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Potential Pitfalls In Trade Mark Adoption And Usage

In this era of fiercely rising competition, companies endeavor to outshine by imploring and hinging upon various strategies, the most prominent of which is trade mark adoption. Adoption of a trade mark serves as a tool to gain an edge over competitors. Companies have been seen to be dependent upon brands to achieve unmatched success.

Marketing departments of companies often tend to give approbation to marks that can be easily associated with the underlying product or service by the general public. This, however, is not the most ideal situation since the principles of law governing trade marks are exactly perverse.

Section 9 of the Trade Marks Act, 1999 envisages absolute grounds for refusal of registration to marks which are devoid of distinctiveness; which are descriptive as to denote the quality, characteristics, nature, etc. of the underlying product or service; and which are comprised of elements which have become customary in the current language or in the bona fide and established practices of trade, unless the applicant is able to prove that such a mark has acquired distinctiveness as a result of its use or has become well-known.

Companies usually encounter challenges in this aspect broadly on two occasions:

Firstly, at the initial stage, when companies are at the brainstorming stage of developing the brand or brand image. They tend to adopt terms that can easily be associated with the underlying product or service by the public or consumers. Choosing a term closely associable with the respective product or service itself or from a layman's jargon often appears to be a viable option as marketing the same becomes effortless and such a term catches the public eye. Such adoption paves hurdles for companies at the scrutiny stage of trade mark registration.

Secondly, at a later stage, owing to the immense popularity of a trade mark, it becomes readily identifiable with a particular type or class of goods or services meaning thereby that the trade mark in question starts drawing inference to the type or class of goods or services it represents and becomes generic in nature.

Courts in India, have, in the past been seen to be reluctant to accord exclusive statutory protection to marks that are found to be foul of the absolute grounds for refusal in Section of the Trade Marks Act, 1999. In fact, in June 2020, the Madras High Court exhibited its reluctance to accord exclusive statutory protection to the phrase 'Magical Masala' by holding that both the terms whether used together or independently are laudatory and commonly used in trade, primarily in the culinary and packaging food industry and therefore, cannot be monopolized by one entity.[1]

The Delhi Court, in a battle of rival trade marks- Delhivery and Deliver-E[2] has observed that both the marks are tweaked forms of the dictionary word 'delivery' where the former incorporates the letter 'H' and the latter has a substitution of the letter 'Y' with '-E' and both in essence connote delivery services. Further, it has been held that the mark "Delhivery is a phonetically generic word, cannot be registered as as to seek benefit of statutory rights."

The Court cited the decision in Praveen Kumar Jain v. Rajan Seth & Ors., wherein it was held that, "if the registrations are wrongly granted when applied for in respect of a completely generic expression, the Court cannot ignore the generic nature of marks and confer monopoly on the same in favour of any party." [3]

Takeaways for companies:

  • It is advisable for companies to adopt marks that are distinctive, meaning thereby, the marks may comprise coined terms, stylized elements, unique features, varied color combinations, thoughtful placement of elements in the layout, motion marks, and the like. In case the adoption of descriptive or generic terms is of utmost necessity for a company's business reasons, one effective strategy could be to use such a mark along with the company's flagship or house brand.
     
  • Since the onus of strategizing for an attractive brand image is usually vested with marketing teams of companies who tend to adopt generic terms or even descriptive or laudatory terms as trade marks, it is quintessential that the marketing and legal departments of companies work in consonance and the latter makes the former abreast of potential pitfalls in such adoption.
     
  • Advertisements promoting the brand should aim not only at popularising it but also at creating a distinguished association of the respective brand to its product or service. For example, The US real estate company called Compass has the tagline, Let us guide you home.. Another example is MasterCard, which uses the tagline, There are some things money can't buy. For everything else, there's MasterCard. This would help in preventing the trade mark from becoming generic in nature.
     
  • The foremost goal of any company while creating its brand is to bolster its trade mark to an extent where the general public starts associating that product or service with its trade mark alone. However, the same needs to be done very carefully so that the public does not start perceiving the trade mark as the product or service itself. Thus, to prevent such a scenario, a company may embark upon educating the public with various means of rebranding strategies, awareness campaigns, etc.

End-Notes:
  1. ITC Ltd. v. Nestle India Limited (Judgement dated June 10, 2020, in CS No. 231 of 2013)
  2. Delhivery Private Limited v. Treasure Vaze Ventures Private Limited (Judgment dated October 12, 2020, pertaining to I.A. 5109/2020 and 6572/2020 in CS(COMM) 271/2020)
  3. Praveen Kumar Jain v. Rajan Seth and Ors. 2019 SCC Online 8499

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