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I. Background

Recently, India’s largest online grocery portal BigBasket served a “cease and desist” notice to a Coimbatore-based online grocery delivery startup Daily Basket[1], alleging trade mark infringement and brand name violation over the use of the term “basket”. The said notice dated 17-2-2021[2] (the original notice bears a wrong date 17-2-2020) sent by BigBasket lawyers claims that Daily Basket infringes on its trade mark and brand and in turn alleged that Daily Basket has adopted a name and a mark which is deceptively and/or confusingly similar to BigBasket name and mark and is carrying out an e-commerce business that offers similar products and services through a similar domain name — BigBasket.com.

As per the legal notice, BigBasket had given the other entity 15 days to comply with the legal notice and to intimate BigBasket regarding the request within the next seven days. In addition, BigBasket had also asked the e-commerce company to shell out Rs 2 lakh towards the cost of the legal notice. The notice from BigBasket comes at a time when Tata Group is in talks with the grocery unicorn for a 68% stake for $1.3 billion[3].

II. Cease and desist

A cease and desist letter is a cautionary letter sent to an alleged wrongdoer describing the alleged misconduct and demanding that the alleged misconduct be stopped. A cease and desist letter provides notice that legal action may and will be taken if the conduct in question continues. Such letters are usually written by attorneys and are often sent to stop alleged or actual infringement of intellectual property rights, such as copyrights, trade marks, and patents.[4]

After setting forth the background, I shall throw some light upon the various contentions made on behalf of BigBasket as part of their “cease and desist” letter. They are enlisted below:

  1. Offering identical products and services through the conflicting similar domain name “dailybasket.com“.
  2. Unauthorised and violative use and dishonest adoption of a deceptively and/or confusingly similar name and mark “dailybasket” and related logo.
  3. Mere mention or reference of a name containing “basket” in word or logo form for any e-commerce business and related products conjure in the minds of relevant class of consumers and members of trade as that of being associated with our client.
  4. Deliberately copying the layout and get-up of the website BigBasket.com.
  5. Creation of a similar mobile application for offering services with mala fide intention.
  6. Promotion and advertisement on social media websites referencing the mark dailybasket which is deceptively and/or confusingly similar.
  7. Prior adopter and user of the brand name BigBasket/bigbasket.com in relation to the online sale of all kinds of household products including organic food, fruits, vegetables and other grocery items, meat, dairy products, bakery products, personal care and grooming products, farming and gardening products, kitchenware and appliances and pet products.
  8. Violating and diluting trade mark rights in its trade dress, trade name and mark BigBasket/bigbasket.com and thus, constituting trade mark infringement.
  9. Unauthorised acts are detrimental to the distinctive character and reputation.

In response to the said notice, Daily Basket made the feud with Big Basket public by launching a website, namely, <https://bbisabully.com/>, wherein it attempts to debunk their claims. The said website delineates a point-by-point rebuttal to BigBasket’s cease and desist notice. Some of them are highlighted as below:

  • Comparison of logos— Except the word “basket”, there are no similarities or trade mark violations in the brand logo. Colors are different, font is different, graphics is different and the name itself is different.

  • Comparison of the websites— Overall get-up not copied; entirely different UI — user interface (graphical user interface).
  • Comparison of mobile application screen— Everything is different from features to functionality.

However, in an attempt to resolve the issue amicably, BigBasket issued a clarification through a tweet dated 24-2-2021[5].

