Evolution of Deceptive Similarity Tests under Trademark Law
By: The Iyea
Tags: Intellectual Property Law, Trademark, Law, Trademark Law, Intellectual Property

Evolution of Deceptive Similarity Tests under Trademark Law

By Satya Sabharwal & Alisha Rastogi

Introduction & Background

The Indian legal system has widely recognized the concept of deceptive similarity as a ground for trademark infringement. However, while the Trade Marks Act, 1999 acknowledges the term ‘deceptive similarity’ as under Section 2(h), it does not lay down any rigid criteria that would narrow the ambit or scope of adjudication by the judiciary. Hence, courts have given meaning to this phrase through judicial decisions, granting relief to parties when their marks have been infringed by another party which uses to gain from the reputation of the mark by causing confusion amongst the public by utilizing a mark that may be deceptively similar. The Courts have gone a long way to ensure fair treatment and due credit of the trademark owners, as seen in the case of the BMW Trademark [2020 SCCOnline Del 484] being benefitted off by the e-rikshaw company DMW. The Hon’ble Courts have discussed the principles of goodwill misuse used for creating confusion among consumers on a case to case basis to ensure a fair trial. With this paper we aim to study the evolution of these principles by way of landmark decisions of the higher judiciary.

Trademark law in India started with the common law principle of passing off and equity, institutionalized from the British. India before independence was equipped with enactment of the Trade Marks Act, 1940. After independence, the Trade and Merchandise Marks Act, 1958 was enacted, which amalgamated the provisions related to trademarks contained in other statutes such as the Indian Penal Code and the Criminal Procedure Code. The Trade and Merchandise Marks Act, 1958 was ultimately repealed by the Trade Marks Act, 1999, which is the current overriding law. The underlying principle of this Act was to incorporate The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and comply with the provisos of the agreement.The Trade Marks Act, 1999 is now fully compatible with the International standards laid down in the TRIPS Agreement and provides for better protection of our services and commodities. Giving distinct identity to the goods and services, the definition of trademark has been expanded to encompass any mark capable of distinguishing the goods and services of one, from the goods and services of another. Every Trademark should not only be unique but must be easily distinguishable by a consumer of average intelligence.

Section 11 of the Trade Marks Act, 1999, lays down relative grounds for refusal of registration of a mark. One of the grounds is any similarity to an earlier trademark and the identity or similarity of the goods or services covered by the trademark leading to likelihood of confusion for public including association with the earlier mark. Another ground as stated in , Sub-section (2) bars registration when a trademark is identical with or similar to an earlier trademark and is to be registered for goods or services which are similar to those for which the earlier trademark is registered in the name of a different proprietor provided the earlier Trademark is well-known in India and the use of the later mark, without due cause, would take unfair advantage of or be detrimental to the distinctive character or repute of the earlier Trademark.

For interpretation and the relevant meaning Section 2(h) of the Act defines deceptively similar as:

Section 2(h): “deceptively similar”- A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion;

Interpretation and Scope of ‘Deceptively Similar’

The idea of Trademark infringement essentially grows from a likelihood of confusion in terms of its origin that is the original trader’s mark and the need to protect its distinctiveness and goodwill amongst its customers and the public at large. It is important to note however that the Trademark Act does not provide for a rigid criterion for the ambit and scope of deceptive similarity, making it imperative that the judicial decisions fill this vacuum. Consequently, the last few decades have laid out numerous case laws concerning trademark infringement that give considerable clarity about the legitimate interpretation of this concept. The extensive trail of landmark judgments has laid down the path for the formation of principles to assist legal enforcement, which include visual and phonetic similarity, rule of entirety, rule of disintersection, test of likelihood and confusion, goodwill and recognizable reputation. These principles present a clear understanding of the concept and therefore, assist in adjudication of such disputes.

