Deceptive Trademarks

What is a Deceptive Trademark?

According to the Trademark Dictionary, a "Deceptive Trademark" is a type of trademark that can most likely mislead or deceive consumers about the nature, quality, or origin of the goods or services being offered. These trademarks are not eligible for trademark protection under the law.

Deceptive Trademark

Deceptive Trademark as defined in legislation.

Under the TradeMarks Act of 1999

In Indian Legislation, "Deceptive Trademark" is also known as "deceptively similar marks", which is defined in Section 2 (a), sub-clause (h), as ''a mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion''.

Factors of Deceptive Trademarks

For one to determine whether any given trademark is deceptively similar to another, one must take note of certain key factors:

1. The Characteristics of the Trademark: The nature here refers to the characteristics like the words, created words, descriptive or non-descriptive names, and so on. For example, "Starbucks" and "Starbox", "Facebook" and "Facebake".
2. Usage of the Goods: This refers to the type of goods that are already being used as trademarks or are likely to be used as trademarks in the future.
3. Degree of Commonality/Similarity: Trademarks are seen as deceptive if there is a certain degree of commonality based on Visual, Phonetic, and Conceptual Similarity. In K.R Chinna Krishna Chettiar v. Sri Ambal & Co, the Supreme Court held that trademark similarity isn't based solely on appearance but also on sound. Deceptive similarity doesn't require intent to deceive, the main focus is on the effect it can have on the customer, assessed by the visual and phonetic tests.
4. Type of Consumers: This focuses on the level of care and intelligence exercised by the consumer while purchasing the goods or subscribing to a service.
5. Mode of Purchase: This refers to how consumers acquire or purchase the goods or services, and such modes can include physical stores like retail/wholesale stores, factory outlets, malls, or online platforms like Amazon, Flipkart, Myntra, etc. These can affect a consumer's perception of these marks.

Appearance of Deceptive Trademark in official databases

Deceptive Trademarks, in an Indian sense, refer to trademarks that are misleadingly similar to trusted trademarks already available in the mainstream market. The practice of branding and naming one product similar to another one that has survived in the cutthroat market and has gathered a trusted customer pool has been an age-old technique used by vendors and producers to attract customers and gain their trust. While the vendors make their profit, it is the customer who is at the receiving end of this deception.

To combat this, the governing legislation, the Trademarks Act of 1999, under section 9 (2) bars the registration of any trademark that has the potential to deceive the public in any way. Additionally, the legislation makes ironclad provisions to prevent the registration of deceptive trademarks under section 11 as well.

Deceptive Trademark as defined in Cases

Parle Products Pvt. Ltd. v. JP & Co. (1972):

In this case, the plaintiffs took the defendant to court for using their registered trademark by employing a similar wrapper design for the packaging of biscuits, which was similar to that of the plaintiff's famous products, Parle G, glucose biscuits. The Supreme Court held in favor of the plaintiffs, finding that using a color scheme and design that was almost identical to the defendant's could mislead consumers into confusing one brand with the other. The Court emphasized that even if the designs were not identical, their resemblance was sufficient to deceive consumers, constituting trademark infringement.

Proctor and Gamble v. Joy Creators (2008):

This case dealt with trademark infringement and deceptive similarity. Proctor and Gamble owns the trademark for the phrase "Total effect" in cosmetics products. popularly known as " Olay Total Effects". The company Joy Creators used the Phrase," Total Effects" while branding their product, "Joy Ultra Look Total Effect". The court ruled in favor of Proctor and Gamble, granting a permanent injunction against Joy Creators, restraining them from using the phrase " Total Effect". The court held, "Deception arises not just from identical words but also from how the mark is perceived in the market."

Starbucks Corporation v. Sardarbuksh Coffee & Co:

Starbucks filed a lawsuit against Sardarbuksh Coffee for using a name and logo that closely resembled its own, despite receiving a cease-and-desist letter. The court ruled in favor of Starbucks, reinforcing the importance of protecting brand identity against deceptive trademarks. If the customer feels confused while differentiating the two brands, they can be deemed deceptively similar. The Court ordered for the defendants to change their brand name to "Sardar -Ji - Baksh"

