In trademark litigation, there are two parties: the trademark owner who is the plaintiff, and the alleged infringer who is the defendant.

Some members of the legal community believe there’s a third party missing in the courtroom. This missing entity is none other than the consumer.

What role should the consumer play in a trademark courtroom proceeding? In trademark litigation,consumer interest including public health is at stake. What is being addressed and fought for is not only the plaintiff’s right but those of the consumers or public interest as well. Hence, the consumer is the missing third party in trademark litigation.

Justice Prathiba M. Singh of the Delhi High Court in India, expressed this belief in one of the sessions held during the 2023 INTA Annual Meeting in Singapore from May 16 to 20, 2023. The session was titled “Delhi High Court Intellectual Property Division (IPD) – The Journey and the Way Forward,” which Singh moderated.

“It is crucial to recognize the vital role of consumer interests, even though they may not actively participate in the courtroom proceedings,” said Singh. “Consumers hold a significant position in trademark law as trademarks aim to protect them from confusion and deception in commercial transactions. Recent disputes show that due to use of illegal domain names consisting of well-known marks, innocent consumers are duped of substantial sums of money.”

Touching on public health, Singh cited counterfeit medications as having a consumer interest angle. The same goes for counterfeiting food products and automobile parts.

In what ways do trademark laws and litigation in countries around the region protect consumer or public interest? Do IP lawyers and attorneys in Asia agree that the consumer should be the third party in a trademark court proceeding? We interviewed some of them for their reaction and for pertinent information on trademark laws in India, Taiwan, the Philippines, Singapore and Vietnam.

India

In 2022, the Delhi High Court Intellectual Property Rights Division Rules, 2022 (the IPD Rules), and the High Court of Delhi Rules Governing Patent Suits, 2022 were issued.

According to Singh, this signifies a proactive approach in addressing concerns pertaining to the protection of public interest in IP enforcement.

Among the provisions under the IPD Rules is Rule 25. “Allowing third parties to intervene in IP-related matters ensures that the perspectives and interests of the public are taken into account. It allows individuals or organizations with a legitimate interest in the case to participate in the proceedings, contributing their insights and concerns,” said Singh.

Another is Rule 26, which consolidates multiple proceedings related to the same or similar IP rights subject matter. This provision, therefore, allows disputes to be resolved in a more streamlined and efficient manner, avoiding duplicative processes and potentially conflicting outcomes. “By avoiding unnecessary delays and reducing litigation burdens, the public’s interest in timely and fair resolution of IP matters is protected,” explained Singh.

Rule 27 also helps safeguard consumer interest by enabling the court to issue a judgement without a full trial. This allows the court to save time and resources, thus catering to public interest as it avoids prolonged legal battles and promotes timely access to IP rights.

Meanwhile, Rule 36 ensures that the IPD proceedings are accessible to all by requiring filings to be in a specific format and providing for reasonable accommodations for individuals with disabilities. “By setting standards for accessibility and accommodating the needs of individuals with disabilities, the public’s interest in fair and inclusive participation in IP enforcement is protected,” noted Singh.

As to public health, Singh cites Cadila Health Care v. Cadila Pharmaceuticals. Cadila Health Care accused Cadila Pharmaceuticals of trademark infringement because the latter used a name and logo similar to theirs. The Supreme Court ruled in favour of the former and ordered the latter to stop using the name and logo.

“The court held that in the case of trademarks for medicinal products, a lower standard of proof is required to establish confusing similarity due to the potential life-threatening consequences of confusion,” said Singh. “The need for clear indicators to differentiate medicinal products is crucial, considering the vulnerability of patients and the risks involved in their usage.”

Taiwan

Gary Kuo, a partner at Winkler Partners in Taipei, agreed that the consumer should be the third party inside the courtroom during trademark litigation.

According to Kuo, the Taiwan Trademark Act explicitly states that it aims to protect consumer interests. When reviewing trademark disputes, Taiwan courts and the Taiwan Intellectual Property Office consider the interest of consumers as to, for example, whether there is actual consumer confusion and the consumers’ familiarity with the disputed trademarks. Yet, the trademark act does not provide consumers with legal rights against the trademark infringer.

“For example, if an infringer imported numerous counterfeit kitchen tools in Taiwan and many consumers bought the counterfeits due to misidentification and confusion, the brand owner of the kitchen tools could initiate a court action against the infringer who sold counterfeits on the market,” said Kuo. “In this case, the party who suffers losses is not only the brand owner but also the consumers who were cheated into buying counterfeits.”