In a more recent judgment, Arudra Engineering Private Limited v. Patanjali Ayurved Limited, [2020 SCCOnline Mad 1670] a Single Judge of the Madras High Court restrained Patanjali Ayurved Ltd by observing that the use of the mark ‘CORONIL’ by the Defendents as a medicine for coronavirus, was deceptively similar to the mark ‘CORONIL-92B’ which was registered and used since 1993 by the Plaintiffs [Arudra Engineering Pvt. Ltd] who had been dealing in chemical cleaning and manufacturing across the world. Hence, the subsequent suit for infringement under Section 29 (4)(b)(1) of the Trade Marks Act, 1999 was upheld. The reasoning for the said decision was that the two marks in question were deceptively similar in terms of the name as well as the spelling, even though the original mark is registered. However, what was not taken into consideration was the difference in the goods in question as it is a criterion under Section 29(4)©, which has to be prima facie satisfied in order to conclude infringement. [The matter is presently in appeal before the Division Bench of the Madras High Court]

Dealing with similar antecedents, the Honourable High Court of Delhi in Winmedicare Limited v. Somacare Laboratories [1997 (17) PTC 34 (Del)], emphasized upon the structural and phonetic similarity between the marks to grant an injunction. The case was regarding the competing trademarks “DICLOMOL” and “DICMOL”, where neither of the two trademarks were registered. The Hon’ble Court emphasized upon the structural and phonetic similarity as there was only a difference of 2 missing letters ‘LO’ which can considered enough to cause confusion among the consumers.

Furthermore, the Hon’ble Supreme Court laid down the test of likelihood and confusion in the case of Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd., [2001 5 SCC 73] where a suit was filed by a pharmaceutical company against another for the grant of injunction against a medicine named “FALCITAB” which was deceptively similar to their own medicine named “FALCOGO” for the treatment of the same disease, the word Falci being derived from the name of the disease Falcipharum Malaria. The Apex Court observed the likelihood of confusion despite supervision by medical professionals. Additionally, given the added threat of medical negligence due to the similarity, the Hon’ble Court opined that the products were phonetically similar and caused confusion.. This case also laid down the Rule of Anti Dissection that emphasizes upon the need to judge a mark as a composite whole rather than breaking it into parts for comparison. The rationale of this rule is based on the presumption that the average consumer would judge the mark in its totality and not in parts.

Following that line of argument and principle, the Hon’ble Supreme Court in Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra, [2002 2 SCC 147] laid out certain guidelines on deceptive similarity that was causing infringement by riding on goodwill and reputation of the original trader. The case involved a renowned motor vehicle manufacturing company, whose name coincided with the name of a paper mill in Gujarat with only a subtle difference of the ‘A’ letter, therefore being phonetically and visually similar and structurally identical. It was contended that the defendants were fraudulently using the goodwill of the Plaintiffs’ name, which the court agreed with and that the long span of time for which the name had been used for, bestowed upon it a certain reputation that shall not be exploited by or benefit a third party.While the essence of all these principles was overall similarity, the Courts have time and again emphasized upon the test of likely deception, which subsequently renders the intention as somewhat irrelevant. In other words, it is sufficient to prove likely deception in terms of the product itself, its origin or the manner of trade as decided by the Courts.

in Ranbaxy Laboratories Ltd. v. Dua Pharmaceuticals Pvt. Ltd., [AIR 1989 Delhi 44] the Courts propounded upon the test of likely deception for proving infringement. The approach taken by the Hon’ble Court is that of a comprehensive analysis of the factors leading to infringement.The case revolves around a suit alleging trademark infringement of the word “CALMPOSE” having a value of almost Rs. 40.16 crores, said to have been unlawfully taken and used by the defendant while manufacturing a similar medicine under the mark of “CALMPROSE”.

Whereas, the defendant denied any scope of confusion or negligence as the marks are dissimilar and the medicine in question is specifically sold by chemists and other medical professionals only via prescription. The Hon’ble Court while interpreting the principles of deceptive similarity decided that the two words in question in the present case, that is “CALMPOSE” and “CALMPROSE” were both visually and phonetically similar as the only difference between the two is just the insertion of the letter “R” by the defendant, which further reflects upon the intention of the defendant, that is to benefit from the reputation and goodwill of the Plaintiff’s brand.

