Damages by Trademark Infringement in India and its potential Remedies

Trademark Infringement

Damages by Trademark Infringement in India and its potential Remedies

Registrationwala

Trademark Infringement meaning

Trademark infringement is a grim violation of the exclusive rights of the registered trademark owner, in which the infringer uses the said brand, without the authorization of the owner, to make a profit off it or damage its reputation in the market.

Trademark Infringement in India

Trademark infringement in India means 

An infringement is committed on the part of the infringer if he/she uses a trademark having close resemblance or confusing similarity to another trademark owned by a different company, and the products and/or services offered by the infringer are identical to the products and/or services of the resembling registered trademark.

In case of such violations, the owner of the registered trademark can start civil legal proceedings against the company or entity which infringes the registered trademark. Trademark Counterfeiting or Infringement is criminalized in the intentional trade markets.

Someone who wants to act against entities who are infringing his/her trademark must ensure that their trademark is registered with the authorities, otherwise, the party with the unregistered trademark cannot begin infringement proceedings in the court. You can also register for your trade dress as a trademark symbol, as it is permitted in some jurisdictions that the infringement of trade dress can also be actionable. 

Anyone who uses your trademark can make profits from your brand without you knowing, and can denounce or degrade the value of your brand in the market by creating cheap replicas which do not match your delivery standards. Even your rivals can infringe on your product to denounce you and your product in the market. Therefore, trademark infringement is a very serious offense, and you should take it seriously. But most trademark infringements are ignored in the Indian market. Plus, the infringement creates a strong financial strain on a  business and this can make it hard for your enterprise to cope with the losses.

Trademark Infringement Damages

Businesses register for trademarks to let the customer know that the brand name on the product(s) or service(s) they are opting for actually belongs to that business. Through this trademark, you establish the credibility of our product in the market. People know that they are buying off those items by recognizing your trademark on the product. So, the counterfeiting of your trademark in the market compromises the credibility of your business and your brand. This can cause severe damage to your business. Let us tell you some major damages done to your brand name caused by trademark infringement.

  1. Brand value compromised: A brand is what a customer trust and when someone infringes your trademark to sell a subpar product, it will blemish your brand name and comprises its promised quality in the eyes of your customer. This falling trust among your customers will in the long run erode your customer loyalty.

  2. Your company’s reputation degrades in the eyes of the customer: If you fail to act against this counterfeiting and do not file for the trademark infringement on time, you will end up with manipulated customers who will avoid your brand the next time. People are extremely fickle-minded and therefore you must act swiftly in your first case of infringement which can drive your customers away.

  3. Consumers may buy counterfeited products: Buying the subpar products under your trademark at cheaper rates, customers might think that your quality has gone done and will switch over to your next market competitor. Also, their recommendations for products might change from your brand to someone else’s. In this digital world, some bad reviews and poor ratings will take your product off the digital store shelves.

  4. Loss of revenue and business: Once the customers become dissatisfied with the counterfeit products with your brand name, they will switch to other brands and you will lose business. The morale of the company will come down with the loss of revenue. Business growth will get hindered, become stagnant, and ultimately will start falling into the abyss. 

Therefore, it is of utmost importance that you must be aware of such trademark infringement activities of your brand and the most common trademark infringement should be your top priority to deal with, to secure your business from falling into an abyss. 

Trademark Infringement Remedies in India

Different kinds of remedies can be used to deal with the trademark infringement cases, both unregistered and registered, and it is through these remedies that you can initiate a lawsuit against the trademark infringer in the courts of law.

Three types of remedies can be used against the counterfeiting of registered trademarks in India:

  1. Civil Remedies 

  2. Criminal Remedies 

  3. Administrative Remedies  

Trademark Infringement Civil Remedies

Following are the civil remedies for infringed trademarks that are mentioned in the Trademark Act of 1999:

  1. Injunction: An injunction is an authoritative direction issued by the court of law. There are two kinds of injunctions- permanent and temporary. A permanent injunction is the one against whom a trademark infringement notice has been filed to follow permanently whereas a Temporary Injunction refers to the order that the alleged infringer has to follow temporarily.

  2. Damages suffered by the infringed company need to be mentioned for carrying out legal actions against the infringer but this is only applicable after the infringer has ceased his/her counterfeiting operations and it has been established that the infringed company has suffered a considerable loss. These facts are then taken into account while calculating damages for trademark infringement in India.

  3. The civil remedies can also handle the profit accounts and remove any product that contains infringed trademarks.

Trademark Infringement Criminal Remedies

For conducting criminal proceedings against the trademark infringer, the Trademarks Act of 1999 specifically details the punishments for trademark infringement in India.

