UNDERSTANDING THE REGIME OF DILUTION IN TRADEMARK LAW

RESEARCH PAPER

INTELLECTUAL PROPERTY RIGHTS I

SUBMITTED TO SUBMITTED BY

SHALIKA HEREZ SHRUTI GUPTA

FACULTY, INTELLECTUAL PROPERTY RIGHTS SEMESTER VI-B

ROLL NO. 719

NATIONAL UNIVERSITY OF STUDY AND RESEARCH IN LAW, RANCHI

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 INDEX

1. STATEMENT OF RESEARCH PROBLEM………………………………………..3

2. LITERATURE REVIEW………………………………………………………..3
3. RESEARCH QUESTIONS……………………………………………………....3
4. RESEARCH METHODOLOGY…………………………………………………4
5. CONTENT
Introduction……………………………………………………..…………..4
Background of the Doctrine
What is Trademark?..............................................................................5
Violation of Trademark and Emergence of Dilution Doctrine………5
Dilution In India
Position before Trademarks Act, 1999……………………………….6
Trademarks Act, 1999…………………………………………….…..6
Standard of Dilution…………………………………………………..6
Types of Dilution……………………………………………….…….6
Criteria of Dilution……………………………………………..…..…7
Relief…………………………………..……………………....…...…9
Exemption…………………………………………………….……..10
6. SUMMARY OF THE FINDINGS………………………………………………..10
7. CONCLUSION…………………………………………………………..……11
8. BIBLIOGRAPHY……………………………………………………….……..12

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 STATEMENT OF RESEARCH PROBLEM

The research is conducted to analyze the Doctrine of Dilution in Trademark Law with special
reference to the Indian Trademark Law i.e. Trademark Act, 1999 and its evolution with respect
to the American Legal Regime.

LITERATURE REVIEW

(i) W. Macias (2017) stated that the trademark dilution has a considerable effect on
purchase decision of the consumer and therefore it is important that the legislations
undertake responsibility to formulate legislation that creates minimum gap for the
disadvantageous interpretation of the statue. It is highly important of protecting well-
known trademarks in order to avoid damage occurring not only in consumer
perceptions, but also in firm's sales and brand financial value.
(ii) In their work Mark D. Janis and Peter K. Yu (2008) laid focus on the International
Comparative Aspects of Trademark Dilution and discussed at great length the
evolution of the Dilution Doctrine through the United States and the adoption of same
in the Indian Legal Regime and how the Indian courts have exercised care in defining
dilution and its grounds.
(iii) In his research C.H. Farley (2006) discussed the prevalence of confusion regarding
the Trademark Dilution Law. In the case of trademarks, the stated goal is to prevent
consumer confusion. The law achieves this goal by granting trademark owners
exclusive rights over a broad and indefinite subject matter for an indefinite term.
Thus, trademark law has a broader subject matter and duration than patent and
copyright law, but it is narrower in scope than the others.

RESEARCH QUESTIONS

(i) What is the role of Reputation in the Doctrine of Dilution of Trademark?

(ii) What are the probable challenges and ramifications in the practice of Dilution of
Trademark due to the legal lacunas?

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 METHODOLOGY

The present research is doctrinal as it is pertaining to the legal doctrinal, literary as it is based on
the different legal document, descriptive and analytical in nature. Secondary resources have been
relied upon to gather information and data about the concerned topic.

INTRODUCTION

Trademark is often cited as a badge of the source of origin of goods or services. It distinguishes
goods or services of a particular source from those of others.1 A consumer associates a trademark
with the quality of products and reputation of the company that is using it. Trademark primarily
performs the following functions:

 Distinguishing a particular seller’s goods from others.

 It indicates the origin of the goods i.e. a customer can identify the particular manufacturer
of a goods or services.
 Signifying quality of goods and advertisement of goods.
 Additionally, trademark protection aims to prevent the use of fraudulent marks

Under Trademark law, Dilution is a concept which entitles the owner of a famous mark to forbid
others from using that mark which may result in hampering in the unique quality of the mark. In
most cases, trademark dilution involves an unauthorized use of another's trademark on products
that have no relation or connection with those of the trademark owner. For instance, a famous
trademark used by one company to refer to hair care products might be diluted if another
company began using a similar mark to refer to breakfast cereals or spark plugs. Dilution is a
basis of trademark infringement that only applies to famous marks. With non-famous marks, it is
highly unlikely that a likelihood of confusion will be found in case of goods or services that are
dissimilar with the registered trade mark. A trademark can be a well-known trademark only if it
is reputed and is known to and recognized by consumers. It is not necessary that all reputed
marks would be accepted as well-known trademarks.

1
http://www.wipo.int/trademarks/en/

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 BACKGROUND OF THE DOCTRINE

WHAT IS A TRADEMARK?