The Hon’ble Court further clarified that while the medicines are to be sold largely via a prescription, it has to be taken into consideration that these are common medicines and are easily available across chemist stores and this may cause confusion between the two names among the chemists whomay pass off one medicine as the other to an unaware purchaser. Going deeper into the similarities and dissimilarities between the two words, the Court adopted the test of knowledge of the final consumer.The possible lack of technical knowledge on the part of the consumer can result in negligence. The Court further closely studied the other aspects of appearance of the product, wherein it observed that the medicine of the defendant was almost identical to the plaintiff’s product in terms of shape and size. They were identical both in font and the form of strips of a similar colour in a similar packaging; thus presenting a clear case of one product being passed off as the other and hence, the interim injunction under Order 39 Rule 1 & 2 Civil Procedure Code was granted in favour of the Plaintiff.[KV1] The Defendants contended that besides the names being phonetically different, the medicine in question is only available via prescription and not over the counter, unless a customer specifically asks for it, thus, minimizing chance of deception. The said defense was rejected by the court in view of the evident similarities. The Hon’ble Court deliberated on the aspect of the misuse of the reputation and goodwill of the plaintiff’s product over the span of several years and the unlawful benefit received by defendants from it by making insignificant changes. The court also observed that the almost identical appearance of the two products would in fact give rise to confusion among the customers. It was held that these similarities infringed the CALMPOSE trademark and considering the possibility of the said medicines being available at the same store interchangeably, where one may be passed off as the other. The Court also relied upon another similar case, (Anglo-French Drug Co. (Eastern) Ltd. vs. Belco Pharma, [AIR 1984 P&H 430]) involving trade names “ENTROZYME” and “ENTOZINE”, where the Division Bench of the Punjab High Court based their reasoning upon the phonetic similarities and dissimilarities between the two words. Therefore, in its final order, the Court relied heavily upon the law regarding passing off, observing that the differentiating facts of each case must be considered before. While the major criteria considered in this case was the nature of the two marks and the similarities between them in term of the words, labels, and composition. The Court also took note of the degree of phonetic and visual resemblance and the nature of goods both being medicines meant for the same purpose and therefore, fell within the same trademark schedule, making them rival traders in that aspect. The existence of same class of purchasers making purchase or placing orders in the same mode leads to the creation of confusion[KV2] .

Flowing from that, in Sun Pharma Laboratories Limited v. BDR Pharmaceuticals [2020 SCC OnLine Del 623] where the mark ‘LABEBET’, registered and used by Sun Pharma Laboratories since 2009, was similar to the mark ‘LULIBET’ used by BDR Pharmaceuticals for which an application for registration was filed in 2016. Subsequently, Sun Pharma, filed a suit for infringement and passing off. The Hon’ble High Court observed that, when considered as a whole, both marks were phonetically and structurally similar which gave rise to the possibility of confusion. Further, the emphasis was that the said products were commonly sold medicinal products, thus, requiring a stricter parameter.

The principles of deceptive similarity were further crystalized in the landmark judgement of Amritdhara Pharmacy v Satyadeo Gupta, [AIR 1963 SC 449] wherein the Appellant [Amritdhara Pharmacy] claimed that they had exclusive proprietary rights over the trademark “AMRITDHARA” acquired since 1901 for a medicinal preparation that had since gained considerable reputation and goodwill. They further opposed the subsequent trademark registration application by the Respondent [Satyadeo Gupta] for their medicinal preparation “LAKSHMANDHARA”, that came into existence in 1923, mainly distributed in the state of Uttar-Pradesh. They claimed that the Respondent’s trademark “LAKSHMANDHARA” was deceptive, becoming a cause for confusion among the consumers due to its phonetic and visual similarity. The Respondent, however, took defenses in order to protect their trademark “LAKSHMANDHARA”. Firstly, that this was being done as an honest concurrent user and secondly, that there was acquiescence on the part of the appellant in the use of the word “LAKSHMANDHARA” in Uttar-Pradesh and which therefore, shall be considered as a special circumstance.The first decision came via the Registrar of Trademarks who had held that there was sufficient similarity between the two words and that would subsequently become a cause for confusion, and henceforth is deceptive in nature. On the question of acquiescence by the Appellant it was observed that that the use of the trade name “LAKSHMANDHARA” evidently entitled the Respondents to use the name for their product for a considerable period of time and therefore, fell under special circumstances as per Section 12 of the Act, the registrar confined the sales registration to the state of Uttar-Pradesh only and passed the order accordingly.[KV3]

