Trademark Litigation

Trademark Litigation

Trademark Infringement and Passing Off

Trademark Infringement in India

InfringementSection 135 of the Trade Marks Act recognizes both infringement as well as passing off actions. Violation of exclusive rights of a registered owner of a trade mark, in the absence of license or approval from the registered owner/proprietor, amounts to infringement. There are basically two types of infringement-

  1. Direct infringement[3]– When violation of a registered trade mark is done by an unauthorized individual/person, when the unauthorized person uses a mark identical, similar or deceptively similar to the registered mark and such unapproved and unauthorized use must be for the usage and propagation of products and services under the same class.
  2. Indirect Infringement- There is no direct reference to indirect infringement in the Act, although liability lies for such an indirect infringement too.
  3. Vicarious liability- In this scenario, not just the principal infringer but the whole body/entity/company would be held liable except the one who is completely without knowledge of the commission of offence. Basically, in order to hold other persons liable except the principal infringer, they must have knowledge of the infringement, they must contribute to the same, they must be deriving financial gains from such infringement.
  4. Contributory infringement– In this scenario, all the persons contributing to the infringement and its abetment are liable. As the term suggests, it is group effort and all are responsible therein.

Trademark- Passing Off in India

On the other hand, passing off is a kind of tort and cannot be initiated if the mark is unregistered. Such an action of passing off can be initiated by the owner or user of the product/service/brand against someone or some company/entity who misrepresents and misleads the public at large. “No men can have any right to represent his goods as the goods of another person”. Relief of passing off can be granted only when actual damage or fraud has been committed and proved by the aggrieved.

The purpose behind passing off action is to enforce rights over an unregistered trade mark. In order to claim the action of passing off, the aggrieved needs to pass a trinity test or needs to prove the presence of the major elements[4]

  • Reputation and goodwill
  • Misrepresentation by use of similar marks
  • Damage accrued by the aggrieved

Registration of a trademark is not a necessary to institute a civil or criminal action against violation of trademarks. Both civil action for infringement of trademark and passing off can be initiated. Moreover, infringement of trade mark comes under the purview of cognizable offences as well and hence, criminal actions may also be taken against the wrong doers.

Jurisdiction in Trademark litigation matters

The following three major factors are adhered to while deciding jurisdiction in case of trade mark infringement/passing off suit-

  • Territorial jurisdiction,
  • Pecuniary jurisdiction,
  • Subject-matter jurisdiction.

It is pertinent to mention that above all, cause of action is the factor of utmost importance. It is that one element that plays key role in deciding jurisdictional issues, cost of the suit or pecuniary value.

According to Section 134 of the Trademarks Act, 1999, one can file suit for infringement before any District/High Court having Ordinary Original Civil Jurisdiction. For passing of, jurisdiction lies with every Court which is not below a District Court.

The Hon’ble Supreme Court of India passed a landmark judgment in India Performing Rights Society Limited vs. Sanjay Dalia & Anr . emphasizing on Section 134 (2) of the Trade Mark Act, 1999 and Section 62 (2) of Copyright Act. In this case, the suit was instituted at Delhi High Court proclaiming jurisdiction based on a branch office of plaintiff at Delhi while the place of business of the Plaintiff, Defendant and the infringement took place at Mumbai. However, the Court held that:

“20. In our opinion, in a case where the cause of action has arisen at a place where the plaintiff is residing or where there are more than one such persons, any of them actually or voluntarily resides or carries on business or personally works for gain would oust the jurisdiction of other place where the cause of action has not arisen though at such a place, by virtue of having subordinate office, the plaintiff instituting a suit or other proceedings might be carrying on business or personally works for gain.”

“21. Section 134 of the Trade Marks Act has removed the embargo of suing at place of accrual of cause of action wholly or in part, with regard to a place where the plaintiff or any of them ordinarily resides, carries on business or personally works for gain. We agree to the aforesaid extent that the impediment imposed under Section 20 CPC to a plaintiff to institute a suit in a court where the defendant resides or carries on business or where the cause of action wholly or in part arises, has been removed. But the right is subject to the rider in case the plaintiff resides or has its principal place of business/carries on business or personally works for gain at a place where cause of action has also arisen, suit should be filed at that place not at other places where the plaintiff is having branch offices, etc.”

This decision was followed by Delhi High Court in the case of Ultra Home Construction Pvt. Ltd. vs. Purushottam Kumar Chaubey In this case the Court held that, Plaintiff must contest a suit for infringement at Defendant’s place of business, if Plaintiff has a secondary office at that place instead of suing at its own place of registered office or principal place of business. The Division Bench of Delhi High Court in the case of RSPL vs. Mukesh Sharma & Anr reiterated and upheld the decision of Delhi High Court in Ultra homes.