Trademarks protects source identifications (marks of trade), which are used by manufacturers
and merchants to identify and distinguish their goods from those of competitors.2

VIOLATION OF TRADEMARKS AND EMERGENCE OF THE DILUTION DOCTRINE

The English common law is believed to be the source of trademark infringement and unfair
competition laws in the United States. The current federal trademark legislation is situated in the
Lanham Act, 1946.3 Unlike the other intellectual property rights, which derive from the Patent
and Copyright clause of the US Constitution, trademark law emanates from the Commerce
Clause and rests on a policy of protecting consumers from fraud and deceit. Trademark
protection was designed to shield consumers from being misled by the use of infringing marks
and also to protect producers from unfair practices.4 Federal trademark law protects against the
likelihood of confusion, and also protects the owners of a highly distinctive or famous mark
against dilution even if there is no likelihood of confusion. Trademark infringement forms part of
the broader law of unfair competition. Unlike the traditional trademark law which is rooted in the
concern for protecting consumers, dilution statutes aim at protecting and benefiting a seller’s
investment in the mark.5

The first instance in modern times of a court providing ‘likelihood of confusion’ remedy
in a non-competing product and service happened in England in 1898, in the case of Eastman
Photographic Material Co. v. John Griffiths Cycle Corp.6 In this case, the court allowed the
camera maker to successfully enjoin the use of ‘Kodak’ bicycles, even though they did not
directly complete with Kodak cameras. This case marked the first significant shift from
traditional trademark protection. Trademark dilution refers to conduct that lessens the capacity of
2
Anna Wong, Big Business in Their Belfry: Congress to Dumb Down Dilution, 6 LOY. L. & TECH. ANN. 43, 45
(2006)
3
15 U.S.C. §§ 1051-141 (2000).
4
Moseley v. Victoria CIN. L. REV. 945, 951 (2005)
5
Michael Adams, The Dilution Solution: The History and Evolution of Trademark Dilution, 12 DE-PAUL-LCA J.
ART & ENT. L. & POL’Y 143, 145 (2002).
6
15 R.P.C. 105 (High Courtt. of Justice, Ch. 1898)

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a famous mark to distinguish its goods or services. This conduct alters the public perception of a
trademarked product that over time can devalue a famous mark and mislead the consuming
public.

Federal Trademark Dilution Act, 1995 was the first uniform Dilution statute that extended the
scope of protection available to owners of famous trademarks, and offered a remedy where
traditional trademark infringement claims would fail. The relevant part of the Act provides: “The
owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms
as the court deems reasonable, to an injunction against another person’s commercial use in
commerce of a mark or trade name, if such use begins after the mark has become famous and
causes dilution of the distinctive quality of the mark.”7

DILUTION IN INDIA

POSITION BEFORE THE TRADE MARKS ACT, 1999

Prior to the 1999 Act, the trade mark law is India was governed by the Trademark and
Merchandise Act 1958. Section 47of the Act provided for defensive registration of well known
marks and passing off action. The test for such defensive registration is whether the mark has
become so well known that the use of it even in goods of dissimilar nature would be taken as
indicating a connection between the two. However, it is pertinent to know that the Trademark
and Merchandise Act did not define ‘well known trade mark’ and the concept was developed
through judicial precedents.

The concept of dilution was first dealt with in India in Daimler Benz Aktiegessellschaft &
Anr. v. Hybo Hindustan8 where the court held that, "In the instant case, "Benz" is a name given
to a very high priced and extremely well engineered product. In my view, the defendant cannot
dilute that by using of the name "Benz" with respect to a product like under-wears."

THE TRADE MARKS ACT, 1999

In India, statutory provisions relating to trade mark dilution is introduced only in the Trade Mark
Act 1999, which came into effect in 2003. The 1999 Act deals only a minor issue of protection

7
15 U.S.C. § 1125(c)(1)
8
AIR 1994 Delhi 239

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against dilution and thus, while dealing with the dilution law in India, it must be supplemented
with judicial precedent in order to conduct a complete study.

STANDARD OF DILUTION

Section 29(4) 9 of the Act introduces dilution as a basis of infringement. The Act did not
explicitly deal with the term ‘dilution’. It is important to note that Section 29(4) clearly intent on
establishing dilution of trademarks in connection with dissimilar goods or services. Simply put,
if the offending mark trades on the reputation of the famous mark or dilutes the reputed
registered trademark, the same has been recognized as constituting infringement.

TYPES OF DILUTION

The TMA, 1999 did not explicitly deal with the types of dilution. However, it can be inferred
from judicial precedents that India recognized three types of dilution i.e. dilution by blurring,
tarnishment and dilution under passing off. Passing off is the misrepresentation of goods or
services as being the goods or services of others.

