Tuesday, June 20, 2017
Friday, December 23, 2016
Guangzhou Hongfu Real Estate Co Ltd is the owner of registered Trademarks 1946396 (September 28 2002) and 1948763 (September 21 2003) comprising combination trademarks STAR RIVER in Chinese characters and device, to be used respectively for the services of "real estate rental, real estate management" in Class 36 and "architecture" in Class 37.
Hongfu assigned the trademarks to Guangzhou Star River Industrial Development Co Ltd, which licensed Hongfu to use the trademarks – enabling Hongfu to bring infringement actions in its own name. Hongfu and its affiliated companies developed several Star River real estate projects in Guangzhou, Beijing, Shanghai and other cities, and won many awards.
In 2000 Jiangsu Weifu Group Construction & Development Co Ltd launched various real estate projects using the names 'Star River Garden', 'Star Garden' and 'Star Scenery Garden' in Nantong – a city in Jiangsu Province. The names of the apartment blocks were approved by the Municipal Civil Affairs Bureau of Nantong.
Star River Co and Hongfu sued Weifu on the grounds of trademark infringement and unfair competition.
The Nantong City Intermediate People's Court ruled that Weifu's use of 'Star River Garden' as the name of its apartment blocks did not constitute trademark infringement, since it did not mislead consumers as to the developer of the buildings. The first-instance court further found that – since Weifu had not intended to free ride and had not caused misidentification among consumers – Weifu's use of 'Star River Garden' did not constitute an act of unfair competition. The court therefore dismissed the claims.
Star River Co and Hongfu appealed to the High People's Court of Jiangsu Province, which upheld the first-instance judgment.
Star River Co and Hongfu then filed a retrial application to the Supreme People's Court.
The Supreme People's Court determined that Weifu's use of 'Star River Garden' as the name of its apartment blocks was likely to cause confusion and misidentification among the relevant public, due to its similarity to the cited marks, which constituted infringement. Consequently, the court overruled the first and second-instance judgments, concluding that Weifu must not use 'Star River' as the name of buildings yet to be developed and sold, and must compensate Star River Co and Hongfu Rmb50,000 for their economic loss.
The case attracted a lot of attention, since it involved the protection of trademarks registered for real estate sale services and liability after a court had found infringement. In the retrial, the Supreme People's Court clarified that when an IP right such as a trademark conflicts with a property right, whether the parties should be ordered to stop using the trademark should be based on the principle of good faith and by taking into account the public interest. The court considered the fact that the name of Weifu's apartment blocks had been approved by the local civil affairs agency. In addition, residents had been living in the complex for many years and there was no evidence to prove whether they knew, upon initial purchase, that the name of the building infringed the cited trademarks. Terminating all use of 'Star River' would have created imbalance between the interests of the trademark owner and those of the public or residents. As a result, the court did not order a complete prohibition against use of 'Star River Garden', but ruled that buildings yet to be developed and sold must not use the name. The verdict protected the trademark owner's interests to the extent allowed by the law, while minimising the harm against the public interest – highlighting the significance of the judicial guidance.
The fact that the infringing products were apartment blocks, with each unit sold individually, created an unusual situation where the final product (the apartment) did not bear the infringed trademark and where the buyer may have been unaware that infringement had been committed. Knowledge of the exact claims submitted by the plaintiffs is essential to assess the significance of this decision. If the plaintiffs requested that the first and second-instance courts affirm the existence of infringement, order the cessation of the infringement and compensate the damages caused, the court's decision did as requested and it was not necessary to rule further. However, if the plaintiffs requested that the courts order the modification of all existing buildings' names, the court's dismissal of the plaintiff's claims may be questioned. Unlike the Patent Law, the Trademark Law contains no reference to the public interest. On the contrary, it is in the interest of consumers not to be confused by an act of infringement, which could happen if the owner of one of the infringing apartments decides to resell.
Thursday, December 8, 2016
The concept of trade dress, although closely associated with trademarks is not explicitly recognized in Indian legislations unlike its U.S.A. counterpart. In Indian context, upon looking closely at the definitions of "mark" and "package" under S. 2 of the Trade Marks Act, 1999 we see that the trade dresses are also protected.
