KEY LEGAL ISSUES AFFECTING BRANDS

By Srishti Singhania & Vanshaj Mehta | May 27, 2021

Published in IPR Gorilla Annual Magazine 2021

KEY LEGAL ISSUES AFFECTING BRANDS

Branding is a process of creating a strong, positive perception of your company, and its products in your customer’s mind by combining elements such as logo, design or consistent theme throughout all marketing communications. Today, a ‘brand’ has become the most valuable strategic asset of a company. According to latest report in 2021 by Brand Finance, the world’s leading brand valuation consultancy, the total valuation of the top 500 global brands is USD 7125.6 billion. Apple has topped the charts with a valuation of USD 263.4 billion, followed by Amazon valuing USD 254.2 billion and Google valuing at USD 191.2 billion. With the pandemic causing business disruption and changes in consumer behavior, it has become even more important for companies to build and protect their brands. A unique brand can have a huge impact on your bottom line by giving your company a competitive advantage over your rivals and helping you acquire and retain customers at a much lower cost. In this article, we will discuss solutions to the key legal challenges faced by a company’s when it comes to protecting their ‘brand’.

Start with choosing a protectable ‘Brand Name’

It is very important to choose a brand name that is protectable under the Trademark laws of the country in which you intent to sell your products/services. Under the Indian Trademark laws, a trademark that does not have a distinctive character or describes the quality, intended purpose or characteristics of the goods/ service cannot be registered. Indian laws also prohibit any trademark that has a potential of hurting religious sentiments, contains scandalous or obscene content. It is also important to ensure that your brand name is not identical or deceptively similar to already registered trademarks, else your company may have to face a trademark infringement suit. Thus, it’s important to get your brand name reviewed by your trademark lawyers and conduct a public search to check the already registered trademarks.

Give your brand a 360 degree protection

It is important for a brand to not only protect their name and logo but seek a 360-degree protection by protecting their product designs, packaging, and other design elements. For protecting these elements, companies would have to go beyond Trademark law protection and register their designs under Design law or Copyright law.

For example, many a times infringers may not copy the brand name but may copy the packaging. For eg., in India, Parle Products have recently been accused of infringing a popular trademark of the Intercontinental Great Brands LLC. The former recently launched a new biscuit by the name of Fabio, whose packaging is allegedly deceptively similar to the internationally popular Oreo cookies.

Protect your brand against Counterfeiting

A widely common challenge that brand owners face is counterfeiting. The production and sale of counterfeit goods pose significant problems for all commercial sectors. Post Covid-19, there has been a significant rise in counterfeits in healthcare and pharmaceutical products. The global losses from the counterfeit market are understood to be in hundreds of billions of dollars, and accordingly, brands and governments have taken notice of this issue and are taking steps to minimize their risks. The first step to fight counterfeits is to detect the misuse early on by keeping a watch on the advertisements in the Trade Mark Journals, and monitor the online and offline market through e-commerce websites, investigators and sales personnel or distributors of brand owners. Another way could be registration of your intellectual property with the custom authorities in India. This will ensure that the counterfeits that are entering India from foreign territories are stopped and the infringing goods are seized at the borders itself. Early detection of counterfeits can help brand owners to tackle this issue head on and take swift action.

Imperative to Use the Brand

At times brand owners file for a trademark registration in anticipation of using the mark in the coming future. In this process, it is imperative to note, specifically in India, that your trademark can be challenged by a third party for non-use if you do not use it within 5 years of grant of the registration. Under Indian laws, the word ‘use’ does not necessarily mean and imply actual physical sale; even mere advertisement without having the existence of the goods can be said to be a ‘use’ of the mark in India. Thus, a company in Silicon Valley which does not sell its products in India may be able to prove clear and cogent use of its mark in India through their website (if the website is accessible in India).

Build your trans-border reputation

The doctrine of trans-border reputation allows a foreign brand owner to protect its unregistered trademarks in India and maintain an action for passing off. In order to prove trans-border reputation, the foreign brand owner needs to show that its brand’s recognition and knowledge has trickled down amongst the relevant section of public in India even though it may not have any business in the territory of dispute.

In the age of internet, foreign brands can build their trans-border reputation by advertising their mark and goods in the relevant trade magazines. One of the first cases in India regarding “trans-border reputation” was the case of Whirlpool Co. v. N. R. Dongre. In this case, the claimant was said to have trans-border reputation as it’s products under the “WHIRLPOOL” mark were advertised in international magazines circulated in India.

Take ‘swift action’ against the infringer

It is also very important to take swift actions against any unauthorized use by the infringer else delay in action can lead to acquiescence. In the case of Khoday Distilleries Ltd. v. Scotch Whisky Association , the Supreme Court of India denied relief to the Scottish claimant as the claimant delayed in initiating a passing-off action against the use of ‘PETER SCOT’ by a period of twelve years. Even though the claimant had been successful in a number of similar cases before Indian courts, in this particular case the claimant’s delay amounted to acquiescence. Thus, it is important for foreign brand owners to avoid delays in order to protect their rightful claims.

Conclusion

For the purpose of creating and building your brand, it important for companies to align their business and intellectual property goals. The business and legal teams need to work together to protect and build the brand at every stage – right from inception till enforcement. In case a company intends to expand in various countries, they should conduct a clearance search and register their brands in those countries. It may be difficult to protect your brand in all countries, but it is imperative to monitor and take action in the problematic markets. Companies need to adopt a pro-active attitude and take aggressive steps such as oppositions, raids, enforcements, etc. in order to deter infringers from selling the brand’s counterfeits. Where the company is expanding in various jurisdictions through licensing or franchisee agreements, it is also important to place responsibility on the licensee or franchisee to protect the brand and curb infringement activities and counterfeits.

Published in IPR Gorilla Annual Magazine 2021