Trademark: Infringement and Legal remedies

Author: Vrinda Sharma, Banasthali Vidyapeeth

Abstract

This article aims to provide information regarding trademark infringement regardless of whether it is registered or unregistered, and the rights associated with the trademark owner who is affected by the infringement. Trademark infringement has become very common in the global market because of competitiveness, it is used by others to create goodwill and brand value in the market. With the growth of digital platforms and global e-commerce, infringement has taken on new forms, including misuse of AI-generated products and domain name piracy. This requires frequent modifications to the interpretation and application of such laws. India's approach to intellectual property protection is strengthened by incorporating international provisions like TRIPS into domestic law.

Trademark infringement occurs when an unauthorized party uses a similar trademark in the market, which means any symbol, phrase, or words that confuse customers regarding the origin of goods and services.

This article covers essential elements of infringement, passing-off, rights of the owner, and remedies such as criminal liability, compensation, injunction, etc., given by the Trademark Act 1999. This article emphasizes safeguarding the intellectual property rights of the owner and concludes with remedies to trademark holder’s rights.

Introduction

Background

Trademark plays a crucial role in the market to identify brands of goods and services. At the international level, agreements such as the Paris Convention for the Protection of Industrial Property, 1883, and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), 1995 have been important agreements in protecting intellectual property rights and establishing a framework for standardizing protection. These conventions required countries to form domestic laws relating to intellectual property.

Before 1940, there was no law on trademarks in India. Several problems of infringement of registered and unregistered trademarks arose which were resolved under Section 54 of the Specific Relief Act, 1877 and registration was adjudicated under the Indian Registration Act 1908. The Indian Trademark Act came into effect in 1940 in order to overcome these challenges. Later, it was replaced by the Trademark Act, 1999, which allows for trademark registration, which grants the owner the legal right to use the brand solely. The Trademark Act aims to protect trademark holders, govern domain conditions, and offer remedies for the enforcement of trademark rights.

Trademarks must be protected by law to serve the purpose of identification to consumers who want to choose between various products of the same type available on the market. If trademarks are not protected, then they can be misused by an unauthorized party to create confusion among customers regarding the originality of products and services.

Research Problem

This article addressed questions like, to what extent the legal remedies are available for trademark infringement effective in protecting trademark holders, especially in cross-border.

Industrialization is important in developing a country’s economy and commercialization but it comes with side effects like infringement of the intellectual property rights of the owner. Due to industrialization and the expansion of the market-focused economy system, competitor manufacturers and sellers are now able to provide customers with a range of products in the same category. They generally vary in quality, cost, and other features, often without the user seeing any differences. consumers must be provided with the necessary guidance to enable them to decide on their options and choose among available products. As a result, the products need to be identified; it is possible with the help of a trademark. However, companies also require trademarks to personalize their goods in order to connect and interact with customers. Thus, trademarks assist their owners when it comes to marketing and selling products, and they also benefit the economy overall by assisting in the rationalization of the commercialization of products.

Purpose and Objectives

This article aims to explore trademark importance and remedies for owners of trademarks against infringement. The main objectives are to know about the following;

what is trademark infringement
What is passing off
What are the remedies provided by the Trademark Act,1999
Landmark Indian case laws relating to trademark infringement and remedies provided by the Indian judiciary.

Types of Trademark Infringement

Whether a trademark is registered or not, it is indicated by the ® for an unregistered trademark and the ™ for a registered one. Trademark infringement occurs when an unauthorized person creates a similar mark that creates confusion among customers regarding the originality of the products. There are mainly two types of infringement, namely;

Direct Infringement

It is defined under section 29 of the Trademark Act 1999, There are a few elements which is essential for a direct infringement, namely;

Use by an unauthorized person – It means when they mark a person who is not authorized by the holder of the registered trademark.
Identically similar – The mark which is used by an unauthorized person is similar to the original trademark and creates confusion among customers regarding the products.
Registered trademark – The act provides protection to the trademarks that are registered in the registry of India.
Indirect Infringement

Regarding indirect infringement, the Trademark Act contains no provisions. The international law concept gives rise to the implementation of this violation. This infringement can be divided into two categories:

Vicarious liability – According to section 114 of the Trademark Act 1999, if a company commits the infringement, then the whole company will be held liable, not only the principal infringer, except the person who satisfies that he had no intention and knowledge about the infringement.
Contributory infringement – It happens when someone directly causes another person's infringement or when someone forces another person to do the infringement.

Passing- off occurs when businesses pass-off goods and services as another person’s goods and services with the intention to confuse consumers into believing that they are getting the same quality and standard of products.

Passing-off is important to protect and safeguard the goodwill of a product or brand that is unregistered.

