Trademark Dilution: Meaning and Application

The Trade Marks Act of 1999 was enacted as a replacement for the Act of 1958, which was repealed by parliament in order to improve the protections afforded to trademarks for both products and services and to discourage the use of counterfeit or otherwise deceptive marks. Trademark dilution was established with the passing of the Trademarks Act in 1999.

What is Trademark Dilution?

Trademark dilution is a legal concept that refers to the weakening or lessening of the capacity of a trademark to identify and distinguish the goods or services of a particular company. Dilution can occur when a third party uses a mark that is similar or identical to a famous mark in a way that creates confusion or diminishes the distinctiveness of the famous mark.

Trademark dilution is a cause of action that is available to the owner of a famous mark, to prevent third parties from using similar or identical marks in a way that dilutes the distinctiveness of the famous mark. Or in other words, it is a principle of trademark law that allows the owner of a famous brand to prevent others from making use of that mark in a manner that would dilute its distinct character.

The majority of instances of trademark dilution involve the unauthorised use of a third party's trademark on items that are not in direct competition with those of the trademark owner and have just a passing similarity to those products. For instance, the reputation of a renowned trademark that is used by one firm to refer to electrical devices may be harmed if any other company starts to use it for referring to breakfast cereals or hair care products.

Different Methods of Diluting a Trademark

Dilution may result in two different kinds of damage: "blurring" and "tarnishing.

• Blurring − This occurs when a third party uses a mark that is similar to a famous mark in a way that causes the public to associate the two marks, thus diminishing the distinctiveness of the famous mark.

• Tarnishment − This occurs when a third party uses a mark in a way that harms the reputation of a famous mark. For example, if a company uses a mark in a way that is offensive or creates negative associations, it can tarnish the reputation of the famous mark.

• Free-riding − This occurs when a third party uses a mark that is similar to a famous mark to benefit from the goodwill and reputation associated with the famous mark, without having to invest in the same level of advertising and promotion.

Doctrine of Dilution

The practice of dilution was first acknowledged by Indian courts in the early 1990s. This was done without offering any consideration of the doctrine in the decisions that they made. It was not included in the previous legislation, known as the Trade and Merchandise Marks Act of 1958. Incorporating the concept of dilution into a legislation for the very first time was made possible by Section 29(4) of the Trademarks Act, which was passed in 1999.

The court first articulated what is now known as the concept of dilution very early on, much before the Act that gives it its globally acknowledged stature. In the case of Daimler Benz Aktiegesellschaft vs. Hybo Hindustan, one of the questions that a single court was tasked with deciding was whether or not the defendant was permitted to use the mark "BENZ" on underpants. It is an intriguing fact to learn that the Honorable Judge utilised the law of dilution without ever uttering the term "dilution."

Furthermore, in International Trade Commission v. Philip Morris Products case, the dilution of a trademark in India is examined thoroughly and clearly. The Court, citing subsection 29(4) of the Trade Marks Act of 1999, ruled that a dilution cause of action is considered to be created if the following prerequisite conditions are met −

There is a high likelihood that consumers would confuse the impugned mark with the well-known mark.

In India, a reputation may be earned either by having a well-known mark or an injured mark. The use of the contested mark is not warranted for any reason.

Taking unfair advantage of the distinctive character or repute of the registered trademark by using the challenged mark is equivalent to doing harm to either of these aspects of the brand. ITC's defeat at the hands of Philip Morris was directly attributable to the presence of the "Namaste" mark on the company's cigarette packaging.

However, infringement of a trademark in the form of dilution will only arise, in accordance with section 29(4) of The Trade Marks Act, where the person uses the mark in a manner that is −

• A registered trademark that is identical to or very similar to another brand that already has a reputation in India and

• The use pertains to a product or service that is not included in the registration's scope of coverage.

Consequences of an Infringement

The following are the consequences of an infringement, which occurs when it is discovered that the infringing mark was used −

• When a person takes unfair advantage of a well-known mark or one that has a distinguishing quality about it.

• When the mark is damaging to the reputation of the distinguishing mark or the renowned mark.

What is Not Considered as a Trademark Dilution?

The following will not be considered a dilution of the claim −

• Any legitimate use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another individual other than as an identification of source for the individual's own products or services, including use in conjunction with

• Advertising or marketing that gives customers the opportunity to compare different products or services; or

• The act of identifying a famous mark and then parodying, mocking, or otherwise remarking about the owner of the famous mark or the products or services.

• Any and all types of reporting on the news, as well as opinion on the news.

Conclusion

Even if it is not a legislation that is focused on the customer, it has to be publicly embraced in Indian trademark law. A separate piece of law is not required; rather, it is recommended that revisions be made to the Trademarks Act of 1999. These changes should be sufficient, and they may even be an improvement. The amendment to Section 24 will modify the scope of the provision so that it will no longer recognise all marks with reputation but will instead only cover renowned marks, excluding marks that are just 'well-known' in the process. It is possible to establish a particular criterion for assessing whether or not a mark is renowned, such as the one that is found in the TDRA. This criterion is to be investigated.

FAQs

Q1. Where burden of proof lies on the trademark dilution cases?

Ans. As far as the burden of evidence goes, it is up to the person who is using the renowned mark to demonstrate that there been genuine dilution. A sufficient answer would be the likelihood of dilution. However, the person who uses the famous mark should be the one to bear the responsibility of establishing that the mark is, in fact, famous.

Q2. What are the two kinds of damages that dilution results in?

Ans. Dilution may result in two different kinds of damage: "blurring" and "tarnishing."

Q3. What information may be found in the Registery of Trademarks?

Ans. The trademark, the class and goods or services in respect of which it is registered, including particulars affecting the scope of registration of rights conferred, the proprietors' address, particulars of trade or other descriptions of the proprietor, the convention application date (if applicable), and where a trademark has been registered with the consent of the proprietor of an earlier mark.