However, consumers cannot claim damages against the infringer under the trademark act. Although consumers can claim damages based on other remedies such as torts, Kuo explained they have to initiate another action and would not be able to solve their disputes with the infringer in the same trademark litigation. In addition, consumers do not have a voice in trademark courtroom proceedings; hence, they cannot relate to the court how fraud, as committed by the infringer, misled them into buying the counterfeit products.

To better serve consumer interest or public interest in Taiwan, Kuo said: “Given that consumers cannot act as a plaintiff under current laws, giving consumers a position in the courtroom might be a good way to bring the consumers’ voices into trademark litigation, where consumers’ views should be a crucial element. This would enable the court to consider factors related to consumer rights – such as actual consumer confusion – with a more direct and authentic source of information.”

He added: “In terms of substantive rights, we can consider granting consumers the right to seek compensation from counterfeit sellers based on the trademark act. Taiwan’s Consumer Protection Act provides consumer advocacy groups with the right to file class actions on behalf of consumers.”

These advocacy groups have websites containing notices of infringement cases on consumer rights. Through these notices, affected consumers are encouraged to join in the class actions. The problem is that most of the cases mentioned in these notices are about traditional consumer rights, such as food safety, rather than counterfeits.

“We believe that if consumers were granted more rights under the trademark act, we might see consumers filing class actions against large-scale counterfeit sellers for compensation in the future,” said Kuo. “This would not only provide greater protection for consumer rights but also result in stricter penalties for counterfeit sellers.”

The Philippines

Trademark litigation proceedings in the Philippines also do not allow active participation from consumers as a third-party litigant.

Mary Wendy Duran, founding senior partner at Duran & Duran-Schulze Law in Manila, believes that allowing consumers to actively participate in trademark litigation would be highly beneficial. A more comprehensive understanding of the case will be laid out by sharing their experiences and voicing their concerns and expectations in a courtroom proceeding. Consequently, it will lead to a more balanced and informed decision-making process for all parties involved.

However, because consumers do not have direct ownership or legal rights over a trademark, she also believes consumers’ participation and presence in trademark litigation must be restricted. “The limitation stems from the nature of trademark disputes. The primary concern in trademark law is to protect the trademark licensee’s rights, which includes the right to use a trademark, the right to sell a product or service using the trademarks, right to use a trade name, and ultimately ensure that their brand is not diluted or misrepresented,” explained Duran.

The silver lining is that the Philippines’ 2020 Revised Rules of Procedure for Intellectual Property Rights Cases now allows the presentation of market survey reports to prove whether the disputed mark may indeed cause confusion among consumers and its significance to the public. Market survey reports contain data gathered from consumers regarding their perception, association or affiliation between two similar brands or trademarks and whether the similarity has caused them to be confused.

The surveys also shed light on consumer understanding of the trademarks involved, which can be crucial in establishing potential harm to the rightful trademark owner. By analyzing the consumer responses, she said experts and the trademark court can determine whether there is a likelihood of confusion or deception among consumers.

She added: “In the consolidated cases of Ginebra San Miguel v. Director of the Bureau of Trademarks and Tanduay Distillers v. Ginebra San Miguel decided on August 9, 2022, the court held that these consumer surveys are reliable, credible and significant, and that the survey methodology, the sampling size undertaken and the resulting empirical data were sufficient to establish the state of public perception with respect to the term GINEBRA.”

To better protect consumer or public interest in the Philippines, Duran believes the legal system should increase transparency and accessibility of case-related information by publishing case summaries or judgments online. This will help make such information accessible to members of the public who may want to know the outcome and details of these court cases.

Another possible measure, according to her, is to provide clear guidelines for reporting potential infringement cases by consumers or for voicing their concerns regarding trademarks.

Singapore

For Ren Jun Lim, principal at Baker McKenzie Wong & Leow in Singapore, it isn’t necessary for the consumer to be the third party inside the courtroom during trademark litigation.

According to him, Singapore’s Trade Marks Act grants trademark rights only to trademark proprietors and licensees. Meanwhile, consumers are not represented in court. However, Lim noted that consumers are not completely unrepresented, and public interest is not set aside. In fact, “consumer interests are explicitly considered in the act.”

“For example, an essential element to ground an infringement of a registered trademark action under Section 27(2) of the act is the likelihood of consumer confusion,” said Lim. “The common law tort of passing off also requires misrepresentation of the consumers before a cause of action can be made out.”

