A registered 'trademark' accords its owner a negative right to prevent third parties from inter alia adopting, using, or registering an identical or a deceptively similar trademark. However, such a right is not absolute and subject to the exception of 'fair use'. The doctrine of 'fair use' is encapsulated under Section 30 of the Trademarks Act, 1999 ("Act"), which is an affirmative defense available against a claim of infringement by the proprietor of a registered trademark.
Specifically, Section 30(1) of the Act lays down the following broad conditions: a) when the Usage is in accordance with the fair practices in the industrial or commercial matters [bona fide use]; b) when the Usage is not to take unfair advantage of or be detrimental to the distinctive character or repute of the trademark. 'Fair use' of a trademark by any party, other than the proprietor, may be broadly categorized into –
1) Descriptive fair use – which relates to using a registered trademark in a descriptive manner i.e. used to the relation to the goods or services which then indicates the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of a rendering of services or other characteristics of goods or services, under Section 30(2)(a) of the Act; and
2) Nominative fair use – which relates to using of a registered trademark by a person in relation to goods adapted to form part of or to be accessories, provided it is 'reasonably necessary' in order to indicate that the goods so adapted are compatible with the goods sold under the trademark, under Section 30 (2)(d) of the Act. Nominative fair use generally applies to news, commentary, criticism, parody, comparative advertising, and any other non-commercial use of a registered trademark.
In view of the foregoing, the key factors which the Courts in India look at for assessing the applicability of the 'nominative fair use' defense are –
(1) whether such use is bona fide and reasonably necessary for identification purposes.
(2) whether such use is intended to suggest sponsorship or endorsement with the proprietor.
(3) whether such use is likely to lead to consumer confusion or deception as to the source of origin
(4) the manner in which the brand owner's trademark is used and whether stylization and font are copied. Indian Courts have reinforced that the defense of 'nominative fair use' is an exception to trademark infringement and therefore is limited in its applicability, aimed at protecting the rights and interest of the brand owner.
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