Beiersdorf A.G V. Ajay Sukhwani and Anr. - Delhi High Court Judgement answers some of the FAQs in TM Dispute

Recently, I came across a judgment passed by the Hon'ble Delhi HC in the Beiersdorf AG (owner of "Nivea") V. Ajay Sukhani and Anr., which perhaps, settles the legal position (at least for the time being) on some of the most often encountered TM disputes.

Facts

"Nivea" is a world renowned brand in the toiletries business (Class 3) and is owned by the Beiersdorf AG of Germany and has been registered in Germany since 1905. Ajay Sukhani (partner) runs an educational consultancy firm under the name and title M/s. Nivea International and also owned the domain name http://www.niveainternational.com/.

Beiersdorf filed a complaint with ICANN for transfer of the above said domain name under the Uniform Domain Name Dispute Resolution Policy and an order was passed by against Beirsdorf rejecting its complaint. Beiersdorf filed a suit for passing off and restraining M/s Nivea International from using a similar or deceptively similar trade mark and domain name as that of Beiersdorf.

Held

While granting the prayers of Beiersdorf and injuncting M/s. Nivea International; the Hon'ble Delhi HC has ruled as follows;

1. On the issue of Res Judicata arising out of the decision of ICANN; Finality is not attached to the decision of the administrative panel. For res judicata to apply, the decision between the parties should have attained finality. Civil suit is maintainable before and after administrative proceedings. It is also not possible to accept the contentions of the Defendants that the decision of the administrative panel is an award.
2. Plaintiff enjoys goodwill and the word "Nivea" is recognised and accepted by the general public as associated with the Plaintiff.
3. To succeed in a suit for passing off, it is not necessary that both parties should be in the same line of business. The test is not whether the parties are in the same or connected line of business but whether there is likelihood of confusion or the Defendant has tried to mislead.
4. Actual damage need not be proved. Possibility of damage is enough.
5. When there is a dishonesty or fraud in the initial adoption of trade name, plea of laches and delay normally is rejected. If the initial adoption itself is mala fide and tainted, it does not become valid and legal with passage of time.

Toshiba sues Moser Baer in US

This one promises to be one of the biggest patent battles ever fought, perhaps as big as Eastman Kodak Company v/s Polaroid Corporation. Japanese electronic major Toshiba has sued Moser Baer of India and host of other Taiwanese, American recordable DVD manufacturers for alleged infringement of its patents.

Toshiba, in the US District Court for the Western District of Wisconsin, alleges that these companies do not have a licensing agreement with it for patents that are essential for meeting DVD format specifications.Toshiba is seeking monetary damages and also an injunction to prohibit production, import, sales or other disposal or use of the named products in the US.

Moser Baer has revolutionised the Indian Home Video market by introducing competitively priced DVDs/VCDs. It has also entered into deals with the leading producers in Bollywood which give Moser an access to huge content repertoire. Moser introducing competitively priced DVDs was also seen as an effective ploy to beat piracy. In the absence of any interim order so far, it is unclear as to what bearing the present law suit will have on the DVD business of Moser in the immediate future.

Will try and bring you more details on this in the days to come. Keep watching this space.

What if you have to pay for using :-), ;-), ;) or :) ??!

Surprised, shocked or just finding it funny? Trust me, my reaction to this was no different. Recently, I read that a Russian businessman, Oleg Teterin (he runs mobile ad company called Superfone) has indeed succeeded in obtaining Trade Mark registrations from the Russia's Federal Patent agency for a range of sequences using colon, semi-colon, hyphen and closed parenthesis. Not just that, Oleg claims, now that he has obtained TM registrations for ;-), :-).;) and :), any usage of colons,semi-colons, hyphens in any manner, to express emotions could also amount to an infringement of his registration.

Oleg proposes to be nice to millions of individual users and make only the companies using emoticons to pay for their usage. It is also reported that he proposes to charge a fee close to $10k from these corporate users towards an annual license.

Well, its questionable whether Oleg will succeed in extending his registrations to the rest of world, but the internet users and lawyers dealing with the IPRs are obviously not too pleased with the manner in which the Russian Federal Patent agency has dealt with this TM application. The Agency is drawing flak from the entire geek community for what seems to be an absurd grant of TM registration.

This trade mark registration of emoticons is questionable on the following grounds;

• The trade mark laws across the world define trade mark to mean any sign capable of graphical representation which is capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings. In this case Oleg does not use these emoticons to distinguish his goods/services from that of others. Even if he does, it is questionable as to what extent they serve the purpose and consequently meet the essential requirements of a TM. Therefore, this TM registrations should not have been granted in the first instance. It is pertinent to note that Despair Inc (of USA) in 2000 itself was successful in obtaining a registration for :-( from the US PTO. But the distinction here is that Despair Inc was using the TM to identify its services unlike Oleg.
• Further, the emoticons have been in usage from 19th century; one Scott Fahlman, of Carnegie Mellon , claims that he was the first to use three keystrokes _ a colon followed by a hyphen and a parenthesis _ as a horizontal "smiley face" in a computer message.
  

