Chapter IV: LAW OF TRADEMARKS

SPECTRUM OF DISTINCTIVENESS

MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION

CHAPTER 11. THE SPECTRUM OF DISTINCTIVENESS OF MARKS § 11:1.
SPECTRUM OF DISTINCTIVENESS OF MARKS
fig. distinctiveness of marks
INHERENTLY NON INHERENTLY NO DISTINCTIVENESS
DISTINCTIVE DISTINCTIVE
No Secondary Meaning Secondary Meaning No Trademark Significance
Required Required
ARBITARY AND SUGGESTIVE, GENERIC
FANCIFUL DESCRIPTIVE,
GEOGRAPHICAL,
PERSONAL NAME

SPECTRUM OF DISTINCTIVENESS OF MARKS—PLACEMENT OF

CANDIDATES ON THE SPECTRUM
The Meaning of “Distinctive” in Trademark Law. The term distinctive is a key term
of art in trademark law. The word sometimes causes misunderstanding because it does
not have the same connotation that it has in everyday speech. Distinctive‖ has a
special meaning in trademark law. If a designation is not distinctive, it is not a mark.
Without achieving distinctiveness, either inherently or through the acquisition of
secondary meaning, then a designation does not have the legal status of a trademark‖
or service mark. No distinctiveness—no mark.
Proving that a Designation is “Distinctive.” How does the applicant for a registration
or the plaintiff in a lawsuit with an unregistered mark prove that its designation is
indeed a trademark—is used by a substantial number of people as a symbol to identify
and distinguish one source? The law could require every claimant to prove trademark
validity. But it does not. The law creates a nonrebuttable presumption that certain
types of designations are trademarks if they have been used in a context that we
usually identify as trademark usage—such as in large letters on a product label or
prominently in an advertisement. These certain types of designations are called
inherently distinctive‖ designations. The law automatically assumes that designations
in the inherently distinctive‖ category are valid marks and are the intellectual property
of the user. For designations that do not fall in that category, the burden is on the
claimant to prove that such designations have in fact achieved trademark status in the
minds of potential customers. That proof of trademark validity and status is usually
called proof of secondary meaning.

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The Spectrum of Distinctiveness of Words. The above chart (Fig. 11:1A) illustrates the
two basic categories into which all candidates for trademark status must be placed:
inherently distinctive or noninherently distinctive. All candidates includes nonword
symbols and shapes as well as words. The primary significance of placement is the
need to prove secondary meaning or distinctiveness. By definition, inherently
distinctive‖ words and symbols need no proof of distinctiveness. As the U.S. Supreme
Court observed:
The general rule regarding distinctiveness is clear: an identifying mark is distinctive
and capable of being protected if it either (1) is inherently distinctive or (2) has
acquired distinctiveness through secondary meaning
Within the two basic categories are sub-categories that form the complete spectrum of
distinctiveness of marks. Arrayed in an ascending order roughly reflecting their
eligibility to trademark status and the degree of protection afforded, the categories
are: (1) generic terms; (2) descriptive; (3) suggestive; and (4) arbitrary or fanciful.
Generic terms can never be trademarks, descriptive terms are not inherently
distinctive and suggestive, arbitrary and fanciful terms are regarded as being
inherently distinctive.
Use of the spectrum of descriptive, suggestive, arbitrary and fanciful is largely
confined to word marks. It is usually not suitable for nonword designations such as
shapes and images making up trade dress. Whether trade dress is inherently
distinctive or not must be judged by other guidelines.
The Second Circuit has noted that the spectrum of distinctiveness is an attempt to
balance the grant of exclusive trademark rights against the right of competitors to use
the language to characterize and describe their goods and services:
The Abercrombie [spectrum of distinctiveness] test, thus, permits courts to separate
those cases in which similar marks are most likely to mislead consumers from those in
which trademark protection would create a linguistic monopoly which would stifle
competitors' efforts to market similar goods to consumers.
As with tonal shade variations in the colors of the visible spectrum of sunlight, the
categories of the trademark spectrum often become difficult to distinguish at the
boundaries. The Second Circuit has lamented that correctly categorizing a potential
mark is a slippery business and a tricky business at best. As the Fifth Circuit noted:
Although meant as pigeon-holes, these useful labels [the categories of marks] are
instead central tones in a spectrum; they tend to merge at their edges and are
frequently difficult to apply.
Similarly, the Second Circuit observed that:
At the extremes of trademark protection are generic terms which can claim no
protection, and arbitrary or fanciful terms which may always claim protection. … In
the broad middle ground where most of the trademark battles are fought are the terms
which are primarily descriptive and those which are only suggestive. The distinction,
while not always readily apparent, is important, because those which are descriptive
may obtain registration [and protection] only if they have acquired secondary

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meaning, while suggestive terms are entitled to registration [and protection] without
such proof.
Strength of a Mark and its Place on the Spectrum. Placement on the spectrum of
distinctiveness does not end the enquiry as to the strength of a mark: it is only the first
step. The second step is to determine the strength of this mark in the marketplace.
That is, to ascertain its degree of recognition in the minds of the relevant customer
class. For example, a word may indeed be fanciful and hence inherently distinctive,
yet have little customer recognition or strength in the market, e.g., because the word is
little known as a mark among customers.

Inherently distinctive marks

Fanciful, arbitrary and suggestive marks are regarded as being inherently distinctive.
A fanciful mark is a word that is coined for the express purpose of functioning as a
trademark. It could also be any obscure or archaic term not familiar to buyers. An
arbitrary mark consists of a word or symbol that is in common usage in the language,
but is arbitrarily applied to the goods or services in question in such a way that it is
not descriptive or suggestive.
As the Fifth Circuit observed, an inherently distinctive mark is presumed immediately
to serve as an identifier of source from the very first moment that it is used:
[T]he legal recognition of an inherently distinctive trademark or trade dress
acknowledges the owner's legitimate proprietary interest in its unique and valuable
informational device, regardless of whether substantial consumer association yet
bestows the additional empirical protection of secondary meaning.
Fanciful and arbitrary marks are protectable and registrable immediately upon use,
without the need for proof of secondary meaning. They are often referred to as strong
marks and are given a broad scope of judicial protection against infringement.
Reference to Fig. 11:1A shows that marks labelled as either fanciful‖ or arbitrary are
given legal protection against infringement immediately upon adoption and use: A
technical trademark, consisting of a coined or fanciful expression, comes into being as
soon as it is affixed to the goods and the goods are sold. … Priority of user alone is
controlling.
As the Third Circuit observed
[E]vidence of secondary meaning is not even relevant if the term is arbitrary,
suggestive or generic. Thus, as the Ninth Circuit remarked, if something such as trade
dress is inherently distinctive, the further requirement of a showing of secondary
meaning would be superfluous‖ to the issue of validity.
Under archaic usage, such marks were called technical trademarks. Today, however,
the prime importance of classifying marks as arbitrary or fanciful‖ is that such marks
do not need proof of secondary meaning‖ or consumer recognition in order to obtain
federal registration or protection in the courts.
As the Second Circuit stated, – The presumption that a fanciful word or mark
becomes distinctive and identifies the source of goods on which it is used
immediately after adoption and bona fide first use is basic in trademark law.

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Also placed in the inherently distinctive‖ category are words and symbols that are not
directly descriptive, but only suggestive‖ and need no secondary meaning for
protection.

What is a fanciful mark?

Fanciful‖ marks consist of coined words that have been invented or selected for the
sole purpose of functioning as a trademark. Such marks comprise words that are either
totally unknown in the language or are completely out of common usage at the time,
as with obsolete or scientific terms. The fact that lexicographers or devotees of
antiquity may recognize the word is irrelevant to the fact that the word is totally
unfamiliar to the ordinary consumer.
If, in the process of selecting a new mark, a seller sits down and invents a totally new
and unique combination of letters or symbols that results in a mark that has no prior
use in the language, then the result is a coined or fanciful‖ mark.

Fanciful marks as inherently strong trademarks

Fanciful marks are referred to as the strongest‖ of all marks, in that their novelty
creates a substantial impact on the buyer's mind—if sufficiently advertised and
recognized. Being a strong mark has significance, in that the mark will then be given
an expansive scope of judicial protection into different product or geographical
markets and as to more variations of format. Consequently, the likelihood of
confusion of a strong mark with similar marks will be more readily inferred:
The more distinctive the trademark is, the greater its influence in stimulating sales, its
hold on the memory of the purchaser and the likelihood of associating similar
designations on other goods with the same source. If the trademark is a coined word
such as KODAK, it is more possible that all goods on which a similar designation is
used will be regarded as emanating from the same source than when the trademark is
one in common use on a variety of goods, such as Gold Seal‖ or Excelsior.
Another aspect of coined marks is that they have no meaning, lending more weight to
similarity in sight and sound: "Two names that look and sound similar will naturally
seem even more similar where there are no differences in meaning to distinguish
them."
Although fanciful marks receive the strongest judicial protection, they are often
unacceptable from a business and merchandising point of view. That is, the business
person and the advertising agency want a mark that, by itself, helps to sell‖ the
product by telling the buyers something about the product or service offered. They do
not want to assume the job of injecting a completely new and fanciful term into the
lexicon of buyers. It may take a substantial advertising campaign for a fanciful mark
like GLOX to be associated by buyers with a certain source of a product.
Of course, from the lawyer's point of view, GLOX is a great mark, since if anyone
else comes along with a similar mark on related goods—such as GLOCKS or CLOX
—infringement may be clear. But the business person wants a mark like SUPERIOR,

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BRIGHT or HIGH STYLE, which connotes an aura of superior grade merchandise
and lends a psychological impression of quality. The problem is that such marks will
probably be classified as descriptive,‖ and thereby be more difficult to protect as
trademarks. Also, such marks may already be in considerable use in closely related
product fields and thus not be very ―distinctive‖ at all. In this sense they are weak‖
marks because they are in a ―crowded‖ market of similar marks. Judge Learned Hand
both asked and answered the question of why descriptive marks are so often adopted:
Examples of fanciful marks: ARGYROL antiseptic, CLOROX bleach,
CUTEX cuticle-removing liquid, CUTICURA toilet soap, EXXON oil and
gasoline products, and KODAK photographic supplies.
Danger of genericness of fanciful marks
Fanciful marks, even with their expanded scope of judicial protection and exception
from secondary meaning requirements, are not always completely safe from a legal
standpoint. There is a legal danger inherent in the use of a fanciful mark, if used on a
new and unfamiliar product. The danger is that buyers will take the mark and use it as
the generic name of the new product itself. Thus, such fanciful marks as ASPIRIN,
CELLOPHANE.

What are arbitrary marks?

Arbitrary marks comprise those words, symbols, pictures, etc., that are in common
linguistic use but which, when used with the goods or services in issue, neither
suggest nor describe any ingredient, quality or characteristic of those goods or
services. For example, the mark ―V-8 on juice made from eight different kinds of
vegetable juice was held to be an arbitrary and nondescriptive mark:
By repeatedly advertising the fact that its cocktail is made from the combined juices
of eight vegetables, the plaintiff has undoubtedly taught the purchasing public that V-
8 on a tin can means such a cocktail. Except for this association, we think, no one
could reasonably be expected to know that V-8 designated a vegetable juice cocktail,
or any other particular thing for that matter, unless it be something so described by
both shape and number, like an eight cylinder engine, for instance, having cylinder
blocks set at an acute angle to each other.
In discussing the mark STORK CLUB as a mark for a night club, the court noted that
applying the common word Stork‖ to a night club was a purely arbitrary,
nonsuggestive use of a word:
The Stork Club‖ is a trade name that, in the language of the books, might well be
described as odd fanciful, strange‖ and truly arbitrary. It is in no way descriptive of
the appellant's night club, for in its primary significance it would denote a club for
storks. Nor is it likely that the sophisticates who are its most publicized customers are
particularly interested in storks.
Arbitrary means that the ordinary meaning of the word mark is applied to these goods
in a totally arbitrary and nondescriptive sense. For example, IVORY soap is not made
of ivory, OLD CROW whiskey is not distilled from old crows, and ROYAL baking
powder is not used exclusively by royalty.

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By the very nature of the term ―arbitrary‖ it is assumed that the word used as a mark
is in use in the language, but has no descriptive connotation with this product. That is,
the fact that a word is found in a dictionary does not derogate from that word's
trademark significance, unless the dictionary meaning of the word is descriptive of the
goods in connection with which the word is used. It is a fallacy that a common‖ word
found in the dictionary cannot be a trademark. Thus, even a ―common‖ word such as
―apple‖ can be used as an arbitrary and inherently strong trademark on a product
such as personal computers.

Arbitrary versus suggestive marks

Arbitrary marks are sometimes difficult to distinguish from suggestive‖ marks.
However, for legal purposes, there is little, if any, reason to make the distinction, and
the cases hardly ever bother to do so. Arbitrary‖ and suggestive‖ marks fall within the
same legal pigeon hole of classification in that neither category requires proof of
secondary meaning for legal protection and registration (see Fig. 11:1A). For
example, it could be argued that a mark like GREYHOUND for a bus line is arbitrary.
On the other hand, it could be argued with equal force that GREYHOUND suggests
speed and sleekness. But the classification need not be made, for in either case, proof
of secondary meaning is unnecessary.

Examples of arbitrary marks

Marks properly classified as arbitrary include:
APPLESEED public advocacy charitable group, ARROW liqueurs, BLACK &
WHITE scotch whiskey.
Other marks that in the author's opinion are properly classified as ―arbitrary‖ are:
CAMEL cigarettes; RAINBOW bread; SHELL gasoline; ARM & HAMMER baking
soda; AMAZON on-line bookstore; SATURN autos; YAHOO web portal and APPLE
computers. Note that none of these words conjures up any mental reaction that
suggests the nature or quality of the product or service. That is, the words used as a
mark do not in any way describe anything about the product at all. The juxtaposition
of mark and product is purely ―arbitrary.

Arbitrary marks as strong marks

Some courts flatly state that arbitrary and fanciful marks are automatically ―strong‖
marks and therefore will be given a wide scope of protection. However, arbitrary
marks are not necessarily ―strong‖ marks. A given arbitrary mark may not suggest or
describe anything as to the product, but it also may be in very common use as a mark
in this or other product fields, and thus be ―weak.
Status of descriptive marks
Secondary Meaning is Needed. Today, the law is that marks categorized as
―descriptive‖ cannot be protected unless secondary meaning is proven. As the U.S.
Supreme Court has observed:

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Marks which are merely descriptive of a product are not inherently distinctive. When
used to describe a product, they do not inherently identify a particular source, and
hence cannot be protected. However, descriptive marks may acquire the
distinctiveness which will allow them to be protected under the [Lanham] Act. …
This acquired distinctiveness is generally called ―secondary meaning.
The common law has long embodied the rule that terms that are merely descriptive of
the qualities, ingredients or characteristics of a product cannot be protected as
―technical‖ trademarks.
The Right to Inform Consumers. Descriptive designations are regarded as being in the
―public domain‖ only in the sense that all sellers must be free to truthfully use
descriptive designations. That is, others are entitled to compete fairly by describing
their goods and services in order to inform consumers.

Secondary Meaning and Fair Use Rules Recognize the Right to Inform
There are two legal rules that protect a merchant‘s right to make a nontrademark use
of descriptive terms. This right is reflected in limiting doctrines which impact both
validity and infringement: (1) Validity. Under the doctrine of secondary meaning, the
only aspect of trademark rights in a descriptive term which is given legal protection is
that penumbra or fringe of secondary meaning which surrounds the old descriptive
word. (2) Infringement. When charged with the alleged infringement of a descriptive
term that has secondary meaning, defendant may raise the defense that it is not using
the term as a mark, but merely as a descriptive adjective. Hence the competitor is not
guilty of trademark infringement or unfair competition. As the Supreme Court
observed:
This right to describe is the reason that descriptive terms qualify for registration as
trademarks only after taking on secondary meaning as distinctive of the applicant's
goods,‖ … , with the registrant getting an exclusive right not in the original,
descriptive sense, but only in the secondary one associated with the markholder's
goods.
The Supreme Court has remarked that the fair use defense is a legal doctrine that
provides a competitive balance to those who attain trademark rights in descriptive
terms by achieving a secondary meaning:
The common law's tolerance of a certain degree of confusion on the part of consumers
followed from the very fact that in cases like this one an originally descriptive term
was selected to be used as a mark, not to mention the undesirability of allowing
anyone to obtain a complete monopoly on use of a descriptive term simply by
grabbing it first. . .. The Lanham Act adopts a similar leniency, there being no
indication that the statute was meant to deprive commercial speakers of the ordinary
utility of descriptive words.

What is a descriptive mark?

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Types of Description: A "descriptive" term is one that directly and immediately
conveys some knowledge of the characteristics of a product or service.
A mark is "descriptive" if it is descriptive of:
• the intended purpose, function or use of the goods.
• the size of the goods.
• the provider of the goods or services.
• the class of users of the goods or services. Thus, the term PHILADELPHIA CARD
was found to be descriptive of credit card services for cards depicting Philadelphia
targeting customers in Philadelphia.
• a desirable characteristic of the goods or services. Thus, the term OATNUT for
bread immediately tells that the bread contains oats and nuts. The word
ERGONOMIC immediately informs potential buyers of a ceiling fan that the fan is
designed to interact efficiently and safely with the user.
• the nature of the goods or services. Thus, the term E-FASHION immediately and
directly says that the Internet service provides information about fashions.
• the end effect upon the user.
Retail Sales Services. A term can be descriptive of retail sales services if it is the
generic name of a product sold at that outlet. For example, a mark for restaurant
services which comprises the generic name of a food that is the speciality of the house
can be merely descriptive of restaurant services, be it in English or in a foreign
language. LE CROISSANT SHOP was held descriptive of restaurant services, since
prospective customers would immediately know that croissants could be purchased.
Similarly, the word PENCILS was held to be descriptive of ―retail stationery and
office supply services‖ because it describes an item that is sold in stationery and office
supply stores even though it is not the main item sold in such stores.
Evaluate the Term in Relation to These Goods and Services. Descriptiveness cannot
be determined as an abstraction. The possible descriptiveness of a designation is
highly dependent on the goods or services in connection with which the designation is
used. A term can be descriptive of one product and nondescriptive of another. As the
Trademark Board observed:
[T]he question of whether a mark is merely descriptive must be determined not in the
abstract, that is, not by asking whether one can guess, from the mark itself, considered
in a vacuum, what the goods or services are, but rather in relation to the goods or
services for which registration is sought, that is, by asking whether, when the mark is
seen on the goods or services, it immediately conveys information about their nature.
Scope and Timing of Descriptive Use. A word need not be in common or widespread
use to be deemed ―descriptive.‖ Also, the fact that this trademark claimant was the
first to use the word in connection with these goods does not itself imbue the word
with trademark significance.

Descriptive of Product Standards

A designation which is recognized by buyers as a product standard may be classified
as being ―descriptive. For example, the Trademark Board held that ―FM4910‖ was

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descriptive because to buyers in the trade, it immediately described a key
characteristic of plastic materials sold to the semiconductor industry. That is,
―FM4910‖ told the buyer that the materials met the FM4910 flammability test
protocol, a widely known standard in the trade for measuring the clean room
flammability of plastic materials.

Illustrative list of marks held descriptive

Prior decisions are of little value in determining whether a given mark is to be
classified as ―descriptive. However, in order to give the reader a feel for the kinds of
marks and their usage that have been held to be ―descriptive,‖ an illustrative list is
given below. No attempt has been made to give an exhaustive list of all such holdings.
Other sources must be consulted for a more complete listing of marks held
descriptive. This listing of some descriptive marks should be compared with a similar
list herein of marks held to be nondescriptive and merely suggestive.
AFTER TAN after sunning lotion, AGENTBEANS computer software, ALO cream
of aloe plant, AMERICA'S BEST POPCORN! Popcorn, ARMED ANTIBODIES
antibodies combined with toxins, ARTHRITICARE gel used to relieve pain of
arthritis, BAD AIR SPONGE odor absorbing material, BED & BATH store for items
for the bedroom and bathroom.

