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DILUTION OF GOODWILL IN TRADEMARKS:

A CASE STUDY IN INDIAN CONTEXT

TABLE OF CONTENTS

PARTICULARS

P. NO.

DILUTION OF TRADEMARKS: AN INTRODUCTION 1 EVOLUTION OF DILUTION AS A FACET OF

TRADEMARK INVASION 4

VULNERABILITY OF WELL-KNOWN TRADEMARKS 10

DILUTION: A CASE STUDY IN INDIAN CONTEXT PRIOR TO INCORPORATION OF THE TRADE MARKS ACT

14

STATUTORY RECOGNITION UNDER SECTION 29(4) OF THE TRADE MARKS ACT

21

U-TURN CARVED OUT BY SECTION 159(5) OF THE TRADE MARKS ACT

39

PASSING OFF: SAVING GRACE & A MORE RELIABLE REMEDY

42

FUTURE ROAD MAP 49 BIBLIOGRAPHY 53

DILUTION OF TRADEMARKS: AN INTRODUCTION

Sankalp Jain*

‘A reputation once broken may possibly be repaired, but the

world will always keep the eyes on the spot where the crack

was.’1

A trademark denotes the identity of an enterprise. It is the function of a

trademark to give an indication to the purchaser as to manufacturing or

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!* Student, 08/ILI/LLM/2011, Indian Law Institute, Delhi 1 Joseph Hall was an English bishop, satirist and moralist. His contemporaries knew him as a devotional writer, and a high-profile controversialist of the early 1640s.

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quality of the goods, to give an indication to his eye of the trade source from

which the goods, or the trade hands through which they pass on their way to

the market. In the present times, the essence of contemporary trademark lies

in its power to sell, which depends on the following factors:

• influence on public;

• merit of the goods upon which it is used;

• uniqueness and distinctiveness of the goods.

Brand is the primary want of consumers and a trademark of a company is a

graphical representation of the brand or reputation built by the company in a

definite territory within the course of time. Trademarks are generally

territorial in nature, but the very territorial nature of trademark is hit for a six

in case of a well-known trademark or a famous mark which develops its

reputation beyond geographical boundaries.

Trademark dilution is that facet of trademark infringement, wherein the

owner of a well-known trademark has the power to prevent others from using

the mark on the ground that such use is likely to lessen the reputation, image

or uniqueness of the trademark. In other words, by trademark dilution, we

mean the loss of distinctiveness and identity of the brand. In most cases,

trademark dilution involves an unauthorized use of another's trademark on

products which do not compete with, and have little connection with, those

of the trademark owner. For example, when we speak of Benz we associate it

with a luxury car but when somebody else uses a similar mark Benz for an

under garment then the mark will remind a consumer of two products and

lead to dilution of the renowned trademark Benz.

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Dilution is a kind of trademark infringement which applies only to famous

marks. Dilution of famous or well-known marks is a wrong committed

against the proprietor of the trademarks and also against the consumers who

would associate the mark with two entirely different products when they

think of a well-known trademark. Dilution theory regards trademark not only

as a commercial signature but also as a ‘silent salesman’ who directly comes

in contact with the consumers.2 A strict adherence to traditional territorial

concept of trademarks, in present world circumstances becomes an economic

concern to those big business houses looking to venture and conquer the

entire globe.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!2 T.G. Agitha, “Trademark Dilution: Indian Approach” 50(3) JILI 341 (2008) !

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EVOLUTION OF DILUTION AS A FACET OF

TRADEMARK INVASION

There are paradoxes as to evolution of the doctrine of trademark dilution. It

is generally believed that the doctrine of "trademark dilution" was for the

first time adopted by a German court in 1925 wherein the manufacturer of a

mouthwash "Odol" was able to obtain cancellation of the same mark being

used in relation to a railroad and steel company. However, others believe that

the doctrine was espoused in England in 1898, in the case of Eastman

Photographic Material Co. v. John Griffiths Cycle Corp.3 in which the court

did not allow the camera maker to successfully enjoy the use of ‘Kodak’

bicycles, even though they did not directly complete with Kodak cameras.

This case, also known as the Kodak doctrine, marked the first significant

shift from traditional trademark protection.4 However, it was Frank Schechter who actually launched the concept of

trademark dilution vide his paper5 in 1927. It marked a turning point in the

history of trademark law as it dilution was a concept which was not

motivated by an interest in protection of consumers. According to Schechter,

the true function of a trademark is ‘to identify a product as satisfactory and

thereby to stimulate further purchases by the consuming public.’6 He rejected

the theory that the exclusive role of a trademark was to serve as a source

identifier and argued that injury occurs to a trademark owner whenever a

trademark is used by another, even when used on non-competing goods. He

further explained that an injury to the trademark owner occurs when there is

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3 15 RPC 105 (High Ct. of Justice, Ch. 1898) 4 Brajendu Bhaskar, “Trademarks Dilution Doctrine: The Scenario Post TRDA, 2005” 1 NUJS L. Rev. 640 (2008) 5 Frank I. Schechter “Rational Basis of Trademark Protection” 40(6) Harv. L. Rev. 813 (1927) available at: http://www.jstor.org/discover/10.2307/1330367?uid=3738256&uid=2129&uid=2&uid=70&uid=4&sid=21100737655691 (Visited on 12th March, 2012) 6 Id. at 818

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a gradual whittling away or dispersion of the identity and hold upon the

public mind of the mark or name by its use upon non-competing goods.7 The initial statutory laws on dilution started with Massachusetts in 1940s, but

due to inconsistent, dissimilar and varied language of the statutory provisions

of the states, the courts could apply them only limitedly, irregularly and

inconsistently. Such a sorry state of affairs called for the uniformity in the

law and greater protection for trademark owners. To bring such uniformity

and consistency in the protection of trademarks from dilution, and to meet

the international obligations under the TRIPS Agreement, the US Congress

amending Section 43 of Lanham Act8 passed the Federal Trademark Dilution

Act, 1995 (FTDA), thereby bringing into picture a federal cause of action for

trademark dilution. FTDA defines the term ‘dilution’ as the lessening of the

capacity of a famous mark to identify and distinguish goods or services,

regardless of the presence or absence of-

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!7 Id. at 825 8 Sec. 43(1)(c), Lanham Act, 1946: Remedies for dilution of famous marks The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided in this subsection. In determining whether a mark is distinctive and famous, a court may consider factors such as, but not limited to-

(A) the degree of inherent or acquired distinctiveness of the mark; (B) the duration and extent of use of the mark in connection with the goods or services

with which the mark is used; (C) the duration and extent of advertising and publicity of the mark; (D) the geographical extent of the trading area in which the mark is used; (E) the channels of trade for the goods or services with which the mark is used; (F) the degree of recognition of the mark in the trading areas and channels of trade used by

the marks' owner and the person against whom the injunction is sought; (G) the nature and extent of use of the same or similar marks by third parties; and (H) whether the mark was registered under the Act of March 3, 1881, or the Act of

February 20, 1905, or on the principal register.

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1) competition between the owner of the famous mark and other parties,

or

2) likelihood of confusion, mistake or deception9 The Act applies when an unauthorized user of a trademark attempts to trade

upon the goodwill established by a famous mark, thereby diluting the mark’s

distinctive quality.10 The protection under the Act applies only to trademark

owner and not the consumers. 11 12 The FTDA after its enactment was

interpreted by numerous federal circuit courts. However, the interpretations

by the courts differed from one another leading to contradictions,

inconsistencies and confusions. The phrase ‘causes dilution of the distinctive

quality of the mark’ led the courts to determine whether the Act required

proving actual harm for a cause of action to arise.13 While the Fourth, Fifth

and Ninth Circuit courts gave a strict interpretation of the Act and required

proving of the actual harm before granting an injunction, the Second, Sixth

and Seventh Circuit courts treated the Act liberally, and held that the

language of the provision did not require an actual harm for relief.14 The

attempt to settle the conflicting views of the circuit courts as to the standard

of harm required to obtain injunctive relief was made by the US Supreme

Court in Moseley v. Victoria Secret Catalogue Inc.15 The Supreme Court

rejected the lenient constructions adopted by the Second, Sixth, and Seventh

Circuits and embraced the stricter ones given by the Fourth and Fifth

Circuits, thereby making it clear that actual dilution is an essential element

for a claim under FTDA.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!9 15 U.S.C. Sec. 1125(c) of FTDA, 1995 10 Supra note 4 at 641 11 Ibid 12 TCPIP Holding Co. Inc. v. Haar 244 F.3d 88, 95 (2001) 13 Supra note 4 at 642 14 Ibid 15 37 U.S. 418 (2003)

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Later, in 2005, the US Congress challenged the Supreme Court’s ruling in

Victoria Secret case16 and advocated the proposal of new dilution legislation.

Subsequently, the Trademark Dilution Revision Act, 2006 (TDRA) was

passed. The new legislation replaced both the FTDA definition of trademark

dilution and the provision on dilution remedies by a revamped 15 U.S.C. §

1125(c), merging the new definition of trademark dilution with the new

language on remedies. The language states that the owner of a famous mark

shall be entitled to an injunction against another person who, at any time

after the owner’s mark has become famous, commences use of a mark or

trade name in commerce that is likely to cause dilution by blurring or

dilution by tarnishment.17 A plain reading of this provision makes it clear

that likely dilution can occur irrespective of the presence or absence of actual

or likely confusion, of competition, or of actual economic injury. As per the definition in TDRA, Dilution as a facet of trademark invasion can

occur in two forms: by blurring and by tarnishment. Dilution by blurring is

said to have taken place when the ability of a well-known mark to identify its

product is marred due to its association in the minds of consumers as to the

similarity between two marks, one of them being a famous one. It results in

partially affecting the descriptive link between the mark of the prior user and

its goods. In other words, the link between the mark and the goods becomes

blurred. It, thus, amounts to reduction in the commercial value of the

trademark.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!16 Ibid 17 Kathleen Goodberlet, “THE TRADEMARK DILUTION REVISION ACT OF 2006: Prospective Changes To Dilution Definition, Claim Analyses, And Standard Of Harm” 6(2) J. High Tech L. 270 (2007) available at: www.law.suffolk.edu/highlights/stuorgs/jhtl/.../Goodberlet.pdf (Visited on 12th March, 2012)

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Dilution by tarnishment, on the other hand, is said to have occurred when the

goodwill of a well-known mark is affected by negative connections arising

out of similarity between the aforesaid trademark and some other mark.