To define it, trade dress is the visual or sensual experience of a product and is inclusive of the packing, shape and combination of colours used in packaging, such that it distinguished the product from the ones of its competitors. So anything from the wrapping of Cadbury chocolates to the design of flagship stores of Apple Inc. would fall within the ambit of trade dress now.
A landmark case discussing the concept is the case of Walmart Stores v. Samara Brothers where trade dress was defined as "a category that originally included only the packaging, or 'dressing,' of a product, but in recent years has been expanded by many courts of appeals to encompass the design of a product."
However, the case of Vision Sports Inc. v. Melville Corp. draws a distinction as to the protection of trade dress and trademark protection wherein it was held that – In contrast, trade dress involves the total image of a product and may include features such as size, shape, colour combinations, texture, or graphics. Trade dress protection is broader in scope than trademark protection, both because it protects aspects of packaging and product design that cannot be registered for trademark protection and because evaluation of trade dress infringement claims require the court to focus on the plaintiff's entire selling image, rather than the narrower single facet of trademark. This was also reiterated in the case of Colgate Palmolive v. Anchor Health.
In the recent case, Seven Towns v. Kiddland, the concept of trade dress is discussed in detail along with comments on the previous case laws discussing the same subject matter. The dispute is with regard to infringement of trade dress of the Rubik's cube by the product of the defendant called Rancho's cube, in terms of not only the product in itself but also the packaging and labelling.
Brief Facts of the case:
The plaintiff in this case, Seven Towns and Funskool are the original manufacturers and distributors of the product called "Rubik's cube" which has been sold since 1975, all across the globe. The inventor of the cube, Mr. Rubik had the invention of the toy patented, in addition to the product being trademarked after his own name, after an amendment to the original name of "Magic Cube". The plaintiffs allege that the defendants have used a deceptively similar trade dress to that of their product in order to confuse the consumers and take undue advantage of their goodwill. Hence Plaintiff filed suit for permanent injunction, restraining infringement of copyright, passing off, dilution, and various other reliefs against the defendants along with the application for seeking various interim reliefs against the defendants.
Arguments of the Petitioner:
In order to prove that the defendants have used a deceptively similar trade dress to that of Plaintiff's product in order to confuse the consumers and take undue advantage of their goodwill, plaintiffs in the form of a table shown the similarities in the packaging of their product with that of the defendant like – copying of the diagonal shape of packaging which gives an impression of a 3D triangle bulging out, the usage of 6 primary colors to denote the product's name, its font and a label that denotes the appropriate age for the product being placed at the lower left hand of the label to name a few. The Plaintiffs did not claim rights over the cube per se, but the expression of the cube i.e. a cube comprised of 36 smaller cubes, 3X3X3 cube with black as its base and green, red, blue, yellow, white and orange being the different colors on each surface of the cube. The petitioners also rely on the fact that they have obtained considerable goodwill and reputation in the market as manufacturers of the cube and how they have been vigilantly acting against any company that infringes their product, in addition to the worldwide recognition and reputation wherein the toy in itself is referred to "Rubik's cube". This petition is thus presented before the High Court against the defendants for the tort of passing off and infringement of trade dress, which has resulted in considerable loss to the plaintiff. The plaintiff further relied on the case law of Ideal Toy Corporation v. Plawner Toy Mfg. Corp. where the U.S. Court of appeals relied on acquired distinctiveness and trade dress serving the purpose of identification of source, apart from determining the trade dress of the plaintiffs and how it was considerably reputed and recognized. Further reliance is also placed on the case law of Heinz Italia v. Dabur India Ltd. which states that an injunction must follow where it prima facie appears that the adoption of the mark in itself was dishonest, thus praying for the interim relief of an injunction against the defendants.
