The season 2 of Shark Tank India has gained immense popularity like its first season. Shark Tank India is an Indian reality television series that airs on Sony Entertainment Television. The show is the Indian franchise of the American show Shark Tank. It features aspiring entrepreneurs from India who pitch their business models to a panel of investors (“Sharks”) and persuade them to invest money in their business. Mostly the pitchers featuring on the show are startups.
The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. [1]These companies generally start with high costs and limited revenue, which is why they look for capital from investors. The show successfully showcases the fact that there is so much innovation, quality and competence in India. It also encourages the “Make in India” and startup culture. However, Shark Tank India also highlights a major issue with Indian startups-lack of trademark awareness.
Most startups featuring on the show tend to have very generic and/or descriptive trademarks/trade names. For instance, Girgit-colour changing clothing, Stage-OTT Platform, Organic Smokes-Herbal smokes, TeaFit- Sugar fee herbal tea are few examples of generic and descriptive trademarks/trade names that appeared on the show. This is not only contrary to the fundamentals of trademark law (barring exceptions) but it would also make it difficult for an entity to stand out/build a brand /protect its interests. This goes to show lack of awareness about trademark law and its importance in protecting and scaling a business. While this may not be a big issue for such entities in the beginning but it would certainly increase their chances of facing trademark related issues upon scaling.
Pitches on the show reflect that there is awareness about patent and its protection, a type of intellectual property that seeks to protect inventions, amongst the pitchers. Sharks are also often seen advising pitchers on the show to change their company name/trade name or logo because of the same being generic/ less attractive/ lacking distinctive character. However, the gravity of this needs to be explained to the pitchers/entrepreneurs in depth. Choosing the right trademark/trade name is extremely crucial for any business from the perspective of brand building, identity creation, creation of an exclusive association of products/services with its brand name in the minds of the customers, preventing other players from adopting the same or similar trademark/trade name for same or similar class of goods or services, protecting legal rights. For example ‘Dettol’, ‘Parle G’, ‘Dalda’ were originally brand names or trademarks of entities and were eventually associated to bear reference to the product itself. For instance, customers would use the word “Parle G” synonymously with biscuits.
What is trademark and why is it important?
Trademark is another type of intellectual property. It can be any word, phrase, symbol, design, or a combination of these things that identifies your goods or services. Section 2 (m) of the Trade Marks Act, 1999 defines “mark” as a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof. Section 2(zb) of the Act defines “trade mark” as a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and— (i) in relation to Chapter XII (other than section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and (ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark. The word “trademark” can refer to both trademarks and service marks.
Thus, trademark is crucial in creating a brand name and identity. It is how customers recognize you in the marketplace and distinguish you from competitors. A trademark:
Identifies the source of your goods or services;
Provides legal protection for your brand;
Helps you guard against counterfeiting and fraud.
Section 9 of the Trade Marks Act provides for absolute grounds for refusal of registration of a trademark. Generic name, lack of distinctive character, descriptive name/mark descriptive of the quality, quantity, intended purpose, geographical origin are also grounds for such absolute refusal of registration. Section 9 reads as follows-
9. Absolute grounds for refusal of registration.—(1) The trade marks— (a) which are devoid of any distinctive character, that is to say, not capable of distinguishing the goods or services of one person from those of another person; (b) which consist exclusively of marks or indications which may serve in trade to designate the kind, quality, quantity, intended purpose, values, geographical origin or the time of production of the goods or rendering of the service or other characteristics of the goods or service; (c) which consist exclusively of marks or indications which have become customary in the current language or in the bona fide and established practices of the trade, shall not be registered: Provided that a trade mark shall not be refused registration if before the date of application for registration it has acquired a distinctive character as a result of the use made of it or is a well-known trade mark.
(2) A mark shall not be registered as a trade mark if— (a) it is of such nature as to deceive the public or cause confusion; (b) it contains or comprises of any matter likely to hurt the religious susceptibilities of any class or section of the citizens of India; (c) it comprises or contains scandalous or obscene matter; (d) its use is prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950 (12 of 1950).
(3) A mark shall not be registered as a trade mark if it consists exclusively of— (a) the shape of goods which results from the nature of the goods themselves; or (b) the shape of goods which is necessary to obtain a technical result; or (c) the shape which gives substantial value to the goods. Explanation.—For the purposes of this section, the nature of goods or services in relation to which the trade mark is used or proposed to be used shall not be a ground for refusal of registration.
Both registered and unregistered trademarks which are popular and reputed can be protected in India. The Trade Marks Act of 1999 deals with “acquired distinctiveness” or “secondary meaning” under the proviso to Section 9(1) and Section 32. According to the proviso to Section 9(1) registration of the descriptive mark is possible only if the mark has acquired distinctiveness before the application for registration. Section 32 provides that if any mark has been registered in breach of sub-section (1) of Section 9 of the Act, the mark shall not be declared void, if it has acquired distinctiveness after its registration and before commencement of any legal proceedings challenging the validity of such registration.
A mark is said to have acquired distinctiveness or secondary meaning when due to the extensive and substantial use of the mark over a period of time it persuades the consumers to relate the mark with a product or services and therefore acquired distinctiveness under Section 9 is equivalent to being mark well known.