CRITERIA OF DILUTION

For Section 29(4) to be applicable, the registered mark should have a ‘reputation’ in India. It is
only the reputed mark which have been extended the right to obtain relief for infringement in
relation to use of different goods or services. If the use of offending mark may dilute the
registered trade mark, the proprietor of registered trade mark can take steps that the similar
offending mark cannot operate in India. The extension of the right of trade mark in relation to
use of mark on different goods and services in Section 29(4) addresses the requirements of
article 16 of TRIPS10 and is a corollary to the right to opposition granted to well known trade
marks in Section 11(2).11

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Section 29(4) in The Trade Marks Act, 1999
(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way
of permitted use, uses in the course of trade, a mark which—
(a) is identical with or similar to the registered trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and
(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair
advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.
10
Article 16
Rights Conferred
1. The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the
owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical

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In Hamdard National Foundation v. Abdul Jalil 12 , the High Court, therefore, held that the
standard for deciding what amounted to trademark infringement in connection with dissimilar
goods and products was "likelihood of deception." In interpreting Section 29(4), particularly
taking unfair advantage of the senior mark causing injury or harm to it, the High Court relied on
Moseley13 decision of the US and concluded that to establish dilution, actual harm has to be
proved. Also, later Court followed the language of Section 29(4) and found that if the mark
enjoys a reputation in India, the plaintiff does not have to prove the defendant’s deception.14

In ITC Ltd. v. Philip Morris Products SA & Ors.15, The court emphasized that the following four
essential elements need to be established in order for a dilution case to succeed:

 The diluting mark is identical or similar to the injured mark;

or similar to those in respect of which the trademark is registered where such use would result in a likelihood of
confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the
possibility of Members making rights available on the basis of use.
2. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services. In determining whether a
trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of
the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of
the trademark.
3. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services which are not
similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those
goods or services would indicate a connection between those goods or services and the owner of the registered
trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such
use.
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Article 16
Rights Conferred
1. The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the
owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical
or similar to those in respect of which the trademark is registered where such use would result in a likelihood of
confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed. The rights described above shall not prejudice any existing prior rights, nor shall they affect the
possibility of Members making rights available on the basis of use.
2. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services. In determining whether a
trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of
the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of
the trademark.
3. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services which are not
similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those
goods or services would indicate a connection between those goods or services and the owner of the registered
trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such
use.
12
CS(OS) No. 1240 of 2004
13
Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003
14
Ford Motor Co. v. Mrs. C. R. Borman
15
2006(33) PTC 281

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  The injured mark has a reputation in India;

 The use of the impugned mark is without due cause;

 The use of the impugned mark amounts to taking unfair advantage of, or is 
detrimental
to, the distinctive character or reputation of the registered trade mark.

RELIEF

The Trademark Act, 1999 provide for an injunctive remedy in case of infringement by dilution.
Remedies were also sought through the law of passing off. It provides remedy against a person
who wrongfully passes off his goods as the goods of the trade mark owner. In Parker Knoll v
Knoll International, 16 the court observed that, the law of passing off aims at protecting the
goodwill and to ensure that purchasers are not exploited and dishonest trading is prevented and
for that the plaintiff must establish that his goods or services have acquired a reputation in the
market. Proof of actual damage is not necessary in passing off action. Further In N.R. Dongre v
Whirlpool,17 the court held that the words ‘subject to the other provisions of the act’ appearing in
Section 28(1)18 make it clear that the rights conferred on a trader was not an indefeasible right as
the same was expressly made ‘subject to the other provisions of the act’. The court also relied on
Section 27(2) of the Act and held that- registration of trade mark would be irrelevant in action of
passing off.

In Honda Motors Co. Ltd. v. Mr. Charanjit Singh and Ors 19, the court observed that,
"With the changed concept of the passing off action, it is now not material for a passing off
action that the plaintiff and the defendant should trade in the same field. Passing Off action is
supplementary and complimentary to infringement as it provides protection for both registered as
well as unregistered trademark. Prior to the 1999 Act, the unauthorized use of a well-known
trade marks in dissimilar goods or services are adjudicated by the law of passing off. Even after

16
[1962] RPC 265
17
1996 PTC (16) 583)
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28. Rights conferred by registration.—(1) Subject to the other provisions of this Act, the registration of a trade
mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark
in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of
infringement of the trade mark in the manner provided by this Act.
19
2003 (26) PTC 1 Del

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the 1999 Act, passing off action still holds a substantial portion while dealing with cases of
dilution.

EXEMPTION

Section 159(5)20 of the 1999 Act provides for an exemption clause. This provision renders the
new act incapable of having a retrospective effect. The section provides that a continuous use of
a mark, which was not considered as infringing mark under the old act, will not constitute
infringement under the new act. Thus, the old marks are exempted from infringement action.

