Posted On 2016/12/05 By In Business, Branding, News, Consumer With 420 Views

Luxury Brands and Trademark Protection in India

While India is a fast growing market for high-end luxury brands, it is also a paradise for creators and consumers of infringing products. In a study conducted by ASSOCHAM and KPMG in 2014[1], the growing prevalence of counterfeit goods and grey market are considered serious impediments to the growth of the industry; “most of these products belong to segments such as apparel, perfumes and accessories, which are usually lower ticket items and can easily be placed in grey channels”[2]. Awareness and collaboration with authorities, who lose taxes and duties thanks to the counterfeit trade, are essential. The courts in India are therefore the first port of call for the proprietors of luxury brands and marks, in the search for protection against infringement.

Courts in India are rapidly gaining expertise, and confidence, in dealing with cases of trade mark infringement with relation to luxury brands. By considering the well-known status of some luxury marks, and considering the potential for loss to the proprietors of the marks, the courts in India are beginning to develop a robust intellectual property jurisprudence, slowly dispelling a long-held image of India as a haven for counterfeit goods.

In one notable case, French luxury brand Hermes took Indian leather goods company Da Milano to court to stop the sale of handbags that resemble Hermes’s noted Birkin Bag. One argument of the injuncted party was that while the Birkin Bag cost upwards of Rs 6 lacs, Da Milano’s purses cost approximately Rs 10,000. Further, the shape was not identical.   The shape of the Birkin bag has been granted protection by the United States Patents and Trademarks Office. Hermes was granted an injunction order in 2013 from the Delhi High Court against Da Milano in 2013. In the interest of ending the litigation, in 2016[3], the parties in the case reached a compromise; while the defendants were allowed to sell their handbag, they were prohibited from showing “ornamental or decorative part of the plaintiff’s handbag viz a horizontal belt and flap having three protruding lobes”, which was part of the Hermes bag protected in India.

Christian Louboutin also received protection from the Delhi High Court in the case of Christian Louboutin Sas vs Nakul Bajaj & Ors[4].  In this case, it was discovered that the defendants had been selling shoes online on their website, claiming that they were the original wares of the plaintiff Christian Louboutin, and indicating that they were associated with the plaintiffs, by using the mark CHRISTIAN LOUBOUTIN prominently on their website. Louboutin contended that the goods would be deemed to be counterfeit since they were being sold without their due permission, authorisation and quality control and that the normal grey market rule would not apply to products sold on the internet since the potentiality of harm was much higher there, rendering it impossible for the proprietor of the mark to exert any sort of quality control. Louboutin, relying on Copad SA v Christian Dior Couture SA (ECJ) also contended that luxury goods “have an aura of luxury and prestige surrounding them differentiating them from other goods”, and therefore, “even very small changes in storage, packaging, labeling, after sale services, ware-housing, etc, can affect the quality of the goods and consumer’s belief in them.” Relief was granted to Louboutin, holding that they would suffer a grave loss if an injunction was not granted.

In the case of Cartier International Ag & Others vs Gaurav Bhatia & Ors[5], the Delhi High Court was faced with a case where the defendants were selling counterfeit goods online at a massive “discount”. The concerned marks were CARTIER (recognised as a well-known mark under S. 2 (zg) of the Act), PANERAI, VACHERON CONSTANTIN, and JAEGER LECOULTRE. Considering the evidence on hand, including screenshots from websites, and complaints made by several duped customers to authorities, the court granted a decree of permanent injunction, ordered furnishing of details of all transactions to the plaintiff, punitive damages of Rs 1 crore, and the declaration of PANERAI, VACHERON CONSTANTIN, and JAEGER LECOULTRE as well-known trade marks.

Districts courts are also increasingly cognizant of the importance of protecting trade mark rights of luxury brands, indicating the increasing spread of awareness of the significance of IPR rights in the Indian judiciary. In the case of Parfums Christian Dior v M/s Dior[6] the District Court in Delhi injuncted the defendants, located in Mumbai, from using the mark “DIOR” on their leather goods.

Courts are able to understand, more than ever, the need to protect well-known trade marks and luxury marks, and do so with alacrity. This need is met by understanding the surrounding facts of a particular case, whether the goods are counterfeit or traded in the grey market, the essential features of the mark and the goods, and the evidence available. The need for proprietors of luxury marks to be vigilant to counterfeits, as well as to the unauthorised trade of their goods cannot be overstated. Indeed, the proprietors of well known marks are sensitive to the need to actively defend their intellectual property rights, in order to maintain their competitive advantage in crowded sectors. However, this need is amplified considerably in the case of luxury brands. The premium attached to the brand comes from the prestige associated with it, and therefore, any tarnishment or dilution of the marks and the overall brand will have a real, and considerable, effect on the value of the brand, ultimately hurting profits and diminishing the value of the brand.

While the proprietors of such luxury brands are well aware that persons who purchase their genuine goods will not purchase the counterfeits, and that those persons who purchase the counterfeit intend only to enjoy the cachet of the brands without paying the premium necessary (therefore, never becoming part of the luxury brand’s target consumers), there is still a pressing need to prosecute every known case of infringement or passing off. Therefore, the proprietors of such luxury brands and widely recognised marks must continue to be vigilant and prompt in defending their brands in Indian markets. It appears that the Indian courts are up to the challenge.

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Article: Lexology / Image: Pinterest

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Stefan (from Austria, Europe) has been living, studying and working in China since 2010. Stefan has worked on several research, publication and consulting projects focusing on the China Travel Market. He holds two Masters degrees and is an expert on China Outbound Tourism, Marketing and Social Media in China. Stefan works with BMG on the Global Ready China Seminars as well as the Global Ready China News and related projects. He also has teaching engagements in the areas of eMarketing and Tourism Strategy.

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