Recent trends of the Indian Courts in deciding Trade Mark infringement cases Introduction A trademark is one of the elements

of Intellectual Property Rights. It is a distinctive mark, sign or indicator of some kind which is used by an individual, business organization or any other legal entity to identify uniquely and distinguish the source of its products and/or services from those of other entities in the market for the benefit of the consumers. It is represented by (if registered under the Trade Marks Act, 1999) or (If not registered or still undergoing the process of registration.) As per section 2(m) of the Trade Marks Act, 1999 (further referred to as the Act) "mark" includes a device, brand, heading, lable, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof.1 It is but obvious that if goodwill and reputation of a product or service is contained in its trade mark to the effect that a consumer would be able to identify the goods through that medium, infringement of such trade marks in order to gain wrongfully by deceiving the consumers of the reputed goods or services into buying or availing the services of the other product or services is bound to happen. This not only reduces the clientage of the product or services the trade mark of which was infringed, but also affects the reputation as the quality of the deceiving goods is not as high as the original goods or services. Trademark infringement is a violation of the exclusive rights of a trade mark owner. The use of a trademark by any person not authorised to use the same through licensing or any other such agreement amounts to infringement. Infringement may occur when one party, the "infringer", uses a trademark which is identical or confusingly similar to a trademark owned by another party, in relation to products or services which are identical or similar to the products or services which the registration covers. An owner of a trademark may commence legal proceedings against a party which infringes its registration. What amounts to infringement of a trademark has been discussed under section 29 of the Act. Against such an infringement the owner of a registered trademark may commence legal proceedings to prevent unauthorized use of that trademark. However, registration is not
1

Trade Marks Act 1999

required. The owner of a common law trademark may also file suit, but an unregistered mark may be protected only within the geographical area within which it has been used or in geographical areas into which it may be reasonably expected to expand. Two types of remedies are available to the owner of a trademark for unauthorized use of his or her mark or its imitation by a third party. These remedies are:

an action for infringement' in case of a registered trademark; and an action for passing off' in the case of an unregistered trademark

While former is a statutory remedy, the latter is a common law remedy. In an action involving infringement or passing off, a court may grant relief of injunction and/or monetary compensation for damages for loss of business and/or confiscation/destruction of infringing labels and tags etc. Although registration of trademark is prima facie an evidence of validity of a trademark, yet the registration can not upstage a prior consistent user of trademark, for the rule is priority in adoption prevails over priority in registration`. Courts always have a trend in a particular time phase to deal with cases of a certain kind. These trends come up owing to the changing times and needs of the society. In the recent times we see a trend being followed by the courts of India where they have become proplaintiff, especially with respect to such cases of trademark infringement where the defense of honest concurrent user is taken. Another area where a pattern or trend has been set is in the awarding of punitive damages to act as a deterrent. These shall be discussed in detail in this paper.

Punitive damages Relief in the form of damages is one of the remedies available in claims of tortuous liabilities. Damages are awarded to the aggrieved party as a compensation for the wrong done. The concept behind awarding damages is that the aggrieved party should be put in as nearly as the same position had the wrong not been done and the party not have gone through loses etc Damages are mainly remedial rather than punitive in nature, but in some cases punitive damages are awarded over and above the compensatory damages. Accordingly there are three types of damages-(a) compensatory damages; (b) nominal damages; and (c) punitive damages. Punitive damages are awarded to the aggrieved party when the defendants conduct is willful, malicious and oppressive. The award of punitive damages is at the discretion of the courts. Award of damages as a relief in trade mark infringement, has increasingly assumed importance in the modernized economies of the world; though grant of punitive damages is more recent. Initially, in order to restrain infringers, the courts usually granted injunction and in rare cases, granted damages. However, with increasing instances of piracy and growth of counterfeit goods, the courts have come to realize that awarding punitive damages maybe a necessary deterrent to protect the interest of trade mark holders. The Delhi High Court, in a decision dated January 3, 2005, perhaps for the very first time, granted punitive damages for infringement of the trademark TIME. In this case Time Incorporated v. Lokesh Srivastava2 the Court awarded the plaintiff Rs. 5 Lakhs for loss of reputation plus another Rs. 5 Lakhs as punitive damages including interest; the total damages awarded being Rs. 16 Lakhs. The Court drew a distinction between compensatory and punitive damages and observed that punitive damages need to be awarded in this case because not only did the plaintiff suffer due to infringement but the readers of the defendants magazine also suffered. They were deceived because they purchased a magazine believing it to be published by the plaintiff. The court observed
2

