TRADEMARK BULLYING
Section 142 of the Indian Trademarks Act 199 mentions that if an individual employing circulars, advertisements threatens another person with the initiation of legal proceedings for infringement of the alleged registered trademark; In such situations, the aggrieved party may file a suit for unjustified threats and obtain a declaration to the extent that such threats are unjustified.[1]
Industry giants such as Adidas, Facebook have been accused of intimidating smaller businesses into abandoning marks that are relatively similar to their trademarks. . Such business must be protected from baseless trademark infringement and unjustified bullying. [2]
The high costs of litigation that they may incur result in irreparable loss of revenue and reputation. The small business’s trademark holder may even have to remove the product from the market as a result of such volatile litigations. [3]
The United States Patent & Trademark Office (USPTO) has defined Trademark bullying as the act where the “trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.” [4]
CASE LAWS
Monster vs. Vermonster – The trademark holders of the energy drink “ Monster” filed a suit against the brewery that manufacturers the beer of “ The Vermonster. “ The makers of Monster energy drinks argued that the name of Vermonster would confuse consumers. [5]This case was dismissed because there was a clear cut difference between both the marks. Further, one was an energy drink, and another was a beer. There is no likelihood of confusion being caused in the minds of consumers. [6]The aftermath of this case involved measures taken to address this issue of trademark bullying. The U.S Department of Commerce, upon consultations with the IP enforcement coordinator and the US Patent and Trademark Office, prepared a report that was presented to Congress. This report was titled “ Trademark Litigation Tactics and Federal Government Services to Protect Trademarks and Prevent Counterfeiting.” The report addressed the issue of wrongful harassment and intimidation of smaller businesses beyond what the law might be reasonably interpreted to allow by trademark owners. [7]
Mcdonalds Case – This is an example of a case of trademark bullying within the EU jurisdiction. McDonald’s has recently been accused of trademark bullying by the CEO of the Supermac fast-food chain. The allegation raised is of McDonald’s bullying its competitors by choosing to trademark every word containing either “Mc” or “Mac” [8]
Forever 21 case- Adidas is a company known for its well-established trademark logo of “ three stripes.” To protect its trademark, the company sued various other brands, including Forever 21, using the design of “three stripes” on their clothing.
Importance of this case – trademark owners, wrongly interpret their position to indicate that they have an absolute monopoly over the use of their logo under the trademark rights held by them. Forever 21 claimed that the stripes used by them were ornamental, decorative, and aesthetically functional. None of their clothing represents the three-stripe mark of Adidas. Consumers are not likely to associate their items with Adidas. Forever 21 then filed a suit seeking a declaration to prevent Addidas from claiming a monopoly over all items with any form of stripes. This case is yet to be decided.[9]
Apple vs. Healthy Kids case /Prepear case (2017) – In 2017, Super Healthy Kids, the parent company of Prepear, filed a trademark application for their logo shaped like a pear. Apple filed an objection relating to its trademark on the last day of filing of objections. Apple’s well-established logo is an apple. Thus, Apple contended that the pear-shaped logo would create confusion in the minds of the public consumers. Prepear filed a counter-petition stating that Apple has continuously engaged in such behavior of opposing any fruit-based logos of small businesses. Eventually, these businesses were forced to abandon their logos. The petition also stated the monetary losses incurred by Prepear as a result of litigation. Although This case is yet to be decided, on analysis, it is evident that the logos of pear and apple are not similar. Prepear’s logo involves a pear with a leaf pointing downwards with a white space in the middle, surrounded by a green border. Apple’s logo is a half-eaten apple. The colors of the logos are completely different. Further, they relate to distinctive fruits. [10]This case’s significance is that it provides various factors to be taken into consideration when deciding whether it is a case of trademark bullying and or trademark enforcement.
Milmet Oftho Industries and Ors v Allergan Inc – In this case, the court held that “The mere fact that the Respondents have not been using the mark in India would be irrelevant if they were first in the world market.”[11] An Indian pharmaceutical company was the appellants in this case. The company was involved in the sale of the drug ‘Ocuflox.’ The respondents were an international pharmaceutical company involved in selling a drug with a similar name as the appellants.[12]Thus, the operative test, when determining trademark infringement, is who was first in the market.
