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The Trademark Act of 1999 was enacted with the goal of updating the legislation to reflect recent changes in trading and commercial activities, fast globalisation, and harmonisation with international trade rules.
The Trademark Act of 1999, Section 2 (zb), defines a “trade mark” as “a mark capable of being represented graphically and capable of differentiating one person’s goods or services from those of others, and may include the shape of goods, their packaging, and colour combinations…”
In addition, Section 2(m) of the Act defined a mark as a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging, or combination of colours, or any combination thereof.
Essential Ingredients for Trademark Registration
- Mark must be capable of being represented graphically: Section 2(1) (k) of the Trademark Rules, 2007 defines graphical representation as a representation of a trademark for goods or services that is represented or capable of being represented in paper form, including representation in digitised form. A trademark’s graphical representation also includes the shape of items, their packaging, colour combinations, and so on. This important requirement for qualification as a legal trademark simply means that the mark must be able to be physically registered on the register and published in the Journal.
- Capable of distinguishing the goods and services of one proprietor from those of others: The term “trade mark” is defined in Section 2(1)(zb) of the 1999 Act as a mark “capable of distinguishing one person’s goods or services from those of another.” As a result, the use of a mark that is incapable of identifying the goods of the trade mark owner would not be eligible for protection under the Act. This trademark requirement essentially states that a trademark must be distinctive, i.e., it must not be devoid of a distinctive character.
In the case of Shakti Vikas Sansthan v. Ayurved Vikas Sansthan, the court held that When assessing whether a mark is distinctive, it must be determined whether the mark has a direct and close relationship to the nature and quality of the applicant’s goods. The term ‘distinctive’ means distinguishing a particular person’s goods from somebody else’s goods-not a quality attributed to the particular article but distinctive in that it means it is a manufacture of his as distinguished from somebody else. The manufacturer may or may not be new, but that is the sort of distinction contemplated by the Statute.
Absolute Grounds of Refusal
Section 9 of the Trademark Act, 1999 enumerates grounds on which a trademark registration can be absolutely refused. The Act provides that following marks can be refused:
- Marks that are devoid of any distinctive character;
- Marks which serve to designate kind, quality, intended purpose, values, geographical origin or the time of production of goods;
- Marks which have become customary in the current language or in the established practices of trade.
If the mark has gained distinctive character or is a well-known mark prior to the date of trademark application, it will not be refused registration.
- Marks that may cause deception or confusion in public;
- Mark comprises of matter that is likely to religious sentiments any class of people;
- Mark comprises of scandalous or obscene matter;
- Mark is prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950;
- If the mark consists of shape of goods which results from the nature of the goods themselves;
- Mark consists of shape of goods which is necessary to obtain a technical result;
- Mark consists of the shape of goods which constitutes substantial value to the goods.
Relative Grounds of Refusal
Section 11 states that a mark may not be registered if the following conditions are met:
- If the mark is likely to generate confusion among the public, i.e., if it is likely to be confused with an earlier trademark;
- If the mark is identical to a well-known trademark in India, and use of the later mark could harm the well-known trademark’s unique character;
- If the mark’s use in India is likely to be prohibited by passing off or copyright laws.
The rule also states that denial will not be justified if the goods are of different description, however registration may be refused if the mark is likely to be deceptive or cause confusion.
Infringement of Trademark
Infringement of an unregistered trademark is prohibited under the Act, but passing off actions in this respect are not barred under Section 27. Section 28 gives the owner of a properly registered trademark the exclusive right to use the trademark in connection with the products or services for which it was registered, as well as the ability to sue for trademark infringement. In Section 29, the term “infringement” is defined as follows:
- The defendants’ mark is identical to, or deceptively similar to, the plaintiff’s trademark and is used in connection with goods or services for which the trademark is registered” [Section 29(1)]
- When the defendant’s trademark is identical to the plaintiff’s trademark and the defendant’s goods or services are sufficiently similar to the plaintiff’s that they are likely to cause confusion or association with the registered trademark” [Section 29(2)(a)]
- Where the disputed trademark is confusingly similar to the registered trademark and the defendant’s goods or services are identical to the plaintiff’s, or so similar as to cause confusion, or have an association with the plaintiff’s trademark [Section 29(2)(b)]
- if the defendant’s registered mark and goods or services are identical to those of the plaintiff, causing confusion or having an association with the plaintiff’s trademark [Section 29(2)(c)] (in which case Section 29(3) creates a presumptive fiction of likelihood to cause confusion on the part of the public)
- “where the defendants’ mark, though identical or similar to the plaintiff’s registered trademark, is used in relation to goods or services that are not similar to those of the plaintiff, if the plaintiff’s registered trademark has a reputation in India and use of the defendants’ mark without due cause takes unfair advantage of, or is detrimental to, the plaintiff’s distinctive character or repute.
