July 10,2019:

The Author, Shivani Rani, is a is student of 3^rd Year, BA.LLB, Aligarh Muslim University. She is currently interning with LatestLaws.com.

Arbitration is a process in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. Arbitration agreements are governed with the provisions of The Arbitration and the Conciliation Act.Trademark infringement is defined as the forbidden use of a trademark or service mark. This use can be in connection with goods or services and may lead to confusion, deception, or a misunderstanding about the actual company a product or service came from. Trademark owners can take legal action against a person who infringed the trademark. If court found guilty to the accused person then it can prevent the person from using that trademark and grant him to pay some monetary relief to suffered party.

A registered trademark is a word, symbol or combination that represents a company or a product and differentiates it in the market. A registered service mark represents a service of that particular business. Trademark also provides public notification of ownership.

Infringement of trademarks as per Section 29 of the Trademarks Act, 1999 is defined as a use of a mark, by an unauthorised or an authorised person or a person who is not the registered proprietor, which is identical or deceptively similar to the trademark in relation to the goods or services in respect of which the trademark is registered. In simple words, it is defined as the violation of exclusive rights that are attached to a registered trademark without the permission of the registered owner or licensees. The courts have time and again assumed that similarity of two marks and the kind of goods and services results in causing confusion in the minds of general public. They may take an undue advantage of enjoying the hard-earned reputation of the registered trademark. In order to have a successful claim against a person infringement of trademark, what needs to be proved is that the infringing trademark is deceptively similar or identical to the registered trademark.

A registered trademark is said to be infringed in case of the following situation:

If the mark in dispute is identical with or deceptively similar to the registered trademark and is in relation to the same or similar goods or services;
If the identical or similar mark can cause confusion in the minds of general public to have an association with the registered trademark
If the registered trademark is used as a part of trade name or business concern for goods and services in respect of which the trademark is registered
If the trademark is advertised and as a result it takes unfair advantage or is contrary to the honest practices or is detrimental to the distinctive character and reputation of the registered trademark.
If the registered trademark is used in the material meant for packaging or labelling of other goods or as a business paper without due authorization of the registered user.

Section 30 of the Trademarks Act, 1999 lays down the certain conditions which can be used by the alleged infringer as defences in suits for infringement of trademark and hence escape his liability. These conditions include:

When any person makes use of a trademark in accordance with honest practices in industrial or commercial matters;
When such use is not in pursuit of taking undue advantage or proves to be detrimental to the distinctive character or repute of the trademark.
Use of a mark for the indication- Whenever any trademark is used in order to indicate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or any other characteristics of goods or services.
Use of mark which is outside the scope of registration- When trademarks are registered, there are certain cases where they are subjected to certain conditions and limitations. Whenever the alleged infringement is under the ambit of those limitations, then it does not constitute to be a case of infringement of trademarks.
Implied consent – Whenever the infringed use of a trademark is in the continuance of the permitted use by the original proprietor who has subsequently not removed or obliterated it, in such cases the use cannot be said to be an infringement.
Use of trademark in relation to parts and accessories
Use of trademarks identical or similar to each other

Section 103 of the Trademarks Act, 1999, deals with Penalty for applying false trademarks, trade descriptions, etc.

If falsification of trademark has been committed;
If any trademark has been falsely applied to goods and services;
Makes, possesses or disposes of any instrument with the object and purpose of falsifying a trademark;
Falsely indicates name of the country or place where the goods have been made or the name or address of the person who is responsible for its manufacturing;
Alters or tampers with the indication of origin that is applied or required to be applied to a product.

The punishment for infringement of trademarks as a result of falsification shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees. Provided that the alleged offender has not committed such falsification based on the following grounds:

All reasonable precautions were taken against commission of such falsification and that at the time of commission of the alleged offence there was no genuine reason to suspect the genuineness of the trademark
That he had acted innocently
On demand of the prosecutor, such necessary documents of the manner and person from whom the goods were recovered.

There is two type of remedy is provided in case of infringement/passing off of Trademark. Plaintiff has the option to initiate proceeding under any one or both of them.

