Trade Secrets

A trade secret is a formula, pattern, physical

device, idea, process, or compilation of
information which is not generally known or
reasonably ascertainable, by which a business
can obtain an economic advantage over
competitors or customers.
¨ a formula for a sports drink
¨ survey methods used by professional
pollsters
¨ recipes
¨ a new invention for which a patent application
has not yet been filed
¨ marketing strategies
¨ manufacturing techniques
¨ computer algorithms
Secrecy
¨ Restrict access to the information (lock it away in
a secure place, such as a bank vault)
¨ Limit the number of people who know the
information
¨ Have the people who know the trade secret agree
in writing not to disclose the information (sign
non-disclosure agreements)
¨ Have anyone that comes in contact with the trade
secret, directly or indirectly, sign non-disclosure
agreements
¨ Mark any written material pertaining to the trade
secret as proprietary
¨ Unlimited duration -trade secrets could
potentially last longer than patents (20 years)
and copyrights
¨ Your protection is theoretically worldwide
¨ No application required
¨ No registration costs
¨ No public disclosure or registration with
government agency
¨ Effective immediately
Formula for Coca-Cola

The Big Mac Special Sauce

KFC Chicken Recipe

WD-40 Formula
¨ According to many, the formula for Coke is the
most famous trade secret. When Coke, at the
end of the 19th century, decided not to patent
its formula, it did so for one reason: to keep it
secret, forever. In May 2006, a Coke employee
and two others were charged with stealing and
trying to sell guarded Coke secrets to Pepsi.
Pepsi notified Coke of the breach and the FBI
was called in.
¨ In 2004 McDonald's acknowledged that they
had lost the recipe for the Big Mac special
sauce. As it turns out, McDonald's changed the
original special sauce recipe to cut costs and
lost the original. When a returning exec wanted
to return to the original special sauce, no one
could find the recipe. The exec remembered the
name of the California company that supplied
the sauce 36 years ago. They still had the sauce
in their record books, and McDonald's was able
to recover the recipe
¨ Only two KFC executives know the finger-lickin'
recipe of 11 herbs and spices. A third executive
knows the combination to the safe where the
handwritten recipe resides. Less than a handful of
KFC employees know the identities of the three
executives, who are not allowed to travel together
on the same plane or in the same car for security
reasons. After being locked in a safe for 68 years,
Colonel Harland Sanders' handwritten recipe was
temporarily relocated to a secret-secure location as
KFC modernizes its safekeeping. It was
transported in an armored car and high-security
motorcade.
¨ The formula for WD-40 is locked in a bank vault
and has only ever been taken out of the vault twice
-- once when they changed banks and once on the
CEOs 50th birthday. The CEO rode into Times
Square on the back of a horse in a suit of armor
with the formula. The company mixes WD-40 in a
concentrated form in three locations -- San Diego,
Sydney and London -- and then sends it to aerosol
manufacturing partners.
What is it that makes you
buy it?
¨ Overall impression

¨ Brand

¨ Attractive Design
Creating Brands
through

“Trademarks”
¨ Definition
A ‘trademark’, or simply a ‘mark’, is a sign
capable of distinguishing the goods or services
produced or provided by one enterprise from
those of other enterprises.
Generally, a mark is a visible distinctive
word,
letter,
numeral,
drawing,
picture,
shape,
logotype,
label or a combination of one or more of these.
¨ Holograms
¡ If u look at the credit card for instance, you will see a
small image that changes according to the angle
from which you look at it.
¨ Sound mark?
¡ Can an advertising jingle serve as trademark.?
¡ Ex:
 R
¨ Filed (pending) applications can use TM to alert
public of his exclusive claim

¨ R Only be used when the mark is

registered.
¨ It identifies the product and its origin

¨ It guarantees its quality

¨ It advertises the product

¨ Builds positive image of the product.

