A Registered Trademark prevents third parties from adopting, using or registering an identical or a deceptively similar trademark. However, such rights are not absolute and subject to the exception of “Fair Use”. The Doctrine of Fair use is defined unders section 30 of the Trademarks Act, 1999, which is an affirmative defense available against a claim of infringement by proprietor of a registered trademark. Specifically, section 30(1) of the Act lays down the following broad conditions-
- Bonafide use of the mark should be there in industrial or commercial matters.
- Use is not as to take unfair advantage of or be detrimental to the distinctive character or repute of the Trademark.
“Fair use” of a Trademark by any person, other than proprietor falls into the following two criterias-
- Descriptive Fair Use- It is related to a use of registered Trademark in a descriptive manner, i.e. used in relation to goods and services indicating the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or other characteristics of goods or services under section 30(2)(a) of the Act.
- Nominative Fair Use- It is related to the use of goods and services of registered Trademark by a person in relation to goods adapted to form part of or to be accessories, provided that its is “Reasonably Necessary” in order to indicate that the goods so adapted are compatible with the goods sold under the Trademark, under section 30(2)(d) of the act. It generally applies to the news, commentary, criticism, parody, comparative advertisement and any other non-commercial use of a registered Trademark.
When we talk about the above two doctrines, Nominative Fair use is more problematic and more controversial one. Therefore, the Indian courts subject “nominative Fair Use” defense to an enhanced scrutiny.
In a case of Consim Info Pvt Ltd. Vs Google India Pvt. Ltd, Madras High Court relied upon the two US Ninth Circuit Judgements, to interpret the meaning of the words “Reasonably necessary” unders section 30(2)(d), and has held that for any unauthorized use of trademark and label it as “Nominative Fair Use”, for this it must meet three tests Viz, (1) the product or services in question must be one which do not gets identified easily by any consumer, (ii) only the mark or marks may be sued as is reasonably necessary to identify the product or services. (iii) the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the proprietor of the Trademark
In Hawkins Cookers Ltd. vs Murugan enterprises, where defendants were using the registered Trademark of “Hawkins” for their gaskets. The court in this case has held that the defendant was using the trademark in relation to refills, spare parts, and accessories adopted for use in or with the goods of the proprietor may not amount to infringement, if the defendant establishes (i) that the use of mark is reasonably necessary for describing that the article is adapted for use with the Plaintiff’s goods. (ii) that the use was bona fide and (iii) that the effect of the use is not likely to deceive the public as to the trade origin. In appeal the division bench held that the defendant was using the word “HAWKINS” similar to the original mark is, therefore the defendant was not allowed to take defense of this Nominative Fair use.
The Delhi High Court in the Landmark judgement of Prius Auto industries Ltd. Vs Toyota Jidosha Kabushiki Kaisha, dealt with the nominative fair use defense against unauthorized use of the plaintiff’s trademark “TOYOTA” Toyota Device and INNOVA in connection with the defendant’s car accessories and spare parts. While the single judge of the High court set aside the ex-parte injunction order and passed the order against defendants from retraining them to use the plaintiff’s mark. The division bench while balancing equities imposed an interim arrangement between parties with their consent, wherein the defendants, (i) were restrained from using Plaintiff’s registered trademark except for the purposes of identifying that the defendant’s products can be used in the cars, (ii) where to ensure that the words “TOYOTA” and “INNOVA” were not be written in the same way as original marks appear, (iii) and where to use the words “Genuine Accessories” only in conjunction with the defendant’s name.
Therefore, the key factors Indian courts take while deciding of the matters related to nominative Fair use are-
- Whether such use is bonafide and reasonably necessary for identification purposes or not?
- Whether such use is intended to suggest sponsorship or endorsement with the proprietor.
- Whether such use will likely cause confusion amongst the consumers or not? And
- The manner in which the brand owner’s trademark is used and whether stylization and font is copied.
Therefore, courts while deciding upon the nominative fair use doctrine, at the same time the courts also consider the right of the actual owner.