What is Trademark Bullying?

Ashwin Pandey is a third-year student pursuing his BA. LLB from the West Bengal National University of Juridical Sciences, Kolkata.

Introduction

A trademark forms a critical element of the image of a brand, it is essentially any symbol, words, logos, etc. which represents that a product has been made by a particular brand. The idea behind a trademark is that it allows the consumer to make an informed decision with regards to the authenticity and quality of a product that they are purchasing, and it keeps them protected from the many counterfeits that can be found in the market.[i]

Trademarks are protected under various intellectual property laws, but in some cases, this protection can be taken to an extreme level by the owners which has led to the emergence of the concept known as trademark bullying. Trademark bullying is said to take place when a party uses vague or baseless claims to say that another party has infringed upon their trademark. It is a tool used by a trademark owner to intimidate other businesses outside of what might be reasonable.[ii]

What are some of the factors that the courts look at when there is a case of infringement of trademark?

Certain factors that courts have looked at when cases on trademark infringement were brought before it has been discussed below:

A. What are the chances of there being some confusion in the mind of a consumer?

An important case on this question came in the form of Monster V. Vermonster in the United States when the energy drink company, Monster, filed a suit against a brewery, the vermonster.[iii] The argument presented by Monster was that similarity in their names would lead to confusion among the customers. It was however held by the court that since one company manufactured beer and the other energy drink, there was no scope for confusion among the customers. Only when the marks of the companies are deceptively similar and are capable of deceiving a rational consumer between 2 similar products will the court uphold such a suit.[iv]

This case was critical because it raised major concerns about trademark bullying in the United States and it led the US Department of Commerce, in consultation with the USPTO, to put a report titled “Trademark Litigation Tactics and Federal Government Services to Protect Trademarks and Prevent Counterfeiting” before the United States Congress.[v]

B. Are the Challenged trademarks of a generic nature?

It has been seen that a number of cases of trademark bullying deal with certain phrases or words that are generic. In such a case, the court will see whether this generic term has managed to gain some distinctiveness through its secondary usage. If a mark has managed to gain this distinctiveness through secondary usage, then the courts will protect the same.[vi]

A recent example came in the Big Basket Case when Big Basket served Daily Basket with a cease-and-desist notice, directing daily basket to stop operating under the name daily basket and also transfer the domain dailybasket.com to Big Basket, further, they were asked to close down their mobile application, and discontinue the usage of any similar domain with the term “basket” appearing as a dominant feature.[vii] However, this notice by Big Basket has been regarded by many as one of bad faith enforcement due to the fact that the term basket is considered to be a term common to the trade and any proprietor should be free to use the same.[viii] Furthermore, outside of the term “basket”, there exist no similarities in the marks used by both the companies, the font, colors, and graphics are completely different and they leave no scope for there to be any confusion for the consumers.[ix]

Trademark Bullying under the Indian Trademarks Act, 1999

Trademark Bullying is covered in India under Section 142 of the Trademark Act. It says: “Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding for infringement of a trademark which is registered, or alleged by the first-mentioned person to be registered, or with some other like proceeding, a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trademark, bring a suit against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats and may recover such damages (if any) as he has sustained, unless the first-mentioned person satisfies the court that the trademark is registered and that the acts in respect of which the proceedings were threatened, constitute, or, if done, would constitute, an infringement of the trademark.”[x]

Thus, under this provision, any aggrieved party may bring a suit against another party with regards to a threat of initiating legal proceedings for the infringement of trademarks that they believe are unjustified.

Some important cases on Trademark Bullying in India

One of the first cases of Trademark Bullying in India was Milmet Oftho Industries and Ors v. Allergan Inc.[xi] In this case, Allergan, a pharmaceutical company, sold a drug by the name of Ocuflux. Milmet also sold a drug that had a similar name in other countries, but not in India. They had instituted a suit for passing off but it was rejected by the court who said “if multinational companies do not have any intention of coming to India or introducing their products in India, they should not be allowed to throttle Indian Companies if the Indian Company has been genuinely using their mark in India and developed the product and was the first in the market”.[xii][xiii]

Another important case on trademark bullying came in the form of Jones Investment Co v. Vishnupriya Hosiery Mills.[xiv] In this case, the appellant was a large American clothing brand and the respondent was a small textile company in Tamil Nadu. The appellants had been using the trademark “Jones New York”, and when the respondents filed an application for the mark “Jones”, it was opposed by the appellants who claimed that the respondents were causing confusion among the consumers, and their products under the mark of “Jones New York” had gained a reputation in the market.[xv] Like the judgment in the Milmet Oftho case, the court once again held that “a multinational company cannot claim infringement of trademark by a local Indian company purely based on international presence unless they can expressly establish that their presence extends to India or precedes that of the Indian company.”[xvi][xvii]

In the case of Bata India Limited Vs Vitaflex Mauch GmbH,[xviii] the defendants had issued the plaintiffs with a legal notice alleging that the Plaintiffs had infringed on their trademark with one of their shoes. This led to the plaintiffs instituting a suit asking the court to restrain the defendants from threatening to issue legal proceedings on grounds that they felt were baseless. The court held that in order for there to be a valid case of trademark infringement, the defendants needed to show that there was a valid intellectual property concern with regards to the disputed design of the shoes. The defendants were unable to show the same since a functional aspect of the shoe could not be said to be a part of the trademark.[xix] On these grounds the court went in favor of the plaintiffs and restrained the defendants from instituting any more threats of legal proceedings.

