is brought to the notice of the owner, then he shall take the responsibility of issuing notices to the Commissioner of Customs in accordance with Section 140 of the Trademarks Act 1999, Section 53 of the Copyright Act and relevant sections of the Customs Act, 1962 like Section 2(33) and provisions of Section 11. This shall prevent the import of the infringing goods at the port through suspension of import and seizure of goods.

CONCLUSION

Recent years have seen a great spike in the rate of offences like trademark infringement and passing-off in India. This is due to the general unawareness of the public and businesspeople, especially in India regarding the protection of their Intellectual Property and the consequences that can accrue upon its infringement. It thus calls for imperative measures to spread awareness and educate people about their intellectual property, its protection and the bountiful results that will follow from taking due care of the same.