OCTOBER 2014 NEWSLETTER NEWS AND INTELLIGENCE FROM TRADEMARKS & BRANDS ONLINE

Branding headaches for alcohol manufacturers Page 6

OTHER CONTENTS: 8 MARQUES 2014: PROTECTING BRANDS IN A DIGITAL MARKET

12 ANTI-COUNTERFEITING IN INDIA: THE LEGALITY OF PARALLEL IMPORTS

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TBO Newsletter 10:14 EDITOR’S LETTER/CONTENTS 3 Keeping a clear head Regulation can dilute the potency of alcohol-related promotion, but hashtags and YouTube videos can provide an easy way for companies to produce entertaining campaigns online. For brands using social media and other online channels, however, the increased exposure and use of their trademark can make IP protection a tricky task. So while alcohol might be the cause of (and, indeed, the solution to) many of life’s problems, many alcohol brands themselves also face dilemmas. This is the theme of this month’s industry report, which takes a wide-ranging look at the IP considerations for drinks brands operating online. In addition, we assess how businesses might respond to various threats including counterfeiting, a curse that has cost the UK drinks sector in particular a lot of money. A few pages further on, you will find an in-depth review of the Marques conference in Copenhagen last month. A record number of people descended on the Danish capital—where bicycles outnumber people—to hear from companies including Google, Nestlé and Lego. The sessions were generally interesting and interactive, and revealed how online infringement presents itself in many different forms and at numerous venues. The internet and social media, it seems, are only going to Trademarks & Brands Online is published by: keep re-shaping this brand protection landscape. Newton Media Limited Kingfisher House, 21-23 Elmfield Road, Bromley, BR11LT, United Kingdom Finally, we hear from Safir Anand, a partner at Indian law firm Anand & Anand, +44 203 301 8200 about some interesting cases involving online counterfeits and parallel imports in Director his country. While counterfeiting disputes are rarely contested in court, we hear that Nicholas Lipinski the law on the legality of parallel imports is ambiguous and hotly contested in India. Publisher Peter Garner We hope you enjoy this month’s issue, and we welcome your feedback. Telephone: +44 203 301 8217 Email: [email protected] Ed Conlon, Editor Managing editor Martin Essex Telephone: +44 203 301 8211 Email: [email protected] Editor Ed Conlon Telephone: +44 203 301 8210 Email: [email protected] Sub-editor Ros Bromwich, Leonie Mercedes News editor Max Walters Editorial assistant David Brooke Consultant John Haley Contents Production and design Fisherman Creative 6 Industry report: branding headaches ©Newton Media Limited 2014 All rights reserved. No part of this publication may be The internet presents many sophisticated ways for drinks companies reproduced, stored in a retrieval system, or transmitted in any form or by any means, electrical, mechanical, to promote their brands but, as TBO finds, there is a fine balancing photocopying, recording or otherwise without the prior act between getting good exposure and protecting your IP. written permission of the publisher. The views expressed in TBO are not necessarily those shared by the publisher, Newton Media Limited. 8 Conference call: Marques 2014 Wishing to reflect the true nature of the market, we At the Marques conference in Copenhagen last month, Google, Nestlé and have included articles from a number of sources, and the views expressed are those of the individual Lego were some of the brands on hand to provide top tips on protecting rights contributors. No responsibility or liability is accepted by Newton Media Limited for any loss to any person, legal online and on social media. TBO provides a round-up of the best advice. or physical, as a result of any statement, fact or figure contained in TBO. 12 Anti-counterfeiting in India This publication is not a substitute for advice on a specific transaction. The publication of advertisements Counterfeiting cases are rarely contested in court but the law on the legality does not represent endorsement by the publisher. of parallel imports is ambiguous and hotly contested in India, as Safir Trademarks & Brands Online (TBO): ISSN 2049-2359 (Print) Anand reports. Cover image: Oleg Golovnev / Shutterstock.com

www.trademarksandbrandsonline.com 4 EDITORIAL PANEL TBO Newsletter 10:14

Safir Anand, Claudio Ingrid Edward partner, Annicchiarico, Baele, vice Chatterton, Anand & head of president, partner, Anand UK digital Philips DLA Piper operations, Intellectual Fiat Property & Standards