Tarnishment of a well-known mark occurs when it is diluted due to low

quality or inferior variety of goods being associated with a similar mark.

Departure from Classical Trademark Law The trademark law in its classical form protects consumers from misleading

or confusing use of trademarks. The proposition on which the classical

trademark law is based is that the consumers rely on a particular trademark to

identify a product possessing a particular mix of attributes.18 When a

trademark is infringed by the use of an identical or similar mark used on a

different product or a set of products, such use is likely to cause confusion in

the minds of consumers as to the source of the goods. But irrespective of the

form of confusion, be it actual or potential, trademark law allows the

trademark owners to recover only to the extent of reasonable confusion

caused to the consumers. Dilution law, on the other hand, is producer oriented in nature which seeks to

prevent lessening of the value of well-known or famous marks arising from

the use of the mark by the third parties. The underlying principle of dilution

law is that the unauthorized use of a well-known mark by third parties, even

if it does not cause confusion to the consumers can affect the mark’s

goodwill and selling power as it then ceases to be associated with a single

source. Unlike in traditional trademark law, dilution claims are not motivated

by consumer interests. Through its exclusionary nature, dilution law on the

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!18 Clarisa Long, “Dilution” 106(5) Col. L. Rev. 1034 (2006) available at: papers.ssrn.com/sol3/papers.cfm%3Fabstract_id%3D942673 (Visited on 12th March, 2012)

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face it looks like to provide a strong protection to trademarks. Unlike, class

trademark infringement, the dilution law ties the third parties under stricter

and stronger duties to refrain from using protected marks. But at the same

time, it cannot be denied that dilution law also poses some serious problems.

Some of the major difficulties are the ambiguity regarding the nature of the

harm arising from dilution of a mark, magnitude of harm which dilution law

seeks to prevent varying from case to case and absence of universally

accepted definition of dilution. The elusiveness of the injury contributed to

the reluctance of courts in enforcing dilution claims. Some commentators

have argued that dilution law is geared toward protecting consumers because

diminution of a famous mark’s ability to identify a product increases

consumers’ search costs.19

However, in the later years, like the Indian cinema, the picture has become

rosier and colorful. The courts have made notable contributions in

developing the law of dilution and to a good extent have carved out decisions

worthy of appreciation and commanding enough to be followed as the

prevailing law.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!19 Id. at 1035

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VULNERABILITY OF WELL-KNOWN TRADEMARKS

The concept of ‘well-known’ Trademark is one of the most controversial

concepts in the field of intellectual property but also the most baronial as

well. The term ‘well-known’ in relation to trademarks originates from the

term ‘reputation’ which for the first time recognized in the 17th century in JG

v. Stanford20 wherein it was held that the law of passing off prevents

commercial dishonesty on the part of traders.21 In the realm of trademarks,

attaining the status of a “well-known mark” is perhaps akin to attaining

Nirvana 22 because the protection of well-known marks transcends the

traditional standards and objectives of trademark protection.23 The protection

of well-known marks departs from the basic objective of trademark

protection, namely, protecting consumers against deception; rather, it focuses

on preserving the distinctiveness of a mark by protecting it against free-

riding and tarnishment. In the light of this statement, let us first understand

the background of well-known trademarks in the realm of intellectual

property law.

A regime for the protection of well-known marks was first introduced by the

Paris Convention, 1967. Subsequently, during drafting of the TRIPs

Agreement, provisions to accommodate protection of well-known marks as

espoused by the Paris Convention were incorporated under Articles 16.224

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!20 (1617) 79 ER 400 21 Vivek Kumar Chaudhary, “Protection of Well-Known Trademarks and Weakening of Honest Concurrent User Defence” 15 JIPR 293 (2010) 22 “Nirvana” refers to a state of bliss achieved by liberating oneself from desire, jealousy, ignorance, and anything holding one back. The state of Nirvana is believed to free the self from fear and death. 23 Latha R. Nair, “TRACKING THE PROTECTION OF WELL-KNOWN MARKS IN INDIA: A BEFUDDLED PATH TO NIRVANA?” 101 TMR 1419 (2011) 24 TRIPS 1995, Art. 16.2- Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services. In determining whether a trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including

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and 16.325 of the Agreement. The TRIPS provision under the TRIPS is

looked upon as an improvement over the one under Paris Convention on the

ground that the latter applies to and provides for protection to well-known

marks only in respect of identical or similar goods whereas the former deals

with protection of well-known marks in connection with both goods and

services. However, when it comes to defining well-known trademarks, it is

neither defined in Article 6 bis26 of the Paris Convention or in Article 16 of

TRIPS, thereby leaving it to the national jurisdictions to define and interpret

the term. In the case of McDonalds Corporation v. Joburger,27 the South

African court held that the term well-known should be tested on the basis of

whether sufficient people knew the mark well enough to entitle it protection

against deception or confusion. 28 The WIPO Resolution concerning

Provisions on the Protection of Well-Known Marks, adopted by the

Assembly of the Paris Union for the Protection of Industrial Property and the !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark. 25 Supra note 23 at Art. 16.3- Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services which are not similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use. 26!Paris Convention 1883, Art. 6 bis-!(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well–known mark or an imitation liable to create confusion therewith.!(2) A period of at least five years from the date of registration shall be allowed for requesting the cancellation of such a mark. The countries of the Union may provide for a period within which the prohibition of use must be requested. (3) No time limit shall be fixed for requesting the cancellation or the prohibition of the use of marks registered or used in bad faith.!27 1997 (1) SA 1 28 Chase Covello, “FAMOUS TRADEMARKS IN U.S. LAW” available at: http://www.anticypher.net/lawresearch/famoustm10.pdf (Visited on 16th March, 2012)

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General Assembly of WIPO, in September 1999. The recommendation29

enlists several factors for determining whether a mark falls into the category

of well-known marks. These factors include:

1) The degree of knowledge or recognition of the mark in a relevant

sector of the public

2) The duration, extent and geographical area of any use of the mark

3) The duration, extent and geographical area of any promotion of the

mark, including advertising or publicity and the presentation, at fairs

or exhibitions, of the goods and/or services to which the mark applies

4) The duration and the geographical area of any registrations, and/or any

applications of the mark, to the extent that they reflect use or

recognition of the mark

5) The record of successful enforcement of rights in the mark, in

particular, the extent to which the mark was recognised as well-known

by competent authorities

6) The value associated with the mark.

India is a member of the World Trade Organization (WTO) and a signatory

to the TRIPS Agreement. In India, the Trade Marks Act, 1999, which

contains provisions for the protection of well-known marks came into effect

in 2003. The incorporation of these provisions can be traced back to WIPO

Resolution. Section 2(1)(zg) of the Trade Marks Act, 1999 defines well-

known mark as follows:

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!29 WIPO Document No. SCT/3/8 dated Oct. 7, 1999, available at: http://www.wipo.org (Visited on 19th March, 2012)!

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“Well-known trademark, in relation to any goods or service, means a

mark which has become so to the substantial segment of the public which

uses such goods or receives such services that the use of such mark in

relation to other goods or services would be likely to be taken as indicating a

connection in the course of trade or rendering of services between those

goods or services and a person using the mark in relation to the first-

mentioned goods or services.” When a mark is recognized as a well-known mark, it is given a wide range of

protection extending to dissimilar goods and services. On the flip side, such

protection quite often leads to criticism that the owners of well-known marks

are also reaping what they have not sown.30 Various issues have been raised

pertaining to vulnerability of well-known marks in India such as requirement

of high degree of reputation; potential harm to competition vis-à-vis potential

harm to the plaintiff’s mark; nature, scope and use of the well-known mark

and the mark in question, etc. More so, in the absence of set parameters, it

becomes more difficult and in some cases, even impossible to reach a

conclusion that a particular mark is a well-known mark.31 The problem just

does not end here as there are also some notable inconsistencies in the statute

which alongwith the aforesaid issues on vulnerability of well-known marks,

will be explored in the later chapters of this paper.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!30 Supra note 22 at 1442 31!Ibid

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DILUTION: A CASE STUDY IN INDIAN CONTEXT

PRIOR TO INCORPORATION OF THE TRADE MARKS ACT

Prior to the enactment of the Trade Marks Act, 1999 (TM Act), the

trademark law in India was governed by Trade and Merchandise Marks Act,

1958 (TMM Act). The well-known marks under the TMM Act were

protected under Section 4732 which provided for defensive registration of

well-known marks and passing off actions. The test for eligibility for

defensive registration of a well-known mark was whether the likelihood of

deception was the decisive factor in determining whether a well-known mark

was eligible for registration under this section. It is pertinent to note,

however, that the TMM Act did not define ‘well-known trademarks’ and the

concept was evolved by way of judge-made law. Owners of well-known

marks often availed of this provision by registering their marks either in all

classes or in selected classes of interest. However, it is noteworthy that even

without defensive registration, Indian courts have upheld rights in several

well-known marks asserted by trademark owners through passingoff actions.

In order to understand as to how the courts protected well-known marks

before the enactment of the TM Act and how the doctrine of dilution burst

into the Indian scenario, let us study some of the important court decisions

prior to coming into effect of the new Act.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!32 TMM Act, Sec. 47(1)- Defensive registration of well-known trade marks Where a trade mark consisting of any invented word has become so well-known as respects any goods in relation to which it is registered and has been used, that the use thereof in relation to other goods would be likely to be taken as indicating a connection in the course of trade between those goods and a person entitled to use the trade mark in relation to the first mentioned goods, then, notwithstanding that the proprietor registered in respect of the first-mentioned goods does not use or propose to use the trade mark in relation to those other goods and notwithstanding anything in Section 46, the mark may, on application in the prescribed manner by such proprietor, be registered in his name in respect of those other goods as a defensive trade mark and while so registered, shall not be liable to be taken off the register in respect of those goods under the said section.

