IPR IPR TRADE MARK REMEDIESTRADE MARK REMEDIES

SANJEEV KUMAR CHASWALSANJEEV KUMAR CHASWALADVOCATE & IPR ATTORNEYADVOCATE & IPR ATTORNEYLL.M IPR, ARB.& ADR, MS CYBER LAW LL.M IPR, ARB.& ADR, MS CYBER LAW & SECURITY& SECURITY

REMEDIES

LEGAL LEGAL REMEDIES AGAINSTREMEDIES AGAINSTINFRINGEMENT ANDINFRINGEMENT AND

PASSING OFFPASSING OFF

REMEDIES

CIVILSection

135

CRIMINALSections 102 to

120 with various section

of IPC

CIVIL AND CRIMINAL ENFORCEMENT•• SuitSuit forfor permanentpermanent injunctioninjunction restrainingrestraining infringementinfringement

ofof trademark,trademark, passingpassing ofof andand // oror copyrightcopyright..

• CRIMINAL ENFORCEMENT -• Cognizable Offence: Criminal complaint directly with the

police for arrest & seizure;• Criminal complaint before the district court for seizure.

:• Non-cognizable offence: Criminal complaint before theDistrict Court for search and seizure warrant againstinfringing parties; Criminal complaint before the DistrictCourt for search and seizure warrant against unknownpersons.

• Sec. 103/104 of the Trade Marks Act, 1999

• Sec. 63 and 64 of the Copyright Act, 1957

STATUES STATUES INVOKED INVOKED FOR FOR CRIMINAL CRIMINAL ACTIONACTION

• Sec. 39 of the Geographical Indication of • Goods Act, 1999

• Sec. 420 of the India Penal Code

• Sec. 91/93 of the Code of Criminal Procedure

• Criminal Complaint in the Court of competent jurisdiction;• Pre summoning Evidence, for satisfying the court on the

basis of the evidence placed on record, that the• allegations by complainant are prima facie maintainable;• Issue of General / specific Search and Seizure Warrants,

along with directions to police; Raid / Search & Seizure byPolice.

PROCEDURE FOR FILING A PROCEDURE FOR FILING A CRIMINAL COMPLAINTCRIMINAL COMPLAINT

Police.• Investigation and arrest (if necessary) of accused persons;• Summons / Warrants against accused persons;• Accused Appear and seek bail;• Framing of charges, after notice of allegations;• Trial - Onus of proof is on the complainant

Passing off, Trademark infringement

Passing off“No body has any right to represent his goods as thegoods of somebody else”

Lord Halsbury- Passing off action allows trader A to preventtrader B from passing their goods off as if they were A’s.Passing off is available where there is a prospect ofPassing off is available where there is a prospect ofconfusion of identity through the unauthorized use of similarmarks or get up, and such use damages, or is likely todamage the goodwill and reputation of a business. Passingoff can apply to virtually any name, mark, logo or get-upwhich distinguishes a company, business, product orservice from the other. Passing off attracts doctrine of strictliability: the intention of the person passing itself off asanother trader is irrelevant.

Passing off action under the Trade Marks Passing off action under the Trade Marks Act, 1999Act, 1999

• PASSING-OFF

• In respect of unregistered trademark, action for passing offcan be initiated.

• A registered Trademark has the backing of infringement• A registered Trademark has the backing of infringementand passing off remedies under the Trade Marks Act.

• The Act does not provide for infringement action in respectof unregistered Trademarks.

• Only Passing off remedy is available in case ofunregistered Trademarks. (Section 27 of TMA Act, 1999).

Essentials of Essentials of Passing Passing offoff

To Succeed To Succeed in an action for passing off, a in an action for passing off, a claimant should establish that:claimant should establish that:

The claimant has a goodwillThe claimant has a goodwill

Passing off is made in the course of trade.Passing off is made in the course of trade.

The misrepresentation damages or is likely to The misrepresentation damages or is likely to damage the goodwill of the claimant.damage the goodwill of the claimant.

TheThe defendantdefendant mademade aa MisrepresentationMisrepresentationthatthat isis likelylikely toto deceivedeceive thethe publicpublic.

MethodsMethods WhichWhich ConstitutesConstitutes PassingPassing--offoffv False representationv Adoption of Trademark which is the same orv A colourable imitation of a Trademark.v Adoption of essential character of a Trademarkv Copying get up or colour scheme.v Imitating the Design or shape of goodsv Adopting the word or name of rival trader.v Adopting the word or name of rival trader.v Against interlocutory order appeal liesv To High Court and thereafterv To Supreme Court.v Again final order appeal lies to High Court

And thereafter to Supreme Court.