Although there are no provisions regarding passing off in the Trademark Act, 1999 but according to Section 27(2) action shall be taken against passing-off. There are a few elements of passing-off, namely;

Goodwill of product and service – The claimant needs to prove that there has been goodwill or reputation associated with the goods and services within the market. To prove this, the claim must be associated with logos, names, packaging, and other marks that the public knows about the goods and services of the claimant.
Misrepresentation – The defendant must copy some element of the claimant's trademark (such as product design, logo colours, packaging, etc.) or use a mark that is similar in order to commit the same type of dishonesty. The people must get confused about where the goods and services are coming from.
Damage to the goodwill – Passing-off must have caused some kind of damage to the claimant’s goodwill. This could include consumer confusion, loss in sales, depreciation of brand value etc.

Remedies

A trademark infringement may involve both civil and criminal remedies, and the plaintiff can choose to take one or both of these actions against the defendant. For the passing-off against the defendant, the common law offers civil remedies.

Civil remedies

Compensation – The court has the authority to order the defendant to pay the plaintiff money. By providing this compensation, the plaintiff seeks for a return to their pre-harm condition. It might include lost income, psychological distress, or other harm brought on by the defendant.
Accounts of profit – Any profit gained by the infringer while using the trademark of another registered owner, all the profits or certain amount in form of money will be provided to the owner of the trademark.
Destruction of goods – The court may issue an order for the destruction of all goods of the defendant which is manufactured using an unauthorised mark.
Injunction - The court has issued an injunction that prohibits the defendant from using the authorized mark. By prohibiting the defendant from using the infringed mark moving forward, the court protects the trademark owner.
Cost of proceedings – The court may order the defendant to bear the cost of proceedings of the plaintiff as compensation.

Criminal remedies

Plaintiffs can claim criminal remedies against defendants. Section 103 and 104 of the Trademark Act, 1999 provide provisions relating to criminal liability. Penalties for applying trademarks intentionally, selling items having false trademarks, and selling services with false trademarks are described in these sections.

According to these sections, if a person commits trademark infringement, he shall be punished with an imprisonment term which shall not be less than 6 months but can be extended to 3 years or with a fine which shall not be less than 50 thousand but can be extended to 2 lakh rupees.

Case laws

Starbucks Corporation v. Sardar Buksh Coffee & Co. (2018)

The plaintiff in this case was ‘Starbucks Coffee’, which is a well-known coffee brand with various outlets in every country. The defendant was ‘Sardar Buksh Coffee’ which also has various outlets in Delhi. In this case, the defendant creates confusion among customers by using a phonetically similar name and a similar logo with just reversing the Starbucks’ logo colour scheme.

The Delhi High Court held that Sardarbuksh's branding was misleadingly similar, and it ruled in favor of Starbucks. The court allowed the two current Sardar Buksh locations to remain open under the previous name, but ordered the company to rebrand its 20 future locations as "Sardarji-Bakhsh Coffee & Co."

The significance of trademark protection and the legal implications of misleading similarity under the Trademarks Act of 1999 are highlighted by this case. It emphasizes how important it is for companies to make sure their branding stands distinct in order to prevent future legal issues.

Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Limited The Apex Court held that whether the petitioner and respondent work in the same industry or produce similar products is meaningless. The type of mark (word, label, etc.), the degree of similarity, the nature of the goods, etc., are all taken into consideration.

Amritdhara Pharmacy v. Satya Deo Gupta

Amritdhara Pharmacy is a company that has been officially registered and has been utilizing the trademark "Amritdhara" for pharmaceutical products since 1901. The owner of Rup Bilas Company, Satya Deo Gupta, has been producing a similar medication called "Lakshmandhara" since 1923, with the majority of its sales taking place in Uttar Pradesh.

In this case the plaintiff established passing-off by the defendant based on the similarity of packaging and name used by the defendant. Though the trademark is not registered but court ordered in favour of the plaintiff due to his goodwill in the market.

This was the one of the leading cases on passing-off in India, which recognizes the importance of the goodwill of an unregistered trademark and provides protection to them.

Conclusion

In today's competitive business climate, trademarks are essential resources that represent a brand's identity, reputation, and goodwill. The increasing number of direct and indirect trademark infringement lawsuits shows the urgent need for strong legal protection and enforcement. Considering that both registered and unregistered trademarks are subject to misuse, as this article explains, the Trademark Act of 1999 offers a wide range of legal remedies, including both civil and criminal ones, to safeguard trademark holders' rights. Both civil remedies like injunctions and compensation, as well as criminal remedies like imprisonment and fines are used to stop infringers.

With the growth of digital platforms and global e-commerce, infringement has taken on new forms, including misuse of AI-generated products and domain name piracy. This requires constant modifications to the interpretation and application of those laws. India's position on intellectual property protection is strengthened by the incorporation of international agreements like TRIPS into domestic law.

Furthermore, the law of passing-off preserves the value of a brand’s goodwill even in unregistered cases, ensuring that businesses that have gained the trust of customers by continually offering high-quality products are not unfairly disadvantaged.The legal rules and case laws collectively strengthen trademark rights protection, encouraging fair trade practices and encouraging market confidence and innovation. To give owners strong safeguards and stop commercial abuse, trademark laws must also adapt to the constantly changing fields of technology and business.