Arguments of the Defendants:
The defendants denied that the trade dress of the plaintiff is distinctive or well recognized and hence, the same cannot acquire goodwill or be reputed. They also claim that the product is not of superior quality and that they have substantially invested in the advertising of their product. A dissimilarity table is produced on behalf of the defendants and reliance is placed on the sale of units, the difference in price to show that the plaintiffs wish to eliminate the serious competition that they fact from the defendants. The defendants also mention the difference in name, in the place of manufacture as points of distinction in addition to stating that the trade dress of the plaintiff fails to be a well known mark as specified under s. 11(6) and s. 2(zg) of the Trade Marks Act, 1999 as the plaintiffs have failed to provide any documentary proof of the same. The defendants further bring forth the concept of trans-border reputation stating that "The trademark registrations in other countries would show that the trade dress of the Rubik's Cube enjoys statutory protection, recognition and popularity in a significant number of countries worldwide. The goodwill and reputation as part of products of plaintiff No.1 in India and its recognition and popularity has seeped into India on account of transborder reputation." The defendants further rely on several judgments to show that trade dress must be examined in its entirety and not looking at specific elements like L'oreal India Pvt. Ltd. v. Henkal Marketing India Ltd. and Kellogg Company v. Pravin Kumar Bhadabhai and the case law of Frito Lay India v. Uncle Chips Pvt. Ltd.which states that competition must be free. Additionally, reliance is placed on s. 15(2) of the Copyright Act, 1957 and the case of Microfibres Inc v. Girdhar Co. which states that copyright ceases to exist when more than 50 copies of the product are made. In addition to this, the defendants also state that only colors cannot be monopolized as they are not distinctive and lack creative or artistic input, relying on Colgate Palmolive v. Anchor Health. Further, the primary colors of the cube are a functional element of the puzzle and cannot be monopolized. The defendants also allege that the patent to the invention of "Magic Cube" has expired and the product is now in the public domain. Furthermore, reference to the puzzle as "Rubik's Cube" is not an indicative of the reputation and good will that the product carries, quoting the examples of packaged drinking water being known as 'Bisleri' commonly and photocopies being called 'Xerox'. The defendants also rely on Cipla v. M.K. Pharmaceuticals to indicate as to how the trade dress of medicine worked in favour of the second entrant to the market.
Observations & Conclusions of the Court
Manmohan Singh, J. decided the matter on September 6, 2016 making interesting observations with regard to the general nature of trade dress, deciding on the test against which passing off and deceptive similarity must be determined, the extent of unfair trade practice by the second or subsequent entrant in addition to the actual dispute of granting of an interim relief to the plaintiff on the existence of a strong prima facie case.
In the case of Hodgkinsons and Corby v. Wards Mobility, the English courts had held that the test for determination of passing off was a 3 step process where – the plaintiff must have considerable goodwill in the market, there must be misrepresentation by the respondent and there must be consequent damage caused to the plaintiff. Justice Singh relies on Microlube India Ltd. v. Rakesh Kumar Trading as Saurabh to state that regardless of subsistence of design right or its exhaustion, a passing off action can lie in given cases and discusses the observations of the case of Laxmikant V. Patel v. Chetanbhat Shah and Another, to state that passing off would be when a competitor initiates sale of goods and services in the same name or imitates the name causing injury to the business of the one who has property in that name. While commenting on the general nature of trade dress and thus what would comprise of passing off, Justice Singh uses the case of William Grant and Sons v. McDowell & Co. Ltd.which further states for injunction there must be material disclosing that the public associates the object in question only with the plaintiffs. The case of William Edge & Sons Limited v. William Niccolls & Sons Limited is relied on to explain that simply naming a product that was previously unnamed but had considerable popularity in the market as belonging to the subsequent entrant would not be distinguishing of the goods but would give the impression as belonging to the original manufactures and hence, passing off. The case of Anglo Dutch Paint Colour and Varnish Works Pvt. Ltd. v. Indian Trading House is also reiterated to explain that the subsequent entrant had no reason to use the applicant's color arrangements save as with the improper motive of benefitting from his good will and the essential question that needs to be asked is why the same colours would be used but to attract the plaintiff's goodwill and trade reputation which would amount to passing off. Justice Singh also uses the case law ofReckitt & Colman Products Ltd. v. Borden Inc. & Ors. to reiterate that the question that needs to be asked here is not whether the plaintiff can sell his product the way he does but why the defendant would deliberately adopt the same and the case of Colgate Palmolive v. Anchor Health which states that "Trade dress is the soul of identification of a product" and the test for passing off is likelihood of confusion or deceptiveness and it is the duty of the subsequent comer to avoid unfair competition and become unjustly rich. This is also explained in the case of Cadbury v. Neeraj Food Productswhere it is stated that deception is the essence of the tort of passing off.
