Leeching as a mode of Trademark Infringement

The Rationale behind Trademark Protection

Just as how humans are identified by their names, the ideas materialized by humans deserve to be identified by a unique name, logo, signature or other discernible attributes. These attributes are nothing but trademarks. For a parishioner,/ layman, trademark includes a brand name (eg.“Nike”), graphical representation of the brand name i.e. logo / signature (eg. The swoosh logo of Nike), as well as the slogan/ tagline adopted by the brand (eg. The slogan of Nike – “Just do it”).  Such attributes enable a person to distinguish the product or services from that of others. Today when we talk about the most renowned organizations providing remarkable products and services, the profoundness of their origin is often overlooked or unheard of by the populace. One of the most in-demand mobile phone brands – Apple, which people can immediately associate with the logo of an apple with a bite taken out of it, is a result of numerous struggles originating right from the scratch. This brand, established in the year 1976, commanded marked up goodwill with time. However, apart from the noteworthy technology, the logo of apple has also contributed significantly to its revenue and reputation. Even people who did not happen to understand it’s functionality or utility, started having a desire to purchase the products of the brand for demonstrating pride and social esteem. Being priced above most of its competitors’ products, over a period of time, Apple was looked upon as a brand preferred by the aristocratic section. One would often witness a passerby talking over his iPhone as recognized by the logo on its rear panel. This instills a feeling of social esteem in the user, while the rest aspire to own the product. Thus, the brand name along with its logo, apart from the utility derived from the product or service, commands considerable value for the brand. However, if such attributes are duplicated by the ones not authorized to do so, it may cause significant economic as well as abstract damage to the original brand. Thus, the legislations pertaining to trademark are framed in a manner as to discourage any form of infringement, thereby reserving the right of deriving economic benefits solely for the registered holder of the trademarks.

Leeching as a Cognate of Infringement

Before dealing with the issue in hand, it is pertinent to understand the term “leeching” in this context. In common parlance, leeching can be understood as unwarranted feeding on resources belonging to others. With regards to intellectual property as a resource, leeching takes place when there is an unauthorized utilization of the same to promote one’s own brand. In such cases, neither does the wrongdoer pretend to be the true owner of the IP, nor does he indulge himself in counterfeiting acts. The attributes of the host brand, which usually command a higher goodwill, are featured alongside one’s brand. This garners significant attention which also places the other brand under the spotlight. Thus, such unethical strategies are adopted by people to facilitate rapid growth of their brand name. However, it should be remembered that utilizing the attributes of the host brand would certainly tantamount to infringement of various intellectual properties which may consist of the brand name, the logo, as well as the design of the product. To understand how leeching amounts to infringement, the following instances need to be analyzed in light of the Trademarks Act, 1999:

THE STIFLE BETWEEN FERRARI AND PHILIPP PLEIN

Social media has proven to be a boon for a number of bootstrapped ventures, since it enables home-grown brands to advertise at a negligible price. All it takes is to click the ‘upload’ button and voila! the brand promotion campaign takes off. This strategy has proved to be successful for several ventures, given the strategy adopted to increase the followers. However, appropriate strategies need to be properly worked out to avoid undesirable consequences. Due to absence of specific regulations pertaining to social media advertising, the possibilities of getting embroiled in legal turmoil is unperceived. One such instance caught wide attention when the global automaker giant- Ferrari, served a legal notice to protect its brand from being leeched. The incident took place when a Germen fashion designer- Philipp Plein, in an attempt to promote his brand, took unauthorized aid of Ferrari’s trademarks. He legally owned several high-end luxury cars. One would discover a number of photographs on his social media pages featuring Philipp along with his luxury cars. As such instances are common these days, given the trend being followed on social media platforms, predicting a legal issue to crop up in such cases is quite haphazard. Things took a sour turn when one day he took his social media page to advertise his brand by placing his shoes on the trunk side of his green Ferrari car. The said pair of shoes was placed next to the trademarks of the car. The photograph taken was such that it would possibly create disorientation amongst audience as to contemplate an association between Philipp’s fashion brand and Ferrari. It didn’t end here, as he went ahead to share another photograph which featured the same car along with females posing in an obnoxious manner. Upon discovering Philipp’s activities, Ferrari did not hesitate to serve him a legal notice. The crux of the said notice read as follows:

Ferrari’s trademarks are used again for promotional purposes of your brands and products, unlawfully appropriating the goodwill attached to them.

Ferrari’s trademarks and model cars are associated in your pictures with a lifestyle totally inconsistent with Ferrari’s brand perception, in connection with performers making sexual innuendos and using Ferrari’s cars as props in a manner which is per se distasteful.

Thereafter, the notice asked Philipp to remove the controversial photographs from all his social media pages. Astonished Philipp claimed it as an attempt to ‘BLACKMAIL’ him and denied to comply with the directions mentioned in the notice. Likewise, there would be several people outraged by what Ferrari asked for. However, it is important for such people and the rest to know how such acts trigger violation of legal provisions.