Secondary meaning for descriptive marks

Trademark protection for descriptive marks is extended only in recognition of
consumer acceptance and recognition of such marks as denoting only one seller or
source. That is, trademark protection is extended only where the user has proven
secondary meaning in a descriptive mark. As the U.S. Supreme Court has observed:
Marks which are merely descriptive of a product are not inherently distinctive. When
used to describe a product, they do not inherently identify a particular source, and
hence cannot be protected. However, descriptive marks may acquire the
distinctiveness which will allow them to be protected under the [Lanham] Act. …
This acquired distinctiveness is generally called ―secondary meaning.
Similarly, the Second Circuit observed: The connection between mark and source is
assumed in the case of a suggestive or arbitrary term. Secondary meaning performs
the role of establishing that connection … in the case of a descriptive term.
Until about the 1920s, protection for descriptive marks with secondary meaning was
regarded as the subject only of general unfair competition law. That is, since such
marks were not ―technical trademarks, they could not be protected by the body of
law called ―trademark infringement. Today, no one makes this distinction.
Descriptive terms with secondary meaning are viewed as merely another kind of
trademark. This is the semantic classification of the federal trademark statute of 1946.
For some time, many courts were reluctant to admit that nontechnical marks should be
protected. But by 1938, the U.S. Supreme Court recognized that descriptive marks
with secondary meaning deserve the same scope of protection as arbitrary and fanciful
marks. In the Armstrong Paint case, the Supreme Court held that the mark NU-

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ENAMEL, although descriptive of enamel paint, had acquired a secondary meaning,
and was, therefore, entitled to protection under both trademark infringement and
unfair competition theories:
Here we have a secondary meaning to the descriptive term ―Nu-Enamel. This
establishes … the common law right of the Nu-Enamel Corporation to be free from
the competitive use of these words as a trademark or trade name. … The right arises
… from the fact that ―Nu-Enamel‖ has come to indicate that the goods in connection
with which it is used are the goods manufactured by the respondent. When a name is
endowed with this quality, it becomes a mark, entitled to protection.
Secondary meaning for a descriptive term is a matter of fact, to be determined from
relevant evidence probative of probable customer reaction. The Supreme Court of
North Carolina gave an excellent capsule definition of secondary meaning in the
context of descriptive terms:
When a particular business has used words publici juris for so long or so exclusively
or when it has promoted its product to such an extent that the words do not register
their literal meaning on the public mind but are instantly associated with one
enterprise, such words have attained a secondary meaning. That is to say, a secondary
meaning exists when in addition to their literal, or dictionary meaning, words connote
to the public a product from a unique source.
Proof that others are using a term descriptively on the same or closely related goods,
is evidence tending to rebut alleged secondary meaning in a descriptive term. Where
there is undisputed proof of secondary meaning or the defendant has admitted its
existence, some courts have stated that there is no need to even enquire whether or not
the mark was originally descriptive or not.
Some courts have stated that proof of secondary meaning is not required for
descriptive terms if other elements of general unfair competition law are present. For
example, the Second Circuit, applying New York law, dismissed plaintiff's claim for
trademark infringement of a descriptive term without secondary meaning, but still
found unfair competition by defendant's breach of a fiduciary duty as a former sales
agent for plaintiff. A similar holding was made as to unfair competition by the use of
confusingly similar packaging materials.
The same evidence of consumer usage may be used to determine secondary meaning
as to determine whether the mark is descriptive or not in the first place.
The more descriptive the term, the greater the evidentiary burden on plaintiff to prove
secondary meaning. The descriptive‖ category is not a monolithic set of terms. Some
terms are only slightly descriptive and need only a minimum quantum of evidence of
secondary meaning. Other terms are highly descriptive and may need a massive
quantity and quality of secondary meaning evidence to become a trademark.

Protectability upon proof of secondary meaning

As with all descriptive terms, merely because a term serves as a grade designation, it
does not necessarily follow that such term cannot also perform a trademark function.
Such a designation, if so used as to acquire consumer recognition and secondary

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meaning, can function and be protected as a trademark. If a style or grade designation
is used and advertised in such a way that buyers link it only with one seller, then it has
acquired secondary meaning and will be protected as a mark. In that event, the
designation serves a dual purpose: to identity the type and grade of product and also
as identifying the seller as the source of the product.
Upon proof of secondary meaning, a grade or style designation can be registered
under the Principal Register of the Lanham Act and can be protected at common law
against use that is likely to cause confusion. The Second Circuit Court of Appeals
stated of style designations:
If it can be shown that the term is identified with the manufacturer, that the public is
motivated to buy the product because of its source, and that a competing use of the
term is likely to produce confusion on the part of consumers, then the manufacturer
will have a remedy.
The Fifth Circuit stated the same general test, although in different terminology. It
said that while a competitor uses a parts numbering system only for purpose of
reference in selling replacement parts, there is no legal wrong. But use of a
personalized, perhaps unusual, numbering system, particularly one on which
customers might rely for the reputation and quality of the product, is a different
matter. Thus, if a style designation has been so used that buyers link such designations
with only one seller, then that designation functions like any other mark.
Of course, the mere intent to use a grade designation as an indication of source is not
per se sufficient to acquire protection—the emphasis is upon the actual reaction of
buyers, no matter what the user intends. On the other hand, where the user's intent is
to use the term as both a style designation and as a trademark, the Court of Customs
and Patent Appeals has held that the mark may still be a valid trademark, for a mark
may be used for both a trademark purpose and a nontrademark purpose and still be a
valid trademark.
If there is no secondary meaning attached to a style or grade designation, then
competitors are free to use that designation to denote the style or grade of their own
goods.
An industry-wide standard style or grade designation cannot be appropriated by one
seller as a trademark. For example, a preliminary injunction was denied in a suit by a
firm using various combinations of the letter X‖ against the IEEE, the electrical
engineers professional association, for listing X‖ as a code designation indicating
shipboard electrical cable insulation containing polymer cross-linked polyethylene.
The court held that X‖ was not plaintiff's trademark and that it was widely used to
describe the presence of the insulation material described above.

Why the suggestive category arose

The descriptive-suggestive distinction arose primarily because the common law
recognized technical trademark rights only in fanciful or arbitrary marks. The
protection of descriptive terms with secondary meaning was given under what was
regarded as a separate body of law—unfair competition—which was only gradually

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accepted later in time. Judges, straining to find technical trademark infringement, had
to have some label for marks that were not merely descriptive, but on the other hand,
were not purely arbitrary or fanciful. Thus, the use of the term suggestive‖ arose.
Another reason prompting use of the suggestive‖ categorization was the fact that the
1905 Federal Trademark Act altogether forbid the registration of a mark that was
merely descriptive of the goods or their quality or character. That is, the 1905 Federal
Act, unlike the 1946 Lanham Act, forbade the registration of descriptive marks
regardless of proof of secondary meaning. When faced with marks that were on the
borderline between the descriptive and arbitrary categories, the courts strained to
uphold registrability by using the term suggestive.‖ That is, marks would be registered
as nondescriptive even if they were somewhat suggestive of some characteristic of the
product. Speaking of the 1905 Act, one court stated:
In this provision, Congress evidently intended to draw a distinction between
descriptive and merely suggestive marks. Marks of the former character, as we many
times have declared, are not susceptible of exclusive appropriation, while those of the
latter class may be. The difficulty is not so much in the statement of the rule as in its
application to the facts of a particular case.
To uphold the registration of marks that were only subtly ―descriptive, the need
arose for a middle category of suggestive‖ marks under the 1905 Act. Although the
Draconian results of the 1905 Act have long passed, the category of suggestive marks
remains.

Suggestive marks: the middle ground between arbitrary and descriptive marks
The distinctiveness of a mark cannot be determined in the abstract, but only by
reference to the goods or services upon which the mark is used. For example, the
mark BRILLIANT may be ―descriptive‖ on diamonds, suggestive‖ on furniture
polish, and ―arbitrary‖ on canned applesauce. The exact position of the line between
descriptive and suggestive marks is almost impossible to define in the abstract. As one
court stated, The line of demarcation may not be easy to draw, but it exists. In
speaking of the descriptive-suggestive distinction, Judge Learned Hand could be no
more definite than to state: It is quite impossible to get any rule out of the cases
beyond this: That the validity of the mark ends where suggestion ends and description
begins.‖ In that case, Judge Hand determined that the mark FASHIONKNIT on
sweaters was descriptive. He stated that: I have not the least doubt that it produces the
effect intended; that the plaintiff expected its customers vaguely to understand that its
clothes were knitted as fashionable clothes should be knitted.
One court attempted to define suggestive marks as a middle ground between purely
fanciful marks and descriptive marks:
Between these two extremes lies a middle ground wherein terms of mingled qualities
are found. It cannot be said that they are prima rily descriptive or that they are purely
arbitrary or fanciful without any indication of the nature of the goods which they
denominate. Such terms, indeed, shed some light upon the characteristics of the
goods, but so applied they involve an element of incongruity, and in order to be

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understood as descriptive, they must be taken in a suggestive or figurative sense
through an effort of the imagination on the part of the observer. Applying this test, the
court concluded that FRIENDLY as used on shoes was not descriptive, but merely
suggestive.
The terms descriptive‖ and suggestive‖ are not mutually exclusive. There is some
description in any suggestion or the suggestive process will not take place. A given
mark does not remain immutably either descriptive or suggestive. It is possible for a
mark which was originally merely suggestive to become descriptive by usage of the
public or the trade.

Tests for determining descriptive-suggestive distinction

The descriptive-suggestive borderline is hardly a clear one. Its exact location in any
given situation is hazy and only subjectively definable. The descriptive category
almost imperceptibly shades over at its fringe into the suggestive domain. Various
tests for determining the difference have been used and are explained here.

Tests for determining descriptive-suggestive distinction—Degree of imagination

test
The most popular test with the courts is the imagination‖ test. The more imagination
that is required on the customer's part to get some direct description of the product
from the term, the more likely the term is suggestive, not descriptive. Thus, while a
descriptive term directly and clearly conveys information about the ingredients,
qualities or characteristics of the product or service, the suggestive‖ term only
indirectly suggests these things. For example, 360° was found to be only suggestive,
not descriptive, of sports shoes because one must use considerable imagination to
remember that 360 is the number of degrees in a circle, connect that circle to
movement and imagine that the mark connotes the ability to pivot in the shoe for a
full circle.
Judge Weinfeld's formulation of the imagination test in the Stix case is often quoted
and applied:
A term is suggestive if it requires imagination, thought and perception to reach a
conclusion as to the nature of the goods. A term is descriptive if it forthwith conveys
an immediate idea of the ingredients, qualities or characteristics of the goods.
Under the imagination test, the question is how immediate and direct is the thought
process from the mark to the particular characteristic of the product. Thus, if one must
exercise ―mature thought or follow a multi-stage reasoning process‖ to determine
attributes of the product or service, the term is suggestive, not descriptive. The Second
Circuit held that GUNG-HO was merely suggestive, not directly descriptive, of a
cartoon-based toy action doll of a hard-bitten marine sergeant because ―a certain
amount of creative imagination is required‖ of the child to intuit the specific attributes
of this particular character from its mark. Also, incongruity is one strong indicator of
suggestiveness.

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For example, to receive any information about the nature of bus services from the
word ―greyhound‖ one must know what a greyhound‖ is and what its attributes are
before the mind makes any connection between the word and any alleged
characteristics of the service.
If the mental leap between the word and the product's attributes is not almost
instantaneous, this strongly indicates suggestiveness, not direct descriptiveness. Other
examples of terms requiring some degree of imagination include SPARKLE for
window cleaner, ORACLE for computer software, PENGUIN for food freezers,
SAMSON for weight training machines and VENUS for a beauty salon.
A typical application of the imagination test is that used by the Trademark Board as
follows:
The mark AIR-CARE is, moreover, not merely descriptive as applied to applicant's
services. The literal meaning of the mark, namely, care of the air‖, may, through an
exercise of mental gymnastics and extrapolation suggest or hint at the nature of
applicant's services, but it does not, in any clear or precise way, serve merely to
describe applicant's preventive maintenance services directed to a scheduled
maintenance program for hospital and medical anesthesia and inhalation therapy
equipment.
The Trademark Board will accord little value to the expert opinion of a linguist on the
ultimate issue of the descriptiveness of a particular term.

Tests for determining descriptive-suggestive distinction—Competitors' need test

The imagination test enquiry naturally leads into the competitors' need test: The more
imagination that is required to associate a mark with the product, the less likely the
words used will be needed by competitors to describe their products.‖ That is, is the
suggestion made by the mark so remote and subtle that it is really not likely to be
needed by competitive sellers to describe their goods? If the answer is yes, then this
tends to indicate that the mark is merely suggestive, not descriptive.
If, however, the message conveyed by the mark about the goods or services is so
direct and clear that competing sellers would be likely to need to use the term in
describing or advertising their goods, then this indicates that the mark is descriptive.
A mark that contains a sufficient minimum of fancifulness to remove it from the
descriptive‖ category will not seriously infringe upon the right of other sellers to use
descriptive terms on their products, especially in view of the fair use defense. There is
an inverse ratio between the imagination test and the competitors' need test: As the
amount of imagination needed increases, the need of [others to use] the mark to
describe the product decreases.
For example, the Second Circuit Court of Appeals stated of its holding that SEASON-
ALL for aluminum storm windows was suggestive and nondescriptive:
Nor does our affirmance of the Patent Office registration of SEASON-ALL render it
difficult for others in the business of selling other storm doors and storm windows
adequately to describe their products. The English language has a wealth of synonyms
and related words with which to describe the qualities which manufacturers may wish

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to claim for their products and the ingenuity of the public relations profession supplies
new words and slogans as they are needed.

CASES RELATING TO TRADEMARKS

1. British Sky Broadcasting Group Plc & Ors v Microsoft Corporation

Microsoft & Anor [2013] EWHC 1826 (Ch) (28 June 2013)

Microsoft has lost a trademark infringement case taken out by BSkyB for
infringement of their Sky trademark by Microsoft’s SkyDrive. The case dates back
to 2011, when BSkyB initiated an action for passing off and for infringement of
two registered Community trade marks (CTMs) and two UK registered trademarks
(UKTMs) for the mark ‘SKY’ by which the Claimants [BSkyB] seek to prevent the
Defendants [Microsoft] from using ‘SkyDrive’ as the name for their cloud storage
service throughout the European Union. Microsoft argued that there is no
confusion between Microsoft and BSkyB’s cloud services but the judge Mrs
Justice Asplin disagreed, saying  the scope of BSkyB’s “SKY” registered
trademarks, as well as its goodwill in the SKY brand, was such that Microsoft’s
use of the “SkyDrive” mark was likely to cause confusion among consumers. She
also decided that use by Microsoft of the “SkyDrive” brand was detrimental to the
SKY mark which, in itself, amounted to trademark infringement.

A. WELL KNOWN TRADEMARKS

2. Gucci Am., Inc. v. Guess Inc., 2012 WL 1847646 (S.D.N.Y. May 21, 2012

Plaintiff Gucci America, Inc. (“Gucci”) and its affiliated companies own and
control the world famous GUCCI brand. Among Gucci’s iconic designs are its
Green-Red-Green stripe design (“GRG Stripe”), its “Stylized G” design mark, and
its “Diamond Motif” trade dress, featuring a repeating diamond pattern bearing
interlocking paired G letters on the corners. Gucci has used these iconic designs
for decades on a wide variety of products, ranging from handbags to sunglasses,
watches, and car interiors. Defendant Guess Inc. (“Guess”) sells branded apparel
and accessories in hundreds of retail stores and over one thousand department
stores nationwide. In 2007, Guess designers came up with a “Melrose 2 men’s
shoe” design, which, as one designer instructed the shoe manufacturer, should
bear striping detail that is “Green/Red/Green like . . . GUCCI.” Gucci filed suit
against Guess and a number of Guess licensees in May 2009. In its complaint,
Gucci alleged trademark infringement and counterfeiting of iconic Gucci designs
“in an attempt to ‘Gucci-fy’ [Guess’s] product line.” The court permanently
enjoined Guess and its licensees from using the Quattro G pattern, GRG Stripe,

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 and certain Square G marks, stating that “the conclusions of infringement and
dilution give rise to a presumption that Gucci has suffered irreparable harm in that
it has lost goodwill towards its unique brand as well as the ability to control its
reputation in the marketplace.” The court noted that such injuries could not be
remedied fully by a monetary award.

3. Already, LLC v. Nike, Inc. (US Supreme Court)

Nike sued Already claiming that Already's Soulja Boys and Sugar shoe lines
infringed and diluted Nike's Air Force 1 trademark. Already counterclaimed that
Nike's Air Force 1 trademark was invalid. Four months after Already
counterclaimed, Nike dismissed its claims with prejudice against Already. Nike
also issued to Already a covenant not to sue, promising not to raise against
Already or any Already-affiliated entity (including customers and distributors)
any possible trademark or unfair competition claim or demand based on any of
Already's existing shoe designs or future designs that were a "colorable imitation"
of Already's current products. Nike then moved to dismiss Already's counterclaim
as moot. The district court granted Nike's motion, holding that there was no longer
"a substantial controversy of sufficient immediacy and reality to warrant the
issuance of a declaratory judgment." The Second Circuit affirmed, holding that the
covenant eliminated a justiciable case or controversy. The Second Circuit found
that because the covenant covered "past sales and future sales of both existing
products and colorable imitations," it was hard to conceive of an Already shoe that
would infringe Nike's Air Force 1 trademark yet not fall within the covenant. 
On January 9, 2013, the United States Supreme Court decided Already, LLC v.
Nike, Inc., holding that a broad and unconditional covenant not to enforce a
trademark against a competitor's existing products and any future "colorable
imitations" moots the competitor's claim challenging the validity of the trademark.
The Supreme Court applying the voluntary cessation doctrine, held that Nike
met its "formidable burden of showing" that it "could not reasonably be expected"
to resume its trademark enforcement efforts against Already.

4. Yale University V. Yale Academy, Inc. Et Al May 8, 2013

This trademark infringement case involved Yale University, one of the country’s
most famous Ivy League schools, and Yale Academy, an education academy that
helps individuals prepare for college entrance exams. Yale University is located in
New Haven, Connecticut. Thousands of students attend classes each day on the
835-acre campus. Yale Academy caters to fewer than 200 students at shopping
malls in New Jersey, Pennsylvania and Delaware. Yale University filed a
trademark infringement lawsuit claiming that the defendant, Yale Academy, was
infringing upon its name. In addition to using “Yale” in its name, Yale Academy
also had a logo that used the same blue-and-white color combination as Yale

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 University. The fact that Yale Academy founder Terry Yang claimed he never
intended to cause any confusion with the name of his company (he claimed he
came up with the name by combining his last name — Yang — and that of his
wife — Lee) mattered little to Yale University and their legal team. Because Yale
Academy was also operating in the “education institution” space, it’s not
surprising that Yale University decided to follow through with their infringement
lawsuit. The case was settled in July in favor of Yale University. The founder
Terry Yang has since changed the name of his educational company from Yale
Academy to Y2 Academy.

5. Daimler Benz Aktiengesellschaft vs. Hybo Hindustan, AIR 1994 DEL 239,

The injunction was sought by the manufacturers of the Mercedes Benz Car against
the defendants who were using the three pointed star in the circle and the word
Benz. Injunction was granted against the defendants who were using the mark
Benz on underwear apparel. In the case Mahinder Narian J. opined that, ―I think
it will be a great perversion of the law relating to Trade Marks and Designs, if a
mark of the order of the "Mercedes Benz", its symbol, a three pointed star, is
humbled by indiscriminate colourable imitation by all or anyone; whether they are
persons, who make undergarments like the defendant, or anyone else. Such a mark
is not up for grabs -- not available to any person to apply upon anything or goods.
That name which is well known in India and worldwide, with respect to cars, as is
its symbol a three pointed star.

6. Kamal trading Co. vs. Gillette UK Limited, 1988 PTC (1) 13,

An injunction was sought against the defendants who were using the mark 7'O
Clock on their toothbrushes. The Bombay High Court held that the plaintiff had
acquired an extensive reputation in all over the world including India by using the
mark 7'O Clock on razors, shaving creams. The use of an identical mark by the
defendant would lead to the customer being deceived.

7. Whirlpool Co. & Anr. Vs. NR Dongre, (1996) 5 SCC 714,

The plaintiff's mark was Whirlpool and they had registered the same in India in
1977. However the mark had not been renewed. The Plaintiff‘s mark had a world
wide reputation and the defendant was using the mark on Washing Machines. The
Plaintiffs had sold machines in a limited number to the US Embassy in India.
However they had also advertised in a number of international magazines having
circulation in India. The Court held that the mark Whirlpool had established a
transborder reputation in India and hence the defendants were injuncted from
using the mark Whirlpool for their goods.

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8. Aktiebolaget Volvo Vs. Volvo Steels Limited, 1998 PTC 47/
(MANU/MH/0076/1997)

It was held that the plaintiff had established a reputation in India in relation to its
mark Volvo. It was advertised in various international magazines having
circulation in India and the plaintiff had also registered the mark in India. The
court also stated that difference in nature of products manufactured not valid
ground for defendants to use name ‘volvo’ with intention to pass of their goods as
plaintiffs‘. Thus, the court concluded that the defendant had adopted the mark
with fraudulent intentions to benefit from the reputation of the Plaintiff.