2005 (30) PTC 3 [Del]

that the time was ripe to award damages with a view to discourage lawbreakers. The court also observed that punitive damages should be penal in nature with the quantum being dependant on the flagrancy of infringement. In this case, the defendants infringed the trademark 'TIME ASIA' owned by Time Warner Incorporation. The defendants had started printing, publishing and distributing for sale TIME ASIA SANSKARAN by using the words now in Hindi also a News Magazine of International Standards. An ex parte decree of permanent injunction and punitive damages were awarded to the plaintiff. The court held that punitive damages need to be granted to discourage and dishearten law breakers who indulge in violations with impunity. Though this was a decision in which the defendant did not contest the matter, it was an indicator that Indian courts were increasingly showing a penchant to grant damages in favour of the intellectual property rights owners. Further in the year 2006 in the case Microsoft Corporation v. Mr. Rajendra Pawar3 , the court while addressing this issue again discussed Mathias v. Accor Economy Lodging, Inc.4 in which the Delhi High Court while elucidating the factors underlying the grant of punitive damages, observed that one of the functions of punitive damages is to relieve the pressure on an overloaded criminal justice system by providing a civil alternative to criminal prosecution of minor crimes. It was further observed that the award of punitive damages serves the additional purpose of limiting the defendants ability to profit from his fraud by escaping detection and prosecution. In Microsoft Corporation v. Deepak Rawal5 the court once again discussed punitive damages and said that the justification for award of compensatory damages is to make up for the loss suffered by the plaintiff and the rationale behind granting punitive damages is to deter a wrong doer and the like-minded from indulging in such unlawful activities. This is more so when an action has criminal propensity.

CS (OS) No. 530 of 2003 347 F.3d 672 (7th Cir. 2003) MIPR 2007 (1) 72

Similar to this is the ruling in the case Hero Honda Motors Ltd. V. Shree Assuramjee Scooters
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where once again following from the Time Incorporated case the court held

that time had come when the Courts dealing with actions for infringement of trade marks, copy rights, patents, etc. should not only grant compensatory damages but award punitive damages also with a view to discourage and dishearten law breakers who indulge in violations with impunity out of lust for money so that they realized that in case they were caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them. Similar to these cases was the view held in the case The Himalaya Drug Company v. Sumit7 which was also discussed in a 2007 case, LDS Lal v. Das8 in which punitive damages to the tune of $55,555 were awarded along with compensatory damages of the same amount. Following this trend of awarding punitive damages, in Hilton International Company v. Kumar9 the court not only restrained the defendant from using the trademark Hilten with respect to his hotel business permanently but granted $58,975 to the plaintiff as punitive damages. Court followed the precedent laid down in Time Incorporated judgment in the 2009 case of St. Ives Laboratories INC. v. Sunny Bakshi and Anr10 and held that where infringement was found, punitive damages should follow to discourage such law breakers. Also in Sasken Communication Technologies Ltd. V. Anupam Aggarwal & Ors11 the Time Incorporated case was followed and a sum of Rs. 2 lac was awarded as punitive damages.

2006 (32) PTC 117 (Del) 2006 (32) PTC 112 [Del]

8 9

2007 (35) PTC 693 [Del] (Suit 2015/2003): also se Cartier International BV v. M/s Cartier 10 2009 (41) PTC 213 [Del]
11

C.S.[OS] No. 1119/2007

Further the punitive damages principle was incorporated by the courts in the recent cases like Cartier v Cartier Enterprises12, Microsoft Corporation v K Mayuri.13 In 2011 one such case that came up involved the famous MDH Spices. The case titled M/S Mahashiyan di Hatti Ltd. v. Mr. Raj Niwas14, proprietor of MHS was decided on May 4th, 2011 where the Court held that: the Court needs to take note of the fact that a lot of energy and resources are spent in litigating against those who infringe the trademark and copyright of others and try to encash upon the goodwill and reputation of other brands by passing off their goods and/or services as those of that well known brand. If punitive damages are not awarded in such cases, it would only encourage unscrupulous persons who actuated by dishonest intention, use the well-reputed trademark of another person, so as to encash on the goodwill and reputation which that mark enjoys in the market, with impunity, and then avoid payment of damages by remaining absent from the Court, thereby depriving the plaintiff an opportunity to establish actual profit earned by him from use of the infringing mark, which can be computed only on the basis of his account books. This would, therefore, amount to putting premium on dishonesty and give an unfair advantage to an unscrupulous infringer over those who have a bona fide defense to make and therefore come forward to contest the suit and place their case before the Court. In this case, punitive damages to the tune of Rs 1 lakh were awarded in favour of the plaintiff along with an order restraining the defendants from manufacturing, selling or marketing any spices or condiments using the impugned logo MHS or any other trademark which is identical or deceptively similar to the registered logo trademark MDH of the plaintiff. Thus, it can be safely concluded from a close analysis of the abovementioned judgments that the trend that the courts have adopted to award punitive damages is in order to deter such infringements from happening and so that the infringers do not gain wrongfully out of it. This mechanism has undoubtedly, as mentioned already, relieved the criminal law from dealing with such issues by letting the civil courts take the matter into their own
12

