Concept of trade mark under the Trade Marks Act 1999 and the protection of domain names under Indian law

Author: | Published: 12 Jul 2001
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Intellectual property rights in India can be classified into the following categories: trade and merchandise marks, patents for inventions, copyright in respect of original works, designs, know-how, confidential information and trade secrets, and domain names. A substantial part of intellectual property law has traditionally been codified under the following legislation:

  • the Trade and Merchandise Marks Act 1958;
  • the Copyright Act 1957;
  • the Patents Act 1970; and
  • the Designs Act 1911

As a consequence of the obligations undertaken by India under the WTO, GATT and TRIPs agreements, the following statutes have recently been passed by the Indian Parliament:

  • Trade Marks Act 1999;
  • Designs Bill 1999;
  • Protection of Plant Varieties and Farmers Rights Act 1999;
  • Geographical Indication of Goods (Registration of Protection) Act 1999;
  • Information Technology Act 2000; and
  • Patents 2nd Amendment Act 1999.

This article deals with the concept of trade marks under the Trade Marks Act 1999, and recent developments in information technology law and law relating to the protection of domain names.

The Trade Marks Act 1999

In recent times, the trade marks law has undergone fundamental changes and to a large extent has started from scratch.

The Trade Marks Act 1999 (the 1999 Act) was developed after a comprehensive review of the existing law and the developments in trading and commercial practices, increasing globalization of trade and industry, the need to encourage investment flows and transfer of technology, the need for simplification and harmonization of trade marks systems, and to give effect to important judicial decisions. To achieve these objectives, the Trade Marks Act 1999 incorporates, among other things, the following:

  1. registration of trade mark for services, in addition to goods;
  2. registration of trade marks, which are imitations of well-known trade marks, are not permitted;
  3. the grounds for refusal of registration of trade marks have been enlarged. Consequently, the provisions for the defensive registration of trade marks are omitted;
  4. abolition of the system of maintaining the registration of trade marks in Part A and Part B with different legal rights, and provision for a single register with simplified procedures for registration and with equal rights;
  5. simplifying the procedure for registration of registered users and enlarging the scope of permitted use;
  6. providing for the registration of "collective marks" owned by associations, etc;
  7. providing an Appellate Board for the speedy resolution of appeals and rectification applications that at present go before the High Court;
  8. transferring the final authority relating to the registration of certification trade marks to the registrar instead of the central government;
  9. providing increased punishment for offences relating to trade marks on a par with the provisions of the Copyright Act 1957, to prevent the sale of spurious goods;
  10. prohibition on the use of someone else's trade marks as part of corporate names, or name of a business concern;
  11. extension of the application of the concept of a convention country to include countries that are members of a group or union of countries and intergovernmental organizations;
  12. incorporating other provisions, such as amending the definition of "trade marks", provisions for filing a single application for registration in more than one class, increasing the period of registration and renewal from seven to 10 years; making trade mark offences cognizable; enlarging the jurisdiction of courts to bring the law in this respect on a par with the copyright law, amplifying the powers of the court to grant ex parte injunctions in certain cases; and other related amendments to simplify and streamline the trade mark law and procedure.

The Trade Marks Act 1999 was passed by both the Houses of Parliament and received the assent of the President of India on January 3 2000. However, it has not yet come into force since the rules to be framed thereunder have not yet been published, and the Appellate Board it contemplates has also not yet been constituted.

Definition of trade mark

Section 2(1) (zb) under the 1999 Act defines the term "trade mark" as follows:

"'Trade mark' means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and:

  1. in relation to Chapter XII (Offences, Penalties and Procedures) (other than Section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and
  2. in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark."

Section 2 (1)(m) defines a "mark" to include a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof.

Section 2(1)(j) defines "goods" to mean anything which is the subject of trade or manufacture.

Section 2(1)(q) defines "package" to include any case, box, container, covering, folder, receptacle, vessel, casket, bottle, wrapper, label, band, ticket, reel, frame, capsule, cap, lid, stopper and cork.