Jones Investment Co Inc vs. Vishnupriya Hosiery mills[13] (2015) – The respondents, in this case, had filed a trademark application for the name “Jones” about their textile products. The appellants are an American company, Jones Investment Co, that have been using the trademark ‘Jones New York’ for their apparel and footwear products. The appellants opposed the trademark application of the defendants, and the registrar dismissed their notice of opposition. Thus the appellants chose to appeal, giving rise to the present case.[14] The appellant contended that it had acquired an international reputation due to extensive use of its trademark. Further, the respondents’ use of the disputed trademark was likely to create confusion in the minds of the consumers. [15] The IPAB ruled against the respondents and held that Indian companies must not be prevented from bonafide use of trademarks by multinational companies that have no intention of selling their goods in the Indian Market, provided the Indian companies were, in fact, the first users of the trademark. In its reasoning, the court relied on the judgment of Milmet Oftho Industries and Ors v Allergan Inc.
Importance of this case– protecting Indian manufacturers, In this case, the courts went in favor of the respondents as the appellant multinational company failed to demonstrate that they had acquired trans-border reputation and that they were in fact the first users of the market[16]
Bata India Limited Vs. Vitaflex Mauch Gmbh (2015)[17] – Vitaflex had issued a legal notice to Bata alleging trademark infringement of their five pressure point shoe design. The plaintiffs filed a suit of trademark bullying against the defendants for restraining the defendant from issuing legal proceedings relating to the disputed trademark. According to the plaintiffs, the threats were baseless and unjustified. They sought a declaration stating the same. [18]Under Section 142 of the Trademarks Act, 1999, the court upheld the plaintiff’s right to seek an injunction against groundless threats. Moreover, to successfully enforce an alleged trademark infringement proceeding, the defendant must demonstrate the existence of a valid IP right concerning the pressure point design. In this case, Vitaflex was unable to present any evidence to support their allegations of trademark infringement. Further, Bata contended that the five pressure points could not be registered as a trademark as it constitutes a functional aspect of the shoes. The Delhi court favored Bata and stated that the threats of Vitaflex were unreasonable and wrongful. Thus vitaflex was restrained from issuing any further legal threats. [19]
The significance of this case is that an individual must ensure that the IP rights they are claiming have been infringed are valid to begin as well.
Manoj Kumar Maheshwari vs. Tips and Toes Cosmetics Act- The plaintiff is engaged in the business of selling bindis under the trademark ‘SUPREME SUHAG.’ The defendants carry on their business under the mark ‘SHILPA.’The court, in this case, held that there was no similarity between the marks and injucted Tips and Toes from issuing any further threats of trademark infringing proceedings.
TRADEMARK ENFORCEMENT VS TRADEMARK BULLYING
It is important to note that there is a thin line between trademark bullying and the trademark holders’ rightfully enforcing their protection. To determine whether the circumstances indicate trademark bullying, various factors can be taken into consideration. To begin with, it must be decided whether an infringement is worth pursuing. To do so, it is pertinent to assess the extent of the infringement. This also depends upon how similar the two marks actually are. Thus, only severe trademark infringements must be strictly enforced. Further, it is advised that individuals do not pursue legal proceedings for trademarks expected to have a short life and are used only for a limited class of products. [20]
The actions of the partly claiming infringement must also be observed. It is almost always a large commercial entity with ample economic and legal resources. These entities then serve smaller companies with standard cease and desist letters that contain subtle threats in legal language alleging trademark infringement and dilution. Certain giant industries may even proceed with initiating trademark opposition proceedings. The final result of trademark bullying is that relatively smaller companies are bullied into a settlement, which the well-established industries intended. [21]
To determine whether the situation warrants for the enforcement of the trademark holder’s right, it is pertinent to infer as to whether the company claiming trademark infringement has abused its position of dominance. If the company is well established, and there exists a foreseeable expectation that the alleged trademark infringement will harm the reputation and finances of said company, the situation warrants for healthy enforcement of the trademark holders’ rights. If the same company uses its position of dominance to establish its monopoly over the mark detrimentally, such a situation is to be considered trademark bullying. [22]
PREVENTIVE MEASURES AGAINST TRADEMARK BULLYING
Smaller companies can take certain measures to protect themselves against baseless threats of trademark bullying. First, the companies must conduct thorough due diligence concerning similar marks before applying for their trademark registration. By doing so, possible future litigations may be avoided. The trademark holders must keep themselves aware of the prevailing and applicable trademark laws. This will enable companies to distinguish between legitimate claims and unreasonable claims. The companies must also consider settling the disputes through Alternative Dispute Resolution mechanisms. This may help in minimizing the cost of defending a litigation suit. Finally, the companies ought to conduct a proper inquiry before agreeing to the terms of a settlement when a trademark infringement notice has been issued to them. [23] Further, Section 106 of the Patents Act 1970 allows for an aggrieved person who has received communications stating initiation of legal proceedings to bring a suit against the said party seeking the following reliefs: a declaration to the effect that the threats are unjustifiable, an injunction preventing the party from issuing any further threats and damages that have been sustained.
