First decision on Section 29(4) of the Trademarks Act issued

In Ford Motor Co v Borman (Case FAO(OS) 9/2008, November 7 2008), the Delhi High Court has addressed the issue of the scope and intent of Section 29(4) of the Trademarks Act 1999 for the first time.

The act (which entered into force in 2003) introduced the doctrine of dilution in Section 29. Under this provision, a registered trademark is infringed in the following circumstances:

use of an identical or deceptively similar trademark in relation to goods or services for which the mark is registered;
use of an identical or similar trademark in relation to identical or similar goods or services;
use of the registered trademark as part of a corporate name; and
use of an identical or similar trademark in relation to dissimilar goods if:
- the registered trademark has a reputation in India; and
- use of the mark takes unfair advantage of, or is detrimental to, the distinctive character or repute of the registered trademark.

The abovementioned fourth point is embodied in Section 29(4) and is essentially a statutory formulation of the dilution doctrine. Although Section 29(4) was introduced in 2003, no court had interpreted the language of this provision.

In the present case, Ford Motor Co filed suit against the defendants, who manufactured shoes under the mark FORD. Among other things, Ford argued that the defendants' use of the mark took unfair advantage of, and was detrimental to, the distinctive character and repute of its registered trademark. A single judge of the Delhi High Court dismissed the suit at a preliminary stage of the proceedings for want of a cause of action and want of territorial jurisdiction. Ford appealed.

The Division Bench of the Delhi High Court set aside the order of the single judge. In doing so, it highlighted the difference between the former legislation and the newly-introduced Section 29(4).

The court pointed out that Section 29(4) was intended to protect registered trademarks with a reputation in India. The provision applies to use of a similar mark in relation to goods and/or services that may or may not be similar to those in respect of which the trademark is registered. The court relied on the parliamentary discussions on the Trademarks Act, which stated that:

“the proposed bill seeks to introduce protection for registered trademarks for services as well as goods. It also seeks to extend protection to well-known trademarks.”

The court believed that the parliamentary discussions supported its interpretation of Section 29(4) as an exception to the general rule (under which infringement occurs only where a similar mark is used in relation to the goods and/or services for which the trademark is registered). The court concluded that it could not ignore the intent of the legislature with regard to the protection of well-known trademarks.

In addition, the court held that if a plaintiff pleads the circumstances envisaged in Section 29(4), a suit cannot be dismissed without trial. Therefore, since Ford argued that FORD was a trademark with reputation in India and that the defendants' use of the mark was detrimental to the distinctive character or repute of its registered trademark, the court held that the veracity of Ford's statements could not be assessed without full trial.

The decision is significant for trademark owners and practitioners in that it is the first to interpret Section 29(4) of the act. It will be interesting to see how the provision is further interpreted in future decisions.

Swathi Sukumar, Anand And Anand Advocates, New Delhi

First decision on Section 29(4) of the Trademarks Act issued

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