In the matter of M/s.Apex Laboratories Pvt.Ltd. v Axis Life sciences, [Civil Suit No. 254 of 2020], a single judge bench of the Madras High Court [N. Anand Vekatesh, J.], on January 3, 2021, held that when there is phonetic similarity between two marks, addition of one or two words to the infringing mark will not render sufficient dissimilarity from the registered trademark and will amount to infringement of that trade mark.

Section 29(9) of the Trade Marks Act, 1999 states that “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…and reference in this section to the use of a mark shall be construed accordingly.” The question that arises here is whether the ‘spoken use of those words’ apply only to marks that contain the same words as the registered trademark or also to such marks that appear to be dissimilar on account of phonetics by way of addition of syllables/words to manipulate the registered mark ?

In the present case, the plaintiff submitted that its registered trademark “ZINCOVIT”, adopted in 1988, has become a well-known mark for health supplements  The plaintiff submitted that the defendant has adopted a similar trademark “ZENKO-VIT” and has been using this mark for identical products i.e., health supplements. Further, it submitted that both marks are phonetically identical with only a change in the syllables and the defendant’s usage of a phonetically similar mark amounts to passing off. The defendant did not defend the plaintiff’s claims.

The court while contemplating the phonetic similarity between the marks observed that “adding of one or two words in a mark does not make any difference as far as phonetic similarity is concerned” and held that “A careful scrutiny of the impugned mark of the defendant “ZENKO-VIT” shows that the mark is deceptively and phonetically similar to the plaintiff’s registered trade mark “ZINCOVIT”…… any confusion in the marks relating to pharmaceutical preparations can have serious consequences and it will go against public interest. The defendant’s mark is phonetically, visually and structurally identical to the plaintiff’s trade mark and it is bound to cause confusion as both the products will be made available through the same trade channels and to the same class of consumers.” Accordingly, the court issued a permanent injunction against the defendant and restrained it from infringing or passing off the plaintiff’s registered trademark “ZINCOVIT” in any manner.

In the matter of C. Prakash Vs. S.N. Media and Others [Commercial Application No.68 of 2021, a Division Bench [Sanjib Banerjee, CJ. And P.D.Audikesavalu, J.] of the Madras High Court, by judgment dated October 29, 2021, accepting an appeal filed by the plaintiff has effectively held that prior payment of royalty by assignee is not a condition required for effective assignment of copyright.

Section 19(3) of the Copyright Act 1957, states that “The assignment of copyright in any work shall also specify the amount of royalty payable,if any, to the author or his legal heirs during the currency of the assignment and the assignment shall be subject to revision, extension or termination on terms mutually agreed upon by the parties.” The question that arises in the present case is whether ‘royalty payable’ means a mandatory prior payment of royalty for the copyright assignment to be effective or can the royalty be paid post the assignment as well?

In the present case, plaintiff was assigned the copyright in favour of two films by the defendants (2&3) via agreement dated May 29, 2020. The plaintiff asserted due payment of the royalty before the assignment which was subsequently denied by the defendants 2&3. The first defendant claims to be subsequent assignee having similar agreement with the defendants 2&3. He asserted that with no prior payment of royalty, plaintiff’s transaction cannot be considered as an effective assignment of copyright.

The Court while granting an injunction in the plaintiff’s favour held that “…Subsection (3) of Section 19 of the Act requires the assignment to specify the amount of royalty or other consideration payable. However, the provision does not mandate that the payment of consideration would be a condition precedent to the assignment taking effect. Indeed, when it comes to royalty in respect of assignment of copyright in musical work, traditionally, royalty has been paid after the music has been played notwithstanding the assignment having been made earlier. Particularly in the music industry, assignment is made and the instrument provides for the royalty payable, based upon the number or the period or other parameters that may be agreed upon between the parties. It is not required for the assignment to become effective upon due or any consideration therefor being tendered by the assignee to the assignor.”

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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In the matter of Assistant Commissioner of Income Tax v. M/s Balaji Trust [ITA 5139/MUM/ 2017], Single Member [S. Rifaur Rahman] of the Income Tax Appellate Tribunal, Mumbai, vide order dated November 25, 2021, dismissing an appeal filed by the Assessing Officer, has effectively held that brand logo is an ‘artistic work’ and cannot be subjected to tax as a ‘work of art’.

Section 56(2)(vii) of the Income Tax Act, 1961deals with ‘Income from other sources’ and states that “… the following incomes, shall be chargeable to income-tax under the head Income from other sources, namely:… (c) any property, other than immovable property,[Explanation.—For the purposes of this clause,— …(d) “property” means the following capital asset of the assessee, namely:—…(viii) any work of art;  or…”. The question therefore arises whether a brand logo registered as ‘artistic work’ under the Copyright Act can be a ‘property’ and be subjected to income tax as ‘work of art’?