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1. Bata India Ltd. v. Pyarelal & Co.33 In this case, the District Court of Meerut refused to grant injunction to the

plaintiff, Bata India Limited (Bata), against passing off by the defendants,

who were using the mark BATAFOAM for rubber foam used in

manufacturing mattresses, sofas, cushions, and automobile seats. The

plaintiff’s mark BATA is a famous footwear brand in India holding

registrations for canvas, rubber, rubber plates, and leather shoes. The

plaintiff argued that by using the mark BATAFOAM, the defendants were

guilty of deceiving customers and such fraudulent and mala fide conduct

amounted to passing off the plaintiff’s goodwill and reputation. The

defendants, denying these allegations, alleged that they were involved in

business different from that of the plaintiff, and because their product was

sold as BATAFOAM, there could not be any confusion or deception. The

District Court rejected the plaintiff’s claim by holding that the plaintiff had

no registration for the mark BATA for mattresses, sofas, cushions,

automobile seats, etc., and that because the defendants’ mark BATAFOAM

was not identical in appearance to the plaintiff’s mark BATA, there could be

no passing off. The decision of the District Court, on appeal, was reversed by

the High Court of Allahabad. The court said that the defendant failed to give

any reasonable or valid justification for the use of the name “BATAFOAM”

which was likely to arise confusion in the mind of the unwary purchaser of

average intelligence that it was a product of the plaintiff. The court held:

“It is this impression which may ultimately cause damage to the

reputation of the plaintiff. It amounts to an invasion of his right vis-a-vis the

name “Bata.” … The name “Bata” is neither a fancy name nor paternal

name nor in any way connected with the defendants. It is not the name of a

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!33!AIR 1985 All. 242

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flower or fauna. It is a fancy name of a foreigner who has established his

business in making shoes and the like products in this country. The name is

well known in the market and the user of such a name is likely to cause not

only deception in the mind of an ordinary customer but may also cause

injury to the plaintiff-Company.” It is pertinent to note that in this case, while the Court considered likelihood

of confusion and deception by the defendants’ mark BATAFOAM as a

factor in granting injunction to the plaintiff, it also took into consideration

the injury which the plaintiff might suffer by the defendants’ use of their

mark which was well-known in the market.

2. Daimler Benz Aktiegessellschaft & Anr. v. Hybo Hindustan34 This is the most celebrated case on trademark dilution prior to the 1999 Act.

The issue in this case was the use of the mark BENZ along with a “three

pointed human being in a ring”. Ignoring the defense of honest concurrent

use by the defendant, the High Court of Delhi granted injunction to the

plaintiff and observed that imitation of mark such as MERCEDES BENZ by

anyone including the defendant would result in perversion of the trademark

law in India. The Court held:

“Such a mark is not up for grabs—not available to any person to

apply upon anything or goods. That name . . . is well known in India and

world wide, with respect to cars, as is its symbol a three pointed star.”35

The Court further held:

“In the instant case, “Benz” is a name given to a very high priced and

extremely well engineered product. In my view, the defendant cannot dilute !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!34 AIR 1994 Del. 239 35 Id. at 240

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that by user [sic] of the name “Benz” with respect to a product like under-

wears.”36 This judgment was the first by an Indian court which touched the concept of

dilution of well-known marks. Even today, it is seen as a landmark decision

on trademark dilution in India and its findings time and again have continued

to be referred in cases dwelling on the protection of well-known marks. This

is also the first case law in India which restrained the defendant from using

the plaintiff’s well-known mark on the sole ground of free-riding, without

bringing analysis of likelihood of confusion or deception into picture.

3. Kirloskar Diesel Recon Private Ltd. v. Kirloskar Proprietary Ltd.37 The plaintiffs, in a District Court of Pune, alleged that the use defendants’

use of the trademark KIRLOSKAR as part of their trade name amounted to

passing off and such adoption of this mark was also in bad faith as one of the

defendants had formerly worked for the plaintiffs. The District Judge passed

an order restraining the defendants from using the aforesaid mark. On appeal

before the Bombay High Court, the defendants argued that the nature of the

business of both parties was different, thereby ruling out the question of

likelihood of confusion or deception. They further alleged that the mark

being a surname, any person with that surname was entitled to use it. The

respondent plaintiffs argued that a trade name’s exclusive reputation was

entitled to protection from tarnishment and also pointed out that the adoption

of the surname by the defendants was not bona fide. Relying on the ruling of

Mercedes Benz case,38 the Bombay High Court affirmed that the law on

passing off protected goodwill in a trademark against erosion, and that it was

not intended to protect a person who deliberately set out to take advantage of !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!36 Id. at 242 37 AIR 1996 Bom. 149 38 Supra note 33

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somebody else’s commercial reputation. Also, taking into account that one of

the defendants was once involved in the plaintiffs’ image-building program,

the Court rejected the defendants’ appeals and affirmed the order of the

District Judge.

4. Caterpillar Inc. v. Mehtab Ahmed39 A famous trademark CATERPILLAR came under attack when a local

defendant in Delhi adopted it representing footwear. The plaintiff company,

Caterpillar Inc. established since 1904 in USA, filed a suit for passing off

and copyright infringement before the Delhi High Court. The Court framed

two issues for consideration. Firstly, whether the trademarks CAT and

CATERPILLAR could be monopolized by anyone; and secondly, whether

the plaintiff was required to prove the use of the mark by showing sales of its

goods under the mark in the country where it alleged passing off. The Court

after making a detailed analysis of trademark dilution, found that the object

of protecting well-known marks was to avoid the weakening or dilution of

the concerned mark. The Court opined that it was a commercial invasion by

the subsequent user and such kind of dilution or weakening of the trademark

need not be accompanied by an element of confusion. The Court further

stated that such use resulted in smearing or blurring the descriptive link

between the mark of the prior user and its goods and reduced the force or

value of the trademark. It further observed:

“Another kind of dilution is by way of sullying or impairing distinctive

quality of a trade mark of a senior user. This in common parlance is known

as dilution by tarnishment. The object of such an invasion is to tarnish,

degrade or dilute the distinctive quality of a mark. . . . .The act of dilution of

mark by way of tarnishment is always with regard to well-recognised, strong

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!39 2002 (25) PTC 438 (Del.)

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and famous marks; it should have effect to diminish or weaken the strength

and identification value of the mark. There is no need to establish likelihood

of confusion as to source, affiliation and connection.”40

5. Honda Motors Co. Ltd. v. Charanjit Singh41 The plaintiff found that the mark HONDA was registered in the defendant’s

name with respect to pressure cookers. The plaintiff therefore, filed an

opposition and a suit for passing off, claiming international reputation and

goodwill of its brand. The defendant, on the other hand, alleged that its use

of the mark dated back to 1985; that the defendant was the prior user of the

mark in connection with pressure cookers; that the parties’ respective goods

were different, hence ruling out the possibility of any confusion or deception;

and that the plaintiff’s claims were barred by laches as a result of its delay in

filing the suit. The Court held that HONDA had a reputation for superior

quality products in the field of automobiles and power equipment and that

the defendant’s use of this mark in connection with pressure cookers would

mislead the public into believing that the defendant’s business and goods

originated from the plaintiff. The Court found that such use by the

defendants had also diluted the goodwill and reputation of the plaintiff. The

Court further held:

“. . . The trade mark HONDA being of global reputation, its user by

the defendants is likely to cause not only deception in the minds of ordinary

customers but may also cause injury to the plaintiff company. . . .” The Court’s decision in this case was based on two prime factors: firstly,

deception of the public; and secondly, dilution of the plaintiff’s goodwill and

reputation in connection with the mark HONDA. An analysis of the above !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!40 Id. at 442 41 2003 (26) PTC 1 (Del.)

! 20!

decisions shows that the Indian courts have applied the common law remedy

of passing off to reach findings of dilution as an act of unfair competition.

There being a lacuna in the existing law on trademark dilution, the principle

of dilution by passing off was developed by the courts on the basis of

globally recognised standards of protection of well-known trademarks. In

addition to dilution of goodwill and reputation of trademarks, in most cases,

the courts heavily relied on the elements of confusion and deception, except

in Mercedes Benz case. Under the TMM Act, there was also no remedy

available against infringement unless the well-known mark was registered in

the class of goods for which the defendant chose to use the mark. However,

the aggrieved trademark owners could still avail the remedy of passing off in

the absence of a defensive registration, that too in a different class of goods.

! 21!