9. Caterpillar Inc.Vs. Jorange and another, 1998 PTC (18) DB 31/ (1998) II MLJ
105, (MANU/TN/0067/1997)

The defendant had started using the marks CAT and CATERPILLAR on there
garments. The Plaintiffs trademark CATERPILLAR or CAT was registered in 175
Countries all over the world. It was also registered in India and the registrations
were valid and subsisting. The Court while granting the injunction held that the
plaintiffs have made out a prima facie having regard to the trans border reputation
established by it undoubtedly with regard to heavy duty vehicles all over the
world and in several countries even with regard to garments. In this case the
Madras High Court referred to the Benz decision and stated that, ―the trade mark
law is not intended to protect a person who deliberately sets out to take the benefit
of somebody else's reputation with reference to goods, especially so when the
reputation extends worldwide.

10. Specsavers International Healthcare Ltd v Asda Stores Ltd (C-252/12) by

European Court of Justice (Third Chamber) on 18 July 2013

Parties to the main proceedings were Specsavers International Healthcare Ltd,

Specsavers
BV, Specsavers Optical Group Ltd, Specsavers Optical Super stores Ltd
(Applicants) and Asda Stores Ltd (Defendant). In the case request for a
preliminary ruling — Court of Appeal (England and Wales) (Civil Division) —
Interpretation of Articles 9(1)(b) and (c), 15 and 51 of Council Regulation (EC)
No 207/2009 of 26 February 2009 on the Community trade mark (codified
version) — Notion of ‘genuine use’ of a trade mark — Combined use of figurative
and word marks which were registered separately — Trade mark registered
without claiming a colour, but used with a particular colour to the point of
creating an association in the mind of a section of the public between that colour
and the mark .
Operative part of the judgment

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 1. Article 15(1) and Article 51(1)(a) of Council Regulation (EC) No
207/2009 of 26 February 2009 on the Community trade mark must be
interpreted as meaning that the condition of ‘genuine use’, within the
meaning of those provisions, may be fulfilled where a Community figurative
mark is used only in conjunction with a Community word mark which is
superimposed over it, and the combination of those two marks is,
furthermore, itself registered as a Community trade mark, to the extent that
the differences between the form in which that trade mark is used and that in
which it was registered do not change the distinctive character of that trade
mark as registered.
2. Article 9(1)(b) and (c) of Regulation No 207/2009 must be interpreted
as meaning that where a Community trade mark is not registered in colour,
but the proprietor has used it extensively in a particular colour or
combination of colours with the result that it has become associated in the
mind of a significant portion of the public with that colour or combination of
colours, the colour or colours which a third party uses in order to represent a
sign alleged to infringe that trade mark are relevant in the global assessment
of the likelihood of confusion or unfair advantage under that provision.
3. Article 9(1)(b) and (c) of Regulation No 207/2009 must be interpreted
as meaning that the fact that the third party making use of a sign which
allegedly infringes the registered trade mark is itself associated, in the mind
of a significant portion of the public, with the colour or particular
combination of colours which it uses for the representation of that sign is
relevant to the global assessment of the likelihood of confusion and unfair
advantage for the purposes of that provision.

B. APPLICATION OF INTERNATIONAL EXHAUSTION PRINCIPLES

11.Samsung Electronics v. Kapil Wadhwa (Decided on 17 February, 2012 by HIGH

COURT OF DELHI )

Samsung (Korea) and its Indian subsidiary Samsung India filed a suit restraining
infringement of Trade Mark Samsung against the Defendants who were importing
printers from Korea bearing the mark Samsung and selling the same into Indian
market. The printers the Defendant was selling were similar to the printers sold by
the Plaintiffs in India. However, the said models which the Defendants were
selling were not being sold by the Plaintiffs in India. The issue involved in the
case was whether the Indian Trade Marks Act, 1999 embodies the International
Exhaustion Principle or National Exhaustion principle when the Registered
Proprietor of Trade Mark places the goods in the market under Registered Trade
Mark?

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 The matter came up for hearing and the Learned Single Judge of the Hon’ble High
Court of Delhi held that India follows the principle of National Exhaustion and
not of International Exhaustion of Rights. Thus, the Defendants were restrained
from importing exporting and dealing in printers and their ink cartridges/toners
bearing the trademark SAMSUNG. The Division bench overruled the order of the
Single Judge after a careful reading of Section 29 and 30 of the Trade Marks Act,
1999, more importantly Section 30(3) & Section 30(4), held that the term ‘the
market’ contemplated by Section 30(3) of the Trade Marks Act, 1999 is the
international market. Thus, legislation in India adopts the Principle of
International Exhaustion of Rights.

12. Micromax Informatics Limited v. Telefonakic Bolaget Lm Ericsson (Decided

on 12 November, 2013 by CCI)

Micromax Informatics Limited (“Micromax”) is the informant who started its

operations in India in 2008 and with ground breaking technologies coupled with
affordable prices for mobile phones. The opposite party is Telefonaktiebolaget
LM Ericsson is one of the world’s largest telecommunication companies, having a
global market share of 38%. Ericsson, on its official website, claims to have
33,000 patents to its credit, with 400 of these patents granted in India, and the
largest holder of ‘Standard Essential Patents for mobile communication.’ The OP
has sent a notice to the informant regarding the infringement of the numerous
patents of the OP without mentioning the specific patents and asked to secure a
license for the same and also mentioned the royalty rates. The Informant before
the Competition Commission of India has alleged that the OP was demanding
unfair, discriminatory and exorbitant royalty for its patents regarding GSM
technology. The royalty demanded by Ericsson was excessive when compared to
royalties charged by other patentees for patents similar or comparable to the
patents held by Ericsson.

13. Dabur India Ltd. v. Real Drinks Pvt. Lid & ors. ( Decided on 3 January, 2014
by Delhi HC)

One of the premium brands of the Plaintiff is packaged juice which was launched
in 1994 under the trademark 'REAL'. The juices are prepared from natural fruit
pulp/juice concentrates mixed with water packed in "Freshness Seal Packs." It is
submitted that the trademark 'REAL' is a suggestive mark having a remote
suggestion that the juices have freshness of fresh fruits and is, therefore, not a
descriptive trademark. It is stated that the trademark 'REAL', therefore, is entitled
to protection as a suggestive and arbitrary mark. It is stated that, on account of
long and continuous use since 1994, extensive marketing and sale campaign, the
fruit juice sold under the mark 'REAL' has acquired considerable goodwill and
reputation amongst the members of trade and public at large and has acquired the

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 status of a well-known brand which connotes the fruit juices originating from the
Plaintiff exclusively. Defendant, a company based in Goa, is stated to be engaged
in the manufacture and marketing of fruit flavored drinks, soft drinks, aerated
drinks and packaged drinking water. Defendant is stated to have adopted 'REAL'
as trademark and is selling aerated drinks and fruit flavored drinks under the
trademark 'REAL'. The Plaintiff alleges that the conduct of Defendant in adopting
the mark 'REAL' for its product is dishonest, and with the intention of taking
advantage of the goodwill and reputation of the Plaintiff's trademark, which has
become a household name.  

14. Aristo Pharmaceuticals Pvt. Ltd. v. Innova Cap Tab and Anr. ( Decided on
24 December, 2013 by Bombay HC)

The Plaintiff has filed the present suit against the Defendants inter alia for a
perpetual order of injunction restraining the Defendants from infringing the
Plaintiff’s registered trademark ‘MONTINA’. The plaintiff’s trademark validly
subsists on the Register of Trademarks since 31 st December, 2002 and use of any
identical and/or deceptively similar trademark by the Defendant amounts to
infringement of the plaintiff’s trademark. The defendant claimed that though the
Plaintiff got its trademark ‘MONTINA’ registered since 2002; the plaintiff has not
used the said trademark until August 2013. As against this, Defendant has been
selling its medicinal preparation in the market since 2009. Thus the defendant has
been the prior user of the mark ‘MONITNA-L’.
The Court held that a bare reading of Section 34 of the Act makes it clear that in
order to avail the benefit of Section 34 of the Act, the use of a trademark by a
person other than the registered proprietor must be prior to the date of use by the
registered proprietor or the date of the registration, whichever is earlier. Thus, the
use by the defendant is prior to the use by the registered proprietor, but not prior to
the date of registration, the benefit of Section 34 of the Act is not available. Thus,
the plaintiff has sought an order of temporary injunction against the Defendants
from manufacturing and marketing any medicinal preparation/product by using the
mark MONTINA-L.

C. JURISDICTIONAL ISSUES

15.Paragon Rubber Industries v. Pragati Rubber Mills & ors. ( Decided on 29

November, 2013 by Supreme Court)

The Plaintiff, who is based in Kerala, filed a suit against the Defendants at District
Court, Kottayam, Kerala in 2001, claiming relief under the 1957 Act and the 1958
Act. The Defendant, who is based in Punjab, filed I.A under Order VII, Rule XI of

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 the Code with a prayer for rejection of plaint for want of territorial jurisdiction.
The District Court dismissed the I.A and held that it enjoyed the jurisdiction to
entertain the suit in view of Section 62(2) of the 1957 Act. The Defendant
challenged the aforesaid Order in the High Court. On concluding that the instant
composite suit encompassing the 1957 Act and 1958 Act would not be
maintainable for lack of jurisdiction under the 1958 Act (in spite of jurisdiction
under the 1957 Act), the High Court set aside the aforesaid Order of the trial
court. The Plaintiff was, however, given the liberty to amend the plaint. Both the
Plaintiff and the Defendants appealed against the Order of the High Court.
Issues before the Supreme Court were although causes of action under the 1957
Act and the 1958 Act are different, can a suit encompassing the same be ipso
facto maintained on the ground that the Court enjoys jurisdiction under Section
62(2) of the 1957 Act (in spite of lack of jurisdiction under the 1958 Act)? And is a
composite suit maintainable when a court enjoys jurisdiction over only one among
the multiple causes of action under distinct statutes? The judgment reiterated the
principle that a composite suit will not entitle a Court to entertain a suit in respect
whereof it has no jurisdiction, territorial or otherwise. Also, the existence
of jurisdiction over one cause of action in a composite suit will not annul the effect
of lack of jurisdiction over the other causes of action. 

D. TRADEMARK IN UNCONVENTIONAL MODES (SOUNDS, SCENTS

& COLOURS)

16.Shield Mark v. Joot Kist, 2004 IPLR 141.

Shield mark havng 14 sound marks or products and services appealed against
the decision of the Trial Court reusing to grant relie on Trademark
infringement. The Appellate court referred the matter to the ECJ for its
opinion on the question of distinctive nature adn graphical representations of
sound marks.
The ECJ held that: A Trademark may consist of a sign which is not in itself
capable of being perceived visually, provided that it can be represented
graphically, particularly by means of images, lines or characteristics, and that
its representation is clear, precise, self-contained, easily accessible,
intelligible, durable and objective.
In the case of a sound sign, those requirements are not satisfied when the sign
is represented graphically by means of a description using the written
language, such as an indication that the sign consists of notes going to make
up a musical work, or an indication that it is the cry of an animal, or by means
of a simple onomatopoeia, without more, or by means of a sequence of
musical notes, without more. On the other hand, those requirements are
satisfied where the sign is represented by a stave divided into measures and

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 showing, in particular, clef musical notes and rests whose form indicates the
relative value and , where necessary, accidents.

17.Qualitex Co. v. Jacobson Products Co., 514 U.S. 159.

In this case in the United States Supreme Court held that a color could meet
the legal requirements for trademark registration under the Lanham Act,
provided that it has acquired secondary meaning in the market.
Plaintiff Qualitex Co. had used a green-gold color for the pads which it sold to
dry cleaning firms to use in their dry cleaning presses. The Defendant
Jacobson Products Co. was a rival of Qualitex. In 1989, Jacobson began
selling their own pads to dry cleaners which were a similar color to those of
Qualitex. In response, Qualitex filed a lawsuit against Jacobson in the United
States District Court for the Central District of California for unfair
competition. In 1991, Qualitex registered the green-gold color of its pads with
the United States Patent and Trademark Office as a trademark, and
subsequently added a trademark infringement count to its lawsuit. The District
Court found for Qualitex, but the United States Court of Appeals for the Ninth
Circuit set aside the judgment, on the grounds that color alone could not be
registered as a trademark.
Justice Breyer, writing for a unanimous court, overturned the Ninth Circuit‘s
decision, holding that the Lanham Act was very broad in its definition of what
a trademark could be. The definition section of the Lanham Act, 15 U.S.C. §
1127, defines trademarks as including ―any word, name, symbol, or device,
or any combination thereof‖. Breyer reasoned that colors could constitute
descriptive trademarks, because while colors do not automatically evoke a
connection to any product by themselves, they could take on secondary
meaning over time, in the course of use in the marketplace. In this way, a color
could serve the chief purpose of trademarks, that of identifying the source of a
particular product.
Breyer also determined that that the functionality doctrine was no bar to the
registration of the plaintiff‘s color as a trademark. He determined that a
product feature is only functional ―if it is essential to the purpose of the
article or if it affects the cost or quality of the article‖. In relation to such
functionality, he held that refusal on this ground is acceptable if exclusive use
of the feature would put the competitors at a significant non-reputation related
disadvantage. In this case, the colour acted purely as a symbol, and served no
other purpose. Jacobson argued that there are only a limited number of colors
that could be used for the products at issue here, and that many colors are very
similar looking, thus a trademark over colour would lead to shade confusion
and colour depletion from the public domain. However, Breyer dismissed this
concern, saying that if the defendant‘s concerns were proven to be valid, the
functionality doctrine would then come into play. Breyer further held that a

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 color could be trademarked separately from any trade dress protection. Thus,
the green-gold colour is a symbol, has acquired secondary meaning, serves no
other functions and is therefore a valid trademark.

18.Libertel Case (C-104/01)

In this case the ECJ held that single colours are capable of acting as
trademarks and can be registered provided that they are defined in a
sufficienty clear way.
It is pertinent to note that in this case Libertel was attempting to register the
colour orange in telation to its telecommunication services. The application
consisted of a rectangular representation of the colour together with the one
word description ―orange‖.
The case was rejected by the Benulux Office and, on appeal, the Gerechtshof.
Libertel appealed further to the Hoge Raad. This latter Dutch Court sought
preliminary rulings from the ECJ on a number of questions surrounding the
principle of registering colour marks which were not in any way spatially
limited (i.e. colour per se marks).
The European Court gave their rulings and clarified the practice that will have
to be followed in the EU in this area post their decision. The Court ruled as
follows:
1. A colour per se is capable, in relation to a product or service, of constituting
a sign. Thus, accepting colours as signs the court held that the same was
eligible for trademark protection in the EU. It may also be capable of
distinguishing the goods and services of one undertaking from those of others.
2. To be acceptable, the graphic representation of a sign must be clear, precise,
self-contained, easily accessible, intelligible, durable and objective.
3. A sample of a colour is not, on its own, an acceptable graphic
representation. In certain cases, such as a paper representation, it may
deteriorate with time and therefore not have the necessary durability.
4. By contrast, a verbal description of a colour mark or a combination of such
a verbal description and a colour sample may, depending on the
circumstances, constitute an acceptable graphic representation. The Court
noted, in particular, that internationally recognised colour identification codes
(e.g. Pantone numbers) were a precise and stable form of verbal description.
5. When considering the registration of a colour per se as a trade mark, one
question to be considered by the authorities was whether the colour, as a
matter of public interest, should remain available to all. The private interest of
a single trader wishing to monopolise one or more colours as trade marks
should be weighed against the public interest of not unduly restricting the
availability of the colours for the use of all traders.
6. The wider the specification of goods and/or services claimed by an
applicant for a colour per se mark, the more likely the monopoly, if granted,

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 would conflict with the public interest and the maintenance of a system of
undistorted competition. The breadth of the specification is therefore a
relevant issue when considering registrability.
7. The examination of an EU national trade mark application (and, by
inference, a CTM application) should not be minimal. It should be a stringent
and full examination to prevent trade marks from being improperly registered.
8. A colour per se mark will not normally be inherently capable of
distinguishing the goods of a particular undertaking. It follows that
distinctiveness without prior use is unlikely to be present, other than in
exceptional circumstances. A colour per se mark may, however, acquire a
distinctive character through use. Evidence that other traders do not use the
colour applied for and that the relevant public recognises the colour as an
indicator of origin will normally be required to succeed.

19.Heidelberger Bauchemie case, Case C-49/02.

Heidelberger Bauchemie GmbH had applied to the German Patent and

Trademark Office for registration of a trade mark, the representation of which
consisted of a piece of paper, the upper part of which was blue, and the lower
part of which was yellow. The description read, The trade mark applied for
consists of the applicant‘s corporate colours which are used in every
conceivable form, in particular on packaging and labels. The specification of
the colours was:
RAL 5015/HKS 47 – blue, RAL 1016/HKS 3 – yellow
Registration was sought in respect of building trade products such as
adhesives, solvents, paints, varnishes and insulating materials.
The German PTO rejected the application on the grounds that the mark was
not capable of distinguishing the goods of one trader from those of another.
Heidelberger appealed to the Bundespatentgericht, who referred the following
question to the ECJ:
Do colours or combinations of colours which are the subject of an application
for registration as a trade mark, claimed in the abstract, without contours and
in shades which are named in words by reference to a colour sample and
specified according to a recognised colour classification system, satisfy the
conditions for capability of constituting a trade mark for the purposes of
Article 2 [of the Directive]?
In particular, for the purposes of Article 2 of the Directive, is such an
‗(abstract) colour mark‘
(a) a sign,
(b) Sufficiently distinctive to be capable of indicating origin,
(C) Capable of being represented graphically?
The ECJ held that:

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 There is a public interest in not unduly restricting the availability of colours
for general use, because colours are often used for decorative purposes or to
attract the attention of consumers without conveying any meaning. Therefore,
not only should examination take this into account, but the graphic
representation must be so clear and precise that it would always be perceived
unambiguously and uniformly. Without this, the trademark registration
authorities could not carry out their examination function, and traders could
not confidently identify the extent of third-party rights.
In answer to the question posed, the Court held that a colour combination
which has not been spatially delimited is not a registrable trade mark, because
it is not sufficiently precise that competitors can see from the register exactly
what is protected. 197
The Court elaborated, ―the mere juxtaposition of two or more colours,
without shape or contours, or a reference to two or more colours ‗in every
conceivable form‘…does not exhibit the qualities of precision and uniformity
required by Article 2 of the Directive…‖ In the view of the Court, this type of
mark would encompass too many possible combinations and interpretations,
and it was impossible to say that a consumer would be able to remember each
one so as to repeat with certainty the experience of a purchase. This could be
accomplished only if the arrangement of colours in a colour combination mark
was systematic, predetermined and uniform.

TRADEMARK INFRINGEMENT BY PHONETIC SIMILARITY

20.Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., AIR 2001 SC 1952.

In this case the Supreme Court decided a case in relation to marks relating
medicinal products and the standards applicable to avoid confusion. The Apex
Court held that, ―a higher standard should be applied to medical products in
contrast to the normal standard of the test applied in case of non-medical goods. It
is necessary, for obvious reasons, to avoid confusion in the dispensing of
pharmaceutical goods. Careless use is dangerous. Hence, greater care should be
taken in the use of registration of TM to assure that no harmful confusion arises.
Physicians are not immune from confusion or mistake. It is common knowledge
that many prescriptions are telephoned by pharmacists, and others are handwritten
and frequently the writing is not legible. These facts enhance the chances of
confusion or mistake by pharmacists in filling the prescription if the marks appear
too much alike when handwritten, or sound too much alike when pronounced. On
this basis the Apex Court held that even though the medicines in contemplation
can only be sold to hospitals and clinics, it Is not uncommon that because of lack
of competence or otherwise, mistakes could arise when the TM are deceptively
similar and the medicines cure the same disease.

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 The next point addressed by the Apex Court related to the true test in determining
TM infringement. The court stated that the true test was to consider the totality of
the marks and one was not to decide on the basis of the differences/dissimilarites
between the marks. It is pertinent to note that in an earlier decision (SM Dyechem
v. Cadbury) a smaller bench of the Supreme Court had endorsed the view that the
test of deception and similarity in marks is to be decided on the basis of the
differences between the marks and whether the differences were substantial
enough to override the similarity of the marks. In the present the Supreme Court
emphatically overruled that view by stating that the decisions for the last four
decades have clearly laid down what has to be seen in the case of an action of
passing off is the similarity between the competing marks and to determine
whether there is likelihood of deception or causing confusion. It is pertinent to
note that the Supreme Court also emphasized on the element of ‗phonetic
similarity.‘
The person in whose mind the confusion is to be caused is an average consumer –
a average man of ordinary intelligence. His reaction (first impression) to the TM
and his association of the TM with a particular business, good or service has to be
considered to determine confusion or deception.