Section 2(1)(z) defines "service" to mean service of any description which is made available to potential users and includes the provision of services in connection with the business of any industrial or commercial matters such as banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising.

Essentials of a trade mark

From the above definitions, the following essential ingredients emerge for constituting a trade mark under the 1999 Act:

  1. it must be a "mark";
  2. it must be capable of being represented graphically;
  3. it must be capable of distinguishing the goods or services of one person from those of others;
  4. it must be used or proposed to be used in relation to goods or services;
  5. there must be a visual representation of the mark;
  6. use of the mark in relation to goods must be upon or in physical or in any other relation whatsoever to the goods; and in relation to services, it must be used as a part of any statement about the availability, provision or performance of such service; ans
  7. the objective of use of the mark should be to indicate a connection in the course of trade between the goods or services, and some persons having the right to use the mark either as proprietor or by way of permitted use. It is not necessary to reveal the identity of the person using the mark.

Capable of being represented graphically

The graphic representation must be able to show the mark. It is important that the Trade Marks Registry should know what is comprised in the mark so that it can be published in the Trade Marks Journal and also be capable of being entered in the register of trade marks maintained by the Registry which can be easily accessed. Any one intending to conduct a search of a register of trade mark or a pending application, must be able to know what the mark is. It was observed in the case of Ty Nant Spring Water Ltd's trade mark (reported in 2000 RPC 55) that there has to be a "a graphic representation in which the identity of the relative sign is clearly and unambiguously recorded... it seems clear that a sign (such as sound or aroma) can be taken to have been represented graphically with the required degree of precision when figuratively represented, even though, interpretation or analysis may then be required to detect or demonstrate use of it. In the case of Swizzels Matlow Ltd's application for a three dimensional trade mark (1999 RPC 879), registration was sought of a three-dimensional mark described as follows:

"The trade mark consists of a circular, compressed tablet bearing a raised heart outline on both flat surfaces containing within the heart outline on one side any one of several different words or phrases." No visual image of the mark was submitted.

It was held that the qualification of the words "represented graphically" did not serve to restrict the means by which the representation is made provided it is in a graphic form. The graphic form could be, for example, by way of writing, drawing, musical notation, written description or any combination thereof. Further, the description of the mark was held to be inadequate. It was not restricted as to the dimensions of the tablet, nor to the positioning, thickness or shape of the raised heart outline, nor to the area available for other matter. The registration was refused.

Shape of goods

Prior to the 1999 Act, the "shape of goods" could have been protected as a design only under the provisions of the Designs Act 1911 if it was "new" or "original". The duration of the statutory protection available to a design has thus been enlarged by virtue of its inclusion in the definition of trade mark under the 1999 Act. By this mechanism, there is also an attempt to recognize the de facto monopoly in the market place.

Under section 9(3) of the 1999 Act, a mark shall not be registered as a trade mark, if it consists exclusively of:

  1. the shape of goods that results from the nature of the goods themselves;
  2. the shape of goods that is necessary to obtain a technical result; or
  3. the shape that gives a substantial value of the goods.

The scope of the provision contained in section 9(3)(c) quoted above is really broad. In the case of Philips Electronic BV v Remington (1998 RPC 283), it was held that this restriction should apply to a shape which exclusively adds value to the goods (design or functional appearance) and one should disregard a value attributable to a trade mark function (ie source indication).

Combination of colours

Under the provisions of the Trade and Merchandise Marks Act 1958, a trade mark could be limited wholly or in part to one or more specified colours, and any such combination had to be taken into consideration by the tribunal having to decide on the distinctive character of the trade mark. Whether any colours or a combination thereof can be construed as a trade mark would depend upon whether it has acquired any secondary meaning or a de facto monopoly in the market place.

In a very recent judgment, Pfizer Inc. obtained an ex-parte injunction from the Delhi High Court restraining Ahmedabad-based Zydus Cadila Healthcare from using the trade mark Penegra for an impotence drug that uses the same ingredients as the plaintiff's high-profile Viagra. The Delhi High Court also restrained the defendant from using any trade mark that was deceptively or confusingly similar to Viagra and also from using the "blue, diamond shape" characteristic of Pfizer's pill. The final judgment is awaited.