“Such representation of consumer interest in the court in the likelihood of confusion or misrepresentation may be in the form of written evidence, such as a market research and/or survey, or the average consumer may also be called as a witness to provide his or her oral testimony in court,” said Lim’s colleague, Darren Leong, an associate at the firm.

To begin with, a trademark cannot be registered in Singapore if it is contrary to public policy or morality. Also, the exclusivity of trademark rights granted to the proprietor is limited by certain defences.

“For example, fair use of a registered trademark in comparative commercial advertising is allowed in Singapore, which allows new entrants to compare its goods and/or services with an incumbent so as to improve information asymmetry between the consumer and brand owners, so long as the public is not mistaken into thinking that the new entrant is associated with the incumbent,” explained Leong.

Still, Lim and Leong stressed that positive rights are only granted to trademark owners, including the right to bring an action for infringement of a registered trademark. Hence, consumers must not inadvertently be provided with more rights than what they are entitled to under Singaporean law.

Lim claimed allowing the consumer as a third party inside the courtroom during trademark litigation runs the risk of doing just that. He cautioned against going further as “a balance has already been struck” by allowing consumer interests to be factored into any trademark litigation indirectly.

“Consumer interests must not be the ‘be-all, end-all’ of trademark laws,” said Leong. “Trademark laws must also accord sufficient protection to a proprietor against unfair competition from third parties who seek to free ride on the goodwill or reputation that the proprietor has acquired for his goods or services.”

Vietnam

Yen Vu, principal and country manager of Rouse Legal Vietnam in Ho Chi Minh, agreed that consumers should not be involved as third parties in trademark litigation.

First, the plaintiff already effectively represents consumer interests in a trademark litigation by endeavouring to prevent confusion and deception among the public.

Second, getting consumers involved in trademark court proceedings will lead to issues. According to Vu, consumers are a large group of undefined individuals. To bring about their representation in trademark litigation, additional resources, costs and efforts are required in connection with the additional procedures and evidence needed.

“We believe that a streamlined legal procedure focusing primarily on the trademark owner and alleged infringers would result in a more targeted and efficient resolution of the dispute,” said Vu. “We should concentrate on promoting our enforcement team and tight management to prevent counterfeit merchandise from circulating on the market.”

Instead, Vietnam has regulations in place to protect consumer or public interest.

One of these is Article 73.5 or Article 130 of IP Law 2005, which addresses false advertising and misrepresentation, thus safeguarding consumer rights.

Another is Article 112 of IP Law 2005, which regulates the third-party observation as a mechanism allowing interested parties, such as competitors, consumer groups or any concerned individuals, to voice their concerns or objections about a trademark application. “It also provides a means for the public to contribute valuable information to the trademark examination process, which can assist the trademark office in making informed decisions,” said Vu.

Furthermore, Article 112a of IP Law 2005 allows any person to have the right to oppose the grant of certificate of protection. “This opposition process is an essential part of the trademark registration system in Vietnam, allowing the public to assert their concerns or raise objections before the trademark is officially granted protection. The fundamental difference between the third-party observation and opposition mechanism is the time limit given to the third-party,” explained Vu.

To determine if there is consumer confusion or if a trademark has acquired secondary meaning, Vu said they consider undertaking consumer market surveys and other indirect engagement initiatives with consumers. Such measures help protect consumer or public interest.

According to her, several consumer protection associations were established in Vietnam in compliance with the Law on Consumers Protection. Unfortunately, these associations haven’t been active, and lack of funds hound the group. To begin with, they do not charge membership fees. She suggested that the government should “seriously consider providing financial funding for consumers’ associations.”

Vu proposed that trademark owners join these associations through financial sponsorship, which will help ensure sufficient resources, and via collaboration for consumer protection campaigns. “This may involve sharing information about trademark infringements and fake – genuine identification. This collaboration can help identify and combat counterfeit products, unauthorized use of trademarks and other violations, ultimately safeguarding the brand’s integrity,” she said.

IP lawyers and attorneys in Asia have different views on the extent of consumers’ involvement in trademark litigation. Nevertheless, in recognition of the importance of consumer interest, including public health, their countries’ laws are protective of consumer rights in different and sometimes similar ways and measures.

While there may be disagreement over whether consumers should be the third party in trademark litigation, the overriding thought is that public interest should be at the core of trademark law.

- Espie Angelica A. de Leon