21.Philips Electronics NV v. Remington Consumer Products Ltd, [1999] R.P.C. 809.

The Appellant had for many years sold under its "Philishave" mark three headed
rotary shavers in which the three heads were arranged in a triangular pattern
which projected slightly above a triangular base plate. The Plaintiff had obtained a
registered trade mark for a device consisting of a picture of the head of a three
headed rotary shaver. The plaintiff sued the defendant for trade mark
infringement, the defendant having recently introduced a three headed rotary
shaver under its "Remington" mark. At first instance, the judge held that the mark
was invalid as it was incapable of distinguishing and was devoid of any distinctive
character (section 3(1)(b)), that it consisted exclusively of a sign which served in
trade to designate the intended purpose of the goods, that it consisted exclusively
of a shape which was necessary to obtain a technical result and which gave
substantial value to the goods. He ordered its revocation. He went on to hold that
even if the mark was valid it had not been infringed. The plaintiff appealed and
the defendant cross-appealed on the rejection of its argument.
While deciding the Appeal, the Court of Appeal focused on the issue of shape of
products as trademarks. Law bans an adoption of a mark exclusively consisting of
the shape of the goods themselves. As in that case, the shape of goods is the basic
or generic shapes which would be achieved by like goods. There is then no
distinctive character to the mark borne by such goods. Also, a shape cannot
distinguish the product of one trader from another. Distinctiveness, the hallmark
of a trademark, is patently not achievable in such a case. Thus, registration of a
shape of a good as a TM will not be permitted if a mark consists exclusively of the

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 shape of the goods which gives substantial value of goods, or the shape of goods
which is necessary to obtain a technical result.
With this background in mind it is important to note that in the present case on the
Defendant‘s argument the court stated that nature referred to the essential quality
or inherent characteristics of the goods. An obvious example was a banana shape
in respect of bananas, or a lemon shape in the case of a lemon. Concerning the
technical result aspect, the court stated that a mark was functional if it was
motivated by, and was the result of, a technical consideration. The essential
features were attributed to the technical result. Thus, they had no trade
significance.
Thus, the Court of Appeal opined that to understand whether the shape
contributed to the technical result or contributes to the substantial value, one
should consider and compare the shape sought to be registered and the shapes of
equivalent values. If the proposed shape contributes substantial value, it should be
excluded from registration. With this opinion the Court of Appeals referred some
questions to the European Court of Justice for determination of certain matters,
while provisionally holding that the trade mark was invalid and not infringed.

COMPARATIVE ADVERTISING

22.L'Oreal SA v. Bellure NV C-487/07 (ECJ)/[2009] All ER (D) 225 (Jun)

The ECJ has given an important decision on three issues concerning imitation
perfumes and the use of well-known registered trademarks in comparison charts.
The court ruled, first, that unfair advantage could be taken of the repute of a mark
under Article 5(2) of the Trade Marks Directive (89/104/EEC) without the need to
show either a likelihood of confusion or detriment to the registered mark. Second,
the use of L'Oréal's registered marks in price and smell comparison lists could
constitute infringement under Article 5(1)(a) of the Trade Marks Directive, even
though the essential function of a trade mark was not harmed, provided that such
use could affect one of the other functions of the mark. Finally, in relation to the
Comparative Advertising Directive (84/450/EEC as amended), the court ruled that
Article 3a(1)(h) prevented an advertiser from stating explicitly or implicitly in
comparative advertising that his product or service was an imitation or replica of a
product bearing a well-known trade mark. The court said that the advantage
gained by the advertiser as a result of such unlawful comparative advertising also
had to be considered as taking unfair advantage of the reputation of that mark
within the meaning of Article 3a(1)(g).

23. Interpretation of Article 5(2), Trade Marks Directive

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The ECJ answered the fifth question in the affirmative, saying that the taking of
an unfair advantage of the reputation of a mark did not require there to be a
likelihood of confusion, or a likelihood of detriment to the distinctive character or
the repute of the mark, or to its owner. The advantage arising from the use of a
sign similar to a mark with a reputation was an advantage unfairly taken of the
distinctive character or the repute of the mark, where that use sought to ride on the
coat-tails of the mark with a reputation in order to benefit from the power of
attraction, the reputation and the prestige of that mark and to exploit, without
paying any financial compensation, the marketing effort expended by the owner of
the mark in order to create and maintain the mark's image.
The ECJ noted that the protection given by Article 5(2) was wider than that under
Article 5(1). The specific condition of that protection consisted of a use without
due cause of a sign identical with or similar to a registered mark which took unfair
advantage of, or was detrimental to, the distinctive character or the repute of the
earlier mark.
There was infringement of Article 5(2) where there was a sufficient degree of
similarity between the mark with a reputation and the sign to have the effect that
the relevant section of the public established a link between the sign and the mark.
It was not necessary to show that there was a likelihood of confusion between
them. However, the existence of a link between the sign and the mark in the mind
of the public was a necessary, but not sufficient condition to establish the
existence of one of the types of injury against which Article 5(2) protected trade
marks with a reputation, namely:

 Detriment to the distinctive character of the mark or "dilution";

 Detriment to the repute of the mark or "tarnishment"; or
 Taking unfair advantage of the distinctive character or repute of the trade mark
or "free-riding".

The court said that the concept of taking unfair advantage covered, in particular,
cases where, by reason of a transfer of the image of the mark or of the
characteristics which it projected to the goods identified by the identical or similar
sign, there was clear exploitation on the coat-tails of the mark with a reputation. It
followed that an advantage taken by a third party of the distinctive character or the
repute of the mark could be unfair, even if the use of the identical or similar sign
was not detrimental either to the distinctive character or to the repute of the mark
or, more generally, to its owner.
The ECJ said that the national court had to carry out a global assessment, taking
into account all factors relevant to the circumstances of the case, which included
the strength of the mark's reputation and the degree of distinctive character of the
mark, the degree of similarity between the marks at issue and the nature and
degree of proximity of the goods or services concerned. The stronger a mark's
distinctive character and reputation, the greater the likelihood that the use of a

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similar or identical sign would take unfair advantage of the distinctive character or
the repute of the mark.
The ECJ went on to say that the global assessment could also take into account the
fact that there was a likelihood of dilution or tarnishment of the mark.
In this case, there was a link between L’Oréal’s and the Defendants' packaging
and this link conferred a commercial advantage on the Defendants. The national
court would have to take account of the fact that the use of packaging and bottles
similar to those of the fragrances that were being imitated was intended to take
advantage, for promotional purposes, of the distinctive character and the repute of
L’Oréal’s marks under which those fragrances were marketed.

Interpretation of Article 3a(1), Comparative Advertising Directive

The ECJ ruled that Article 3a(1)(h) of the Comparative Advertising Directive
prevented an advertiser from stating explicitly or implicitly in comparative
advertising that the product or service he marketed was an imitation or replica of a
product bearing a well-known trade mark. The advantage gained by the advertiser
as a result of such unlawful comparative advertising had to be considered as
taking unfair advantage of the reputation of that mark within the meaning of
Article 3a(1)(g).
The court noted that the use of a competitor's trade mark in comparative
advertising was permitted where the comparison objectively highlighted
differences and where the effect of the comparison was not to give rise to unfair
competition, as described in Articles 3a(1)(g) and (h) (among others) of the
Comparative Advertising Directive.
As regards Article 3a(1)(h) of the Comparative Advertising Directive, the court
said that it was clear that the object and effect of the Defendants' comparison lists
were to draw the attention of the relevant public to the original fragrances of
which the Defendants' perfumes were purportedly an imitation. The comparison
lists attested to the fact that those perfumes were imitations of the fragrances
marketed under L’Oréal's marks, and they consequently presented the goods
marketed by the advertiser as being imitations of goods bearing a protected trade
mark within the meaning of Article 3a(1)(h).
As regards Article 3a(1)(g) of the Comparative Advertising Directive, the ECJ said
that the term "unfair advantage" had to be interpreted in the same way as in Article
5(2) of the Trade Marks Directive. The court ruled that since, under the
Comparative Advertising Directive, comparative advertising which presented the
advertiser's products as an imitation of a product bearing a trade mark was
inconsistent with fair competition and unlawful, any advantage gained by the
advertiser through such advertising would have been achieved as the result of
unfair competition and must, accordingly, be regarded as having taken unfair
advantage of the reputation of that mark.

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24.L‘Oréal SA and others v Bellure NV and others [2010] EWCA Civ 535, 21 May 2010.

An update on the Court of Appeal's decision in L’Oreal SA and others v Bellure

NV and others [2010] EWCA Civ 535, 21 May 2010, following the ECJ's ruling
on questions referred by the Court of Appeal concerning Articles 5(1)(a) and 5(2)
of the Trade Marks Directive (89/104/EEC) and Article 3(a)(1) of the Misleading
and Comparative Advertising Directive (97/55/EC).
The Court of Appeal has very reluctantly applied the ECJ's ruling on a reference it
sent to it in a high-profile case concerning imitation perfumes and the use of
L'Oréal's well-known registered trademarks in comparison charts. Before
concluding that the defendants' comparison lists amounted to an infringement of
L'Oréal's trademarks under Articles 5(1)(a) and 5(2) of the Trade Marks Directive
(89/104/EEC), Jacob LJ strongly criticised the ECJ's ruling and indicated that he
would have found the lists lawful. He criticised the ECJ for failing to consider
conditions (g) and (h) of Article 3a(1) of the Comparative Advertising Directive
(97/55/EC) separately, and then giving condition (h) a wide meaning in relation to
"imitations or replicas" so as to catch the defendants' lists. He regretted that the
ECJ had not addressed the competition aspects of what it called "riding on the
coat-tails", nor provided any clear rules for traders as to what they could or could
not do under Article 5(2) of the Trade Marks Directive. He also questioned the
ECJ's conclusion that the protection under Article 5(1)(a) of the Trade Marks
Directive was not limited to the essential function of a trade mark, namely the
guarantee of origin. Brand owners will welcome the end result of Jacob LJ's
decision and his reluctant finding of infringement.
Jacob LJ explained that if he was not bound by the ECJ's decision he would have
said that trade mark law did not prevent traders from making honest statements
about their products where those products were themselves lawful, for the
following reasons:
• He was in favour of free speech and there was no reason to dilute
• His second reason was about the freedom to trade and compete honestly. Jacob
LJ said that, there was a real danger that important areas of trade would not be
open to proper competition if a trader could not say (when it was true): "my goods
are the same as Brand X (a famous registered mark) but half the price". He
referred to his comments in the Court of Appeal's earlier decision as to how the
case raised an important topic concerning how competitive trade mark law
allowed European industry to operate. He regretted that the ECJ had not addressed
the competition aspects of what it called "riding on the coat-tails" and had not
provided any clear rules for traders as to what they could or could not do. Jacob
LJ said that he was not alone in such thinking and referred to a number of journal
articles in which similar comments about the ECJ's ruling had been made.
The consequence of the ECJ's decision was that the EU had a more "protective"
approach to trade mark law than other major trading areas or blocs, such as the US.

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25.Reckitt & Colman of India Ltd. v. M.P. Ramchandran, 1999 (19) PTC 741

(CASE EXCERPT TAKEN FROM HTTP://WWW.LEGALSERVICEINDIA.COM/ARTICLES/TADV.HTM)

PLAINTIFF‘S MARK – ROBIN BLUE
Brief Facts – The plaintiff was the manufacturer of blue whitener under the
name ―Robin Blue. The defendant also manufactured blue whitener, and
issued an ad in which he depicted the product of the petitioner showing the
container in which the product of the petitioner was sold and in regard to
which the he had a registered design. It was further shown in the
advertisement that the product contained in the said container was priced at
Rs.10. The price identified the product of the petitioner since the only blue
whitener sold in the market at the relevant time priced at around Rs.10 was the
product of the petitioner. It was contended in the ad that the said blue was
uneconomical and it was then contended that at Rs.10 the average blue is the
most expensive. Thereafter it was added ―What is more, you have to use lots
of blue per wash‖. This comment showed the container of the petitioner
upside-down and also showed the liquid gushing out. The object was, arguably
to show that the product of the petitioner priced at Rs.10 gushed out as a squirt
and not in drips while being used and, therefore, it was an expensive way to
whiten the clothes.
Court – The Court held that the assertion made in the advertisement was
clearly related to the product of the petitioner and was made with a view to
disparage and defame the petitioner's product. The Court had based its
decision mainly on the fact that the price of the container shown in the
advertisement was Rs.10 while no other blue whitener except that of the
petitioner was at the relevant time priced at Rs.10 and it, therefore, held that
the ad was directly related to the product of the petitioner. The Court
restrained the respondent from issuing the ad in question. This case also laid
down the five principles that are most frequently cited as the legal principles
on this issue:

a. A tradesman is entitled to declare his goods to be best in the words, even

though the declaration is untrue.
b. He can also say that his goods are better than his competitors', even
though such statement is untrue.
c. For the purpose of saying that his goods are the best in the world or his
goods are better than his competitors' he can even compare the
advantages of his goods over the goods of others.
d. He, however, cannot while saying his goods are better than his
competitors', say that his competitors' goods are bad. If he says so, he
really slanders the goods of his competitors. In other words he defames
his competitors and their goods, which is not permissible.

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 e. If there is no defamation to the goods or to the manufacturer of such
goods no action lies, but if there is such defamation an action lies and if
an action lies for recovery of damages for defamation, then the Court is
also competent to grant an order of injunction restraining the repetition
of such defamation.

26.Paras Pharmaceuticals Ltd. v. Ranbaxy Laboratories Limited and 2 Ors.

IR2008Guj94

TV advertisement showing a box of pain reliever product identical with the box
used by the appellant for marketing its pain reliever product (MOOV) along with
same distinctive artistic work and color scheme (VIOLET). The advertisement
portrays that the product is ineffective (patient asks ―soh, what to do, this is
backache!) Also shown in the advertisement was that respondent‘s product
(VOLINI) should be used: ―YOU NEED A TRUE PAIN RELIEVER.
It was Held: Since the appellant‘s product is much popular amongst the general
public, as a pain reliever, the respondent has tried to take unfair advantage which
may amount to an infringement of Trademark. The average consumer or the
reasonable audience would normally go by the colour which is shown on the TV
commercial. Direction was given by the court to change the colour of the pack of
the product.

27. Hindustan Lever Limited v. Reckitt Benckiser India Limited and Ors.
MANU/DE/3643/2006

PLAINTIFF‘S MARK – LIFEBUOY; DEFENDANT‘S MARK – DETTOL

Brief Facts – The claim of the plaintiff is that Lifebuoy is a 'red colored soap'
and the red color has become synonymous with Lifebuoy; the consumer and
public at large perceive the red color to be Lifebuoy; that the moment a person
would see red color soap in any ad he would imagine the same as Lifebuoy
soap. Finally, the plaintiff claims that the defendant‘s ad disparages his
product and brand. The TV commercial for Dettol soap launched by the
defendant is as follows: (i) a football floats in dirty water and a few kids are
looking into a pool of dirty water in a construction pit; (ii) four kids are
huddled together in the TV commercial looking concerned, worried and upset
at not being able to get the football from inside the construction pit; (iii) the
kids want to take the football out of the pit but are scared. Another boy
declines to get the football from the pit of dirty water since they claim that
they have just had a bath; (iv) a fifth boy who represents and depicts Dettol
soap of the defendant is shown to be extremely confident and determined to
get the football from the pit full of dirty water. He kicks the football out. The

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 four kids look sheepish and thank the Dettol boy; (v) The frame shows four
soaps including a green soap, brown soap and white soap in the background
and a red soap (which looks similar to the red colour Lifebuoy bar soap) of the
plaintiff. There is a prominent inscription, which says that as compared to the
four soaps including Lifebuoy, Dettol soap of defendant is ―10 times better‖.
A boy is shown having a bath with Dettol soap, which is claimed to be 10
times better.
Plaintiff‘s main grievance is about the frame shown where four other soaps in
green, brown, white and red colors are shown and Dettol soap of the defendant
is shown as 10 times better than those soaps.
Court – None of the four colored soaps show the name of any soap inscribed,
only the colors are shown. Plaintiff contends that since red color is
synonymous with Lifebuoy, anybody watching the ad would get an impression
that it is the Lifebuoy soap which is compared with Dettol (and is 10 times
better than Lifebuoy as per the ad). Moreover, he contends that by making a
statement that Dettol is 10 times better while depicting other soaps including
one in red color, the defendant has disparaged the plaintiff's goods, namely,
Lifebuoy red, which is clearly malicious or injurious falsehood and amounts to
slander of the plaintiff's goods. The moot question considered was whether the
advertisement of the defendant disparages the plaintiff's product Lifebuoy. This
is looked at in two parts – one, whether there is a reference to Lifebuoy and
two, whether the reference disparages. In the ad, soaps of other colors are
discarded and it is shown that Dettol soap is '10 times better' than other soaps
but the name of the plaintiff's Lifebuoy soap is not specifically mentioned.
These soaps include red color. After analyzing the entire material on record and
watching the TV commercial in question, the judge was of the opinion that
there is no reference to Lifebuoy. The overall impression one gets is that there
are certain unbranded soaps available in the market which are being removed.
The second issue was decided as follows: In any case, when it is not
disparaging any product in particular, such a claim would, be merely puffing
the defendant's product Dettol, which is permissible. The judge held that the
present campaign of the defendant, prima facie, does not amount to disparaging
the plaintiff's product Lifebuoy.

28.Pepsi Co., Inc. and Ors. v. Hindustan Coca Cola Ltd. and Anr. MANU/DE/0896/2003

PLAINTIFF‘S MARK – PEPSI; DEFENDANT‘S MARK – COCA COLA,

SPRITE ETC
Brief Facts – There is a commercial in which there is a bottle with the word
―Peppi‖ written. It is clear that the bottle is intended to be that of PEPSI because
(a) the boy who is called from the audience is asked to give his preference of Cola
drink and he mutters PEPSI in muted manner, (b) there are only three cola drinks
i.e. PEPSI, Thums UP and COCA COLA and only the first does not belong to

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 respondents, (c) the global device and color scheme on that with the word Peppi is
that of the PEPSI. The commercial also uses the following lines/describes the
drink in the following ways: ―Bachhon Wali Drink‖ (the message being that the
kids who want to grow up should drink Thums Up‖ - it is intended to convey that
kids should prefer Thums Up‖ as against PEPSI‖). The commercial shows that the
lead actor asks a kid which his favorite drink is and asks the boy to taste two
drinks covered with lid; the question asked by the lead actor is Bacchon Ko Konsi
pasand aayegi‖? The boy says, Who meethi hain, Bacchon ko meethi cheese
pasand hai‖. The lead actor lifts the lid from both the bottles and the one which is
said to be strong taste reveals to be Thums Up‖, and one which is sweet, word
Peppi‖ is written on the bottle with a globe device and the colour that of the
PEPSI‖. The boy is shown to feel embarrassed, as depicted by putting his hands on
his head. In another ad, on the choice of the boy for Peppi the lead actor
mockingly says, Wrong Choice Baby‖. In these commercials the bottle which
resembles PEPSI‖ and is referred to as Peppi‖ is termed as Bacchon Wali‖ whereas
Thums Up‖ is referred to as Bado Ke Liye and Damdar Hai‖.
Issue – Whether the ad amounts to disparagement or simply healthy competition
and puffing up the product of the respondents.
Court – In response to the defendant‘s argument (that calling it children's drink
does not mean it is a bad, harmful or inferior drink and hence would not amount to
disparagement, but only convey that Peppi‖ is sweet and sweet things are not
preferred by grown up), the Court observed the following:
a. No doubt that by saying it is a drink meant for children may not by itself
denigrate the appellants‘ product but the manner in which the boy felt
embarrassed depicts the product of the appellant in low estimation. It is
nothing but denigrating the product of the appellants. The expression on the
face of the boy indicates that being grown up he must not have given
preference for PEPSI.
b. By using lines such as Bacchon Wali. Bacchon Ko Yeh pasand Aayegi‖,
Wrong Choice Baby‖, the depiction in the commercial was meant to be
derogatory and mocking. It cannot be called puffing up. The message is that
kids who want to grow should not drink PEPSI‖. The manner in which this
message is conveyed does show disparagement of the appellant's product.
c. One cannot say that the known technology is bad and harmful or that the
product made with the known technology is inferior. While comparing Thums
UP‖ with Peppi, the respondents have tried to project to the customers that the
appellants‘ product is not meant for adults or for grown-up children. Hence, it
reflects inferior quality, and is not a mere comparison.