Civil remedies,
Criminal remedies

Civil Remedies

Suit for infringement/Passing off under section 134:- Suit for Infringement/Passing off arising out of the use by the defendant of any trademark which is identical with or deceptively similar to the plaintiff’s trademark, whether registered or unregistered shall be instituted in District Court having jurisdiction to try the suit.
Relief under Section 135:- Under Section 135(1) In a suit for Infringement/Passing off if the court agree (on the request of plaintiff ), can grant either:

Damages or
An account of profits,

Together with or without any order for the delivery-up of the infringing labels and marks for destruction or erasure. Under Section 135(2) Court can give Ex parte or interlocutory injunction order in accordance with Section 36-42 of Specific Relief Act, 1963 or Order XXXIX Rules 1 & 2 and section 151 (Inherent power of the Court) of the code of civil procedure, 1908, for discovery of documents, preserving of infringing goods, documents or restraining the defendant from disposing Assets which cause adversely affects the plaintiff.

Procedure under civil law

In the case of infringement, a suit can be filed under section 134 of Trade Mark Act, 1999 in district court. Jurisdiction for the same will be where the head office of plaintiff is situated or where the cause of action has arisen. Section 20 of CPC does not apply for the purpose of suit under 134 of Trademark Act, 1999.
If the court thinks fit it can allow any of the following order:
- An injunction restraining further use of the infringing mark under Order XXXIX Rules 1 & 2 of CPC i.e. temporary injunction or under Section 36-42 of specific relief act i.e. permanent injunction
- Damages or an account of profits.
- An order for delivery-up of infringing labels and marks for destruction or erasure.
These remedies can be taken in case of infringement as well as in the case of passing off of trademark.

In case of Bajaj Auto Ltd. v. TVS Motor Company Ltd[1], the Supreme Court of India held that “experience has shown that in our country, suits relating to the matters of patents, trademarks and copyrights are pending for many years and litigation is mainly fought between the parties over temporary injunction. This is a very unsatisfactory state of affairs, and hence, we had passed the above quoted order in the abovementioned case to serve the ends of justice. We direct that the directions in the aforesaid order be carried out by all courts and tribunals in this country punctually and faithfully.” It is evident that due to unwarranted delay in the disposal of cases and the costly litigation which could prolong the protection accorded to the work, rather than promoting the progress of intellectually protected work, the aggrieved parties are opting for alternate dispute resolution mechanisms for the advancement of intellectual property rights in India. LEGAL ALERT Moreover, the commercial nature of the transactions involved in majority of intellectual property based litigations, solicits such an approach.

Alternative Dispute Resolution Measures for Intellectual Property

The solution lies in the introduction of alternative dispute resolution mechanisms, for the redressal of grievances related to infringement of protected rights of an intellectual property holder. Alternative dispute resolution mechanisms are less time consuming, efficient and provide flexibility to the right holder. It is important to note that in all the commercial transactions, the route of alternate dispute resolution has already shown its majority over the traditional modes of litigation. Nowadays, contracts related to transfer of intellectual property mostly include the “arbitration-mediation” clause. This highlights the weight of arbitration in commercial intellectual property transactions.

In a landmark judgment in the case of Bawa Masala Co. vs. Bawa Masala Co. Pvt. Ltd. and Anr.[2], where a number of legal disputes were already resolved through a process of alternate dispute resolution, the Delhi High Court passed orders for adoption of a process known as early neutral evaluation, in an intellectual property based litigation suit. The Court in this case, under the umbrella of section 89 of the Civil Procedure Code, 1908 mooted for the inclusion of such procedures for amicable settlement of disputes. The Court further said that the early neutral evaluation procedure shares the “same features as a mediation process, the difference is that in case of mediation the solutions normally emerge from the parties and the mediator makes an endeavour to find the most acceptable solution” whereas “in case of early neutral evaluation, the evaluator acts as a neutral person to assess the strengths and weaknesses of each of the parties.” The Court further made a distinction between early neutral evaluation and arbitration by stating that in early neutral evaluation “there is no testimony or oath or examination and such neutral evaluation is not recorded.” The Court also held that early neutral evaluation is “confidential and cannot be used by any of the parties against the other. There is no award or result filed.” This stands as a seminal case, where, Indian Courts have tried to bring alternative dispute resolution machinery for solving intellectual property infringement related matters. This case also highlights the inclination, which Indian Courts have started sharing, towards involvement of alternate dispute resolution measures in resolving of such disputes. However, use of alternative modes of dispute resolution for determination of intellectual property related disputes, may face some problems.

