ONLINE MARKETING PLACES AND TRADEMARK INFRINGEMENT IN INDIA

ONLINE MARKETING PLACES AND TRADEMARK INFRINGEMENT IN INDIA: IPR Club

Introduction 

Trademark refers to any logo, symbol, or mark used by a company or organisation for its specific identification. In simple terms, it may be called an identifying mark or symbol. These symbols may be used by companies or organisations so that they may stand out in the market amidst their competitors. Trademarks not only refer to symbols or marks, even slogans and taglines fall under the ambit of the word ‘trademark’. 

These symbols, marks and slogans are permitted and suggested to be registered under the Trademarks Act, 1999. 

There are many types of recognized trademarks. A few of them are namely; 

1. Service mark 
2. Collective mark 
3. Identification mark

Registration of these marks and symbols is essential to protect the business and most importantly the business plan and identity of any organisation. These marks are one way of promoting the company without having to explain their services or do any other formal functions of marketing. A logo speaks for the company and a company is most often recognized by its logo. 

Why should trademarks be protected?

Not every company or company owner has all the resources to make it big in their respective industries. Only those who can afford the resources, time and other contributing factors, make it big and their name is known across the market. So, the rest of the players are left to struggle to make a mark. In these situations, there have been companies and/or persons who try to impersonate a brand through its logo or trademark or symbol. By doing so, they are using the goodwill, name and fame of such established organisations without their permission. This is illegal. And this is very different from franchising. 

What is Trademark Infringement?

Trademark infringement refers to the malpractice committed by a person or organisation who uses the logo, symbol, mark or slogan of a company without their permission or knowledge. Simply put, it is the illegitimate use of a registered trademark. 

The most common understanding about trademark infringement is that infringement takes place when the trademark of a company has been adopted by another, verbatim. But this is not the case. Infringement can arise in cases where the underlying concept of the company which has been expressed through its trademark has been copied or used illegitimately. An underlying concept, one portion of the tagline or even the mere colour combination of the logo could amount to infringement. 

Also Read: Disclosure Of Copyright Infringing Telegram Users: NEETU SINGH vs TELEGRAM FZ LLC

To avoid trademark infringement is why the Trademarks Act, of 1999 suggests registration. While registering, if a trademark of a similar type has already been registered then your application would get rejected. This seems like a rejection of the application but what is truly happening is that the competent authority is protecting you from a possible trademark infringement. Most of the intellectual property laws which have been enacted in India have their roots in the Paris convention[1]. 

Online Marketing Places and the Role of Trademark 

With a rise in accessible technology, the word market is now one that exists both virtually and physically. Particularly now, in the post-pandemic world, any online marketing place is now a booming business providing a huge market and easy accessibility to millions of customers around the world. While this sounds like great news, it would remain great news only where such sellers and their marketing managers pay attention to the little details such as their brand name, logo, and tagline and in particular, make sure it is not infringed or that they do not infringe it. 

Another popular sight in the online shopping/ market is counterfeit products. A lot of luxury goods have been counterfeited and sold at much lesser prices, which are affordable to those who do not have the income to afford the original product. While it may seem like this is a good thing for customers who cannot afford the original product, what is truly happening is that these counterfeit products are destroying the business of the real company and they are infringing the product, idea and ultimately the business of such companies. 

A very popular example in India is the Adidas-Adibas scenario. Adidas shoes are known for their famous three stripes on the sides of the shoes and the product name typed near the ankle. While this product drove the market into a frenzy to purchase it, there was an entire section of the society who wanted to buy these shoes but could not afford them. Thereafter, in any part of India, in both physical and online markets, you could see these counterfeit Adidas shoes with the name slightly changed to ‘Adibas’. It did not stop with the shoes, it also came with bags, socks, and clothing. 

This is the crux of this article. There has been an infringement of the trademark in the above-mentioned scenario. The rest of the article would deal with the online aspects of the same and possibly discover a few solutions as well. 