SUMMARY OF FINDINGS AND SUGGESTIONS

The definition clause in Section 2(1)(zg) is ambiguous in the sense that it did not provide
factor(s) for determining whether a mark is well known or not. The Court in numerous ways can
interpret the wordings of the word and it may lead to conflicting decision. Therefore, a proper
guidelines or determining factor for well-known trademarks is required in order to avoid
inconsistency and ambiguity.

The ambiguity in the definition of well known trademarks has also upset the enforcement
provision of Section 11. Although recourse is taken to Sub section 6, 7 and 9 while determining
whether a mark is well known or not.

Section 29(4) is silent about bad faith adoption of a mark as a relevant factor in deciding whether
the act of the defendant amounts to dilution of well-known mark of the plaintiff.

According to Section 159(5) of the 1999 Act, an action of infringement is not applicable
retrospectively. The inclusion of this section creates loopholes in infringement issues. Under this
provision, if an infringing mark resurfaces after 2003, it would amount to trade mark
infringement although the continuous use of the trade mark would not be so. It also means that
the benefits under Section 29(4) will be inapplicable to old registered trademarks. Hence, the
very purpose of the section will be defeated.

The expression used in Section 11 and Section 29(4) is in conflict with each other i.e well known
marks and marks having reputation in India. A combine reading of the provisions reveals that the

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159. Repeal and savings.— (5) Notwithstanding anything contained in this Act, where a particular use of a
registered trade mark is not an infringement of a trade mark registered before the commencement of this Act, then,
the continued use of that mark shall not be an infringement under this Act.

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Indian law is silent on trans-border reputation. Marks having a global reputation are covered by
the passing off action only. Therefore, it is suggested that the term ‘marks having reputation in
India’ should be replaced by ‘well known marks’ widening the subject matter of protection to
marks having global reputations

CONCLUSION

No doubt dilution doctrine is recognized in both the countries for decades, the concept is
relatively young especially in India. The analysis of the legal position in both the countries reveal
that both countries give due importance to dilution law and protection of distinctive trade mark
against undue advantages. However, no legislation can be perfect from its inception and there is
always scope for improvement. I believe that by adhering to the suggestion mentioned above, the
laws on dilution would be much more effective in eliminating duplication of trademarks and
more efficient in its implementation.

The Indian laws fall short in dealing with various scopes of dilution efficiently. It is
suggested the vacuum in relation to dilution law viz., inter alia definition and conflict between
well-known trademarks and reputed marks. It is further opined that an independent legislation,
which deal extensively with the suggestion mention above, is the needed in India in order to
effectively adjudicate dilution case.

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 BIBLIOGRAPHY

[1] http://www.wipo.int/trademarks/en/

[2] William H. Browne, A Treatise on the Law of Trade Marks (1885), p. 14

[3] J. T. Me Carthy, Trade Marks and Unfair Competition (1973), p. 86

[4] Dr. J. K. Das, Intellectual Property Rights

[5] Shredded Wheal, (1940) 57 RPC 137 at 149

[6] Smith Kline’s Appln (1976) RPC 511 at 538

[7] Bass v. Nicholson (1932) 49 RPC 88 at 111 (HL)

[8] United States v. Steffens, 100 US 82 L. Ed. 550 (1879)

[9] Meghraj Biscuits Industries V. Commissioner of Central Excise (2007) 3 SCC 780

[10] Shwetasree Majumder, Fidus Law Chambers, Uttar Pradesh, India; Eesheta Shah, Nabarro
LLP, London, UK; Sujata Chaudhri, Cowan Liebowitz & Latman, P.C., New York, New York,
USA; Mahua Roy Chowdhury, Solomon & Roy, Mumbai, India, Indian Trademark Law: A
Comparison with EU and U.S. Laws, INTABulletin (The Voice of International Trademark
Association), Vol. 65 No. 7, April 1, 2010

[12] Lakshikant Patel v. Chetanbhat Shah, 2002 SC 275

[13] Article 4 of CTMR

[14] Rule 3 of CTMIR

[15] An overview of conditions for registration and scope of protection for various trade mark
categories under comparison from the perspective of the CTMR
(http://euipo.europa.eu/en/office/ejs/pdf/von_Kapff.pdf)

[16] Hardie Trading v. Addison Paints, 2003 (27) PTC 241

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[17] Vulcan v. Palanichamy, AIR 1969 Cal 43

[19] Daimler Benz Aktiegesellschft, AIR 1994 Delhi 239

[20] Section 2 (h), Trade Marks Act, 1999

[21] Dr. J. K. Das, Intellectual Property Rights

[22] Sarda Plywood Industries Ltd. V. Deputy Registrar of Trade Marks, 2007 (34) PTC 352
(IPAB)

[23] Article 15, CTMR

[24] Article 38 (2), CTMR

[25] An overview of conditions for registration and scope of protection for various trade mark
categories under comparison from the perspective of the CTMR
(http://euipo.europa.eu/en/office/ejs/pdf/von_Kapff.pdf)

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