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Dilution of Trademarks – An Evolving Concept

Issued: September 01 2011

Dilution, a species of trademark infringement relating to dissimilar goods and services, made its way into the Indian Trade Marks Law by amendments made in 1999, which came into force in 2003. Although there is no explicit reference to the term dilution in the Indian Trade Marks Act, 1999, Section 29(4) in effect lays down the requirement to establish dilution of a trademark.

The plaintiff seeking protection for his trademark under the said provisions of Section 29(4) has to establish inter alia the following:

(i) Reputation in India;

(ii) That the use of the impugned mark is without due cause;

(iii) That the use of the impugned mark amounts to taking unfair advantage of or is detrimental to the distinctive character or repute of the plaintiff’s registered trademark.

The provision seeks to offer a wider protection to well known trademarks against identical or similar trademarks in respect of dissimilar or unrelated products and services without emphasis on the requirement of ‘likelihood of confusion’.

The Law on Trade Marks under the Trade and Merchandise Marks Act, 1958 did not provide for trademark dilution. While the law was in effect, the principle of dilution was developed by courts with regard to internationallyrecognized standards on the need to protect well known trademarks against their wrongful exploitation in relation to diverse or dissimilar goods and services. The statutory recognition granted to the said principle of dilution has brought about a change in the approach of the Courts in dealing with such issues.

One such issue was dealt with by the Delhi High Court with interesting observations in the case of ITC Limited v. Phillip Morris Products SA and Ors (2010). The plaintiff, ITC, is one of India’s largest private sector companies engaged in diverse areas of business. The plaintiff commenced its hospitality business several decades ago and adopted a WelcomGroup Namaste Logo (“W”), which is a stylized and graphical depiction of the Indian greeting “namaste.” The plaintiff claimed that the M logo, stylized and tilted towards the right in yellow colour, as used by the defendants on its cigarettes sold under the Marlboro mark was similar to the plaintiff’s W logo.

In dealing with the issue of dilution of trademarks, the High Court observed that the following enquiry was necessary:

(i) whether the plaintiff’s marks have reputation?

(ii) Whether the defendant’s logo is sufficiently similar to that of the plaintiff so that the public is either deceived into the belief that the goods are associated with the plaintiff so that the use of impugned mark takes unfair advantage of the mark or causes detriment in its mind to either (a) The repute, or (b) The distinctive character of the mark, or

(iii) Even if the public is not confused, whether the use of the impugned sign has this effect and the use complained of is nonetheless without due cause.

Primarily, the High Court was of the view that the need to establish “linkage” or “mental association” of the impugned mark with that of the plaintiff is one of the vital essentials for securing relief in any claim for dilution. While analyzing the issues and examining the evidence filed by the plaintiff, the High Court held that the plaintiff’s W Namaste Logo was just a part of larger composite marks and was predominantly used in conjunction with other words and elements and only in respect of its hospitality services. Further, the said logo being a graphical and stylized depiction of the Indian greeting “namaste” had a natural association with the hospitality industry. The plaintiff had also not secured any separate registrations for the logo.

The court further held that in cases of dilution, the plaintiff has to fulfill a more stringent test of proving identity or similarity. It held that a “global” look rather than a focus only on common elements of the mark has to be taken while considering if the impugned mark infringes, by dilution, an existing registered mark. In the present case, the court observed that the plaintiff’s mark was not a stand-alone mark and clearly was a depiction of the namaste greeting. The defendant’s M mark, which was in use for a few years,clearly resembled the letter “M” of the Marlboro mark and therefore had no similarity in presentation as compared to the plaintiff’s logo.

Further, in evaluating the requirement of “reputation”, the court held that there was no evidence to show that the reputation of the plaintiff’s logo extended to mid- to high-priced cigarettes or that the said logo is likely to be affected prejudicially or that the defendant’s use of the impugned logo would result in detriment to the plaintiff’s mark. The defendant on the other hand was successful in showing that its marks had always carried a distinctive M logo. In light of its own findings and observations and various earlier decisions on the said issue, the High Court held that the plaintiff in the present case was not entitled to a temporary injunction sought by it. Having laid down a comprehensive test for determining dilution of trademarks, this decision offers some interesting and thought provoking insight into the subject.

Krishna & Saurastri
K.K. Chambers, 1st Floor,
Sir P.T. Marg, Fort,
Mumbai 400 001, India
T: +91 22 2200 6322
F: +91 22 2200 6326

About the Author

Kavita Mundkur Nigam is an associate attorney at Krishna & Saurastri. Her practice areas include trademark prosecution and oppositions, copyright, design, domain names, technology transfer and IP licensing. She also deals with matters relating to infringement, passing off, counterfeiting and due diligence. She has worked on projects relating to company mergers and acquisitions, private equity, project finance and foreign investment. Mundkur holds a Bachelor’s degree in law from Government Law College, Mumbai, and a Bachelor’s degree in commerce from Narsee Monjee College of Commerce & Economics. She also holds a diploma in cyber laws from the Asian School of Cyber Laws, Pune.