A trademark infringement is typically viewed from the aspect of similarity of marks in addition to resemblance of goods or services. The same principle will apply when an infringing deceptively similar trade name or company name is adopted.  The test for determining deceptive similarity for an infringement action between two trademarks and for infringement of a trademark right by deceptively similar company name, would be the same. The above mentioned principle is discussed by Courts at length in  Parle Products Pvt Ltd. v. J.P. and Co[1]Laxmikant V. Patel vs. Chetanbhat Shah[2]Skipper Limited vs Akash Bansal[3]to mention a few. 

In this article, we will analyze the possible three circumstances when a trademark is infringed by a trade name/ company name:

First scenario– the trademark and the impugned company name are similar or identical and the relevant goods or services are also similar or identical.

A corporate name, trade name, or company name falls within the definition of a ‘mark’ as per Section 2(1)(m) of the Trade Marks Act, 1999 (Act) which states that 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 thereof. Further, Sub-clause (5) of Section 29 of the Act prevents adoption of someone else’s trademark as part a company name, as the same will constitute trademark infringement.  It relates to a situation where (i) the infringer uses the registered trademark “as his trade name or part of his trade name, or name of his business concern or part of the name of his business concern” and (ii) the business concern or trade is dealing in the same goods or services in respect of which the trade mark is registered. If the owner/proprietor of the registered trade mark is able to show that both the above elements exist then an order of injunction, restraining the infringer is likely to follow. This is in the nature of a ‘no-fault’ provision which offers a higher degree of protection where both the above elements are shown to exist. For the purpose of Section 29(5) of the Act, there is no requirement to show that the trademark has a distinctive character or that any confusion is likely to result from the use of the impugned company name.[4]

Second scenario– where a reputed or well-known trademark is similar or identical to the impugned company name but the relevant goods and/ or services are dissimilar.

Where the first element is present and not the second, obviously the requirement of Section 29(5) is not fulfilled. The question is whether in such a situation the owner or proprietor of the registered trade mark is precluded from seeking a remedy under Section 29(4) of the Act if the conditions attached to Section 29(4) are fulfilled.

This issue was dealt with by the learned Single Judge of Delhi High Court in the case of Bloomberg Finance LP v. Prafull Saklecha & Ors[5]. In this case, the Plaintiff claimed that their trademark (Bloomberg) was being used in 100 countries and the same was in use in India through their associate companies from the year 1996. It was claimed that the Plaintiff was reaching millions of people worldwide through Bloomberg Television and Bloomberg Radio Programming. A suit was brought before the Delhi High Court seeking inter alia to restrain the Defendants from using company names which are identical or deceptively similar to the Plaintiff’s well known mark ‘Bloomberg’ causing infringement of trademark rights in ‘Bloomberg’. The Plaintiff learnt that the Defendant No. 4, Bloomberg Realty (India) Private Limited, was carrying on business from Indore and Madhya Pradesh. The Defendant Nos. 1 and 2 had formed other Indian ‘Bloomberg’ companies and had changed the name of another company, Smart Developers Private Limited, to Bloomberg Developers Private Limited. The contention raised before the Delhi High Court by the Plaintiff was that if the Defendants continue use of the name ‘Bloomberg’ for their real estate business (though completely different from the business of the Plaintiff), it would affect the reputation and distinctive character of the registered mark of the Plaintiff. Reliance was placed by the Plaintiff on Sub-Section (4) of Section 29 of the Trade Marks Act. The contention of the Defendants were that only Sub-Section (5) of Section 29 was exhaustive of the issue and if the Plaintiff was not able to make out a case under Sub- Section (5), they were not entitled to injunction. The learned Single Judge of the Delhi High Court, thereafter proceeded to consider provisions of Section 29 of the Act and opined that Section 29(4) is also distinct from Section 29(1) to (3) of the Act in another important aspect. The element of having to demonstrate the likelihood of confusion is absent when the goods are different. Perhaps to balance out this element, the legislature has mandated the necessity of showing that (a) the mark has a reputation in India (b) that the mark has a distinctive character (c) the use by the infringer is without due cause.

Section 29 (4) (c) of the Act, is reproduced below:

the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.”

The learned Judge held that the words ‘detriment’ in the context of the ‘distinctive character’ of the mark brings in the concept of ‘dilution’ and ‘blurring’. In the context of ‘repute’ they are also relatable to the concept of ‘tarnishment’ and ‘degradation’. The words “takes ‘unfair advantage” refers to ‘free-riding’ on the goodwill attached to mark which enjoys a reputation.[6]

Therefore, a company name will be held to be infringing a reputed or well-known trademark, even if the core area of business of the infringing company name is different. The legislative intent is to afford stronger protection to a trademark that has reputation without the registered proprietor of such mark having to demonstrate the likelihood of confusion arising from the use of an identical or similar company name in relation to dissimilar goods or services.

Third scenario– where a prior registered trademark, which is not of repute, is being infringed by a company name where the goods/ services are dissimilar.

In a situation, where the trademark in question is not of repute, and the goods or services are dissimilar, the only remedy is to invoke Section 16 (1)(b) of the Company’s Act, 2013 (‘the Company’s Act’). Under the said Section of the Company’s Act, the owner of the registered trademark can apply to have the name of a company that is purportedly infringing the trademark, cancelled. There is no prior requirement to prove distinctiveness of the registered mark or likelihood of confusion.

As per Section 16(1)(b) read with Section 4(2)(b)  of the Companies Act, 2013, Regional Director has the power to order a company to rectify its name in case name of the company is identical with or too nearly resembles a registered trademark of another entity. However, the primary challenge in filing an application before the Regional Director of the Registrar of Companies, is that the application ought to have been filed within 3 years from the date of such knowledge of incorporation of the company, infringing a registered trademark. If the said aforementioned limitation is met, the proprietor of a registered trademark can take action under Section 16 (1)(b) of the Companies Act  , even if the business objective of the company is different from the goods or services protected under the registered trademark.

Recently, in M/S. Raymond Pharmaceuticals v Union Of India[7], the Court observed that merely because injunction was rejected in favour of the 3rd respondent before the Court, it cannot be said that he has no remedy under the Companies Act, 2013. As the Companies Act operates in a different field, what is required to be seen is whether the name of a company is identical with or too nearly resembles a registered trademark.

However, the Delhi High Court in M/S Bhagwan Das Khanna Jewellers v Union of India and Ors[8], suspended a company name rectification order because the Petitioner who filed a writ sometime in 2011 was later a Defendant in a trade mark infringement action over the same impugned trade name. Since the infringement court held the use of the company name as an infringement , the writ court’s order was suspended. In conclusion, we need to assess each case of infringement of trademark by trade name/ company name on facts and circumstances of each case. If remedy is available before the Court in an infringement action and the same remedy is available before Registrar of Companies, the jurisdiction of the Court is over bearing and conclusive.

[1] MANU/SC/0412/1972

[2] AIR 2002 SC 275

[3] 2016 SCC Online Cal 983

[4] Cipla Ltd. v. Cipla Industries Pvt. Ltd., AIR 2017 Bom 75

[5] 207 (2014) DLT 35

[6] 207 (2014) DLT 35

[7]W.P.No.28593 of 2012 and M.P.Nos.1 & 2 of 2012

[8]W.P. (C) 7851/2011 & CM APPL. 17758/2011

Authors: Ruchi Singh & Paramita Nandy Gupta

author
Ruchi Singh

Regional Head - North

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