[1] https://www.intepat.com/blog/trademark/trademark-bullying-india/
[2]https://www.manupatrafast.com/NewsletterArchives/listing/SAIPTech%20Singh%20Associates/2017/Sep/IPR-Alert-September17.pdf
[3] https://www.ipwatchdog.com/2015/07/16/trademark-bullying-defending-your-brand-or-vexatious-business-tactics/id=59155/
[4]Find link for USPTO definition of trademark bullying
[5] https://www.al.com/press-register-business/2009/10/monster_vs_vermonster_in_energ.html#:~:text=The%20maker%20of%20Monster%20energy%20drinks%20has%20taken%20aim%20at,because%20it%20could%20confuse%20consumers.&text=Based%20in%20Corona%2C%20Calif.%2C,of%20Monster%20drinks%20last%20year.
[6] https://www.sevenelementz.com/2013/10/25/trademark-bullying-bullied/
[7] https://www.remfry.com/wp-content/uploads/2017/06/STO-1599-WTR-OBE-Supplement-2017_Remfry-Sagar-1.pdf
[8] https://www.whitcomblawpc.com/blog/mcdonalds-accusedtl
[9]https://www.manupatrafast.com/NewsletterArchives/listing/SAIPTech%20Singh%20Associates/2017/Sep/IPR-Alert-September17.pdf
[10] https://www.latestlaws.com/articles/apple-v-prepear-trademark-bullying-or-enforcement-of-ip-rights/
[11] https://www.manupatrafast.in/NewsletterArchives/listing/SAIPTech%20Singh%20Associates/2018/Jan/IPR-Alert-January-18.pdf
[12] https://spicyip.com/2014/04/ipab-guards-against-trademark-bullying-jones-investment-co-v-vishnupriya-hosiery-mills.html
[13] Citation for Jones case
[14] https://spicyip.com/2014/04/ipab-guards-against-trademark-bullying-jones-investment-co-v-vishnupriya-hosiery-mills.html
[15] https://theiprbeacon.wordpress.com/2014/04/11/ipab-raps-mnc-on-the-wrist-for-being-a-trademark-tyrant/
[16] https://bestlawyerskenya.com/concept-of-trademark-bullying-in-india/#Jones_Investment_Co_Inc_vs_Vishnupriya_Hosiery_Mills
[17] Insert citation for case
[18] https://www.lexology.com/library/detail.aspx?g=5ebedec6-709c-4eac-8453-fe8bc7e6ba07
[19] https://lexforti.com/legal-news/concept-of-trademark-bullying-in-india/#Trademark_Bullying_in_India
[20] https://www.whitcomblawpc.com/blog/mcdonalds-accused
[21]https://www.manupatrafast.com/NewsletterArchives/listing/SAIPTech%20Singh%20Associates/2017/Sep/IPR-Alert-September17.pdf
[22] https://www.articlecube.com/trademark-bullying-concept-should-not-be-kept-hidden
[23] https://lexforti.com/legal-news/concept-of-trademark-bullying-in-india/#Trademark_Bullying_in_India
