Co-published editorial

Trademarks: evolving law in India

multinational . Local brands have India’s rise to prominence on the also gained strength – not only in India, but international scene has made also internationally, due to global business it an increasingly attractive market expansion. law is constantly evolving in an attempt to meet the challenges in which to do business. The of the rapidly developing Indian economy. trademark regime is continually Indian courts first recognised the being refined to accommodate this concept of trans-border reputation in NR growing interest Dongre v Whirlpool Corporation, following which multinationals were able to enforce their trademark rights against infringing By Safir Anand and Swati Sharma, Anand entities. A foreign entity can now enforce and Anand, India trademark rights against an Indian entity if it can demonstrate that its trademark India is a country in a state of transition. enjoys trans-border reputation by way of The rate of growth in India over the past documentary evidence (eg, magazine and two decades has been overwhelming: newspaper articles, television coverage, from lines at food ration shops to huge online presence). The Registry hypermarkets; from potholed roads to super has also started accepting affidavits of highways; from rickety buses to one of the prior international use at the examination most advanced metro transit systems in the stage in cases where the examination report world; from US$2 billion worth of foreign cites conflicting citations which may be exchange reserves in 1990 to being the subsequent to the date of first adoption and fourth-largest economy in the world in 2013 international use. International registration (by purchasing power parity). certificates and articles in magazines For growth to persist, strong foundations and newspapers with an international are needed. Brands are “faces” for businesses. circulation have immense persuasive value For a business to grow and be visible to before trademark examiners in getting a consumers, it needs a well-protected mark accepted for advertisement in the through which to implement strong Trademark Journal. branding initiatives. Indian laws governing trademarks have supported this need by Damages constantly evolving. This article discusses The courts have recognised the concept of some of the developments that have damages in IP matters. For the first time, in occurred in the trademarks arena in India Hero Honda Ltd v Shree Assuranji, the court during the past decade. classified damages into three categories: • Compensatory. Trans-border reputation • Punitive. For a business to grow and flourish, it • Damage due to loss of goodwill and needs a strong IP system in terms of novel reputation. technology, product design, and brands. Trademarks have gained immense In Microsoft v Khosla the Delhi High significance over the years due to an Court awarded damages of US$280,000 increase in competition and an influx of to Microsoft. The recognition accorded to