The plaintiff contended that the definition of ‘property’ covering the term ‘work of art’ in the Income Tax Act is pari materia with the definition of ‘artistic work’ provided in the Practice and Procedure Manual [Artistic Work] published by the Copyright Office. Since the brand has been registered as ‘artistic work’ under the Copyright Act, ipso facto, it falls under the category of ‘property’ under Section 56(2)(vii) of the Income Tax Act read with Explanation (d).

The defendant contended that ‘artistic work’ refers to work which is an artistic innovation and is exceptional in its artistic quality. The registration of brand logo under the head ‘artistic work’ does not refer to the characterization of the brand but is simply a reference as to how does the logo looks like.

The tribunal concluded that “…a simplicitor registration of the logo…under the Copyrights Act, 1957 as “an artistic work” would not ipso facto mean that it is in the nature of “a work of art”…is neither an artistic innovation nor possesses any artistic quality for being brought within the meaning of “any work of art” as contemplated in the definition of “property” in Explanation (d) to Section 56(2)(vii) of the Income Tax Act, 1961 the same, merely for the reason that it was registered under the Copyright Act, 1957 as “an artistic work” could not be held to be in the nature of “a work of art”.”

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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In the matter of M/s. Novex Communications Pvt. Ltd. v.  DXC Technology Pvt. Ltd. & Cognizant Technologies Solutions India Pvt. Ltd. [Civil Suit Nos. 407 and 413 of 2020], a Single Judge [N. Anand Venkatesh, J.] of the Madras High Court, on December 8, 2021, held that the plaintiff, not being a copyright society, was not entitled to grant copyright licences under Section 33 of the Copyright Act, 1957 (“Act”).

Section 33(1) of Act provides that – “No person or association of persons shall…commence or, carry on the business of issuing or granting licences…except under or in accordance with the registration granted under sub-section (3)”. Section 33(3) provides for the registration to persons as a Copyright Society. At the same time, proviso to Section 33(1) states that – “an owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works…”.  The above statutory anomaly raises the question that when a copyright owner assigns their copyright to a commercial entity, can such entity carry out ‘business of granting licenses’ to third-parties, without being registered as a copyright society?

In the present case, the plaintiff submitted that they are the absolute owners of the copyright in the sound recordings by virtue of the assignment agreements executed in their favour. Thus, as owners, they have an unfettered right to issue licences independently of any copyright society. On the other hand, the defendants argued that Section 33 precludes the plaintiff from issuing licences except through a copyright society. Therefore, they did not have to obtain licences from the plaintiff for the on-ground performance of such sound recordings.

The Court rejected the plaintiff’s argument and held that, “the right of an owner, in his individual capacity, to exploit a right by issuing a license remains untouched. However, when it comes to the “business” i.e., a commercial enterprise of issuing licenses, the law, as it presently stands, requires it to be routed only through a copyright society registered under Section 33(3) of the Act.” The Court observed that the plaintiff’s grant of licences had transcended into the realm of business, and hence the statutory embargo of Section 33 applied to them. Accordingly, the Court held that the defendants had not violated the rights of the plaintiff by not obtaining licenses from them for the on-ground performance of sound recordings and dismissed the plaints.

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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In the matter of ITC Limited v. N. Ranga Rao & Sons Private Ltd. [O.S.A Nos. 183 and 184 of 2021], a Division Judge Bench [Sanjib Banerjee and P.D. Audikesavalu, JJ.] of the Madras High Court, by judgment dated November 15, 2021, allowed the appeal and set aside the previously passed injunctions, holding that similarity in the combination of primary colours of the colour scheme on the packaging, cannot by itself be a ground for injunction.

Section 29 (7) of the Trade Marks Act, 1999 (“the Act”) states, “A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services…” and Section 2(1)(zb) of the Act defines, “‘trade mark’ means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours;”. The question that arises is whether similarity in a ‘combination of colours’ can be a ground for trademark infringement by itself, or does it need to be assessed as a whole with the packaging?  

The Respondent argued for their “specific” colour combination of yellow-gold, which they have conceived and adopted for their products and have obtained statutory protection by obtaining registration under the Act. The Respondent alleged that the Appellant was engaged in the business of similar goods and had used a similar combination of colours.

The Appellant argued that no one can claim exclusivity or ownership over any colour combination, particularly if two primary colours are involved. And further argued that their names, get-up, and packaging materials are distinct.

The Court upheld the Appellant’s claims clarifying that the packaging was distinct except for the similar colour combination and that a combination of colour scheme of primary colours cannot by itself form a basis for issuing an injunction on the grounds of passing off; and made relevant observations: “upon a look at the defendant’s packaging material, notwithstanding the colour combination thereof, there is scarcely any resemblance to the plaintiff’s packaging apart from the fact that the red and yellow hues are somewhat common” and that “… there does not appear to be any element of passing-off, notwithstanding the similarity in the colour scheme where two primary colours are used in both cases, there was no justification or basis for issuing any injunction.”

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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