India being a mixed market, has many industries that operate under the free market concept. The competition in the market system is extreme. For any enterprise to thrive in the open market, they have to create brand recognition and brand value. The simplest way through which this is achieved is via trademarks.
The need for trademarks can be considered a three-prong approach to represent goods or services by:
- Helping consumers recognise the source
- Helping consumers determine the quality
- Helping consumers make a purchasing decision
Once such value is attached to the trademark, it is imperative to protect it from misuse and infringement by others.
What is Trademark Infringement
The Trademarks Act, 1999 (hereinafter referred to as the Act) is the legislation that protects trademarks in India. The Act lays down the rules dealing with registration, protection and penalties against infringement regarding trademarks. Trademarks are given the status of intellectual property across the globe. There are many organisations, both international and national, that endeavour to protect intellectual properties such as trademarks.
In India, the organisation that deals with the protection of trademarks are the Indian Patent Office administered by the Controller General of Patents, Designs and Trademarks. In simple words, trademark infringement is the unauthorised usage of a mark that is identical or deceptively similar to a registered trademark. The term deceptively similar here means that when an average consumer looks at the mark, it is likely to confuse him/her of the origin of the goods or services.
Types of Trademark Infringement
When looking into trademark infringement, one must know that are two types of infringement:
1. Direct infringement
Direct infringement is defined by Section 29 of the Act. There a few elements that have to be met for a direct breach to occur; they are as follows:
- Use by an unauthorised person: This means that violation of a trademark only happens when the mark is used by a person who is not authorised by the holder of the registered trademark. If the mark is used with the authorisation of the holder of the registered trademark, it does not constitute infringement.
- Identical or deceptively similar: The trademark used by the unauthorised person needs to either be identical to that of the registered trademark or deceptively similar to it. The term ‘deceptively similar’ here only means that the common consumer ‘may’ be confused between the marks and may think of them being the same. The operational word here being ‘may’, it only needs to be proven that this is a possibility and does not require proof of actually happening. As long as there is a chance of misrecognition of the marks, it is enough for proving infringement.
- Registered trademark: The Act only extends protection to trademarks that have been registered with the trademark registry of India. In the case of breach of an unregistered mark, the common law of passing off is used to settle disputes. It is a tort law that is used where injury or damage is caused to the goodwill associated with the activities of another person or group of persons.
- Class of goods or services: For the infringement of the trademark, the unauthorised use of the mark has to be used for the propagation of goods or services that fall under the same class of the registered trademark.
2. Indirect infringement
Unlike direct infringement, there is no provision in the Act that deals with indirect infringement specifically. This does not mean that there is no liability for indirect infringement. The principle and application of indirect infringement arise from the universal law principle. It holds accountable not only the principal infringer but also anyone that abets, induces that direct offender to infringe. There are two types of indirect infringement:
- Vicarious liability: According to Section 114 of the Act, if a company commits an offence under this Act, then the whole company will be liable. Therefore not only the principal infringer but, every person responsible for the company will be liable for indirect infringement, except for a person who acted in good faith and without knowledge of the infringement. The elements for vicarious liability are:- When the person can control the activities of the principal infringer – When the person knows of the infringement and contributes to it – When the person may derive financial gains from the infringement The only exception to vicarious liability of a company for infringement is when the company has acted in good faith and had no idea about the infringement.
- Contributory infringement:There are only three basic elements to contributory infringement:- When the person knows of the infringement – When the person materially contributes to the direct infringement – When the person induces the principal infringer to commit infringement In the case of contributory infringement, there is no exception as there exists no chance of the contributory infringer to act in good faith.
Penalties for Trademark Infringement
In India, the infringement of a trademark is a cognisable offence which means that the infringer may also face criminal charges along with civil charges. It is also not required by the Indian law for the trademark to be registered for the institution of civil or criminal proceedings. As mentioned before this is due to the common law principle of passing off. In the case of trademark infringement, the court may award the following remedies:
- Temporary injunction
- Permanent injunction
- Account of profits (damages in the amount of the profits gained from the infringement)
- Destruction of goods using the infringing mark
- Cost of legal proceedings
In the case of a criminal proceeding, the court dictates the following punishment:
- Imprisonment for a period not less than six months that may extend to three years
- A fine that is not less than Rs 50,000 that may extend to Rs 2 lakh
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