29.Dabur India Limited v. Colgate Palmolive India Limited. MANU/DE/0657/2004

PLAINTIFF‘S MARK – LAL DANT MANJAN; DEFENDANT‘S MARK –

COLGATE TOOTH POWDER

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 Brief Facts – The ad in question here was as follows: Suneil Shetty is seen
stopping purchasers of Lal Dant Manjan powders. He informs them of the ill
effects of such Lal Dant Manjan by rubbing it on their spectacles (it leaves marks
which are termed by Sunil Shetty as being akin to sandpapering). He also
describes the defendant Colgate's tooth powder as being 16 times less abrasive
and non-damaging to the spectacles. He says that while it is easy to change
spectacles, the same cannot be said for teeth.
Court examined the following facts – The impugned ad runs down all Lal Dant
Manjan tooth powders as severely detrimental to dental health and in particular
damaging the tooth enamel. Dabur has 80% of the share in the Ayurvedic tooth
powder trade and is directly hit by this advertisement as the principal producer, by
the denigration of the generic product Lal Dant Manjan. The visual representation
in the ad leaves no doubt that the product being referred to, is Lal Dant Manjan.
Hence, the fact that the substance/content of the ad is, in itself disparaging is
not in question.
Ratio & Reasoning – It was contended by the defendants that insinuations against
all are permissible though the same may not be permissible against one particular
individual; the Court did not accept the contention because while saying that all
are bad it was necessarily being said that everyone and anyone is affected thereby.
In my considered opinion, even if there be no direct reference to the product
of the Plaintiff and only a reference is made to the entire class … in its
generic sense, even in those circumstances disparagement is possible.‖ If the
ad disparages the entire class of products, the plaintiff is certainly entitled to
complain as it is one of the largest producers of such tooth powder, even if there is
no direct reference to that product. I am further of the view that generic
disparagement of a rival product without specifically identifying or pin
pointing the rival product is equally objectionable. No one can disparage a
class or general of a product within which a complaining plaintiff falls and
raise a defense that the plaintiff has not been specifically identified.

30.Colgate-Palmolive (India) Limited v. Anchor Health and Beauty Care Private Ltd,
MANU/TN/0980/2008

PLAINTIFF‘S MARK – COLGATE, DEFENDANT‘S MARK - ANCHOR

Brief Facts – the defendant came out with an ad for ―Anchor‖ wherein an
actress advises her daughter that Anchor‖ tooth paste is the ONLY tooth paste
containing Triclosan, Calcium and Fluoride and that it is the FIRST tooth
paste providing all round protection. There are four objections of the plaintiff
to claims of defendant – one, that it is the ONLY tooth paste; two, that
Anchor‖ is the FIRST all round protection tooth paste; three, that the Fluoride
in Anchor‖ tooth paste gives 30% more cavity protection; and four that

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 Triclosan contained in "Anchor" tooth paste is ten times more effective in
reducing bacteria. It is clear that Anchor is neither the FIRST nor the ONLY.
To a man of average intelligence it would seem as though the defendant's
product is either the only such product or the first in the market, and such a
message is misleading. The ad contains only positive features and there is
nothing negative; moreover there is no reference to any other tooth paste.
Court – The law recognizes the right of producers to puff their own products
even with untrue claims, but without denigrating or slandering each other's
product. However, in this case, the effect of this right of the producers (de-
recognition of the rights of the consumers guaranteed under the Consumer
Protection Act, 1986) was considered. If two trade rivals indulge in puffery
without hitting each other, the consumer is misled by both. On the other hand,
if both are restrained from either making false representations then the
consumer stands to gain. Similarly, permitting two trade rivals to expose each
other in a truthful manner, will also result in consumer education.
The usage of the words ONLY and FIRST actually falls within the meaning of
Unfair Trade Practice under the Consumer Protection Act, 1986. The claim
made by the respondent is tantamount to a false representation that the goods
are of a particular standard, quality and composition. It is also tantamount to a
false representation concerning the usefulness of their goods. I find the
respondent guilty of an Unfair Trade Practice, because of the false or
misleading information that the advertisement purports to propagate. However,
I do not find the respondent guilty of disparagement. The respondents were
restrained from using the words ONLY and FIRST in the offending
advertisement.

31.Godrej Sara Lee Ltd. v. Reckitt Benckiser (I) Ltd, MANU/DE/0715/2006.

The plaintiff was the manufacturer of popular brand Hit which had two
variants, one for flying insects and one for cockroaches and crawling insects.
The defendant produced a similar insecticide product known as Mortein, which
had only one variety that was effective against all kinds of insects. In one of its
advertisements, the latter portrayed a woman being the subject of an attack by
insects. Initially she has two cans, red and blue in front of her, which soon
morph into a single can of Mortein. This is used to spray the insects, who are
fearful and retreat quickly under its effect. The surrounding mosquitoes also
fall prey to its, and ultimately the commander is defeated. The plaintiff claimed
that the advertisement had portrayed its products in a poor light by showing the
predicament faced by the lady with two cans. However, the Court held that the
defendant had merely demonstrated the positive characteristics of its own
product and its convenience. It had not attempted or in fact disparaged the
plaintiff‘s product at all.

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32. Eureka Forbes Ltd., v. Pentair Water India Pvt. Ltd., MANU/KA/0141/2007

In this case, the makers or the water purifier brand Aquaguard were aggrieved
by the advertisement of the defendant company, which stated that its own water
filter technology was more effective than UV filters technology because water
contained certain bacteria and impurities that remain invisible to the naked eye
and the UV filters. The plaintiff, a premier manufacturer of UV filters, whose
goods were associated with the technology felt that this amounted to
disparagement of his goods. Firstly, the Court held that after the Dabur case, it
had become established that generic comments could also amount to
disparagement as these comments affected the entire class of users. Therefore,
it was held that the plaintiff had a cause of action. Secondly, the Court held that
since the defendant had pointed out flaws in the plaintiffs technology, he could
not claim that the advertisement merely commended his own products. The
advertisement was ruled to be disparaging and hence objectionable.

33.Glaxosmithkline Consumer Healthcare Ltd. v. Heinz India (P) Ltd.,

MANU/DE/3273/2010

This judgment encompassed three different suits filed between the parties. the
first two were filed by Horlicks against Complan, alleging that descriptions of
Horlicks as cheap, alleging it to be made of inferior ingredients, and showing
that it prevented growth was disparagement. The third suit filed by Complan
alleged that price comparison by Horlicks and saying that it made children
taller, stronger and shaper as opposed to complain making a children taller
amounted to disparagement. The Court held that Complan was liable for
disparagement on the first two counts as it had attempted to show horlicks in a
bad light by describing it as cheap. On the other hand Horlicks price
comparison and commendation of itself could not amount to disparagement.

TM IN DOMAIN NAMES

34.Yahoo Inc v. Akash Arora, (78) DLT 285.

The Delhi High Court had to decide whether domain names could be protected
as Trademarks and consequently whether an action of passing off can be
maintained in relation to a Domain name.

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 The plaintiff owned the Trademark Yahoo! and the domain name
‘Yahoo.com’. The domain name for the website of the Defendants was
YahooIndia. The Plaintiffs contended that the domain name was deceptively
similar and would qualify for a passing of action as internet users who are
familiar with the practice of companies to select domain names that
incorporated their company name, well-known trademark, and/or
product/service name and generally attempt to locate a particular company's
web site by simply typing in www.(company name).com or www.(product
name).com when they are unsure of the internet address of the company.
According to him, thus, it would not be unusual for someone looking for an
authorised 'Yahoo!' site with India-specific content to type in
'Yahooindia.com', i.e., the defendants' domain name and thereby instead of
reaching the internet site of the plaintiff, the said person would reach the
internet site of the defendants'. Thus, the deceptive similarity would go on to
confuse the consumers.
The Defendant argued that he trademark laws in India relate to goods and,
therefore, the provisions of Trade and Merchandise Marks Act, 1958 ('the
Act') are not applicable to the facts and circumstances of the present case
which deals only with goods.
The court held that an action of passing off (a common law tort) can be
initiated in relation to services also and courts have recognized an action of
passing off in the case of services also. The principle underlying the passing
off action is that no man is entitled to carry on his business in such a way as to
lead to the belief that he is carrying on the business of another man or to lead
to believe, that he is carrying on or has any connection with the business
carried on by another man. It is also well-established that passing off action is
a common law remedy.
The court held that the Plaintiff had a credible business reputation attached to
the term ‘Yahoo!’ Further, the court held that, ―There can be no two opinions
that the two marks/domain names 'Yahoo!' of the plaintiff and 'Yahooindia' of
the defendant are almost similar except for use of the suffix 'India' in the latter.
The degree of the similarity of the marks usually is vitally important and
significant in an action for passing off for in such a case there is every
possibility and likelihood of confusion and deception being caused. When
both the domain names are considered, it is crystal clear that the two names
being almost identical or similar in nature, there is every possibility of an
internet user being confused and deceived in believing that both the domain
names belong to one common source and connection, although the two belong
to two different concerns.‖ On these grounds the court held that prima facie the
Plaintiffs had satisfied the criteria of the tort of passing off and granted a ad-
interim injunction in favour of the Plaintiffs.

35.Satyam Infoway v. Sify Net Solutions, AIR 2004 SC 3540.

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The principal question raised in this appeal is whether internet domain names
can be subject of trademark protection and whether an action of passing off
could be maintained in the case of a domain name. The Appellant had
registered several domain names as www.sifynet, www.sifymail.com,
www.sifyrealestate.com with internationally recognized registrars, viz,
Internet corporation for assigned names and numbers (ICANN) and world
intellectual property organization (WIPO) in June 1999. The Appellant
claimed the invention of word Sify’ by using elements of its corporate name,
Satyam Infoway. On the other hand, the Respondent claimed registration of its
two domain names www.siffynet.com and www.siffynet.com from 5.6.2001.
On getting to know that the Respondents were using ‗sify‘ in their domain
name the Appellants issued a cease and desist notice to the Respondents
asking them to restrain from either carrying on business in names of siffynet
solutions (P) ltd. or siffynet corporation and to transfer domain names to
appellant. The Respondent‘s refused to do so and consequently a suit was filed
by appellant on ground of passing off its business and services by using
appellant‘s name and domain name. The Trial Court granted a temporary
injunction in favour of the Appellant on ground that appellant was prior user
of trade name ‗Sify‘ and that confusion would be caused in mind of general
public by deceptive similarity between two domain names. The Respondents
appealed to the High Court which allowed the appeal on the ground that the
business of the Respondent was different from that of the Appellant, and there
being no similarity between two businesses, there was no question of
customers being misled.
An appeal to Supreme Court followed. The Apex Court stated that domain
names reflected the business reputation and business interests of the
proprietors of the domain name. Thus, the court reasoned that the use of same
or similar domain names may lead to diversion of users which could result
from such users mistakenly accessing one domain name instead of another.
Thus, a domain name may have all characteristic of a trade mark, could found
an action for passing off. In terms of satisfying the criteria of passing off, the
court held that there was no dispute as to appellant‘s claim of being leading
information technology services company and one of largest internet services
providers in country. Further, the evidence on record showed the existence of
goodwill and reputation claimed by Appellant in connection with trade name
―Sify‖. Apart from the existence of goodwill, in terms of the names
themselves the court found that apart from there being close visual similarity
there was also phonetic similarity between ―Sify‖ and ―Siffy‖. (Refer to the
decision of the Hoffman case, where the Apex Court in 1970 had used the
visual and phonetic tests)
Thus, in the absence of any evidence to prove that respondent company
unaware or ignorant of use of trade name Sify‖ by Appellant or the fact that
the Appellant prior user of trade name Sify‖ and in light of the evidence which

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 showed that the public associated trade name Sify‖ with Appellant, the action
of passing off was maintainable. Thus, the Appellant was entitled to relief
claimed and the impugned judgment of High Court was liable to be set aside.
Also, given the fact that the internet allows for access without any
geographical limitation, a domain name is potentially accessible irrespective
of the geographical location of the consumers. The court opined that the
outcome of this potential for universal connectivity is not only that a domain
name requires worldwide exclusivity but also that national laws (relating to
Trademark) might be inadequate to effectively protect a domain name.

PARODY ( Exception to the conferred rights)

Elements of Parody!!

a. An original host work

b. Original host work must be famous and /or known to particular target
audience
c. Creator of …parody…must take only so much of the original work
as necessary to bring to mind original work; and
d. Derivative work which conjures up the famous host must result in
new original work

Critical Issue: Whether …to so exaggerate/distort the original as to clearly

distinguish the parody from the original.

36.Tel, Inc., V.MCA Records, Inc [296 F.3d 894, 63 U.S.P.Q.2d 1715, 02 Cal. Daily Op.
Serv. 6617 Ninth Circuit ]

a. The court held that music companies‘ use of ―Barbie‖ mark in song was
not an infringement of toy manufacturer‘s trademark associated with doll;
b. The song that lampooned toy manufacturer‘s doll fell under non-
commercial use exception in Federal Trademark Dilution Act (FTDA);

37.Humorous Association: [jordache v. Hogg Loyld ……10th cir. 1997]

 JORDACHE (with associated Horse‘s head device) for JEANS

 LARDASHE (with associated Pig‘s head device) for JEANS
 (benefit arises from the HUMOROUS association, not from PUBLIC
CONFUSION—parody relied upon difference from original work—
humorous association).

38.Audience perception: (Hormal Foods v. Jim Honson Productions 2nd cir. 1996)

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  SPAM for luncheon meat
 SPA‘AM for a character in a Muppet film ( high priest of a tribe of wild
boars that worshipped Miss Puggy)
 (unlikely to cause confusion as to sponsorship—audience see it as a joke
and hence allowable parody).

39. Charles SMITH v. WAL-MART STORES, INC [537 F.Supp.2d 1302, 86 U.S.P.Q.2d
1835 March 20, 200]

Held:
Owner successfully parodied trademarks of retailer;
Retailer's trademarks WALMART ―WAL-MART, and WAL*MART and its
word mark ALWAYS LOW PRICES. ALWAYS‖ likely would not be
confused with WALOCAUST, WAL-QAEDA, FREEDOM HATER MART,
or BENTON*VILLEBULLIES ALWAYS concepts, as required for Lanham
Act trademark infringement claim, since appearance and usage of marks were
different and advertising methods were vastly different
Successful parodic work using Walocaust and Wal-Qaeda concepts promoted
through designs that were sold to public on t-shirts and other novelty
merchandise was noncommercial speech.
J Batten: „even if speech benefits the speaker economically, it is non-
commercial so long as it consists primarily of non-commercial elements…
such as religious or political commentary….

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 Chapter VI. LAW OF DESIGNS

A. SUBJECT MATTER

1. Mastermann‘s Design, [1991] RPC 89.

The registrar of designs declined to register a design for a male High Lander doll
which, when its sporran was lifted, revealed its genitals. On appeal Aldous J while
allowing the appeal said that the test was not whether a section of the public
would be offended. Instead the test was whether the moral principles of right
thinking members of the public would think it very wrong for the law to grant
protection.

2. AMP Incorporated v. Utilux Proprietary Limited,

Electrical terminals were devised for a customer for use in washing machine. In
designing the terminals function was the sole cause which led the author of the
design to choose the shape. So the main reason for the manufacturer of the
washing machine to choose the terminals was the function it performed and not
the design.

3. Rosedale Associated Manufacturers v Airfixproducts,[1957]RPC 239.

The design of the bucket which was used to build sand castles was held not to be
‗mode or principle of construction‘, since the design related to a shape. Lord
Evershed M.R. said that the effect of the exclusion is to prevent registration of the
‘process or operation by which a shape is produced as apposed to the shape itself’

4. Ferro & CSPA‘s Application [1978] RPC473.

A design for a chocolate egg consisting of an inner layer of a chocolate
surrounded by an outer layer of dark chocolate was held to be registrable even
though it was not visible at the point of sale. According to Whitford J, as it was
inevitable that the egg would be broke open and thus that the pattern would be
seen, it could be said that the design had ‗eye appeal‘. It was held that provided
that the features claimed were features of the finished article, the features need
not be judged at the time when an article was bought.

5. Re Clarke‘s Design,

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 A design for a "Lamp for electric lighting, applicable for its shape" was registered.
It was, in fact, a design for a lamp-shade, consisting of a reflecting screen which
had been commonly used for gas lights, and a ventilating top not materially
differing from those which had been used before for gas, except that a chimney
which was required for gas lights, but not for electric lights, was omitted. The
Court of Appeal held, that what had been registered was substantially the old form
of lamp-shade with the omission of the chimney, which was useless when the
shade was to be applied to electric lights, and that there was no such originality or
novelty in the design as to make it a proper subject of registration. The court said
that, the design registered is nothing more or less than an old and well known
lamp or lamp-shade, with the omission of a part which was wanted for gas or oil
burners, but which is useless for an electric light.
6. Re Bach's Design,42 Ch. D. 661,
A lamp-shade in the shape of a rose, but made in linen, was registered for goods in
Class 12. It was held that a lamp-shade of the same shape, but made in china, and
which had been registered for goods in Class 14, was not entitled to protection,
and it was removed from the register accordingly. Although the substances were
dissimilar the shape was the same, and the articles having that shape were both
lamp- shades--that is, they were both of the same kind and used for the same
purpose.

B. CRITERIA FOR PROTECTION

7. Interlego A. G. v. Tyco Industries Inc [1988] R.P.C. 343(PC) at 356

The plaintiff ("Lego") had right drawings for a system of toy building bricks and
had produced engineering drawings for manufacturing the products. consisting in
the main of plastic brick-shape blocks so designed that they are capable of being
joined together so as to form a stable structure but one which is capable of being
disassembled without damage to the constituent elements. This was accomplished
by providing on the upper surface of each block one or more cylindrical studs or
knobs which are so spaced and designed as to fit tightly into the base of another
similar block, such base being hollow and furnished with a skirt and tubes
positioned so as to bear upon the studs and hold them in position. At various times
over many years Lego had made minor alterations to the drawings and added new
information by way of written instructions. The defendants ("Tyco") had copied
Lego's toy bricks.
In the infringement action it was contended that products made according to the
drawings made are not capable of registration as designs because the features were
wholly dictated by function, and secondly because they lacked novelty. It was
held that the Lego brick had eye-appeal. An important part of its very purpose was
to appeal to the eye and the shape or configuration of the Lego brick was not
dictated solely by the function it had to perform. The shape had significant

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 features, both of outline and proportion, which were not dictated by any
mechanical function which the article had to perform as part of a construction set.

8. SmithKline Beecham v Hindustan Lever Ltd. 2001 IPRL 1 (Delhi High Court ),

The issue was with respect to the design of a tooth brush consisting of a
distinctive aesthetic handle and head shape, a connecting portion with S-shaped
(zigzag) folds between the head (carrying the 'bristles'). The ‗S‘ shaped region
was claimed to be primarily aesthetic and also serving the function of modifying
flexibility of the connecting portion. The registration of the design was challenged
on the ground that it is a pure and simple functional feature and therefore, no
novelty could be claimed in respect of the same. The purpose and advantage of the
design was basically to lend certain flexibility to the neck portion of the tooth
brush, as so to provide extensive pliability of the handle thereby enabling better
access of the bristle to the inner surface of the tooth. The said feature was held to
be dominant and primarily functional feature, although there could be an aesthetic
feature with the zig-zag bend, which seeks to give an aesthetic view to the user,
but still the dominant purpose of the feature was held to be functional and
utilitarian.

