The Plaintiff, Adidas AG, manufacturer and distributor of sports accessories and apparel under the trademark "ADIDAS," has filed the suit seeking to secure their rights against the use of an identical mark by the Defenda

CS Professional · Intellectual Property Rights - Laws and Practices · PYQS · December 2024
The Plaintiff, Adidas AG, manufacturer and distributor of sports accessories and apparel under the trademark "ADIDAS," has filed the suit seeking to secure their rights against the use of an identical mark by the Defendants for various classes of goods, including textiles. In 1948, the founder of the Plaintiff Company, Mr. Adolf Dassler, also known as 'Adi', coined the mark "Adidas" by combining his name 'Adi' with the first three letters of his surname 'Das'. The mark was put to commercial use in 1949 when Mr. Dassler incorporated the company 'Adolf Dassler adidas Sportschuhfabrik' for manufacturing and marketing a wide range of sporting equipment, accessories, and apparels. Over the years, the company underwent corporate restructuring and is presently known as Adidas AG. The Plaintiff launched several brands, including "Adidas Originals," for its range of products. The cumulative global sales of the Plaintiff till the year 2010, the period preceding the filing of the suit, amounted to € 11,990 million. The trademark "Adidas" has been registered in the Plaintiff's favour in various countries, with the earliest one dating back to 1954. Further, the Plaintiff expended substantial amounts in promoting its products across the world. The Plaintiff has also periodically sponsored popular football, rugby, and cricket leagues. Owing to Plaintiff's extensive promotion and high quality standards of the "ADIDAS" products, they are widely recognized all over the world and exclusively associated with the Plaintiff. The Plaintiff's predecessor first registered its mark "ADIDAS" in India in the year 1971. In 1989, the Plaintiff granted a license to commercially trade in India to M/s Bata India Pvt. Ltd., thus marking their entry in the Indian market. Later, in 1996, Plaintiff established a joint venture company named 'Addidas India Marketing Private Limited' (formerly, Adidas India Trading Private Limited) in India. This joint venture was terminated in 2006, when 'Adidas India Marketing Private Limited' became Plaintiff's subsidiary. Thus, the Plaintiff has been openly and continuously carrying on their business in India since 1989. Even before 1989, the Plaintiff's goods were being purchased by Indian consumers travelling abroad. Further, their products were also available in duty-free shops at Indian airports. That apart, there were extensive broadcasting in India of sporting events which were either sponsored by the Plaintiff or where competing players used the Plaintiff's Adidas products. Such prevalence and widespread publicity even before their launch in India, indicate that Plaintiff's reputation garnered in other countries spilled into India. To further promote their "ADIDAS" mark/products, the Plaintiff sponsored several teams participating in the Indian Premier League along with other tennis, athletics, and football tournaments, and issued advertisements in print media extensively distributed throughout the country. The mark has also been endorsed by celebrated cricketers. The Plaintiff has, over the years, secured multiple registrations for "ADIDAS" trademark including it variants. The grievance arises when the plaintiff came to know that the Defendant has adopted identical word "ADIDAS" as a trademark as well as part of its tradename for their textile business (class 24) which was published in Journal No. 1029 dated 16th April, 1992. The said application was opposed by the Plaintiff's Licensee and Distributor-M/s Bata India Pvt. Ltd. stating that he has adopted this name in bad faith, with