  1. Imprisonment: Imprisoning the trademark infringer for up to six months, or, depending upon the extent of the crime, the punishment can extend to up to 3 years.

  2. Financial penalty: Anyone who contravenes the trademark rights of another registered trademark owner will have to pay a penalty of fifty thousand rupees. This is the second form of criminal remedy that can be initiated against the infringer.

  3. Property seizure: In the case of both the civil and criminal liabilities committed by a trademark infringer can lead to the seizure of property of the infringer. These seized assets of the infringer then will be used to pay for the damages caused by the trademark counterfeiting.

Trademark Infringement Administrative Remedies

The administration can also take the initiative that infringement of any trademark, intentional or otherwise, is not happening. And for this, they have the following courses of action:

  1. Trademark Opposition:  The trademark authorities can conduct an investigation during the registration of a soon-to-be-registered trademark.

  2. Trademark Correction: If during the trademark search process, you find a registered trademark with close similarity with any of the registered trademark(s), then the applicant can make the necessary changes in the design of the trademark to avoid replication and ultimately the rejection of the trademark registration application.

  3. Trade activity surveillance: The authorities must first assess the credibility of the infringing trademark company before initiating a lawsuit against them. Pointless infringement cases are quite common these days, and they waste the time of the court and the defendant.

Some of the famous Infringement cases in India

Since we have discussed much of the trademark infringement, the damages it causes to your enterprise, and the remedies that can be used in such cases, let us look at some of the real-life examples of the Trademark Infringement cases in India which received national and international coverage. 

Cadbury had previously registered three trademarks in India that included the name Eclairs. It even holds the right to use the shade of purple on chocolate wrappers in some regions. The three registered trademarks are for 

But Cadbury, despite being registered in 1972, didn’t use any of these trademarks and on grounds of being latent, more than one decade later, the court announced the verdict in the favour of ITC in 2015 on an account of non-usage of the registered brand name.

The plaintiff, London Dairy, which sells premium-quality ice cream, and the defendant, Londonderry, which sells inexpensive confectionery items, both of these brands sound similar phonetically, thereby creating confusion among the customers. London Dairy stated this was a clear case of infringement to which the Bombay High Court disagreed because, according to the court, everything besides the sound of their brand names was different. The court held that no law says that a single test of pronunciation will be sufficient to overcome all other points of differentiation. Also, there were no visual or structural similarities between their products, also no similarities in colors, trade dress, goods, and pricing.

Also Read: 7 Biggest Trademark Infringement Cases in Recent History

In the 1980’s Bata, the shoemaker company filed for trademark infringement against a company for using the same brand name which sold foam materials. The court questioned the latter that a customer coming to purchase shoes would not inquire if a product is being made by the shoemaker BATA.  As a result, even though both the companies operated in distinct commercial realms, Bata the shoemaker won the case.

Both these companies provide digital payment gateways to their customers and both Paypal and Paytm target the same audience in the Indian market. But Paytm is far more popular than Paypal in the Indian market. Paytm is used by the masses whereas Paypal is an internationally recognized brand whose operations in India are limited to eBay shoppers, forex investors, crypto enthusiasts, and some IT software professionals, who transact with the global world regularly. Paypal's cause of worry is, that if Paytm finds its place in the global market, then Paypal will lose its position and business in the global marketplace. Fearing this, in 2016, Paypal filed for trademark infringement against Paytm for using its logo and having this homogeneity with each other’s brand name. In their trademark infringement lawsuit filed in the Indian trademark office, Paypal accused Paytm to use the same two-tone color scheme as theirs.

This case is still going on and may take several years to get the final verdict.

Conclusion

Trademark infringement is not something new in this world. We all have, at some point, used infringed products because they provide us the illusion of owning a quality, branded product within our nominal charges.

This has happened to us in our formative years. But this sort of encouragement from the consumer side to purchase subpar products is, in the long run, going to harm us. 

That is because our continuous purchase of these counterfeited products will slowly orient the market towards the business of lower-quality goods and services. 

The registered trademark businesses will pull out of the market, and we will be left with nothing but infringed subpar products. 

This will in turn reduce our standard of living and quality of our life. So take this responsibility onto yourself and always, always choose the quality original products and subscribe to trademark registered companies services. 

And to such unregistered businesses, I would say, do not put your company, and your hard work at risk, and right away secure your business with us by registering the trademark for your company with us at Registrationwala.  

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