Copycat threat to goodwill, trademark of legacy brands increasing

Small businesses violate trademark laws with deceptively similar brand names which not only confuses consumers, but also leads to production of fake goods resulting in huge losses to corporates

Brands must not only innovate continually to remain relevant and dynamic, but they must also prevent attempts by smaller businesses to use their equity and goodwill as leverage in sharp marketing strategies. When third parties and small businesses violate trademarks with deceptively similar brand names, it results in production of fake goods and significant financial losses for top corporate groups.

Data gathered from courts indicates that despite the fact that these legacy brands have always been vulnerable to intellectual property violations, particularly trademark infringements, these disputes appear to be increasing, reported The Times of India.

The adoption of the practice of recognising marks as ‘well-known’ in respect of specific goods by the Trade Marks Office since 2017 may be responsible for the rise. This opens the door for others to develop similar brands for unrelated goods or services.
 

In a recent trademark battle, for instance, Amul went to court to protect its trademark and stop another company from using the same brand for a non-competing product—candles.
 

Tata Sons, in another incident, has recently sued overseas trading entities HakunaMatata Tata Founders and Tata Bonus for infringement for engaging in the sale of a cryptocurrency labelled Tata coin.
 

According to legal experts, the recognition of "well-known" trademarks is a significant intellectual property right that a business acquires for its goods and/or services after broad and extended use and associations with quality and consistency in the minds of consumers.

The Amul brand, popular for its range of dairy-based goods, is renowned for its dependability, quality, and consistency. According to them, depending on the products they want to sell or the services they want to provide using this brand, enabling such unconnected parties to misrepresent and deceive the general public could have serious repercussions.
 

Furthermore, the top corporate groups including Godrej and Mahindra & Mahindra, as well as companies across sectors including Honda Motors, Biocon, Asian Paints, Mother Dairy, HUL, Castrol and Boroline are also facing similar problems.

According to experts, fast-moving consumer goods including biscuits, salt, soaps, detergent powder, tobacco and alcohol are primarily the most infringed products. 
 

A survey has revealed that the prevalence of fake and counterfeit goods ranges from 2-15 per cent in tier-1, -2, and -3 markets.

There are some parties who wilfully seek to openly utilise well-known trademarks as their own. When detected, they argue that there is no prohibition on using the owner's trademark in relation to a different product because it is for different items.

According to an industry expert, it is evident that such adoptions are carefully thought out given that the party wants to quickly increase its financial position and capitalise on the goodwill of the well-known brand. 
 

While talking to ToI, Suhrita Majumdar, a partner at law firm S Majumdar & Co highlighted that due diligence ought to be undertaken before using/applying for a business name/trading name and also a trade mark. She said, “Courts continue to acknowledge rights of an entity in its well-known trademarks even in respect of dissimilar/unrelated goods or services. However, after the Trade Marks Rules, 2017, the Trade Marks Office adopted the practice of recognising marks as well-known in respect of specific goods/services, which is contrary to the legal provisions. From the enforcement point of view, such recognition in respect of specific goods/services could be a deterrent, considering that third-parties would presume that such mark is free for adoption/use in respect of dissimilar/unrelated goods/services, defeating the purpose of the Act.”
 

A lawyer working for Tata Group told ToI, “We are very vigilant to protect the brand and IP against infringement. We also carry out criminal raids against counterfeit products carrying our brand names. Sometimes, certain group companies have approached the courts for blanket/collective orders for such infringers/ counterfeiters.”
 

In addition, corporations who suspect cross-border infringement not only protect their brands in other regions, but also pursue legal action against violators through the proper channels of commerce or through local offices.