What are the consequences of trademark infringement in the online marketing industry? 

The consequences are quite many but let us focus on the most important ones. 

1. Customers’ confusion: When a product is duped or counterfeited, those indulging in this practice usually try their best to make sure that it looks exactly like the original. In doing so, it might be difficult sometimes for consumers to be able to distinguish between the original and the knock-off. Therefore, if they want to file a complaint against the product, they would file it against the original producer as they are unaware of the differences due to infringement. 
2. Loss of business: If someone chooses to infringe the trademark of a well-established company, the original company loses its potential customers. And as for the existing customers, once they find out about dupes and knock-offs, it would be quite difficult to establish themselves once they have been perceived in such a manner. 

The Indian Scenario

Online infringement of trademarks would fall under the overlapping ambit of two legislations in India- the Information Technology Act, 2000 and the Trademarks Act, 1999. Until 2009, there was no specific provision which regulated trademarks in cyberspace. The amendment that was brought in focused mainly on data protection, privacy and more importantly curbing cyber-terrorism[2]. These amendments do not directly aim to protect against trademark infringement but do provide a feeble foundation for better, future legislation on the same. What does exist is the mode of establishing liability upon those who infringe. Liability comes under the ambit of the Law of Torts. According to the Law of Torts, there exist two main types of liabilities and the same may be made applicable to specific legislations such as the Information Technology Act, 2000 and the Trademarks Act, 1999. The two types of liabilities[3] are as follows;

1. Contributory Liability- A person may be made liable under this category when he/she aids, abets another to infringe a trademark after having full knowledge that such an act would amount to an offence under respective legislations.
2. Vicarious Liability- a person is said to be vicariously liable for the actions of another. But this would be applicable only when these two parties have an existing, legal relationship between them, preferably of a fiduciary nature. When a person indulges in infringement during the execution of any work as a result of the such fiduciary relationship, then he/shall be made liable but the person with whom such an offender has such a relationship shall be made vicariously liable.

Landmark Case-Yahoo Inc. v. Akash Arora & Anr[4]

The name Yahoo and yahoo.com were both trademarks registered by the company in nearly 69 countries. These registrations took place before the filing of this case. The domain name was not registered in India. Therefore, the defendant registered the domain name ‘Yahoo India’ and claimed to offer all services identical to those provided by Yahoo Inc.

Once the company found out, they filed a case against the defendant for infringing the trademark on an online platform.

The issue raised before the High Court of Delhi was whether the act committed by the respondent was considered as an infringement. The answer was in the affirmative.

The reasons for the same were that the consumers may not be able to distinguish between services provided by the plaintiff and respondent as the respondent claimed to provide services on the same lines. This could potentially bring down the goodwill of the company and the same was well established.

The legislations used by the plaintiff’s counsel to substantiate their claims were

1. Section 27, Trade and Merchandise Marks Act, 1958
2. Section 29, Trade and Merchandise Marks Act, 1958
3. Section 30, Trade and Merchandise Marks Act, 1958
4. Section 106, Trade and Merchandise Marks Act, 1958

The judgement ordered that there shall be a permanent injunction on the usage of the domain registered by the defendant and it shall be permanently discontinued.

Conclusion

From the above-mentioned case, it is clear that a trademark is a term which includes a plethora of symbols within its ambit. It also establishes the fact that online infringement of trademarks in India is punishable and the punitive action shall be decided upon the discretion of the Court.

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[1] Paris Convention for the Protection of Industrial Property, 1883

[2] Information Technology (Amendment) Act, 2008

[3] Shireen Shukla, Liability of Online Market Portals Vis-À-Vis Trademark Infringement in The Cyberspace, Mondaq, 8^th August 2022, 13:25, https://www.mondaq.com/india/trademark/588882/liability-of-online-market-portals-vis-vis-trademark-infringement-in-the-cyberspace

[4] (1999) SCC Online Del 133