Problem with generic, descriptive and less distinctive marks
On 12th October, 2020, the Hon’ble Delhi High Court vacated an interim injunction effectively permitting the Respondent (Treasure Vase Ventures Pvt. Ltd.) to use the impugned trademark ‘DELIVER-E’. In doing so the court held that the Applicant’s (Delhivery Pvt. Ltd.) registered trademark ‘DELHIVERY’ is phonetically similar to the English word ‘delivery’ and is a generic mark, not eligible for benefit of statutory rights. The court reiterated that unless a generic mark has achieved distinctiveness, it cannot be accorded protection under law, and to determine the ‘so claimed’ distinctiveness of the mark at the interim stage would essentially amount to conducting a mini trial, which is prohibited. The court rejected the Applicant’s argument that owing to high sales figures the mark ‘DELHIVERY’ has acquired secondary meaning. Citing para. 19 from the People Interactive case, the court rejected this argument and reiterated that “evidence, showing the displacement of the primary meaning by the secondary meaning, must be of the members of the public as well, not merely those specially placed to attest to its uniqueness.”[2]
Similarly, in 2011, in the Hon’ble Delhi High Court in Bhole Baba Milk Food Industries Ltd v. Parul Food Specialities (P) Ltd, refused to allow for a trademark over the word “Krishna”. It is relevant to note that the trademark was already registered but the court reasoned that the word Krishna in India was as common as “John in the West”. Thus, a word as common as “Krishna” would not afford the Appellant’s product any secondary distinctiveness. Secondary distinctiveness/meaning essentially implies that the usage of the term reminds people of the goods or its source. So, for the appellant to have been successful in establishing that their trademark “Krishna” had acquired distinctiveness, they would have had to prove that, when one says “Krishna”, one would automatically associate it with the milk and milk products produced by the Appellant, like when one says “just do it” and you are reminded of Nike.
Power of distinctive and popular marks
A popular example of distinctive character of a trademark is Cadbury chocolates. Cadbury (Kraft Foods) successfully asserted its claim against SOCIÉTÉ DES PRODUITS NESTLÉ S.A (Nestle)[3] to register the colour purple (Pantone 2685C) on the whole of the visible surface of its chocolate bars, eating chocolate and drinking chocolates. The order stated that the colour had acquired a distinctive character and people associated the colour with Cadbury chocolates. Evidence, in the form of a public survey, proved that the public associated the colour with Cadbury’s products. It is pertinent to note that the same relief was not extended to chocolate assortments and chocolate cakes despite the fact that the colour had been in use for these products as well. This was because the evidence did not indicate that the public associate this colour, for these products, with Cadbury.
In January 2022, a single-judge bench of the Delhi High Court in the case of Hamdard National Foundation (India) v. Sadar Laboratories Pvt. Limited had refused to grant an interim injunction preventing the defendant from using the mark ‘Sharbat Dil Afza’ which was alleged to infringe on the plaintiff’s mark ‘Sharbat Rooh Afza’. The injunction was refused on the ground that the marks were dissimilar and that similarity in the meaning of the words ‘Dil’ and ‘Rooh’ was not a substantial ground to hold that there would be confusion between the two marks, despite there being a common suffix. Consequently, Hamdard filed an appeal seeking a permanent injunction against Sadar from using the mark ‘Sharbat Dil Afza’. The division bench of the High Court set aside the order of the Single Judge and held that there was phonetic similarity between the marks ‘Sharbat Rooh Afza’ and ‘Sharbat Dil Afza’, while also comparing their trade dress. Hamdard’s reputation and goodwill with respect to the mark ‘Sharbat Rooh Afza’ were held to be of importance while stating that the defendant would gain an undue advantage if allowed to continue using the ‘Sharbat Dil Afza’ mark. The impression created by the label in the minds of the public, the trade dress of the two products, and the shape of the bottles – all of which create the overall impression were considered to be relevant factors to arrive at the conclusion that the marks were similar. The goodwill acquired by ‘Rooh Afza’ and its function as a source identifier for the appellant’s product from 1907 was noted as a reason to accord the mark a high degree of protection.
Conclusion
The foregoing discussion reaffirms the fact that choosing the right trademark/ trade name can prove to be extremely crucial for a startup in the long run. A trademark/trade name can define how a business or a brand is perceived by the consumers. The right trademark/trade name helps to scale a business and create a unique identity in the market. It helps distinguish the goods/services of one entity from that of another. It also provides legal protection to entrepreneurs to secure their rights in the mark, protect the goodwill and reputation of their brand/trademark/trade name/business, and prevent other entities from using the same or similar mark for same class of goods or services with an intent to ride upon their goodwill.
It is well settled that under the Trade Marks Act, 1999, common words or descriptive words or names cannot be trademarked unless these words or names have acquired a great reputation and goodwill in the market and have gained secondary significance.[4] Therefore, startups must seek legal advice while choosing a name/mark. A thorough trademark search must be conducted before finalising the same to ascertain uniqueness and distinctive nature, and whether the same or similar mark already exists. Accordingly, the mark can be registered under the Trade Marks Act, 1999.
Shark Tank India features entreprenuers Peyush Bansal, Amit Jain, Aman Gupta, Anupam Mittal, Namita Thapar and Vineeta Singh as judges/Sharks.
[2] https://spicyip.com/2020/10/delhi-hc-delivers-a-blow-to-delhivery-rules-the-mark-to-be-phonetically-generic-not-eligible-for-statutory-benefits.html
[3] Order dated 20-10-2011 in respect of TRADE MARK APPLICATION No. 2376879 (UK) http://www.ipo.gov.uk/types/tm/t-os/t-find/t-challenge-decision-results/o35811.pdf
[4] Living Media (India) Ltd. v. Jitender V. Jain, 2002 SCC OnLine Del 605