dishonest intention. The Plaintiff adopted the "ADIDAS" trademark in 1971 and secured registration of the said trademark before Defendant registration. The Plaintiff has documented the use of the "ADIDAS" mark internationally well before 1987. They have also proved their commercial use in India from 1989 through their witness testimony, who has stated that Bata India Pvt Ltd. was appointed as the Plaintiff's licensee and distributor in 1989. Defendant claims that the adoption of the trademark "ADIDAS" was both bona fide and honest. The rationale for choosing a mark identical to that of the Plaintiff is rooted in personal affection. From childhood, Defendant held deep admiration for his elder sister, addressed as 'ADI' in the Sindhi community. This admiration was so profound that he was commonly described as her devotee ('Das' in Sindhi). Consequently, the term "ADIDAS" (to mean devotee of elder sister) was conceived, combining 'ADI' (elder sister) and 'DAS' (devotee), to reflect this familial devotion. Defendant applied for registration of the Impugned mark on 19th May, 1987 on proposed to be used basis and secured registration of the trademark "ADIDAS" under no. 472388 on 29th September, 2006. The Defendants have been the prior adopter and user of this mark in India since 1987. As per the defendant, lawsuit warrants dismissal on the grounds of the stale nature of the cause of action and the Plaintiff's evident acquiescence and laches. Despite the Plaintiff's acknowledged awareness of the Defendants' use of the trademark since 1987, no suit for infringement was initiated until 2011. This prolonged period of inaction, spanning over two decades, implies a tacit consent to the Defendants' use of the mark. Given this context, initiating a suit after such a significant delay not only undermines the urgency normally associated with trademark infringement claims but also signals an abandonment of any objections to the Defendants' use. Consequently, the Plaintiff's claim is barred by principles of delay, estoppel, acquiescence, and waiver, each underscoring the unreasonable delay and its prejudicial impact on the Defendants. As per the defendant there is no reasonable likelihood of confusion between the Plaintiff's and the Defendants' trademarks, despite their textual similarity. The Defendant's trademark "ADIDAS" is consistently used in all capital letters, distinctly differentiating it from the Plaintiff's use of lowercase letters in 'Adidas.' This deliberate stylistic choice mitigates confusion among consumers, emphasizing a visual distinction in branding. Additionally, the Defendants' adoption of the trademark was conducted honestly at a time when the Plaintiff had not yet established any commercial presence in India. This timing further supports the argument that the Defendants' use of the trademark did not seek to capitalize on the Plaintiff's brand identity, as it was non-existent in the Indian market at that point. The Defendants contend that they are the prior users of the "ADIDAS" trademark for textiles, arguing that when they adopted and began using the mark in 1987, the Plaintiff's products were not commercially available in India under that trademark. However, the Plaintiff's evidence shows that their products bearing the "ADIDAS" mark were introduced into the Indian market in 1989 through Bata India Pvt. Ltd., who acted as their licensee and distributor. A registered proprietor can initiate legal proceedings for infringement, without actual use of the registered mark. Thus, the relevant date for the purpose of establishing prior use in the present case would be the date of registration of the mark and not when the Plaintiff actually started using it. How infringement/passing off is relevant with respect to the use of the mark "ADIDAS" in respect of textile pieces by the Defendants ?

