Trade Marks: Concept, Functions and Protection

1. Definition and kinds

Section 2(1)(zb) of the Trade Marks Act, 1999 defines a trade mark as a mark capable of being represented graphically and capable of distinguishing the goods or services of one person from those of others, which may include the shape of goods, their packaging and combination of colours. A “mark” includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours, or any combination (section 2(1)(m)). The Act protects:

• marks for goods and, since 1999, service marks;
• collective marks of associations (sections 61 to 68);
• certification marks certifying origin, material, quality or other characteristics, such as the ISI mark or Agmark (sections 69 to 78); and
• well-known marks (section 2(1)(zg)).

Non-traditional marks such as sounds have been registered in India (the Yahoo yodel and ICICI Bank’s jingle are often cited). Smell marks face the graphical representation hurdle seen in Sieckmann (CJEU, 2002); the EU dropped the graphical representation requirement in 2017.

2. Functions and theory

• Origin function: the mark tells the consumer that goods come from a single source, even if anonymous.
• Quality or guarantee function: consistent quality under one mark.
• Advertising function: the mark itself sells. Frank Schechter’s article “The Rational Basis of Trademark Protection” (Harvard Law Review, 1927) argued that the real injury is the gradual whittling away of the uniqueness of a mark, which became the theory of dilution. Section 29(4) of the Act protects marks with a reputation in India against use on dissimilar goods that takes unfair advantage of or is detrimental to their distinctive character or repute.
• Economic justification: marks lower consumer search costs and give firms an incentive to maintain quality (Landes and Posner). This is why a mark lasts as long as it is used, unlike a patent.

3. Registration: grounds of refusal

Absolute grounds (section 9): marks devoid of distinctive character, descriptive marks, and marks that have become customary in the trade, unless they have acquired distinctiveness by use; deceptive marks; marks hurting religious susceptibilities; scandalous or obscene marks; marks prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950; and shapes resulting from the nature of the goods, necessary to obtain a technical result, or giving substantial value to the goods. Relative grounds (section 11): conflict with earlier marks creating a likelihood of confusion, and protection of well-known marks. Registration lasts ten years and is renewable indefinitely (section 25).

4. Infringement and passing off

Infringement under section 29 is a statutory action available only to the registered proprietor: use in the course of trade of an identical or deceptively similar mark for identical or similar goods or services, with confusion presumed where both mark and goods are identical. Passing off is the common law action, saved by section 27(2), which protects goodwill whether or not the mark is registered.

In Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, 1964 INSC 221, AIR 1965 SC 980, the Court distinguished the two: infringement is a statutory remedy for violation of the exclusive right to use the mark; passing off is an action for deceit, passing off one’s goods as another’s. In infringement, if the essential features of the mark are copied, added matter on the defendant’s get-up indicating a different origin is no defence; in passing off it may be. The classic elements of passing off are goodwill, misrepresentation and damage (Reckitt & Colman v. Borden, the Jif Lemon case, House of Lords, 1990). In Laxmikant V. Patel v. Chetanbhai Shah, 2001 INSC 594, (2002) 3 SCC 65, the Court granted an interim injunction against the use of “Muktajivan” for a colour laboratory, holding that a trading name is protected against a competitor who adopts it to divert business.

5. Deceptive similarity

• Amritdhara Pharmacy v. Satyadeo Gupta, 1962 INSC 170, AIR 1963 SC 449: “Lakshmandhara” was deceptively similar to “Amritdhara” for a medicinal preparation. The question is the overall impression on a person of average intelligence and imperfect recollection, not a side-by-side comparison.
• Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., 2001 INSC 173, (2001) 5 SCC 73: on “Falcigo” and “Falcitab”, both anti-malarials, the Court set out the factors for passing off in unregistered marks (nature of marks, degree of similarity, nature of goods, class of purchasers, mode of purchase) and held that a stricter approach is needed for medicines, because confusion can be fatal.

6. Well-known marks and trans-border reputation

Paris Article 6bis and TRIPS Article 16(2) and (3) require protection for well-known marks, even against dissimilar goods where registered. The Act lists factors in section 11(6) and allows the Registrar to determine a mark as well known (Rule 124 of the Trade Marks Rules, 2017).

• N.R. Dongre v. Whirlpool Corporation, 1996 INSC 971, (1996) 5 SCC 714: Whirlpool’s registration in India had lapsed, but its reputation travelled through advertisements in magazines circulating in India. An injunction against an Indian firm using WHIRLPOOL for washing machines was upheld. This is the trans-border reputation doctrine.
• Milmet Oftho Industries v. Allergan Inc., 2004 INSC 374, (2004) 12 SCC 624: the first user of “Ocuflox” in the world was protected against an Indian company, because in medicines a court must prevent confusion even if the foreign proprietor had not yet entered India.
• Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries, 2017 INSC 1230, (2018) 2 SCC 1: the Court adopted the territoriality principle from Starbucks v. British Sky Broadcasting (UK Supreme Court, 2015) and held that a foreign claimant must prove goodwill among consumers in India at the date the defendant entered. Toyota failed for “Prius”, launched in India after the defendant’s adoption.

7. International framework

Paris (national treatment, priority of six months, independence, 6bis, 6quinquies); TRIPS Articles 15 to 21; the Nice Classification (45 classes); the Madrid Protocol (1989), which India joined in 2013, allowing an international application through the Trade Marks Registry designating other member states; and the Singapore Treaty on the Law of Trademarks (2006). Appeals from the Registrar now go to the High Court after the abolition of the IPAB in 2021.

How this is examined

Short note: definition, kinds, functions, registration and passing off, one case. Essay: functions and theory (Schechter), absolute and relative grounds, infringement versus passing off (Durga Dutt), deceptive similarity (Amritdhara, Cadila), well-known marks and the Whirlpool–Toyota debate, and the Madrid Protocol.