STATUTORY RECOGNITION UNDER SECTION 29(4)

OF THE TRADE MARKS ACT

The Trade Marks Act of 1999 (TM Act), which came into force in 2003, vide

Section 29 deals with the provisions of trademark infringement. Sub-section

(4)42 of Section 29 provides protection to registered trademarks having “a

reputation in India” against the use by third parties in connection with

dissimilar goods and services. The new Act, like its predecessor, does not

explicitly refer to the term ‘dilution’. The statutory language does not

mention dilution by name, but mirrors an equivalent basis for infringement in

Section 10(3)43 of the United Kingdom’s Trade Marks Act, 1994.44 One of

the leading common law texts on intellectual property notes that Section

10(3) is “intended to allow protection against ‘dilution’.45 Even though there

is similarity in the statutory language, the Indian courts are not under an

obligation to follow the UK approach. It cannot be overemphasized that each

case is ultimately decided on its own facts and circumstances.46 47 However,

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!42 TM Act 1999, Sec. 29(4)- A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which –

(a) is identical with or similar to the registered trade mark; and (b) is used in relation to goods or services which are not similar to those for which the trade

mark is registered; and (c) the registered trade mark has a reputation in India and the use of the mark without due

cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

43 Sec. 10(3)- A person infringes a registered trademark if he uses in the course of trade in relation to goods or services a sign which . . . is identical with or similar to the trademark, where the trademark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trademark. 44 Dev Gangjee, “The Polymorphism of Trademark Dilution in India” 17 Trans. L. & Cont. Prob. 113 (2008) available at: papers.ssrn.com/sol3/papers.cfm?abstract_id=1273711 (Visited on 12th March, 2012) 45 Ibid 46 Parle Products Ltd. v. J.P. & Co. [AIR 1972 SC 1359] 47 Supra note 44

! 22!

the structure of Section 29(4) expresses Parliamentary intent about the

standards required to establish dilution of trademarks, in connection with

dissimilar goods or services. The ‘likelihood of confusion’ test, which was

the prime consideration when the old law was in force, is not incorporated in

Section 29(4). The object of dilution as a form of infringement under Section

29(4) is to provide wider protection to trademarks without the concomitant

requirement of likelihood of confusion, as such protection is in respect of

dissimilar or unrelated goods and services. The well-known marks, either

expressly or impliedly, are also referred to in Sections 2(1)(zg)48, 11(2),49

11(6),50 11(7),51 and 11(9).52 Before moving on to the course taken by Indian

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!48 See Chapter 3 “VULNERABILITY OF WELL-KNOWN TRADEMARKS” pg. no. 9 of this paper. 49 Supra note 42 at Sec. 11(2)- A trade mark which—

(a) is identical with or similar to an earlier trade mark; and (b) is to be registered for goods or services which are not similar to those for which the earlier

trade mark is registered in the name of a different proprietor, (c) shall not be registered, if or to the extent, the earlier trade mark is a well-known trade

mark in India and the use of the later mark without due cause would take unfair advantage of or be detrimental to the distinctive character or repute of the earlier trade mark.

50 Id. at Sec. 11(6)–The Registrar shall, while determining whether a trade mark is a well-known trade mark, take into account any fact which he considers relevant for determining a trade mark as a well-known trade mark including—

i. the knowledge or recognition of that trade mark in the relevant section of the public including knowledge in India obtained as a result of promotion of the trade mark.

ii. the duration, extent and geographical area of any use of that trade mark.! iii. the duration, extent and geographical area of any promotion of the trade mark, including

advertising or publicity and presentation, at fairs or exhibition of the gods or services to which the trade mark applies.

iv. the duration and geographical area of any registration of or any publication for registration of that trade mark under this Act to the extent they reflect the use or recognition of the trade mark.

v. the record of successful enforcement of the rights in that trade mark, in particular, the extent to which the trade mark has been recognised as a well-known trade mark by any court on Registrar under that record.

51 Id. at Sec. 11(7) – The Registrar shall, while determining as to whether a trade mark is known or recognised in a relevant section of the public for the purposes of sub-section (6), take into account:

i. the number of actual or potential consumers of the goods or services. ii. the number of persons involved in the channels of distribution of the goods or services.

iii. the business circles dealing with the goods or services.

! 23!

courts on dilution after the coming into effect of the new Act, it would be

advantageous to first understand the nature, scope and purpose of the

provision under Section 29(4) of the Act. First and foremost, for the application of Section 29(4), the registered

trademark should have a reputation in India. It is only the reputed marks

which are given protection from infringement in relation to use on dissimilar

goods or services. As per the ingredients of Section 29(4), trademark

infringement in the form of dilution is said to have occurred if the person in

the course of trade or business uses the mark which is:

1. identical with or similar to the registered trademark having reputation

in India; and

2. such use is on different goods or services than those covered by the

registration. Such use of the mark would constitute infringement in the form of dilution if

it is found that the use of offending mark produces the following results:53

1. without due cause takes unfair advantage of the distinctive character or

reputation of registered trademark

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!to which that trade mark applies. 52 Id. at Sec. 11(9) – The Registrar shall not require as a condition, for determining whether a trade mark is a well-known trade mark, any of the following, namely:-

i. that the trade mark has been used in India; ii. that the trade mark has been registered;

iii. That the application for registration of the trade mark has been filed in India; iv. That the trade mark—

a. Is well known in; or b. Has been registered in; or c. In respect of which an application for registration has been filed in, any

jurisdiction other than India; or v. that the trade mark is well-known to the public at large in India

53 Ashwani Kr. Bansal, Law of Trade Marks in India 498 (Institute of Constitutional and Parliamentary Studies, New Delhi, updated edition, 2009)

! 24!

2. without due cause is detrimental to the distinctive character or repute

of the registered trademark

In other words, if the offending mark trades on the reputation of the famous

mark or dilutes the reputed registered trademark, the same would amount to

dilution of goodwill of the well-known trademark.

The extension of rights enjoyed by reputed marks in relation to their use on

dissimilar goods or services in Section 29(4) addresses the requirement of

Article 16 of TRIPS and is a corollary to the right of opposition granted to

well-known trademarks in Section 11(2).54 What is also notable that a

trademark can be a well-known trademark even without registration but it

shall not be eligible for protection under Section 29(4) as the provision lends

protection only to the registered well-known marks. While Section 11(2), a

corollary to Section 29(4) and envisioning relative grounds for refusal of

trademark registration, provides that a trademark that is identical or similar

to a “well-known mark” cannot be registered for dissimilar goods or

services, Section 29(4) does not mention “well-known marks” and rather

uses the phrase “mark having reputation in India”. Is it that the intent of the

legislature was to protect well-known marks only at the stage of registration?

If not, what are the reasons behind using different terminologies in Sections

11(2) and 29(4)? How far the courts have been successful in applying the

doctrine of dilution in Indian jurisdiction and in expanding trademark

jurisprudence in India? In light of these questions, it is pertinent to study and

examine the rulings of the Indian courts and their role in evolving the

doctrine of dilution in India.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!54 Id. at 497

! 25!

1. Hamdard National Foundation v. Abdul Jalil55 The plaintiff, who was the owner of the mark HAMDARD accompanied by

an eye design, used in connection with the practice and manufacture of

Unani medicines. In a suit for passing off and infringement before the Delhi

High Court, the plaintiff alleged that the defendants were using the plaintiff’s

well-known mark HAMDARD for Basmati rice in Class 30 and that the

trade channels of the respective products overlapped as the plaintiff also sold

beverages under the mark HAMDARD, hence the defendants’ use created

likelihood of confusion and deception. Infringement of the mark under

Section 29(4) of the TM Act was also specifically pleaded. The defendants

counter-argued on the grounds of dissimilar products and bona fide adoption.

The High Court relied on several cases such as Bata,56 Caltex,57 and Honda58

and also considered case laws of United States59 and Canada.60 The High

Court on considering the recent trends in Canada and the pre-2006 decisions

in the United States found that the mere advertence to existence of a famous

mark was not sufficient to guarantee an injunction. The court was of the

opinion that the plaintiff has prima facie established that the goods are

dissimilar and the magnitude of resemblance and nature of products is such

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!55!2008 (38) PTC 109 (Del.) 56 Supra note 33 57 Sunder Parmanand Lalwani & Ors v. Caltex (India) Ltd. [AIR 1969 Bom. 24] 58 Supra note 41 59 The U.S. Supreme Court, in Moseley, reviewed a Court of Appeal’s order holding that the mark VICTORIA’S SECRET was distinctive and that the evidence established dilution even though no actual harm had been proved. The U.S. Federal Trademark Dilution Act (FTDA) defines “dilution” as “the lessening of the capacity of a famous mark to identify and distinguish goods or services.” Reversing the concurrent findings of the district court and the court of appeals, the U.S. Supreme Court held that the standard contemplated by the U.S. Lanham Act was not “likelihood” of dilution, but “actual” dilution. 60 The Canadian Supreme Court in Mattel rejected an opposition to the use and registration of BARBIE in connection with restaurant services. In doing so, it reasoned that the mere fact that a mark was famous did not entitle its owner to a monopoly in connection with unrelated products and services. The Canadian court went on to affirm that there should be certain objective markers, which the “famous” mark must satisfy if the monopoly is to be granted. These should regard, for example: the inherent distinctiveness of the mark and the extent to which it has become known; the duration of the trademark use; the nature of the goods and the trade; and the degree of resemblance between the respective marks.

! 26!

that the defendants goods are likely to be confused with that of those of the

plaintiffs, and the latter is likely to suffer from such injurious association.

The High Court, therefore, held that the standard for deciding what

amounted to trademark infringement in connection with dissimilar goods and

products was “likelihood of deception.” In interpreting Section 29(4),

particularly taking unfair advantage of the senior mark causing injury or

harm to it, the High Court relied on Moseley61 decision of the US and

concluded that to establish dilution, actual harm has to be proved. The court in this case echoed the rulings pronounced during the times when

the old law, i.e. TMM was governing the trademarks in India. Even in

interpreting Section 29(4), the court with special reference to the Moseley

case, stuck to the requirement of likelihood of confusion or deception.

2. Ford Motor Co. v. Mrs. C. R. Borman62 This case was decided by the Division Bench of the High Court of Delhi

from an order of the Single Judge granting the defendants’ motion to dismiss

the plaintiff’s complaint. The defendants filed their motion on several

grounds, alleging that they were not subject to the jurisdiction of the Delhi

High Court, that there was no infringement and that the plaintiff’s complaint

did not state a claim for which relief could be granted. The defendants used

the mark FORD in connection with footwear, to which the plaintiff objected

in the suit before the learned Single Judge. The plaintiff’s infringement case

rested on Section 29(4) of the TM Act. On appeal, the Division Bench

reversing the order of the Single Judge held: “The view of the learned Single Judge is that the intendment of the

Act could not be for a blanket protection to be made available to a !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!61 Supra note 15 62!2008 (2) CTMR 474 (Del.) (DB)!

! 27!

trademark in respect of the entire gamut of Classes. What should not be lost

sight of is the fact that Section 29(4) is palpably an exception to the scheme

of the Act and applies only to those trademarks which have earned a

reputation in India. If it is, prima facie, clear or it is proved through

evidence that the concerned trademark enjoys and commands a reputation in

India, the Plaintiffs do not have to prove deception on the part of the

Defendants or likelihood of the customer being misled because of the use of

the challenged trademark. Once the Plaintiffs have made out a case that the

offending trademark is identical with or similar to its registered trademark,

relief would be available even if the purveyed goods are not similar and/or

fall in the same category or class.”63

Unlike in Hamdard,64 the Court in this case followed the language of Section

29(4) and found that if the mark enjoys a reputation in India, the plaintiff

does not have to prove the defendant’s deception.