III. Definition of trade mark bullying

The United States Patent and Trademark Office (USPTO) defined the amorphous term trade mark bullying or trade mark trolling as the vexatious practice of a “trade mark owner that uses its trade mark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow”. Mirroring the modus operandi exhibited by patent assertion entities and copyright bullies, several creative mark owners have adopted and modified this sue-to-settle paradigm and applied it in the trade mark context. In short, trade mark trolls—businesses both large and small—aggressively assert rights beyond the scope of trade mark protection afforded by the statutes through the issuance of threatening cease and desist letters.[6]

Section 142 of the Trade Marks Act, 1999Groundless threats of legal proceedings (1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding for infringement of a trade mark which is registered, or alleged by the first mentioned person to be registered, or with some other like proceeding a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trade mark, bring a suit against the first mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats and may recover such damages (if any) as he has sustained, unless the first mentioned person satisfies the court that the trade mark is registered and that the acts in respect of which the proceedings were threatened, constitute, or, if done would constitute, an infringement of the trade mark.

In a case, namely, Bata India Ltd. v. Vitaflex Mauch GmbH[7], the plaintiff had instituted a case against the defendant for restraining them from making baseless groundless threats of initiating legal proceedings. The main conundrum before the court was to deal with the issue that whether the legal notice sent by the defendant amounted to a legal threat and whether the plaintiff was entitled to an injunction and monetary compensation and damages. The Delhi High Court held that the legal notice amounted to threat and the same was unjustifiable, therefore, the defendants were ordered to restrain themselves from issuing any further baseless threats.

  

IV. Spectrum of distinctiveness

In United States trade mark law[8], Abercrombie & Fitch Co. v. Hunting World Inc. 537 F.2d 4 (2nd Cir. 1976),[9] established the spectrum of trade mark distinctiveness in the US, breaking trade marks into classes which are accorded differing degrees of protection. Courts often speak of marks falling along the following “spectrum of distinctiveness”[10].

V. Law of the land

  • Consumer confusion: As per Section 29(2)(c)[11] of the Trade Marks Act, a registered trade mark is considered to be infringed by a person who uses a mark which is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark. In F. Hoffmann-La Roche & Co. Ltd. v. Geoffrey Manners & Co. (P) Ltd.[12], it was held as follows:

It is also important that the marks must be compared as a whole. It is not right to take a portion of the word and say that because that portion of the word differs from the corresponding portion of the word in the other case there is no sufficient similarity to cause confusion. The true test is whether the totality of the proposed trade mark is such that it is likely to cause deception or confusion or mistake in the minds of the person accustomed to the existing trade mark.

Thus, in Lavroma case (Tokalon Ltd. v. Davidson & Co.[13]) Lord Johnston said:

… we are not bound to scan the words as we would in a question of comparatioliterarum. It is not a matter for microscopic inspection, but to be taken from the general and even casual point of view of a customer walking into a shop.

VI. Deceptive similarity

In Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.[14], the Supreme Court observed that in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity, the following factors are to be considered:

    1.  … (a) the nature of the marks i.e. whether the marks are word marks or label marks or composite marks i.e. both words and label works;

(b) the degree of [resemblance] between the marks, phonetically similar and hence similar in idea;

(c) the nature of the goods in respect of which they are used as trade marks;

(d) the similarity in the nature, character and performance of the goods of the rival traders;

(e) the class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods;

(f) the mode of purchasing the goods or placing orders for the goods; and

(g) any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.