Online Jurisdiction

The Delhi High Court in the case of Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy and Anr[5] passed a landmark judgment on the issue of online jurisdiction. In this case a suit was instituted for passing off action by the Plaintiff against the Defendants for misusing the website name i.e., www.banyantree.com and www.banyantreespa.com as ‘Banyan Tree Retreat’ and www.makprojects.com/banyantree. One of the most issue was that, both the parties did not have or were situated/located within the limits of territorial jurisdiction of the Court. The Hon’ble Court held that simply accessing and using a website in Delhi or any other state would not satisfy the jurisdictional qualifications of that Court. On the contrary, it needs to be revealed that the infringer or the opposite party intentionally opted for such jurisdiction, by portraying that such use of the infringing website by the Defendants/infringers was mala fide and with the intention to extract commercial transaction and financial gains, thereby resulting in injury to the aggrieved/Plaintiff.

In the present case, the intention of the Defendant was prima facie to deceive the viewers and customers by use of the concerned website with ill-intention to extract commercial transaction, focusing on the forum state resulting in injury to the aggrieved in the forum state. Hence, the Hon’ble Court was of the view that, the aggrieved/Plaintiff needs to prove a prima facie case that the concerned website is precisely besieged at users in the forum state for commercial transactions and financial gains.

Penalties and Reliefs granted

  • Earlier only temporary or permanent injunction, damages, costs of litigation, damages, accounts of profits, destruction of inventory, goods/products and rendition of accounts was available in cases of infringement and passing off.
  • In other cases, the aggrieved may approach the Hon’ble Court for appointment of Local Commission for conduction of raid, search and seizure, to seal infringers’ property by way of Anton Piller injunction, to freeze assets, products, inventory of the defendant or infringer by way of Mareva injunction etc. As per Intellectual Property Rights (Imported Goods) Enforcement Rules, IP owners may register their rights over the concerned product or services with Customs Department and protect themselves against imports of counterfeit goods and products.
  • In the case of Cartier International AG v Gaurav Bhatia (226(2016) DLT662) the Hon’ble Delhi High Court granted the highest ever punitive damages, worth Rs 10 million, for the infringement of trademarks and selling of counterfeit luxury brands online. In another landmark case[6], the Hon’ble Court granted costs and damages to the aggrieved in a preliminary judgment. It is one of the very infrequent occurrences.
  • Generally, John Doe orders are issued in a strong prima facie cases. The Hon’ble Delhi High Court in the case of Louis Vuitton Mattetier v Aggarwal (CS (OS) 2296/2011) issued a John Doe order along with an Anton Piller order, permitting and allowing the aggrieved to conduct raids over a period of one-month, for tracing counterfeit Louis Vuitton products and goods. Such an act would enable impleadment of each party dealing with counterfeits.
  • Plea bargaining is a pretrial negotiation between the accused and the prosecution wherein the accused agrees to plead guilty in exchange for certain concessions by the prosecution. It is a bargain where a defendant pleads guilty to a lesser charge and the prosecutors in return drop more serious charges. In State v Prakash (FIR 189/05 (Del)), the Hon’ble Court settled the matter by way of a plea bargain, following which the accused parties paid a fine of $222 each.

Well-known trademark in India

According to Section (2) (1) (zg) of the Trademarks ACT, 1999, a well-known mark is defined as “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.”

A few remedies are available to owners of well-known marks for protection against infringement such as, not allowing registration of similar or deceptively marks in the first place, removal of infringing marks, punitive damages. The Hon’ble Delhi High Court in the case of Time Incorporated v. Lokesh Srivastava [2005 (30) PTC 3 (Del.)], observed that punitive as well as compensatory damages are equally important to prevent the infringers from using well-known marks and earning financial gains from the same. The Delhi High Court in the case of Exxon Mobil Corporation v. Exoncorp Private Ltd. CS (COMM) 111/2019 answered the question the whether trade mark infringement would take place or arise if the place of business and services do not match and are different. The Hon’ble Court held that, if the concerned mark is a well- known mark within the definition under Section (2) (1) (zg) of the Trademarks Act, such mark would be protected irrespective of the use of the mark for other goods and services for which it may not even be registered.

Related Articles

Territorial Jurisdiction of Delhi High Court in Trademark Infringement cases

[1] Park’N Fly, Inc.v. Dollar park and Fly,Inc. 469 U.S 189(1985)

[2]  692 F.2d 1250 –

[3] Section 29 of Trademarks Act, 1999

[4] Reckitt & Colman Products Ltd. v. Bordan Incorporation.

[5]  CS (OS) No. 894/2008

[6] Philip Morris Products SA v Sameer (Bombay) (2014(58)PTC317(Del)) and Philip Morris Products SA v Singh (Kolkata) (209(2014)DLT1 )

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