Plea of common use: A challenge for Plaintiff

INTRODUCTION:

In the present dynamic market and economic landscape, with an ongoing surge in trademark registrations, there is a parallel escalation in trademark infringement. One of the major obstacle in the trademark infringement law suits is the defence of the “plea of common use or the third-party usage”. This defence stems from the common practice of parallel branding and rebranding, where infringers deliberately weaken a brand's reputation by selling exact copies of its products. This strategy confuses consumers, leading them to unintentionally purchase counterfeit items due to their similarity to the original brand. This deceptive copying method has been recognized in the case of in Marico Limited v. Mr. Mukesh Kumar & Ors., MANU/DE/3084/2018), where, court stated that the most clever way to copy something is to make it similar enough to confuse people, but different enough to trick the courts. Not many people would be foolish enough to make exact copies of someone else's trademark or symbol.

In plea of common use the defendants' assertion hinges on the premise that the trademark in question, over which the plaintiff claims rights, is utilized by multiple parties. They argue that if the plaintiff refrains from pursuing legal action against these third parties, it should consequently preclude the plaintiff from taking action against the defendant. In the event that it is determined within a legal proceeding that there has been an unreasonable delay in asserting a claim, or if the plaintiff has consciously chosen to remain silent, then the rights of the plaintiff will be waived off. In Addition to that, this defence presents a substantial challenge for the plaintiff regarding the extent to which it must pursue each infringer to safeguard its trademark. The notion of disentitling the plaintiff from seeking protection for its trademark simply because it has not initiated legal action against all infringing parties has been discussed at length in various judgements by the Hon’ble Supreme court of India and high courts of various states.

PLEA OF COMMON USE AS A DEFENCE

In legal actions where a plaintiff sues for passing off infringement, defendants often raise a defence based on other entities using a similar trademark without consequence. They argue that the plaintiff's failure to act against these parties implies approval of their usage. Following this logic, defendants claim the right to continue using the allegedly infringing trademark until all such users are sued. Defendants raise a crucial question: if the plaintiff refrains from pursuing legal action against third parties or known infringers, does this omission preclude the plaintiff from securing an injunction against the defendant? The effectiveness of such a defence becomes a pivotal issue in this context. Defendants commonly employ this defence to argue before the court that if numerous other infringers are also violating the plaintiff's trademark, the plaintiff should have initiated legal action against all such infringers. According to this defence, only those who are specifically named in the lawsuit should not face consequences, rather others should also be penalized who are using the mark of the plaintiff. Defendants also claim that since the plaintiff has failed to take an action against the other infringers which shows that the plaintiff has abandoned its trademark.

This contention of defendants have been negated in various judgements such as In Dr. Reddy’s Laboratories Ltd. Vs. Reddy Pharmaceuticals Limited 2004(29) PTC435(Del) [26.08.2004], the court affirmed that trademark or copyright owners aren't obliged to pursue every infringer, particularly if the infringement poses no significant threat to their business. They may choose to address minor transgressions only when they escalate to affect their business interests and customer confusion arises. In Prakash Roadline Ltd. Vs. Prakash Parcel Service (P) Ltd. 1992(22)DRJ489, [01.03.1992], the court clarified that the lack of legal action against certain parties doesn't prevent the plaintiff from pursuing action against the defendant. Non-action against these parties could stem from their insignificant impact on the plaintiff's business or from a perceived threat from the defendant, particularly if the defendant's promoters have prior affiliations with the plaintiff. Thus, the plaintiff's decision not to pursue legal action against other parties doesn't undermine its right to initiate proceedings against the defendant. Even in the case of In P.M. Diesels Ltd. Vs. S.M. Diesels, 1993- PTC-75, [21.02.1994], the court emphasized that its role is to determine the rights of the involved parties, not those of other entities. The usage of "Marshal" by other manufacturers is irrelevant. Additionally, the plaintiff's inaction against other instances of infringement doesn't signify trademark abandonment; it can independently challenge the defendant's actions.

However, To successfully plead common use, defendants must prove substantial usage of the plaintiff's trademark by other parties; simply using the name of the registered proprietor's trademark isn't relevant. In Pankaj Goel Vs. Dabur India Ltd. 2008(38)PTC49(Del), the court clarified that while the plaintiff isn't required to sue every infringer, the defence is valid if defendants demonstrate significant business turnover by third-party users of a similar mark or a threat to the plaintiff's distinctiveness. Similarly, in A.O. Smith Corporation and Ors. Vs. Star Smith Export Pvt. Ltd. and Ors. MANU/DE/2247/2024, the court held that defendants must prove significant business turnover by third-party users or a threat to the plaintiff's distinctiveness, aligning with previous judgments. The plaintiff isn't obligated to act against infringements that don't prejudice it.

CHALLENGES FACED BY THE PLAINTIFF

In cases of trademark infringement, when the plaintiff initiates a passing off action seeking relief for its trademark, it is often observed that the defendants, as part of their trial contentions, assert a common plea defence. This defence is typically established by highlighting the presence of multiple infringers who are using the plaintiff's trademark. The defendants contend that the plaintiff has chosen to pursue a lawsuit only against them, despite the existence of various other infringers.

The primary issue arises for the plaintiff when an infringing party appends a suffix or prefix to the tradename or trademark and starts utilizing it. Numerous infringers may use the plaintiff's trademark, and pursuing each infringer individually becomes impractical. It is not feasible for the plaintiff to file a lawsuit against every new infringer daily. In order to safeguard their established goodwill and reputation in the market, plaintiffs diligently work to build an image and value for their trademark. However, frequent infringement by various parties poses a significant challenge for the plaintiff in initiating trademark infringement suits against all offenders. In such a situation, the plaintiff faces a substantial workload in monitoring trademarks, conducting raids on each infringer, initiating fresh lawsuits against each party, and subsequently contesting these cases in a court of law. Moreover, it is impractical for the plaintiff to obtain leads or information about the infringing party. The plaintiff's primary office or market where they sell their products may be situated in one location or state, while the infringer could be distributing counterfeit goods and products in a market located in another state. Consequently, acquiring accurate information about the specific locations where each infringer is selling counterfeit products proves to be a challenging and cumbersome process for the plaintiff. Secondly, on numerous occasions, the plaintiff may choose not to initiate legal proceedings against every minor infringer, either because they do not pose a significant threat to the plaintiff's interests or due to insufficient evidence demonstrating substantial use of the plaintiff's trademark by these small-scale infringers.

CONCLUSION:

After reviewing various judgments from both the Hon’ble Supreme Court of India and the Hon’ble High Court, a clear principle emerges: while the use of the plaintiff's trademark by third parties can be a valid defence in trademark infringement and passing off cases, courts often establish that the plaintiff isn't required to pursue every infringer. Failure to act against other infringers doesn't grant defendants the right to use the plaintiff's trademark. However, if it's proven that the plaintiff has been negligent or acquiescent, the defence of common plea can succeed.

This situation presents a significant challenge for the plaintiff, as it's impractical to chase after every infringer. Importantly, the plaintiff's decision not to pursue action against other infringers doesn't mean trademark abandonment; the plaintiff retains the right to wait until it perceives that third-party usage is negatively impacting its rights. Even if a company has prior usage rights, it isn't immune to potential trademark infringement by third parties. There could be cases where a new entity begins marketing its products under another party's registered trademark, gaining brand recognition through sales and advertising.Therefore, the plaintiff must remain vigilant. Upon learning of trademark infringement, it must promptly take action to safeguard its goodwill, reputation, and brand identity in the market.