Sounds

Any sound can be registered and recognized as a trade mark provided it can be represented graphically.

Smells

Smells can also be registered as a trade mark if they can be accurately described or represented graphically. This may pose some practical problems in making a search at the Trade Marks Registry. While the representation of a smell trade mark can be articulated in words and is capable of being understood in theory, it would be extremely difficult in practice to implement it.

Impact of the new technology and trade marks protection

In the third millennium, technological advances have outpaced the legal developments for protecting and preserving modern intellectual property. Business organizations during the nineties increasingly used advances in information technology and the world wide web to augment their business prospects. Domain names, like trade marks, trade names and trade dresses are becoming among the prominent indicia of a global business. The information technology has permitted the evolution of new forms of transnational reputation of businesses. This of course has posed different kinds of problems. Over the past few years, the registration of domain names has become exceedingly cheap with the obvious consequence of the tremendous increase in cybersquatters.

Domain names

A domain name is a conventional internet name for a network or computer system consisting of a sequence of two or more groups of characters separated by periods. It is equivalent to a telephone number or a geographical address.

With the growing awareness of the internet and its potential for B2B and B2C transactions, the Indian government has decided to use this medium for bringing more transparency to the Indian corporate world. Under the Companies (Amendment) Act 2000 and the listing agreements of the recognized stock exchanges, substantial disclosures for compliance or corporate governance are now required to be published by Indian companies on their websites.

Domain name disputes

While a number of Indian companies have registered their domain names on the internet, domain name disputes are relatively new to the Indian judicial system.

Generally there are three types of domain name disputes:

  1. Infringement:
    1. Registration of a deceptive domain name – where the original registrant intentionally chooses a domain name that closely resembles another well-known trade mark and the registrant attempts to cash in on the reputation and goodwill of the well-known trade mark. This clearly constitutes infringement and passing off.
      The legal principles that may be relevant for the determination of the issues are:
      1. the registration/reputation and goodwill associated with the well-known mark;
      2. the deceptive similarity between the trade mark and the domain name; and
      3. likelihood of confusion or deception in the minds of the public and members of the trade.
    2. Meta-tags: A meta-tag is visible to internet search engines and web browsers to index relevant web sites. The use of infringing meta-tags that are identical or deceptively similar to the well-known trade marks have the potential for an internet subscriber to be diverted to an unknown or unwarranted website.
  2. Concurrent claims: where there are more than one legitimate user without any intention to pass off. There may however be some element of potential for confusion or deception.
  3. Cybersquatting: where domain names bearing striking resemblance to the well-known marks are registered with the intention to sell these to the proprietor of the trade mark. Usually, the cybersquatter does not offer for sale any goods or services nor do they attempt to trade any goods or services as those of another trade mark

Jurisdictional issues

Many computer crimes have been brought under the purview of the Information Technology Act 2000 (IT Act). Under section 75 of the IT Act, it is declared that it shall apply to any offence or contravention committed outside India by any person irrespective of nationality. The extra-territorial jurisdiction imposed by the IT Act is limited to an offence or contravention committed outside India by any person if the act or conduct constituting the offence involves a computer, computer system or computer network located in India.

Cybersquatting has not been brought within the purview of the IT Act. In case of judicial challenges in Indian courts concerning infringement of trade marks by use of domain names, the conventional rules of jurisdiction under the Code of Civil Procedure 1908 (CPC) would continue to apply. Section 20 of the CPC provides that every suit shall be instituted in a court within the local limits of whose jurisdiction: (a) each of the defendants actually and voluntarily resides, or carries on business or personally works for gain, at the time of commencement of the suit; (b) any of the defendants actually and voluntarily resides, or carries on business or personally works for gain provided that either the leave of the court is obtained or the other defendants acquiescence in such institution; or (c) the cause of action arises wholly or in part.

Recent judgments

In view of the limitations and restrictions imposed by the CPC, many Indian corporations have successfully used the ICANN (Domain Names) Dispute Resolution Policy to remove cybersquatters and to reacquire the 'stolen' property in domain names.

