This article has been written by Komal Agrawal, a motivated student pursuing B.A.LLB from KIIT School of Law, Bhubaneswar backed by practical experiences & court procedures.
Table of Contents
Whenever we discuss Trademark infringement, one must also be aware of remedies or in other words, defences available in the trademark infringements. And here comes the concept of fair use available as a defence to a claim of Trademark (hereinafter TM) infringement.
Legal doctrine defines fair use of a trademark as the “reasonable and good faith use of a descriptive term that is another’s trademark to describe rather than to identify the user’s goods, services, or business.”
Because not every use of a trademark is an infringement. Fair use, in the context of trademark, refers to the usage of someone else’s trademark in a way that it will not constitute infringing the owner’s rights on the user’s behalf. Therefore, the Lanham Act (also known as the Trademark Act) allows individuals & entities to use another’s a registered trademark to make Fair use of that mark under certain circumstances without having prior permission from the owner.
The fair use exception has been recognized throughout most of the world. Countries like Argentina, Canada, Hong Kong SAR, Malaysia and the Philippines often do not expressly refer to the doctrine of fair use yet recognize certain legal theories similar to that of fair use.
There are two types of fair use in trademarks: –
Normative Fair use
Classic fair use
Nominative fair use: – Nominative fair use happens in cases of independent retailers, comparative advertising & media coverage. It includes those cases where a party uses the owner’s trademark to refer to the owner’s genuine goods or services associated with the mark. Like, for example, when an auto repair shop says that it repairs Maruti Suzuki & Hondas. So, here it is using the mark ‘Honda’ to refer to the cars genuinely produced by the Honda Motor Company. It advertises that it does make repairs on those cars. Also, nominative fair use is permitted in the case of comparative advertising when a company refers to its competitor’s services for comparing that they provide services of better quality than that of the competitor company. Here the company is making nominative fair use of its competitor’s mark. For example, Horlicks comparing with that of Complan showing itself as a better & cheaper option than Complan, in terms of nutritional value & market price. Here, the fair use is termed as nominative because it ‘names’ the owner of the mark. The nominative fair use is permitted to that extent as is necessary to identify the good & services to which it is referring & shall not cause any likelihood of confusion as to any sponsorship or endorsement by the mark’s owner. Because the ‘fair use’ will dilute if there is any implication of sponsorship or endorsement by trademark’s owner. The burden is on the owner to show likelihood of confusion due to the usage of its mark.
In a famous case of Playboy Enterprises, Inc. v. Welles, Playboy Enterprises, Inc (PEI) filed a suit against Terri Welles for trademark infringement when she made a website containing several titles, headings & banners using the marks such as PLAYBOY, PLAYMATE, PLAYMATE OF THE YEAR 1981, PLAYBOY PLAYMATE OF THE YEAR 1981 & repeated use of abbreviation PMOY81 as watermark on the pages of the website. In this case, the court held that except for the repeated use of PEI’s protected terms in the wallpaper of Welles’ website, the use of mark by Welles does come under the ambit of nominative fair use & is therefore permissible. There’s no such implication of sponsorship or endorsement by PEI. Neither did it use PEI’s logo or any of its stylized font. Rather her website contained a disclaimer of any affiliation with PEI.
Classic fair use: – Classic fair use happens when someone else’s trademark is used to refer to the user’s goods or services rather than to indicate the source of goods or services that is from the owner. It is permitted when the trademark is used in good faith in its primary descriptive meaning and will not cause any confusion in the mind of an average consumer. This fair use is usually appropriate where the trademark concerned is descriptive, geographically descriptive or in other words describes a personal name, place or attribute of goods or services. For example, when a food related company adopted a descriptive name though differently spelled in advertising for its products as, ‘Hygrade food products’, the law does not prohibit others from using the term ‘high grade’ because of fair use & that the advertisement was used only to describe the product. Similarly, in a case WD-40 Company’s used the term ‘inhibitor’ which was found to be descriptive fair use of the registered mark THE INHIBITOR when used to describe a long-term WD-40 product. The owner while choosing a descriptive term must be aware of the fact that the other individuals & entities are free to use the term in its descriptive sense. But this in no way allows others to use someone else’s descriptive trademark as a trademark. Like in the above example, other companies cannot use the mark Hygrade food products as the name of their food brand.
