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TRADEMARK DILUTION: BLURRING AND TARNISHMENT

Introduction

It is very well known that Trademarks have been used centuries now even before there was a law to govern them.

The World Intellectual Property Organization (WIPO) defines a trademark as “ a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises.” Consequently, a trademark is a distinctive image, slogan, sign, logo, mark, or phrase linked to a particular good for sale in order to distinguish it from commodities sold or created by others. Once the rights are granted, the marks become his property, giving him the ability to legally prosecute any infringers using the mark without his consent or permission[1]. Contrary to popular assumption, a trademark serves as both a symbol of goodwill and a tool for cultivating the reputation and goodwill of its owner.

Hence the protection of any trademark becomes very important to any brand especially big brands as their trademark serves as their identity and their goodwill is attached to it. Hence whenever there is any infringement of the trademark of a very well known brand then it's known as ‘trademark dilution’ under law. Trademark dilution is a type of trademark infringement when the owner of a well-known mark has the authority to forbid others from using it on the grounds that doing so will likely damage the mark's goodwill, reputation, or distinctiveness. The doctrine of dilution is however a departure from traditional trademark law. The premise upon which traditional trademark law is built is that consumers rely on a certain trademark to identify a product having a specific combination of characteristics.

The goal of dilution law, on the other hand, is to prevent the value of well-known or well-known marks from being diminished as a result of third parties using the mark. It is producer-oriented in nature. The fundamental tenet of dilution law is that illegal third-party use of a well-known mark, even if it does not lead to consumer confusion, can still negatively impact the mark's goodwill and selling power since it loses its association with a single source[2].

Since dilution of trademark is different from any other type of infringement of trademark it's essential to understand how it takes place. In order to do so the paper will briefly explain the doctrine of dilution and its history. The paper will also explain the two methods in which dilution of a trademark takes place. The paper will also discuss case laws on the doctrine in order to explain how the two methods of dilution are different from each other.


Doctrine of dilution and history

A producer's identity is established through a trademark. Such an identification transforms into a brand and falls under the category of well-known marks when it acquires widespread recognition. A well-known name becomes diluted when it is violated.

Dilution occurs when a well-known trademark loses its exclusivity due to infringement. As a result, the mark loses its distinctiveness and capacity to stand out in comparison to other trademarks that are available on the international market. Before the Trademarks Act 1999 was passed, the Trade and Merchandise Marks Act of 1958, which governed the law of trademarks, did not contain the necessary provisions to address the problem of dilution, leaving Indian courts with a huge burden to analyze and incorporate the problem of dilution within the trademark legal system[3]. However, even though the Trademark legislation didn't contain a dilution rule, courts still applied the theory to decide cases. Daimler Benz Aktiengesellschaft v. Hybo Hindustan[4] is one of the most well-known cases of trademark dilution before the 1999 Act.

The defendant was using the mark BENZ combined with a "three pointed human being in a ring" on undergarments in this case. Ignoring the defendant's defense of honest concurrent usage, the High Court of Delhi awarded an injunction to the plaintiff, observing that replication of a mark such as MERCEDES BENZ by anyone, even the defendant, would result in a violation of Indian trademark law. This was the first decision by an Indian court to address the issue of dilution of well-known marks. However the 1999 Act introduced the concept of dilution in the Trademark law.

Section 29 of the Trade Marks Act of 1999 (TM Act), which went into effect in 2003, covers the rules for trademark infringement. Registered trademarks with "a reputation in India" are protected under Section 29's Subsection (4)41 from being used in connection with unrelated goods and services by third parties. Like its predecessor, the new Act does not use the word "dilution" directly. Although dilution is not specifically mentioned in the statute, it is mirrored by a similar ground for violation in Section 10(3)42 of the Trade Marks Act of 1994 of the United Kingdom[5].


Forms of Trademark Dilution

Dilution occurs after the two primary types of infringement: blurring and tarnishment of the well-known mark. Both cause the mark to lose its luster and the distinctiveness of the being a well-known mark. Although they both fall within the category of dilution, the two notions are distinct from one another.

(i) Blurring

When we use the word "blur," we refer to something that is not distinct or clear. Blurring occurs when a third party's mark makes it harder for consumers to relate a well-known mark to the plaintiff's goods or services, or when a well-known mark's distinctiveness has been compromised because it has become or is likely to become associated with a similar mark or trade name. A fictitious example might be used to better understand this idea[6]Consider DELL kitchenware instead of the well-known brand "DELL," which is most often linked with laptops. In these situations, the well-known brand "DELL" is linked to products that aren't directly in competition with laptops, but the use of the same mark to identify the place of origin of different goods from the original one eliminates the mark's sole relationship with the goods of the original owner.

Now, additional items with such a label attached as a source recognizer will also come to mind when one thinks of DELL rather than only laptops.

In the case of Honda Motors Co. Ltd. v. Charanjit Singh[7] The plaintiff discovered that the defendant had registered the HONDA mark for pressure cookers under his name. The plaintiff filed a lawsuit for infringement, citing the goodwill and repute of its brand on a global scale. On the other hand, the defendant claimed that it had been using the mark since 1985 and was the first to utilize it in connection with pressure cookers. The court determined that because HONDA was known for producing high-quality items in the automobile industry, the defendant's use of this mark in connection with pressure cookers would encourage consumers to believe that the defendant's company and products were made by the plaintiff. The Court discovered that the defendants' use of the plaintiff's name had damaged its reputation and goodwill which was caused by blurring.


