India: Do You Need Permission to Use Someone Else's Trademark?

 

Trademarks are a form of intellectual property (IP) right that safeguards the invention/creation of an individual from being used by someone else without the inventor’s/developer’s permission. As such, when someone other than the owner uses a trademark for commercial purposes without the owner’s exclusive permission, it is bound to create a lot of confusion in the market and can, potentially, tarnish the trademark’s owner’s brand in the market. Such usage can, therefore, be deemed unlawful.

However, there are some instances where such usage is permissible. These exceptions are provided under Section 30 of the Trademarks Act, 1999.

As per the above-mentioned provisions, if the usage complies with the honest practices in industrial or commercial matters and does not aim to gain unfair advantage of or diminish or belittle the unique characteristics or reputation of the trademark, it shall be deemed permissible.

Legally, such exceptions are termed ‘doctrine of fair use’.

‘Fair use’ falls under Trademark law and refers to using a mark in a way that does not infringe upon the owner’s IP rights. Often used as a defense in infringement litigation, fair use states that an individual/entity may use a protected mark for its descriptive meaning and not in the form of an actual trademark.

Birth of the Doctrine of Fair Use

In the case of New Kids on the Block vs. News America Publishing Inc., the US Court of Appeals for the Ninth Circuit introduced the ‘nominative use doctrine’. The case basically was filed by a famous singer after the defendant used their name for a survey, which led to a trademark infringement. The court reviewed a copy of the ‘New Kids on the Block’ survey and found that it was simply impossible to get the people’s opinion of the band without actually mentioning them in the survey. As such, the court realized the importance of using trademarks in a descriptive manner, like for the purpose of the survey.

A similar scenario was found in the case of Playboy Enterprises, Inc. vs. Welles, where Playboy Playmate Terri Welles had used the trademark ‘Playmate of the Year’ as metatags on her website. She was sued by the trademark owner for infringement, who claimed that the usage of the trademark on the website falls under unauthorized usage. However, the court held the fact that to accurately identify herself as the individual who was awarded the title ‘Playmate of the Year’ Welles had to use the trademark on her website. Thus, the court recognized the need for using trademarks in a nominative way to suggest some intended meaning or association.

As we move on, you must know that fair use is divided into two types – descriptive fair use and nominative fair use.

Descriptive Fair Use

Under Section 30(2)(a) of the Trademarks Act, descriptive fair use refers to usage of a registered trademark in a descriptive way, i.e., used with respect to goods or services with the aim of signifying the kind, quantity, quality, intended purpose, geographical origin, value, the time of production of goods or of providing services or any other aspect of goods or services.

Example: Food critics may use a restaurant or hotel’s trademark to help readers identify the entity being reviewed. Unless the usage is misleading or confusing, it shall fall under descriptive fair usage.

 

Nominative Fair Use

Under Section 30(2)(d) of the Trademarks Act, nominative fair usage refers to using a registered trademark in relation to goods that have been adapted to be a part of or to be used as accessories, considering it is ‘reasonably necessary’ to signify that the goods that have been adapted are compatible with the products sold under the trademark. It usually applies to news, criticism, commentary, parody, comparative advertisements, and other non-commercial uses of registered trademarks.

Example: A car company may use another company’s trademark when presenting a fuel comparison between the products of the two companies. Using the competitor’s trademark is necessary in this scenario to help customers identify the entities between whom the comparison has been made. Such usage would be considered nominative use as long as the comparison presented is true and not misleading in any sense.

Between the two, nominative fair use is the more controversial one, as it involves using someone else’s trademark to refer to their products or services without obtaining the owner’s consent.

When hearing the case of Consim Info Pvt. Ltd. vs. Google India Pvt. Ltd., the Madras High Court held that any trademark usage shall only fall under ‘nominative fair use’ if it fulfills the following:

• The product/service in question should be one that is not easily identifiable without using the trademark,
• Only a certain part of the trademark or trademarks may be needed to aptly identify the product/service, and
• The user does not do anything that would, alongside the trademark, suggest some sponsorship or endorsement by the trademark’s owner.

In addition, the Delhi High Court, in the case of Hawkins Cooker Ltd. vs. Murugan Enterprises, stated that if the use of the trademark is legal, without any attempt to mislead or confuse the customers and fairly presents that the item is apt to be used with the plaintiff’s goods, it shall be considered fair use.

Application of Fair Use

When it comes to trademark law, fair use of trademark may apply to a wide range of scenarios, as long as it is used in good faith and the usage is not bound to cause any confusion among consumers. Some instances where fair use of trademark may be applicable are mentioned below.

News Reporting and Commentary

It is allowed to refer to someone else’s trademark in news stories, commentaries, blogs, or publications. Trademark owner’s rights do not permit them to silence criticism.

Product Reviews

Majorly, it is not possible to review a product without mentioning the brand name, which is usually trademarked, itself. However, people who review products must not be wary of trademark infringement under the ‘fair use doctrine’.

Parody

Parody falls under fair use as consumers are highly unlikely to be confused by it. In such cases, consumers know that the trademark is just being used for a joke. Besides, courts may deem parodies to be legal under the First Amendment.

Comparative Advertisements

Advertising comparisons between two products help consumers gain valuable information about the pros and cons of all the products that were reviewed and make a better purchasing decision. In such cases, there should be no attempts to deceive the consumers while the trademark must only be used for comparison purposes.

Compatibility Claims

Compatibility claims are basically instances where an individual/entity claims that their products or parts are compatible with the products of another brand. For example, a company selling phone cases will mention different brands to establish the brands with which its own products are compatible with.

Identifying Customers

Entities often use different methods to identify their customers or business partners on their marketing materials/products. Although nominative use permits an entity to use another person’s trademark for such reasons, they may only use the trademark as necessary to establish their relationship.

Examples of Fair Use

• In case a photographer uses the trademarked ‘Barbie’ mark to create a satirical review, the usage shall fall under nominative use as the work shall involve criticism and be a parody of ‘Barbie’.
• A restaurant that uses the term ‘Mao Shan’ shall not be infringing the trademark, which is owned by another individual, as ‘Mao Shan’ is the name of a place and quite generic. Therefore, the usage shall be deemed to be in ‘good faith’.

Examples of Non-Fair Use

• When Unibic Biscuits India launched biscuits with the tagline ‘Why have a Good Day, when you can have a Great Day!’, the comparative advertisement was deemed to be non-fair use, as the tagline directly compared the biscuits to ‘Good Day’ biscuits and influenced the consumers decision to buy ‘Good Day’ biscuits.
• Coca Cola calling Pepsi ‘Bacchon Wala Drink’ in their advertisement was deemed inapt, as it intended to disparage the cold drink manufactured by the latter.

Conclusion

In situations where an individual or entity cannot convey something about their own trademark without using the trademark or a part of the trademark owned by someone else, such usage shall be fall under nominative fair use.

The line between trademark infringement and nominative fair use is quite thin, which makes it imperative to pay close attention to such advertisements to ensure you avoid violating any IP rights of the owners whose IP rights you use.

However, it is still expected of courts to be extremely strict when allowing advertisements under nominative fair use, as not anyone and everyone should be allowed to use the identity of any random business they like. The work that goes behind creating a reputation for the trademark in the market is quite a lot. Therefore, allowing anyone to use such trademarks can potentially compromise the trademark’s reputation.

 

For further information, please contact:

Gautam Khurana, Managing Partner

India Law Offices, New Delhi

e: g.khurana@indialawoffices.com

t: +91 11 24622216

 

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