Subway v. Suberb

Subway is a well-established restaurant chain from the United States, popularly known for its submarine sandwiches. They registered the trademarks of two terms, "veggie delight" and "subway club", which they used to describe their sandwiches. Infinity Food and its partners, who ran a business together, owned the licenses that the Plaintiff originally had. The Plaintiff had permitted these licenses to be used in a franchise, allowing them to operate under the Plaintiff's brand. Starting in 2019, these partners began selling products from the Plaintiff in their stores, which were supplied via their shops. They used the name and logo "Subway," including their yellow and green colour scheme. They also used the terms "Veggie delicious" and " Sub on a club," which were deceptively similar to those registered by the plaintiffs. Use of the same or comparable food menus as well as paper napkins, in addition to similar or identical signs, outlet designs, menu cards, and employee outfits. Use of images and wall art at their outlets that were identical to the plaintiff's registered trademarks. The Delhi High Court allowed Suberb to make amends to their brand. The Plaintiffs were, however, unhappy with the adjustments made and filed a petition for an interim injunction. The Court held that after the modifications undertaken by Infinity Food, the appearance of Infinity Food's red and white “SUBERB” mark could not be said to be deceptively similar to Subway's device mark. Further, the modifications in respect of the two marks “VEG LOADED REGULAR” and “TORTA CLUB” would rest any allegation of infringement as the words “CLUB” and “VEG” were publici juris. The Court held that, prima facie, no case of passing-off had been made out and no claim to injunction could be sustained by Subway because of the modifications that Infinity Food had carried out. Therefore, the prayer for interim injunction was dismissed.

Sunpharma Lab Ltd v Lupin Ltd and An. 2018

Sunpharma Lab Ltd, the plaintiff, coined and registered a trademark for their diabetes drug, TRIVOLIB, in 2011. It grew to have a significant market presence. Lupin LTD, the defendant, launched its drug named TRI-VOBIT in 2014. The plaintiff argued that the defendants mimicked their drug's name, structure, and purpose. The plaintiff sued for trademark infringement. The defendants took the defence that the word 'TRI' is used to denote three active ingredients, and the word 'VOBIT' has been used in various other registered drugs. The court directed an interim injunction in favour of the plaintiff and gave the defendant six months to liquidate the TRI-VOBIT stocks. The court reinforced that composite marks must be assessed holistically, and prior use of a mark’s segment does not override infringement claims

BDH Industries Ltd v. Croydon Chemical Works Pvt Ltd

The plaintiff applied for the Trademark registration of their drug "PV-DINE', but was rejected by the assistant registrar of trademarks, as they had allowed the opposition by the respondent who had registered the trademark of their drug 'POIDIN'. The registrar raised certain complaints and asked for PV DINE to be amended, the plaintiff then adjusted it to P.V. DINE. The Assistant Registrar further held that the petitioner failed to furnish any tangible evidence to substantiate its bona fide adoption of the mark and that it cannot claim absolute proprietary right in respect of the common suffix. The Bombay High Court held that the comparison must be made from the viewpoint of a person of average intelligence and imperfect recollection. Marks should be considered as a whole, rather than dissected into parts. The evaluation should focus on the impression formed by an average person, considering visual, phonetic, and structural similarities or dissimilarities.

M/S Nandhini Deluxe v. M/S Karnataka Cooperative Milk Producers Federation Ltd (2018)

This Supreme Court case revolved around trademark disputes between "Nandhini Deluxe," a restaurant chain, and "Nandini," a dairy brand. The court ruled that the word "Nandini/Nandhini" is generic, derived from Hindu mythology, and not an invented term. While the trademarks were phonetically similar, the logos and nature of goods/services were different (restaurants vs. dairy products). A proprietor cannot claim monopoly over an entire class of goods if they do not use the trademark for all goods in that class. Thus, Nandhini Deluxe was allowed to use its mark for non-dairy products

Sociological Analysis of Deceptive Similarity in Trademark

The picture is a classic example of deceptive similarity in trademarks. The bottles in the picture all look the same but they are not, each one has a slightly different spelling of the brand and doesn't have the same tagline of," With added minerals". They are all made and marketed to seamlessly blend into the shelf with bisleri bottles offering a sense of familiarity and trust.

While discussing deceptive similarities in trademarks, one must seldom forget who the final affected party is: it is the Consumers. Companies invest a lot of time, money, and resources into making a unique trademark for their product, so as to ensure consumer attraction and the smooth registration of the trademark of their product. This product is then put into the market and gains consumer trust. When a product of a particular brand performs well, the consumers often get used to the overall look of the product and may not necessarily be familiar with the nuanced aspects of a design, which then allows for the sale of similar-looking products. Consumers often only notice that they have purchased a deceptively similar product, which is neither registered nor can assure the quality of the product. This is a severe breach of trust; sellers often misuse the comfort and trust that consumers have in well-established products to place themselves in the market race. Another affected party is the business owners themselves, these owners invest a lot of their resources into innovative design and trademark registration. It is unjust to make use of the clout and trust that the original product has gained. While big corporations have the connections and resources to combat infringements, small and medium enterprises rarely do.