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the damages culture by the Indian courts • General bond. – especially the Delhi High Court – has • Indemnity bond. encouraged proprietary companies to file lawsuits in India and to recover damages Once the online application has been suffered due to actual loss of business and filed, a temporary registration number is loss of reputation and goodwill. generated. The physical documents must then be submitted at a customs office with Well-known trademarks the temporary registration number. Once The courts and the Trademarks Act 1999 these documents have been inspected, a recognise the concept of a well-known permanent registration number is granted. A trademark. Section 11(6) of the act lists customs registration is valid for a maximum several factors which must be considered by term of five years, after which it can be the registrar of trademarks in determining renewed. Once these rights are recorded, whether the mark is well known. These they are entered into an electronic database, include: which can be accessed from any of the 43 • Recognition/knowledge of the mark connected seaports and 10 airports. At among the relevant public sector. this stage, if Customs – either of its own • Duration, extent and geographical area accord or through information received – Safir Anand of use. apprehends counterfeit goods, it will inform Senior partner • Duration, extent and geographical area the individuals named in the database (ie, Anand and Anand of promotion (eg, advertising, publicity, the power of attorney holder) and grant him India use at fairs and exhibitions). or her a period of three to five days to raise +91 120 405 9300 • International registrations. any objection. The rights holder is permitted [email protected] • Evidence of successful enforcement to inspect the goods and, in some cases, of the mark in other jurisdictions or receive samples in the event that testing is Safir Anand is the firm’s head recognition of the mark as a well-known required. If the rights holder subsequently of trademarks, entertainment trademark in other jurisdictions. raises an objection, Customs will commence and contractual intellectual proceedings and adjudicate on the matter. . A strategist for several A mark can be declared to be well known The benefits of customs recordal IP portfolios, Mr Anand also in India only by a court order in litigation or include the following: advises on legal issues relating by the Trademarks Registry in opposition or • The system creates a mechanism by to franchising and licensing, rectification proceedings. The Trademarks which rights holders are notified of the sports and media, packaging Registry also maintains a register of well- import of counterfeits into the country and advertising, competition, known trademarks, which currently lists 56 as soon as Customs details such goods. the Internet, character marks which have been declared to be well • Customs is obliged to provide full merchandising, IP audits, due known by either a court or the Trademarks information (including names, addresses diligence, oppositions and Office (including CARTIER, DUNHILL, and other details) of the infringers, rectifications, copyright and GLAXO, MARS, FORD, PEPSI, TATA and which provides valuable factual inputs IP law. He is a member of YAHOO!). The declaration of a mark as well by which to bring civil actions against the International Trademark known enables its owner to initiate action the importers. Association, the Asia-Pacific against an infringing trademark across all • The system preserves the health of the Lawyers Association, the categories of goods and services. rights holder’s distribution system within Association of Media and the country. The system also allows the Entertainment Counsel and Customs recordal rights holder to ascertain what portion the International Franchising The Rights (Imported of the imported goods is counterfeit and Association. Goods) Enforcement Rules 2007 empower what portion is grey market. Mr Anand has spoken at Customs to seize, forfeit and destroy various conferences, including counterfeit goods that have been imported Consumer and advertising laws a LexisNexis conference on into India. A rights holder may register Advertising is extremely significant for intellectual property in mergers its trademark, copyright, design or businesses, since it is the medium through and acquisitions. Recent articles with Customs. The recordal process can which companies communicate their brand include “Key Licensing Issues be done online and takes approximately and products to consumers. Advertisements in India” and “Legal Issues in three to four working days to be processed. help companies to build brand equity. It is Advertising - Major Implications Before commencing the online registration important to project brand image correctly for IP Rights”, both for process, the applicant must have all of in an advertisement, as this can leave a Intellectual Asset Management the documents required to complete the lasting impression in consumers’ minds. magazine. recordal process, including: Care must be taken not to use the brand in • Power of attorney. a descriptive or generic manner, and use of • Statement of case. the trademark must be consistent (eg, in • Grounds of exclusivity. size, font, colour). • Registration certificate. False or misleading advertisements, or • Clear images of the genuine goods. advertisements that create false association, www.iam-magazine.com Intellectual Asset Management May/June 2013 105 Co-published editorial

are prohibited by law – namely, the Comparative advertising is permissible Trademarks Act, the Consumer Protection in India; however, the advertiser cannot Act 1986 and the code of self-regulation disparage another party’s goods and services. drawn up by the Advertising Standards In Reckitt Benckiser (India) Limited v Cavinkare Council of India (ASCI). Pvt Ltd, Reckitt Benckiser (India) Limited The ASCI has issued basic guidelines filed a suit against Cavinkare Pvt Ltd for to all advertisers, advertising agencies and disparagement of its product, Harpic, in a media. These state that such entities must: television advertisement. Reckitt contended • Ensure that any representations and that the blurred image of the bottle with claims made by advertisements are which Cavinkare’s product was compared truthful and honest. was virtually identical to Harpic in terms • Safeguard against misleading of shape, colour and overall appearance. advertisements. The court held that Cavinkare was not • Ensure that advertisements are attempting to disparage Reckitt’s product, as inoffensive and contain no indecent, the advertisement did not mention Reckitt’s vulgar or repulsive content which is products and the bottle was blurred to the likely, in light of generally prevailing extent that no shape was visible. standards of decency and propriety, to A rights holder may file a complaint cause grave or widespread offence. related to product disparagement with the Swati Sharma • Safeguard against the promotion ASCI in the prescribed form along with Managing associate of products which are regarded as the relevant particulars (eg, a clipping Anand and Anand hazardous or harmful to society or or a copy of the print or electronic India to individuals (particularly minors) advertisement, and the time and date when +91 120 405 9300 to a degree or of a type which is it was broadcast/publicised). On receipt swatisharma@anandandanand. unacceptable to society at large. of the complaint, the secretariat asks the com • Ensure that advertisements observe advertiser to comment or respond within fairness in competition, so that two weeks. The complaint is sent to the Swati Sharma has significant consumers are informed about choices advertiser verbatim, but the complainant’s experience in the field of in the marketplace and the canons identity is not revealed. The complaint, contractual and commercial of generally accepted competitive along with all supporting information exploitation of intellectual behaviour in business are served. provided by both parties to the dispute and property. In addition to the an opinion of the Consumer Complaints drafting of licensing, distribution The code defines “advertisement” to Council’s technical expert (if any), will be and franchise agreements, she mean “a paid-for communication, addressed placed on the agenda of the next council has advised various companies to the public or a section of it, the purpose meeting (usually held in the fourth week of on establishing operations of which is to influence the opinions or every month). If the matter requires deeper in India, including advice on behavior of those to whom it is addressed”. technical evaluation, the council will refer adopting the best business Any text or graphics on packaging or the complaint to independent experts, model. As a brand strategist, contained in an advertisement is subject to chosen from a list of experts nominated Ms Sharma has extensive this code. by the board as specialists in certain areas experience of advising on Section 29(8) of the Trademarks (eg, soaps and detergents, drugs, lubricants, the choice and protection of Act states that a registered trademark white goods). brands and on maximising is infringed by any advertising of that If the council fails to uphold the brand visibility. She has also trademark if such advertising: complaint, the complainant and the provided advice on packaging • Takes unfair advantage of and is advertiser will be informed simultaneously. and labelling laws, copyright contrary to honest practices in If the complaint is upheld, the advertiser issues and intellectual property industrial or commercial matters. will be informed of the council decision in takeovers and joint ventures. • Is detrimental to its distinctive within five working days. The advertiser Ms Sharma has spoken at character. will be given two weeks to assure time- workshops conducted by the • Is against the reputation of the bound compliance with the decision. On Franchising Association of India trademark. receipt of this assurance, the complainant on the operation of franchising will also be informed of the council in different sectors. Section 30(1) creates an exception to decision. If a positive response is not such infringement – that is, a trademark is received or compliance is not assured by not infringed where: the advertiser within two weeks, a letter • The use of the mark is in accordance from the vice chairman of the ASCI will be with honest practices in industrial or dispatched to the advertiser requesting its commercial matters. commitment to withdrawing or modifying • The use is not such as to take unfair the offending advertisement within two advantage of be detrimental to the weeks in order to avoid contravening the distinctive character or repute of the ASCI code. Simultaneously, the concerned trademark. agency and media vehicle will be advised

