This article is written by Janvi Kashyap, 6th Semester, B.Com. LL.B., Maharishi Markandeshwar (Deemed to be University), Mullana, Ambala, during her internship at LeDroit India.
SCOPE OF THE ARTICLE
•This article looks at the laws about trademarks that’re too similar to each other under the Trade Marks Act, 1999.
•It checks out the tests that Indian courts use to figure out trademark disputes.
•The article also looks back at how trademark laws have changed from the 1960s to now.
•It talks about the Cadila -factor framework which is the standard that everyone follows now.
•The article covers what happens when someone infringes on a trademark, including what remediesre available passing off and injunctions.
•It also talks about issues like online shopping and how trademarks are seen across borders.
•The article only talks about trademark law and does not compare it to other countries.
•This article is useful, for people who study law those who deal with intellectual property rights and for people who write academic papers.
ABSTRACT
A clear dividing line exists in trademark law between truly distinctive marks and those that unfairly piggyback on the goodwill of another brand by being deceptively similar. Deceptive similarity under the Trade Marks Act, 1999 operates as a bar to registration, and it is also a ground for infringement. However, it is left to the courts to decide on a method for determining similarity and it has, over the past six decades of litigation, established a significant body of legal doctrine.
This article will consider the chief methods applied by Indian courts to the problem – namely the imperfect recollection test, the totality rule, the dominant mark analysis, phonetic and structural similarities and the composite scheme outlined in Cadila Healthcare Ltd. V. Cadila Pharmaceuticals Ltd – tracing the way these tests have shaped Indian trademark cases. This article will argue that while no one test will necessarily prevail in every instance, they all shed light on a common question: is it likely that a consumer on the real market could be misled into believing that two non-identical marks come from the same source, because the marks in question are dangerously close.
Keywords: Deceptive Similarity, Trade Marks Act 1999, Section 2(h), Section 11, Section 29, Trademark Infringement, Imperfect Recollection, Dominant Mark, Phonetic Similarity, Cadila Test, IPR
1. INTRODUCTION
The concept of a trademark exists primarily in the realm of consumer trust; when a consumer picks up a particular branded product from the shelf, searches the web for a particular name or asks in a store for a particular product they trust the mark attached to the goods to inform them accurately of their origin and their quality. It is this trust that is threatened by deceptive similarity.
The real danger is not outright counterfeiting where one mark is simply copied. Rather, it is those marks that closely resemble each other and threaten to confuse consumers. It is the competitor that can alter a recognized mark; the entrant to the market that can adopt a name that sounds the same as a dominant player when pronounced aloud; the brand that adopts the most distinguishing feature of an existing mark but incorporates it into a new phrase. The entire doctrine of deceptive similarity exists to combat this threat.
The Trade Marks Act of 1999 says a mark is deceptively similar if it looks the same as another mark and might trick people or cause confusion.
This is a deal, under section 11 because it can stop a mark from being registered. Also section 29 says if a mark is deceptively similar it can be considered trademark infringement. Together these sections broadly outline a legal framework and give to the courts the onus of determining the manner of assessment of deceptive similarity.
In response to this task, courts have created a sophisticated yet incomplete body of law; the different tests adopted by courts and how they have shaped litigation are the subject of this article and finally, what remain the most pertinent issues that need to be decided.
2. THE LEGAL FOUNDATION: What The Trade Marks Act, 1999 Established
Before analyzing the tests that courts have established in order to address the legal question of deceptive similarity, it is worthwhile to clearly set out what the statute itself demands. A mark is said to be deceptively similar when, “so nearly resembles another mark as to be likely to deceive or cause confusion.”
Thus, there are two parts to the requirement-identity or similarity in marks is necessary, and that similarity must be “likely to deceive or cause confusion.” Even where there is some degree of similarity, if It is so slight that it would not fool anyone then the thing is not similar in a way that tricks people. The difference is clear.. Similarly, there is no deceptive similarity even if consumers get confused due to an overlap in the class of goods or services that two marks cover.