Interestingly, in 2001 Despair Inc, it filed a law suit in a U.S. District Court in Dallas, alleging trademark infringement against over 7 million individual Internet users. The company also requested for separate injunctions against each of them. It was believed to be the largest single trademark dispute in history. These 7 million individual internet users were listed by monitoring their usage of :-( over a period. However, the public outrage against this worldwide made Despair Inc to withdraw this law suit and post an apology on their website.

For now, there appears no immediate threat for the users of emoticons unless the EU and US TM authorities encourage any such moves to register the emoticons in future.

Service Tax on movie theaters

It appears that Notification No. 109/2009 dated 23/02/09 proposes to clarify the confusion on Service Tax on movie theatres. The following appears to be the clarified position on the Service Tax liability of the movie theatres;

A] Theater owner screens the movie for fixed number of days and gets a fixed amount contracted. The revenue of tickets goes to distributor; in such cases ST is not applicable.

B] Distributor takes theater on rent and theater owner gets rent; in such cases ST is applicable under ‘Renting of immovable property’.

The industry may now work towards reducing the incidence of cost to enable exhibitors to reduce the cost of tickets to lure the already dwindling number of multiplex visitors.

Defamation Arising Out of Court Filings-Salzano v. North Jersey Media Group, Inc., et. al.

Continuing on the topic of defamation, I thought about bringing to the notice of the readers an interesting case which brings a new dimension to the Fair Report Privilege to the statements made in the judicial proceedings.

The New Jersey Appellate Division recently handed down an important decision relating to the republication of allegations that were originally set forth in a legal complaint. In Salzano v. North Jersey Media Group, Inc., et. al., A-6715-06T1, the plaintiff, Thomas John Salzano sued various newspapers and related individuals at those entities for defamation. The statements underlying the alleged defamation consisted of newspaper articles that outlined (and arguably elaborated upon) a complaint brought against Mr. Salzano by a bankruptcy trustee. The complaint alleged, among other things, that Mr. Salzano had “‘unlawfully diverted, converted and misappropriated’ [the entity that was in bankruptcy]’s funds ‘for his own personal benefit.’” These allegations were then reported in various newspaper articles published by the defendants.
The media defendants moved to dismiss the civil complaint on the basis that the fair report privilege should apply as a defense to defamation. The Appellate Division reversed the lower court decision and held that the privilege did not apply. Hence, the case should not be dismissed.
The fair report privilege is an established exception to republication liability under New Jersey defamation law. The general rule is that absent the application of a privilege, a person or entity is liable for republishing a defamatory statement. The Court in Salzano cited the New Jersey Supreme Court’s decision in Costello v. Ocean County Observer, 136 N.J. 594 (1994), where the fair report privilege was articulated and discussed at length. Citing Costello, the Court noted that “to republish a defamatory statement, the reporter or newspaper must verify that a statement was spoken, and also that the substance of the statement is true.” Accordingly, the Court held that the newspapers and related defendants erred in not verifying the facts of the complaint prior to republishing them in the articles.
The Court further held that the fact that the original statements were made in the context of a judicial proceeding was not enough to immunize the media entities. In so holding, the Court noted that although the fair report privilege applies to statements made in “judicial and other official proceedings,” it did not provide an exception to liability in this case. The Court noted that the fair report privilege does not apply to preliminary pleadings “‘such as a complaint or petition, before any judicial action has been taken.’” Accordingly, the Appellate Division held that the media defendants could not assert that the privilege extended to their republication merely because the statements were republished from a judicial filing. Specifically, the Court said that the fact that they were in a complaint made it clear that the privilege should not apply.
Another interesting determination by the Salzano Court was that the actual malice standard should apply to Mr. Salzano’s claims because he was, in essence, a public figure by association. This essentially means that it would not be enough to prove that the defendant was negligent in publishing the statements, but instead, the plaintiff would need to prove an intentional misstatement or willful disregard of the truth. The Court specifically noted that at the time of the articles’ publication, Mr. Salzano was not a public figure. Nevertheless, the Court noted that, as the chief managing officer of the bankrupt entity which was in a highly regulated industry, Mr. Salzano’s father was a public figure. The Court noted that the bankruptcy made the company’s business affairs a matter of public interest and concern. The Court then extended this to indicate that, through the allegations made against him, Mr. Salzano had himself become “enmeshed in a matter of public concern.” Therefore, the Court applied the more stringent, actual malice standard. (Internet Defamation Law Blog)

Defamation

Defamation is one of the most common allegation that routinely gets levelled against a media house/ media professional involved in publishing and broadcasting. Defamation law suits are filed seeking damages, public apologies etc. from the publisher/broadcaster for damage to the reputation of the person filing the suit. In the following paras, I would attempt to simplify the law on defamation from the perspective of a layman's understanding.