INFRINGEMENT CASES

9.Mohan Lal, Proprietor of Mourya Industries and another v. Sona Paint and
Hardwares and another(Delhi High Court 15 May 2013)

The first issue in this case was whether the suit for infringement of registered
Design is maintainable against another registered proprietor of the design under
the Designs Act, 2000? The court reasoned that the registration of a design would
only result in creation of a rebuttable presumption that it fulfils adoption of all
procedural safeguards which are required to be taken and that it is shorn of all
prohibitions as contained in the Designs Act. The entry by the Controller of
Designs in the Register of Designs is only a prima facie evidence of validity of the
design. The court also took cognizance of the fact that there was no procedure
(unlike under Patents Act, 1970 or Trademark Act, 1999) prescribed for prior
publication of an application made seeking registration of a design, followed by
any request for entertaining an opposition to such an application for registration.
Therefore the court held with respect to this issue that a holder of a registered
design could institute a suit against a defendant who is also in possession of a
registered design.
Secondly the court considered the question whether there can be an availability of
remedy of passing off in absence of express saving or preservation of the common
law by the Designs Act, 2000 and more so when the rights and remedies under the
Act are statutory in nature? The court noted that it cannot be said that a design,

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 which includes shape of goods, can never be used as a trade mark. Therefore a
design can be used as a trade mark and if by virtue of its use, goodwill is
generated in the course of trade or business, it can be protected by an action in the
nature of passing off. Though once registered as a design the same cannot be
given registration under the trademark law. It may not be possible to register
simultaneously the same mater as a design and a trade mark. However, post
registration under Section 11 of the Designs Act, there can be no limitation on its
use as a trademark by the registrant of the design. The reason being the use of a
registered design as a trademark is not provided as a ground for its cancellation
under Section 19 of the Designs Act. Thus reasoned, the court held that a holder
of a registered design can institute an action for passing off. As is obvious, such a
passing off action would be based on a plea that: the design, which is an
unregistered mark, was being used by the plaintiff for the purposes of business;
and that the plaintiff's goods and/or services had acquired a reputation and/or
goodwill, which were identified in the minds of the consumers, by associating the
design / the mark, with the goods and / or services. In other words, the plea would
be that the design which was being used as a mark identified the plaintiff, as the
source of the goods supplied or services offered.
The last issue in the case was whether the conception of passing off as available
under the Trade Marks can be joined with the action under the Designs Act when
the same is mutually inconsistent with that of remedy under the Designs Act,
2000? Holding that the two actions cannot be combined in one suit the court
reasoned that since the cause of action for bringing the two suits is different,
separate suits would have to be filed; though if filed at the same time or in close
proximity they may be tried together as there may be some aspects which may be
common. The fundamental edifice of a suit for infringement under the Designs
Act would be the claim of monopoly based on its registration, which is premised
on uniqueness, newness and originality of the design. Whereas, the action for
passing off is founded on the use of the mark in the trade for sale of goods and/or
for offering service; the generation of reputation and goodwill as a consequences
of the same; the association of the mark to the goods sold or services offered by
the plaintiff and the misrepresentation sought to be created by the defendant by
use of the plaintiff's mark or a mark which is deceptively similar, so as to portray
that the goods sold or the services offered by him originate or have their source in
the plaintiff. Since they have different causes of action, they cannot be joined
together.

10. Salzer Electronics Ltd.v. Zenith Mould & Tools Pvt. Ltd. (1998 Mad. HC)

Facts of the case: Plaintiff is the registered holder of design in respect of rotary
switches comprising a contact stage and cover plate. He argues that the switches
manufactured by him enjoy a goodwill and reputation all over India and abroad.
The plaintiff is selling the switches under the Trade Mark 'Salzer' which is

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 distinctive and exclusively identified by the trade and public with the rotary
switches manufactured and sold by the plaintiff. He alleges that rotary switches
similar to his distinctive rotary switches were being manufactured and sold by the
defendants under the trade mark 'Senith'. The defendant’s rotary switch looks
identical to that of the plaintiff in colour scheme, shape and configuration.
The plaintiff sought injunction order which was rejected by the learned single
Judge. The appellate court during the course of proceedings, was supplied with
by, the plaintiff, the rotary switches manufactured by the plaintiff as well as by the
defendant. The court came to the conclusion that a mere look at them went to
show that they were almost identical except the name written on the cover plate as
"Salzer" in the case of the plaintiff's switches and "Zenith" in the case of
defendants' switches.
It was also held that, “when the shape and configuration of the contact stage and
cover plate are shown in the certificate of registration of design, it cannot be
accepted that the colour of the design of the switches of the plaintiff having not
been registered under any of the Acts, it is not open to the plaintiffs to restrain the
defendants from carrying on their business.” Further the defendants failed to show
that the plaintiffs have changed the design from that of the registered one. Had
that been the case the plaintiffs would have been not able to get the benefit of
injunction order…..

11. Rotomac Pens Ltd. v. Milap Chand & Co. (1999) PTC 757 Cal. HC

Rotomac had a registered design for fighter brand ball pens under the Designs
Act, 1911 and the respondents introduced in the market a deceptively similar
product called writer pen. Rotomac filed a suit for permanent injunction to prevent
infringement of its registered design and passing off. The learned Single Judge did
not grant any interim relief and an appeal was filed before the Division Bench. In
the Court of Appeal, while opposing Rotomac's prayer for injunction, the
respondents urged that its registration of design is vague and invalid and the
registration is lacking in any novelty and originality. It was also urged that the
respondents' application for cancellation of registered design is pending. Reliance
was placed on behalf of the respondents on certain decisions under UK Design
Act for cancellation of registration. The Appeal Court, after comparing the law of
designs between Indian and English statutes, pointed out the difference between
two and came to the conclusion that the Courts in India have no jurisdiction to
consider the validity of a registered design in a suit for infringement of design
unlike the Courts in UK and, as such, the decisions of UK Courts are not
applicable to Indian cases. On that ground, the Court held that the Division Bench
decision of the Delhi High Court in Nicky Tasha, which followed the English law,
was erroneous.

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 The Court held that the only question, which was relevant under the old Act in a
case for infringement of design, was whether there is a prima facie case for
infringement of the registered design going by visual inspection. The Court on
visual inspection found that the respondent's product was deceptively similar
despite some small differences.

12. Premiere Polish Co Ltd v. Office for Harmonization in the Internal Market
(Trade Marks and Designs) EU General Court 06 December 2013

The applicant, Premiere Polish Co Ltd, had applied to register the word sign
ECOFORCE as a Community trade mark in respect of goods in Class 3
(preparations and substances for laundry use). However, the application was
opposed based on the earlier Community figurative mark including inter alia the
word elements "eco" and "forte" written in yellow on a green background and
consequently the application was rejected. Appeal was also dismissed. In
particular, the Board of Appeal had found that there was a likelihood of confusion
between the marks at issue within the meaning of Regulation 207/2009 art.8(1)
(b), given the identity of the goods covered by those marks and taking into
account the marks' low degree of visual similarity, high degree of phonetic
similarity and their conceptual similarity, for the public in some EU Member
States, and the average distinctiveness of the earlier mark. It took the view that the
visual differences were insufficient to allow consumers who displayed an average
degree of attentiveness to distinguish between those marks without a likelihood of
confusion. So the application was filed before EU General Court which upheld the
rejection by Board of Appeal. The Board of Appeal's finding that the word
elements of the earlier mark were clearly dominant and located in a central
position in the sign was upheld, with the result that the two signs - ECO FORTE
and ECOFORCE - comprised the same letters placed in the same order, with the
exception of a single letter (t or c). It was also pointed out that, in view of the
limited number of colours used, namely yellow and green, and of the banal nature
of the arrangement of the shapes around the word element and their lack of any
specific distinctive character, the figurative element of the earlier mark was not
likely to make an impression on consumers and be remembered by them. Held
that the word elements of the earlier mark were likely to dominate the overall
impression created in the minds of members of the relevant public and that,
visually, there was a low degree of similarity between the signs at issue. Secondly,
regarding the phonetic similarity of the signs, it was clear that the marks at issue
were highly similar phonetically, in view of the fact that not only the letters, but
also, and above all, the syllables of which the word elements of the signs at issue
consisted, had the same sequence. Regarding the conceptual comparison of the
signs at issue, it was clear that, by means of their word, phonetic and semantic
structures, the terms retained a close link and that the concept they evoked in the

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 minds of consumers was essentially the same, namely that of strength or vigour.
Therefore, the signs were conceptually similar for part of the relevant public
(English or French speaking public). Finally, the Court also upheld that there was
a likelihood of confusion between the marks at issue when the following factors
were taken into account: the identity of the goods at issue, the average
distinctiveness of the earlier mark, the low degree of visual similarity, the high
degree of phonetic similarity and the conceptual similarity in relation to the public
in some Member States.

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***

Chapter VIII –TRADITIONAL KNOWLEDGE, TRADITIONAL CULTURAL

EXPRESSION

CUSTOMARY LAW, TRADITIONAL KNOWLEDGE AND

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 INTELLECTUAL PROPERTY: AN OUTLINE OF THE ISSUES
Customary law and intellectual property system: the issues
What is customary law?
Defining and characterising “customary law” would itself be the subject of an
extended study. The present study does not attempt to define “customary law”, but
some general comments on its character may be helpful.
First, the idea of “customary law” that is under consideration concerns the laws,
practices and customs of indigenous peoples and local communities. It is not, for
instance, the same idea as “customary law” in the international context. “Customary
international law” has a more precise and technical meaning in the realm of rules
governing relations between distinct States, referring to those aspects of international
law that are based on custom or practice between States. The Charter of the United
Nations annexes the Statute of the Permanent Court of International Justice, which
requires it, when deciding disputes in accordance with international law, to apply
(among other things) “international custom, as evidence of a general practice
accepted.” Some experts have suggested that there are or should be linkages or
overlap between customary international law and the customary law of indigenous
peoples and local communities, but in general these two distinct areas of law and
practice should not be confused with one another.
Customary law is, by definition, intrinsic to the life and custom of indigenous peoples
and local communities. What has the status of “custom” and what amounts to
“customary law” as such will depend very much on how indigenous peoples and local
communities themselves perceive these questions, and on how they function as
indigenous peoples andlocal communities. According to one definition, “custom” is a
“rule of conduct, obligatory on those within its scope, established by long usage. Are
valid custom must be of immemorial antiquity, certain and reasonable, obligatory, not
repugnant to Statute Law, though it may derogate from the common law. General
customs are those of the whole country, as, e.g. the general custom of merchants.
Particular customs are the usage of particular traits. Local customs are customs of
certain parts of the country.”1
Approaches to defining or characterising “customary law” typically make some
reference to an established pattern within a community which is seen by the
community itself as having a binding quality. For instance, customary laws are
defined variously by some authorities as
• “customs that are accepted as legal requirements or obligatory rules of conduct;
practices and beliefs that are so vital and intrinsic a part of a social and economic
system that they are treated as if they were laws”2, and
• “established patterns of behaviour that can be objectively verified within a particular
social setting. The modern codification of civil law developed out of the customs, or
coutumes of the middle ages, expressions of law that developed in particular
communities and slowly collected and written down by local jurists. Such customs
acquired the force of law when they became the undisputed rule by which certain
entitlements (rights) or obligations were regulated between members of a

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community.” Another term used is “consuetudinary law” (from the Latin, consuetudo:
custom), referring to law the validity of which is established by custom (in contrast to
specific legislation or statutory law). A recent workshop defined customary law as
“locally recognized principles, and more specific norms or rules, which are orally held
and transmitted, and applied by community institutions to internally govern or guide
all aspects of life.”
This section of the study explores the interaction between the customary law and
protocols of indigenous peoples and local communities, and intellectual property (IP)
systems. The issues to be considered include:
_ What is the nature of the customary law and protocols of indigenous peoples and
local communities, and other communities bound by such laws? Can common themes
or elements be identified, or are customary laws and protocols simply too diverse?
_ What relationships between customary law and IP law have been encountered in
practice? What models could be explored?
_ How has customary law been recognized or applied in other areas of law, such as
family law, the law of succession, the law of land tenure and natural resources,
constitutional law, human rights law and criminal law, as well as the law and practice
of dispute resolution in general? How does customary law define the very legal or
cultural identity of indigenous peoples and local communities? What lessons does this
wider experience offer to the law and practice of IP?
_ What experiences have been reported concerning the role of customary law in
relation to intangible property, and rights and obligations relating to intangible
property such as cultural expressions, traditional knowledge5 (TK), and specific
material such as motifs, designs, narratives, as well as the tangible form of
expressions such as handicrafts, tools, and forms of dress?
_ How do sui generis laws for the protection of TK and traditional cultural
expressions6 (TCEs)/expressions of folklore (EoF) apply or otherwise recognize
customary law?
_ For the holders of TK/TCEs/genetic resources7 (GRs) themselves, what is the
preferred role or roles of customary laws and protocols:
− As a basis for sustainable community-based development, strengthened indigenous
peoples and local communities’ identity, and promotion of cultural diversity?
− As a distinct source of law, legally binding in itself – on members of the original
community, and on individuals outside the community circle, including in foreign
jurisdictions?
− As a means of factually guiding the interpretation of laws and principles that apply
beyond the traditional reach of customary law and protocols?
− As a component of culturally appropriate forms of alternative dispute resolution?
− As a condition of access to TK and TCEs?
− As the basis for continuing use rights, recognized as exceptions or limitations to
any other rights granted over TK/TCEs or related and derivative subject matter?

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Role of customary law in protecting traditional knowledge and traditional cultural
expressions
The WIPO Intergovernmental Committee on Intellectual Property and Genetic
Resources, Traditional Knowledge and Folklore (IGC) was established by the WIPO
General Assembly in October 2000. Negotiations are currently underway in the IGC
towards the development of an international legal instrument for the effective
protection of TK and TCEs, and to address the IP aspects of access to and benefit-
sharing of GRs. The WIPO draft articles on the protection of TK and TCEs and a
number of national sui
generis laws and the conventional IP law set out several possible roles for customary
law which have already been developed or applied in practice. Customary law can
serve as:
• The fundamental legal basis or source of law for indigenous peoples and local
communities’ legal rights over TK or TCEs.
• A factual element in establishing indigenous peoples and local communities’
collective rights over TK or TCEs.
• One element of the definition of TK or TCEs, or can otherwise establish the
relationship to indigenous peoples and local communities that is central to the concept
of TK and TCEs.
• A means of determining or guiding the procedures to be followed in securing
indigenous peoples and local communities’ free prior informed consent.
• The basis of specific user rights or exceptions, exempting the continuing customary
uses and practices from other legal restrictions on the use of TK or TCEs.
• Guide for the assessment of cultural or spiritual offence or damage caused by
inappropriate forms of use of TK or TCEs.
• A determinant of or guide for how benefits from the use of TK or TCEs should be
equitably shared within a community.
• A means of determining appropriate forms of remedies, sanctions or restitution
following the breach of rights over TK or TCEs.
• An avenue for resolving disputes over ownership or other forms of custodianship
over TK or TCEs.
• A guide on the transmission of rights over TK or TCEs from one generation to a
following generation.
Customary law and intellectual property: a brief overview
Customary laws and protocols are central to the very identity of many indigenous
peoples and local communities. These laws and protocols concern many aspects of
their life. They can define rights and responsibilities of members of indigenous
peoples and local communities on important aspects of their life, culture and world
view: customary law can relate to use of and access to natural resources, rights and
obligations relating to land, inheritance and property, conduct of spiritual life,
maintenance of cultural heritage and knowledge systems, and many other matters.
Customary law can help define or characterize the very identity of the community

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itself. Further, for many indigenous peoples and local communities, it may be
meaningless or inappropriate to differentiate their laws as “customary”, suggesting it
has some lesser status than other law – it simply constitutes their law as such.
Maintaining customary laws and protocols can therefore be crucial for the continuing
vitality of the intellectual, cultural and spiritual life and heritage of indigenous
peoples and local communities. Customary laws and protocols can define how
traditional cultural heritage is shared and developed, and how TK systems are
appropriately sustained and managed by indigenous peoples and local communities.
So maintaining customary laws and protocols even within the original community is
an important concern; it is often a key aspect of preserving the cultural and legal
identity of indigenous peoples and local communities. But indigenous peoples and
local communities have also called for various forms of respect and recognition of
their customary laws and protocols – beyond the scope of indigenous peoples and
local communities themselves. This can be a complex issue in national constitutional
law, and may arise, for example, in claims over land and natural resources.
Customary law and the character of traditional knowledge
What makes TK or TCEs “traditional” is above all the fact that they are developed,
maintained and customarily disseminated within traditional communities. This
context is seen as integral to TK and TCEs, so that appropriate protection may require
showing respect and recognition for the legal, cultural and social context that applies
within the original community. Frequently, this original context includes customary
law and protocols: the kind of norm that determines, for indigenous peoples and local
communities, how knowledge and cultural expressions should be maintained and
disseminated, as part of how the community conceives of itself as a community. Such
customary law or practices may be codified or not; they may be written or oral; they
may be expressly articulated or implicit in a community’s practices; they may be
formally recognized by external legal systems in various ways, or currently not
recognized by the community; it may be linked with other legal systems, including
national constitutions and national laws and regulations.
The normative force of customary law may be felt within a community in particular,
but may also create a legal or moral expectation that it will be recognized beyond the
original community. The full effect of customary law may only be understood with
reference to the social and community context: as one commentator observes, “to
understand why customary law rights such as those in folklore are binding, it is
necessary to examine more closely the nature and significance of the social and
political structure in tribal societies”.
For some commentators, and in some legal texts, customary law or practice is an
implicit or explicit component of TK and TCEs, or helps define ownership or other
custodial rights over TK and TCEs. For example, in the Pacific Regional Framework,
traditional owners of TK or
TCEs are defined as “(a) the group, clan or community of people or (b) the individual
who is recognized by a group, clan or community of people as the individual in whom
the custody or protection of the TK or expressions of culture are entrusted in

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accordance with the customary law and practices of that group, clan or
community.”25 One commentator, considering folklore protection in some African
countries, observes that the “scope of rights in folklore can be determined only with
reference to the customary practices of specific communities…. Folklore forms part
of the customary law of … communities and quite naturally will be subject to that
system of law.”
An IGC study on the definitions of the term TK27 commented that “there have been
calls in the work of the Committee for there to be some recognition of customary
law28 as an element in the definition and protection of TK. If there is to be reflection
of customary law in the characterization of TK, this would necessarily involve a more
general form of definition at the international level, given the diverse and distinct
quality of customary laws; equally, if weight is to be given to local cultural factors,
this could also entail a general umbrella definition at an international level. This
general approach was foreshadowed in document WIPO/GRTKF/IC/1/3 (itself
echoing comments in the “WIPO Report on Intellectual Property Needs and
Expectations of Traditional Knowledge Holders”29): “Given this highly diverse and
dynamic nature of TK it may not be possible to develop a singular and exclusive
definition of the term. However, such a singular definition may not be necessary in
order to delimit the scope of subject matter for which protection is sought. This
approach has been taken in a number of international instruments in the field of
intellectual property.”30
Customary law may therefore be an element of the very definition of TK or TCEs – in
other words, what sets knowledge or cultural expressions apart as being ‘traditional’
may be the existence or operation of customary law. This approach is apparent in
draft definitions of TK and TCEs that have been considered by the WIPO IGC. For
instance, it is suggested that protection should be available for TK which is, among
other things, “integral to the cultural identity of an indigenous or traditional
community or people which is recognized as holding the knowledge through a form
of custodianship, guardianship, collective ownership or cultural responsibility. This
relationship may be expressed formally or informally by customary or traditional
practices, protocols or laws.” And those who benefit from protection may also be
determined by customary law: thus the provisions suggest that protection of TCEs
“should be for the benefit of the indigenous peoples and traditional and other cultural
communities … in whom the custody, care and safeguarding of the TCEs are
entrusted in accordance with their customary law and practices.”
These references do not suggest that the definition of TK or of TCEs should be
limited just to that which is governed by customary law, but rather that the existence
of customary law could be a strong indicator in identifying TK and TCEs, and the
relevant forms of custodianship and other legal relationship between communities and
TK and TCEs.

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WIPO/GRTKF/IC/30/INF/10
ORIGINAL: ENGLISH
DATE: MARCH 3, 2016

Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional

Knowledge and Folklore

Thirtieth Session
Geneva, May 30 to June 3, 2016

TECHNICAL REVIEW OF KEY INTELLECTUAL PROPERTY-RELATED

ISSUES OF THE WIPO DRAFT INSTRUMENTS ON GENETIC RESOURCES,
TRADITIONAL KNOWLEDGE AND TRADITIONAL CULTURAL EXPRESSIONS
BY PROFESSOR JAMES ANAYA

Information document submitted by the Secretariat of the United Nations Permanent Forum
on Indigenous Issues

247
1.The United Nations Permanent Forum on Indigenous Issues (UNPFII) recommended at its
Eleventh Session, which took place from May 7 to 18, 2012, that “WIPO commission a
Technical Review, to be conducted by an indigenous expert, focusing on the draft texts
concerning traditional knowledge, genetic resources and traditional culture expressions, and
to provide comments thereon to the Intergovernmental Committee through the Forum. The
review should be undertaken within the framework of indigenous human rights.”
2.In consultation with the Secretariat of the UNPFII, Professor James Anaya, Professor of
Human Rights Law and Policy, University of Arizona, United States of America, was
commissioned by the Secretariat of WIPO in 2014 to undertake this technical review under
his sole responsibility. Professor Anaya completed his review (entitled “Technical Review of
Key Intellectual Property-Related Issues of the WIPO Draft Instruments on Genetic
Resources, Traditional Knowledge and Traditional Cultural Expressions”) in 2014 and
submitted it to the Secretariat of the UNPFII.