3. ITC Ltd. v. Philip Morris Products SA & Ors.65 The suit between the parties in this case came before the High Court of Delhi

over the defendant’s use of roof design logo containing the inverted letter

‘M’ on the ground of the alleged similarity between the logos of the plaintiff

and the defendant. ITC, one of the largest private sector companies in India,

alleged that the use of the ‘M’ logo by the defendant was violative of Section

29(4) of the TM Act. The plaintiff argued that the WelcomGroup logo was

associated with the ITC group for 30 years, and defendant’s use of the logo

could mislead customers, and injure the distinctiveness and exclusivity

associated with the former. The court found plenty of evidence of use of W-

NAMASTE logo by the defendant Philip Morris in the hospitality and !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!63 Id. at 483 64 Supra note 55 65!2010 (42) PTC 572 (Del.)!

! 28!

restaurant businesses, however, there was no evidence of use of this logo in

connection with cigarettes.

The defendant argued that while the W-NAMASTE logo was registered for

cigarettes, but it was not used in connection with these goods by the plaintiff.

The defendant further submitted that the plaintiff’s cigarettes were sold

without the use of the W-NAMASTE logo under various other brands. The

court after hearing arguments of both sides refused to grant preliminary

injunction to the plaintiff. The plaintiff did not deny selling cigarettes,

although under different brands, but without the logo in question, and this

was considered to be a relevant consideration by the High Court which titled

the balance in the defendant’s favour. The plaintiff even though proved that

the logos were similar but as there was no connection between the

defendant’s mark and the plaintiff’s services which could cause harm to the

plaintiff or undue advantage to the defendant, the mark of the plaintiff, could

not be said to have been diluted. The Court held: “This Court is of opinion that the test here (for dilution) is not

exactly the same. For one, Parliament has consciously eschewed the

“deceptively” similar standard—which is defined by Section 2, in relation to

infringement claims under Section 29(4). This would mean that the identity

or similarity standard is a notch higher—the claimant has to prove or

establish that the two marks are identical with or similar to each other. The

question of deception does not arise here. There must be a near

identification of the two marks or they must have the closest similarity. The

second aspect is that the other elements necessary to establish dilution—

dissimilarity of goods, the claimant mark having a reputation in India; the

use of the mark without due cause, resulting in detriment to it, or the

! 29!

defendant taking undue advantage, have to be established. These ingredients

are all to be established, as the conjunctive “and” is used, in Section 29(4).66

The court emphasized that the following four essential elements need to be

established in order for a dilution case to succeed:

1. The diluting mark is identical or similar to the injured mark;

2. The injured mark has a reputation in India;

3. The use of the impugned mark is without due cause;

4. The use of the impugned mark amounts to taking unfair advantage of,

or is detrimental to, the distinctive character or reputation of the

registered trade mark.

This case deserves huge appreciation for providing the in depth discussion of

trademark dilution. Till date, in particular, since the enactment of the TM

Act, this decision can certainly be termed as the most significant one which

examined the doctrine of trademark dilution.

4. Raymond Ltd. v. Raymond Pharmaceuticals Private Ltd.67 The plaintiff’s mark RAYMOND is a popular Indian brand of men’s formal

wear. The plaintiff’s complaint before the High Court of Delhi was that the

defendant, which was a pharmaceutical company, used the plaintiff’s mark

RAYMOND as part of its corporate name thereby amounting to infringement

under Section 29(4). The Court said that the plaintiff’s case falls under of

Section 29(5)68 of the TM Act and further held that this subsection precludes

the applicability of Subsection (4) when a defendant has adopted a plaintiff’s

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!66 Id. at 601 67 2010 (44) PTC 25 (Bom.) (DB) 68!A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect f which the trade mark is registered.

! 30!

registered trademark as its trade name or corporate name. On appeal to the

Supreme Court, the plaintiff raised the following two issues:

a) Whether Section 29(5) of the TM Act restrains the court from

examining the claim of infringement of a registered trademark having

a reputation in India as described under Section 29(4), if such

infringement arises from the unauthorized use of such trademark as a

trade name in respect of dissimilar goods or services; and

b) Whether the registered trademark under Section 29(4) having a

reputation in India refers to well-known trade mark?

The Supreme Court refused to interfere with the order passed by High Court.

By not dwelling upon the merits of the case, the apex Court erred and missed

a rare opportunity to rectify the discrepancy between “well-known marks”

and marks having “a reputation in India” under the TM Act, which till date

remains an unresolved issue. Needless to say, Section 29(5) offers narrower

protection to well-known marks, in fact, lesser than even the defensive

registration provision under the old Act. The plaintiff, in such a case, would

be more inclined to seek passing off action against the defendant for using

the former’s mark as a trade name or corporate name with respect to

dissimilar goods or services. If practically observed, the High Court failed to

provide adequate protection to well-known mark by bringing it within the

purview of Section 29(5) at the cost of a wider protection available under

Section 29(4) which could not have been the intent of the legislature, given

that codifying protection to well-known marks is one of the main objectives

of the TM Act; and subsequent erring by Supreme Court by refusing to plug

the aforesaid lacunae between well-known marks and marks having a

reputation in India has added insult to injury which should have been healed

by antiseptic in the form of judicial treatment.

! 31!

5. Chorion Rights Ltd. v. Ishan Apparel & Ors.69

Yet another case decided by the High Court of Delhi, the plaintiff in this case

was the owner of the mark NODDY which is a famous character of Enid

Blyton’s novels. Bringing an infringement action against the defendant for

using the aforesaid mark for ready-made apparel for children, the plaintiff

argued that the target of the defendant’s products were the children who read

the plaintiff’s books. However, what is to be noted is that despite being

aware about the defendant’s application since 2000, the plaintiff never

approached the Court to seek relief in the form of injunction and also failed

to establish use of the mark prior to 1995 when the defendant was granted

registration of the mark. The Court observed:

“The plaintiff has not adduced any evidence to show prior user in

India, it is even not the prior registered owner of the said trademark in India.

A claim of dilution cannot sustain against a registered owner of the

trademark, as is clear from Section29(4). In this case the defendant has not

only established prior user, at least from 1995, but also prior registration of

the mark. While it may be true that some sections of the public, especially

those exposed to a certain kind of education, and having access to imported

books were aware of Noddy and were reading about his escapades in

Toyland, so vividly created by Enid Blyton, (the author of this judgment

being one such) and even retaining fond memories, yet the Court is not

unmindful of the fact that there is not even a shred of evidence disclosing

sales figures, as to importation of such books, authorized stockists,

periodicity of such sales, advertisements, areas where such sales took place,

and their volume, etc.”70

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!69 2010 (43) PTC 616 (Del.) 70!Id. at 624

! 32!

The court, therefore, found that the plaintiff was not the prior registered user

of the mark ‘NODDY’ in India and in such a case, a dilution claim could not

be made against the defendant, as per the provision of Section 29(4).

According to the findings of the court, the defendant was found to have

established the prior registration as well as use of the mark. The court rightly

decided the case in favour of the defendant, but in that process raised the

following issues pertaining to well-known marks:

a) Firstly, whether prior use in India is a pre-requisite for a well-known

mark. The position with respect to prior use followed in India is that

the first registered user of the mark globally would be treated as the

first user of the mark in India. It is however, pertinent to note that

Section 11(9) of the TM Act provides that use of a mark in India is not

a factor the Registrar of Trade Marks is required to consider while

determining whether or not a mark is well known.

b) Secondly, the court failed to comprehend the reason behind the

defendant’s adoption and use of the mark NODDY which is neither a

surname, nor a word in any Indian language.

6. Kamdhenu Ispat Ltd. v. Kamdhenu Pickles and Spices Ind. Pvt. Ltd.71

The plaintiff company, engaged in the business of manufacturing and

marketing Steel Bars and other cognate products, cement and construction,

chemicals and industry, paints and varnishes, industrial oils,

pharmaceuticals, paper and cardboard, leather Bakelite and laminated

products, etc. since 1995, filed a suit seeking injunction to restrain the

defendant from manufacturing or dealing with any articles or products under

the trade-name KAMADHENU or any other deceptively similar mark. The

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!71 2011 (46) PTC 152 (Del.)

! 33!

plaintiff argued that the defendant's unauthorized use of KAMADHENU is

an infringement of both corporate name trademark, as well as infringement

by dilution, under Section 29(4) and (5) of the TM Act.

The defendants by submitting that they have been using KAMADHENU

since 1969 when it was started as a partnership involved in the business of

manufacturing and retailing pickles, spices, jellies, juices, sauces, and

processing articles and condiments used for the preparation of those goods,

and they also established a small scale industry registration certification

issued by the Maharashtra State Government in 1993 and also registration

under the Bombay Shops and Establishments Act in 1999, established a prior

use of the mark. On due observation and analysis of findings and evidences

adduced, the court rightly came to the conclusion that the plaintiff has failed

to establish the case for either infringement by dilution or of the corporate

name, by the defendant and the suit itself does not disclose any cause of

action for any of the reliefs claimed. The importance of this case lies in the fact that it spelt out the objective of

trademark law and the essence of goodwill protection as a form of property.

