BRAND INFRINGEMENT LOSSES AND PREVENTION.

A?commercial court in Pune has rejected an attempt by American fast-food giant Burger King Corporation to prevent a restaurant in Pune from using the ‘Burger King’ trademark. District judge Sunil Vedpathak ruled in favour of the local ‘Burger King’ on 16 August, after a 13-year legal battle.

The court dismissed the petition filed by the Burger King Corporation, which sought a permanent injunction against the local establishment for trademark infringement, along with damages. The lawsuit was filed against Anahita and Shapoor Irani, owners of the local Burger King that has outlets at Pune Camp and Koregaon Park.?

In his ruling, judge Vedpathak said the Pune-based Burger King had been using the name and trademark since well before the American corporation registered its trademark in India in 1989. He also noted that the US company had not used the trademark in India for nearly 30 years, during which time Pune's Burger King had continuously provided services under the name, making their use of the trademark both legal and honest.

The lawsuit stemmed from Burger King Corporation's discovery in 2008 of the Pune Burger King's trademark application No. 1209146. The US firm had sent a cease-and-desist letter to the Iranis, who, on 3 July 3, insisted on continuing to use the name. This refusal sparked to the prolonged court battle.

This is not the first trademark dispute involving Burger King in India. In December 2023, the Delhi High Court recognised "Burger King" as a well-known trademark due to its long-standing use, ruling against an entity operating under the name ‘Burger King Family Restaurant’.

BRAND NAME and Trademark Registrations have become more important with competition increasing in every category of products whether its in Consumer products or Businesses. Earlier Brand Names and Trademark Registrations was never considered as the first step towards starting a business in any type of businesses. It always has been to start the business and then look for a suitable Brand Names and Trademark for Registration. Many times, it happens that the Brand Names & Trademarks selected would have been taken up or registered and used by others. There used to be the assumption that there exists an inexhaustible supply of unclaimed trademarks that are at least as competitively effective as those already claimed. With respect to word marks in particular, the conventional wisdom holds that will always enjoy a surplus of preexisting words, and in any case trademark adopters can simply coin new words, the supply of which is thought to be effectively “infinite.” This empirical assumption — that the supply of good, competitively effective trademarks is inexhaustible — has long formed the foundation of important theoretical conjectures at the core of trademark law and policy. The most significant of these is that when there is a grant of exclusive rights in a trademark, the cost to competitors, consumers, and more generally to the public domain has been inconsequential. Today every entrepreneur’s effort to find a name for his new company or new product has been daunting and difficult as Every name liked was either taken / registered already by somebody or it was not trademarkable.

A Great name can never make a lousy Product better, but a great product can make even the worst name seem genius. In a Harvard Law Review study recently titled?"ARE WE RUNNING OUT OF TRADEMARKS? AN EMPIRICAL STUDY OF TRADEMARK DEPLETION AND CONGESTION" found that more than 70% of common English words have already been trademarked. When one think of just how many words are in the English language and how few of them are actually suitable as brand names, that figure becomes even more daunting.

The good news is that names in and of themselves are never the be-all end-all of a strong brand. A?brand audit?of any of the world’s top brands will reveal that there is a lot more to a strong brand than just a name.

?

Some of the common well-known BRAND Name Infringement in the Indian Market are as follows:

MRF Tyres launched their Car Radial Tyres in 1989 with the Jawaharlal Nehru Cricket World Cup in India. The MRF World Series for Jawaharlal Nehru, to give it its full name, was a mini-World Cup, and a forerunner to the Champions Trophy, which involved six of the seven Test-playing nations. The tournament was ostensibly a celebration of the centenary of the birth of Nehru, the first Indian prime minister and an independence activist. During this Cricket World Cup MRF launched their much-hyped Car Radial Tyres “MRF ZIGMA” with much fanfare and positioning the Radial Tyres as the Space Age Radials. The Brand Name ‘Zigma’ was registered in the Indian Market but was not available in the International Markets as a leading International Tyre Brand had the ownership and rights of the Brand Name in the international markets. MRF Tyres continued to invest in the brand through more promotional investments and new Car Tyres un the Zigma brand were launched. Later realising that the brand cannot be used in the international markets, MRF Tyres started slowly changing over to the Zigma acronyms as MRF ZVT / MRF ZGP etc……

Another major Brand in the Food and Beverages Category which has faced the Brand Registration nuances has been the Spices Brand – EVEREST Spices. The Everest story of spices blended in a 200 sq.ft shop of South Bombay where Shri. Vadilal Shah realized that besides the existence of 14 languages and over 200 dialects, India is home to a number of different taste buds. With every 100 kilometres, the flavour gets a different twist, and that Indian cuisine is an epic tale well garnished with spices.

