In the matter of Pernod Ricard India Private Limited v. Frost Falcon Distilleries Limited, [CS (Comm) 94/2021], Single Judge [C. Hari Shankar, J.] of the High Court of Delhi, vide order dated March 2, 2022, held that a passing off action in a trademark suit is product specific and can exist even in the absence of infringement.

Section 29(1) of the Trade Marks Act, 1999 (the “Act”) states that a registered trademark is infringed by “a mark which is identical with, or deceptively similar to, the trade mark”. Section 27(2) of the Act reserves a proprietor’s right to initiate action against “passing off goods or services as the goods of another person or as services provided by another person.” The question that arises is whether “passing off of goods or services” would also include establishing “similarity” of a “mark” with the registered “trade mark”, or whether a connection based on the overall picture is enough?

The Plaintiffs, proprietors of the marks “BLENDERS PRIDE” and “IMPERIAL BLUE” in Class 33 used for Indian Made Foreign Liquor (IMFL) contended that the Defendant’s mark “CASINOS PRIDE” (containing the word “PRIDE”), used in the same class, bears phonetic similarity to the former mark and visual similarity to the latter’s trade-dress, including its “essential features” such as the blue colour, golden dome design, etc. The Defendants argued that the marks should be seen in a composite manner (by application of the anti-dissection rule) and claimed that the individual aspects of the Plaintiff’s marks, design, and representation could not be sought for protection as they were not registered individually. The Defendant’s also argued that their marks, label, and packaging were distinctive.

The Court held that none of the similarities pointed out in the separate marks constituted a strong infringement case. The Court held that “infringement is a mark specific tort whereas, passing-off is goods specific. Relief in an action for infringement is, therefore, aimed at protecting the mark whereas relief in an action for passing off protects the product and the goodwill and reputation commanded by the product. The comparison in an infringement case is, therefore, mark to mark, whereas the comparison, in a case of passing off, is, product to product.”. The Court further held that passing-off action can suffice if it is shown that “by combining distinctive features of different marks of its goods, the defendant is seeking to create an overall picture of association between the products of the defendant and the plaintiff”.

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.

Copyright: ALG India Law Offices LLP

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.

Copyright: ALG India Law Offices LLP

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.

Copyright: ALG India Law Offices LLP

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.

Copyright: ALG India Law Offices LLP