Justice Singh clarifies the position with respect to where similarities or dissimilarities are to be considered in the case of the tort of passing off, stating that it was the points of similarity that need to be considered rather than the points of dissimilarity thus taking into consideration the judgments of S.M.Dyechem v. CadburyIndia Ltd.and Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. Relying on the judgment of Sanjay Kapur v. Dev Agri Farms and several other judgments cited within the case, the learned judge in this judgment states that affixing their own label does not amount to exclusive trade dress capable of distinction and there must be clear distinctions and the duty lies on the second entrant to ensure that he is not indulging in unfair trade practices or free riding the goodwill and reputation of an existing competitor. Justice Singh also states that monopoly over a single colour can surely not be enjoyed but that is certainly not the case here as it is the combination of colours that the plaintiff allege as infringed and is protected as their trademark. There exists considerable goodwill on the side of the plaintiff and they do have a huge reputation in the market, thus ensuring that the mark is well known under s. 11(6) of the Trade Marks Act. In arguendo, although the defendants claim that they can change the shape of the cubes to make them distinctive of the plaintiff's product, Justice Singh states that this question can be answered later, when such case arises. The defendants relying on the case of Cipla v. M.K. Pharmaceuticals is also declared as wrong as the purchase of toys is distinct from that of medicines which is elaborated in the judgment.
Therefore, the Delhi High Court in this case ruled in favour of the plaintiff finding a prima facie case and granted them an injunction against the product of the defendants while also clarifying significant changes with respect to trade dress protection. This case is certainly an essential to understand the concept of trade dress and the extent of protection in the light of monopoly over colours, the test of similarities and labeling products if indicative of distinctiveness. However, Hon'ble Court has also specifically mentioned that the findings are tentative in nature and the same shall not have any bearing when the same would be decided on merits. It would be interesting to note the final outcome of the suit.
- Wal-Mart Stores vs. Samara Bros., 529 U.S. 205, 120 S. Ct. 1339 (2000).
- Vision Sports, Inc. v. Melville Corp. 12 USPQ 2d 1740.
- Colgate Palmolive v. Anchor Health, 108 (2003) DLT 51.
- Seven Towns v. Kiddland, I.A. No.13750/2010 in CS(OS) No.2101/2010, as decided on September 06, 2016.
- Ideal Toy Corporation v. Plawner Toy Mfg. Corp, 685 F.2d 78 (3rd Cir. 1982).
- Heinz Italia v. Dabur India Ltd., (2007) 6 SCC 1.
- Seven Towns v. Kiddland, Para 16.
- L'oreal India Pvt. Ltd. v. Henkal Marketing India Ltd, 2005 (6) BomCR 77.
- Kellogg Company v. Pravin Kumar Bhadabhai, 1996 (36) DRJ 509.
- Frito Lay India v. Uncle Chips Pvt. Ltd., (2000) 86 DLT 31.
- Microfibres Inc v. Girdhar Co, (2006) 128 DLT 238.
- Colgate Palmolive v. Anchor Health, 108 (2003) DLT 51.
- Cipla v. M.K. Pharmaceuticals, MIPR 2007 (3) 170.
- Hodgkinsons and Corby v. Wards Mobility,  FSR 178.
- Microlube India Ltd. v. Rakesh Kumar Trading as Saurabh, (2013) 198 PTC 120.
- Laxmikant V. Patel v. Chetanbhat Shah and Another, (2002) 3 SCC 65.
- William Grant and Sons v. McDowell & Co. Ltd., 55 (1994) DLT 80.
- William Edge & Sons Limited v. William Niccolls & Sons Limited, (1911) AC 693 at 709.
- Anglo Dutch Paint Colour and Varnish Works Pvt. Ltd. v. Indian Trading House, AIR 1977 Delhi 41.
- Reckitt & Colman Products Ltd. v. Borden Inc. & Ors., 1990 R.P.C. 341 at page Nos.414 to 416, 422, 426.
- Colgate Palmolive v. Anchor Health, 108 (2003) DLT 51.
- Cadbury India Ltd. v. Neeraj Food Products, 142 (2007) DLT 724.
- S.M.Dyechem v. Cadbury India Ltd., (2000) 5 SCC 574.
- Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 783.
- Sanjay Kapur v. Dev Agri Farms, 2014 (59) PTC 93 (Del).
- Cipla v. M.K. Pharmaceuticals, MIPR 2007 (3) 170.