?While working with his father in the small shop which specialized in spices and dry fruits, Shah keenly observed the tenacity with which Indian women selected spices to blend in their kitchen and also the quantity they purchased. He soon realized that there was no set list of specific spices or ingredients for the perfect blend but a mix of different combinations that suited different platter Many women who came to his father’s shop shared their recipes with him and he spent his spare time blending, grinding, and experimenting, focusing on getting the aroma and flavour exactly right and the same each time.

While officially the first factory under the brand name ‘Everest’ was said to be set up in 1981, the brand got registered itself much before and two years later, in 1968 rolled out the first product from the company — Kesari Milk Masala — in the market followed by Garam Masala and Tea Masala. The first three blends became an instant hit among the Indian households but that did not stop Shah from experimenting with various condiments for years ahead where he spent time traveling across the country, scouting the best of raw materials to get more flavoured blends in the years to come. Serving two categories - blended and basic - Everest Spices offers around 45 different spice variants across continents also catering to the Indian diasporas and non-Indians across continents.

Meanwhile Lurking in the UP City of Meerut – another Entrepreneur established the Brand Everest for his range of Ketchups, Sauces, Condiments, and other related food products. Little dis they realise that their Brand of Everest Ketchups, Sauces, and condiments with infringe on the Everest range of Spices. Both the manufacturers were entangled in a legal battle over the ?Brand name usage and finally the two manufacturers agreed for a settlement with the Mumbai based Everest using for Spices and Condiments and the Meerut based Everest using for Sauces, Ketchups, and other food products.

In the year 1958, Shri Damji Jeevraj Shah ji opened a store in Begum Bazaar, Hyderabad named “SWASTIK MIRCHI STORE” starting with ground spices sold loose and then into unbranded packaged ground spices. From the beginning the spices powders were known for its purity and Swastik became synonymous with Quality Chilli Powder and other spice powders. Over the years Swastik Spice powders became popular among Domestic Consumers and Food Service / HoReCa Customers across South India with domination in the erst while Andhra Pradesh, Hyderabad linked parts of Karnataka. In the 90s Swastik Mirchi Store launched the ground Spice powders in a branded packaged formats and the distribution was from the Begum Bazaar Store to wholesalers across the states of Andhra Pradesh and Karnataka. Swastik Spices has over the years has grown into a leading regional Spice products brands in the Southern States of Andhra Pradesh, Telangana, and Karnataka.

?In 1973 another Entrepreneur Mr. A.C. Venkata Chalapathy started a company named Swastiks Food Products consisting of ?Spice Categories, Breakfast Foods, Instant Foods, and Desserts. Little did her realise that there was a Brand Infringement and in 2010 Hyderabad Swastik Spices filed for Brand Infringement and a hard-fought legal battle followed. With the legal battles taking years both the Swastik brand owners reached an out of court settlement wherein it was legally agreed that the Hyderabad Swastik Mirchi Store / Swastik Spices will use the Brand Name SWASTIK for only straight Spices and the Bangalore based Swastiks Food Products will use the Brand Name SWASTIK for Blends and other Food Products. This has been continued in the Market place as Swastiks Food Products changed their straight Spices to a new brand – RALA and the Hyderabad based Swastik Spices / Swastik Mirchi Store shifted their Blends, Pickles, and Cooking pastes to their other brand – ‘Three Mango’.