Defence of Fair Use in case of Infringement Suit:
As already mentioned a registered “trademark” gives its owner a negative right to prevent others from adopting, using, or registering a trademark that is identical or deceptively similar to theirs. However, such a right does not exist in its whole, and it is subject to the exception of “fair use.” Section 30 of the Trademarks Act of 1999 encapsulates the idea of “fair use”.
This is an affirmative defence to an allegation of trademark infringement brought by the owner of a registered trademark. Section 30(1) of the Act, in particular, establishes the following broad conditions:
a) where the use is in conformity with fair industrial or commercial practises
b) when the use does not take unfair advantage of or detract from the distinctive character of the mark.
‘Fair use’ of a trademark by any party, other than the proprietor, may be broadly categorized into –Descriptive and Nominative Fair Use.
Descriptive Fair Use
Under Section 30(2)(a) of the Act, it relates to the use of a registered trademark in a descriptive manner, i.e. in relation to goods or services, to indicate the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or rendering of services, or other characteristics of goods or services.
Nominative Fair Use
In today’s competitive global environment, we frequently see trademarks being used by third parties on a variety of platforms, including ad campaigns, parodies, comparative product marketing, media, and so on, all under the guise of “nominative fair use.”
Nominative fair use by a third party does not qualify as trademark infringement under Section 30(2)(d) of the Trade Marks Act, 1999, as long as neither the purpose nor the effect of the use of the mark produces any confusion as to trade origin. In the simplest terms, nominative fair use of a trademark is a legal doctrine that serves as a defence in certain sorts of trademark infringement circumstances, such as when a registered trademark is used to allude to the mark owner’s goods or services by someone else. Because it “names” the true owner of the mark, this use is considered nominative. Furthermore, certain services are offered for specific products, and in order to expose the services to the market, the brand of a third-party product for which the service is supplied must be used. In these instances, the registered trademark is used by a third party to identify the registered trademark’s proprietor’s product in which the third party’s product is to be utilised.
For example, an electronics business may advertise that it sells and repairs Samsung items, but it must guarantee that the general public does not get the notion that it is an official Samsung retailer or that it has any link or sponsorship with Samsung. The user merely needs to show that it exclusively used the trademark to refer to the trademark owner’s goods or services, after which the burden of proof shifts to the trademark owner to show that the claimed use caused public misunderstanding or association.
Origin of the Doctrine
The United States Court of Appeals for the Ninth Circuit first used the nominative use doctrine in the case of New Kids on the Block v. News America Publishing, Inc. In this case, the defendant conducted a poll using the name of a well-known singer. The musician has launched a lawsuit against the newspaper for infringement. The court looked at the defendant’s “New Kids on the Block survey” and determined that there was no way to ask individuals their thoughts on the band without mentioning its identity. Similarly, in Playboy Enterprises, Inc. v. Welles, the trademark owner sued Playboy Playmate Terri Welles for infringement after she used the trademark “Playmate of the Year” as metatags on her website. The court ruled that the defendant must use the trademark on her website to show that she has been awarded the title “Playmate of the Year” by the trademark proprietor.
The third circuit court of the United States recently ruled in Century 21 Real Estate v. Lendingtree, Inc. that “many variables previously considered in a likelihood of confusion analysis were extraneous in circumstances of nominative fair use,” and that only four considerations were required to be examined:
- degree of consumer care;
- length of time defendant has used plaintiff’s mark without evidence of actual confusion;
- intent of the defendant in adopting the mark; and
- evidence of actual confusion.
After considering these considerations, the next step was to determine whether the defendant’s usage constituted nominative fair use by looking at:
- if “use of plaintiff’s mark is essential to describe both plaintiff’s product or service and defendant’s product or service,” i.e., whether defendant’s need to use plaintiff’s mark to describe its own products is examined;
- whether the defendant uses “only as much of the plaintiff’s mark as is required to characterise plaintiff’s products or services;” and
- Because the defendant may have a relationship with plaintiff that is erroneously depicted by defendant’s use of plaintiff’s name, the court must decide whether “defendant’s conduct or language reflects the real and accurate link between plaintiff and defendant’s products or services.”