Section 11 reiterates this; where two earlier marks are identical or deceptively similar and are used in relation to identical or similar goods or services, a subsequent mark shall not be registered. It places identical and deceptively similar marks at par regarding the ability to confuse customers and thus, also in terms of damage caused.
This idea carries over into the assessment of infringement; a registered trademark is infringed when a person uses a deceptively similar mark on goods or services. The phrases “in the course of trade” and “in relation to goods or services” ensure that the comparison being made is between two marks that are genuinely competing with each other, in an actual commercial setting, rather than two marks that look similar in theory but are not used in relation to identical or similar goods/services, thus preventing academic comparison.
These sections therefore lay down a legal, rather than a factual, standard to be adopted by the courts when making their determination as to whether there is sufficient deceptive similarity to justify legal action.
3. THE TESTS COURTS APPLY
3.1 The Imperfect Recollection Test
Perhaps the oldest and certainly the most commonly applied test in Indian trademark law can be termed the imperfect recollection test, also known as the average consumer test. This principle is a vital one: comparison between marks should not be made side-by-side. Such comparison would not reflect reality as a consumer’s memory will not have a photographic representation of a mark but merely a general impression. It is a question of whether a general memory, coupled with a description of the mark that is only average, could make it difficult for a customer to know that two different brands of product do not originate from the same seller.
The Supreme Court defined this test in the famous case of Parle Products (P) Ltd. V. J.P. & Co. Mysore, where it held that “it is not necessary to place two rival marks side by side and scrutinize the details in each of them. It would be sufficient if, looking at the rival marks side by side, the marks give such a general impression as is likely to confuse a customer and that confusion would arise if the mark, when remembered imperfectly, has resemblance with the other.” This test is now the cornerstone of judicial analysis of deceptive similarity and has continued to be applied rigorously.
It relies on comparing the “overall impression” of two marks; “This test is from the point of view of a customer of average intelligence who may, after a period of time, not remember all the elements of one of the rival marks and that of a consumer with the imperfect recollection of the one with the other of the marks. While the direct comparison of two marks will, no doubt, have a degree of importance, at the end, it is from the perspective of the average consumer that this test of imperfect recollection has to be adopted.”
This benchmark of an “average consumer of average intelligence and perception” is not a reference to the particularly sophisticated, nor particularly foolish individual but rather the common man of average awareness that an ordinary purchaser would carry with him, “so as not to put too high a degree of care on the public and at the same time not to make too high a degree of protection available to a trademark owner where the likelihood of deception or confusion is remote.”
3.2 The Rule of the Totality of the Mark (Anti-Dissection Rule)
The second basic rule is the rule of the totality of the mark, which has also been called the rule against dissection. When considering two marks, particularly in relation to composite marks containing words, device elements, colors or other features, courts must resist the temptation to split a mark into its components, compare these component elements, and draw conclusions on whether two marks are similar based upon that comparison. The mark has to be considered as an entity, because that is how the consumer perceives it.
This rule taps into the nature of human perception. Consumers do not analytically analyze marks. When a consumer looks at a label they see it as a whole and form an overall impression, or gestalt. The arrangement of syllables, the shape of the letters, the color used, the tactile feel of the mark in its overall context. All these together create something greater than its individual components. To break down a mark into parts, to conclude that the part looks different than the other party’s part and therefore the marks look dissimilar to some degree, has no relation to the consumer’s actual experience.
The Supreme Court firmly established this in Indian trademark law in Corn Products Refining Co. V. Shangrila Food Products Ltd., AIR 1960 SC 142, stating that the comparison is between the marks as entities and not between their features. It is the overall impression rather than itemized analysis that is of concern. The decision is frequently cited in many hundreds of Indian trademark cases and provides the law on the subject.
3.3 The Dominant Feature of the Mark
The rule of the totality of the mark is not intended to mean that each component feature carries equal weight. Courts have acknowledged that in many composite marks there is a component element of the mark which stands out visually – the part of the mark that is most likely to be remembered and recalled from one experience with the product. The dominant feature rule states what is the most memorable component of the prior mark and has it been used in the later mark?
This rule becomes most salient in cases where the overall totality of the two marks are not identical but have a pronounced similarity in a particular element. If a competitor is unwilling to copy the mark entirely, they will often incorporate a particular striking element of that mark into a new context, and hope to obtain the recognition the part will bring without having to use the whole. The dominant feature rule catches this use.
The use of the dominant feature rule is evident in many pharmaceutical and FMCG cases and in particular, it has been commonly used by both the Delhi High Court and Bombay High Court. It is particularly important in pharmaceutical cases, where two medications with phonetically similar names that contain a dominant syllable can lead not only to commercial confusion but actual harm where the wrong medication is taken. “The Delhi High Court used this principle in the case of Midas Hygiene Industries (P) Ltd. Versus Sudhir Bhatia, in 2004.
In this case the court said that if a competitor uses a part of a very well-known brand then an injunction should usually be given, because using that part of the brand suggests that the competitor wants to trick people. The court wrote this in a 2004 judgement 3 SCC 90.”
3.4 Phonetic or Aural Similarity
In many situations, consumers will not rely on the written text on a label when asking for a product by its name. Given the plurality of languages, levels of literacy and purchasing habits in India, a very high proportion of consumers will know and request products by name from a retailer, and in doing so the name is always expressed through its sound. This makes phonetic or aural similarity another important dimension of deceptive similarity.
The seminal case on phonetic similarity in India is Amritdhara Pharmacy v. Satya Deo Gupta, AIR 1963 SC 449, concerning the marks “AMRITDHARA” and “LAKSHMANDHARA”, both used for medicated oils. The court stated that although the marks were not visually identical and also included proper names, they were structurally and phonetically similar and that “consumers asking for the product by the name in a market or in a shop might easily mistake one for the other and in the same way, would ask for one name and would receive the other.” The court again confirmed that the test is commercial confusion in everyday dealings and not careful scrutiny by judges in a courtroom.
Phonetic similarity is considered not by writing out what each word sounds like when said but rather, the pronunciation itself of each word should be examined, as is particularly important given the use of pronunciation across multiple regions of the country, which will include numerous dialects and accents. The test of phonetical similarity takes into account which consumers will likely be purchasing the product, and if those consumers typically utilize the common pronunciations found throughout the region or areas that those consumers frequent, that is the aspect of phonetic similarity that must be taken into account.
3.5 Visual and Structural Similarity
Where a mark is seen rather than heard, its visual appearance and structure become extremely important. This can involve examination of the syllable structure, the presence of identical prefixes or suffixes in the names or device, the overall size and structure of the words in comparison and, with regard to marks containing device elements, how such features are positioned together.
In Ruston & Hornsby Ltd. V. Zamindara Engineering Co., AIR 1969 SC 815, it was decided that two marks which were visually extremely similar were deceptively similar. This was a case involving marks that were quite structurally similar, since the words contained the exact same letters in the exact same order at the beginning, although differing in the last syllable. The court stated that the test was whether the two words looked sufficiently alike to deceive an ordinary person of average intelligence and memory.
4. THE CADILA FRAMEWORK: A Multi-Factor Approach
The most systematic and complete articulation of Indian law on deceptive similarity is found in Cadila Healthcare Ltd. V. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 73. The decision by the Supreme Court represents the current authoritative statement on the doctrine and its multi-factor test has now become the standard analytical framework applied in all significant trademark similarity cases.