Appeals were then filed by both parties, with the Appellant seeking cancellation of the respondent’s registration of the mark, while the respondent was seeking registration for all other states as well. However, the Hon’ble High Court rejected the appellant’s appeal, while allowing the respondent’s appeal, consequently allowing registration for the mark “LAKSHMANDHARA” countrywide as the court found no reason to prohibit registration of the trademark on the basis that it did not find sufficient similarities between the two marks and additionally pointed out that the two words were in fact a part of a common language, which would be free for all to use and not become a monopoly of a particular individual. While dealing with the question of honest concurrent use, the court again favoured the respondent but did not accept that there existed acquiescence on the part of the Appellants.

Finally, the Honourable Supreme Court, in a detailed judgement decided that the marks were in fact similar and thus, overruled the High Court’s decision, upholding the decision of the registrar. The court in its application of the test of comparison, observed that the comparison must be approached from the point of view of an average man or consumer, with average intelligence and an imperfect recollection.Upon a critical comparison of the two marks, the Court observed, despite a few dissimilarities, the similarities are sufficient to possibly cause deception to an unaware purchaser of average intelligence and improper recollection considering the similar nature of the medicines. The court relied upon the test laid down in an old English case — In re Pianotist Co.’s Application [(1906) 23 RPC 774], which stated that the two words shall be compared both visually and phonetically and then within the context of the nature of the goods to which they apply as well as the nature and kind of consumer base that is relevant for the sale of such products.The Apex Court further emphasized that the test for comparison shall be based on both the names considered as a whole and not merely between their specific components thereof. Further, on the question of honest concurrent user, the court held that the appellant’s claim was valid and that there existed acquiescence to the use of the mark “LAKSHMANDHARA” by the respondent as both the companies had been simultaneously advertising on common mediums for years. The Honourable Court, therefore, laid down two important tests for conclusively judging the facts on deceptive similarity. Firstly, that similarities and dissimilarities shall be considered from the point of view of a reasonable man with average intelligence and imperfect recollection. And secondly, the marks should be considered as a whole and not their parts, that is, the overall phonetic and visual similarity.

The aforementioned principles were also observed in M/s Allied Blenders and Distillers Pvt. Ltd. v. Govind Yadav &Anr. [2019 SCC OnLine Del 6834], wherein the Hon’ble High Court of Delhi dealt with another thought-provoking matter with respect to deceptive similarity between the marks “Officer’s Choice” and “Fauji” [alcoholic beverages]. The Plaintiff’s [Allied Blenders and Distillers Pvt. Ltd.] argued that the idea behind the two trademarks are similar and are having the same meaning while being conceptually and deceptively similar. It was proposed by the Plaintiffs to the Honourable Court that the English translation of the Defendant’s product [which is in Hindi] “Fauji” which means a “Military Officer” and are using their respective mark with respect to goods of identical description. Furthermore, it was stressed upon that the defendants are also in the same trade and/or business i.e. Alcoholic Beverage [whiskey] and therefore, the likelihood of the confusion amongst the consumer will be very high. The Plaintiff also crafted out that the labels of the Defendant are also conceptually and deceptively similar to “Fauji” and is written in red colour slanting upward in a stylized font and had a similar colour combination. An image depicting the marks is reproduced below for reference.