BRAND INFRINGEMENT LOSSES:

Once a consumer told me that he does not buy a particular Brand of product as there many counterfeits for the Brand and cannot take a risk resulting in buying a counterfeit / inferior quality of the Brand of product. Hence the Customer buys a brand in which he has confidence and that he will not a risk. If Brand Infringement is not prevented or action not taken against the imitator of the Brand, then the loss is to the Brand is immeasurable in Lost Sales, Brand Trust, Brand Value and declining Market Shares.

A trademark is a company’s biggest asset and it defines the brand’s identity. Even though it lacks a tangible form, the profit a Brand can generate is not abstract. However, in most cases, competitors and counterfeiters understand the brand’ value more.

The Brand generates a profit, competitors and copycats do not have an ounce of apprehension when they see a chance to destroy the Brand. They can either market the trademark as their own or tarnish the brand’s name by producing inferior imitations. To understand the importance of protecting a brand through trademark registration one must first learn the damages an act of infringement can bring to your business.

Loss of Brand Identity: Brand names & Trademarks are essential for establishing and protecting a brand’s identity. When another party infringes on a trademark, they may use a similar or identical mark, causing confusion among consumers. This confusion can erode the distinctiveness and recognition of the original brand, leading to a loss of brand identity and dilution of its value.

Customer Confusion and Lost Sales: Brand & Trademark infringement can result in customer confusion, as consumers may mistakenly believe that the infringing products or services are associated with the original brand. This confusion can lead to lost sales, as customers may choose the infringing products instead of the genuine ones, impacting the brand’s market share and revenue. Also Consumers who are aware of the fact that the Brand has counterfeits and imitators, Consumers avoid buying the Brand itself and shift to another brand to avoid any risk.

Brand Reputation Damages: If the infringing products or services are of inferior quality or fail to meet customer expectations, it can tarnish the reputation of the original brand. Customers may associate the poor experience with the genuine brand, leading to negative perception, decreased customer trust, and potential long-term damage to the brand’s reputation.

Legal Expenses: Brand & Trademark infringement often necessitates legal action to protect the brand’s rights. This can result in substantial legal expenses, including attorney fees, court costs, and potential damages. Legal battles can be lengthy and resource-intensive, diverting the brand’s focus and resources away from the core business operations of the Brand.

Brand Devaluation: A Brand infringement case can negatively impact its value. If the infringement is widely publicized or if it persists over an extended period, it can create the perception that the brand is unable to protect its intellectual property. This perception can erode investor confidence, reduce the brand’s attractiveness for partnerships or collaborations, and potentially lower the overall brand value.

Market Saturation and Competition: In cases where multiple parties infringe on a trademark, the market can become saturated with similar or identical marks. This saturation can dilute the brand’s uniqueness and make it challenging to differentiate from competitors. Increased competition can also lead to price erosion, reduced market share, and decreased profitability.

Trademark infringement and Brand Protection:

BRAND Names & Trademarks are unique phrases, logos, marks, or other design aspects serve to help consumers quickly identify which brand a product is coming from. According to Harvard, trademark infringement occurs when an existing logo, phrase, or other identifying feature on a product or packaging “is likely to cause consumer confusion as to the source of those goods” Trademarks are essential to help brands stand out and be easily identifiable for consumers. They also serve as an important protection against counterfeit sellers and products. With more businesses appearing online every day and a growing number of?counterfeit products?on the market, it’s essential for brands to take the proper steps to register and protect their trademarks.?

While there are cases of?unintentional trademark infringement, infringements also occur when counterfeit sellers intentionally trick consumers into buying a product which they believe is coming from a legitimate brand. This hurts the consumer, as well as the brand being infringed upon.?

How to prevent Brand & Trademark infringement?:

Trademark infringement litigation can be extremely costly and time-consuming for a brand, whether they are the ones taking legal action, or are defending their trademark use. It is important for brands to take proper preventative measures to ensure they will not have to face this challenge down the road. To ensure that they aren’t infringing on an existing brand, as well as protect their unique trademarks, here are steps brands can take to prevent trademark infringement and avoid them.