VII. My take

  1. Well, we all can agree that “basket” is a term that is common to trade i.e. publici juris and no person or entity can claim monopoly or exclusive rights in the said term whatsoever and therefore, it is incapable of being monopolised by any trader. Thus, there is no visual or ocular similarity between the two device marks.
  2. Alternatively, the colour scheme, layout, style and overall get-up of the two device marks bearing the terms BigBasket and Daily Basket are different. There is no scope for confusion —logos, websites as well as mobile application user interfaces.
  3. It is pertinent to note here that BigBasket in its reply filed to examination report has overcome Section 11 objection raised by the Registry against a cited mark, for e.g. “Apna Big Basket” by stating that “a mark should be considered and compared as a whole and should not be compared in parts in order to determine a conflict with another mark”. Subsequently, it has also submitted that the cited mark is visually, structurally and phonetically, very different from the subject mark i.e. BigBasket. By this very logic, Daily Basket can also claim their marks to be different when compared as a whole and disclaim their exclusive rights over the term “Basket” as and when directed by the Registry — if the situation arises in the future.
  1. On the other hand, if Big Basket can prove that it has acquired distinctiveness/secondary meaning through long and uninterrupted commercial use and prove that the consumer may associate their brand over others with the goods in question and none other, they can make a strong case during the course of trial, if any. However, in doing so, another closely similar mark i.e. “Godrej Nature’s Basket” may cause an impediment in their pursuit to exclusive use/monopoly over the term “basket”. It is to be noted here that Godrej is the prior user and adopter and is using the mark Nature’s Basket in conjunction with their well-known brand “Godrej” such as since long, hence, the very sole reason it could not oppose their mark in the first place.
  1. Bullying? I do not think so. It has become the modus operandi for intellectual property firms and well-known companies to serve “cease and desist” letters to new entrants/start-ups/small companies/entrepreneurs in India to ward off any potential threat or dilution of one’s brand in order to claim exclusivity in the market. This is a standard protocol adopted by firms by regularly checking trade mark journals every once in a week to check whether there is any similar and/or identical mark in the records of the Trade Marks Registry. However, upon a preliminary internet search it could have missed out to oppose another online grocery store named “Your Daily Basket”[15], which seems to be based in Noida, Uttar Pradesh and other companies/firms alike. The website claims a copyright dating 2017.
  1. It is worth mentioning here that every startup these days are in a hurry to launch their products/company in the market without doing a proper survey and/or consulting a trade mark attorney or conducing a clearance search before adopting a brand and ultimately, cutting on costs. It is imperative these days that one should adopt these methods or one should be ready to bear the brunt.
  1. It is a good strategy on part of Daily Basket that it has launched a dedicated website to debunk various claims made by BigBasket in turn making it public and gaining sympathy and garnering support, however, what one cannot understand is why would you adopt a closely similar and/or identical name of your brand that may become a cause for concern. It is highly improbable/unlikely that they will be able to register their trade mark without any opposition from third parties. There are various “Big” formative marks, marks containing with the suffix “Basket” already existing in the market within the same segment of goods and services.

VIII. Advise to startups

  1. Invest your time in creating a distinctive trade mark before you launch your company — Think Big, Get Creative rather than simply launching your brand hurriedly with no impact or making tweaks to an already existing product in the market, be innovative.
  2. Consult a trade mark attorney or a specialist before you launch a product and conduct a trade mark clearance search.
  3. If you are bootstrapped, there are many organisations providing free legal assistance and pro bono advice. Do a simple online search.
  4. Conduct a due diligence exercise such as this becomes although more necessary when you operate in a competitive market wherein a company is able to foresee any lacunae or legal dispute that may arise in the future.

 

†Yashvardhan Rana, Intellectual Property Lawyer, Esteemed Member, FICCI IP Forum. He can be contacted at  yash0843@gmail.com.

[1] <https://dailybasket.com>.

[2]https://www.scribd.com/document/495188261/Cease-and-Desist-Notice? secret_password=tHnV6KHZHCJvzkRMXXtM#download&from_embed

[3].https://economictimes.indiatimes.com/tech/startups/tata-group-to-take-1-3-billion-stake-in-bigbasket- report/articleshow/80982050.cms .

[4]https://www.law.cornell.edu/wex/cease_and_desist_letter .

[5] https://twitter.com/bigbasket_com/status/1364445472811675652.

[6]https://www.ipwatchdog.com/2015/07/16/trademark-bullying-defending-your-brand-or-vexatious-business-tactics/id=59155/.

[7] 2015 SCC OnLine Del 11505.

[8] https://www.wikiwand.com/en/United_States_trademark_law.

[9] https://cyber.harvard.edu/people/tfisher/IP/1976_Abercrombie_Abridged.pdf

[10] https://www.wikiwand.com/en/Trademark_distinctiveness.

