The Threat of Trademark Dilution in India: What You Need to Know

Introduction

A trademark (also known as a brand name) in layman's terms is a visual symbol that one company uses on goods or services to distinguish them from those offered by other brands. In today's era, it is important to register a trademark as it establishes the origin of goods or services sold by a brand, secures the quality of goods or services and promotes them by establishing a certain image in the consumers' minds.

The Trade Marks Act, 1999 under which better protection of trademarks for goods and services is ensured and governed, the concept of trademark dilution was introduced.

Even though the ancient law in India did not address the concept of trademark dilution, the history of trademark dilution can be traced back to 1927. A famous trademark dilution theory, proposed by Frank I. Schechter, back in the 1900s stated that the protection of a trademark should not be merely restricted to address issues pertaining to the deception of the public, but must extend to preventing people from "vitiating the originality and uniqueness of the mark".

Over time, the meaning of trademark dilution has further developed & expanded. Trademark dilution is a type of trademark infringement in which the proprietor of a well-known trademark has the legal right to prevent others from using their mark because it damages their monopoly or reputation. Albeit, no one has the right to copy a well-known trademark or use its reputation without permission. However, trademark dilution protection is intended to safeguard a strong and well-known trademark from losing its association with a specific product in the public's consciousness.

Oftentimes, trademark dilution occurs when someone uses their company's brand name on merchandise that doesn't compete with the trademark owner's products, but only has a superficial resemblance to them.

For example, if one brand uses a well-known trademark to refer to food items, it may be diluted if the same mark is used by another business to designate hair products, which means that the renowned brand can avert this other brand from using their mark under the protection that trademark dilution offers them.

The Doctrine of Dilution of Trademarks

Prior to the 1999 Trademarks Act, there was no incorporation of the doctrine of dilution in any law- i.e. The Trade and Merchandise Marks Act, 1958. However, courts introduced this doctrine much earlier on, taking into consideration internationally recognized standards.

As per the doctrine of dilution of trademarks, in order to show that a trademark has been diluted, the burden is on the person suing (the plaintiff) to prove two things: (1) The company they are suing (the infringer) used a mark that is similar enough to the famous one owned by the plaintiff in order to make people believe there is some kind of relationship between the well-known brand and the infringing brand; and (2) as a result of this use, caused economic harm to how much the well-known mark is worth.

Trademark Dilution Laws in India

Section 29(4) of the Trade Marks Act, 1999 deals with trademark dilution. However, the term 'dilution' has not been defined under the Act. Section 29(4) of the Trade Marks Act enumerates the conditions that classify as dilution:

A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which —

(a) is identical with or similar to the registered trade mark; and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) 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.

As a result, section 29(4) states that trademark infringement in the form of dilution can occur if an offender develops a mark that is similar or identical to a well-known registered mark and uses it on goods and services that are not covered by the registration while causing economic harm to the value and reputation of the well-known brand.

The Case of ITC v Philip Morris Products SA & Ors.

The trademark dilution basis of action in India is well-understood in this instance. A dilution legal action is identified if the following fundamental components are satisfied, according to the High Court, citing section 29(4) of the Trade Marks Act, 1999:

• The contested mark is deceptively similar to a reputed mark.
• In India, the reputed mark has a Goodwill.
• The usage of the contested mark is without justification.
• The usage of the contested mark amounts to taking unfair advantage of the registered trademark's unique character or repute or is harmful to it.

Types of Trademark Dilution

Trademark dilution takes place when an unauthorized party uses a trademark in a way that affects, tarnishes or blemishes the image of a well-known trademark. Trademark dilution is categorized into two types: blurring and tarnishing.

• Dilution by blurring occurs when a famous trademark’s uniqueness is impaired due to a trademark created by an unauthorized party.
• Dilution by tarnishment occurs when an unauthorized person or business uses a mark similar to a famous mark in an offensive, inappropriate, or absurd context.

Exceptions

The following shall not be actionable as dilution:

Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person for the person’s own goods or services, including use in connection with–

• Identifying and parodying, criticizing, or commenting upon the famous mark;
• Advertising or promotion that permits consumers to compare goods or services;
• All forms of news reporting and news commentary.

CONCLUSION

In simple terms, trademark dilution occurs when an unauthorized party uses a trademark in a manner that would tarnish or diminish the image of a well-known trademark. More often than not, it occurs when an unauthorized party attempts to make a profit out of a well-known mark's goodwill and image. Trademarks are a valuable asset to a company or a business. This essentially means that the value of a trademark is directly proportional to a company's growth, hence the protection of exclusive rights against such trademarks becomes of paramount importance for any business. Let Global Trademark Company help protect your brand's goodwill today!