In a case, a cosmetics company used the term SEAL IT WITH A KISS for their marketing where the customers were asked to use the lipstick in kissing a complimentary postcard & mail it to their loved ones. The company which owned the mark SEALED WITH A KISS filed a suit for trademark infringement. The court held that the company’s use of the said term was descriptive as it gives instructions as to how to convey your sentiments to the recipient of the card which is sufficient enough to qualify under the ambit of classic fair use.
Common situations which are considered fair use
Usage of a geographical name, for example, a city’s name by the user which relates to the user’s business location will be considered as fair use even if the name is similar to another’s mark. We have already discussed that fair use is permitted in cases of descriptive terms including name, place, kind, quality, quantity & others attributed of goods or services.
Using a trademark in a fictional work to identify or describe particular goods or services such as ‘eating a Hershey bar’ will not be an infringement as it does not cause any confusion in the minds of the reader as to the sources or who owns the trademark. But this normative use will be permitted as fair use only when it meets certain requirements: –
- The author’s use of the trademark must clearly describe the owner of the product’s mark.
- The use must be in good faith
- The trademark owners’ product or service should be one that cannot be identified without the use of the trademark.
- The author shall only use as much of the trademark as is necessary to identify the trademark owner’s product or services.
- It shall in no way suggest any kind of endorsement or sponsorship or collaboration with the owner of the mark.
Nor shall it cause any damage to the goodwill or loss in any other form to the owner.
One also needs to be aware of the lack of legal certainty to rely upon because the judicial pronouncements differ owing to different facts of different cases & therefore, decisions involving fair use in a particular case may appear contradictory to a decision in a different case.
Harpic v Domex Advertisement: –
Plaintiff: Reckitt Benckiser, a UK-based company has been selling the famous cleaner HARPIC in India since 2001.
Defendant: Hindustan Unilever Limited (HUL). Domex is one of its well-known brands.
The plaintiff contended that the defendant had launched a new ad campaign consisting of 5 advertisements all of which degenerate & defame the plaintiff’s toilet cleaner HARPIC. The 1st advertisement is a television commercial where the famous television actress, Ms Divyanka Tripathi explains that DOMEX contains fresh guard technology which eliminates toilet stink entirely which brands like HARPIC is unable to do. And the advertisement portrayed HARPIC as cleaner leading to a bad odour in the bathroom. The 3rd advertisement which is in print form makes a comparison & portrays DOMEX to be the preferred choice for fighting longer for bad smell. While the 2nd, 4th& 5th Advertisements are in the commercial form of youtube videos & posts on social media which show a bottle that can be clearly identified by an average user to be that of HARPIC & implies the same to be an ordinary toilet cleaner. As the shape of the bottle is registered as a trademark by the plaintiff, therefore, the defendant infringed the mark.
While the defendant contended that 1st advertisement only describes the special benefits of the product & does not defame the plaintiff’s product. 3rd advertisement is just an awareness medium to the users to let them know that defendant’s cleaner fights longer for bad smells & there’s nothing wrong with it. 2nd, 4th& 5th advertisements highlight the generic shape of the cleaner bottle & do not specifically refer to HARPIC.
The issue, in this case, was whether the advertisements degenerate or disparage the plaintiff’s product HARPIC?
The Hon’ble Delhi High Court referred to two important judgments while pronouncing the decision.
In the case of Colgate Palmolive Ltd v Hindustan Unilever Ltd, the Delhi High Court observed that disparagement occurs when an advertisement reprimands the product of others among the general public to gain popularity of its own product. The court held that “A trader can certainly compare the advantages of his goods over the goods of the competitor. What is prohibited is for the trader to say that his competitor’s goods are bad.” There should be a healthy competition.
In Dabur India ltd. v M/S Colortek Meghslaya Pvt. Ltd., the Delhi High Court determined the factors to be taken into consideration while deciding the claim of disparagement.
- What is the sole intention behind such an advertisement? This can be well taken from the message sought to be conveyed to an average consumer. An average consumer cannot be deemed to be ignoramus or fools & they can easily identify & detect the tactics used by advertisers to promote their brands.