The Hon’ble Court held that there is no deceptive similarity between the marks “Officer’s Choice” and “Fauji” and rejected Allied Blenders and Distillers Pvt Ltd’s trademark infringement suit for its mark ‘Officer’s Choice’ against the owner of another alcoholic beverage, ‘Fauji’. The Honourbale, Court observed that there is no resemblance or similarity between plaintiff’s trademark “Officer’s Choice” and the defendant’s mark “Fauji”. The Court stated that the two marks were not only phonetically different but also had different meanings. The word “Officer” refers to “a person in power” whereas the word “Fauji” means a soldier who is not a military officer. To interpret the meaning of the word “Soldier”, reference was made to Advanced Law Lexicon by P. Ramantha Aiyar’s which referred to the meaning of the word as defined in Section 2(zy) of the Cantonments Act, 2006 i.e. “soldier” means any person who is a soldier or sailor or an airman subject to the Army Act, 1950, the Navy Act, 1957 or the Air Force Act, 1950, as the case may be, and who is not a military officer. Therefore, two words having two different meanings. Subsequently, this argument of the Plaintiff also collapsed. Additionally, the Plaintiffs proposition of identical font being used by the defendants was also disregarded and rejected by the Hon’ble Court as the font was different.

Furthermore, the Hon’ble Court observed that the defendant’s epaulette was also different in as much as the defendants had shown “Three Stars” of a soldier whereas the plaintiff had shown the epaulette of an officer. The Hon’ble Court disregarded the judgments produced by the Plaintiff. The Plaintiff relied upon M/s Allied Blender and Distillers Pvt. Ltd. v. Shree Nath Heritage Liquor Pvt. Ltd. and Shree Nath Heritage Liquor Pvt. Ltd. v. M/s Allied Blender and Distillers Pvt. Ltd. wherein the defendant therein was using the mark “Collectors Choice” which was held to be deceptively similar to “Officer’s Choice” on the ground that both represent the person in power and the consumer is likely to get confused. However, there was no such similarity/likelihood in the instant matter. The plaintiff further relied upon M/s Surya Roshini Ltd. v. M/s Electronic Sound Components Co. wherein the two marks were “Surya” and “Bhaskar” and the Hon’ble Court therein found deceptive similarity on the ground that both are the different names of Sun and are likely to create confusion. In Hindustan Lever Ltd. v. Pioneer Soap Factory, the Court was dealing with marks “Sun” and “Suraj” which were held to be deceptively similar on the ground that that “Suraj” being the translation of the word “Sun” and was likely to create confusion. Furthermore, M/s Bhatia Plastics v. M/s Peacock Industries Ltd., the Court was dealing with marks “Peacock” and “Mayur” which were held to be deceptively similar being the translation of the name of bird and likely to create confusion. The Court observed that the aforesaid judgments did not help the plaintiff in any manner as the cases which were produced in support were the ones where in the infringing mark was a direct Hindi translation of the original mark or a synonym of the original mark. Summing up, “Peacock” and “Mayur”, “Surya” and “Bhaskar”, “Sun” and “Suraj”. This actually weakened the case, since in the present case Fauji (military man) cannot be said to be a plain Hindi translation of the word “Officer” as Officer does not necessarily means a Military officer.The Hon’ble Court opined that any judicial precedent cannot be followed as a statute and has to be applied with reference to the facts of the case involved in it. Following this principle, the the Court pronounced that:

“What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it. It has to be remembered that a decision is only an authority for what it actually decides. It is well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision. The ratio of one case cannot be mechanically applied to another case without regard to the factual situation and circumstances of the two cases.”

The Hon’ble Court relied upon Padma Sundara Rao v. State of Tamil Nadu [(2002) 3 SCC 533] where the Apex Court held that the ratio of a judgment has to be read in the context of the facts of the case and even a single fact can make a difference. In paragraph 9 of the said judgment, the Hon’ble Supreme Court held as under:

“9. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morris in British Railways Board v. Herrington. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases.”