(ii) Tarnishment

A mark is considered to be tarnished when it is used without permission by a third party on goods that could lead consumers to form a negative opinion of the mark, harming its status and reputation. Basically, it happens if an unlawful use of a well-known brand is unpleasant or unfavorable[8]. This may include using a well-known mark in connection with anything that is disparaging or hurtful to the reputation or values of the mark owner, or that directly disparages the mark owner or its goods or services. The case of Daimler Benz Aktiengesellschaft v. Hybo Hindustan[9] discussed above is a good example for tarnishment. The Plaintiff in this case was a Mercedes Benz, and the Defendant was utilizing the BENZ mark to market its underwear.

The court held that there was tarnishment to the plaintiff’s brand as using its trademark on undergarments would be degrading for the brand. It is crucial to demonstrate that the original mark has been used or affixed on goods of inferior quality to those bearing the original mark, or that the mark has been used on goods that may not be regarded as dignified or goods with disagreeable pictures or conceptions. People have a bad opinion as a result of this[10]. For the owner who built a global reputation based on the quality promised and delivered for years, this unfavorable association is fatal.

However even though the two forms of dilution are distinct from each other, there can be case’s in which dilution has occurred in both the form’s.Best example for this would be the famous Victoria’s Secret case[11]. In this case a little store called Victor's Little Secret was sued for dilution by the well-known brand Victoria's Secret for selling a variety of items including adult movies, adult novelty items, and lingerie. This is a perfect example of tarnishment as well as dilution through blurring. It is obvious that using the name "VICTORIA'S SECRET" on crude coffee mugs and sexual products is demeaning and damaging the original name.

While merely using the mark to identify products made by the defendant dilutes its unique linkage and produces confusion in consumers' perceptions.

Hence even though the forms are distinct, there can be cases in which dilution takes place by blurring as well as tarnishment. However it is important to note that this is not the situation in every case and that there can be cases in which dilution has taken place in only one form as seen by the cases given above.


Conclusion

An examination of the dilution principle and the relevant regulations reveals that only trademarks that are famous, well-known, or have a particular level of consumer popularity can legitimately acquire protection under anti-dilution laws.

Dilution cannot be compared to traditional infringement given the significant financial and time commitment made by the owner to ensure that the mark passes the threshold of niche fame and develops into a brand recognised on a global scale for providing a certain level of quality assurance to its customers. Because of this, such marks are frequently exploited by unauthorized parties in an effort to capitalize on their reputation or notoriety.According to the aforementioned research, trademark dilution refers to when a well-known trademark is used by someone other than the owner in a way that decreases the mark's distinctiveness.

Dilution is not specifically included in the trademark act of 1999, which also does not use the term dilution in the statute however its concept is a part of the law[12]. The goal of the dilution form of infringement is to provide a well-known trademark more extensive protection. In this case, the court is essential to safeguarding trademarks from unlawful usage. It is so abundantly obvious that Trademark Dilution supports the idea that some marks are so well-known that they merit protection over and beyond the usual danger of confusion evaluation to identify trademark infringement. The paper also clearly shows that it is essential to understand the two forms of dilution in order to better protect any brand as both the forms are distinct from each other and can however also overlap in cases.


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[1] Brajendu Bhaskar, “Trademarks Dilution Doctrine: The Scenario Post TRDA, 20051 NUJS L. Rev. 640 (2008) [2] T.G. Agitha, “Trademark Dilution: Indian Approach” 50(3) JILI 341 (2008) [3] Latha R. Nair, “TRACKING THE PROTECTION OF WELL- KNOWN MARKS IN INDIA: A BEFUDDLED PATH TO NIRVANA?” 101 TMR 1419 (2011) [4] AIR 1994 Del. 239 [5] Dev Gangjee, “The Polymorphism of Trademark Dilution in India” 17 Trans. L. & Cont. Prob. 113 (2008) [6] Vivek Kumar Chaudhary, “Protection of Well-Known Trademarks and Weakening of Honest Concurrent User Defense” 15 JIPR 293 (2010) [7] 2003 (26) PTC 1 (Del.) [8] V.K. Ahuja, Law Relating to Intellectual Property Rights (LexisNexis Butterworths, New Delhi, 2007) [9] Supra Note 4 [10] T.G. Agitha, “Trademark Dilution: Indian Approach” 50(3) JILI 339 (2008) [11] V Secret Catalogue, Inc. v. Moseley, 2001, 6th Circuit, 259 F.3d 464 [12] Supra Note 8


Bibliography

• V.K. Ahuja, Law Relating to Intellectual Property Rights (LexisNexis Butterworths, New Delhi, 2007)

• Brajendu Bhaskar, “Trademarks Dilution Doctrine: The Scenario Post TRDA, 20051 NUJS L. Rev. 637 (2008)

• P. Narayanan, TradeMarks and Passing Off (Eastern Law House, New Delhi, 6th edition, 2004)

• T.G. Agitha, “Trademark Dilution: Indian Approach” 50(3) JILI 339 (2008)

Frank I. Schechter, ‘The Rational Basis of Trademark Protection’, Harvard Law Review p. 813 volume ,



This article is written by Muskaan Halani of NMIMS School of Law.