Precedents on Passing offPrecedents on Passing offIn the case of Marks & Spencer Plc and others v. One in

a Million Ltd. and others,the deputy judge of the English Court held that:"Anyperson who deliberately registers a domain name onaccount of its similarity to the name, brand name or trademark of an unconnected commercial organization mustexpect to find himself on the receiving end of an injunctionto restrain the threat of passing off, and the injunction willbe in terms which will make the name commerciallyto restrain the threat of passing off, and the injunction willbe in terms which will make the name commerciallyuseless to the dealer.“In the case of Rediff Communication Limited v.Cyberbooth and Ramesh Nahata of Mumbai (1999), theBombay High Court supported an action of passing offwhen the Defendants used the term ‘RADIFF’ (similar tothe name ‘REDIFF’ of the Plaintiff) to carry on business onthe Internet.

Example of passing off Example of passing off actionactionDomain name similar to that of known companies are used by persons in order to promote their products or services.A company creates a website to promote his business ofsoft drinks and deliberately gives it the domain namewww.cocacola.com , now this domain name is bound toconfuse and mislead the customers as that of the wellconfuse and mislead the customers as that of the wellknown Coca-Cola and encourage them to buy theproduct which infact is of another company. This can betermed as passing off.

Decided Case Decided Case on Passing off on Passing off Yahoo! Inc. vs Akash Arora(1999)

FACTS: The defendant installed a website Yahooindia.comnearly identical to plaintiff’s renowned yahoo.com andprovided services similar to those of the plaintiff.

DECISION: The Delhi High Court granted an injunctionDECISION: The Delhi High Court granted an injunctionrestraining defendant from using yahoo either as a part ofhis domain name or as a trade mark .It held that trademark law applies with equal force on the internet as itdoes in the physical world.

Section 29 of the Trademark Act states that when aregistered trade mark is used by a person who is notentitled to use such a trade mark under the law, itconstitutes infringement. A registered trade mark isinfringed ,if:-

1. The mark is identical and is used in respect of similargoods or services or

2. The mark is similar to the registered trade mark and thereis an identity or similarity of the goods or services covered

Trademark infringementTrademark infringement

is an identity or similarity of the goods or services coveredby the trade mark

3. And Such use is likely to cause confusion on the part ofthe public or is likely to be taken to have association withthe registered trade mark.For example, if you are not the Nike® company orauthorized by it, it is an infringement to sell sports clothescalled "Nikestuff “

FOLLOWING ACTS CONSTITUTE INFRINGEMENTAffixes registered trademark to goods, manufacturers

v offers, exposes, sales, stocks, or supplies goods andservices under registered trademark.

v Import and Export, use of registered trademark onbusiness papers or advertisement.

DO NOT CAUSE INFRINGEMENTv DO NOT CAUSE INFRINGEMENT

v not taking unfair advantages of or cause. Detriment todistinctive character or repute of trademark. Use in relationto goods or services indicating character, quality orgeographical origin. The object of use is to indicate that theservices have been performed by the proprietor or changethe condition of goods.

If registration is confined to certain territories, use of tradebeyond those territories does not constitute infringement,but amounts to passing-off.

Sale of goods on retail basis after purchasing the same inbulk, except repacking.

Sale of accessories of goods such as machinery, authorities,cycles where parts are manufactured by different persons.cycles where parts are manufactured by different persons.

Identical mark registered by more than one person.sale of goods by assignee of a trademark as long as he doesnot

ACTION FOR INFRINGEMENT & RELIEFS:-• a suit can be filed in the district court having jurisdiction.

• A suit can be filed in addition to district judge in high courtof Delhi, Mumbai, Calcutta and Chennai which haveoriginal jurisdiction.

• (1) mandatory injunction restraining defendants from using trademark-trademark-

• (i) damages and costs

• (ii) suits for accounts

• (iii) surrender of infringed goods.

• (iv) surrender of labels, bills, hoardings, letter heads, transparencies, negatives, positives, pamphlets, brouchers, etc.,

ACTION FOR INFRINGEMENT & RELIEFS:-• The Jurisdiction of High Court could be invoked, subject to

the payment of Court fees. The structure of Court fees varyfrom state to state.

• (1) mandatory injunction restraining defendants from usingtrademark-

• (i) damages and costs• (i) damages and costs

• (ii) suits for accounts

• (iii) surrender of infringed goods.

