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The evolving Indian trademark environment (sponsored discussion)

Sudeep Chatterjee and Jaya Mandelia of Singh & Singh Lall & Sethi talk about some of the most important court cases and legal developments in India, as well as some best practices for enforcement

What are some of the most important cases in the past year or so?

Sudeep Chatterjee: Anchor vs P&G is one of the important trademark cases from the past year. Anchor manufactures and sells its toothpaste under the trademark ALLROUND along with the tagline ALLROUND PROTECTION since 2007. P&G launched ORAL-B toothpaste using the tagline ALL AROUND PROTECTION and had also sought registrations for the same in India and various jurisdictions of the world. Anchor filed a suit for permanent injunction against P&G for infringement, passing off, dilution and damages. The Single Judge of the Delhi High Court granted an interim injunction against P&G and restrained it from using the slogan/tagline.

P&G filed an appeal before the Division Bench against the order of the Single Judge. The Division Bench, in a landmark judgment, recognized that taglines and slogans used within advertising campaigns are valid and enforceable trademarks.Moreover, since P&G had sought registration for ALL AROUND PROTECTION in India and other jurisdictions of the world, P&G ought not to be permitted to argue descriptiveness. Thus it could not aprobate and reprobate.

This is the first judgment that categorically holds that taglines and slogans can serve as a trademark and that advertising campaigns have an impact on the perception of the trademark by consumers.

P&G appealed to the Supreme Court of India, which also dismissed the case.

Jaya Mandelia: Havells vs Eveready was another noteworthy case. Eveready released the impugned advertising/promotional campaign for their LED Bulbs. The ads stated: ‘Switch to the Brightest LED’ below which it read ‘Check lumens and price before you buy’ followed by a chart comparing the price and lumen quantity of several brands of LED bulbs, including Havells with that of Eveready’s.

Havells filed a suit against Eveready on the ground that the advertisement wrongly laid stress on the assertion that Eveready’s LED Bulbs are the brightest at the least price whereas those of other brands, including Havells, are of inferior quality and unreasonably priced. Havells further alleged that such advertising is misleading and results in disparagement of the brand as well as Havells’ products. It selectively compares only two criteria which were favorable toward Eveready’s product whereas Havells’ product was superior to that of Eveready’s in all other respects such as power factor and life of bulb. Havells also argued that such a misrepresentation would create a false impression in the consumers’ mind that brightness and price are the only relevant factors to be considered while buying an LED bulb, whereas other factors such as power factor and lifespan are actually equally important when determining the quality of an LED bulb.

Eveready contended that its advertisement only contained true representations and that it was completely justified in only comparing the two aspects, lumens and price, it considered to be the most important. It further contended that there is no requirement to disclose all factors in a comparative advertisement.

The Single Judge of the Delhi High Court held that Eveready’s advertisement was merely trade puffery and completely permissible under law. The Single Judge held that for an advertisement to be misleading, it must satisfy two essential elements- first, it must deceive the consumers and second, as a consequence of such deception the economic interests of the competitor should be negatively impacted. It was further held that there is no requirement in law to compare every factor in a comparative advertisement and that it is open to an advertiser to highlight the special features of its products and compare the same with a competitor as long as such comparison was true.

Chatterjee: I think Jasper Infotech vs Deepak Anandis also worth noting.

In this case, KAFF, the defendant, a brand of kitchen appliances, published a caution notice on its website stating that Snapdeal, the plaintiff, a leading online marketplace website, was selling unauthorized KAFF goods which are counterfeit and deceiving to consumers. KAFF also proceeded to stop offering warranties to the products purchased from Snapdeal’s website. Snapdeal therefore preferred a suit inter alia alleging defamation, disparagement and misrepresentation against KAFF. Snapdeal also contended that it is the intermediary and is only a platform on which sellers sell their products to the end consumers. It further argued that its policies are framed in a manner to avoid any violation of intellectual property of the manufacturers as well as all third parties and therefore undertakes only to sell genuine products.

The Single Judge of the Delhi High Court issued an order to restrain KAFF from publishing any further caution notices until further orders.

What do these cases mean for rights holders?

Chatterjee: As far as Anchor vs P&G is concerned, it is a very significant development for right holders. Slogans and taglines are integral elements of most advertising campaigns. They create the recall value.

Despite satisfying the definition of a trademark as provided under the Trade Marks Act, 1999, up until this decision, slogans and taglines had not been recognized as valid and enforceable trademarks in India. Although the Courts had granted slogans and taglines protection under the law of Copyright such as in the case of Pepsi vs Hindustan Coca Cola wherein the dispute related to use of Pepsi’s slogan “Yeh Dil Maange More” by Coca Cola in its advertisement, the Courts had consistently refrained from granting slogans and taglines protection under the law of Trademarks.

Internationally, there is a growing trend for recognizing slogans and taglines as trademarks. Not only does this decision make the Indian position more consistent with the general trend being followed internationally, it also means that right holders can now reasonably expect that their slogans and taglines will be upheld and protected by the Courts as trademarks.

Mandelia: The decision of Havells vs Eveready on the one hand preserves competition and on the other is likely to bring the fight to the streets. This judgment lays down some very definitive guidelines qua comparative advertising and also the tests to be applied when adjudicating whether a comparative advertisement is misleading in nature.