3.On May 28, 2015, the Secretariat of WIPO received a request from the UNPFII Secretariat
to submit the technical review undertaken by Professor Anaya to the WIPO
Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional
Knowledge and Folklore (IGC) as an information document.
4. The UNPFII Secretariat also requested that the technical review be submitted to
future sessions of the IGC which address traditional knowledge and traditional cultural
expressions respectively.
5. Pursuant to the request above, the technical review was made available for the
Twenty Ninth Session of the IGC, held from February 15 to 19, 2016, as an information
document WIPO/GRTKF/IC/29/INF/10. The same technical review is contained in the
Annex to the present document.

6. The Committee is invited to take note of the technical review in the Annex to this
document.

I. Background and introduction

1. At its 11th session the United Nations Permanent Forum on Indigenous Issues
requested the World Intellectual Property Organization (WIPO) to commission an
independent technical review within the framework of indigenous human rights of the draft
texts developed by the WIPO Intergovernmental Committee on Intellectual Property and
Genetic Resources, Traditional Knowledge and Folklore. The present report contains the
requested review. As instructed by the WIPO secretariat it refers to the current draft texts,
which are contained in WIPO documents WIPO/GRTKF/IC/28/4, WIPO/GRTKF/IC/28/5
and WIPO/GRTKF/IC/28/6.

2. This report has been prepared under the sole responsibility of the author. It does not
necessarily reflect the views of WIPO, WIPO’s Member States or WIPO observers.

3. The first part of the report sets out the basic contours and content of the human rights
framework that is applicable to indigenous peoples in relation to the intellectual property-
related issues of the draft texts. Subsequently, key aspects of the draft texts are examined
against the backdrop of the human rights framework. Limitations of space do not permit an
exhaustive or more detailed review of the draft texts or of all the human rights concerns that
may be raised by them.

II. The human rights framework

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4. The draft texts are aimed at advancing international standards for recognizing and
protecting proprietary and other interests in genetic resources (WIPO/GRTKF/IC/28/4),
traditional knowledge (WIPO/GRTKF/IC/28/5), and traditional cultural expressions
(WIPO/GRTKF/IC/28/6). Directly relevant to the intellectual property-related issues
addressed in these texts is article 31 of the United Nations Declaration on the Rights of
Indigenous Peoples, which states:

Indigenous peoples have the right to maintain, control, protect and develop their cultural
heritage, traditional knowledge and traditional cultural expressions, as well as the
manifestations of their sciences, technologies and cultures, including human and genetic
resources, seeds, medicines, knowledge of the properties of fauna and flora, oral traditions,
literatures, designs, sports and traditional games and visual and performing arts. They also
have the right to maintain, control, protect and develop their intellectual property over such
cultural heritage, traditional knowledge, and traditional cultural expressions.

5. This provision of the Declaration is grounded in a range of universal human rights,

including rights of culture, religion, property, and self-determination, as understood in light of
the fundamental norm of non-discrimination and the specific characteristics of indigenous
peoples.

The rights to culture and religion

6. It is widely recognized that the right to the enjoyment of culture that is affirmed in
multiple human rights instruments extends to the distinctive cultural characteristics of
indigenous peoples, which include the traditional knowledge they have generated through
their own patterns of observation and experiences, as wells as their distinctive art forms and
other cultural expressions. Indigenous peoples’ use of genetic resources, as with other
natural resources, is also typically part of or associated with cultural identity. As stated by the
Human Rights Committee in connection with the right to culture protected by article 27 of the
International Covenant on Civil and Political Rights, “culture manifests itself in many forms,
including a particular way of life associated with the use of land resources, especially in the
case of indigenous peoples.” In many instances these aspects of indigenous heritage are part
of or related to indigenous religious belief systems and hence fall within the ambit of the right
to religion.

The right to property

7. Beyond being grounded in the right to culture, article 31 of the Declaration quoted
above is an affirmation of indigenous peoples’ proprietary interests in the referenced aspects
of their cultural heritage. That indigenous peoples hold property rights over traditional
knowledge and cultural expressions generated and created by them follows from the general
idea that intellectual creativity vests its creator with moral and material interests, but is also
reaffirmed in other sources such as the International Covenant on Economic, Social and
Cultural Rights, article 15, paragraph 1(c), as interpreted by the Committee Economic, Social
and Cultural Rights. A number of international sources of authority as well as an
increasingly rich jurisprudence emanating out of regional and domestic courts and human
rights bodies , establish that indigenous peoples have property rights over lands and natural
resources traditionally used, including, by implication, genetic resources they traditionally
have used or possessed.

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 The right to self-determination

8. In addition, the “right to maintain, control, protect and develop” aspects of cultural
heritage articulated in article 31 of the Declaration is a component of the right to self-
determination, which is affirmed for “all peoples” in the international human rights covenants
and for indigenous peoples in particular in article 3 of the Declaration. Interpreting the right
to
self-determination as enshrined in the International Covenant on Civil and Political Rights,
the Human Rights Committee has emphasized, with explicit reference to indigenous peoples,
that the right “requires, inter alia, that all peoples must be able to freely dispose of their
natural wealth and resources”.

9. As part of their right to self-determination, indigenous peoples “have the right to

autonomy or self-government in matters relating to their internal and local affairs”. This
right necessarily implies a right of indigenous peoples to manage and regulate the use of their
genetic resources, traditional knowledge and cultural expression, in accordance with their
own customs, laws and traditions. An important component of indigenous peoples’ control
over their resources and aspects of their cultural heritage is the right to determine to what
extent and under what conditions such subject matter can be accessed and used by others.

The obligation of States to implement human rights

10. A corollary of all internationally recognized human rights is the duty of States to
respect, protect and fulfill them. This duty is affirmed in the major United Nations and
regional human rights instruments in various formulations, including in the Declaration on the
Rights of Indigenous Peoples, which prescribes in relation to the rights in cultural heritage
and genetic resources affirmed in article 31 that, “[i]n conjunction with indigenous peoples,
States shall take effective measures to recognize and protect the exercise of these rights.” In
adopting such effective measures, the broader interests of society and human rights of others
must duly be taken into account, as stipulated by article 46 of the Declaration; but in the end
the specific rights of indigenous peoples must be recognized and protected, and brought into
harmony with the human rights of all.

Free, prior and informed consent

11. Among the affirmative duties of States to protect the rights of indigenous peoples is
that of ensuring consultations with them to obtain their free, prior and informed consent to
any measure that may materially affect the enjoyment of their rights. That indigenous
peoples’ natural resources, including genetic resources, can ordinarily be accessed only with
their consent has for instance been repeatedly confirmed by the Committee on the Elimination
of Racial Discrimination. As to traditional knowledge and cultural expressions, the
Committee on Economic, Social and Cultural Rights has underscored that States “should
respect the principle of free, prior and informed consent of the indigenous authors”. The
principle of free, prior informed consent is also gaining increasing acceptance in practice. As
a general rule, therefore, indigenous peoples’ genetic resources, traditional knowledge and
cultural expressions should not be accessed or used by others without consent upon terms that
are consistent with the affected rights. The principle of consent functions as protective of and
instrumental to the enjoyment of rights recognized in authoritative international sources,
including those referred to above.

III. The draft text on genetic resources (annexed to WIPO/GRTKF/IC/28/4)

250
12. The draft text on the protection of genetic resources aims to prevent the
misappropriation and patenting of properties of these resources and of related traditional
knowledge by those who have not discovered or generated such properties or traditional
knowledge.

Disclosure: The key mechanism of protection

13. The key mechanism for achieving this objective in the draft is a requirement that a
patent applicant disclose the country or source of origin of the subject matter. This and the
related operative provisions of the draft text clearly provide a certain level of defensive
protection against the misappropriation of indigenous peoples’ genetic resources and
traditional knowledge, thereby advancing the implementation of relevant international human
rights standards. Precisely how far that protection goes, however, remains ambiguous in the
text, because it includes bracketed language throughout with alternative formulations of the
operative provisions as well as of the preamble.

Absence of recognition of indigenous peoples as rights holders

14. In any event, with its reliance on a defensive mechanism of disclosure, the draft
instrument does not go so far as to provide or require affirmative recognition of or specific
measures of protection for indigenous peoples’ rights in genetic resources or associated
traditional knowledge. Such recognition and protection are largely left to the domestic legal
systems of the countries of origin, with States not being specifically obligated in this regard
beyond the obligation to impose on patent applicants the disclosure of origin requirement.
The preamble does refer to ensuring the rights of indigenous peoples over genetic resources
and traditional knowledge as an objective of the instrument, and one of the alternative
formulations of “misappropriation” in the glossary refers to the absence of consent by holders
of genetic resources and associated knowledge, implying that indigenous peoples are among
such holders. But affirmation of these rights and the corresponding obligations of States do
not explicitly make their way into the draft instrument’s operative provisions.

15. This omission raises concern, since it may practically enable ongoing or potential
resistance, both in domestic and international transactions, to treating indigenous peoples as
holders of property rights in the genetic resources and associated knowledge that they have
duly possessed. On the other hand, the omission, if kept, could not properly be read as
implying a legal basis for such denial of indigenous peoples’ rights over genetic resources,
which find support in the Declaration on the Rights of Indigenous Peoples and other
international sources.

IV. The draft texts on traditional knowledge (annexed to WIPO/GRTKF/IC/28/5) and on

traditional cultural expressions (annexed to WIPO/GRTKF/IC/28/6)

16. The other two instruments have as their respective objectives protection of traditional
knowledge and traditional cultural expressions.
Beneficiaries
17. In contrast to the instrument on genetic resources, these two instruments identify
indigenous peoples as among the holders of rights or interests in relation to the subject matter.
Indigenous peoples that create traditional knowledge or cultural expressions are direct
beneficiaries of protection. Use of the term “peoples”, however, continues to be bracketed,
which is considerably out of step with the contemporary human rights regime, in which use of
the term is widely accepted.

The scope of protection

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18. While indigenous peoples or communities are beneficiaries of protection, the nature
and degree of protection that States would be required to implement remain substantially
undefined by the heavily bracketed texts. Certain general parameters and issues, however, are
evident in and common to both texts.

19. Each of the draft instruments, in the parts on “scope of protection”, indicates differing
levels of protection depending on the extent to which it can be established that a beneficiary
has a close cultural nexus or exclusivity with the traditional knowledge or cultural expression
in question. At the end of the spectrum with the highest level of protection are traditional
knowledge and cultural expressions that are sacred or known only to beneficiaries. For these
forms of knowledge and expression, States are to ensure beneficiaries control over the subject
matter, prevention from unauthorized use or distortion, as well as attribution for and equitable
benefits from any authorized use.

20. At the other end of the spectrum are traditional knowledge and cultural expressions
that are now widely known or publicly available and no longer intensively used by the people
or community of origin. In these cases, protection is in the realm of ensuring attribution and
respectful use; more robust protections for direct control and sharing in the benefits or the
use would not be required. Benefit-sharing and certain other protections would apply at the
mid-range of the spectrum.

21. Animating the sliding scale framing of the scope of protection is the concept of public
domain, which has problematic aspects in its application to indigenous peoples. This concept
is inherent to conventional intellectual property rights regimes, which aspire to provide
sufficient protection to spur creativity, but not more as it is held beneficial to society at large
if others can eventually build on existing creativity. Public domain theory provides, generally
speaking, that intellectual property rights should eventually expire and that, further, what is
already known to a wider circle cannot be subject to such rights unless certain conditions
related to individual creativity are met.

22. However, from a human rights perspective, this rationale does not make complete
sense for determining the scope of protection of indigenous peoples’ traditional knowledge
and cultural expressions. Rather, the human rights regime requires recognition that traditional
knowledge and cultural expressions, irrespective of broad public awareness of them, form
integral parts of indigenous peoples’ cultures and societies. As the Committee on Economic,
Social and Cultural Rights has held: “While … intellectual property rights … may be …
limited in time and scope … human rights are timeless expressions of fundamental
entitlements of the human person”; human rights protections, moreover, safeguard the link
between “peoples … and their collective cultural heritage”. The major purpose of the
contemporary international concern for indigenous peoples, as manifested by specific
programs and standards within the human rights regime, is to address past and continuing
wrongs directed against them , including the nonconsensual taking or use of their traditional
knowledge and cultural expressions. Hence, the human rights regime as applied in this
context requires a wider scope of protection than follows from conventional intellectual
property theory.
Term of protection

23. With regard to the term of protection, both texts include paragraphs that allow States
to determine the longevity of protective measures, under alternative formulations that more or
less are confined by the scope of protection to be defined by the instruments. In each case, the
alternative formulations are mostly detached from the logic of the human rights norms that
mandate recognition and protection of indigenous peoples’ rights in traditional knowledge

252
and cultural expressions. Conventional intellectual property theory allows for time-bound
protection as a means of promoting dissemination and creativity, with an emphasis on the
economic value of generated knowledge and creative work. However, the human rights
regime recognizes both that traditional knowledge and cultural expressions constitute integral
elements of indigenous peoples’ cultures and societies, and that it is this characteristic, above
their economic value, that motivates their protection. This implies that indigenous traditional
knowledge and cultural expressions should be protected as long as such subject matter
remains relevant to indigenous peoples’ cultures.

Exceptions and limitations

24. Closely connected to the scope and term of protection are the draft provisions on
exceptions and limitations in the two draft texts. These contain a number of various draft
proposals for sweeping and far-reaching exceptions and limitations that could have the same
effect as a narrowly formulated scope of protection. The above has explained how the scope
of protection, as a general rule, should extend also to indigenous peoples’ traditional
knowledge and cultural expressions that might otherwise be considered in the public domain
in order to comply with the human rights standards. This necessarily implies that these
human rights standards also prohibit the various substantive and far-reaching proposals for
exceptions and limitations found in the draft instruments. The suggestion that it be left to
national law to determine the exceptions and limitations to the scope of protection are
particularly problematic, as it leaves States with latitude to decide that certain traditional
knowledge and cultural expressions should not be subject to protection at all. Any potential
exception or limitation should be defined and concretely formulated in the instruments, and
compliance with human rights law should be ensured.

Definition of misappropriation

25. Similar to the draft articles on exceptions and limitations, the misappropriation
provisions include proposals suggesting that misappropriations of traditional knowledge or
cultural expressions be defined as violations of national law. Again, such proposals are
problematic, since they fail to incorporate an international standard and project the possibility
for traditional knowledge and cultural expressions to remain unprotected. That is, if national
law does not protect traditional knowledge and cultural expressions, no misappropriation, by
definition, occurs when these aspects of cultural heritage are used by other than those who
generate or create them. In keeping with human rights standards, misappropriation should
instead be defined as occurring when someone accesses indigenous traditional knowledge and
cultural expression without consent.

******************************************

Chapter IX: Interface of IPR with Standards, Competition law and Human
Rights

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Intellectual Property and Competition Law: The Innovation Nexus
There has been a long fought battle between the IP Laws and Competition
Law and their objectives seem to be contradicting each other. The issue note
highlights the common objectives of framing both the set of laws which
include promoting innovation, creativity and a better market for consumers.
Intellectual Property (IP) is the creation of mind. Intellectual Property Rights
(IPRs) are the exclusive rights granted to the inventor/ creator of intellectual
property to exclusively exploit his intellectual property. The law dealing with
Intellectual Property offers a bundle of rights (economic as well as moral
rights) to the owner of property for a specified period of time. The prime
objective of IPRs is to reward the inventor for his invention and at the same
time encourage new & innovative products to the market. Intellectual Property
is divided under two main heads: The Industrial Property, which encompasses
the trade marks, patents, industrial designs, geographical indications and
circuit layouts and the other head is Copyright- which is related to literary,
dramatic and artistic work.
Throughout the world, member countries of World Trade Organization (WTO)
follow similar system of granting rights to the creator of intellectual property.
Member countries have signed Trade Related Agreements on Intellectual
Property Agreement (TRIPS) which stipulates minimum standards of
regulation. Member countries have to bring their domestic laws in conformity
with the TRIPS agreement. In contrast to this, till now, no multilateral rules
for competition law exist.
The term ‘Competition’ is not defined in Indian Competition Act but is
generally understood to mean the process of rivalry to attract more customers
or enhance profit. In some jurisdictions such as the US, some experts have
defined Competition law, as law that promotes or maintains market
competition by
regulating anti-competitive conduct by companies1. It can be said that
Competition Law, also termed as the ‘Antitrust Law’ in some jurisdictions has
been enacted with the intention to promote competition in the market and
provide a level playing field to all market players in the market. Competition
Law aims to foster competition as an instrument for accelerating growth
through better products and economic efficiencies besides maximising
consumer welfare by offering better products at lower prices. Innovative
products to the market are an important by-product of increasing competition
in the market which gives the seller an early mover advantage.
IP laws at the outset, offers a bundle of rights, which includes right to
exclusive selling (often termed as monopoly) to the IP owner to make good his
invention, whereas competition law emphasises on increasing competition in
the market. The objective of IP Rights may also be understood as protecting
individual (inventor) interest and rewarding him by giving exclusive right to

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sell, whereas Competition Law on the contrary focuses on increasing
consumer welfare. This situation apparently creates a tension between the
founding principles of IP laws and competition law. There appears a conflict
in the objectives of the laws as one focuses on individual interest while the
other on promoting collective interest through increasing competition. Now, a
question arises whether IP & Competition laws are at odds with each other?
To address this we need to understand, whether IP laws & Competition laws
overlap? If they do not contradict, then do they have anything in common?
Arguing that intellectual property creates a “monopoly” does not
automatically mean that it creates the kind of monopoly which competition
law is supposed to tackle. Indian legislation is largely silent on the issue of the
relationship between competition and IPRs; however it gives a special mention
to IPR in relation to Anti-Competitive Agreements. The IP owner can impose
reasonable restrictions to protect his rights as given under the respective IP
laws. It is to be understood that competition law is not against monopoly per
se, instead the goal is to prohibit anti-competitive conduct. A company that
achieves a monopoly without entering into anti-competitive conduct will not
violate the principles of competition law at all. In sum, the argument is that
there is no tension in the goals being sought by intellectual property rights and
competition law (there might however be some tension in the means through
which the goals are sought to be achieved). The goals in both cases are the
same – promotion of innovation, consumer welfare and more product choices.
The clear shift towards viewing IPRs and competition law as complementary
to each other can also be seen in the 2003 Report by the FTC that note that
patents do not necessarily confer monopoly power on their holders, and further
that, even where a patent confers a monopoly power that alone does not create
an antitrust violation2. This report concludes that both IPRs and competition
make significant contributions towards innovation, consumer welfare and in
order to maximize these benefits, an appropriate balance between the two
needs to be struck.
Competition Law has never questioned or interfered with the most primary
function of IP rights: preventing free riding of creative achievements and/or
the firm’s identity and reputation, acting as an incentive to innovate3. In fact,
the former acknowledges the role of IP in promoting competition because by
preventing free-riding, firms are encouraged to produce their own innovative
products, which necessarily leads to competition. The competition law
promotes innovation and consumer welfare by prohibiting certain actions that
may harm competition with respect to either existing or new ways of serving
consumers.
It can be safely concluded that Intellectual Property and Competition are not in
conflict with each other and work towards some common goals. These two
branches of law, being multifaceted, allow for the interaction of seemingly
conflicting objectives and are capable of converging on the ultimate goal of

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 enhancing the competitive dynamics of innovation5. The common objective of
framing of both the laws is promoting innovation, creativity and a better
market for consumers.

********************************

INDIAN CASES RELATING TO STANDARD ESSENTIAL PATENTS

[Compiled by Mr. S.K.Murthy]

1. Ericsson vs. Micromax

In March 2013, Ericsson filed a patent infringement suit against Micromax, claiming Rs. 100
crore (Rs. 1 billion) in damages. Ericsson alleged that Micromax had infringed on 8 of its
standard essential patents (SEPs) registered in India. The Delhi High Court granted an ex-
parte injunction restraining Micromax from selling, importing, or manufacturing mobile
devices that implemented 3G, AMR and EDGE standards. Micromax and Ericsson later
entered into an agreement in which the former would pay interim royalty:

● For phones or devices implementing GSM, Micromax would pay 1.25% of the sale price
of every unit.

● For phones or devices implementing GPRS and GSM, Micromax would pay 1.75% of
the sale price of every unit.

● For phones or devices implementing EDGE, GPRS, and GSM, Micromax would pay 2%
of the sale price of every unit.

● For devices (mobile phones and tablets that support voice calling) implementing
WCDMA/ HSPA, Micromax would pay 2% of the sale price of every unit.

● For dongles and data cards, Micromax would pay US $2.50 for every unit sold.