Andy Elisa Cooper, Stuart Fuller, David Green, Churley, senior director of head of chief director communications, global digital marketing of product NetNames marketing, officer, marketing, KPMG Famous Four MarkMonitor Media

Marie- Brett Heavner, Susan Kayser, Roland Emmanuelle partner, partner, LaPlante, Haas, head of Finnegan, Jones Day chief the internet Henderson, marketing committee, Farabow, officer,Afilias ECTA Garrett & Dunner LLP

Igor Motsnyi, John Olsen, Flip Petillion, Adam Rendle, partner, partner, partner, senior Motsnyi Legal Edwards Crowell & associate, Services Wildman Moring LLP Taylor Palmer LLP Wessing LLP

Kristina Bob Dan Smith, David Taylor, Rosette, of Samuelson, director partner, counsel, vice president and head of Hogan Lovells Covington & of sales and advertising International Burling LLP marketing, and LLP Donuts Inc marketing law, Wragge

Stéphane David Weslow, Catherine Nick Wood, Van Gelder, partner, Wiley Wolfe, managing managing Rein LLP partner, Boult director, director, Wade Tennant Valideus Milathan

With thanks to the members of the TBO editorial board. Contact Ed Conlon, the editor, for more information.

www.trademarksandbrandsonline.com TBO Newsletter 10:14 INDUSTRY REPORT 5

Branding headaches for alcohol manufacturers OLEG GOLOVNEV / SHUTTERSTOCK.COM

The internet presents many sophisticated ways for drinks companies to promote their brands but, as TBO finds, there is a fine balancing act between getting good exposure and protecting your IP.

omer Simpson summed it up online retailers. These methods help to raise the hand, “the trademark owner’s gut feeling is to best when he declared alcohol profile of the brand and distribute its products to retain control over how their trademark is used, as the “cause of and solution a larger audience. and, on the other hand, what the marketing to all of life’s problems”. For department wants is to embrace social media, But there is a conflict between exploiting the alcohol brands themselves, while the internet which is all about sharing and encouraging H advantages of digital marketing channels and and social media can provide ways to develop complying with heavy regulation. Alcoholic interaction with the brand”. brands further, they can cause a number of drinks companies are typically particularly keen trademark protection problems. to promote responsible drinking, and therefore Social media The advantages of marketing online are it is important they retain control over how their A lot of drinks brands use their trademarked ineluctable: brands can create new dialogues brand is presented. slogans as hashtags. Foster’s encourages followers to use its ‘Good Call’ slogan in their tweets. and interactions with customers through social For John Wilks, partner at DLA Piper, the With thanks to the members of the TBO editorial board. Contact Ed Conlon, the editor, for more information. media, while selling directly to them through problem such brands face is that on the one But encouraging followers to use registered

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trademarks in this way inevitably presents desist letter”, according to Patrick Wensink, of a successful social media campaign that problems for brand owners. Wilks notes: “The an author who was on the receiving end of the brands could potentially imitate; however, it is a key risk here is that you lose control once company’s trademark assertion for a book he phenomenon that drinks manufacturers should something is used as a hashtag.” was publishing. On the other hand, Anheuser- be wary of. ‘Neknominate’, a drinking game encouraging people to drink to excessive levels Despite having the rights in place, bringing Busch has been criticised for an allegedly that went viral, received a lot of bad press earlier a successful trademark infringement claim aggressive approach to protecting its brand. this year due to dangerous levels of consumption. against an individual user using its slogan In 2012 it filed a takedown request with the could prove difficult for a brand owner. producer of the Academy Award-nominated Drinks manufacturers were keen to distance film Flight, in which the alcoholic protagonist is themselves from the ‘Neknominate’ social Wilks says: “It will be quite difficult to bring shown to be consuming Budweiser, one of the media campaign. Drinkaware, the UK-based about a successful trademark infringement company’s important brands. alcohol awareness campaign supported by claim, as we’re talking about individuals various large drinks manufacturers, outright making comments on Twitter and quite likely If a user uploads a video of him or herself condemned the game. But Wilks notes that not in the course of trade.” interacting with a brand, in a similar way to Denzel Washington’s character in Flight, then there might if a “particular brand featured prominently, Another popular method of reaching be very little the brand can do because, again, and the video gave the impression that it was consumers online is playing video there is no use in the course of trade. endorsed by them, then that is something they advertisements on platforms such as YouTube. will want to take action against”. Adverts for alcoholic drinks will flash up on The ALS ‘Ice Bucket Challenge’ is an example Pursuing every video on YouTube that may YouTube clips before the selected video plays. be using its trademark in a damaging way But the risk of losing control of the trademark can be counterproductive for a brand owner is similarly present. “It will be quite and drain limited resources, so the brand Leighton Cassidy, partner at Field Fisher difficult to bring about may want to issue a takedown notice only Waterhouse, says: “The main pitfall of in an “extreme” case, says Wilks. He does, increasing brand presence online is that with a successful trademark however, recognise that the more popular the greater exposure comes greater potential for video becomes, “the greater the backlash will loss of control. Once the adverts have been infringement claim, be if you take steps to take it down”, leaving placed online, there is a greater chance that the as we’re talking the brand to appear more like an Anheuser- advert will be picked up by a third party and Busch than a Jack Daniel’s. will appear alongside conflicting content.” about individuals Such a situation may present difficulties for making comments Counterfeit products exactly what kind of strategies brand owners Online retailers sell alcoholic drinks through employ to combat infringement. Jack Daniel’s on Twitter.” their own channels. But where brand owners won plaudits for the “most polite cease-and- go, so do those looking to exploit their IP