Firstly, since the protection of intellectual property is territorial in nature, the public policy consideration as set down by the Supreme Court of India in the case of O.N.G.C v. Saw Pipes, can pose a hurdle towards enforceability of arbitral awards, if made on the mandate of intellectual property related disputes. Secondly, the issue of validity of intellectual property points towards determination of right against everyone. This might pose another roadblock for the use of alternative dispute resolution machinery in intellectual property related disputes. However, the determination of infringement of intellectual property, as it determines the rights between two parties, can certainly be adjudicated by the use of alternative dispute resolution machinery.

Trademarks and Alternative Dispute Resolution

In India, trademark litigation covers an overwhelming landscape in the intellectual property related litigation. The trademark litigation is an inter partes adjudication. That being the case, the modes of alternative dispute resolution can certainly provide an appropriate recourse to the ailing judiciary. Moreover, it is germane to note that in cases of cyber squatting, arbitration plays an eminent role in the streamlined procedure outlined under the Uniform Domain Name Dispute Resolution Policy, 1999 and the Indian Domain Name Dispute Resolution Policy for the adjudication of disputes. This brings to fore the importance of arbitration and the use of other alternate dispute resolution measures for reconciliation of the interests of the trademark owner and the impugned party.

Recent cases on infringement of trademark

Verizon Trademark Services LLC v. Bhaban Sankar swain, 2016 SCC OnLine Del 5109

The present suit has been filed by the plaintiffs, inter alia, seeking a decree of permanent injunction restraining the defendants from directly or indirectly dealing in goods and/or services under the trademark ‘VERIZON’ or any other mark which is deceptively similar to the plaintiff trademark ‘VERIZON’. The plaintiffs also pray for an order for rendition of accounts of profits earned by the defendants and a decree of Rs. 20, 05,000/- towards damages against the defendants. The plaintiffs are granted reasonable costs of litigation, which are quantified at Rs. 2 lakhs.

Volvo Trademark Holding AB v. Cosmos1, 2003 SCC OnLine WIPO 627

The Complaint was filed with the WIPO Arbitration and Mediation Centre (the “Centre”) on August 15, 2003. On August 18, 2003, the Centre transmitted by email to Intercosmos Media Group d/b/a directNIC.com a request for registrar verification in connection with the domain name at issue. It has been held that actual or constructive knowledge of the Complainant's rights in the trademarks is a factor supporting a finding of bad faith.

Vanguard Trademark Holdings USA LLC v. Jameel Fort nationalcarrental.mobi 2009 SCC OnLine WIPO 25

The Complaint was filed with the WIPO Arbitration and Mediation Centre (the “Centre”) on November 17, 2008. On November 18, 2008, the Centre transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the Disputed Domain Name. On November 18, 2008, GoDaddy.com, Inc. transmitted by email to the Centre its verification response confirming that the Respondent is listed as the registrant and providing the contact details. In this case the facts show that Respondent knew of Complainant and its famous NATIONAL CAR RENTAL mark at the time it registered the Disputed Domain Name and that Respondent intended to use the Disputed Domain Name to trade off this fame and associated goodwill. Respondent was not authorized or licensed to use the National Marks for any purpose whatsoever. Nevertheless, Respondent registered the Disputed Domain Name, which is identical to Complainant's famous mark NATIONAL CAR RENTAL. Because Respondent is not using the Disputed Domain Name for any legitimate non commercial use, Respondent's unauthorized and unlicensed registration of the Disputed Domain Name with knowledge that it was infringing of Complainant's trademark is evidence of Respondent's bad faith.

[1] (2008) ILLJ 726 Mad

[2] AIR 2007 Delhi 284

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