106 Intellectual Asset Management May/June 2013 www.iam-magazine.com Brands in the Boardroom

A foreign entity can now enforce trademark rights against an Indian entity if it can demonstrate that its trademark enjoys trans-border reputation by way of documentary evidence

that the advertisement contravenes the “the code advertisements should not code. The secretariat will then advise the make unjustifiable use of the name or complainant of the council decision. initials of any other firm, company or If positive assurance from the institution, nor take unfair advantage advertiser is still not received, the of the goodwill attached to the offending advertisement will be included trademark, on symbol of another firm”. in the ASCI’s nationwide quarterly media The advertiser assured that it would release, along with a compilation report of redress the matter with consumers. The council decisions. This report is circulated advertisement was withdrawn. to all ASCI members, associations of practitioners in advertising and government Comment authorities, including the Ministry of Indian law has been dynamic and responsive Information and Broadcasting and Media. to international developments in the In recent years, the ASCI has been active in trademarks arena. Such developments have handing down decisions on misleading and boosted the confidence of multinationals in disparaging advertisements. A few examples conducting business in India. The law has of such decisions are as follows: recognised changing business needs and • Jyothi Laboratories Ltd (Maxo Max new mechanisms of brand protection and Power Liquid) – it was held that the enforcement. claim “One drop of Maxo is enough to get rid of mosquitoes” was not substantiated. The advertisement was modified. • Hindustan Unilever Ltd (Ponds Gen White) – it was held that the claim that Ponds Gen White “gives spotless fairness” was not substantiated adequately. The advertiser agreed to modify the advertisement. • Ranbaxy Laboratories (Revital Woman) – it was held that the claim “Revital Woman is a daily health supplement, it has balanced combination of 12 vitamins, 18 minerals and ginseng which fights weakness, fatigue and tiredness, keeps physically active and mentally alert, maintains healthy hairs, skin and nails, Anand and Anand strengthens immunity and promotes First Channel Building Plot No 17A Sector 16A bone health, takes care of general body Film City ache and pain, helps manage daily stress Noida 201301 (UP) better” was not substantiated. The India advertisement was withdrawn. Tel: +91 120 405 9300 • TVC Skyshop Ltd (full gliding LG Fax: +91 120 424 3056 touch screen) – the court stated that www.anandandanand.com www.iam-magazine.com Intellectual Asset Management May/June 2013 107