The case involved a dispute between two companies who had originated from the same corporate family but were using confusingly similar marks in the pharmaceutical trade. The context was serious as confusion between pharmaceutical products could result in the patient receiving the wrong medication. In resolving the dispute, the Supreme Court consolidated the previous tests and laid out the structured approach now being adopted:
Nature of the marks. Whether the marks are word marks, device marks, or composite marks will shape how they are viewed. Word marks are primarily examined on their phonetic and structural resemblance, device marks on their visual similarities. Composite marks will require evaluation of all three aspects.
Degree of resemblance. Phonetic, visual, and structural aspects are all considered but one aspect alone cannot determine the outcome. For example, a word mark could be phonetically identical to another but sufficiently distinguishable visually so as not to constitute deceptive similarity (or vice-versa), though all the dimensions will be viewed as a whole.
Nature and character of the goods. Because of the physical risk that confusion may impose on a patient using a pharmaceutical product, the pharmaceutical industry is viewed with stricter scrutiny. For other consumer goods, the concept of the “average consumer” remains, but if the market sector carries a lesser risk, it may apply with some leniency.
Class of purchasers. Unlike a commercially savvy professional buyer, the ordinary, less literate consumer will be less discerning, therefore the acceptable level of resemblance to prevent deception is lowered in such circumstances. The court calibrates the test according to the typical buyer of the product.
Mode of purchase and commercial conditions. The way the product is purchased affects whether deception will occur. If a sale takes place over a counter at a pharmacy where an intermediary such as a pharmacist might assist the consumer, deception might be less likely than if a product is placed on a crowded supermarket shelf where customers are largely choosing for themselves.
The Cadila Framework’s usefulness is derived from the fact that it is non-mechanical. These are not five factors that must be individually ticked off to form an opinion. They are interconnected tools to assess what is likely to happen in the given circumstances. Different cases will therefore place varying levels of importance on these factors depending on the nature of the goods and the consumers they are intended for.
5. THE CONSEQUENCES OF A FINDING OF DECEPTIVE SIMILARITY
The declaration of deceptive similarity has ramifications in all aspects of trademark law.
Registration. Under section 11 of the Trade Marks Act, 1999, a mark that is deceptively similar to an existing registered mark shall be refused registration. This is a gatekeeper function performed at the stage of initial registration, the Trademark Registry, or on appeal, by the courts.
Infringement of registered trademark under s.29 of the Act occurs when the deceptive similar mark is used in the course of trade. Remedies include an injunction to restrain the infringing use, damages to compensate the owner of the registered trademark, account of profit by the infringing party and delivery or destruction of the infringing goods.
Passing off. For unregistered trademarks, passing off is the relevant cause of action, though deceptive similarity remains the core element. In Laxmikant V. Patel v. Chetanbhai Shah (2002) 3 SCC 65, the Supreme Court confirmed that the passing off action is for protecting the goodwill that a claimant has in their mark. The elements are that the defendant is misrepresenting their goods or services as being connected with those of the claimant, and that the claimant is suffering or likely to suffer damage as a result. Deceptive similarity forms the basis of the misrepresentation.
The interim injunction. The injunction, granted in cases where deceptive similarity is clearly established on an interlocutory application, represents a crucial form of relief. In trademark cases, it has been consistently held that when the issue is one of deceptive similarity and has been clearly demonstrated, the balance of convenience typically tilts heavily in favour of the party seeking to prevent the infringing use, as no remedy can adequately recompense the damage to goodwill and consumer trust which results from the passing off of the trademark.
In the case of Wander Ltd. Versus Antox India Private Limited the Supreme Court made a decision. This was back in 1990. The court said that when two trademarks look very similar it is usually an idea to stop one of them from being used right away. This is because the damage, to the reputation of the company is hard to measure in terms of money. The Supreme Court decided this in the case of Wander Ltd. Versus Antox India Private Limited.
6. CURRENT ISSUES
Although the doctrine has been developed for a significant amount of time, there are still several controversial areas in the application of trademark law in India.
