Does an Apprehension of Trademark Infringement constitute a Cause of Action under Trademark Law?

Trademark

Does an Apprehension of Trademark Infringement constitute a Cause of Action under Trademark Law?

[This piece has been authored by Shubhank Suman, a student at the National Law University, Odisha.]

Introduction

Quia timet action is a Latin expression meaning, ‘because he fears’. It leads us to the concept where a plaintiff seeks an injunction in a court of law based on the apprehension that the defendant will hurt him or infringe his rights in the future. As a result, in such case, the court determines whether or not the plaintiff has a cause of action, to decide the injunctive relief. This concept poses a question that does mere apprehension of trademark infringement also constitute sufficient cause of action for an injunction? If yes, then what would be the degree of such apprehension? These questions require legal dissection in light of the Trademark Act, 1999.

Infringement of the trademark is not necessary for an injunction

Section 29 of the Trademark Act, 1999 provides that “a registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trademark concerning goods or services in respect of which the trademark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trademark.” This section also mentions ‘likelihood of confusion’ as a ground for trademark infringement, thereby, widening the scope for action of infringement based on apprehension of infringement in the future. It may, thus, be said that a cause of action can arise even when the defendant has not used the trademark and there is mere apprehension of infringement. The Delhi High Court in the case of Intel corporation v. Harpreet Singh & Ors., observed that it is unfair to expect the aggrieved party to wait for actual infringement to take place, especially when apprehension of infringement is proved. “A stitch in time always saves nine and that is what is the essence of quia timet action.” Hence, a cause of action would arise even when there is mere apprehension of infringement. Similarly, the Delhi High Court, in Cadila healthcare limited v. Uniza healthcare LLP and Anr., dealt with the facts where a suit was instituted merely on the ground that the defendant had a website through which they were advertising their proposed product containing similar mark as that of the plaintiff. The honourable court, in this case, accepted the cause of action on the ground that Delhi was one of the largest markets for the sale and distribution of healthcare products. Therefore, it is reasonable to apprehend that anybody who manufactures healthcare products will necessarily sell them in Delhi and target customers.

Can mere apprehension confer jurisdiction?

From the above discussion, It is clear that a suit can be instituted on the basis of mere apprehension of infringement. However, whether mere apprehension of infringement also confers jurisdiction on the court is not clear.

For the trademark infringement, the plaintiff has the option to institute proceedings either under section 134 of the Trademark Act or under section 20 of the CPC. Section 134 of the Trademark Act, 1999 enables a plaintiff to institute the proceedings at the place where they reside or carry out the business. On the other hand, section 20 of the CPC confers jurisdiction where the cause of action arises. Thus, to confer jurisdiction, mere apprehension of infringement must be established as a cause of action under section 20 of the CPC.

In the case of Allied Blenders & Distillers Pvt. Ltd. v. Prag Distillery Pvt. Ltd. & Anr., where the plaintiff instituted the suit as a quia timet action, the Delhi High Court observed that if there is an imminent apprehension that the defendant would infringe the trademark within the jurisdiction of this court, then it would result partly in the cause of action and therefore, confer jurisdiction by virtue of sec 20 of CPC. Similarly in the case of Pfizer Products, Inc v. Rajesh Chopra, the Delhi High Court, while dealing with the question of territorial jurisdiction, observed that “threat of selling the offending goods in Delhi would in itself confer jurisdiction [to] the courts in Delhi to entertain a suit claiming an injunction in respect thereof. Whether the threat perception is justified or not is another matter.”

In earlier cases, the Delhi High Court’s emphasis only on the apprehension of infringement to confer jurisdiction and not the degree of such apprehension is evident. However, this approach was later modified and the Court began considering the degree of apprehension or threat as well to establish jurisdiction. The reason behind this is that if there is no substantial threat of infringement, then no cause of action arises.

In Shree Nath Heritage Liquor Pvt. Ltd. & Anr v. Octaga Green Power & Sugar Co., neither the plaintiff nor the defendant had a place of residence or carried out their business within the territorial jurisdiction of the Delhi High Court. The plaintiff’s case was premised upon the mere apprehension of infringement and they argued that mere apprehension can be interpreted as the cause of action under section 20 of CPC and hence, is sufficient to confer jurisdiction. The Delhi High Court analyzed the degree of apprehension and observed that mere apprehension does not confer jurisdiction under section 20 of the CPC. The apprehension must be so substantial and imminent that it directly indicates a defendant would infringe the mark in the future. The court based its reasoning on the case of Banyan Tree Holding Ltd. v. A. Murali Krishna Reddy, wherein it was observed “to prima facie establish that the Defendant purposefully availed of the jurisdiction of this court, the Plaintiff would have to show that the Defendant engaged in some commercial activity in the forum State by targeting its website specifically at customers within that State.” Similarly, in Impresario Entertainment & Hospitality Pvt. Ltd. v. S & D Hospitality, the plaintiff tried to institute infringement proceedings merely on the basis of the defendant’s website. The Delhi High Court returned the plaint under Order VII Rule 10 due to a lack of territorial jurisdiction and observed that “jurisdiction of the forum court does not get attracted merely on the basis of interactivity of the website which is accessible in the forum state.”

The aforementioned legal reasoning clarifies when, in infringement proceedings, apprehension of infringement can and may confer territorial jurisdiction on the court. Albeit, such apprehension must be so substantial and imminent that it directly indicates future possibilities of infringement. This provision, however, is not applicable when infringement proceeding is instituted under section 134 of Trademark Act, 1999.

Degree of apprehension

Mere apprehension of infringement can constitute a cause of action and confer jurisdiction under Indian trademark law. However, the degree of such apprehension has not been categorically defined. So far, Indian courts have not taken a systematic approach to identify the exact criteria to prove imminent danger before awarding a quia timet injunction. In most cases, courts considered inquiry of marks, interactive websites, etc., as factors of apprehension of the trademark infringement. But simply because the defendant advertised or enquired about a mark does not mean they are going to infringe the said trademark. Courts may consider certain factors while assessing the imminent threat of infringement –

  • In none of the cases, the duties of the plaintiff are discussed to avoid such infringement. However, if we apply the concept of a ‘caveat venditor’, the steps taken by the plaintiff to avoid infringement must also be considered.
  • The defendant’s attitude is also critical in determining any such threat. Thus, whether or not the defendant’s attitude suggests that he would commit such an infringement must also be considered.
  • The period between the threat and application for relief should also be considered.

These parameters must be taken into account to develop a strait-jacketed formula for determining what can amount to proof of imminent danger under trademark law as mere indicators such as advertisements, marketing approvals cannot be sufficient to prove the imminent threat of infringement.

Conclusion

In light of the above discussion, infringement of a trademark is not necessary to institute proceedings – mere apprehension of infringement, if proved, may also suffice. However, the degree of such apprehension required is not properly formulated. There are no precise rules to decide what constitutes proof of imminent danger in a trademark case. Mere indicators such as regulatory approvals, allegations of clinical trials may not be enough to prove the presence of imminent danger. Given the internet’s crucial role in marketing and sales today, there is a dire need to resolve the lacunae in the application of the principle of quia timet action to cope with the present realities. The author firmly believes that courts must adopt standard criteria to determine the degree of apprehension, as required in a quia timet action, due to the difficulty in conclusively ascertaining a defendant’s infringing intention.

Leave a Reply

Your email address will not be published. Required fields are marked *