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Here are two examples of alcohol brands using Twitter ...

Fosters’ use of the Carling uses slogan #GoodCall hashtag to interact with fans SOURCE: @FOSTERSFUNNY SOURCE: @CARLING

and to make money by selling counterfeit Cassidy also recommends that brand owners Alcohol branding has moved on significantly products. HM Revenue & Customs estimates work with other trade bodies and authorities, and from the Orson Welles lie detector tests for that counterfeit alcohol costs the UK economy establish partnerships that can better funnel the Carlsberg in the 1970s—where the late actor £1.2 billion ($1.9 billion) a year, and the health resources to the biggest potential threats. Alibaba, declares the beer to be probably best in the concerns that arise from the sale of such the Chinese e-commerce company, recently world—or the comical ‘My Goodness My unauthorised, unregulated products create announced a partnership with the China-Britain Guinness’ illustrations that adorned many further headaches for brand owners. Business Council to better police counterfeit student walls. Perhaps the internet has made it products sold on its website. It is understandable for brand owners to be a lot more sophisticated. pessimistic about confronting this counterfeiting These types of strategies should be encouraged, But with the move to online marketing, challenge. Cassidy adds: “The fact that the internet says Cassidy. “Brand owners should commence there are more sophisticated problems with is so large and difficult to regulate means that there online monitoring and communicate effectively the way a brand is presented. Ultimately, the is an increased chance that online purchasers may with the police. They should also consider find themselves mistakenly buying counterfeited communicating with internet service providers central concerns for drinks manufacturers alcohol products.” with the ultimate aim of working together”. are ensuring the correct trademarks are associated with the product and that the It has not deterred brand owners from seeking He is, however, clear that these partnerships correct product is being sold through online solutions, however. “Brand owners can use may not completely eradicate the problem of retailers. several different options to attempt to restrict this. counterfeit alcohol products from being sold The first option is to work closely with Trading and that “one should be wary that without While branding online provides marketing Standards officers and UK customs officials to effective intervention at the source, takedown departments at drinks companies with a clamp down on sales of the counterfeit product, notices will amount to little more than lot of solutions for better reaching their both in Europe and the UK,” says Cassidy. chopping the head off the hydra—another two intended audiences, it can also be the cause heads will appear in its place”. “Another option for brand owners is to put of many problems associated with protecting management systems in place in order to assist He adds: “Work must be taken to identify the their names. With further growth in online them when following up leads between different counterfeit suppliers producing material and to marketing, one can be sure that further countries and measuring results and trends over prevent them from advertising and selling their headaches await brand owners and IP lawyers time,” he continues. counterfeit products in the first place.” in the future. n

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“We have a cross- functional team and a clear policy about what media we’re focusing on.” Peter O’Byrne

www.trademarksandbrandsonline.com TBO Newsletter 10:14 CONFERENCE CALL 9 Marques 2014: protecting brands in a digital market