Whats "defamation" ?

Defamation means a false publication calculated to bring a person in disrepute. It is an intentional false communication (be it print, broadcast, Internet or any other means of communication), either published or publicly spoken, that injures another persons’ reputation or good name. Thus, the essentials of defamation claim involves two things, communication to public and a consequent damage to the reputation, good will or image of a person.

Thus to succeed in a defamation suit the following are the things that need to be present;

To succeed in a suit for defamation, the presence of the following four ingredients is necessary :

(i) The statement must be defamatory;
(ii) The statement must refer to the plaintiff;
(iii) The statement must be published by the defendant; and
(iv) The statement must be false.

Types of defamation

Defamation can be classified into two types, "Libel" and "Slander". Libel is malicious defamation, expressed either in print or writing or by signs and pictures etc. which is intended to damage the reputation, good will of a person. On the other hand Slander means the same offence of defamation committed orally through spoken words used by one person against another. While therefore both libel and slander are two different forms of defamation, libel is in writing while slander is oral. Each of these give a right of action to the defamed person against the person so doing.

Legal Remedy

Legal remedy under the law can be invoked by filing complaint under section 499 & 500 of the Indian Penal Code.

Defence in a defamation suit

Accused person can seek any of the following as defences in a defamation suit

(i) Truth- That the statement alleged to defamatory is a truth;

(ii) Statements made in good faith and with a reasonable belief that they were true;

(iii) Innocent dissemination is a defense available when the had no actual knowledge of the defamatory nature of the statement or had no reason to believe that the statement was defamatory.

(iv) Privileged Statement is a defense when witnesses' testimony, attorneys' arguments, and judges' decisions, rulings, and statements made in the court, or statements made by legislators on the floor of the legislature or in the Parliament, or statements made by a person to his/her spouse, are the cause for the claim.

(v) Opinion: If the allegedly defamatory assertion is an expression of opinion rather than a statement of fact, defamation claims usually cannot be brought because opinions are inherently not falsifiable.

How 'surrogate' is 'Surrogate Advertising' ?

What is 'surrogate advertising'?
Countries world wide have laws to ban tobacco, alcohol and other narcotic products from advertising. This is obviously intended towards discouraging the consumption of such products in the overall interest of a healthy society. 'Surrogate advertising' is referred to those advertisement campaigns which are projected as ads of products or services whose advertisement is not prohibited but intended to promote the brand which in fact is of prohibited products. Eg. a popular alcohol brand advertising music cassettes and CDs, which music cassettes ans CDs you never find in your neighbourhood music store or a very popular Scotch brand advertising its 'apple juice' which you never find on the shelves of any super markets !

Why companies resort to Surrogate Advertising?
Obviously because that's the only way they can probably get away by advertising their brands which are popularly associated with prohibited products is through surrogate advertising.

What is the latest trend on Surrogate Advertising?
'Surrogate Advertising' per se is prohibited and the government often comes heavily on these advertising practices. ASCI and other advertising bodies have adopted regulations to discourage/prohibit surrogate advertising.

What the companies which make and market prohibited products are resorting to?
Companies are increasingly resorting to brand extensions wherein they will tie up with a genuine product or service providers and launch co-branded products or services. Typically one can see these tie ups happening with music publishers, travel websites etc. where the companies make an attempt portray as if the advertisement is being done for genuine product which in fact contributes to minuscule part of its revenue, if at all it has any overflows after paying the other parties.

There is also a trend where brand extension are more genuine and large scale e.g. ITC launching 'Wills Lifestyle" or Kingfisher launching the 'Kingfisher Airlines'. This serves two purposes; one is to collectively further the brand and two is to de-risk the business from the risk associated with the prohibited products.

How do one distinguish a 'surrogate advertisement' from a genuine 'brand extension'?
The emerging law on this topic seems to be taking the following factors into consideration while deciding on the surrogate nature of an ad campaign;

1. Trade Mark registration certificate/application if any made with respect to the brand extension ;
2. Arrangement with the co-branded entity; and
3. Documentary proof to establish the existence of a distribution channel for the product/service; and
4. Documentary proof to establish the availability of the product in the market where the advertisement campaign is launched;
5. Whether the creative of the advertisements clearly state the products which are being advertised in a large font;
6. Whether all the advertisements in question display the products in the creative of the advertisement. For example if the advertisement is for the Cassettes and CDs, the advertisement in addition to clearly stating the products and services also displays the picture of the cassettes and CDs.
7. With respect to the services, whether the ad clearly describes the service. For example, an ad for the ‘holiday packages; should clearly state the same.

The question of whether an ad campaign is surrogate or genuine is always a subject matter of facts and will depend on case to case. However, in the meantime, it appears that the surrogate advertising continues unabated.