13

(CS (OS) 1208/2003) (unreported, CS (OS) 1027/2005) CS(OS) No. 326/2009

14

hands and rightly so. This is an achievement more so when the concept of punitive damages is fairly new and was rarely used, but by the incorporation of which now, such cases should and have created a fear in minds of such culprits which would deter them from going against the laws for their wrongful gains. The IP sector has unanimously supported the paradigm shift in the judiciarys approach towards damages in IP rights matters, as it looks set to usher in a more favourable legal environment for the creation, promotion and protection of IP rights in India.15

Honest concurrent user- a weak defense now As the court decisions have acquired a distinctive path with regard to awarding of punitive damages in trademark infringement cases in India, similarly when it comes to defense of honest concurrent user being taken by either of the parties in a case involving trade mark infringement, the courts have taken a sharp turn from the earlier trend of accepting this defense with open arms and very little obstruction as compared to the current times. Section 12 of the Act reads: 12. Registration in the case of honest concurrent use, etc.In the case of honest concurrent use or of other special circumstances which in the opinion of the Registrar, make it proper so to do, he may permit the registration by more than one proprietor of the trade marks which are identical or similar (whether any such trade mark is already registered or not ) in respect of the same or similar goods or services, subject to such conditions and limitations, if any, as the Registrar may think fit to impose. Before beginning the massacre of the path from which the trend has been acquired subsequently, it would be of great worth to note that the defense of honest concurrent user came into being through two cases. In 1861, in the case of Dent v. Turpin16, it was
15

Pravin Anand & Sumeera Raheja, India- The changing face of intellectual property, (Building and enforcing intellectual property value 2008) < http://www.buildingipvalue.com/08_AP/203-206Anand.pdf> 16 (1861)2 J & H 139 (70) ER 1003

determined that two users of a mark that had been derived from a common predecessor had a separate right to obtain an injunction against a third party from using the same mark. Further in the case Southorn v. Reynolds17, the Dent case was followed to come to a conclusion on very similar facts. However, it should be kept in mind that neither of these two cases was related to a dispute dealing with concurrent users. The underlying objective of the courts in these two cases was to restrain a person from misrepresenting his goods as those of another. To have a successful claim in case of honest concurrent user 5 essentials were laid down in the case John Fitton & Co18.: (a) the extent of use in time and quantity and in area of the trade. (b) The degree of confusion likely to ensue from the resemblance of the marks which is to a large extent indicative of the measure of public inconvenience. (c) The honesty of the concurrent use (d) Whether any instances of confusion have in fact been proved, and (e) The relative inconvenience which would be caused if the mark were registered, subject if necessary to any conditions or limitations It is on the lines of this above mentioned rationale that section 12 of the Act, as noted above, stands. If application for such a trade mark comes to the Registrar, he is not obliged to register such an honest concurrent user; rather it depends on his subjective discretion. The Indian case in which law pertaining to honest concurrent user was laid down is Kores (India) Ltd. v. M/s Khoday Eshwarsa & Son19. This case was related to section 12(3) of the Trade Marks and Merchandise Act of 1958, which is ejusdem generic with the section 12 of the 1999 Act. Here, it was held that certain facts were required to be taken cognizance of while determining the authenticity of the registration under the abovementioned provision. These are as follows: (a) Honesty of the concurrent user (b) The quantum of concurrent use of trade mark shown by the petitioners having regard to the duration, area and volume of trade and to the goods concerned.
17 18

(1865) 12 LT 75 (1949) 66 RPC 110,112 (Reg) 19 (1984) Arb LR 213 (Bom)