Analysis as per Indian laws:

Section 29 of the Trademarks Act, 1999 deals with instances which tantamount to infringement of registered trademarks. However, the alleged acts of infringement can be bifurcated as follows:

  • Pretending deceptive association: The manner in which Philipp placed his pair of shoes on the car could possibly cause confusion amongst the viewers regarding an association between the two brands. Such a situation is dealt by section 29(2)(c) which reads as follows: “A registered trade mark 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 because of its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark.” An important part of this section states “in the course of trade”, which means that it must be proved that Philipp committed the alleged act in the course of conducting his trade. This part makes the case debatable due to absence of specifications as to what amounts to “in the course of trade”. Advertisement can be considered as an ancillary activity of any trade. Thus, there would be no advertisement without an existing trade or business activity. As a consequence, the requirements of this provision can be fulfilled by the aforementioned argument. It must be noted that even the courts are supposed to presume that people have been confused by such acts.
  • Tarnishing reputation: The notice served by Ferrari further alleged that the manner in which Philipp used the car as a prop (performers making sexual innuendos alongside the car) could tarnish the automobile brand’s reputation. This would certainly sound unfair on the part of Ferrari to refrain a legal owner of the vehicle from using it as per his whims and fancies. However, it is pertinent to note what the law has to say in this regards. Section 29(8) reads as follows: “A registered trade mark is infringed by any advertising of that trade mark if such advertising (a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or (b) is detrimental to its distinctive character; or (c) is against the reputation of the trade mark.” As the wordings of the sub-section are quite self-explanatory, all that is needed further is to establish that the brand commands a decent reputation and that, the wrongdoer’s acts have tarnished its reputation. In the present case, since Ferrari as a brand does not even need an introduction, let alone be its reputation amongst people belonging to varied segments and societies, the possibilities of the case being decided in favor of Ferrari, if disputed in the Indian jurisdiction, are indeed mammoth.

Key takeaways: Philipp’s acts clearly demonstrated how he tried to leech on Ferrari’s goodwill. Just as Rome wasn’t built in a day, it takes years and at times decades, for a brand to establish the desired reputation in the commercial world. Thus, leeching not only becomes illegal, but also unethical as a business practice. Ferrari has partnered with several brands and has permitted its licensees to use its trademarks for commercial purposes. Thus, trademark licensing as a substitute to leeching, serves the desired purpose in a legally acceptable manner. 

VERBAL USE OF TRDEMARKS IN THE ENTERTAINMENT INDUSTRY

The entertainment industry is one of the major contributors to the GDP of a nation.   It serves several purposes like generating employment for the artists as well as the support staff, encouraging creative works, and ultimately, entertaining its audience. However, when creativity falls prey to leeching, it must be remembered that justice takes its own course to reach its destination, and one would have to pay through his nose to rectify the wrong done. Now-a-days, the use of registered trademarks has been on a rise by the Indian music industry. Citing the most recent works in the industry, the Punjabi song named “Lamberghinichalai jane o” features the luxury car Lamborghini, as well as the brand name has been numerously incorporated in its lyrics. Taking a similar illustration from Bollywood, the song named “Aajana Ferrari Mein” features a Ferrari car as well as the brand name has been incorporated several times in its lyrics. In such cases, especially where the centre of attention or the star element is the one which happens to consist of a registered trademark, the producers as well as the composers must be aware that failure to obtain a license to use the concerned trademark would trigger Section 29(9) of the Trademarks Act, 1999 which reads as follows: “Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly.”However, a casual tone of the judiciary’s approach can be observed when in a matter before the Delhi High Court, the parties were asked to ‘chill’[1]. The plaintiff being the manufacturer of “Barbie” dolls approached the Court alleging infringement of its trademark “Barbie” by the defendants, whereby the defendants being the producers of the movie “Tera Intezaar” incorporated a song in their film named “Barbie Girl”. The plaintiffs alleged unauthorized use as well as unsuitable use of its trademark, since “Barbie” is a name associated with children’s toys. The use of trademark by the defendants calling “Barbie” as sexy as well as associating it with an adult female entertainment celebrity would tarnish the reputation of the trademark. When sued for an ex-parte injunction, the court’s order reiterated a judgment by the United States District Court, as well as the Supreme Court of India, wherein the freedom of speech and expression by using trademarks was upheld. Though freedom of speech and expression does form an integral element of a democracy, intellectual properties need adequate legal protection from the fear of being diluted. This must be ensured by the Courts especially when the intellectual properties are being applied for commercial purposes. In the absence of strict interpretation in such cases, the creative industry would start losing its originality and leeching would turn out to be a new normal.


[1]Mattel, Inc. & Anr vs Ms. Aman Bijal Mehta & Ors., CS(COMM), 803 of 2017
Picture credits:
Ferrari image: theverge.com
Philipp Plein: Youtube (Isabella Barrett)
Board meeting: CoolCLIPS.com

About Kunal Chandriani 1 Article
I am passionate about the commercial aspects of IPR. I came across the subject while pursuing the course of Company Secretary, and since then, I have been trying to explore the unexplored aspects of this domain. I hold a bachelor's degree in commerce and am currently pursuing LLB from a college affiliated to the University of Mumbai.

4 Comments

    • Very informative. Isn’t the clause of tarnishing of a brand’s image subjective and prone to wide interpretation(when there is no advertising involved)?

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