The court further reiterated essential elements of dilution and said:

“Unlike in infringement of trademark in relation to similar goods or

services, in the case of dilution (infringement of mark by use in respect of

dissimilar goods or services) there is no presumption of infringement of the

mark. This means that each element has to be established.”72

The court further stated:

“The analogy of tests evolved in infringement actions where similar

goods or services are in question appears to be inapposite, after the

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!72 Id. at 161

! 34!

enactment of Section 29(4). The plaintiff has to fulfill a more stringent test

(than the deceptive similarity standard) of proving identity or similarity,

where trademark dilution is complained. Applying the reasoning of the

decisions cited previously, it is held that a "global" look, rather than a focus

only on the common elements of the mark, is to be taken, while considering if

the impugned or junior mark infringes, by dilution, an existing registered

mark.”73

7. Tata Sons Ltd. v. Manoj Dodia74

In this case, the plaintiff company Tata Sons Ltd. for injunction, damages,

rendition of accounts and delivering of infringed materials. Similar to earlier

cases, the plaintiff of this case too alleged that the defendant by use of the

trademark “TATA” has caused infringement of the plaintiff’s registered

trademark and that the impugned mark is inherently deceptive and

constitutes a misrepresentation to consumers that the goods of the defendant

belong to the plaintiff or approved by it. The defendant did not appear before

the court and therefore, the suit was proceeded ex parte. The court made the

following observations:

a) The doctrine of dilution, which has recently gained momentous,

particularly in respect of well known trademarks emphasizes that use

of a well known mark even in respect of goods or services, which are

not similar to those provided by the trademark owner, though it may

not cause confusion amongst the consumer as to the source of goods

or services, may cause damage to the reputation which the well known

trademark enjoys by reducing or diluting the trademark's power to

indicate the source of goods or services.75

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!73 Ibid 74!2011 (46) PTC 244 (Del.)!75 Id. at 246

! 35!

b) Another reason for growing acceptance of trans-border reputation is

that a person using a well known trademark even in respect of goods

or services which are not similar tries to take unfair advantage of the

trans-border reputation which that brand enjoys in the market and

thereby tries to exploit and capitalize on the attraction and reputation

which it enjoys amongst the consumers. When a person uses another

person's well-known trademark, he tries to take advantage of the

goodwill that well-known trademark enjoys and such an act

constitutes an unfair competition.76

c) The concept of confusion in the mind of consumer is critical in actions

for trademark infringement and passing off, as well as in determining

the registrability of the trademark but, not all use of identical/similar

mark result in consumer confusion and, therefore, the traditionally

principles of likelihood of confusion has been found to be inadequate

to protect famous and well known marks. The world is steadily moving

towards stronger recognition and protection of well-known marks. By

doing away with the requirement of showing likelihood of confusion to

the consumer, by implementing anti-dilution laws and recognizing

trans-border or spill over reputation wherever the use of a mark likely

to be detrimental to the distinctive character or reputation of an

earlier well known mark. Dilution of a well-known trademark occurs

when a well-known trademark loses its ability to be uniquely and

distinctively identify and distinguish as one source and consequent

change in perception which reduces the market value or selling power

of the product bearing the well known mark. Dilution may also occur

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!76!Id. at 247

! 36!

when the well-known trademark is used in respect of goods or services

of inferior quality.77

Decreeing the suit in plaintiff’s favour, the court awarded the company

punitive damages of 2 lakh rupees against the defendant. This looks like one

of the most crystal clear cases decided by the Delhi High Court dealing with

trademark infringement by dilution. In clear and unambiguous terms, the

court batted around the well-known trademarks with reference to the

reputation enjoyed in India as well as trans-border reputation, dilution of

goodwill and unfair competition. Like some of the previous decisions, the

court proved beyond doubt that the traditional principles of likelihood of

confusion with every passing year is gaining inadequacy when it comes to

protect famous and well known marks.

Protection under Section 29(4): A Critical Analysis Section 29(4) of the TM Act has brought about a much needed protective

umbrella for well-known trademarks. Out of the three conditions required to

determine dilution of goodwill in trademarks under Section 29(4) of the TM

Act, it is not very difficult to establish the first two conditions, however, the

third one, i.e. what is a well-known mark, suffers from serious vagueness and

complications due to lack of guidelines and therefore the courts had to rely

on foreign case laws of UK and US to plug the loophole. There are also other

glaring discrepancies which time and again are affecting the accuracy of the

courts to interpret provisions dealing with well-known trademarks, some of

which are listed as follows:

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!77 Ibid

! 37!

1. The term “well-known mark” as defined under Section 2(1)(zg) of the

TM Act provides no factors of determining whether or not a mark is

well known, as a result, leading to ambiguity. The words “a mark

which has become so to the substantial segment of the public which

uses such goods or receives such services” are capable of numerous

interpretations. Until and unless the guidelines are framed for

determining the yardstick of well-known marks, inconsistencies will

keep on arising like this and considerations relied on by the courts will

continue to differ and the courts will end up pronouncing conflicting

decisions in providing protection against dilution to well-known

marks.

2. The vagueness of definition for well-known marks also upsets the

enforcement provisions under Section 11 which makes it all the more

important to frame guidelines for laying down the test of trademarks to

qualify as well-known marks. Though reference at times is made to

registration provisions encompassed in sub-sections (6), (7), and (9) of

Section 11, but again, vulnerability owing to dearth of guiding

principles makes its presence felt in enforcement proceedings, leaving

it to the courts to unearth and take recourse to a pathway towards

providing protection against dilution to well-known marks.

3. The expression “registered trademark has a reputation in India” as

used in Section 29(4), if viewed from a layman’s standpoint, refers to

a well-known trademark. But at the same time, it ventilates the

objection apropos the Parliament of inculcating two different

expressions, i.e. “registered trade mark has a reputation in India” in

Section 29(4); and “well-known mark” in Sections 2(1)(zg) and 11(2)

of the Act.

! 38!

4. It is also notable that Section 29(4) nowhere alludes to bad faith

adoption of a mark as a relevant factor in deciding whether the act of

the defendant amounts to dilution of well-known mark of the plaintiff.

Bad faith means predatory intent. 78 Wherever the intent of the

defendant is to free ride the reputation or goodwill or advertisement or

publicity of the plaintiff is evident, it is a case of bad faith.79

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!78 Supra note 53 at 263 79!Id. at 264

! 39!

U-TURN CARVED OUT BY SECTION 159(5) OF THE

TRADE MARKS ACT

At the outset, Section 159(5) of the Trade Marks Act reads as under:

“Notwithstanding anything contained in this Act, where a particular

use of a registered trademark is not an infringement of a trademark

registered before the commencement of this Act, then, the continued use of

that mark shall not be an infringement under this Act.”

The introduction of well-known trademarks in the new Act which came into

force with from September 15, 2003 is not to apply retrospectively to restrain

a user of a trademark or trade name who has been in existence prior to the

plaintiff achieving any such well-known status or reputation in India in view

of Section 159(5). In the recently decided case of Radico Khaitan

Limited v. Carlsberg India Private Limited, 80 recognizing this exception

under Section 159(5), the High Court of Delhi held:

“A bare reading of the Sub-Section 159(5) would reveal that the

same is the non obstante clause and would therefore prevail over in

addition to what has been stated under the Act. The new Act of 1999

although extends the registration under the existing law of 1958 to the

New Act. However, the exception is carved out under Sub-section (5)

which states that the particular user of the mark if it is not an infringement

under the old Act then, the same shall also not to be an infringement

under this Act.”81

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!80 MIPR 2011 (3) 125 (Del.) 81 Id. at 152

! 40!

The court further held:

“The combined reading of Section 29 of the old Act and saving clause

of Section 159 makes it amply clear that the user of the numeral 8 would not

have been an infringement under the old act and injunction cannot be

granted if it is established the said numeral does not indicate the connection

in the course of the trade with the Plaintiff. Thus, the said user cannot be

extended to be an infringement under the new act by virtue of the saving

clause of Section 159 of the Act of 1999.”82 Legal rights of a third party to use a mark without causing infringement of a

mark registered under the said 1958 Act, is protected under Section 159(5) of

the Act, as stated in Lowenbrau AG. v. Jagpin Breweries Ltd.83 Section 159(5) is evocative of the situations covered under Section 29(4) of

the new Act only, which enables injunctions in relation to disparate goods as

well. This would, therefore, mean that misuse of a trademark for disparate

goods did not amount to infringement during the regime of the 1958 Act. It

can further be inferred that if an infringing activity that was carried during

the regime of the 1958 Act does not amount to infringement, the continuance

of such an activity would not amount to infringement under the Act of 1999. This interpretation of the above provision, however, would mean that if an

earlier infringing activity stood discontinued on September 15, 2003 and re-

surfaced after the said date, it constitutes an infringement but an

uninterrupted activity does not. It would further mean that an old registration

will be deprived of the benefit under Section 29(4) while a relatively new

registration retains eligibility to sue for infringement. Such an interpretation

would defeat the very purpose of enacting Section 29(4) of the Act. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!82 Ibid!83 2009 (39) PTC 627 (Del.)

! 41!

It is also evident from the plain reading of Section 159(5) that its

applicability is confined to the statutory remedy of infringement and has no

applicability vis-à-vis to the remedy of passing off. Section 27(2) of the Act

explicitly provides:

“Nothing in this Act be deemed to affect rights of action against any

person for passing off goods or services as the goods of another person or as

services provided by another person, or the remedies in respect thereof.”

It is pertinent to note that Section 27 of the erstwhile TMM Act and TM Act

of 1940 also contained the abovementioned provision in identical terms. The

right to passing off action, therefore, is not affected by the statute including

but not limited to Section 159(5) of the 1999 Act. On due analysis of Section 159(5) and the judicial pronouncements in which

the provision has been referred, it can be inferred that a bare reading of

Section 159(5) gives a crystal clear indication of a paradoxical situation

emanating from the said provision which melts down the protection of

trademarks in cases of continuing infringements. It is noteworthy that the

expression “continued use” in Section 159(5) does not cover in its ambit any

new infringing acts, that may be done after September 15, 2003. Any new act

of invasion of trademark rights will not merge in the stream of pre-continued

act of invasion of the same rights. By applying this situation to dilution of

well-known marks, it can be implied that if the use of a well-known mark by

the defendant in connection with different goods or services did not amount

to dilution during the pendency of the TMM Act, then it would not be

considered as dilution under the new Act of 1999.

! 42!