At the Marques conference in Copenhagen last month, Google, Nestlé and Lego were some of the brands on hand to provide top tips on protecting rights online and on social media. TBO provides a round-up of the best advice.

he magic number at this year’s Marques conference, from September 23 to 26, was 777—the number of attendees at the event andT a record at that. Perhaps what attracted brands and practitioners in their droves was a respected list of speakers and an interesting set of topics or, simply, a chance to mix work and pleasure in one of Europe’s nicest cities. One of the refreshing elements of Marques is that during sessions on social media, attendees are asked to tweet using a common hashtag and interact in a more informal manner. Things were no different this year, as those watching a discussion about brand abuse on social media platforms were asked to vote, via Twitter, on when to take action against alleged infringers. At times, the results were surprising. The talking points in the session, which heard from counsel at Google, Nestlé and King (the maker of popular video game Candy Crush Saga), were presented as a series of case studies. First up was IP infringement versus free speech, with the audience watching a video mocking painter’s tape brand Scotch Blue. Perhaps TUPUNGATO / SHUTTERSTOCK.COM provocatively entitled Psychos around the world are counting on Scotch Blue, the video shows a man being tied up with Scotch Blue tape. It was badly made, said Andy Abrams, senior trademark counsel at Google, but the video constitutes free speech and protectable parody. He said when Google decides whether to

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remove any suspicious content, including from but chooses not to—for example, when fans YouTube, it first considers whether the “flow produce guides to playing Candy Crush or of ideas and open access to innovation” will be make game-related merchandise in small impeded. quantities, she said. “Obviously in clear-cut cases of infringement There is also a “ridiculous” amount of fan- we would take action, but in this case we would created content including YouTube videos, not want to stifle innovation,” he explained. one of which, shown by Harris, was a fake “Pick up the phone or Nestlé’s senior legal counsel Caroline Perriard, trailer for a Candy Crush film. send a nice message; who was sitting alongside Abrams, agreed that On the flip side, Harris continued, if guides are the video was a parody even though she would used to offer cheats to the game or provide links they might even start be tempted to challenge it—a view reflected to scam sites, if merchandise is mass produced by the respondents on Twitter, who voted or if there are fake apps, she would have to take supporting your brand marginally in favour of free speech. action. “Apps are a big priority,” she explained, and become an ally.” The next example was the now infamous adding that typically there will be an increase in suspended spoof Twitter account called ‘Shell unauthorised apps after the company launches a Andy Abrams is prepared’. The account was part of a hoax new game on Facebook. campaign created by environmental charity While discussing whether to permit or tackle Greenpeace in 2012, when it launched a spoof infringement, Harris recommended that brands site called Arctic Ready that was designed to look familiarise themselves with the nuances of like Shell’s but which featured fake advertisements different websites’ takedown procedures. “If about oil drilling in the Arctic. One image on something is not an exact copy, often they will the site included a photograph of polar ice caps take it down based on a similar trademark, not accompanied by the slogan, ‘It’s time to melt some copyright.” Companies should file takedown ice’, while another used a lone polar bear with the notices “as soon as possible”, she added, and caption, ‘He can’t run forever’. check the major platforms daily. Back in the warmer surrounding of Marques, From a platform’s viewpoint, Abrams said he can the question was inevitably “should Shell take appreciate brand owners’ frustration when they action?”, to which a majority of tweeters voted yes. try to remove content, but one of the challenges However, neither Abrams nor Susie Harris, head companies such as his face is scale. As he of IP of King, agreed with this view. Abrams said explained, there are 100 hours’ worth of YouTube Greenpeace’s campaign was brilliant and witty but content uploaded every minute—“a tremendous it was a PR, not a legal, issue. amount”—and every flagged item gets diverted “Greenpeace wants attention. I definitely would to a reviewer, who can take time to process it. not have started legal action,” Abrams said, Each complaint is processed based on the law of before Harris added: “They are waiting for you the relevant jurisdiction, he explained. to bite and make that campaign successful.” He added: “You should differentiate between Good PR different types of infringement. Don’t use the same approach to egregious infringement and