One final case that will be looked at in this section is that of ITC v. Nestle.[xx] In this case, ITC had launched the Sunfeast Yippee! Noodles with a “magic masala” variant in the year 2010. Three years later, Nestle, while advertising their own instant noodles they used the phrase “Maggi extra delicious magical masala”.

The plaintiff instituted a suit claiming that the phrase “magic masala” was an important feature of their trademark, and the same had been copied by the defendants by making a small alteration and saying “magical masala” instead of “magic masala”.

The defendants contended that the phrase “magical masala” was not being used by them as a trademark, but rather as a descriptor of the flavor. They further said that terms such as “magical” and “masala” were terms that were commonly used in the industry and could not be monopolized by one company. This argument was accepted by the court went on to say that since the terms in question were laudatory, they could never be monopolized.

Some measures that can be taken to prevent Trademark Bullying

Some of the measures that companies can take in order to protect themselves from trademark bullying are discussed below:

- Conduct proper due diligence with regards to similar marks before making an application for a trademark.

- Have some basic knowledge about the trademark laws.

- Consider alternate dispute resolution mechanisms.

- Conduct proper inquiries before agreeing to a settlement with regards to a trademark infringement suit. [xxi]

Conclusion

Thus, as we have seen, trademark bullying presents a challenge for smaller companies that are trying to enter the market. They are discouraged from launching a product or using a particular trademark out of fear of litigation. It is here that the trademarks act looks to protect their interests. It allows them to be able to claim compensation or even bring a claim of defamation against the bullying company. This protects small businesses from their larger counterparts who might have more resources, and it helps create a more level playing field for businesses to flourish.

REFERENCES

[i] Mondaq.com. 2021. An Overview On Trademark Bullying In Commercial Environments - Intellectual Property - India. [online] Available at: <https://www.mondaq.com/india/trademark/1112722/an-overview-on-trademark-bullying-in-commercial-environments> [Accessed 15 December 2021].

[ii] Lexology. 2021. Trademark Bullying: A Legal Means to Illegal Ends. [online] Available at: <https://www.lexology.com/library/detail.aspx?g=72ae12b4-4b83-4ec4-a0d2-96d9aa534be5#_ftn1> [Accessed 15 December 2021].

[iii] Davidson, J., 2021. MONSTER Mash: Analyzing MONSTER ENERGY v. THE VERMONSTER. [online] IP Registration and Enforcement Blog. Available at: <https://davidsontm.wordpress.com/2009/10/16/monster-mash-analyzing-monster-energy-v-the-vermonster/> [Accessed 15 December 2021].

[iv] Joshi, V. and Mansingka, T., 2021. Is Trademark Bullying For Real? - Intellectual Property - India. [online] Mondaq.com. Available at: <https://www.mondaq.com/india/trademark/1118588/is-trademark-bullying-for-real?> [Accessed 15 December 2021].

[v] Interns, I., 2021. Concept of Trademark Bullying and landmark cases - Intepat IP. [online] Intepat IP. Available at: <https://www.intepat.com/blog/trademark/concept-of-trademark-bullying-and-landmark-cases/#_ftn4> [Accessed 15 December 2021].

[vi] Joshi, Mansongka, Supra note iv.

[vii] Dhonchak, A., 2021. BigBasket and Daily Basket Row – Confusion or Bullying?. [online] SpicyIP. Available at: <https://spicyip.com/2021/03/bigbasket-and-daily-basket-row-confusion-or-bullying.html> [Accessed 16 December 2021].

[viii] Lexology, supra note ii.

[ix] Dhonchak, supra note vii

[x] The Trademarks Act, No. 47 of 1999, §142.

[xi] Milmet Oftho Industries and Ors v. Allergan Inc, (2004)12 SCC 624.

[xii] Ibid.

[xiii] Lexology, supra note ii.

[xiv] Jones Investment Co v. Vishnupriya Hosiery Mills, 2015-4-L.W.30.

[xv] Mehta, P., 2021. Concept of trademark Bullying in India - LexForti Legal Journal. [online] LexForti. Available at: <https://lexforti.com/legal-news/concept-of-trademark-bullying-in-india/> [Accessed 16 December 2021].

[xvi] Supra note xiv.

[xvii] Lexology, supra note ii.

[xviii] Bata India Limited v. Vitaflex Mauch GMBH, 2015 SCC OnLine Del 11505.

[xix] Intern, supra note v.

[xx] ITC Limited v. Nestle India Limited, 2015 SCC OnLine Mad 720

[xxi] Mehta, supra note xv.

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