• (iv) surrender of labels, bills, hoardings, letter heads,transparencies, negatives, positives, pamphlets,brouchers, etc.,

In which court a Civil Case can be filed against violation of IPR ?

In India, the jurisdiction for the purposes of filing a civilsuit, will depend upon following facts, and subject to thefollowing conditions:-– Where the cause of action has accrued;– Where the part of the cause of action has

accrued;accrued;– Where the properties / violations are taking place;– Where the defendants reside or work for gain; In

brief, the jurisdiction for the purposes of filing a casewould depend upon the activities of the defendants /their place of business.

–– UniqueUnique provisionprovision inin IPIP casescases-- CivilCivil SuitSuit cancan bebe filedfiledinin placeplace wherewhere plaintiffplaintiff carriescarries onon businessbusiness..

REMEDIESREMEDIES THATTHAT CANCAN BEBE OBTAINEDOBTAINED ININ AA CIVILCIVIL SUITSUIT• Injunction (an order issued by the court restraining the

defendant from dealing in infringing goods)-

– Temporary / ad interim (pending proceedings in thesuit)

• Anton piller order: Court order appointing a localcommissioner to visit the premises of the defendant &seize the infringing goods – the order is usually issuedwithout notice to the defendant (ex parte).without notice to the defendant (ex parte).

• Mareva Injunction – Court uses power seize the assets ofthe defendant to make order enforceable, where there isprobability of assets being disposed off.

• Interlocutory Injunction - An interlocutory application canalso be filed for interim injunction.

• Perpetual Injunction- It is final an order restrainingdefendant totally for all times to come/.

Interim / Interlocutory Injunction• Often the real remedy• Objective: • To maintain status quo• Time is of essence• Factors considered in granting :• Factors considered in granting :

– Prima facie case – Balance of convenience– Irreparable injury if injunction not grantedGujarat Bottling Company v. Coca Cola 21

IPLR 201

Ex Parte OrderEx Parte Order• When the matter is extremely urgent

• Injunction;• Discovery of documents; • Preserving of infringing goods, document of other evidence

related to the subject matter of the suit;• Restraining the defendant from disposing off his assets in a

manner which may adversely affects rights of the IP owner to claim damages, costs or other pecuniary remedies. claim damages, costs or other pecuniary remedies.

• At a preliminary hearing of the interim application without noticeto the answering defendant.

• Granted before the motion for interim injunction is fully heard butfor a limited period only.

• After grant of ex parte injunction, the Court must proceed withdisposal of the interim injunction application after the defendanthas entered appearance

Anton Pillar Orders & John Doe Order• Sensitive in nature

• Pre conditions for grant:

• Extremely strong prima facie case,

• Damage (potential or actual) very serious,

• Clear evidence that defendants have in their possession,incriminating document/ material which they may destroy.

•• John Doe OrderJohn Doe Order•• John Doe OrderJohn Doe Order• Court appointed commissioners to enter the premises of any

suspected party and collect evidence of infringement.

• Suspected party may not be named in the suit.

• Indian Courts have conferred expanded powers to commissioners- Roving commissioners

• Ardath Tobacco Co. Ltd. vs. Mr. Munna Bhai & Ors.

MarevaMareva InjunctionInjunction• Freezing order

• Prevents the infringer / offender from removing / disposing of assets in which the gains from infringement have been invested.

• Aim- unjust enrichment of the defendant and to ensure payment of damages to Plaintiff.

•• Final injunctionFinal injunction•• Final injunctionFinal injunction• To ascertain rights of the parties

• Remedies for Breach of injunction

– Police assistance

– Assistance of administrative bodies

– Contempt proceedings

Damages / Account of Profits • These are mutually exclusive alternative remedies

• Account of profits- An equitable relief

– Plaintiff adopts defendant’s acts as his own.

• Damages- for the losses suffered by the Plaintiff on accountof the defendant’s acts.

• Damages- Recent trends• Damages- Recent trends• Time Inc. vs. Lokesh Srivastava

– Punitive damages awarded for the first time – Rs 5 lakhs

– Distinction between compensatory damages and punitive damages was made out.