The Hon’ble Court stressed upon on one additional principle i.e. of Circumstantial flexibility, meaning that one additional or different fact may make a world of a difference between conclusions in two cases. Therefore, Disposal of cases by blindly placing reliance on a decision is not proper. Emphasizing on the words of Lord Denning in the matter of applying precedents Court opined locus classicus[a passage considered to be the best known or most authoritative on a particular subject]:“Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it.”The Hon’ble Court was of the view that there was no legal and valid cause of action in favor of the Plaintiff and against the defendants, therefore, the Hon’ble Court rejected the suit.

Coda

A critical analysis of the above cases highlights the importance of judicial precedents. As far as the deceptive similarity is concerned, Courts have made it abundantly clear that there cannot be a viable straitjacket formula that can be applied across all cases and have largely depended upon an ordinary man’s reasoning, that is, of the average customer. The Courts have time and again opined that since deceptive similarity is subjective in nature, each case must assessed on its own the ‘matter in issue’. Since what is required to be proven is a certain standard of originality and creativity, this may differ largely from case to case and therefore, no streamlined criteria of infringement for all cases would be applicable. The judgements further highlight a pattern followed by the courts by way of guidelines used for proving deceptive similarity. Although most cases tend to focus on a specific principle depending upon the form of similarity, overall, a few principles have been followed time and again. These include the nature of the mark, the degree of visual and phonetic resemblance between the marks, the similarity between the products or services or the class of purchasers and the mode of purchasing, and lastly, any other circumstances relevant to the case, depending on the facts. Further, while judging in toto, the responsible factors also include consumer base and packaging. For confusion, it is perhaps an appropriate description of the “state of mind of a customer” who, on seeing a mark thinks that it differs from the mark on goods which he has previously bought, but is doubtful whether that impression is not due to imperfect recollection. A deceptively similar mark may lead the consumer to make an error into thinking that a certain good has another origin point, which the consumer associates with the original product/mark. To consider resemblance, as elucidated in Case IV, two important factors are: (a) who are the persons whom the resemblance must be likely to deceive or confuse, and (b) what rules of comparison are to be adopted in judging whether such resemblance exists.

The Delhi High Court in Colgate Palmolive Co v Anchor Health and Beauty Care Pvt. Ltd. [2015 SCC OnLine Del 13576] opined that it is the overall impression that a consumer gets as to the source and origin of the goods from the visual impression of colour combination, shape of the container, packaging, etc. If the illiterate, unwary, and gullible customer gets confused as to the source and origin of the goods which he has been using for a longer period by way of getting the goods in a container having a particular shape, colour combination, and getup, it amounts to passing off. In other words, if the first glance of the article without going into the minute details of the colour combination, get up or layout appearing on the container and packaging gives the impression as to deceptive or near similarities in respect of these ingredients, it is a case of confusion and amounts to passing off one’s goods as those of the other with a view to encash upon the goodwill and reputation of the latter.

In the case of ITC v. NESTLE, [the Curious Case of The Magic Masala] , the matter in question pertained to the mark ‘MAGICAL MASALA’, first used by ITC Ltd. in 2010 for Sunfeast Yippee! Noodles and then used by Nestle in 2013 for their noodles, resulting in an application for injunction being filed by ITC for ‘passing off’. The court held that the mark was not a descriptor of the product but only a laudatory expression and therefore, cannot be protected as a ‘descriptive mark’. The court also observed that the two words are commonly used terms and therefore, it would be unfair to grant such a monopoly. It was further clarified that the two terms, not being descriptive of the product, had no scope of causing confusion and thereby, dismissed the suit.

An important aspect that Courts have repeatedly stressed on is that the principle of entirety has to be applied to all cases, that is, all aspects of the above criteria shall be considered in its entirety and the mark or any of its elements shall not be dissecting and judged on its parts. The marks shall be taken comprehensively in totality and only definitive similarity would constitute infringement.