Brand Wars Begin at First Sight: Delhi HC’s Take on Trademark Confusion

In this fast-paced, moving world, the first impression generally affects the consumer’s perception of a particular brand. Imagine strolling through the shopping stalls or online platforms, and coming across a brand name that resembles a well-known trademark. One can easily get confused, and even if the consumer soon realises that the particular brand is different, the initial misdirection has already served its strategic purpose. This phenomenon is termed as Initial Interest Confusion. It describes a scenario in which a product’s resemblance to a well-known brand draws in customers. But this confusion soon fades away, and when the purchase is being made, the consumer is aware that both brands are different. Though this principle is not explicitly codified, it can still find backing under section 29(1) of the Trademarks Act.  Against this background, the Delhi High Court in the case Under Armour Inc. v. Anish Agarwal & Anr held that Initial Interest Confusion is sufficient to establish trademark infringement under section 29. This judgment clearly shows that trademark protection is not just to prevent the final purchase of the product, but also to protect the brand’s association with the public.

Facts

In 2017, the American company Under Armour made its entry into the Indian market. The business sells athletic gear, footwear, and related goods. The company owns multiple trademarks in India for Under Armour, Armour and UA under class 25. The conflict began when Anish Agarwal began producing and marketing their clothing and footwear through the Aero Armour brand. They also applied for a Class 25 trademark registration. Under Armour, in addition to opposing the use of the contested mark, also filed a claim for an injunction against trademark infringement, passing off, and copyright infringement. Anish Agarwal contends that they drew inspiration from aviation and military themes. Moreover, their products and consumer base were different.  The single judge bench had refused the claim for injunction, but imposed certain restrictions on Anish Agarwal’s mark. The present case is an appeal against this decision of the single-bench judge.

The Court’s decision

The court determined after hearing both sides that the contested marks were similar to the appellant’s mark. Moreover, the single judge had made an error in breaking up the mark and treating Armour as a generic, and not a distinct word. Armour formed the dominant part of the mark, and not considering it during the comparison violated the anti-dissection rule. The court accepted the initial interest confusion principle, explaining that a trademark can be infringed even before the consumer finally purchases a product. Provided that a similar mark should have created confusion in the mind of the consumer at first impression. They further rejected Anish Agarwal’s claim that the goods dealt with by the parties were different. Both used the same online platforms for product distribution, and the distinction between the goods was found to be artificial and insignificant. Based on these grounds, the court granted a temporary injunction against Anish Agarwal, approved the appeal, and overturned the ruling of the single judge. Anish Agarwal and Ors were prohibited from using the Aero Armour mark or any other mark that resembled Under Armour.

Analysis

What has been the prior situation?

Historically, infringement used to occur only at the time of the point of sale, where courts had to satisfy themselves that the consumer was confused at the time of purchase of goods. There were a lot of debates surrounding this doctrine because, as per the conventional interpretation, the trade mark law should only protect against actual confusion and not momentary confusion that misleads the public.

However, this view changed when the Madras High Court agreed with the plaintiff’s assertions of initial interest confusion in the case of Consim Info Pvt. Ltd. v. Google India Pvt. Ltd . The case ruled that the use of confusingly similar terms in search engine advertising and the usage of click-through rates to increase the ads’ effectiveness showed the goal of perplexing consumers. It proved to be a strategic diversion at the very inception of consumer engagement. This case highlights how digital tools and strategies can manipulate the initial brand perception.

Another important judgement can be of Dharampal Satyapal Limited & Anr. vs Mr. Youssef Anis Mehio & Ors where the court relied upon McCarthy’s reasoning and agreed that if there is confusion in the mind of the consumer when they first see the brand, it is enough to cause harm to the integrity of the infringed mark, even though the consumer later realises that the brands were different.

In another recent case, Mountain Valley Springs India Private Limited v. Baby Forest Ayurveda Private Limited & Ors. the court was of the view that initial confusion, even though for a very short period, can adversely affect the goodwill of the brand.

Future Impact

This Court took a more dynamic approach towards modern consumer behaviour. In the era of technology, e-commerce, Google search, online advertisements and marketing, often the first impression becomes the last impression. Consumers often browse through the products in a hurry. Even if no purchase is made, the transient moment of confusion can steal the attention and divert the traffic. This puts the new businesses under pressure to conduct due diligence with great caution in selecting the trademark to avoid trademark infringement. Further, if the confusion starts online, then many platforms like Amazon, Flipkart, Instamart might get dragged into more disputes, and greater responsibility would be put on these sites in identifying the lookalike brands. Moreover, the focus is now shifted towards the shopping habits, like how people scroll, search and decide what to buy. For example, if a customer searches for “Under Armour” but “Aero Armour” pops up, they might click on it. Although no purchase is made but it would still be beneficial for the infringing party if they got noticed.

What can go wrong?

The doctrine lays emphasis on the momentary confusion without the concrete evidence of any harm. This raises serious questions about the actual impact on consumer behaviour and brand reputation. Further, if not applied in a regulated way, it can lead to the monopolisation of common and generic words that could adversely affect creativity and stifle competition, thereby reducing consumer choice in the market. Moreover, there is no differentiation between innocent similarity and deliberate imitation of the established brands, which could penalise the small business without any malicious intent.

Suggestions and Way forward

Courts must set specific guidelines for applying the initial interest confusion. Importance could be given to the degree of similarity, whether the goods and services operate through the same trade channel and cater to the same consumers. There should be a clear distinction between the deliberate attempt to blatantly override the goodwill of the established brand and coincidental similarities arising from common industry practices. For these factors that can be looked into are whether the respondent did thorough market research before adopting the mark, whether the brand entered the market only after a well-established brand gained success. However, if a brand is independently created its own market identity, has different principles, goals and consumer experience, then it may suggest an innocent overlap. Since the confusion is gone by the time of purchase, empirical evidence rather than traditional tests of infringement should be preferred. As this usually occurs online, what can be analysed are bounce and click-through rates, which will be able to indicate how people are engaged with the brands even before they read the product description. At the end court should take a balanced approach where the brand’s identity is protected, as well as it encourages new business for creativity and innovation to promote fair competition.

Author:– Pragya Saigal, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.

Reference

• Trademarks Act 1999, section 29(1).
• Under Armour Inc. v. Anish Agarwal & Anr FAO(OS) (COMM) 174/2024
• Consim Info Pvt. Ltd. v. Google India Pvt. Ltd S.No.832 of 2009
• Dharampal Satyapal Limited & Anr. vs Mr. Youssef Anis Mehio & Ors CS(COMM) 1255/2018
• Mountain Valley Springs India Private Limited v. Baby Forest Ayurveda Private Limited & Ors 2024 LiveLaw (Del) 609