PASSING OFF: SAVING GRACE & A MORE RELIABLE REMEDY

Passing off provides a remedy against a trader who deceives the plaintiff

trader's customers into believing that his goods are the plaintiff's goods. It

redresses the wrongful conduct of the defendant in passing off his goods as

the goods of the defendant. While the exact origins of passing off are

unclear, it was recognized in common law in the 16th century during the

reign of Elizabeth I. There is evidence of passing off cases in both the Courts

of Law and the Courts of Equity. The law regarding passing off was defined

by Lord Langdale in Perry v. Truefitt:84

“A man is not to sell his own goods under the pretence that they are

the goods of another man....” 85

Passing off originally protected trade names as badges of origin, that is a link

to the source of the goods. Over time protection has been extended beyond a

badge of origin.86 Traders can now prevent their rivals from imputing a

connection between their products by use of a mark, name or get-up. The tort

of passing off lies in the misrepresentation by the defendant. The

misrepresentation is zeroed on at the consumers of goods who are induced to

buy the goods assuming that they belong to the plaintiff. Passing off action

aims to remedy the actionable wrong which is based on the common law

principle that nobody has the right to represent his goods or services as those

of somebody else. The underlying principle is that trading must not only be

honest but must not even unintentionally be dishonest.87 The purpose of

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!84 49 ER 749 (1842) 85 Rembert Meyer-Rochow, “PASSING OFF: PAST, PRESENT AND FUTURE” 84 TMR 39 (1994) available at: http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/thetmr84&div=12&id=&page= (Visited on 3rd April, 2012) 86 Stephen Todd, The Law of Torts in New Zealand, 756 (Brookers, Wellington, 2nd edn. 1997) 87 Parker-Knoll v. Knoll International Ltd. [(1962) RPC 265]

! 43!

passing off action is to protect commercial goodwill and to ensure that

purchasers are not exploited and dishonest trading is prevented88 and for that

the plaintiff must establish that his goods or services have acquired a

reputation in the market. There is no need to establish actual deception in

such cases.89 Over the years, the Indian judiciary has been recognizing and accepting the

common law remedy of passing off. Inspired from Lord Diplock’s

formulation in Advocaat case90 the Indian Supreme Court devised the test for

passing off in Cadila Healthcare v. Cadila Pharmaceuticals Ltd. 91 as

follows: “The passing off action depends upon the principle that nobody

has a right to represent his goods as the goods of some body [else] . . . .

[T]he modern tort of passing off has five elements i.e.

(1) a misrepresentation

(2) made by a trader in the course of trade,

(3) to prospective customers of his or ultimate consumers of goods or

services supplied by him,

(4) which is calculated to injure the business or goodwill of another

trader (in the sense that this is a reasonably foreseeable consequence)

and

(5) which causes actual damage to a business or goodwill of the trader by

whom the action is brought or (in a quia timet action) will probably do

so.”92

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!88 Ibid 89 Ibid 90 Warnink v. Townend [(1979) 2 All ER 927 (HL)] 91 AIR 2001 SC 1952 !92 Id. at 1956

! 44!

In subsequent cases, this five element test time and again was referred to and

relied on by the courts for establishing whether or not the use of disputed

marks by the defendants amounted to passing off.93 Passing off action has

stood the test of time and that is reflected in the Acts of 1958 and 1999

which under Section 27(2) have kept the common law remedy intact. Section

27(2) makes it crystal clear that registration of a mark in the trademark

registry is irrelevant in a passing off action and a mere register entry of the

mark does not prove that the person in whose name it is registered is the user

of the mark.94 Dilution of goodwill in trademark, however developed it may be in the

modern trademark jurisprudence, is not a complete remedy in itself in

protecting well-known trademarks. It may be a diversion from the traditional

law of trademark infringement, however, it owes its roots to the common law

remedy of passing off. First and foremost, what has to be established is the

confusion or deception. At the heart of passing off lies deception or its

likelihood, deception of the ultimate consumer in particular.”95 96 In the

context of passing off, dilution is a form of damage or injury emanating from

misrepresentation in connection with goodwill or reputation of goods or

services, rather than an independent cause of action. In other words, dilution

is a genus of damage or harm within passing off accruing from likelihood of

confusion or deception. In the light of this statement, let us briefly illustrate

some of the leading case laws in which it has been, whether expressly or

impliedly, affirmed that dilution is a genus of damage or harm within passing

off accruing from likelihood of confusion or deception and that passing off

can be alleged and proved even in case of dissimilar goods or services. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!93 Bhavnesh Mohanlal Amin v. Nirma Chemicals Works Ltd. [PTC 2005 SC 497]; Heinz Italia v. Dabur India Ltd. [PTC 2007 SC 1] 94 Koninkhijke Philips Electronics v. Kanta Arora [2005 (30) PTC 589 (Del.)] 95 Hodgkinson & Corby Ltd. v. Wards Mobility Services. Ltd. [(1995) FSR 169 (Ch.)] 96 Supra note 44 at 107

! 45!

1. Bata India Ltd. v. Pyarelal & Co.97 The High Court of Allahabad stated

that a passing off action would lie even if the defendants were not

manufacturing or producing any goods similar to that of the plaintiff.98

2. N. R. Dongre v. Whirlpool Corporation:99 In this case, the international

goodwill and reputation of a trademark was protected under the law of

passing off. The learned Division Bench of Delhi High Court held that the

rights of action under Section 27(2) are not affected by provisions dealing

with infringement or registered trademarks. On appeal, this position was

reinforced by the Supreme Court as under: “Passing off action is said to be a species of unfair trade competition

or of actionable unfair trading by which one person, through deception,

attempts to obtain an economic benefit of the reputation which another has

established for himself in a particular trade or business. The action is

regarded as an action of deceit.”100

3. Caterpillar Inc. v. Mehtab Ahmed:101 The High Court of Delhi accepted

the argument that this was a passing off situation involving a “spillover”

reputation in India and that there was a likelihood of consumer confusion on

the basis of identical goods being sold. The court believed that limited scope

for dilution has been occasionally ignored in a few other passing off

decisions as well.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!97 Supra note 33 98 Supra note 53 at 572 99 20 IPLR (1995) 211 (Del.) 100 JT 1996 (7) SC 555!101 Supra note 39

! 46!

4. Honda Motors Co. Ltd. v. Charanjit Singh:102 Captivating dissimilar

goods coupled with trans-border reputation criteria, the High Court of Delhi

observed:

“With the changed concept of the passing off action, it is now not

material for a passing off action that the plaintiff and the defendant should

trade in the same field. I find that some businesses are truly international in

character and the reputation and goodwill attached to them cannot in fact

help being international also. The plaintiff’s trademark HONDA, which is of

global repute, is used by the defendants for a product like the pressure

cooker, to acquire the benefit of its goodwill and reputation so as to create

deception for the public who are likely to buy defendant’s product believing

the same as coming from the house of HONDA or associated with the

plaintiff in some manner. By doing so, it would dilute the goodwill and

reputation of the plaintiff and the wrong committed by the defendants would

certainly be an actionable wrong and the plaintiff is within its rights to ask

for restraint against the defendants from using its mark HONDA for their

products.”103

5. Colgate Palmolive v. Anchor Health & Beauty:104 It was held by the

Delhi High Court that that a substantial reproduction of a trade dress was

liable to cause not only confusion but also dilution of distinctiveness of

colour combination.

6. Frito-Lay India v. Guru Prasad Enterprises:105 The High Court of

Delhi observed that the imitation of product packaging and color schemes

would cause confusion and deception thereby resulting in passing off as well !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!102 Supra note 41 103 Id. at 17!104 2003 (27) PTC 478 (Del.) 105 2004 (29) PTC 537 (Del.)

! 47!

as dilution of the brands, labels and packaging of the plaintiffs.

7. United Distillers & Vintners v. Khoday Breweries:106 In this case, the

use of the mark “Johnny Walker” was in dispute. It was held by the court

that the plaintiffs would suffer adversely if the defendant is allowed to

continue using the deceptively and confusingly similar trademark resulting

into irreparable loss to the plaintiffs and dilution and erosion of plaintiffs’

reputation and goodwill.

8. Hamdard National Foundation v. Abdul Jalil:107 The High Court of

Delhi in this case held that the standard for deciding what amounted to

trademark infringement in connection with dissimilar goods and products

was “likelihood of deception” therefore, clearly indicating that even after the

passing of the new Act and availability of protection under Section 29(4),

passing off remedy can still be banked upon.

Passing Off Action: An Appraisal It is noteworthy that even after the strengthening of statutory protection

against infringement in the TM Act, passing off trend in India has not been

arrested. Under the old as well as the new Act, the action for infringement

lies only in respect of registered trademarks. Passing off action, however,

provides protection to unregistered trademarks as well. The Act of 1958

provided for infringement action to the registered trademarks only in

connection with similar goods and also, there was no provision under which

well-known trademarks could be protected against use of dissimilar goods or

services. Prior to the commencement of the Act of 1999, i.e. till 15th

September 2003, the unauthorized use of well-known marks in connection

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!106 2005 (31) PTC 369 (Del.) 107 Supra note 55

! 48!

with different goods was remedied by passing off actions108 which is a clear

indication of the huge void filled by judiciary in India. Even after the commencement of the new Act, the courts (though with lesser

frequency) have continued to recognize and take recourse to passing off

action in cases of well-known trademarks used on different goods or

services. The case study in this as well as the previous chapters also testifies

that wherever statutory remedy has proved to be inadequate in protecting

goodwill of well-known marks, passing off remedy has come to the rescue

thereby keeping a check on dishonest and unfair competition. Therefore, taking into account the aforementioned facets, passing off can be

appropriately termed as a saving grace and a reliable remedy. Moreover,

Indian courts have rich experience in providing passing off remedy in a wide

range of trademark infringement disputes, making it a settled sphere of

trademark jurisprudence. Passing off is a quintessential weapon of choice

where an interlocutory injunction is sought, particularly in situations of

trans-border reputation and dissimilar goods. As proved by case laws

illustrated earlier in this chapter, dilution is a recognized species of harm or

injury within passing off, in which the mark in question is confusing or

deceptive. Doctrine of dilution, even though recognised by courts in

reference to Section 29(4) as a remedy independent of infringement action,

owes its development to and flourishes in the protective blanket of passing

off.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!108 See Chapter 4 of this paper

! 49!