(c) The chances of confusion arising from the similarity of the trade marks of the applicants and opponents, as a measure of public interest or public inconvenience. (d) Whether any instances of confusion have in fact been proved, and (e) The relative inconvenience that maybe caused to the parties concerned.20 These, it is worth making note of, are extremely similar, almost identical to the guidelines given in the John Fitton case21. An instance when the defense of honest concurrent user was allowed was the case of Lowenbrau AG & Anr v. Jagpin Breweries & Anr22. In this case the plaintiffs and the defendants both incorporated in Germany were using the term Lowenbrau for their beer in India. Literally the term Lowenbrau means lions drink and it was proved this word was being used for a substantial time by many breweries for their beer back in Germany, thus making it synonymous with beer from German source. Also, the fact that the plaintiff hadnt pursued any legal action against the defendants for a long time as both were involved and busy with their business in other countries as well. It was a perfect case of the word Lowenbrau having become public juris or generic term and acceptance of the same. Along with this taking the sales figures of the defendants business the court did not think fit to grant injunction in favour of the plaintiffs thus allowing the defense of honest concurrent user and along with damages to the tune of Rs. 20,000. Following on from thereon however, elements of public interest and likelihood of confusion were given importance while concluding whether the defense should be allowed or not. In Dalip Chand Aggarwal v. Escorts23the court held that it was not necessary for the applicants trade to be larger than that of the opponent in order to get the trade mark registered under honest concurrent user bracket but factors such as extent of applicants business and that of opponents business interest along with public interest are necessary factors to determine the registrability of applicants trade mark.

20 21

Ibid (1949) 66 RPC 110,112 (Reg) 22 IA Nos 11355/207 and 13772/2007 in CS(OS) No. 1810 of 2007, Delhi High Court (14 January 2009)
23

AIR 1981 Del 150

Further in 1994, owing to a new amendment to the Trade Marks Act, the preservation of the defense of honest concurrent user got even more diluted as then the position which stood was that a proprietor of an earlier mark could oppose the registration of the mark only in the opposition proceedings. Soon after this, in the Roadrunner case it was held that when an earlier proprietor of the mark opposes the registration of the mark during the opposition proceedings then the Registrar is required to reject the application. In Re Majestic Distilling Co.24 case, Majestic pleaded that they had used the trademark prior to other companies like the mark owners of Red Bull and that hence they should be allowed to manufacture tequila. The court rejected their contention on the grounds that it would cause confusion in the minds of the public. Once again in the year 2004, in the case Franco Indian Research Pvt. Ltd. v. Unichem Laboratories Ltd.25 the court held, Even where the adoption, is honest and bona fide, but if it is likely to cause deception, then in my opinion, that the fact that the adoption was bona fide and honest would not come in the way of the Court granting temporary injunction in favour of the plaintiffs to prevent possibility of deception and/or confusion. Increasing role of transborder reputation and spill-over effect have also diluted the use of the honest concurrent user defense. In the case of Indian Shaving Products Ltd. v. Gift Pack26 the court while loking at the advancement of technology and fast access to information, said that intrinsic worth, reputation and value of goods spread like wild fire to every nook and corner of the world through magazines, telephones, newspaper, television, etc. Also that India was that time soon to be a part of the World Intellectual Property Organizations Madrid System which would enable the owners of registered trade marks to protect their brands in member countries. This implies that the courts would require satisfactory evidence to prove the honesty of the concurrent user and would accept the contention of a reasonably conscious innocent person as opposed to that of someone careless/ignorant/in bad faith. Hence, the test to determine the honesty of a trader would be objective in the sense that he would be expected to know of the well

24 25

315 F 3d 1311 (2003) 2005 (30) PTC 131 Bom 26 (1998) PTC 698 [Del]

known marks/brands in the market before choosing his own, limiting the scope of the defense of honest concurrent user once again. This leads us to a conclusion that those traders who would choose a unique name, or invent a name etc for a mark to be registered would have a greater protection of their intellectual property as in such a case it would take a lot for the defendant to prove his honesty in adopting the said mark or give a satisfactory reasoning in choice of adoption of the same mark. In Rainforest Caf Inc. v. Rainforest & Ors27the court recognized the uniqueness in the name of this American Restaurant characterized by an ambience of rainforest with flora and fauna and prohibited the defendants from using the same theme and name. Further in the case Mc Cain International Ltd. v. Country foods Ltd28. it was held that while a descriptive name does not signify the source of goods but nature of goods, and a fancy name on the other hand signifies a single source of goods, it is difficult for the defendant to copy the fancy name without committing the wrong of passing off. On a close scrutiny we realise that the attitude or trend of the courts in dealing with such cases has been pro-plaintiff but the findings of an empirical investigation undertaken by a student of WBNUJS clearly excavates the truth in this matter which re-affirms the conclusion taken by analyzing the case-laws. As per the investigation (the base year being 1976) out of all the cases reported in 1976, 32% were adjudged in favour of the plaintiff and 68% in favour of the defendants. In the years 1984-1986 the percentage of cases adjudged in favour of plaintiffs and defendants were 64.07% and 35.93% respectively. Further in the years 1994-1996 the ratio of cases adjudged in favour of plaintiff to those of the defendants was 56.11% to 43.89% and in the years 2004-2006, 56% to 44%. The trend appears to show the weakness in the defense of honest concurrent user over time. However, as we would have it, there is an exception to this trend that can be seen in the rulings of the court in cases involving adoption of a trademark regarding educational institutions. For example in the case Goenka Institute of Education and Research v.

