Trademark dilution: A fairly new concept

Article 16.3 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement extends this protection to wellknown marks when they are used for goods or services that their trademark registrations do not cover, if the use indicates a connection to the owner and the well-known trademark owner would be damaged.

Pakistan implements these standards by protecting registered as well as unregistered well-known marks, of both domestic and foreign origin, from use and/or registration by unauthorised parties.

They are protected by the Trademarks Ordinance 2001 (TMO), which came into effect on April 12, 2004, and aligned Pakistan’s intellectual property (IP) regime with its TRIPS obligations as a World Trade Organization member.

Specifically, section 17(3) of the TMO disallows the registration of a “later mark” when an “earlier trademark” has repute in Pakistan and use of a later mark without due cause “would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trademark”.

The term “earlier trademark” is defined in section 18(1)(c) of the TMO to mean “a trademark which, on the date of application for registration ... was entitled to protection under the Paris Convention as a well known trademark”.

Section 17(3) largely corresponds with section 5(3) of the UK Trade Marks Act 1994 before its 2004 amendments.

Likewise, under section 29(4), the owner of a mark that is well known or has a reputation in Pakistan may oppose the registration of a subsequent mark on the grounds that the use of the subsequent mark would cause dilution or a likelihood of confusion.

Section 29(4)’s identification of a “well known trade mark” is not limited to registered well-known marks. It is therefore possible thata well-known trademark not yet registered in Pakistan may be the basis on which an application for a similar mark is rejected by the Pakistan Trademarks Office.

In the past, the owner of a well-known trademark needed to establish that its trademark was well known to the general public. This has been revised in recent years to clarify that the well-known trademark must be well known to the relevant public.

For example, the High Court of Sindh at Karachi in Soneri Travel and Tours Ltd v Soneri Bank Ltd observed that the condition that the trademark must have a reputation in Pakistan would be met if the earlier mark is known by “a significant part of the public concerned by the products or services covered by that trade mark”.

Only “registered” well-known trademarks can serve as the basis for raising infringement claims under the TMO.

However, the owner of a mark that is well known in Pakistan is entitled, under section 86(3), to an injunction against another’s use of the mark regardless of whether the owner conducts business in Pakistan or has any goodwill in Pakistan.

In determining whether a mark is well known, courts or tribunals in Pakistan may consider the following factors:

• The level of recognition that the trademark has in Pakistan or elsewhere;

• The degree of inherent or acquired distinctiveness of the trademark;

• The length of time that the trademark has been used and advertised in Pakistan or elsewhere;

• The commercial value that is attributed to the trademark;

• The geographical scope of the trademark’s use and advertising;

• The quality and image that the trademark has acquired; and

• The exclusivity of use and registration that has been attained by the trademark and the presence or absence of identical or deceptively similar third-party trademarks that are registered or used in relation to identical or similar goods and services.

There is a distinct lack of case law that addresses the scope of protection afforded by section 86(3) of the TMO, as the provision is relatively new.

Also, the issue of what will amount to unfair advantage or detriment to the distinctive character or repute of a well-known mark, under section 17(3), is yet to be examined in Pakistan. Even so, unlike trademark infringement, which occurs when there is a likelihood of confusion between trademarks, dilution occurs when there is a “lessening of the capacity of a well known trademark to identify and distinguish the goods or services” under section 2(xiii) of the TMO, and can occur through “blurring” or “tarnishment”.

Unfair advantage exists separately from dilution. While the courts in Pakistan are yet to wrestle with these concepts, they may draw reference from, but are not bound by, UK decisions such as Premier Brands UK Ltd v Typhoon Europe Ltd, which have interpreted the counterpart UK provisions.

Another important aspect of the anti-dilution provisions in the TMO is that owners of well-known trademarks are required to prove that actual dilution has occurred in order to bring a successful action for infringement of their trademark rights by means of dilution. By contrast, other types of infringement contained in the TMO are predictive and require only a likelihood of confusion or deception.

Notably, in the Soneri case (supra) it has been held that actual dilution was required, rather than a likelihood of dilution.  is has posed the greatest challenge to successful and potential dilution cases in Pakistan, as it is often diffi cult for the owner of the registered well-known trademark to obtain proof of actual dilution. It is also to be seen whether or not Pakistani courts will accept and use evidence such as market surveys to  find that actual dilution has occurred.

In conclusion, Pakistan has taken concrete steps over the past decade to strengthen protection for well-known marks against dilution, in line with international standards and to meet its obligations under WTO membership. It will be interesting to see how Pakistani courts deal with sections 17(3) and 86(3) of the TMO in the future and how the courts integrate the growing body of overseas case law into their own decisions.

Julie Ismail is a senior associate at Khursheed Khan & Associates. She can be contacted at: julie.ismail@pakistanlaw.com