- What’s the result of such an advertisement? Whether it helps in branding & promotion of advertiser or does it disparage or degenerate competitor’s product. It means whether it has a negative effect on a rival’s product.
- In which manner the advertisement was made?
Hence, referring to these judgments the Court made the following observations:-
As to the 1st advertisement i.e. television commercial, the court stated that the advertisement claimed DOMEX to be a better solution to remove bad odour & does not disparage the plaintiff’s product. No prima facie case is established against the defendant.
In respect to the 3rd advertisement i.e. in print form, an interim injunction was passed on following grounds:-
- The advertisement certified its product to be superior than that of plaintiff’s product thereby disparaging HARPIC branded product.
- The advertisement prima facies establishes defendant disparaging plaintiff’s product
As to the 2nd, 4th& 5th advertisements i.e. youtube & social media videos, the bottle displayed in advertisements is prime facie deceptively similar to that of the plaintiff’s registered marks. And the advertisements were very clearly trying to highlight that the bottle of cleaner being portrayed in the advertisement is ordinary cleaner & fails to remove stains & bad odour, thereby, degenerating & disparaging the plaintiff’s product.
In this case, the court passed an injunction from publishing advertisements (print & social media) on any platform & favoured the defendant’s liberty to advertise in television commercials.
Therefore, the Indian courts have repeatedly from time to time through their judgments/pronouncements held that advertisement is an indispensable part of commercial speech under Article 19(1)(a) of the Indian Constitution & that the free flow of commercial information is necessary. But any manufacturer cannot disregard, defame, degenerate or disparage the trademark of his competitor to promote its own brand vis advertisements which are misleading & deceptive.
It is pertinent to note that the courts never failed to give greater importance to consumer interest. In the case of Colgate Pamolive (India) Ltd. v. Anchor Health and Beauty Care Pvt. Ltd.,
the Delhi High Court observed that a case of disparagement occurs when an advertisement tried to berate or admonish the product of others in order to promote & increase the popularity of its own brand by representing it in the general public.
Section 29(8) of the Trade Marks Act, 1999 clearly states that a registered trade mark is said to be infringed by any advertisement of that trade mark if such advertising takes unfair advantage or is detrimental to its distinctive character; or is against the reputation of the trade mark.
Henceforth, in the above case, the defendant tried to disparage the plaintiff’s product through its 4 respective advertisements while the television commercial was not deemed to disparage the product.
So, the question here arises whether the defendant can claim defence on grounds of nominative fair use?
Referring to the provisions of the TM Act, 1999,
Section 30(1) of the Act authorises the use of a registered trademark for the purpose of identifying goods or services of the competitor but such use must be in accordance with honest practices in industrial or commercial matters without any intent to take unfair advantage of the competitor’s goodwill or reputation in the market.
Under section 30 (2)(d) of the Act, nominative fair use by another party won’t qualify for infringement if neither the purpose nor the effect of the use of the trade mark is to indicate or causes any confusion as to trade origin.
In the case of Consim Info Pvt. Ltd. v. Google India Pvt. Ltd., the Madras High Court held that any unauthorised use of a registered trademark must meet the following 3 conditions to be eligible to come under the defense of nominative fair use: –
- The trandemark owner’s product or service must be difficult to identify without the use of the mark.
- The use of mark should be to the extent as is reasonably necessary to identify the product or service.
- The use shall in no way suggest any sponsorship or endorsement by the trademark owner.
In the above case of Harpic v. Dolmex, there is undoubtedly no suggestion or inference that can be drawn as to sponsorship or endorsement. But, it is not difficult to identify DOMEX without referring to the mark HARPIC. Or we can say that the purpose of the advertisement by DOMEX to present itself as an odour remover could have been achieved without giving reference to the HARPIC mark. Therefore, the defence of nominative fair use is not available with Hindustan Unilever Limited (HUL).
Playboy Enterprises, Inc. v. Welles, 279 F.3d 796 (9th Cir. 2002)
2013 (SCC) Online Del3186
2010 (42) PTC 88 (Del)
108 (2003) DLT 51
2013 (54) PTC 578 (Mad)