Trademark search

Before registering one's trademark, conducting an exhaustive?trademark search?is a must. The number of new brands and marketplaces is ever-growing, and even the most unique logo or phrase could already be in use by another brand. One can do a search for Brand Name availability in the appropriate Class at https://tmrsearch.ipindia.gov.in/tmrpublicsearch/. In India Trademarks are categorized into various classes based on the type of goods or services they represent. The World Intellectual Property Organization (WIPO) established a classification system called the Nice Classification. This system comprises 45 Trademark classes, each representing a specific category of goods or services. Assigning the Brand/ ?Trademark to the correct class is crucial for effective protection and registration. Benefits of Performing a Trademark Category Analysis

Here are several key reasons why conducting a TM class search is crucial:

• Avoiding Conflicts:?Conducting a TM Class search helps identify existing trademarks that may conflict with the proposed Brand / Trademark. This prevents potential legal disputes and costly litigations.
• Registration Success:?Assigning trademark to the correct class ensures a higher chance of successful registration. An accurate classification minimizes the risk of rejection by the trademark office.
• Protection of Brand Identity:?Registering the Brand / Trademark in the appropriate class ensures the brand is protected within the industry, allowing one to operate confidently.
• Market Expansion:?As the business grows, having a well-classified trademark allows to expand the Brand into new product or service categories under the same Trademark.

?

A good place to start the Brand & Trademark search is to define the market for the Business and products.

·?????? Will the brand sell products only in one’s own country, or hoping to sell to the global market?

·?????? What Class of products that want to cover for the Brand which may be present or in future.

·?????? Is one’s products going to be filling the shelves of brick-and-mortar shops, or existing solely on online D2C marketplaces?

·?????? This will help to determine where one needs to begin the ?trademark search and understand of having a strong, unique brand trademark.?

·?????? Is there a product with a similar trademark already?

·?????? Is the trademark misleading to some other brands?

These questions will not only help one get a better understanding of the brands doing well in the market, but it will allow to create a brand name and other strong, unique trademarks that will serve as Brand Identifiers and help avoid infringing trademarks on existing brands.?

Register the Brand / Trademark and actively use it:

Once having conceptualized a strong brand and cross-referenced the logos and branding with existing brands and classes, one will want to ensure branding is protected. In order to enforce the trademark, it needs to be properly registered and used immediately. This will ensure to address counterfeits using the Brand’s trademarks and is an essential step to protect the Brand’s?unique idea.?

Trademark monitoring

Registering the Brand & Trademark does not mean the brand will be automatically protected. One will still have to keep a close eye online to monitor any possible misuse of the Brand & Trademark. This work can be done manually or with the help of a Trademark Legal Counsel.

Litigation process

When one finds an infringement of the trademark, it is essential to address it as quickly as possible. Infringements can be detrimental to one’s brand image, and time is of the essence when it comes to preserving the Brand & Trademark.?

Contact the legal team or go to attorneys who can handle infringements ?as soon as they are discovered. While the legal process may be time-consuming, legal penalties and sanctions when publicised can be one way to prevent scammers from further infringing on one’s trademark.

Protecting one’s brand from trademark infringement does not have to be difficult. Whether at the beginning of the brand journey or when the business is booming with the existing brand, these steps will help ensure in avoiding trademark infringements in the future.

?

***********************************************************************

P. Rajan MATHEWS,

Chief Brand Mentor,

PRO NEXT FOOD BRANDS.

A passionate Food & Beverage Senior Management Professional who is involved in nurturing, growing, and developing the Next Generation of Brands in the Global Packaged Food & Beverage industry. Presently is the Chief Brand Mentor at PRO NEXT Food Brands, (www.nextfoodbrands.com) a boutique Brand Consultancy firm focused on the packaged Food & Beverage industry. With more than 30 years of work experience in the Packaged Food and Beverage industry spanning categories from Chocolates and Confectionery, Dairy, Processed Poultry Meat, Bakery Products, Processed Foods, Spices and Culinary Products and all formats of new age packaged foods such as Frozen Foods, RTC, RTE and Instant Foods. A Postgraduate in Agri Sciences from TNAU, Coimbatore, a Post-Graduate Alumni of The Indian Institute of Management, Ahmedabad, and an International Food Business program from the ESSEC Business School, France.

?For any further guidance and future insights can be reached on his Emails : [email protected] / [email protected]

***********************************************************************************************