¨ Distinctiveness of trademark
¨ Be an invented word
¨ Easy to pronounce(Bata, Zen, Nano, SONY etc..)
¨ Should be short
¨ Must be easy to spell and write legibly.
¨ Should not be descriptive but may be suggestive
of the quality
¨ Should be appeal to eyes and ears
¨ Should satisfy the requirements of registration
¨ To protect the registered trademark, the
following remedies can be restored
¡ Civil remedies
ú Grant of
  Interlocutory injunction
  Damages
  Account of profit
¡ Criminal proceedings
ú Punishment to infringer
¡ Administrative remedies
ú Removal of deceptively similar trademark
¨ Nearly resembles to cause confusion
¨ The nature of the mark( word or label)
¨ The degree of the similarity
¡ Phonetically (butterfly vs betterfly)
¡ Visually
¡ Structurally similar

¨ The nature of the goods in respect of which

they are used as trade mark
¨ The similarity in the nature and performance of
the goods
¨ Applicant’s “principle place” of business
¡ Where a person carriers on business
­ If is carried in one place of India, then that place
­ If more than one place, then the place mentioned by him as
principle place of business.
¨ Exclusive right to use of the trademark in
relation to the goods or services in respect of
which the trademark is obtained.(exclusive
dealing)
¨ Right to file a suit for infringement of his right
¡ Injunction
¡ Damages
¡ Account of profits
¨ Any use of the mark beyond the scope of the
rights granted is not protected
¡ Ex: if a trademark of soap is registered in India, then
use of the same trademark in foreign country is not
infringement.
¨ the registration of trademark will not entitle
the proprietor to bring infringement action
against identical or similar marks which also
registered.
ú MDH, BDH
1. Submission of Application

2. Advertisement

3. Hearing of the parties

¨ Any person who claims to be proprietor shall
apply for registration in the prescribed form to
Registrar.
¨ After completing all specifications on the
prescribed application form, an application can
be filed in the Office of the Trademark
Registrar within jurisdiction of principal place
of business
¨ Every application shall contain representation
of the mark in the space provided in the
application form.
¨ The application is accepted as it is
¨ The application is accepted subject to certain
changes
¨ The application is accepted but later it is found
to have accepted in error
ú This effect is communicated within 2 months and
applicant has to amend to comply. If fails to comply,
application is withdrawn.
¨ The application stands rejected.
¨ Soon after the acceptance of the application, the
application in advertised in the Trade Marks
Journal
¨ Any person may give notice in writing to the
Registrar regarding the opposition within 3
months from the date of advertisement.
¨ A copy of the opposition is sent to applicant.
He shall send the counter statement of the
grounds on which his application relies to the
Registrar.( within 2 months from the date of
receipt )
¨ The Registrar calls up two parties with their
evidence.
ú Decision goes favour of the applicant
  Trade mark is registered in the name of the proprietor
ú Decision goes against applicant
  Application is free to appeal to the High Court.
¨ A trader cannot claim absolute proprietary right on
any word or symbol.
¨ Descriptive words, surnames and geographical name
are not registerable.
ú Sharma
¨ The interest of the public should be safeguarded.
¨ The life of the trade mark depends on its actual use.
¨ A trademark is assignable and transmissible.
¨ The property right in trademark acquired by use are
superior to similar rights obtained by registration
under the act.
“a trademark shall not be registrable unless it
contains words having no direct reference to
the character and quality of goods”
Ex: SAFO ( cleaning powder and liquid)
SATININE (starch used in laundry)

Allowed: SUN ( lamps),SOLAR (studio lights,

projections)
¨ UPDATE ( for printed matter)
¨ CENTURY(for machines)
¨ STANDARD(bath tubs, sinks)
¨ TASTEE-FREEZ(Ice cream)
¨ PERFECTION(for soaps)
¨ ELECTRIX( electric vacuum cleaners-”Electric”)
¨ OFF(insect repellant)
¨ SOUNDCRAFT(sound recording apparatus)
¨ NEEDLE-TIP(machine saws)
¨ FAIR-AND LOVELY(for cosmetics)
Many foreign and domestic Applicants have been
able to successfully register their marks in
India. Indian courts have upheld many of those
registrations and granted favorable decisions to
rights holders.