Deceptive Trademark as Appeared in Research

1. THE CONCEPT OF DECEPTIVE SIMILARITY: LAW & PUBLIC POLICY: This study examines misleading trademarks and their economic and legal impacts. It shows how deceptive similarity can confuse consumers, weaken a brand's presence in the market, and lead to unfair competition. Using court case examples, it illustrates how judges decide on trademark violations and deceptive similarities based on the Trademarks Act, 1999.
2. Protection Of Trademarks In The Realm of Deceptive Similarity: In The Age Of AI: The paper "Protection Of Trademarks In The Realm Of Deceptive Similarity: In The Age Of AI" explores the new challenges of protecting trademarks, especially with the rise of artificial intelligence (AI). It underscores the necessity for legal systems to evolve to address AI-related issues in trademark infringement. The paper stresses the need to maintain consumer trust and safeguard brand identities as technology advances rapidly. It explains that deceptive similarities in trademarks can mislead consumers and exploit the reputation of genuine trademark owners, reinforcing the need to protect trademarks from misuse.

International Experiences

International Agreements:

When it comes to protecting trademark rights internationally, no systems regulate the registration and protection of these rights beyond one jurisdiction, and a single trademark registration will not automatically apply to the whole world.

Trademarks are considered territorial, and thus they must be filed in each country where protection is sought and it is granted on a national basis.. Each jurisdiction is required to recognize and protect trademark rights in a manner that fulfils its policy goals.

However, many jurisdictions have agreed upon common procedures or protocols for filing trademark applications and the trademarks are protected by various international agreements and instruments. Some include:

EUIPO (European Union Intellectual Property Office)

This is the governing agency, managing all European Union trademarks, geographical identification, and patents for craft and industrial products. It maintains a database of trademarks and allows for the registration of new ones. Article 7(1)g of the European Union trademark regulation prohibits the registration of deceptive trademarks and is considered grounds for absolute refusal.

The Paris Convention for the Protection of Industrial Property

This is an international treaty that is concerned with protecting intellectual property, and it has been adopted by 177 countries; thus, these countries constitute the Paris Union. The main principle here is that the nationals of countries, that are part of the Union, will have the same advantage concerning intellectual property protection and the enforcement of their home countries' laws to grant the protection.

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)

This agreement protected intellectual property in trade-related regions to a large extent and is regarded as a comprehensive framework for intellectual property standards protection. The Agreement sets out the minimum standards of protection to be provided by each member country, and the elements of protection include the subject matter to be protected, the rights to be conferred and their permissible exceptions, and their minimum duration of protection.

The Madrid System

It is a system for the international registration of marks. It provides a means to simultaneously seek protection for a trademark in multiple jurisdictions. This is governed by 2 separate entities: The Madrid Agreement and the Madrid Protocol, wherein the Agreement, signatory nationals can protect their registered trademarks in all member states, and on the other hand, the Protocol, the members secure protection in member jurisdictions based on pending application or registrations. The benefits of the Madrid System is mostly based on a singular application, one language, one currency (CHF), one registration number and renewal date, and most of all, the registration can be further extended geographically. The treaties under the Madrid System are regulated by the International Bureau of the World Intellectual Property Organization (WIPO).

International Jurisdictions:

Apart from international agreements that govern the registration and protection of Trademark rights, we will also look into the stance held by foreign states against deceptive trademarks. Some of these states include:

The United States of America

Lanham Act (15 U.S.C. § 1052(a)): Prohibits the registration of trademarks that contain "deceptive matter." Definition: A deceptive mark misleads consumers to the point that it affects their purchasing decisions. This goes beyond mere deceptiveness, where the mark only has the potential to deceive.

Key Considerations are the Misrepresentation: The mark misrepresents or misdescribes the goods or services. Believability: Consumers are likely to believe the misrepresentation. Materiality: The misrepresentation is a material factor in the consumer's decision to purchase the goods/services.

The United Kingdom

The Trade Marks Act 1994: Section 3(3)(b) prevents the registration of trademarks that are "of such a nature as to deceive the public." Consumer Protection from Unfair Trading Regulations 2008: Protects consumers from unfair or misleading commercial practices.