A PR disaster triggered by IP enforcement fan pages. Don’t make fans angry—you could SEAN PAVONE / SHUTTERSTOCK.COM is clearly something most brand owners start a social media war. Pick up the phone want to avoid, even if they are legitimately or send a nice message; they might even start protecting their rights. In that vein, the supporting your brand and become an ally.” next case study focused on the relationship between taking action and maintaining a Empty vessels good public image, with Harris saying PR Empty accounts—those that produce no teams must be briefed in advance of any content—was another issue for the three enforcement “so that nothing is a surprise” lawyers to tackle. Attendees were shown to them. Abrams explained that Google a Twitter account using the name ‘Purina’ girl’s face and there was no content; the user usually files “nice” cease-and-desist letters, (also the name of a Nestlé pet food brand), name alone is not necessarily trademark use, particularly as the company has to expect from which there were no tweets. The which is consistent with domain name law.” some of them being shared online. question was simply: “Would you ignore it The case shone a light on the need for legal and According to Harris, she assesses the or take action?”, to which more respondents marketing teams to cooperate to ensure brands potential harm of any infringement to answered ignore. However, Perriard, who Candy Crush’s players and its brand before recovered the account in question for register their names as widely as possible across making a decision, as there are “way more Nestlé, said “we want to use our brand” and social media. For brand owners with a large infringements than we can take action on, defended her company’s right to take action. number of trademarks, it is impossible to register so we need to prioritise”. There are cases Interestingly, this view was challenged all of them, said Perriard. But, for example, when King might be able to enforce its IP directly by Abrams. “In this case it was a Nestlé uses naming conventions to ensure new

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whether fan sites are increasingly using adverts to make revenue and wondered what Lego’s policy is for dealing with them. In response, Andersen said she is quite sure that if there was an advert on a site, “the fans would make sure it is taken down”. She added: “We look at domain names and if there is commercial content we will explain to them they can’t use our trademark commercially—and they change the name or take down the adverts.” The Marques conference, although dedicated to trademark owners and practitioners, was notable this year for its increased focus on brand promotion and business strategy. Several speakers covered this angle, from Thomas Ryge Mikkelsen, chief marketing officer at jeweller Pandora, who said that in 2007 the company had no website or social media presence, to Emma Stopford, vice president of healthcare company GlaxoSmithKline (GSK). She told the audience there are “no boundaries to social media” and that GSK has accounts with the likes of Flickr, Google Plus and LinkedIn. Social media have “transformed our trademark work”—by requiring more clearance and reviewing—Stopford added. A separate talk by Peter O’Byrne, group counsel at cosmetics brand The Body Shop, highlighted the risks of using social media for brands. “It’s very important to establish who is responsible: marketing? legal? communications? We have a cross-functional team and a clear policy about what media we’re focusing on,” he said. The Body Shop must also be wary of infringing third-party rights, he explained, noting that celebrity endorsement is a typical form of marketing in his company’s industry “and we have to be careful”. The theme of brand promotion and business strategy did seem slightly tenuous at times. After all, the Marques conference is dedicated to brand owners and trademark practitioners, most of whom are concerned about how to protect and enforce their rights, rather than monetise them. However, after chatting to a campaigns are launched at an appropriately- infringement, in particular from fan websites. couple of lawyers at the event it became clear named account, she said. Now the biggest toy manufacturer in the that keeping abreast of the latest marketing and world, the Danish company was represented Harris agreed: “We do that as part of our game business trends on social media and online launches—it’s the marketing team’s responsibility by corporate counsel Mette Andersen, who is certainly helpful, even if not completely to get the URL on Facebook, Twitter, etc, in explained that “we don’t mess with fan sites” necessary. because it might alienate them. In a show of advance of a launch.” Overall, this year’s conference appeared loyalty to the brand, she said, fans themselves to be a resounding success, and one which will pursue unauthorised sites and “tell them Fan sites provided much food for thought for brands ‘you’re not allowed to use the Lego logo’”. Later on in the conference, Lego provided an seeking to navigate the increasingly tricky update on its strategy for dealing with online But one member of the audience questioned areas of the internet and social media. n

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Counterfeiting cases are rarely contested The legality of in court but the law on the legality of parallel imports parallel imports is ambiguous and hotly contested in India, as Safir Anand reports.