In addition to the registering of their trademarks

in India, businesses need to adopt other
strategies for protecting their trademarks. Some
of them are mentioned below:
¨ Get trademark searches conducted in the
Indian Trade Marks Registry in the classes that
are of interest to you including the ancillary
classes.
¨ Get common law searches (this includes the
internet, market surveys, yellow pages and
directories) conducted to ascertain whether
third parties are using your trademarks and if
so, the extent of such use.
¨ Based on this information and after seeking the
local counsel’s opinion decide if the trademark
is available for use or not.
¨ Should the trademark be available for use, immediately
apply for the registration.
¨ The rights holder should also consider hiring a watching
service to monitor the trademark journals in order to
alert them to any published, deceptively similar
trademarks or descriptive trademarks that might be of
concern.
¨ Should the rights holder own a trademark that has been
used and has acquired goodwill and reputation, it is
advisable that along with filing of the trademark
application in India, they should also make press
releases, publish cautionary notices and advertise the
mark to ensure that the relevant section of the public is
aware that they are entering the Indian market and are
protecting their trademark from any kind of third party
violation.
¨ The rights holder should also take immediate steps to
register their domain names including country coded
top level domain names in India, as there have been
many instances of third parties registering domains for
certain well known marks with the intention of
extracting money by selling these domain names to the
rights holders.
¨ Should the rights holder discover that their trademark is
being infringed, they should take immediate steps to
protect their trademark, either by the means of filing
oppositions, cancellations, conducting investigations,
sending cease and desist notices or initiating appropriate
civil and criminal actions.
¨ For filing new applications there are prescribed
forms depending on the nature of application
such as Form TM-1, TM-2, TM-3, TM-8, TM-51
etc.
¨ To file a Notice of Opposition to oppose an
application published in the Trade Marks Journal
(FormTM-5).
¨ For Renewal of a Regd. trademark (Form TM-12 ).
¨ Surcharge for belated renewal (Form -10)
¨ Restoration of removed mark (Form TM-13)
¨ Application for rectification of a registered trade
mark (Form TM-26)
¨ Legal Certificate (Form TM-46)
¨ Official search request (Form TM-54).
¨ Preliminary advise of the Registrar as to the
registrability of a mark (Form TM-55).
¨ Copyright search request and issuance of
certificate (Form TM-60)
Under the Indian trademark law the following are
the types of trademarks that can be registered:

¨ Product trademarks: are those that are affixed

to identify goods.
¨ Service trademarks: are used to identify the
services of an entity, such as the trademark for
a broadcasting service, retails outlet, etc. They
are used in advertising for services.(rather than
on the packaging or delivery of the service,
since there is generally no "package" to place
the mark on, which is the practice for
trademarks)
¨ Certification trademarks: are those that are capable of
distinguishing the goods or services in connection
with which it is used in the course of trade and which
are certified by the proprietor with regard to their
origin, material, the method of manufacture, the
quality or other specific features
¨ Energy Star (trademarked ENERGY STAR) is an
international standard for energy
efficient consumer products originated in the United
States of America. It was created in 1992 by
the Environmental Protection Agency and the Department
of Energy. Since then, Australia, Canada, Japan, New
Zealand, Taiwan and the European Union have adopted
the program. Devices carrying the Energy Star service
mark, such as computer products and peripherals, kitchen
appliances, buildings and other products, generally use
20–30% less energy than required by federal standards.
¨ ISI mark is a certification mark for industrial products in
India. The mark certifies that a product conforms to the
Indian Standard,mentioned as IS:xxxx on top of the mark,
developed by the Bureau of Indian Standards (BIS), the
national standards body of India.The ISI mark is by far the
most recognized certification mark in the Indian
subcontinent. The name ISI is an abbreviation of Indian
Standards Institute, the former name of theBureau of Indian
Standards. The ISI mark is mandatory for certain products
to be sold in India, like many of the electrical appliances
like -switches,electric motors, wiring cables, heaters,
kitchen appliances etc., and other products like portland
cement, LPG valves, LPG cylinders, automotive tyres etc.
¨ Collective trademarks: are registered in the name of
groups, associations or other organizations for the
use of members of the group in their commercial
activities to indicate their membership of the group.
¨ A collective trademark is a trademark that
distinguishes one or more common characteristics of
goods (products) or services
¨ A well-known example of a collective trademark is
the Woolmark symbol.
In trademark licensing, a trademark owner
(Licensor) grants permission to another
(Licensee) to use that trademark on mutually
agreed terms and conditions.
Trademark licensing became acceptable where the licensor
(the owner of the trademark) remained in control of the
nature and quality of the goods or services sold in
association with the trademark.
¨ Quality control is, therefore, the essence of trademark
licensing, providing the means for ensuring that the
licensee's use is consistent with the licensor's interest in
the trademark and at the same time ensuring that the
consumer will get essentially the same quality good or
service no matter where the trademarked good is
purchased or the service is experienced.
(1) Franchising
Franchising is a specialized license where a franchisee is
allowed by the franchisor in return for a fee to use a
particular business model and is licensed a bundle of IP
rights, notably, trademarks and supported by training,
technical support and mentoring.
When a business model is successful and replicable at other
locations, permitting interested third parties to set up
independent businesses based on a proven business model,
along with its attendant trademarks,
know-how and other intellectual property rights (such as
designs, patents and copyright), has proven to be an
enormously successful and rapidly growing trend.
(2) Merchandising
The licensing of trademarks, designs, artworks as well
as fictional characters (protected by these rights) and
real personalities are broadly referred to as
merchandising.
Allowing manufacturers of ordinary consumer goods
such as plates, mugs, towels, caps, clothes, to name a
few, to apply on their products the trademark of
another immediately adds appeal to an otherwise
commonplace object and a means of distinguishing
themselves in the market place.
(3) Brand Extension
Through a trademark licensing agreement, a
company may team up with another who may
be provided with the right to apply the
trademark on a new product.
Example: Monaco Coach, a manufacturer of
luxury recreational vehicles entered into a
licensing agreement with Dodge, a
manufacturer of trucks, to use the Dodge
trademark and logo on their trailers. By this
agreement Dodge successfully extended their
product (trucks) into (trailers).
(4) Co-branding
Two or more reputed trademarks, not necessarily
with the same level of reputation may join together
in one product creating a new appeal to the same
clientele or break into a new market.
Example: Lexus, the luxury motor car of Toyota and
Coach reputed for its high quality leather
accessories joined together to produce Lexus
Coach Edition which is the luxury motor car Lexus
with the interior finishing in coach leather
products.
(5) Component or ingredient branding
A product may license the right to use the trademark
of an ingredient. Using the trademark of that
ingredient in the packaging, advertising or on
the host product itself influences consumers towards
that product.
The reputation of the trademark of the ingredient
lends value and appeal to the host product.
Example:
- PC computers with Intel Inside
- Diet soft drinks with NutraSweet
- Stereos with Dolby noise reduction
- Teflon in cookware
Exclusive license: An exclusive trademark license
provides the licensee with the right to use
trademark to the exclusion of all, including the
licensor.
Thus, the trademark owner cannot use the
trademark himself nor can he license any rights
to others. The licensee remains the only user of
that mark in the relevant market.
Non-exclusive license: A non-exclusive license grants to
the licensee the right to use a trademark according to
the grant, the licensor may continue to use the
trademark himself as well as grant other licenses.
Any of the above licenses can also include other
limitations or limited rights provisions.
The most common of those limited license provisions is
that the territory of the licensee is limited either as to
the products or services that can be provided in
association with the trademark, the geographical
territory within which the licensee can sell, the
location or site from which the licensee can sell (site
location) or the market sector to which they can sell
and promote the licensed product or service.
Passing off is a species of unfair trade competition
by which one person seeks to profit from the
reputation of another in a particular trade or
business.
The action against passing off is based on the
principle that “a man may not sell his own
goods under the pretence that they are the
goods of another man.”
An action for infringement, which is a statutory
right, is dependent on the validity of the
registration of the mark. Unlike infringement,
passing off is not a proprietary right in the
name or the get-up, which has been
misappropriated by the defendant. It is a
wrongful invasion of a property right vested in
the plaintiff.
A passing off action is, therefore, independent of
a statutory right and is established by evidence
of reputation and goodwill of the business.
In a passing off action, the registration of the trade
name or a similar mark is irrelevant. Here, the
priority in adoption and use of trade mark is
superior to priority in registration.