[11] Section 29(2) in The Trade Marks Act, 1999.

[12] (1969) 2 SCC 716.

[13] 32 RPC 133 at 136

[14] (2001) 5 SCC 73

[15] yourdailybasket.com/ .

Conference/Seminars/LecturesLaw School News

GNLU Centre for IPR in collaboration with its industry partner Intellectual Property Protection Organization (IPPO) invites all interested faculty members and students to a Special Lecture titled ‘Intellectual Property and Artificial Intelligence’ by Mr. Gregory Maurer- Partner, Klarquist, USA. Mr. Maurer’s practice focuses on the preparation and prosecution of computer-related and bioinformatics patent applications, open source software, and intellectual property counselling.
The lecture will be held on 25th January, 2019 at VITAN II, from 02:00 P.M. to 04:00 P.M.
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Blockchain — the technology infrastructure behind bitcoin and many other emerging platforms have been a hot topic recently, with multiple industries exploring their possibilities and new blockchain use cases emerging almost every day. Blockchain technology is poised to revolutionise almost everything from supply chains including illegal fishing and human rights abuses. It is flourishing in an open-source environment, which raises the question whether our current intellectual property (IP) laws are fit for the purpose to foster innovation.

 

 

 

 

 

What is blockchain

Blockchain is an open ledger of information that can be used to record and track transactions, and which is exchanged and verified on a peer-to-peer network. Blockchain and other distributed ledger technologies create a trustworthy and transparent record by allowing multiple parties to a transaction to verify what will be entered onto a ledger in advance without any single party having the ability to change any ledger entries later on. Each transaction or “block” is transmitted to all the participants in the network and must be verified by each participant “node” solving a complex mathematical puzzle. Once the block is verified, it is added to the ledger or chain.

From the perspective of information, the real innovation of distributed ledger technology is that it ensures the integrity of the ledger by crowdsourcing oversight and removes the need for a central authority. In other words, transactions are verified and validated by the multiple computers that host the blockchain. For this reason it is seen as “near unhackable”, because to change any of the information on it, a cyberattack would have to strike all copies of the ledger simultaneously. While the traditional concept of blockchain is an open and anonymous network, there are also “private” blockchains which prescreen as to who is allowed to administer the ledger.[1]

Attractive beyond the world of fintech

Since distributed ledger technology creates a secure, time-stamped and immutable chain of information, it is already finding applications in brand protection and enforcement, marketing and consumer engagement. More use cases seem to emerge on an almost daily basis. The technology has fast become attractive beyond the world of fintech. It is already being used to track the progress of goods in a supply chain, which is of interest to many IP-intensive sectors including the pharmaceutical, automotive, luxury and consumer goods industries, where the traceability of goods is important and counterfeit and grey goods are of concern.[2]

Blockchain is attractive to many different industries because of its potential uses. Different types of data can be added to a blockchain, from cryptocurrency, transaction and contractual information to data files, photos, videos and design documents. And the technology is continuing to develop with new types of distributed ledgers such as hashgraph software, which seeks to address issues of scalability.

Intellectual property laws incentive theory

Intellectual property laws, such as patents and copyright, are premised on the incentive theory. To incentivise people to create, they are given, in effect, a monopoly on their creations and, can go to court and stop others from free riding on their work.

The digital world has made the tension between innovators and free riders even more acute. In the pre-digital era, copying a book incurred considerable costs for the copier. Now, given that digital files can be copied indefinitely for near zero cost, one could argue that we need even stronger IP laws to prevent rampant and unfair copying.

But theory does not always match reality. History is littered with examples of patents harming rather than aiding innovation. James Watt’s steam engine was an advance over existing steam engines, yet the technology could not be built upon because of Watt’s patents. It was not until the patents expired — one of which had inexplicably been extended by Parliament — that steam power came into its own in driving the industrial revolution.

