In this article, we will touch upon the basics of the DOCTRINE OF DILUTION in India. MEANING OF DILUTION: Dilution of the trademark is the power given to owners of well-known marks to protect their mark from unauthorized use, damaging the industry’s reputation. Well-known marks have been in the market for quite some time now and have established their brand associated with their products. The products are recognized by these brand names. There are around 100 plus well-known marks in India. A peculiar thing about well-known marks is that they are not registered brands but have established their name in the market so that they form the source of recognition for the products.
Brand recognition and reputation in the industry are core elements of well-known marks. A well-known trademark is diluted when there is the use of similar or identical trademarks against non-competing markets. It means that the trademark might lose its capacity to depict itself as a single source. Dilution is aimed to protect the well-known marks from losing their recognition to others who can use the name in similar or different product lines leading to damage in the reputation and fame of these marks. To get protection under Dilution it is important to check if the trademark used does not confuse consumers regarding who is the product owner. It should not confuse the customers regarding the proprietor, brand, and category of the product. Even the slightest variation in the mark if confuses the consumers or makes them believe that the products are from the same manufactures, then the protection under Dilution shall not be extended to the mark. Example:
- Kodak is popularly used in photography-related services. Suppose the brand “Kodak” is used in footwear services. In that case, it might create an impression that the proprietors of photography services and footwear are similar or the same, thereby damaging the brand reputation of “Kodak”- it being a well-known mark.
- In 2014, the Supreme Court made its stand clear on dilution and trademark infringement in the case of Nestle v. Iffco. The issue dealt with the defendant selling the chocolates that were a replica of nestles’ Kit Kat- leading to loss of distinctive attributes of nestles’ mark, thereby causing loss of advertisement and economic value of KIT KAT. The Court held it to be the case of Dilution of infringement too.
DOCTRINE OF DILUTION: “Doctrine of dilution allows the proprietors of a well-known trademark to restrict any person from using their mark for the same product line or different in a way that would lead to lessening the uniqueness and distinctiveness of the mark.“
The concept of Dilution divided into two categories:
1. Blurring, or blurs a mark from the group with a single product to signify other products in other markets;
In Mead Data Central v. Toyota, the Court held that blurring includes ‘the whittling away of an established trademark’s selling power through its unauthorized use by others upon dissimilar products.’
2. Tarnishment, which is the damaging of a mark through unappealing links. FORD MOTORS COMPANY LIMITED VS C.R.BORMAN
The Court held that to prove the case of Dilution or passing, there is no requirement for the goods to be in the same product line. Suppose the goods are in a different product line and the use of well-known marks is evident. In that case, the claims are sustainable, leading to the tarnishment of the trademark. The Trade and Merchandise Marks Act, 1958 ( now replaced by Trademark Act, 1999), had no reference to the concept of Dilution, and it had to always rely on international cases and standards set by Foreign Courts in the U.S., U.K., and E.U. to deal with the cases of Dilution. The purpose was to save the reputed marks from any dilution in the public’s minds at large. Infringement suits were maintained in situations where similar marks were used in the same product category. Thus, no remedies were given to the parties who were subjected to Dilution of the mark. The current Trademark Act, 1999, throws some light on the concept of Dilution. Although the legislations have not taken the issue of Dilution seriously and have accorded a little protection to aggrieved applicants, various judicial precedents have come in handy to solve Dilution cases. However, section 29(4) gives us a brief idea of the intention of the legislatures to include Dilution as infringement criteria: “This section posits similarity in goods that are not related to each other.” Common elements to establish in anti-dilution case:
3. Reputation: The most important thing to succeed in the case of Dilution is to establish that the mark has an extreme reputation in the industry and that using the mark by someone else can cause a loss of uniqueness of the mark.
In GENERAL MOTORS CORP V. YPLON, S.A., the Court held that the plaintiff has to establish that the mark intended to be protected immense fame and reputation in the mark beyond a reasonable doubt that if anyone else uses the mark can confuse the public about the association with the brands. The term “reputation” was clearly defined in the case: “If a reasonable buyer doesn’t think of the well-known trademark in his or her mind, even subtly or subliminally, then there can be no dilution.”
4. Protection to legitimate owners: The next important element is protection to the legitimate owner of the mark. The aggrieved party to Dilution must show that they had a substantial interest in the mark, and the party is the legitimate owner of the mark. If so established, then the owner of the mark can seek the protection of the Court.
5. Establishment of Prima-Facie case: The third important aspect is establishing a Prima-facie case to seek protection under the Law.
To establish a prima –facie case, courts have emphasized SECTION 29(4):
- The mark is a well-known mark.
- There was damage to the reputation of the well-known mark.
- The damage was in such a nature that it would lessen the uniqueness of the brand.
EXCEPTIONS TO DILUTION Every Legislation covers itself from certain exceptions, and so has the doctrine of Dilution also. There are certain acts if done, would not amount to Dilution. They are:
- Advertising or promotion that permits consumers to compare goods or services; or
- Identifying and parodying, criticizing, or commenting upon the famous mark owner r the goods or services.
- All forms of news reporting and news commentary.
- Any mark which includes parodies, criticism, or comments.
In the case of Louis Vuitton Malletier S.A. v. Haute Diggity Dog, the Court was very lenient in pronouncing the judgment. The application of Dilution was filed against the defendant operating under the brand “CHEWY VUITTON” for manufacturing apparel for dogs. Now, the plaintiff filed the case on the ground that the said impugned mark was a parody of the famous mark “LOUIS VUITTON.” The Court favoring the defendant held that “mere parody of mark does not constitute dilution.”
FAMOUS CASES ON DILUTION OF TRADEMARK:
The Court observed that ITC never used the mark on the cigarettes and that the ITC mark’s fame could not be extended to mid to high priced cigarettes; therefore, the trademark dilution cause of action cannot survive.
2. BATA INDIA PRIVATE LIMITED VS PYARELAL:
In this case, the plaintiff filed a dilution case against the defendant. Even though the defendants were dealing with a different product, the injunction was passed. There was some element of diminishment in the plaintiff’s trademark.
3. TATA SONS VS MANOJ DADIA:
The principle of Dilution is enshrined in Section 29(4) of the Trade Marks Act, 1999, and the Court stated that the test for Dilution cannot be the same as that of deceptive similarity.
4. BMW v DMW:
The Court stated that the defendant has adopted the indispensable features of the plaintiff’s mark, and there is a clear visual and phonetic resemblance. Therefore, the defendant’s mark DMW is likely to deceive and cause confusion, and thus there is an established case of Dilution.
5. DAIMLER BENZ AKTIEGESELLSCHFT AND ANR. V. HYBO HINDUSTAN [AIR 1994 Delhi 236] the Court exclaimed that using the trademark “BENZ” for underwear when the mark was used by the plaintiff’s for the cars will discriminate the benefits of usage acquired by the plaintiffs.
MIDAS HYGIENE INDUSTRIES (P) LTD. V. SUDHIR BHATIA AND OTHERS (2004) 3 SCC 90, made it clear that even if there was a delay on the part of the plaintiff in filing the suit, the same would not be sufficient to deter grant of injunction in favor of the plaintiff; given that the defendant’s adoption of the mark was also prima facie dishonest. It was held by the Court that the plaintiff has made out a prima facie case, and the balance of convenience is also in its favor.