The Sports Law & Policy Centre | Ambush Marketing and Indian Law – Learning Module
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Ambush Marketing and Indian Law – Learning Module

In this learning module, we describe and summarise the current state of Indian law on “ambush marketing”, analysing the applicability and adequacy of available remedies with respect to such “ambush marketing.”

Trademark Law

Under the Trade Marks Act, 1999, a trade mark may be registered or unregistered. By registering a trade mark, the registrant is granted: (i) title to the mark established, which enables the trade mark owner to avoid proving his title against any infringement of the mark, (ii) the exclusive right to use the registered trade mark in relation to the goods or services in respect of which the trade mark is registered, and (iii) the right to obtain relief in respect of  infringement of the trade mark.

In order to register a trade mark, the applicant must be able to display the “distinctiveness” of such mark. This is essentially a quality in the trade mark which earmarks the goods marked as distinct from those of other products or goods. A trade mark devoid of any distinctive character or a trade mark “deceptively similar” to an existing trade mark will not be registered. Generic words and those in common descriptive usages are not considered sufficiently distinctive and ought not to be the subject matter of a trademark registration.

In the trade mark infringement analysis under Indian law, the key determinant is the “likelihood of confusion” in the mind of the customer. Further, where a registered trade mark is infringed, the following elements must be present to constitute an infringement of the trade mark:

(i) use of a registered trade mark by a person other than its registered proprietor or registered user

(ii) use either of the whole of the registered trade mark or an adapted one by making a few additions or alterations

(iii) use of such infringing mark in relation to the regular trade of the registered proprietor or user

(iv) the infringing trade mark is identical or similar to the trade mark already registered

(v) the likelihood of causing confusion on the part of the public; and

(vi) advertising of the registered trade mark in such advertisement takes unfair advantage of and is contrary to honest practices in industrial or commercial matters.

As the court stated in ICC Development (International) Ltd. v. Arvee Enterprises and Anr., albeit in the context of passing-off, in order for a plaintiff to find success an “ambush marketing”infringement claim, it is crucial for him to show that there was a “likelihood of confusion” in public mind that defendants were sponsors or licensees of the World Cup.

Additionally, the issue of the “nominative fair use” defence to a trademark infringement action must be considered. The registrant of a trade mark is not granted the right to limit the bona fide use by an unlicensed third party of his trade mark to describe the character or quality of the trade mark registrant’s goods or services. Accordingly, where a defendant uses a trade mark to describe the plaintiff’s product rather than its own, a fair use defence is available provided that the product or service in question is not identifiable without using the trade mark, that only so much of the mark or marks are used as is reasonably necessary to identify the product or service and that the defendant has not done anything that would suggest a sponsorship or endorsement by the trade mark holder.

Passing-Off

According to the Trade Marks Act, 1999, no person is entitled to institute any proceedings to prevent or to recover damages for the infringement of an unregistered trade mark. However, the Act, while recognising this principle also provides that nothing in the Act is deemed to affect the rights of action against any person for passing-off goods or services, as the goods of another person, as services provided by another person or any available remedies. A passing-off action is thus maintainable under the law of tort or common law of right.

An action for the tort of passing-off involves a combination of two elements:

(i) That certain names were distinctive and related to a party’s goods; and

(ii) That a third party’s use of the name was likely to deceive and thus cause confusion and injury to the business reputation of the former party.

In an action for passing-off, the onus lies upon the aggrieved party to establish the existence of the business reputation sought to be protected. Further, in a passing-off action, fraud is not a necessary element and therefore the absence of “intention to deceive” is not available as a defence.

The vital element in passing-off cases is the probability of deception. This may depend upon a number of matters as well as the question of similarity of the marks or of the get-up. Legal precedent in India shows that courts may summon witnesses to prove the circumstances and the places in which the articles are sold, the classes of persons who buy them and whether they include persons who are illiterate or ignorant or the reverse, the manner in which the public is accustomed to ask for the articles and other similar considerations.

The protection afforded to unregistered marks is also extended to foreign marks, which have a reputation in India on the basis of extensive advertisements and publicity and based on the fact that the same mark was in use in a number of other geographical regions around the world. Indian courts recognise the existence of trans-border reputation and grant injunctions in cases where a third party attempts to derive economic benefit from the reputation established in a particular trade by another.

The test to be applied in such matters is as to whether “a man of average intelligence and of imperfect recollection would be confused.” If the goods are not similar and the trade names, logo, colour scheme, etc., used are not likely to cause confusion in the minds of the customers, no injunction to restrain the use of the trade name will be granted, because there cannot be any monopoly in the use of the trade name in respect of the goods falling in different classes.

Misrepresentation and loss or damage of goodwill are also essential elements for a successful passing-off action. In addition, the goods of the plaintiff must have acquired distinctiveness and must be associated in the minds of the general public as goods of the plaintiff.

The nature of activity and the market of consumption of the goods of the parties to the passing- off action must be the same. Moreover, the use of the same trade mark or trade name by thedefendant must be likely to injure the business reputation of the plaintiff.

In the context of “ambush marketing” it there must be a representation that the defendant’s goods are connected with the plaintiff in such a way as would lead people to accept them on the faith of the plaintiff’s reputation in order for a ‘passing-off’ case to be made. Therefore, for advancing a successful passing-off action in a case of “ambush marketing,” it is essential to prove the existence of confusion in the market, which misleads the members of the public into believing that the defendants are official sponsors or associated with the event and/or its sponsors.

Copyright Law

The Copyright Act, 1957 is the law in force governing copyrights in India. The nature of rights and the extent of protection conferred on the holder of the copyright depend on the nature of the holder’s work. Original literary, dramatic, musical and artistic works, cinematographic films and sound recordings are classes of works in which copyright subsists. The owner of a copyright enjoys the exclusive rights to reproduce, perform, publish, adapt or translate the copyrighted work and any such act undertaken without the license of the copyright owner would, generally, constitute copyright infringement.

Infringement, according to the Act, consists of two essential elements:

(i) There must be sufficient objective similarity between the infringing work and the copyright work; and

(ii) The infringing work must have been derived from the copyright work.

Indian courts have used the “Lay Observer” test to evaluate cases concerning alleged copyright infringement. This test relies on the belief that “If to the “lay observer” it would not appear to be reproduction, there is no infringement of copyright in the works.”

There are certain “affirmative defences” available to a defendant in the case of an allegation of copyright infringement. These exceptions include “fair dealing”, which covers private use, research work, review, criticism, etc.; “reporting of current events”, which constitutes reports of works in the various forms of publication; and “reproduction in connection with judicial proceedings.”

With respect to “ambush marketing,” the Delhi High Court case of ICC Development (International) Ltd. v. Ever Green Service Station recognised a limited role for copyright law in granting an injunction preventing the defendants from using the logo of the “ICC World Cup 2003” consisting of black and white strips and the mascot “Dazzler” holding these to be “artistic works” protected under Section 2(c) of the Copyright Act, 1957.

Based on the above, copyright law is acknowledged as being capable of providing a remedy in a limited set of instances of “ambush marketing,” i.e., where logos or other original works of authorship are used without license by third parties. This protection is available to original slogans that are considered as “literary works” under the Copyright Act, 1957.

The Emblems and Names (Prevention of Improper Use) Act, 1950

The avowed purpose of the Emblems and Names (Prevention of Improper Use) Act, 1950 is to prevent the improper use of certain emblems and names for professional and commercial purposes. The restrictions under the Act are with regard to:

(i) The improper use of certain protected emblems and names; and

(ii) The prohibition on registration of certain companies and other bodies, trade marks and designs as well as grant of patents that bear a title containing any protected emblem or name.

In order to be protected under this legislation, an emblem or name must be notified in the Official Gazette and included in the Schedule to the Act. The only sports-related emblem and name currently notified and protected are “the name and emblem of the International Olympic Committee consisting of five interlaced rings.”

Conclusion

This article has set out the major legislative regimes and remedies available for alleged instances of ambush marketing. At present, India has not enacted specific anti-ambush marketing laws and accordingly redress must be had to the Trade Marks Act, 1999, the Copyright Act, 1957, the Emblems and Names Act, 1950 and the common law notion of passing off. Given trends in the rest of the world whereby anti-ambush marketing law is increasingly viewed as a prerequisite for hosting nations, perhaps the time has come for a major legislative change in the area in India.

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