Key Considerations are the Likelihood of Deception: The mark must be likely to deceive the public. Nature of Goods/Services: Focuses on whether the trademark misrepresents the characteristics, quality, or geographical origin of the goods/services.

Japan

Trademark Act (Act No. 127 of April 13, 1959): Trademarks that are likely to deceive consumers are unregistrable (Article 4, paragraph 1, item (xvi)). Unfair Competition Prevention Act: Prevents acts that cause confusion with other businesses' goods or services.

Key Considerations are the Likelihood of Confusion: Whether the trademark is likely to cause confusion among consumers regarding the origin or quality of the goods/services. Public Interest: Considers whether the use of the trademark harms public interest.

Challenges

Trademarks, despite having legislation and international agreements, face numerous challenges when it comes to protecting these rights. Some of these challenges include:

• Legal framework and enforcement: The term deceptive trademark is not always clearly defined in legal frameworks. Different jurisdictions may have varying standards for what constitutes deceptiveness, making global trademark registration more challenging has a different interpretations
• Misleading consumer perception: deceptive trademarks mislead consumers about the nature, quality or origin of goods or services, creating confusion and eroding trust in brands
• Impact on brand integrity: Deceptive marks can damage brand reputation by undermining consumer trust and loyalty. This long-term impact includes diminished sales and potential legal liabilities
• Market competition distortion: deceptive trademarks distort fair competition by granting an unfair advantage to businessmen who use misleading branding practices, which harms both consumers and legitimate competitors.
• Geographic Limitations: Trademark rights are considered territorial, thus their protection is limited to their jurisdiction only within which they are registered.

Apart from the ones mentioned above, we have to take into account difficulties or issues with trademarks that occur at the initial stages. Some of these issues can include:

1. Choosing a Trademark without Research: This happens when businesses tend to rush to finalize their trademark, and as a result, avoid all the research and formalities required. Thus, one may not be able to use the ark if another company is using it already.
2. Non-Evaluation of Trademark Strength: If one does not evaluate the strength or value of their trademark on the first basis, then this can affect their long-term interests as other businesses can use the mark with only minute changes in it. Thus, losing the brand value of their overall business.
3. Limitations to Specific Goods and Services: Trademark protection is limited to specific goods and services for which the mark is registered, as there are 45 classes, and by these classes the scope is determined.

Way Ahead

A deceptive trademark is a mark that misleads consumers about the nature, quality, or origin of a product or service. Such trademarks are not generally granted. It is refused under legal provisions like section 9(2) (a) of the Indian TRADEMARKS ACT, 1999, which provides about the nature of the goods and services. It should involve stricter enforcement of trademark laws, increased consumer awareness, and judicial interpretations.

With the rise of global trade and e-commerce, regulatory bodies must enhance scrutiny during the trademark registration process to prevent misleading branding. Legal frameworks like the TRADEMARKS ACT,1999 (INDIA) and International agreements like the TRIPS Agreement should be reinforced to ensure that deceptive trademarks are effectively rejected or removed. Public awareness campaigns and stricter penalties for fraudulent trademark use could further deter deceptive practices, particularly in sectors like pharmaceuticals, food, and fashion, where deception can have serious consequences. While coming up solutions to mitigate the issue of deceptive trademarks, we must take into account various other aspects within Intellectual Property like Industrial Design, Authorship, Trade Dress, Artistic Work and so on, to ensure the protection and safeguard of such commodities and services and that due credit for the original owner.

A Proactive legal approach is essential to maintaining market integrity.

Synonyms

Deceptive Trademarks are also known by various other terms, and they include:

• Misleading Trademark

• confusingly similar Trademark

• Fraudulent Mark

• passing off (Common Law doctrine)

Done By:

Malavika GV, 2nd BA LLB 'A', Linkdin: https://www.linkedin.com/in/malavika-g-v-b574aa2bb/

Heena Altaf, 2nd BA LLB 'A'. LinkedIn: https://www.linkedin.com/in/almel-heena-6156372bb?utm_source=share&utm_campaign=share_via&utm_content=profile&utm_medium=android_app

Ankitha Sushma. R. L., 2nd BA LLB 'A', LinkedIn: https://www.linkedin.com/in/ankitha-sushma-a01a28293?lipi=urn%3Ali%3Apage%3Ad_flagship3_profile_view_base_contact_details%3BtJhHuew8RF6DnxYlphyLng%3D%3D