However, the law laid down in this case may be interpreted to permit right holders the use of another’s registered trademark in a manner which may be misleading such that it creates a negative impression in the minds of consumers toward the particular brand. The reason I say that is because in this case, Eveready selected only two criteria out of several to compare the products giving the misleading impression that Havells’ product (amongst others) was inferior in quality and more expensive than Eveready’s. Although Eveready is correct in claiming that it was squarely telling the ‘truth’ so to speak, however, it cannot be denied that it was only telling a ‘half-truth’. Also, in this particular case, I believe that Havells should have been offered protection by the Courts considering that the Havells mark has been held to be a well-known mark by the very same Court vide an order in a different lis.

I apprehend that a situation might occur wherein IP right holders may start releasing counter advertisements using each others’ registered trademarks and the same will create chaos in the marketplace. Further, the Court’s decision to not offer protection to a well-known mark may be discomforting to brand owners today because it is generally perceived that well-known marks deserve a higher degree of protection. Although healthy competition is essential to any marketplace and comparative advertising is permissible under Indian laws, the damage or loss of reputation suffered as a consequence of misleading advertising needs further addressing.

Chatterjee: The interlocutory decision in Jasper Infotech vs Deepak Anand is a very balanced approach taken by the Hon’ble Delhi High Court. It promotes e-commerce and competition but also does not in any manner authorize the sale of non-genuine and counterfeit goods. Promotion of e-commerce will undoubtedly benefit consumers and IP right holders alike in the long run as brick and mortar retail is declining and the future of retail rests in e-commerce.

Are there any important decisions or developments that we should keep in an eye on in the next year?

Mandelia: The Indian IP Policy is slated to be published shortly. It aims to provide a roadmap for the growth and development of IP in India over the next few years. The Department of Industrial Policy and Promotion set up a six-member panel called the ‘Think Tank’ which has been given the responsibility of identifying the areas in IP laws which require further research and policy making and also to advise the government about the ongoing IP cases and problems faced in the realm of IP in India. On the basis of its consultations and research, this panel is also entrusted with responsibility for drafting the National IP Policy. We expect this new IP Policy to greatly impact the IP landscape in the country at an administrative and legal level and across all areas including trademark, copyright, patent, design, geographic indications, etc.

Chatterjee: Another interesting development involves the status of the IP Appellate Board (IPAB). In a writ petition filed before the Hon’ble Madras High Court, Shamnad Basheer vs UOI & Ors, a bench headed by the Hon’ble Chief Justice of the Madras High Court has observed that the selection process of the members of the IPAB is entirely executive whereas the functioning of the IPAB is judicial in nature. The Hon’ble Madras High Court while holding various provisions of the Trade Marks Acts, 1999 that provides for the establishment and constitution of the IPAB as ultra vires to the Constitution of India and has also specifically directed the minimum required qualifications for various posts in the IPAB such as Technical Member, Vice-Chairman and Chairman. Unless the Government of India appeals from this decision before the Hon’ble Supreme Court and is able to secure a favorable order, it will have to necessarily re-constitute the IPAB and ensure that the members are qualified and competent for their roles per the decision of the Madras High Court.

Mandelia: The Asian Patent Attorneys Association (APAA) also filed a writ before the Delhi High Court concerning the IPAB. This petition was with regard to the constitution and working of the IPAB inasmuch as it was submitted that there was no Chairman or Technical Member at the IPAB, which resulted in patent cases not being taken up for hearing for a long period time and a large number of cases were therefore pending. Also the long time taken in disposing of trademark cases was defeating the very purpose and object behind the constitution of the IPAB, which was to ensure the speedy disposal of cases. It was further contended that more permanent benches of the IPAB need to be established. As a result of the said writ petition, the Delhi High Court issued various directions such as locating a premises in Delhi for the IPAB and appointment of staff for it. The Hon’ble Delhi High Court also issued a direction to the Government of India to take a reasoned decision on the need for having a permanent bench of IPAB at Delhi within three months.

In light of the above two writ petitions, we can now hope that going forward, the IPAB will be a better equipped tribunal with smoother and more efficient functioning. The same would result in a higher disposal rate of cases as well as sounder decisions.

How can brand owners take enforcement actions against infringers in physical marketplaces?

Chatterjee: Anton Piller injunctions and search and seizure operations are important enforcement tools.

Anton Piller injunction orders grant the right to conduct search and seizure of an infringer’s premises. They are the most effective tools for assessing the extent and nature of infringement occurring in the marketplace. Following the issuance of an Anton Piller injunction, a civil search and seizure operation is conducted within short notice wherein the infringing stock is seized. Such operations have a significant impact on infringers and act as very effective tools in deterring future infringing activities.

Mandelia: John Doe orders can also help with enforcement efforts. In the physical marketplace, most infringers and counterfeiters are fly-by-night operations, the roots of which are typically very hard to track. Therefore, especially when tackling counterfeiting cases, seeking a John Doe order which includes an Anton Piller injunction is the most effective way of getting hold of counterfeiters. In such cases, if search and seizure operations are conducted in a strategic and widespread manner, it will enable brand owners to deter the retail of counterfeit goods and may also lead them to the source of the counterfeit goods.

Border control measures such as registration of your intellectual property with Customs authorities to intersect goods suspected to be counterfeit or pirated at the border are also very effective means for curbing infringement and counterfeiting in the physical marketplace. Once IP is registered with Customs, seizure of suspected counterfeit goods are carried out suo moto (on its own initiative) by the authorities. The proprietors or authorized representatives of the IP are informed and required to inspect the same However, such measures only cover goods which are imported into India, not exports.

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