Updates on trademark law in India

Safeguarding trademarks presents real challenges amid the pandemic, with massive shifts to online trading, difficulties getting cases to court and physical enforcement challenges to name a few. As policymakers and regulators rush To adapt, many Asian jurisdictions have rejuvenated their regimes to protect valuable IP and the public interest

India is in the midst of a deadly covid-19 crisis, yet rampant transformation and growth on several fronts of the legal sector can be seen. This article captures some of the changes surrounding process, functioning and services within the IP fraternity due to the pandemic. Businesses are shifting online. Mobility restrictions and safety precautions are keeping consumers at home. Fashion brands have held online shows, film producers and distributors have shifted to over-the-top (OTT) media services, and corporate brands have led their companies towards digitisation as soon as the pandemic affected their usual way of working.

Several goods and services traditionally not in the online model – such as pharmacies, consultations and eyewear – have all seen major sales online. Due to this paradigm shift in the preferred interaction channels of consumers and brands, the nature of the protection of brands has expanded substantially. As a result, the IP fraternity has seen expansions in filings due to the digital shift of brands, and additional enforcement mechanisms followed by these brands.

Risk of counterfeiting

The pandemic accelerated India’s e-commerce growth, largely in online models, and specifically with various delivery options seen throughout the past year. This sudden spurt in home-delivered goods and services has affected the demand for essential goods, medical supplies, and even luxury goods in some cases.

With consumers not doing physical shopping, issues with counterfeit goods available on online portals were faced by numerous brands. Infringers and counterfeiters were actively scamming consumers through online channels by marketing branded goods and selling cheap and fake products. While this most certainly affected consumers, the burden of intermediaries to try and regulate such activities came to the forefront, especially in cases of spurious goods that may affect one’s health and safety.

Brand registries

The brand registry is essential in online delivery business models where the intermediaries use their resources for such services. With a duty to prevent counterfeiting and deceit, the liability of intermediaries has certainly increased, and robust mechanisms such as Amazon’s brand registry were brought in as a way to protect brands and give them direct control of their products online. Without the option of physical market enforcement, mechanisms such as these can provide much-needed assistance to brands and consumers.

As both counterfeiters and original brands sell their products online, the enforcement battle between the two brings the accepted position of trademark law into the picture, with age-old principles of the distinctiveness and vitality of well-known marks taking precedence. The brand with prior use, enforcement and recognition will gain from brand registry on e-commerce platforms, rather than brands with little to no enforcement or use, making legal negotiations and the assertion of rights easier for brands that have taken their rights and enforcement seriously.

Need for enforcement

Millions all over the country now go online to connect with brands. As a result, the need to prevent counterfeits and fakes from reaching consumers has increased considerably, especially when products available online might be harmful to consumers’ health and safety, for example, goods purchased from e-pharmacies.

With restrictions on movement brought on by the pandemic making physical market enforcement (checking warehouses and factories) or enforcement through customs (visiting ports and inspecting goods) impossible, practical issues have arisen when trying to gauge whether imported goods or stored goods are genuine or not.

Unique protection measures by the Indian courts have come in handy to ensure public health and safety by providing immediate relief on matters concerning essentials such as counterfeit masks, imports of oxygen concentrators, etc. Orders to address courts virtually in emergency matters have also assisted in prioritising matters for general public safety over corporate disputes. A great deal of comfort comes to right holders through the courts’ system of expedited trials, where the timeframe for relief is lowered in cases where pre-litigation mediation is encouraged. This reduces time, effort and costs incurred for each such dispute, while finding a quicker solution between parties. Similarly, the courts’ well-defined focus on arbitration as an alternate dispute resolution mechanism also makes virtual relief accessible, as is the need of the hour.

Collaborative efforts

While brand owners are typically responsible for ensuring sourcing, distribution and enforcement of their goods and services, many international brands ceased to have an equitable presence in India as the borders closed. During the pandemic, when certain brands – typically from the medical equipment and services industry – have not been present, the licensees of these brands have taken care of their operations in India.

The licensees are assigned specific rights under a licensing agreement, and special provisions are also made to ensure enforcement in Indian markets in these cases. For example, Gilead has signed voluntary licensing agreements with five generic pharmaceutical companies for expanding the supply of the Remdesivir drug in India and the sub-continent. To enhance global access to life-saving drugs, a right to receive technology transfer of Gilead’s manufacturing process introduces a brand new breed of IP in the Indian market.

While technology transfer is helpful in the current global scenario, medicines and other medical products enter India from international waters through licensees. As such, a mere waiver of IP or patent rights or technology transfer renders the broader process incomplete in the larger scheme of things. Despite having assigned rights to manufacture a drug in the country, there is no way to ensure the constant monitoring of quality standards for such setups. Health and safety requirements for such projects are also very specific, which may need infrastructural and legal changes.

Influx of technology

Technology has played a major role within the legal fraternity throughout the pandemic, with virtual hearings and e-consultations taking over the judicial process. As the IP industry is fairly digitised, this massive influx of technology due to lockdowns worldwide, the digitisation of records, court files, and documents have moved online faster than before.

Undoubtedly, having an already tech-savvy trademark office before the pandemic hit us has been a big relief to the IP fraternity, and a step in the right direction. Disputes surrounding receipt dates have come down substantially with online filing, documentation of trademarks, and the digital examination process, making the entire process clearer and faster in the interim. Obtaining and monitoring IP in India is fairly smooth, with increased transparency and reduced red tape.

Safe harbour

In February 2020, Delhi High Court reaffirmed the judiciary’s position on e-commerce and the safe harbour protection that such online intermediaries are afforded under the law. This decision set aside an earlier judgment where applications were filed by direct selling entities like Amway, Modicare and Oriflame against e-commerce platforms including Amazon, Snapdeal and Flipkart. It was held that direct selling guidelines are not law, but mere guidelines until the new Consumer Protection Act, 2019, is enacted. It was further held that the value-added services provided by the e-commerce websites (such as warehousing, packaging, delivery, etc.) do not dilute the safe-harbour granted to them under section 79 of the IT Act in any way. Such clarifications are vital for litigants, consumers and large e-commerce websites with increased online activities during the current pandemic.

Enforcement in cybersquatting

With the advent of online branding during lockdowns, cybersquatting is another way that a brand may suffer. In June 2020, the Bombay High Court, in Hindustan Unilever v Endurance Domains and Others, shed light on the nature of judicial relief granted in cybersquatting cases in India, also focusing on the registrar’s role in domain name registrations.

While addressing the relief sought against the registrars, the court held that the process of registering a domain name does not involve any manual intervention. As such, a blocking or continued suspension request may not be feasible through registrars. This assists brands in taking enforcement actions further through online routes.

Blocking access. The court noted the importance of “blocking access” as an instruction given by the government to an internet service provider, a relief that proves detrimental for cybersquatters. As such, the court directed the infringing third-party domain names to be suspended by the respective registrars. In doing so, the judgment provides us with a fundamental framework that can be relied on in cybersquatting cases, an increasing menace that right holders struggle with to protect their online presence.

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