ounterfeit goods and unauthorised imports can become a nightmare across all industries. The counterfeit market is a fast- Cgrowing menace, and with the advent of the internet it is becoming difficult to rein in. For example, the fake luxury goods market in India is growing at 40 to 45% annually and its current estimated worth of $4 billion is likely to more than double in the next few years. The Assocham-Yes Bank study, conducted in 2013 in India, stated that fake luxury goods account for about 5% of the overall luxury market. The growing market for counterfeits is fed by high consumer demand for easily accessible, cheap branded products. From a consumer’s point of view, what exactly is a counterfeit? A counterfeit is an imitation, usually one that is made with the intent of fraudulently passing it off as genuine. Such goods are often produced with the intent of taking advantage of the established worth of the imitated product. It is therefore most important to lay ground rules to curb the nuisance. But how do you curb this growing menace? There are a number of ways of tackling counterfeits and parallel imports, but obtaining an interim injunction with an Anton Piller order (a court order that provides the right to search premises and seize evidence without prior warning, to prevent destruction of relevant evidence) from courts is the most effective option. Trademark counterfeiting is the act of producing, offering for sale, selling or distributing a product or service with a spurious mark that is identical to, or substantially indistinguishable from, a

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registered mark. Counterfeiting is the most one needs to rely on Section 134 of the Trade common form of trademark infringement Marks Act. In the case of M.K. Sowbhagyam and is dealt with severely by Indian courts. “Parallel imports or grey v Wipro Ltd, the court stated Section 134 is in Consequently, traditional counterfeiting the nature of expanding the scope of Section matters are rarely contested in court and market goods, unlike 20 of the Civil Procedure Code (CPC). usually end in settlements. counterfeits, carry Section 134(2) of the Trade Marks Act carves On the other hand, the law on the legality a specific provision to safeguard the aggrieved of parallel imports is ambiguous and hotly legitimate marks but in such cases of infringement. In comparison, contested in courts in India. The Supreme in cases of unregistered marks, reliance is Court of India is aware of this issue. Brand are not authorised to be placed on the CPC as the plaintiff approaches owners argue in favour of the principle of imported or sold in the the court against an action of passing off and national exhaustion of trademark rights, claims his rights under common law. putting parallel imports on the same pedestal country of import.” As discussed, parallel imports or grey market as counterfeits. Importers want India to follow goods, unlike counterfeits, carry legitimate the principle of international exhaustion so marks but are not authorised to be imported the trademark owner should have no control In the recent cases of Louis Vuitton Malletier or sold in the country of import. On this over genuine goods after they have been put in v Gaurav Bhatia & Ors; Montblanc Simplo issue the High Court of Delhi, in the matter any market worldwide. Gmbh v Gaurav Bhatia & Ors; and Cartier of Microsoft Corporation & Anr v Jayesh & One such case, filed in the High Court International AG & Ors v Gaurav Bhatia Anr, has tried to define unauthorised imports of Delhi, is Christian Louboutin v Nakul & Ors, the court ordered the defendant to and the effects of them at all levels of the Bajaj, where the plaintiff asked the court immediately shut down his e-commerce production and marketing chain. for an injunction against the defendant, website, www.digaaz.com, as he was found The court said: “An ‘unauthorised import’ is www.darveys.com. The defendant was to be selling counterfeit goods with the a genuine, non-counterfeit product which selling the plaintiff’s products without its intention of misleading consumers and escapes the authorised channel of shipment, permission, thereby creating a shadow of members of the trade into believing the sold distribution and sales of the manufacturer/IP doubt regarding the quality of the product products originated from the plaintiffs. owner and reaches another country/territory in the minds of consumers. The plaintiff The courts in these cases have relied on for which it was not earmarked or authorised alleged that the defendant’s activities were Yahoo, and taking a step forward have to be sold or distributed. Such goods, when also affecting the goodwill and reputation of directed the domain name registrar and sold in the market, entail repercussions for: its brand, and that the continuing use of the hosting service provider of the e-commerce plaintiff’s name would lead to irreparable • The seller, since the unauthorised trader uses website to discontinue the services offered to his own distribution network, and the goods harm to a luxury brand like Christian the defendant. Louboutin. are susceptible to damage and impairment during transport, handling and storage; Relying on the contentions presented by Legal background • The consumer, since they are unable to the plaintiff, the court granted an interim A review of the cases in question raises the avail themselves of any warranties or after- injunction that restrained the defendant question of whether the courts have sufficient sales support on such goods; and from selling unauthorised products. The jurisdiction to be able to help the aggrieved court in this case relied on an earlier case, parties. The answer to this can be traced in the • The government, which loses taxes and Yahoo Inc v Akash Arora and Ors. legislation. In cases of registered trademarks, custom collection on account of such goods

