WHAT LEGAL OPTIONS DO BUSINESSES HAVE IF A COMPETITOR USES A CONFUSINGLY SIMILAR BRAND NAME?

INTRODUCTION

In the constant hustle of growth, businesses adopt different strategies that leads to their rise, starting from the scratch to building up a well-known brand each step requires a lot of efforts, vision and innovation. Entrepreneurs often think creatively to stand out among public, while some resort to unfair practices such as disparaging competitors, tarnishing the image of well- known brands, or confusing public by using deceptively similar brand name, such a tactic is popularly known as Trademark infringement and is most common in the trade industry. The article while citing relevant judicial precedent explores the legal framework against such unfair tactics by interpreting provisions under the Trademarks Act,1999 that provides legal remedies in the form of both statutory and common law protection.

TRADEMARK AND ITs INFRINGEMENT

Trademark as an identity for businesses is a type of mark capable of distinguishing goods and services of one person from those of others. Trademark protection in India under the Trademarks Act,1999 is provided for the unique and distinctively created mark that can be a word mark, device mark, composite mark(word+logo) and may include the shape of goods, their packaging and combination of colors. While adopting unfair trade practice of deceptively using similar brand name does not only deceive consumers but also dilutes the distinctiveness of the established marks and leads to trademark infringement or passing off.

LEGAL PROVISIONS UNDER THE TRADEMARKS ACT, 1999

Infringement under the Trademarks Act,1999 is the statutory right while passing off is the common law remedy, however the difference between the two is that the former is for the registered trademark while the latter is for the unregistered trademark.

Section 29 - Trademark Infringement This is the principle of statutory protection. However, a trademark will be considered infringed if it is determined that:

• A mark that is identical to or deceptively similar to the registered mark is used without consent.

• The use pertains to goods/services that are the same or closely related.

• The use creates a likelihood of confusion or association with the registered mark. Section 29 also extends protection to trademark dilution - instances where the use of a well-known trademark in a dissimilar category blur or tarnishes its distinctive element.

Section 30 - Limits on the Effect of Registered Trademark: The Act also provides ample defences against acts of infringement to ensure there is fair competition. For instance, an honest use of a descriptor, or use of terms to refer to the kind, quality, or geographical origin of goods will not qualify as an act of infringement.

RECOGNITION OF PASSING OFF – COMMON LAW REMEDY

Registration provides statutory rights, but the Act also recognizes and protects the common law remedy of passing off.

Section 27(2) of the Act states: “Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof.” This shows that there is protection against unregistered trademarks. Passing off actions protects the goodwill that a business has accrued so that competitors cannot falsely represent their goods/services as those of the proprietor.

Elements in Passing Off Indian courts (in accordance with English common law) will examine the following three factors in passing off cases:

1. Goodwill: the plaintiff must prove reputation and goodwill in the mark.

2. Misrepresentation: the defendant must use a deceptively similar mark that misleads or is likely to mislead consumers.

3. Damage: the misrepresentation must cause or be likely to cause damage to the goodwill of the plaintiff.

STEP-BY-STEP GUIDE TO OBTAINING REMEDIES FOR TRADEMARK INFRINGEMENT

The Trade Marks Act 1999 provides in statutory remedies to protect businesses from infringement. These remedies will fall under the categories of civil actions or criminal actions. The procedure usually involves:

STEP 1: FILING A SUIT FOR CIVIL REMEDIES

Under Section 134 of the Trade Marks Act 1999, the proprietor of a registered trademark is entitled to institute a suit for infringement in any District Court having jurisdiction. The Act also permits the plaintiff to institute a suit in the place where he resides or carries on business, even though the defendant does not reside or carry on business in that jurisdiction. Once the suit is initiated,

Section 135 of the Act allows the Court to grant relief including: Injunctions (temporary or permanent) preventing the infringer from using the deceptively similar mark. Damages or account of profits, which means the infringer may be ordered to pay damages for the loss caused by the infringement or give back the unlawful profits made. Delivery-up of infringing goods, labels and packaging which are the subject matter of the infringement to be destroyed or erased. Thus, civil remedies seek to prevent further infringement and compensate in the event of infringement.

STEP 2: LAUNCHING CRIMINAL PROCEEDINGS

In addition to civil remedies, the Act also criminalizes trademark infringement, thereby providing a deterrent against counterfeiters and intentional users.

Section 103 of the Trade Marks Act, 1999 penalizes the use of a false trademark, the use of a false description of goods, or use leading to a false indication of origin. The punishment provided is imprisonment for a term of not less than six months (which can be extended to three years) and a fine of not less than ₹50,000 (which can be extended to ₹2,00,000).

Section 104 provides for similar punishment for the sale of goods or services bearing false trademarks.

Section 105 establishes offences by companies and fixes liability on persons responsible for the conduct of the company's business.

Criminal action is generally instituted by way of a criminal complaint before the Magistrate or by delegating the authority of raids to the enforcement authorities for raiding the properties on direction of a Magistrate, after obtaining a search warrant.

STEP 3: PARALLEL/SIMULTANEOUS MEASURES

Since both civil and criminal remedies exist, businesses tend to take measures on a parallel basis—such as seeking injunctions and damages and also filing criminal complaints to provide quick restraining resolutions for counterfeit behaviour/actions.

This step-wise statutory mechanism ensures that a business is not only compensated and provided with preventative remedies but also provides deterrence for infringing through criminal prosecution.

CONCLUSION

The use of confusingly similar brand names undermines not only business goodwill but also consumer trust. Indian law, through the Trade Marks Act, 1999 and judicial precedents, provides a great mechanism to counter such practices. Through statutory remedies such as injunctions and damages as well as the common law remedy of passing off, businesses have robust mechanisms to safeguard their brand identity. In summary, careful enforcement and proactive engagement in the judicial process will continue to initiate that trademarks serve their intended purpose: distinguishing one business to another in the marketplace.