Time Incorporated vs. Lokesh Srivastava

Delhi High Court:

“ The award of compensatory damages to a plaintiffis aimed at compensating him for the loss sufferedby him whereas, punitive damages are foundedon the philosophy of corrective justice and assuch, in appropriate cases these must besuch, in appropriate cases these must beawarded to give a signal to the wrong-doers thatlaw does not take a breach merely as a matterbetween rival parties but feels concerned aboutthose also who are not arty to the lis but suffer onaccount of the breach”

Wander Ltd. & Anr. vs. Antox India P. Ltd.Supreme Court on interlocutory injunctions:

“Usually, the prayer for grant of an interlocutory injunction is at a stagewhen the existence of a legal right asserted by the plaintiff & its allegedviolation are both contested… The object is to protect the Plaintiffagainst injury by violation of his rights for which he could NOTadequately be compensated in damages recoverable in the action ifthe uncertainty were resolved in his favour at the trial.

Supreme Court on Balance of Convenience:Supreme Court on Balance of Convenience:

“The need for such protection must be weighed against thecorresponding need for the defendant to be protected against injuryresulting from his having been prevented from exercising his own legalrights for which he could not be adequately be compensated. TheCourt must weigh one need against another and determine where thebalance of convenience lies.”

Midas Hygiene Industries P. Ltd. V. SudhirBhatia & Anr.Supreme Court…

“…in cases of infringement either of trademark or ofcopyright normally an injunction must follow. Meredelay in bringing the action is not sufficient todefeat grant of injunction in such cases…the grantof injunction also becomes necessary if if it primaof injunction also becomes necessary if if it primafacie appears that the adoption of the mark itselfwas dishonest”.

Lakshmikant V. Patel vs. Chetanbhat Shah

Supreme Court:

“ In an action for passing off it is usual, rather essential to seek an injunction, temporary or ad-interim”

“ proof of actual damage is not essential… likelihood of damage is sufficient”of damage is sufficient”

“ an absolute injunction can be issued restraining the defendant from using or carrying on business under the Plaintiff’s distinctive trademark”.

Plaintiff and Defendant evidence / Proof

v Certified Copy of Registered Trademark Certificate,Bills, Invoices, stationery and It assessment orders,Advertisements, Audited Balance Sheets, Packages,Boxes Etc., PhotographsBoxes Etc., Photographs

• Defendants Documents / Proof

• Photographs, bills and invoices, product, packages, Pamphlets, advertisements, Affidavit of Persons who have knowledge about infringement.

Civil vs. CriminalCivil vs. Criminal

• Less hassle for the plaintiff• Jurisdictional advantage• Interlocutory Injunctions• Damages • Possibility of settlement• Possibility of settlement

However…• No deterrence• No fear factor- no arrest• Expensive & lengthy

REMEDIES - CIVIL

• CIVIL-ADVANTAGES:

– Anton Piller Order, similar to police.

– Matter in control.

– Settled/compromised.

• CIVIL -DISADVANTAGES:

– Less deterrent effect.

– Less publicity.

– High Cost of litigation.

– Consumes more time to – Settled/compromised.

– Permanent injunction.

– The order can be used for future actions.

– Possibility of Damages etc.

– Consumes more time to reach logical conclusion.

REMEDIES-CRIMINAL• CRIMINAL-ADVANTAGES:

– Immediate deterrent effect.

– Lots of publicity.

– May lead to Arrest.

• CRIMINAL-DISADVATAGES:– Can’t settle.– A state case.– Matter not in control.– As a complainant, to

be present on each – May lead to conviction.

– Less expensive.

be present on each date of hearing.

– No permanent injunction.

– No damages etc.

ExampleExample ofof aa successfulsuccessful civilcivilenforcementenforcement actionaction• 3 suits filed by Adidas

Saloman AG in the DelhiHigh Court againstcounterfeiters

• At the initial stage,• At the initial stage,infringing goods were seizedby the Local Commissioner

• Cases were decreed recently& damages of Rs. 15 lakhswas awarded to AdidasSaloman

Example of a successful criminal enforcement action

• Criminal raids conducted in2003 by the EconomicOffences Wing, Delhi Policeupon a complaint of acomplainant.complainant.

• Printers printing counterfeitstickers & labels- Levi’s,Adidas, Lee, DKNY,Timberland

Damages- recent trends• Microsoft Corporation vs. Yogesh Papat & anr. 2005 (1)

CTMR 424

– Highest costs and Damages ever awarded for IP infringement by Indian Courts

– Approximately Rs 20 lakhs

– Criminal Remedies- TM/ CR• Cognizable offence • Imprisonment- 6 months to 3 years• Fine- Rs 50,000 to 2 lakhs• Enhanced penalty on subsequent convictions. • Seizure, forfeiture and destruction of infringing goods/

material for placing before the Magistrate.