The Indian courts have also successfully applied the principles of passing off to order interim injunctions against users of offending domain names.

Broadly, two tests are applied in a passing off action for determining the question of whether the plaintiff is entitled to an injunction:

  • whether the words used in the trade name of the plaintiff are mere descriptive words of common use or they have come to acquire a distinctive or secondary meaning in connection with the plaintiff's business; and
  • whether there is any reasonable probability that the use of the name adopted by the defendant was likely to mislead the customers of the plaintiff by reason of similarity of the two trade names.

In the case of Yahoo, Inc v Akash Arora (1999 PTC (19) 201), the plaintiff instituted the suit against the defendants seeking for a decree of permanent injunction restraining the defendants, their partners, servants and agents from operating any business and/or selling, offering for sale, advertising and in any manner dealing in any services or goods on the internet or otherwise under the trade mark/domain "Yahooindia.com" or any other mark/domain name that is identical or deceptively similar to the plaintiff's trade mark "Yahoo!". The plaintiff had adopted the trade mark Yahoo! in 1994 and registered the domain name Yahoo.com in 1995; trade mark applications were filed by the Plaintiff in 69 countries including India. The defendants registered the domain name "Yahooindia.com". The defendant offered informational services specially targeted to India. The Delhi High Court held the two marks/domain names "Yahoo!" and "Yahooindia" as almost similar except for the use of the suffix India. The court considered that due to the nature of the internet, there is every possibility of an internet user being confused and deceived into believing that both the domain names belong to the common source and connection, although the two belong to two different concerns. The court further held that the defendants' appropriation of the plaintiff's mark could not be adequately remedied by a disclaimer. The ratio and principle laid down in Jews for Jesus v Brodsky reported in 46 USPQ 2d 1652 was followed by the Delhi High Court in this behalf. The defence that the word 'Yahoo' is a dictionary word and therefore cannot be appropriated as a domain name/trade mark was also considered as misplaced. While granting the interim injunction in favour of the plaintiff, the court observed that there are many dictionary words that have acquired uniqueness and distinctiveness, and are associated with the business of the concerned companies, and such words have to come receive the maximum decree of protection by courts.

The above ruling was followed by the Bombay High Court in the case of Rediff Communications Limited v Cyberbooth (A.I.R. 2000 Bombay page 27 = 2000 PTC (20) 209). The court held that in determining the question of jurisdiction, there is no warrant to draw a distinction between a passing off action based on trade mark and other passing off actions. The Trade and Merchandise Marks Act covered all passing off actions whether based on trade marks, trade names or business names. The Learned Judge followed the judgment in Kirloskar Diesel Recon Pvt Ltd v Kirloskar Proprietary Ltd (AIR 1996 Bombay 149), where it was held that with the passage of time, the law on the requirement of a common field of activity in a passing off action had radically changed. The real question in each case is whether there is, as a result of misrepresentation, a real likelihood of confusion of the public and consequent damage to the plaintiff. The plaintiff carried on the business of communication and provided services through the internet. The services of the plaintiff under the trade mark/domain name REDIFF had been widely published. The turnover of the plaintiff's group companies and the plaintiff's company individually was also substantial. Both the plaintiff and the defendant have common fields of activity – they operate on the web, provide information of a similar nature, offer the facility of sale of goods, music cassettes, CDs and flowers, and offer a chat line and a cricket opinion poll among other things. The court held that the domain names REDIFF and RADIFF are almost similar and there is every possibility of the internet user being confused and deceived into believing that both domain names belong to one common source and connection, although the two belong to different persons. While granting an interim injunction, the court rejected the defence that the word "Radiff" was derived from the four words viz. "radical", "information", "future" and "free", and held that the adoption thereof was with the intention to trade on the plaintiff's reputation.


Trade Marks

Little & Co.
Central Bank Building
Mahatma Gandhi Road
Mumbai-400 023
India
Tel: 91 22 265 2739
Fax: 91 22 265 9918