Anand Kumar & Kanupriya Sabharwal
Introduction
In a fast-evolving physical and digital marketplace, trademarks serve as silent salesmen, helping build enduring consumer trust with every interaction. They embody brand identity, communicate value and quality, and build enduring consumer trust with every interaction. In this digital age of commercialisation, brands are more than mere word or logo identifiers, as they represent trust, goodwill, and reputation. In the early years of the 21st century, brand owners took significant steps to protect their business from fly-by-night operators by seeking trademark protection and taking legal actions against trademark infringement. While brand owners adjusted themselves to the concept of infringement, Trademark Act, 1999 (“Act”), introduced the concept of well-known trademarks which are meant to protect well-known marks from trademark dilution. This concept impacted the unauthorised use of a trademark even for entirely unrelated products, which can potentially harm the brand owner. Though both concepts and statutes protect trademarks, they serve very different purposes under Indian law.
Infringement Meaning
An infringement means a violation of a law, regulation, contract, or invasion of the rights secured by patents, copyrights, and trademarks[1]. Under the Indian trademark law, as held in Ruston & Hornsby Ltd. v. Zamindara Eng. Co., (1969) 2 SCC 727, the action for infringement is a statutory right and is dependent upon the validity of the registration, subject to other restrictions laid down in the Act. The law on trademark infringement is guided by Section 29 of the Act. A trademark infringement occurs when an entity that is not a registered proprietor of a trademark uses a trademark that is identical or deceptively similar to a registered trademark in respect of similar or dissimilar goods and services without any authorization of the trademark owner or registered proprietor.
Confusion or Deception or Association Resulting in Trademark Infringement
To establish a case of trademark infringement based on confusion or association, the registered proprietor must successfully prove four essential elements: (a) the similarity or identity of the competing marks, (b) the similarity or identity of the goods or services in question, (c) use in the course of trade and (d) the likelihood of confusion, deception or association in the minds of the public. As held in JSB Cement LLP v. Assam Roofing Limited, 2017 SCC OnLine Cal 5180 (1), these requirements are cumulative, not disjunctive except in cases where both the marks and the goods/services are identical, in which even consumer confusion is presumed by law[2]. The courts have clarified that the identical character or the resemblance with both the registered mark and the nature of the goods or service covered thereunder is the first qualifying test. The next test is whether such similarity or identity is likely to cause confusion on the part of the public or an association with the registered mark.
Section 29 of the Act serves as the legal backbone for enforcing trademark protection in India. It ensures that the rights of a registered trademark owner are safeguarded against any unauthorized use that may mislead consumers regarding the source or identity of goods and services, an increasingly critical safeguard in India’s competitive, brand-driven marketplace.
Dilution Resulting in Trademark Infringement
In the context of trademark law, dilution can be understood as the unauthorized commercial use of a mark or trade name that is similar enough to a famous mark to diminish its distinctiveness or damage its reputation, even without causing consumer confusion[3]. Under the Indian trademark law, Section 29(4) of the Act offers a special layer of protection to trademarks that have built a strong reputation in India against any kind of diminution of distinctiveness or denigration of reputation. For emerging businesses, it’s a reminder that, apart from the brand registration, reputation, goodwill, and the distinctive character of the trademark equally deserve legal protection, especially against the unauthorised use in respect of dissimilar goods and services, even without having to demonstrate the likelihood of confusion or association. In Dharampal Satyapal Limited v. Suneel Kumar Rajput, 2013 SCC OnLine Del 3473 the Court held that “the legislative intent is to afford a stronger protection to a mark that has a reputation without the registered proprietor of such mark having to demonstrate the likelihood of confusion arising from the use of a similar mark in relation to dissimilar goods and services.”
In V Guard Industries Ltd. v Crompton Greeves Consumer Electricals Ltd. 2022 SCC OnLine Del 1593 : (2022) 91 PTC 214, the court held that the trademark owner must prove the following four conditions cumulatively to establish a case of trademark infringement through dilution:
- the offending mark must be identical with or similar to the registered trademark;
- the offending mark must be used in the course of trade and in relation to different goods or services;
- the registered trademark has a reputation in India; and
- the offending party’s use must be without due cause and must either take unfair advantage of, or cause detriment to, the distinctive character or reputation of the registered proprietor’s trademark
It may not always be necessary for the proprietor of a registered mark to show that it is a ‘well-known trademark’ as defined in Section 2(zg) of the Act, however, if the registered mark is a well-known trademark, it becomes easier to satisfy the ‘reputation’ requirement of Section 29(4) of the Act. In simple terms, it’s a brand so famous that the relevant public and consumers instantly associate it with a particular source, regardless of the product category.
In RPG Enterprises Limited v Riju Ghoshal and Another 2022 SCC OnLine Bom 626, the Court held that “the word ‘detriment’ (i) in the context of the ‘distinctive character’ of the mark brings in the notion of ‘dilution’ or ‘blurring’ and (ii) in the context of ‘repute’ it brings in the notion of ‘tarnishment’ and ‘degradation’. The words “takes unfair advantage” refers to ‘free-riding’ on the goodwill attached to mark which enjoys a reputation”.
Classification of Dilution
- Dilution by Tarnishment: This occurs when a well-known mark is used in a way that harms its reputation or creates a negative association. It usually involves the use of the famous or well-known trademark on inferior, offensive, or inappropriate products. For instance, the use of a well-known trademark, “Rolex”, for cheap plastic watches.
- Dilution by Blurring: This occurs when a well-known mark’s distinctiveness is weakened because it’s used on unrelated products or services. Over time, a famous or well-known trademark starts losing its unique association with the original brand.
- Dilution by Unfair Competition: The Delhi High Court in “Tata Sons Ltd. v. A.K. Chaudhary and Another 2009 SCC OnLine Del 687 ” recognised the concept of dilution of a well-known trademark by unfair competition. The Court opined that when a person uses a well-known trademark for the purposes of dilution of that trademark, such use may not cause confusion among consumers, but it takes advantage of the goodwill of the well-known trademark, which constitutes an act of unfair competition.
Our View
It’s important for businesses to understand the distinction between infringement by confusion and infringement by dilution, two pillars of trademark protection that often overlap but serve distinct purposes.
To shield and preserve the distinctive identity of a brand from blurring or degradation, it is crucial to build strong market recognition and reputation through consistent use, promotion, and vigilant enforcement. Maintaining exclusivity across categories of goods and services strengthens a brand’s position against misuse and dilution. For emerging brands, understanding this difference early helps in building and safeguarding a strong identity until the mark achieves “well-known” status.
For Indian brands contemplating expansion across sectors and borders, scaling reputation and preventing dilution are no longer theoretical and academic discussions, and instead they are strategic necessities in today’s competitive and global marketplace.
[1] Black’s Law Dictionary, 2nd Ed.
[2] Section 29(3)