Rahul Chaudhry & Partners | View firm profile
The fashion industry thrives on the influence and allegiance of brands and their loyal customer bases. Consider the famous phrase “It’s not a bag, it’s a Birkin’, people wait for months, if not years, to get their hands on a Birkin Bag.The name and the craftsmanship attached to the said name is the reason for brand loyalty. This is the case for all the brands in the fashion industry. Every person who shops has a preference, Ted Baker or Louis Vuitton for bags, Uniqlo or Moschino for clothing, Nike or Adidas for shoes, Casio or Hublot for watches and the list is endless. These are the reasons why the protection of brands are considered necessary, both in the interest of the general public as well as for the owners and the customers of such brands.
Many brands that are popular are considered to be a luxury or a high end brand, which are usually not within the reach of a common man. This is where counterfeits come into the picture, i.e., copies of the original product for a fraction of the actual price, which with the advent of e-commerce platforms, has only become easier to sell. This means that someone is using the brand value, reputation and the goodwill attached to a famous company and their brand, in order to sell goods which may be more reasonable and of lesser quality and craftsman. This takes place in two forms, the primary one being non-deceptive counterfeiting wherein the consumer may be consciously buying a counterfeit just to be associated with the brand value of the famous brand. Another one being where people fall prey to deceptive counterfeiting wherein the goods sold are deceptive and are being sold through comparable channels where the consumer may actually believe the same to be a genuine product[1]. The primary method steers to a loss for the brand owner and the latter is a loss for both the owner and the purchaser.
For better understanding we can focus on the trademark H&M with the red lettering. If someone was selling clothes under the brand name “H&N” or “HM” in the same red letters, due to the deceptive similarity of both the marks, a confused consumer may purchase the counterfeit goods. Another instance could be that the counterfeiters are using the exact same logo of H&M but are selling clothes at a lower price and cheaper quality however the consumer may knowingly purchase the same to make use of and be associated with the brand value of H&M. In the case of H&M Hennes & Mauritz Ab v. Hm Megabrands Pvt. Ltd.[2] the Hon’ble Delhi High Court held that the use of the letters “HM” even with the absence of “&” in between would lead to confusion in the minds of the customers of the brand.
In the case Puma Se V. Ashok Kumar[3] before the Hon’ble Delhi High Court, the defendant was selling shoes under the well-known mark of the plaintiff “Puma” along with the leaping cat device. The Hon’ble Court held that the defendant being aware of the brand equity of the mark “PUMA” has deliberately acted to ride upon the goodwill and reputation of the Plaintiff. The court also listed out the consequences of such an act on the owner as well as the consumer which are erosion of the brand equity and dilution of the mark of the owner and consumer paying a higher price believing the same to be the product of the Plaintiff. The Hon’ble Court granted an injunction and awarded damages against the defendant on the basis of profits earned by the infringing party and the duration of such income.
Such instances of infringement of famous and well-known fashion brands are multiple in number. As per a report by CRISIL and ASPA[4], the apparel sector faced counterfeiting to the extent of 30-40% in the year 2022, highlighting the urgent need for the same to be curbed.
The courts have continued to uphold the brand value and equity of the rightful owners for decades through reliefs including injunction and awarding damages. Also, many institutions have initiated campaigns in India and around the world against counterfeiting such as the ‘Unreal Campaign’ started by Amazon. In addition to traditional methods of protecting Intellectual Property Rights in the fashion industry which includes securing registration of brand names, logos, design registrations, keeping a regular watch on the applications of deceptively similar brands published in the Trade Marks Journal and monitoring the online and offline channels of trade, companies should also create and use technologies such as development of applications to check if a product is genuine or not, seek active participation of e-commerce platforms to hinder counterfeiting as well as educate consumers. The implementation of these measures ought to be undertaken on a priority considering the fast growth of such counterfeit products in the market.
Authors: Ravi Chadha and Akanksha Choudhary
Footnotes
[1] Ghadge, A., Duck, A., Er, M., & Caldwell, N. (2021). Deceptive counterfeit risk in global supply chains. Supply Chain Forum: An International Journal, 22(2), 87–99. https://doi.org/10.1080/16258312.2021.1908844
[2] 2018 SCC ONLINE DEL 9369
[3] 2023 DHC 7696
[4] CRISIL – ASPA report on the state of counterfeiting in India, 2023.