These are the key considerations in determining whether a third-use party’s of a registered brand qualifies as a nominative fair use. The idea of nominative fair use must be applied with extreme caution in order to distinguish circumstances in which a registered brand is utilised solely to take unfair advantage of its established reputation.
Indian Legal Scenario
Under Section 30 (2)(d) of the Trademark Act, 1999 it is provided that a nominative fair use of a trademark by a third party is not an infringement of a registered trademark. Section 30 (2)(d) provides that: “the use of a trade mark by a person in relation to goods adapted to form part of, or to be accessory to, other goods or services in relation to which the trade mark has been used without infringement of the right given by registration under this Act might for the time being be so used, if the use of the trade mark is reasonably necessary in order to indicate that the goods or services are so adapted, and neither the purpose nor the effect of the use of the trade mark is to indicate, otherwise than in accordance with the fact, a connection in the course of trade between any person and the goods or services, as the case may be;”
According to this section, a use of a registered trademark is not considered infringement if it is reasonably necessary in relation to genuine spare parts or accessories adapted to form part of the defendant goods, and the purpose or effect of the use of the mark is not to cause any confusion as to trade origin.
If a particular piece of machinery or some other manufacture or goods have become known with the consent of the proprietor under the name of the trademark of which the owner or maker of the goods is the proprietor, then it is not an infringement of the trademark so to describe the goods or the particular piece of machinery, no it is an offence so to describe the goods which are adopted to form part of or to be accessory to the other goods in respect of which the name has become recognized as the name of the particular proprietor’s goods.
In Consim Info Pvt. Ltd vs Google India Pvt. Ltd, the Madras High Court relied on two Ninth Circuit decisions to interpret the meaning of the words ‘reasonably necessary’ under Section 30(2)(d), and held that any unauthorised use of the trademark must meet three tests to be considered a ‘nominative fair use,’ namely,
- the product or service in question must be difficult to identify without the use of the trademark;
- only as much of the mark or marks as is reasonably necessary to identify the product or service; and
- the user must do nothing that suggests sponsorship or endorsement by the trademark owner when using the mark.
The Court held in Hawkins Cookers Ltd. vs Murugan Enterprises, which involved the defendant’s use of the registered trademark ‘HAWKINS’ on gaskets, that use of the trademark by the defendant in relation to refills, spare parts, and accessories adapted for use in or with the proprietor’s goods may not constitute infringement if the defendant establishes the following:
1) that the use of the mark is reasonably necessary for characterising that the article is fitted for use with the plaintiff’s goods;
2) that the use was genuine; and
3) that the result of the use complained of is unlikely to confuse the public as to the source of the goods.
In an appeal, the Delhi Court’s Division Bench held that the initial defendant had given the phrase “HAWKINS” undue weight by printing it in a distinguishing red colour while saying ‘Suitable for Hawkins Pressure Cookers,’ and so denied the defence of nominative fair use under Section 30(2) (d).
In Prius Auto Industries Ltd. vs. Toyota Jidosha Kabushiki Kaisha, the Delhi High Court addressed the nominative fair use defence in the context of the plaintiff’s trademarks ‘TOYOTA,’ TOYOTA Device, and INNOVA in connection with the defendant’s car accessories and spare parts and the defendants were ordered to:
1) refrain from using plaintiff’s registered marks, except to identify that the defendant’s products can be used in the cars;
2) ensure that the words “TOYOTA” and “INNOVA” were not written in the same font as Toyota; and
3) only use the words “Genuine Accessories” in conjunction with the defendant’s name.
The defence of “nominative fair use” has been reaffirmed by Indian courts as an exception to trademark infringement with limited applicability, aiming at protecting the brand owner’s rights and interests. Even though it is difficult to prove all of the ingredients mentioned above by a user, the courts must be exceedingly stringent in order to grant nominative fair use relief. Anyone and everyone should not be allowed to utilise a company’s trademark, which represents its identity.
Given the foregoing, it can be claimed that when a person is unable to convey what they wish to convey about their own trademark without using a trademark or a portion of a trademark of another, such use of a trademark falls under the idea of nominative fair use. It’s crucial to emphasise, however, that the distinction between nominative fair usage and trademark infringement is razor-thin. To qualify as nominative fair use, it is necessary to ensure that the use of another’s trademark does not imply sponsorship, endorsement, or relationship with the trademark owner at any stage.