In an action for passing off, the motive of the

defendant is not important. Once reputation is
established by the plaintiffs, no further proof of
fraudulent intention on the part of the defendants
is required to be proved or established.
Misrepresentation and loss or damage of goodwill.

¨ The relief available in suits for passing off

include an injunction restraining further use of
the mark, damages, an account of profits, or an
order for delivery of the infringing labels and
marks for destruction or erasure.
The plaintiff has to prove that there is a similarity in the
trade names; the defendant is deceptively passing off
his goods as those of the plaintiff; or that there is
bound to be confusion in the minds of the customers.

If the goods are not similar and the trade names, logo, colour
scheme, etc., used are not likely to cause confusion in the
minds of the customers, no injunction to restrain the use
of the trade name will be granted, because there cannot
be any monopoly in the use of the trade name in respect
of the goods falling in different classes.
1. Direct false representation
2. Adoption of trade mark which is same or
colorable imitation of trade-mark of rival
traders.
3. Adoption of essential part.
4. Copying the color scheme of the label.
5. imitating of design or shape.
 PASSING OFF INFRINGEMENT
1) Based on the property in
goodwill acquired by use of
the mark. Registration is not
relevent.
2) Defendants goods need not be
same.
3) Use of the mark as trademark
is not sufficient. Use of the
mark or symbol must likely to
deceive cause confusion.
4) Violation of common law.
5) Applies to any business,
services.
6) Common law remedy
1. Based on property
acquired by registration
2. Defendant must use
offending mark on the
same goods for which
plaintiff;s mark is
registered.
3. Use of the mark as
trademark is sufficient
4. Violation of statutory
right.
5. Applies only to goods.
6. Statutory remedy.
 PASSING OFF INFRINGEMENT
7. Registration of trademark 7. Registration is essential.
is not essential 8. Taking essential feature
8. Damage to the goodwill of trademark.
¨ Plaintiff were selling lollypops under the name
‘ZOOM’. Defendants proposed their bubble
gum under the same name. injunction was
granted.
¨ No injunction was granted against the use of
“BATA’ for lungies and handkerchiefs. BATA
is famous for footwear.
¨ Plaintiff’s weekly magazine ‘News Week’ had
good circulation. Defendants proposed to put
out weekly television programme to be called
‘News Week’. Injunction was refused.
¨ Satyam Infoway Ltd vs. Siffynet Solutions

ú www.sify.net www.siffynet.net
ú www.sifymail.com www.siffynet.com
ú www.sifyrealestate.com

Respondent were guilty of ‘passing off’

Passing off would apply to domain name also.

¨ Plaintiff used the trademark “Yahoo” for
internet domain name.
¨ Defendants were using the trademark
“Yahooindia” for domain name.

Restrained the defendants from using the

tradename “Yahooindia”
¨ The appellant-company is one of the pioneers in
India in the field of manufacturing and marketing of
coconut. The appellant-company is in this business
since 1945 and the trade mark "Shalimar" thus
became a distinctive identification of the appellant's
goods among the public.
¨ The respondent marketed sun-flower edible oil
under the same name.

It was held that once the trademark is registered, it

can’t be used by others.
¨ The opponent/defendants were registered
proprietor of trade mark GLUCON-D.
¨ The application was filed for registration of the
trademark GOLDCON.

It was held that, even though no visual

resemblance between two marks, close affinity of
sound exists between two words.
Hence application for registration was rejected.