Answer & Explanation:

Infringement of Trademarks As per Section 29 of the Trade Marks Act, 1999, infringement is defined as the use of a mark, by an unauthorised or an authorised person or a person who is not the registered proprietor, which is identical or deceptively similar to the trademark in relation to the goods or services in respect of which the trademark is registered. In simple words, it is defined as the violation of exclusive rights that are attached to a registered trademark without the permission of the registered owner or licensees. The courts have time and again assumed that similarity of two marks and the kind of goods and services results in causing confusion in the minds of general public. They may take an undue advantage of enjoying the hard-earned reputation of the registered trademark. In order to have a successful claim against a person for infringement of trademark, what needs to be proved is that the infringing trademark is deceptively similar or identical to the registered trademark. When can a person be considered as infringing a trademark: A registered trademark is said to be infringed in case of the following situations: If the mark in dispute is identical with or deceptively similar to the registered trademark and is in relation to the same or similar goods or services; If the identical or similar mark can cause confusion in the minds of general public to have an association with the registered trademark; If the registered trademark is used as a part of trade name or business concern for goods and services in respect of which the trademark is registered; If the trademark is advertised and as a result it takes unfair advantage or is contrary to the honest practices or is detrimental to the distinctive character and reputation of the registered trademark; If the registered trademark is used in the material meant for packaging or labelling of other goods or as a business paper without due authorization of the registered user. According to Section 103 of the Trade Marks Act, 1999, a person is said to be applying for a trademark wrongfully in the following conditions: If falsification of trademark has been committed; If any trademark has been falsely applied to goods and services; Makes, possesses or disposes of any instrument with the object and purpose of falsifying a trademark; Falsely indicates name of the country or place where the goods have been made or the name or address of the person who is responsible for its manufacturing; Alters or tampers with the indication of origin that is applied or required to be applied to a product. The punishment for infringement of trademarks as a result of falsification shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees. Provided that the alleged offender has not committed such falsification based on the following grounds: All reasonable precautions were taken against commission of such falsification and that at the time of commission of the alleged offence there was no genuine reason to suspect the genuineness of the trademark; That he had acted innocently; On demand of the prosecutor, such necessary documents of the manner and person from whom the goods were received. Kind of legal action and remedies that can be taken against infringement of Trademarks: Whenever a trademark is said to be infringed, both civil and criminal action can be brought about. The complaining party can either file a criminal complaint. The Trademark Act, 1999 recognises infringement of trademarks as a cognizable offence i.e. a police complaint can be lodged, and the infringers can be prosecuted directly. Even the courts are empowered with the authority to suo moto conduct raids and seizure operations. On the other hand, a civil action can also be brought about against such infringements. A suit can be initiated depending on whether the trademark is registered, pending or unregistered. Since trademark infringement is a continuing offence, there is no limit on the time period for filing a suit. The court of competent jurisdiction can give the following remedies if the infringements are successfully proved: Injunction/stay against the use of trade mark; Appropriate Damages; Handing over of accounts and profits; Appointment of a local commissioner by the respective court for custody or sealing of infringing material and accounts. The court can even go up to the extent of granting injunctions and directing the custom authorities to withhold the infringing material from being shipped or being disposed so that the proprietary interest of the owner gets protected; An application under Order 39 rule 1 & 2 of CPC for grant of temporary or ad interim exparte injunction. Interim orders are generally ex-parte or after notice. Passing Off Passing off is recognised as a common law tort which is used to protect and enforce unregistered trademarks in India. Like protection of trademarks, Passing off also prevents a person from misrepresenting its goods and services from that of the other. The concept of passing off has emerged in the recent past. It has extended its ambit from goods to businesses and services. Today it is even applied to many forms of unfair trading and competition. There are three elements of passing off popularly known as the classical trinity. These include Reputation, Misrepresentation and damage to goodwill. Common law courts have come up with a few basic characteristics of passing off which include the following: Misrepresentation; Made by a person in the course of trade; To prospective or ultimate consumers of goods and services; To injure the business or goodwill of the other person; It causes actual damage to the person by whom the action is brought about. Whenever such a case of passing off is brought before a court of law, it generally goes to the extent of deciding issues such as firstly, nature of mark, secondly, degree of resemblance, thirdly, whether the misrepresentation has resulted into causing confusion in the minds of people and ultimately causing loss to the plaintiff, fourthly, nature of goods, fifthly, similarity in the nature, character and performance of the goods of rival mark, sixthly, class of purchasers, the education and intelligence level, seventhly, mode of purchasing and surrounding circumstances. In, Kaviraj Pandit Durga Dutt Sharma Vs. Navaratna Pharmaceutical Laboratories, 1965 AIR 980 the Apex court held that there are some differences between the trial for passing off and trial for infringement of a trademark. In American Home Products Corpn. Vs. Lupin Laboratories Ltd., AIR 1995 , Supreme Court held that it is well-settled law that in the infringement of a registered trademark is important to carry in mind the difference between the search for infringement and the search in passing off. In a passing off action, the courts seem to see whether there is deception whereas, in infringement matter, it is important to note that the Trademark Act gives to the owner an exclusive right to the use of the mark which will be infringed in the case of indistinguishable and/ or related marks, even though there is deception, infringement can still take place.

Topics: Trademark Law

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic