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Contributory Infringement And Secondary Liability In Trademarks



This Article is written by SALONI GAUTAM from JIMS School of Law


In 2000, WIPO’s member states designated April 26 – the day on which the WIPO Convention came into force in 1970 – as World IP Day with the aim of increasing general understanding of IP.

Since then, World IP Day has offered a unique opportunity each year to join with others around the globe to consider how IP contributes to the flourishing of music and the arts and to driving the technological innovation that helps shape our world.1

INTRODUCTION

Essentials required for a living have been changing with the development of human beings, which has gradually resulted in having trading facilities. The existence of various players offering similar products could have led to confusion among the consumers and hence symbols and words were used to create a distinction among the various players offering similar products. These combinations of symbols and words are now known as “trademarks”. 

The trademark not only helps the consumers to distinguish among the competitors but also gives the competitors an advantage over others as the goodwill of the product can be determined when the consumers can differentiate among various products. 

According to the definition given in Trademark Act, 1999 under S. 2(zb), – 

“Trademark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging, and combination of colors; and— 

  1. in relation to Chapter XII (other than section 107), a registered trademark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and 
  2. in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person and includes a certification trademark or collective mark;

While discussing the definition of a trademark, it is also important to understand the instances when the use of a certain trademark is considered as infringement and is punishable under the Trademark Act, 1999. Infringements can be termed in simple words as unauthorized use of a mark or an identical/deceptively similar to a registered trademark. Deceptively similar marks can be understood as marks that create confusion among the general consumers about the players manufacturing/providing the goods and services.

Various types of infringements given under the Trademark Act, 1999 are given as follows:

Direct infringements

Direct infringements have been dealt with under S. 29 of the Trademark Act, 1999. The Section is divided into 9 clauses where the first clause defines the infringement of trademark, the second clause talks about the infringement by an unauthorized person, the third clause talks about the intention to create confusion about the usage of the trademark, the fourth clause talks about infringement for taking advantage of the goodwill of the registered trademark, the fifth clause talks about what is deemed as an infringement of trademark, the sixth clause talks about specified usage for infringement, the seventh clause makes it clear that when the trademark is used at any place apart from where the authorized person is duty-bound to apply for the trademark then it will be considered as trademark infringement, eight clause talks about infringement of trademark by using it for unfair advertisement/defaming it, the ninth clause deals with infringement of trademark consisting of the symbol as well as words.

Direct infringements can be understood with the example of Bisleri. The packaged water company has a considerable amount of market share in the drinks industry and has many counterfeits available in the market having names such as Bislery, Bilseri, etc.

Indirect infringements

The indirect infringements have not been directly given in the Trademark Act, 1999 but the concept of indirect infringement arises from the universal law principle and holds accountable not only the principal infringer but also anyone abetting or inducing the direct offender into infringement. There can be two types of liabilities in indirect infringements. 

(a) Vicarious liability  

Vicarious liability for infringement of trademark has been given under S. 114 of the Trademark Act, 1999, in which not only the principal infringer is made liable for the infringement but also the whole company is made vicariously liable for the acts of the employee who is the main infringer. The basic elements for making a company vicariously liable are: 

  • Control over the activities of the principal infringer.
  • Knowledge of infringement and contribution.
  • Deriving financial gains from infringement.

The only exception for the vicarious liability is acting in Good Faith.

(b) Contributory infringement

The concept of contributory liability, in general, is to punish the people who have contributed in any wrong act/omission punishable by law. In the world of intellectual properties, the requirement of punishing the contribution becomes even more necessary as the infringement may result in huge losses. The elements required for proving contributory infringement are:

  • Knowledge of infringement,
  • Material contribution leading to infringement,
  • The inducement for the infringement to the principal infringer.

There is no exception for the contributory infringement as the person cannot act in good faith while contributing to infringement.2

These secondary infringements have been a serious concern for the Intellectual property holders as the number of internet users has increased rapidly in the last two decades and with the number, the risk of infringements has been increased rapidly. The direct infringers can avoid liability of selling counterfeits as it’s easy to mask the identity over the internet.

The search engines cannot be held responsible for the secondary infringement as they cannot be proved to have direct financial gain from the infringements. Search engines have various websites to accommodate and hence the search engines cannot be proved to know about the infringement.

As the difficulty in stopping counterfeiters on the Internet continues, intellectual property owners will continue to try to expand the boundaries of secondary liability by suing parties involved in some manner in the sale, advertising, payment, shipment, or other activities relating to such goods. As a result, the law of secondary liability will continue to be unsettled for some time.3


Footnotes

  1. https://www.wipo.int/ip-outreach/en/ipday/
  2. https://cleartax.in/s/trademark-infringement-india
  3. https://www.lrrc.com/files/Uploads/Documents/M.%20McCue%20Utah%20Cyber%20Symposium%20SECONDARY%20LIABILITY%20Sept%2023.pdf

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