Internet and digital commerce has brought a new level of analysis to issues of phonetic and visual similarity. Online search results can place confusingly similar marks in close proximity, thereby magnifying the danger of confusion. Issues of keyword advertising where competitors bid for search words associated with their competitors’ marks also raise questions regarding deceptive similarity that are only beginning to be clarified.
Trans-border reputation is an area which also raises several questions about deceptive similarity. The Toyota Jidosha KK v. Prius Auto Industries Ltd. (2018) 2 SCC 1 decision attempted to clarify the extent of a foreign trademark’s reputation, which exists without a tangible presence in the Indian market, and how this impacts deceptive similarity. The judgement demonstrated that the current approach to these issues is one that attempts to strike a balance between providing adequate protection to globally well-recognized marks and allowing Indian businesses to develop and trade under marks that resemble those recognized marks without registration of the foreign marks in India.
The concept of the “average consumer” in an increasingly brand-literate market is also a key area of discussion. If markets have changed and consumer awareness has increased significantly compared to the market in the 1960s, has the concept of the average consumer changed also, and, at what point do the needs of more sophisticated consumers need to be protected in a way which will simultaneously safeguard less discerning groups?
7. CONCLUSION
The issue of whether two trademarks are deceptively similar occurs at the confluence of law, market psychology and commercial practice. It cannot be resolved by a textual analysis of the statute since the statute itself delegates the mode of analysis to the courts. Nor can the question be answered by economic theory alone since the central issue is always the nature of the experience real consumers have of marks in real markets.
What the courts have developed over six decades is an adjustable but disciplined set of tools. The imperfect recollection test allows the analysis to remain tied to the experience of the real consumer instead of the artificial comparison between two marks; the totality rule ensures that marks are not analyzed by deconstruction but as whole units that the consumer does not distinguish by part;
dominant mark analysis seeks out attempts to trade on the unique value added to another mark; phonetics and structural similarity prevent immunity from this doctrine merely because the two marks do not differ on the dimensions which consumers use in distinguishing marks; and the Cadila analysis has put in place a flexible multi-factor framework applicable to the unique circumstances of each dispute.
Each of these tests can never function in a vacuum; they are used together as part of a shared commitment by the courts to ensure that a strong marketplace can persist-one in which consumers can rely upon and businesses can invest in their trademarks, and where rivals cannot profit by a near-miss copying of their distinctive marks. Deceptively similar doctrine serves the ends of that promise. As markets change-move to the electronic arena, traverse international borders, become ever more diverse-the law must change with them. In the strong bases the cases discussed herein have built, courts will find the guidance to do so with the prudence the next generation of judges and lawyers brings to their work.
REFERENCES
¹Trade Marks Act, 1999 — Sections 2(h), 11, 29, 30.
²Parle Products (P) Ltd. v. J.P. & Co. Mysore, (1972) 1 SCC 618.
³Corn Products Refining Co. v. Shangrila Food Products Ltd., AIR 1960 SC 142.
⁴Amritdhara Pharmacy v. Satya Deo Gupta, AIR 1963 SC 449.
⁵Ruston & Hornsby Ltd. v. Zamindara Engineering Co., AIR 1969 SC 815.
⁶Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73.
⁷Laxmikant V. Patel v. Chetanbhai Shah, (2002) 3 SCC 65.
⁸Toyota Jidosha KK v. Prius Auto Industries Ltd., (2018) 2 SCC 1.
⁹Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia, (2004) 3 SCC 90.
¹⁰P. Narayanan, Intellectual Property Law (4th ed., Eastern Law House, 2010).
¹¹V.K. Ahuja, Law Relating to Intellectual Property Rights (3rd ed., LexisNexis, 2017).
¹²Law Commission of India, Report No. 290 (2023) — Review of Trade Marks Act, 1999.
¹³Wander Ltd. v. Anton India(P) Ltd., 1990 (Supp) SCC 727