27 28

(2001) PTC 353 (1982) PTC 156 (CA)

Anjani Kumar Goenka and Anr29 the court upheld the honest concurrent user defense and directed the parties to give additional information and disclaimers so that students or general public dont get confused in thinking that both the institutes originate from the same source. It appears to be that the law has come to such a point where a trademark owner can oppose a deceptively similar trademark even at the stage of the latters registration. And the amount of publicity a trademark has goes a long way in deciding a matter in its favour or otherwise. Also, it can be safely concluded that a traders smartness would reflect in the mark chosen, as fancy marks as has been mentioned earlier as well acquire greater protection due to their uniqueness as opposed to descriptive or otherwise deceptively similar names. And this is owing to the massive advancements in technology as well that the defense of honest concurrent user has negligible value now as in this era of the world being flat, it is very unlikely that a trader would have not heard of a mark belonging to the market which he trades in so as to make him a loser in case of ignorance if he adopts the same or mark of a similar nature honestly. Conclusion Trends of the court help us in discerning and in a way predicting the outcome of a certain situation or a case with similar facts in hand. Going by the above two areas of trends of the court that have been discussed it would be correct to come to the inference that on the one hand where the idea of awarding punitive damages is becoming a more used act, keeping in mind the deterring effect it has on law breakers, on the other hand, owing to the technological advancements as mentioned above the admissibility or acceptance of the defense of honest concurrent user is diminishing to a great deal and rightly so. It is correctly said that ignorance can be no defense and hence using a deceptively similar mark to a prior trade mark would attract the judgment going against the person. I opine that the attitude of the courts that have been adopted recently in the two above discussed situations have been very correct as they are in consonance with the need of the hour. Such flexibilities undoubtedly let the judiciary run its course in such a manner so as to give best of what is expected of it. Law and order being a major area that needs to be
29

(2009) 40 PTC 393 [Del]

focused on, and the growing speed of intellectual property rights, the awareness and the claims and disputes, it is but natural that there are those who would want to take advantage of certain situations to gain wrongfully out of them, but such constant checks and deterrents through legislations and more importantly by the judiciary help the society build in a positive manner for a better tomorrow. Bibliography Trade Marks Act 1999 Pravin Anand & Sumeera Raheja, India- The changing face of intellectual property, (Building and enforcing intellectual property value 2008) < http://www.buildingipvalue.com/08_AP/203-206Anand.pdf> Astha Negi & Bharat Jyoti Thakuria, Principles Governing Damages in Trademark Infirngement, (Journal of Intellectual Property Rights, Vol 15, September 379.pdf Prakruti Gowda, Report on NUJS Event: Injunctions v. Damages in IP Cases by Justice Sikri http://spicyipindia.blogspot.com/2009/02/report-on-nujs-eventinjunctions-v.html Subhojyoti Acharya, Trade Mark Law in India & Its Violation an Analytical Study Anoop <http://www.articlesbase.com/intellectual-property-articles/trade-markNarayan, A changing IP environment in India law-in-india-its-violation-an-analytical-study-543492.html#ixzz1NvPsScVS> http://www.majmudarindia.com/pdf/IP%20environment%20in%20India-%20an %20overview.pdf Vivek Kumar Choudhary, Protection of Well Known Trademarks and Weakening of Honest Concurrent User Defense (Journal of Intellectual Property Rights, 301.pdf Vol 15, July 2010, pg 293-301) http://nopr.niscair.res.in/bitstream/123456789/10008/1/JIPR%2015(4)%202932010, pg 374-379) http://nopr.niscair.res.in/bitstream/123456789/10213/1/JIPR%2015(5)%20374-