Blockchains and IP rights

Companies are investigating blockchain applications such as IP rights clearance and royalty payments, and some say the technology has great potential for managing digital rights such as copyright. They could also potentially be used to embed digital rights management into the digital signature structure, or to record the provenance of content and track its use.

The “great excitement in this industry is palpable”, and the issue of whether any blockchain technology should be patented, which had been put to one side until now, is growing in importance.

A search of the term “blockchain” showed that no developers have any issued patents containing that name, but the companies interested in using the technology have filed blockchain patent applications. Published applications containing the term “blockchain” have been filed by Texas Instruments, Panasonic, Marvell, LG, Intel, Apple, Qualcomm, IBM, Toshiba and Samsung, said Keller. Blockchains are expected to create new markets first in the financial services sector.

“Speed bumps”: Court decisions and open source

The main “speed bumps” in the IP landscape around blockchains are whether they are patentable, the intersection of IP and open source, and the question of trade secrets and open source.

The 2014 US Supreme Court decision in Alice Corpn. v. CLS Bank International[3] held that a claim cannot be drawn entirely to an abstract idea. The High Court established a two-set test for determining whether a computer-implemented invention is patent-eligible, with most of such inventions being denied patents.

Since Alice, however, two further decisions, DDR Holdings, LLC v. Hotels.com, LP[4] and Enfish, LLC v. Microsoft Corpn.[5], have raised hopes that software patents may be more easily obtained, but it is still a challenge.

Compatibility issues between the open source GNU General Public License v3.0 and Apache 2.0 create another problem. There are hundreds of different open source licences, but the six most common licences cover around 90 per cent of open-source projects. Around 55 per cent use a “copyleft” licence which offers people the right to freely distribute copies and modify the software as long as the same rights as in the original open-source licence are preserved in the derivative version. But GPL may not be compatible with a company’s licensing strategy, and GPL 3.0 also prohibits the use of trade secrets.[6]

These issues can be resolved. “But it is important that people understand the impact of their decision to use open source (e.g., what type of open-source licence to use) has on IP as well as the impact of their decision to, say, patent an invention used in a blockchain on what types of open-source licences would be acceptable.”[7]

Conclusion

It is a matter of finding the right balance to encourage and reward innovation with practical solutions that the marketplace accepts. Before you go to market, questions about whether to use trade secrets or copyright to protect blockchain technology show how early in its infancy the industry is. Patents will be the primary mechanism for protecting IP in blockchains, but the situation will become clearer as the sector develops.

Only 685 patents have been filed in the US. And, unlike, say, a pharmaceutical innovation which is of substantial benefit for a company to own and keep closed, there is little value in making blockchain platforms proprietary.

The platforms need to be open and free of IP entanglement so innovators can add value through applications or by providing better services than rivals. Higher up the systems, however, above the blockchain network, patents for proprietary technology could make sense.

 

Vaishali Singh is Research Associate, GNLU-Microsoft IPR Chair, Gujarat National Law University.

[1] Ament, D. Report and Recommendations of the Technical Upgrades Special Project Team, 2015. Available at <https://www.copyright.gov/technology-reports/reports/usco-technicalupgrades.pdf>.

[2] Boucher, P., Nascimento, S., and Kritikos, M. How blockchain technology could change our lives, 2017. Available at <https://pdfs.semanticscholar.o rg/0a09/9da451b5be9a5c7fa6cbd66afec33a240c91.pdf>.

[3] 189 L Ed 2d 296 : 134 S Ct 2347, 2354 : 573 US—(2014).

[4] 773 F 3d 1245 (Fed Cir 2014).

[5] 822 F 3d at 1339, 1327 (Fed Cir 2016).

[6] McMullen, G. Blockchain & Law in 2017, 2017. Available at <https: //medium.com/ipdb-blog/blockchain-and-law-in-2017-f 535cb0e06c4#.96qcsc1mu>.

[7] ibid.