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often being smuggled or under-invoiced at harm and injury to their business, goodwill damages. When discussing the liability of entry ports. and reputation. the seller, it is of utmost importance to look in to the liability of an intermediary as well. In Ferrero USA Inc v Ozak Trading Inc, the In addition, the plaintiffs claimed that these Section 79 of the Information Technology court stated that non-compliance with the acts were diluting their marks. The courts statutory requirement amounts to difference granted a permanent injunction in both Act deals with the issue of liability of a or changes which may entitle the proprietor matters. In The Polo/Lauren Company case, network service provider. But the key defect to oppose such imports or dealings. However, the court observed that “such attempts of of the act is that the defences under this the court in another case went a step further counterfeit not only cause loss of profits to the provision are applicable only to offences and said “the right to oppose the use of the plaintiff but result in inferior products being committed under the IT Act and not to trademark once the goods have been put on made available to the public at large, who are offences committed under other laws. the market arises only where such use is liable deceived by the conduct of the defendants”. In the Bazee.com case, protection under the to impair the guarantee of identity of origin The courts have given diverse opinions on IT Act was not available to the intermediary, of the goods”. this issue, but with the recent judgment of as the offence committed was an offence The question is therefore what actually amounts Microsoft Corporation & Anr v Jayesh & Anr, under other laws. Counterfeiting is an to infringement in such cases of unauthorised the High Court of Delhi has interpreted that offence under the Trade Marks Act, so by imports, to which the courts have held that goods that are unauthorised importations taking the principle of the Bazee.com case, the act of importation without the consent of and/or pirated or counterfeit versions of the it can be stated that the intermediary is not the registered proprietor would amount to goods, infringe the registered trademark and protected and is to be held liable for the infringement. This decision has been reiterated copyrights of those goods, and in turn violate offence of counterfeiting. Since the kind by the Delhi High Court in a recent judgment the rights of the registered owners. of due diligence required to be conducted that said the sale of unauthorised imported in such trademark cases is not feasible, goods amounts to infringement of rights held Damages there have been no instances where the intermediary has been held liable for the by the trademark owner. Whether the aggrieved party is eligible offence. Since our laws are comparatively In The Polo/Lauren Company LP v Rohit S. to claim damages in such cases remains new, we are still carving a path to tackling Bajaj & Ors, and Timberland Company v a pertinent question, but the courts have the issue of the liability of an intermediary Rohit Bajaj & Ors, the plaintiffs pursued an responded positively by telling the infringers in counterfeiting cases. e-commerce website selling counterfeit goods. to pay damages based on the profits they have The defendants were involved in the business incurred through riding on the goodwill of It is not wrong to say that the internet is of manufacturing, marketing and exporting the aggrieved party. The High Court of Delhi, unmanageable, as anything which goes counterfeit goods, deceitfully and fraudulently, in the case of Disney Enterprises Inc & Anr v online spreads like wildfire. In order to using several domain names such as www. Santosh Kumar & Anr, said punitive damages safeguard IP rights, companies need to put varshaa.com, www.rohitfashions.com and are a must in cases where a party has adopted in place an effective mechanism of online www.stockgarments.com. the trademark of the registered owner with vigilance. In instances where the owner has the intent to pass off its goods and to cash in found products which are not genuine, the The plaintiffs approached the court in on its goodwill and reputation. courts have held the seller liable for punitive different suits and asked for a permanent damages. n injunction against the defendant, as the In cases where the infringer chooses not to surreptitious online trade activities of the appear despite court notices being served, Safir Anand is a senior partner at Anand defendant under the well-known trademarks the courts have observed that the defendants, & Anand. He can be contacted at: of the plaintiffs was causing incalculable by being ex parte, cannot avoid liability in [email protected]

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