Philip Morris decision provides clarity on dilution provisions

India
On January 7 2010 the Delhi High Court dismissed ITC Limited's application for an injunction preventing Philip Morris from using a stylized logo for its popular Marlboro brand of cigarettes.
 
In 2003, when the new Trademarks Act was introduced, specific provisions on dilution were incorporated to provide a sound basis for brand owners to claim trademark infringement. The decision provides clarity on the application of these provisions.
 
ITC is one of India’s largest private sector companies, with diverse business interests ranging from cigarettes and consumer goods to the hospitality industry. ITC claimed rights in the Welcomgroup W logo, which appears as hands folded together in the way Indians traditionally greet each other (referred to as 'Namaste'). The mark was adopted in 1975 and has been used ever since in relation to the hotel business. On account of such extensive use, ITC claimed that its W logo had become a famous mark.
 
ITC alleged that Philip Morris’s use of an M logo on its Marlboro festive pack of cigarettes infringed its W logo. ITC's primary argument was that this case fell under Section 29(4) of the Trademarks Act and that Philip Morris should be restrained from using a logo similar to its W logo. The court opined that, to establish dilution under Section 29(4), ITC had to demonstrate that:
  • the two marks were similar or identical;
  • its mark had a reputation in India;
  • use of the mark by the alleged infringer was without due cause; and
  • such use took unfair advantage of, or was detrimental to, the distinctive character or repute of its registered trademark. 
All elements must be cumulatively satisfied, as, in cases of dilution, there is no presumption of infringement of the mark, making the test for trademark dilution more stringent.
 
With regard to the first element under Section 29(4), ITC had to prove or establish that the two marks were identical or similar. The question of deception did not arise. The court was of the view that “a global look, rather than a focus only on the common elements of the mark, is to be taken” when considering whether a later mark dilutes a registered mark. The court noted that ITC’s W logo was part of a larger trademark or label, and was not a standalone mark; it was used with the word 'Welcomgroup', or the name of the resort or service. 
 
The court concluded that, based on an overall assessment, without looking into the similarities/dissimilarities in detail, the two logos were not identical or similar.
 
The court then turned to the issue of whether ITC’s mark had a reputation in India. The court conceded that the ample evidence presented by ITC supported its claim that the Welcomgroup brand had acquired a reputation. However, ITC's claim that the W logo was its house mark was found to be unconvincing.
 
The court thus held that “though the aura of the [W] logo may go beyond niche hospitality services, and could extend to other luxury goods, there is nothing suggesting that such association extends to mid to high-priced cigarettes”, for which Philip Morris was using its mark.  
 
Finally, the court considered whether use of the mark by Philip Morris was without due cause, and was detrimental to the distinctive character or reputation of ITC's mark. Noting that Philip Morris had shown that its marks have always carried a distinctive ‘M’ roof design with the word ‘Marlboro’ prominently accompanying it, the court was satisfied that ITC had failed to show that Philip Morris had taken undue advantage or caused detriment to it.
 
Crucially, the court took into account the discerning consumer exposed to goods and services of the parties in order to rule out dilution.
 
Gauri Kumar, Ranjan Narula Associates, associate firm of Rouse Group, Delhi  

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