FUTURE ROAD MAP

Though the major development of the concept of dilution of trademarks took

place in the post-liberalization stage, it is notable that the breakthrough was

provided in the pre-liberalization period when Bata case was decided by the

Delhi High Court in 1985. Even though the Indian courts (Delhi High Court

in most cases) have been dealing with cases on dilution for close to three

decades, the doctrine of dilution of trademarks is still young and in the

nascent stage, more so, due to the fact that the old Act provided only limited

and inadequate protection to well-known marks and the courts relied on

passing off action for disposing of cases. Before the new Act came into force, dilution was merely looked upon as a

species of passing off dependent on finding of misrepresentation and the

likelihood of consumer confusion. However, under the new Act, doctrine of

dilution is impliedly recognized as an independent cause of action under

Section 29(4). Though likelihood of confusion or deception is still an

essential requirement to establish dilution owing to passing off action, there

has been a drastic shift from it in the reign of the Act of 1999. In 1993, while

deciding Mercedes Benz case, for the first time the court did not rely on

likelihood of confusion criteria and restrained the defendant purely on the

ground of free-riding, thereby laying the foundation stone of doctrine of

dilution as an independent cause of action and leading to further

developments which took place in subsequent cases as dealt in the fifth

chapter. It is notable that even after considerable developments, be it through judicial

decisions or recognition under statutory provision, doctrine of dilution still is

not qualified to be termed as an independent cause of action and even now, it

owes a part of its life to passing off action. For dilution to mature as an

! 50!

independent and a more reliable doctrine, the following suggestions are to be

taken into consideration:

a) Enforcement provisions of the TM Act should be amended to include

certain guidelines for determining whether or not the impugned mark

is a well-known mark. Insertion of such guiding principles in the Act

will complement the definition of well-known marks109 and bring

about more consistency and transparency in providing protection to

well-known marks. It is true that time and again, passing off action has

been an ideal weapon for the courts when it comes to protecting well-

known marks against dilution, however, lack of guidelines has

continuous has ensured inefficiency in enforcement proceedings and

such a lacunae needs to be addressed and remedied to counteract

future repercussions and adverse effects.

b) In order to tackle the inconsistency manifestly arising out of the erring

by the Supreme Court in Raymond110 case, of not repairing and

rectifying the discordance between the terminologies used in Sections

11 and 29(4), i.e. well-known marks and marks having a reputation in

India, the need of the hour is either an amendment to Section 29(4)

substituting “well-known marks” in place of “marks having a

reputation in India” or a judicial explication redressing the apex

court’s missed opportunity by interpreting and bridging the difference

in the terms used in the abovementioned provisions. This will help in

curtailment of meting out different treatments to disputed marks by the

courts and the registrar.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!109 Sec. 2(1)(zg) 110 Supra note 67

! 51!

c) Section 29(4) provides for protection against dilution only to the

owners of registered trademarks. The Act contains no provision which

lends protection to unregistered trademarks clearly indicating that

unregistered well-known trademarks are not entitled to protection from

infringement in the form of dilution. Though this deficiency has been

looked after by taking recourse to passing off remedy, it does not

mean that statutory protection to unregistered trademarks should be

completely ruled out. By legislative amendment, in addition to

aforementioned suggested provisions, a provision enabling protection

to unregistered trademarks should also be inserted which would not

only reduce the dependence on the passing off principle in

strengthening the claim of unregistered well-known marks against

dilution, it would also expand the horizons of protection by stitching

the worn out portions of the statutory blanket providing such

protection.

d) Silence of the TM Act on the aspect of trans-border reputation111 is

another cause of concern affecting well-known marks. Though judge-

made law in passing off actions has been at the forefront in protecting

trademarks with global reputation, the adequacy is still lacking and

that calls for insertion of a statutory provision which would extend the

protection to well-known marks having cross-border reputation.

Substitution of the term “well-known marks” in place of “marks

having a reputation in India" in Section 11(2) in addition to addressing

the previously mentioned discrepancy, would also enable the well-

known marks based on trans-border reputation to claim protection !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!111 Anheuser Busch v. Budejovicky Budvar [(1984) FSR 413 (CA)]; Yabushsiki Kaisha v. Toshiba Appliances [19 IPLR (1994) 79]; Calvin Klein Inc. v. Intel Apparel Syndicate [20 IPLR (1995) 83 (Cal.)]; N.R. Dongre v. Whirlpool Corporation [20 IPLR (1995) 211 (Del.)]; Kamal Trading Co. v. Gillete UK Ltd. [(1998) IPLR 135 (Bom.)]; Sakalain Meghjee v. BM House (India) [2002 (24) PTC (Del.) 207]; Milment Oftho Industries v. Allergan Inc. [2004 (28) PTC 585 (SC)]

! 52!

against dilution. The subject-matter of protection should be not the

marks with a reputation only in India but the marks with global

reputation.

e) With regard to the exception carved out in the provision under Section

159(5), the courts need to resort to purposive interpretation. Each act

of infringement gives rise to a separate cause of action. If the plaintiff

is able to prima facie establish that the defendant has, after the

aforementioned date, indulged in an act, which on its own constitutes

an act of infringement, it would give rise to a new cause of action,

independent of an already continuing cause of action, if any.

From the above suggestions, it is quite evident that the trademark legislation

in India to a considerable extent lacks the requisite mechanism of protecting

trademarks, particularly in relation to dilution, unregistered trademarks and

trans-border reputation and as depicted by the courts, more than statutory

application, it is the passing off action which has had a bigger say in

deciding cases relating to trademark infringement, be it in connection with

similar or dissimilar goods. In this regard, the TM Act is a statutory dog

lacking bite and fails to protect trademarks due to broken teeth and such a

situation calls for dental treatment in the form of amendments and judicial

clarifications, particularly with respect to dilution doctrine which would

certainly contribute to the growth of trademark jurisprudence in India.

! 53!

BIBLIOGRAPHY Statutes

1. Code of Civil Procedure, 1908

2. Federal Trademark Dilution Act, 1995

3. Lanham Act, 1946

4. Trade and Merchandise Marks Act, 1958

5. Trademark Dilution Revision Act, 2006

6. Trade Marks Act, 1999

Conventions and Treaties

1. Paris Convention, 1883

2. WTO-TRIPS Agreement, 1995

Books

1. Ashwani Kr. Bansal, Law of Trade Marks in India (Institute of

Constitutional and Parliamentary Studies, New Delhi, updated edition,

2009)

2. Deepak Gogia, Intellectual Property Law (Ashoka Law House, New

Delhi, 2010)

3. K.C. Kailasam & Ramuvedaraman, Law of Trade Marks &

Geographical Indications (LexisNexis Butterworths Wadhwa,

Nagpur, 2009)

4. Morcom, Roughton, et al., The Modern Law of Trade Marks

(LexisNexis Butterworths, New Delhi, 3rd edition, 2008)

! 54!

5. P. Narayanan, Trade Marks and Passing Off (Eastern Law House,

New Delhi, 6th edition, 2004) 6. Stephen Todd, The Law of Torts in New Zealand (Brookers,

Wellington, 2nd edition, 1997)

7. V.K. Ahuja, Law Relating to Intellectual Property Rights (LexisNexis

Butterworths, New Delhi, 2007)

8. T.R. Srinivasa Iyengar, Commentary on the Trade Marks Act

(Universal Law Publishing Co. Pvt. Ltd., New Delhi, 4th edition, 2011)

ARTICLES & ESSAYS

1. Brajendu Bhaskar, “Trademarks Dilution Doctrine: The Scenario Post

TRDA, 2005” 1 NUJS L. Rev. 637 (2008)

2. Latha R. Nair, “TRACKING THE PROTECTION OF WELL-

KNOWN MARKS IN INDIA: A BEFUDDLED PATH TO

NIRVANA?” 101 TMR 1419 (2011)

3. T.G. Agitha, “Trademark Dilution: Indian Approach” 50(3) JILI 339

(2008)

4. Vivek Kumar Chaudhary, “Protection of Well-Known Trademarks and

Weakening of Honest Concurrent User Defence” 15 JIPR 293 (2010)

WEB SOURCES

1. Chase Covello, “FAMOUS TRADEMARKS IN U.S. LAW” available

at: http://www.anticypher.net/lawresearch/famoustm10.pdf (Visited

on 16th March, 2012)

! 55!

2. Clarisa Long, “Dilution” 106(5) Col. L. Rev. 1029 (2006) available at:

papers.ssrn.com/sol3/papers.cfm%3Fabstract_id%3D942673 (Visited

on 12th March, 2012)

3. Dev Gangjee, “The Polymorphism of Trademark Dilution in India” 17

Transnational Law & Contemporary Problems 101 (2008) available

at: papers.ssrn.com/sol3/papers.cfm?abstract_id=1273711 (Visited on

12th March, 2012)

4. Frank I. Schechter “Rational Basis of Trademark Protection” 40(6)

Harv. L. Rev. 813 (1927) available at:

http://www.jstor.org/discover/10.2307/1330367?uid=3738256&uid=2

129&uid=2&uid=70&uid=4&sid=21100737655691 (Visited on 12th

March, 2012)

5. Kathleen Goodberlet, “THE TRADEMARK DILUTION REVISION

ACT OF 2006: Prospective Changes To Dilution Definition, Claim

Analyses, And Standard Of Harm” 6(2) J. High Tech L. 249 (2007)

available at:

www.law.suffolk.edu/highlights/stuorgs/jhtl/.../Goodberlet.pdf

(Visited on 12th March, 2012)

6. Rembert Meyer-Rochow, “PASSING OFF: PAST, PRESENT AND

FUTURE” 84 TMR 38 (1994) available at:

http://heinonline.org/HOL/LandingPage?collection=journals&handle=

hein.journals/thetmr84&div=12&id=&page= (Visited on 3rd April,

2012)

7. WIPO Document No. SCT/3/8 dated Oct. 7, 1999, available at:

http://www.wipo.org (Visited on 19th March, 2012)