In November 2014, the Delhi High Court fixed new interim royalty rates and set a deadline
of December 31, 2015 for the trial.
From November 12, 2014 to November 12, 2015:

○ For phones or devices that implement GSM standards, Micromax would pay 0.8% of the
net selling price.

○ For phones and devices that implement GPRS and GSM, Micromax would pay 0.8% of
the net selling price.

○ For phones and devices that implement EDGE, GPRS, and GSM, Micromax would pay
1% of the net selling price.

○ For phones, devices and calling tablets that implement WCDMA/ HSPA, Micromax
would pay 1% of the net selling price.

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 From November 13, 2015 to November 12, 2016:

○ For phones or devices that implement GSM standards, Micromax would pay 0.8% of the
net selling price to Ericsson.

○ For phones and devices that implement GPRS and GSM, Micromax would pay 0.8% of
the net selling price.

○ For phones and devices that implement EDGE, GPRS, and GSM, Micromax would pay
1.1% of the net selling price.

○ For phones, devices and calling tablets that implement WCDMA/ HSPA, Micromax
would pay 1.1% of the net selling price.

From November 13, 2016 to November 12, 2020:

○ For phones or devices that implement GSM standards, Micromax would pay 0.8% of the
net selling price to Ericsson.
○ For phones and devices that implement GPRS and GSM, Micromax would pay 0.8% of the
net selling price.
○ For phones and devices that implement EDGE, GPRS, and GSM, Micromax would pay
1.3% of the net selling price.
○ For phones, devices and calling tablets that implement WCDMA/ HSPA, Micromax would
pay 1.3% of the net selling price.
As of 2013, when the suit was filed, Ericsson held 33,000 granted patents worldwide and 400
in India. Ericsson claimed to hold a third of 2G SEPs and a quarter of 3G SEPs. Micromax
was then the largest domestic smartphone manufacturer in the country, second only to
Samsung in terms of the number of smartphone units sold, and holding roughly 20% of the
smartphone market share.
In November 2013, Micromax filed a complaint with the Competition Commission of India
(CCI) claiming that Ericsson had abused its dominant position in the market by imposing
exorbitant royalty rates. The CCI determined prima facie that Micromax's claim was valid
and ordered an investigation,http://cis-india.org/a2k/blogs/compilation-of-mobile-phone-
patent-litigation-cases-in-india - _ftn9 which was challenged by Ericsson in the Delhi High
Court. The court declared that the CCI cannot interfere in an ongoing patent infringement
lawsuit. Micromax has challenged the validity of the 8 suit patents held by Ericsson.
Micromax contends that while Section 13(4) of the Indian Patents Act allows the patent
holder to file a suit in case of infringement, it is not proof of the validity of such a patent.
Ericsson, on the other hand, has claimed that the burden of proving invalidity of patents lies
on Micromax. In addition, Ericsson filed a suit for contempt claiming that Micromax failed to
provide the statement of sales and also failed to pay the royalty on sale of its Yureka and YU
brands and devices. In response, the court ordered Micromax to submit the statements for the
sales of these products along with a response to the contempt proceedings within four weeks
time. On the question of royalty that ought to have been paid to Ericsson since November
2014, the court rejected Micromax’s contention that the payment should be stayed till Intex’s
appeal on the same issues were decided. It directed Micromax to pay the royalty due to
Ericsson.

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 2. Ericsson vs. Gionee

Ericsson sued Indian budget smartphone manufacturer Gionee in late 2013 over the alleged
infringement of the same 8 SEPs over which Micromax was sued. In October 2013, the Delhi
High Court fixed an interim royalty to be paid by Gionee to Ericsson for one month, which
was calculated on the basis of the sales of Gionee's devices worth approximately US $24
million in India. These rates were established on the basis of the interim royalties awarded to
Ericsson in March 2013 in the patent infringement suit against Micromax.

○ For phones or devices implementing GSM, Gionee would pay 1.25% of the sale price of
every unit to Ericsson.
○ For phones or devices implementing GPRS and GSM, Gionee would pay 1.75% of the
sale price of every unit.
○ For phones or devices implementing EDGE, GPRS, and GSM, Gionee would pay 2% of
the sale price of every unit.
○ For devices implementing WCDMA/ HSPA, which includes mobile phones and tablets
that support voice calling, Gionee would pay 2% of the sale price of every unit.
○ For dongles and data cards, Gionee would pay US $2.50 for every unit sold.

The outcome or status of FRAND negotiations between Ericsson and Gionee are not present
in publicly accessible documents of the High Court. Gionee is one of the largest mobile
phone manufacturers in China and has captured roughly 2% of the smartphone market share
in India.

3. Ericsson vs. Intex

In 2013, Indian mobile phone manufacturer Intex filed a complaint with the CCI alleging that
Ericsson was abusing its dominant position during the course of negotiations over an SEP
licensing agreement. The CCI determined prima facie in January 2011 that Ericsson had
abused its dominant position in the market and ordered that an investigation clubbed with the
one following a similar complaint made by Micromax be done. The next month, Ericsson
filed a writ petition in the Delhi High Court challenging the CCI's investigation. In April the
same year, Ericsson sued Intex claiming Rs. 56 crores (560 million) in damages for the
alleged infringement of 8 of its SEPs, the same ones over which Micromax and Gionee were
sued. The court ordered Intex to pay 50% of the amount of royalty for the duration from the
date the lawsuit was filed to March 1, 2015, directly to Ericsson. The royalty amount was
determined on the same lines as the one that was paid by Micromax. Intex was ordered to pay
the remaining 50% with a bank guarantee within 4 weeks. The court also declared these terms
would be applied every six months until the trial completes. In support of the claim, Ericsson
submitted results and reports of lab tests it had conducted in-house on four “representative”
Intex handsets available in the market. The reports were accompanied by an affidavit from
telecom expert Vijay Ghate and another by Max Olofsson, the Director of Patent Licensing at
Ericsson.
Intex, which manufactures feature phones and smartphones, ranked third in terms of market
share (8%) in India in the fourth fiscal quarter of 2014.

4. Ericsson vs. Xiaomi

In December 2014, Ericsson filed a suit against Xiaomi in India for the alleged infringement
of the 8 SEPs over it had sued Micromax, Gionee and Intex. Xiaomi, merely 6 months old in
the Indian smartphone market, was inundated with demand for its phones, which were rich in
features and performance and priced comparatively low. The Delhi High Court granted an ex-

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parte injunction on the sale, manufacture, advertisement, and import of Xiaomi's devices.
Xiaomi claimed that its latest devices in the Indian market (as of December 2014), the Mi3,
Redmi1S and Redmi Note 4G, contained Qualcomm chipsets, which implemented
technologies licensed by Ericsson. The Redmi Note 3G and previous models of the Mi and
Redmi ranges, however, contained chipsets from Mediatek, which does not have a licensing
agreement with Ericsson. Xiaomi subsequently challenged the injunction before a Division
Bench of the Delhi High Court, which issued temporary orders to allow Xiaomi to resume the
sale, import, manufacture, and advertisement of its mobile devices subject to the conditions:

● Xiaomi would only sell devices that contained Qualcomm chips.

● Xiaomi would deposit Rs. 100 towards royalty for every device it imported to India
from the date of the launch of the device in India to January 5, 2015. This amount was to be
kept in a fixed deposit for three months while the case proceeded.

5. Ericsson vs. Kingtech

The earliest wrangle over mobile phone patent infringement in India started in March
2011 when Ericsson notified Customs officials to not grant clearance to a consignment
imported by Kingtech Electronics. Ericsson stated in its request that the consignment
containing 1,900 handsets comprising 18 models of the G’Five brand infringed 5 of its AMR
patents. These patents (IN203034, IN203036, IN234157, IN203686, and IN213723) are the
same ones over which Ericsson subsequently sued other budget mobile phone manufacturers
in India. Additionally, Ericsson submitted lab test reports verified by an “independent expert”,
which showed that the 18 models infringed upon its AMR patents.
In response, the Customs department detained the goods as per the Intellectual Property
Rights (Imported Goods) Enforcement Rules, 2007. Kingtech was called upon to put forth its
side before the Customs department, after which it filed a writ in the Delhi High Court
challenging the detention of its goods. Kingtech contended that the Deputy Commissioner of
Customs was not the appropriate authority to determine the validity of a granted patent and to
decide if goods infringed on that patent, and that she was overstepping her authority by
suspending the release of goods without an injunction from the court. Kingtech also asked for
the goods to be released in the interim.
In December 2011, the Delhi High Court ordered for the release of Kingtech’s goods.
Ericsson appealed for a stay on the order and requested that sample mobile phones from
Kingtech’s consignment be lab-tested independently to determine patent infringement. In
April 2012, the court rejected the appeal and ordered for a sample to be sent to two
laboratories, Sasken and CanvasM.

6. Vringo vs. ZTE

Vringo has filed two separate patent infringement suits against ZTE in the Delhi High Court.
6. 1. Vringo Infrastructure Inc. and Anr vs. Xu Dejun and Others
In November 2013, Vringo and filed a suit against ZTE, its CEO Xu Dejun, and its Indian
subsidiary ZTE Telecom India over the alleged infringement of its patent IN243980 entitled
"Mobile station operable with radio access network and a packet data serving node and a
method for operating such mobile station". Vringo claimed that IN243980 is a standard
essential patent for the CDMA2000 family of standards used by 6 “representative” mobile
devices of ZTE: Optik V55, N880E, Chorus, AR910, Flash, and AC2736.

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By conjecture, the standards pertaining to the patent as per Vringo’s claim are CDMA2000 1x
Advanced, CDMA2000 1x EV-DO (Evolution-Data Optimized) Revision A, and CDMA2000
1x EV-DO Revision B. Curiously, Vringo submitted a report and an affidavit by an expert
(not named in the case text) who stated that the 6 devices support "at least CDMA2000-EV-
DO Rev. A”.
The Delhi High Court granted an ad-interim ex-parte injunction on the manufacture, import,
sale, use, or advertisement of ZTE’s infringing products. ZTE challenged the injunction,
which was lifted by the court on December 12, 2013. ZTE was directed to file within 4 weeks
its counter statement, pay a bank guarantee of Rs. 5 crores (50 million), and file an affidavit
disclosing the number of CDMA devices sold by it in India along with the amount of revenue
obtained from them.
For the first time since litigation over mobile technology patents started in India, the
court agreed to appoint a “scientific advisor” from a list of experts to apprise the court
about the technical and scientific evidence placed on record. The list was to be drawn up
by the litigating parties. The court also appointed local commissioners to record evidence
from ZTE’s premises and directed Indian customs officials to notify Vringo of all ZTE
shipments. The trial was ordered to be completed within six months of Vringo and ZTE first
appearing before the local commissioners.
ZTE filed the affidavit on January 13, 2014, one day after the deadline. On February 3,
2014, Vringo filed a contempt suit against ZTE for its failure to comply with the deadline and
requested the court to increase the amount of bank guarantee to be paid by ZTE. The suit has
been clubbed with the second patent infringement suit filed by Vringo against ZTE,
apparently from September 11, 2014. Both patents belong to a portfolio of Nokia acquired by
Vringo following a confidential agreement between them made in August 2012.
6. 2. Vringo Infrastructure Inc. and Anr vs. Indiamart Intermesh Ltd. and Others
In January 2014, Vringo and Vringo Infrastructure filed a patent infringement suit in the
Delhi High Court against ZTE, ZTE’s Indian subsidiary, and Indiamart, a distributor of ZTE
products, over the alleged infringement of its patent IN200572. The patent entitled “A method
and a device for making a handover decision in a mobile communication system” pertains to
2G and 3G infrastructure, viz. base station controllers ZTE ZXG10 iBSC and ZTE ZXG10-
BSCV2. This is the first among high-priced patent infringement lawsuits filed in India
over mobile technologies that refers to the allegedly infringing components and not
entire devices. China-based ZTE is a manufacturer of telecom equipment and systems
and mobile phones unlike the other mobile phone makers sued in India, which are
Indian companies with OEMs (original equipment manufacturers) in China.
In February 2014, the court granted an ad-interim ex-parte injunction restraining ZTE from
importing, selling, advertising, installing or operating devices that comprise the infringing
components. It also appointed local commissioners to inspect ZTE’s premises and instructed
customs authorities to detain ZTE's shipments that may contain such devices and to notify
Vringo about them. In March 2014, ZTE appealed against the injunction, which was lifted on
August 5 the same year with ZTE being ordered to deposit Rs. 17.85 crore (178.5 million) to
the court.
A public update dated September 2, 2014 issued by Vringo to its shareholders states:
“ZTE must also provide a complete accounting of its allegedly infringing activity by
September 3, 2014.
On August 30, 2014, Vringo filed a contempt motion alleging that ZTE failed to deposit the
required funds [within the stipulated time and] violated the interim injunction while it was in
effect."

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Vringo submitted an affidavit by one Regis J. Bates to support its claims of patent
infringement. A Single Judge of the High Court observed in his ruling in an order dated
August 5, 2014 that Bates had stated that he was not a patent attorney nor did he intend to
provide “expert opinions” on Indian patent law in his report. On this ground and owing to his
not holding a degree in science, technology, or engineering; serving in only managerial
positions throughout his career; and not possessing practical or research experience, the court
ruled that Vringo had not been able to make a prima facie case of patent infringement.
Further, the court directed that a panel of three “scientific advisors or experts” be appointed
from three premier engineering colleges in Delhi by the heads of the respective institutions
and that the panel submit its report within 6 weeks of holding its first meeting.
In response to an appeal made by Vringo on various counts, a 2-member bench of the Delhi
High Court opined without interfering with the rest of the order (dated August 5, 2014) that a
person without an academic degree in a specialised field could still be an expert by virtue of
their vocation or avocation.
The suit is sub judice. As of August 2014, ZTE had filed for the revocation of IN200572 on
grounds of it not being innovative as well as for violating some statutory provisions under
Section 64 of the Indian Patents Act.
Vringo, Inc., headquartered in the US, is “engaged in the development and monetisation of
intellectual property and mobile technologies”.
ZTE is a multinational company headquartered in Shenzhen, China, which manufactures
products and provides services in the telecom infrastructure, equipment, systems; mobile
phone; and telecom software sphere. As of mid-2014, ZTE claimed to hold more than 17,000
patents worldwide.

7. Vringo vs. Asus

In April 2014, Vringo filed a patent infringement suit against AsusTek Computer Inc. and
one of its distributors in New Delhi, Nuage Techsol Pvt. Ltd. in the High Court of Delhi. As
per public updates issued by Vringo to its shareholders, Vringo has alleged the infringement
of a non-SEP, IN 223183 entitled "Method and system for providing wireless communication
using a context for message compression" by Asus in India.
Asus claimed that in the context of IN 223183 it was using technology licensed to it by
Google. In August 2014, Google filed a request to become a party to the proceedings.
Vringo had requested for an injunction on Asus’ use of the technology in India. The
injunction has not been granted yet. The suit is sub judice. No further information about the
lawsuit is publicly available. Unlike in the other cases listed in this blog post, neither has
the injunction been granted nor do the legal orders mention interim royalty, bonds, or
accounting statements or affidavits to be filed by the defendants.
Asus is a multinational company based in Taiwan. It manufactures computer hardware,
desktop computers, laptops, tablets, and mobile phones. In 2014, it was ranked fifth by
Gartner in terms of the number of PC shipments.

8. Ericsson vs. iBall

In November 2011, Ericsson issued a letter to iBall stating that the latter’s mobile devices
infringed upon Ericsson’s patents, the same 8 SEPs over which Micromax, Gionee, Intex, and
Xiaomi were later sued. Ericsson also offered to discuss a FRAND licensing agreement with
iBall.

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On Ericsson’s proposal of entering into a global patent license agreement (GPLA), iBall
agreed, but on the condition that details of its alleged patent infringements be disclosed to it.
Ericsson replied that it could reveal these details only after entering into a non-disclosure
agreement (NDA) with iBall. In subsequent communication with Ericsson, iBall also
contended that it was only a vendor importing products from China and selling them in
Indian, and thus an “innocent infringer”, if it is one.
Upon receiving the terms of the NDA, iBall brought the matter before the Competition
Commission of India. iBall claimed that Ericsson’s refusal to identify the allegedly infringed
SEPs; the threat of patent infringement proceedings; the attempt to coax iBall to enter into a
“one-sided and onerous NDA”; tying and bundling patents irrelevant to iBall’s products by
way of a GPLA; demanding unreasonably high royalties by way of a certain percentage value
of handset as opposed to the cost of actual patented technology used all constituted abuse of
Ericsson’s dominant position under Section 4 of the Competition Act, 2002. In May 2015, the
CCI found prima facie abuse of dominant position by Ericsson in the domain of “Standard
Essential Patents for 2G, 3G and 4G technologies in GSM standard-compliant mobile
communication devices in India”, and asked the Director General to conduct an investigation
within 60 days.
A few days later in in the month of May 2015, Ericsson challenged the CCI’s order before the
Delhi High Court on the grounds that the order was “arbitrary in nature and without
jurisdiction”. In September the same year, the court ordered that the Director General of the
CCI shall not submit a report of the investigation or pass a final order in the case before the
CCI.
In the same order, the Delhi High Court observed that iBall had not entered into a licensing
agreement under FRAND terms despite Ericsson’s willingness to do so. It also found that
iBall was aware of Ericsson’s portfolio of standard essential patents pertaining to GSM,
GPRS, and WCDMA standards. The court held that as the infringing technologies are
“standards”, there exists no substitute for them and thus these technologies are necessarily
used by iBall’s telecommunication devices. Hence iBall’s plea of being aware of the
violations was dismissed.
The court also passed an interim injunction against iBall in light of interim orders passed in
the matters of Ericsson vs. Xiaomi (December 2014), Ericsson vs. Gionee (October 2013),
and Ericsson vs. Micromax (March 2013). While the injunctions imposed on Xiaomi and
Micromax were on the sale, manufacture, advertisement and import of their devices, iBall and
its agents and affiliates have been restrained from only importing devices that are allegedly
infringing in nature. The court held that without an interim injunction, Ericsson would suffer
irreparable losses. The injunction against iBall lasts from September 9, 2015 to the date of the
next hearing at the Delhi High Court.
iBall in a personal electronics and computer peripherals company based in Mumbai, India. It
ventured into the mobile phone business in 2010 and into the domain of tablet PCs and
moulded interconnect devices (MIDs) a year later. iBall’s website states that the company’s
revenue stood at Rs. 9000 million in the financial year 2013-14.

9. Ericsson vs. Competition Commission of India

The Competition Commision of India found Ericsson prima facie guilty of abuse of its
dominant position in the matters of Ericsson vs Micromax (November 2013), Ericsson vs.
Intex (January 2014), and Ericsson vs. iBall (September 2015). In response, Ericsson filed
writ petitions in the Delhi High Court against the CCI’s orders that the Director General (DG)
conduct an investigation and file a report in each of these cases.

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The question of the DG’s authority to file such a report cropped up in Ericsson vs.
Competition Commission of India and Anr. in May 2015. The Delhi High Court passed an
interim order along the lines of its previous orders, wherein it stated that the DG shall be free
to conduct an investigation but not to submit a final order. The court also restrained the CCI
from passing final orders in the three cases. Though the DG could call upon any local officer
of Ericsson, he would have to request Ericsson first in order to call officers stationed abroad.
If Ericsson considered the request unreasonable, it would be entitled to move court.
In September 2015, the Delhi High Court set aside the summons issued by the DG in Case
No. 50/2013 (Micromax Informatics Limited and Telefonaktiebolaget LM Ericsson (Publ),
November 2013) and asserted that no coercive measures be taken against Ericsson till the
next hearing. About a week later, the court converted the interim order into an absolute one
in force till the final decision on the petition was passed. The Division Bench of the Delhi
High Court had previously directed Ericsson and Micromax to try to reach a settlement. If
there is no settlement by the date of the next hearing (November 23, 2015), the court will
proceed to give its orders.

10. Ericsson vs. Lava

Ericsson sued Lava over its standard essential patents relating to AMR, GSM and EDGE
technologies. The matter was first heard in court in March 2015. Both companies tried to
negotiate a FRAND agreement but failed. Subsequently, the Delhi High Court decided in
April 2015 and later in May 2015 that the case would be heard on its meritshttp://cis-
india.org/a2k/blogs/compilation-of-mobile-phone-patent-litigation-cases-in-india - _ftn68.
The next hearing is scheduled for October 29, 2015.
Lava Mobiles, a manufacturer of mobile devices such as smartphones, feature phones and
tablet PCs, is headquartered in NOIDA, India. As per information published on its website, it
has testing facilities in China, and “is the only Indian mobile handset brand in the country to
have invested in research and development”. The website also states that Lava’s revenues in
the fiscal year 2013-14 were approximately Rs. 29,090 million.

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