Brand Protection in India and the USA, A Comparison

Trademark Protection in India

In India, trademark rights are legally protected by the Trademark Act, 1999 and also by the common law remedy of passing off. The Controller General of Patents, Designs and Trademarks is responsible for the administration of any rights under the Act. The 1999 Trademark Act deals with the protection, registration, and illegal use of marks. It also prescribes the protections given to the trademark holder, the penalties for infringement, the remedies for the affected party, and the means of transfer of the trademark. Both civil and criminal remedies are available against infringement and passing off under this act.

The word infringement applies to a violation of the rights of another. A trademark is infringed where it or a significantly similar mark is used illegally on products or services of a similar nature but not by the registered user. In such a case, the court will investigate whether the use of the trademark will cause the consumer any doubt over the particular brand they are buying.

According to the statute, a trademark is violated if:—

If the trademark is a replica of a few changes or modifications to a registered trademark.
Where the infringed mark has been printed or used in advertising.
Where, in the course of business, the infringed mark is used
If the mark used is identical to a licensed mark, the user is likely to be confused or fooled when choosing a product category.

In the event of a registered trademark violation, an individual can sue for damages. The following conditions must be fulfilled for filing such a suit:

The licensed owner of the trademark must be the person filing the suit (plaintiff).
The violating party (defendant) must use a label similar to that of the claimant in such a manner that it can be readily mistaken.
Of nature, any use by the defendant is not accidental.
The use of the mark by the offender must be in relation to the products or services in the course or equivalent to that to which the mark is registered.

Passing off is a tort principle used under common law for exercising rights over unregistered trademarks. In passing off, Party B misappropriates the reputation of the trademark of Party A, so that Party B misrepresents itself as being the owner of the trademark or possessing any affiliation/nexus with Party A, thus destroying Party A’s goodwill. Trademark registration is not a pre-requisite for the continuation of civil or criminal litigation against trademark violations in India.

Permanent and interim injunctions, damages or benefit accounts, the supply of the offending product for destruction and the expense of the civil proceedings are included in the relief which a court may normally award in a case for violation or passing off.

The interim injunction order can be passed either ex parte or after warning. Order for: The Interim reliefs in the action can also include:

Appointment of an Anton Pillar Order[1]-like local commissioner for the search, seizure and protection of infringing items, account books and inventory planning, etc.
Restraining the infringer from disposing with or engaging with the properties in a way that would negatively impact the right of the claimant to recover damages, costs or any monetary remedies that may potentially be granted to the complainant.

Trademark Protection in the USA

The US Trademark Act allows for a national registry scheme for the registration of a trademark that protects the holders of a federally licensed trade mark from the usage of duplicate marks if the use is likely to lead to misunderstanding among customers, or where there is a risk of dilution of a popular trade mark. For a mark to be eligible for trademark rights, two basic conditions must be fulfilled: it must be used in commerce and it must be distinctive.

A trademark is defined by the law in question as a mark used in trade or licensed with a bona fide intention to use it in trade. Where a trade mark is not in commercial use at the time of the filing of the application for registration, registration can only be allowed if the applicant has developed, in writing, a good faith plan to use the trade mark at a future date. This application must be accompanied by proof of use within a period of six months. This deadline can be extended a number of times, but each extension requires an additional fee.

The second criterion, that a trade mark be identifiable, addresses the potential of a trade mark to define and differentiate individual products as coming from one manufacturer or supplier and not from another. Where a trade mark is defined as either arbitrary/fanciful or suggestive, it shall be deemed intrinsically distinctive and the exclusive privileges to the trade mark shall be decided exclusively on the basis of the priority of use. A trademark defined as descriptive is only protectable as a trademark if, in the eyes of the consumer public, it has gained a secondary significance. In order to secure trademark rights for a personal name or a geographic term, a secondary definition is also required.

The benchmark for infringement of a trade mark is when the alleged infringement of a trade mark causes a “likelihood of confusion” amongst customers. Manufacturers would need to prove in the illegal distribution sense that third parties are inappropriately implying to customers that the goods they offer bear the same specifications and quality controls as the genuine products of the manufacturers. Traffic diversion schemes and other false websites may also contribute to liability under US trademark law; ie, corporations using the logos of others to bring attention to their own websites and merchandise. In a product analysis, for example, website owners or authors will often refuse to reveal their real affiliations and financial interests.

The three primary claims in trademark litigation are trademark infringement, unfair competition, and dilution of trademarks. Applicants may seek injunctions against any of these. Claimants can also be granted punitive relief, including damages, profits and litigation costs, in piracy, unfair competition and intentional dilution cases. However, non-intentional acts for dilution are usually limited to injunctive relief.

All in all, companies have to work to defend their names and reputations. Unauthorized vendors or other bad actors who can breach the Lanham Act or the Trademark Act must be aware of them. Although not absolutely mandatory, it is beneficial for manufacturers to register and vigorously pursue their trademarks for the better protection.

Author: Kriti Pundir, Legal Intern at PA Legal.

In case of any queries, kindly contact us here.