Alternate Dispute Resolution Method in Pakistan

The relevant laws (or particular provisions) dealing with the ADR are summarized as under:

·          The Arbitration Act, 1940.

·         Articles 153–154 of the Constitution of Pakistan, 1973 (Council of Common Interest)

·         Article 156 of the Constitution of Pakistan, 1973 (National Economic Council)

·         Article 160 of the Constitution of Pakistan, 1973 (National Finance Commission)

·         Article 184 of the Constitution of Pakistan, 1973 (Original Jurisdiction when federal or provincial governments are at dispute with one another)

·         Sections 102–106 of the Local Government Ordinance, 2001.

·         Sections 10 and 12 of the Family Courts Act, 1964.

Arbitration in Pakistan:

Although no explicit mention of ADR is mentioned in the Constitution of Pakistan, a reference to commercial and financial activities can be pinpointed in the Constitution.

Pakistan has also signed and ratified the New York Convention. The New York Convention is also known as the New York Convention of 1958 and the Convention for the Recognition and Enforcement of Foreign Arbitral Awards. UNCITRAL is a Commission of the UN established by the General Assembly on 17 December 1966 by Resolution 2205 (XXI). Thus, although the New York Convention was adopted in 1958, the Commission’s essential mandate is to promote the Convention further. Furthermore, UNCITRAL serves as the International Trade Law Branch of the Office of Legal Affairs of the UN. Hence, UNCITRAL, under the umbrella of the UN, is the biggest organizational body to prepare rules relating to ADR, namely arbitration and conciliation.

Arbitration in Pakistan is still largely governed by the 1940 Act which was enacted by the British for the undivided Indian colony. Though Pakistan has signed the NYC, the enforceability of foreign arbitral awards is unclear as the NYC has not been implemented. The first attempt to implement the NYC was made in 2005, when the new Arbitration Act was passed as an Ordinance (along with an Ordinance to implement the ICSID Convention in 2006, which is now the Investment Disputes Act) almost 50 years after they signed on the NYC.

Pakistan Engineering Council Islamabad:

PEC Rules of Conciliation and Arbitration is one such document prepared by a team of experts comprising Employers, Constructors and Consultants and Legal Advisors in line with the advice by Planning Commission, Govt. of Pakistan. It is expected that use of this document will provide an equitable and just basis for settlement of disputes pertaining to construction and consultancy contracts expeditiously.

The Rules specified in the this document shall be applicable for all construction  and engineering services (consultancy) contracts to be executed in Pakistan irrespective of their source of financing and/or nationality of the constructors/consultants (engineering service providers).

Any dispute, controversy or claim arising out of or relating to a Contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in  accordance with the PEC rules of Arbitration in-force.

This indicates that there are a number of institutions which are working as an institution for conciliation. And this gives a reference that as contrary to Indian laws, in Pakistan, there is a specific requirement that parties referring to conciliation and the institution will be mentioned in the contract.

Recent Initiatives regarding ADR in Pakistan:

·         Code of Civil Procedure (CPC) which is the primary procedural law for civil matters in Pakistan, has been amended (under AJP) for providing enabling mechanism for Court Annexed ADR in Pakistan (Section 89-A).

·         Small Claims and Minor Offences Ordinance 2002 has been promulgated for providing exclusive forum (at the district level) for facilitating the resolution of smaller disputes. This law also provides ADR mechanism for facilitating the resolution and settlement of disputes within the framework of the formal court system. This could be transformed into an excellent forum for addressing disputes in the emerging justice sector in Pakistan;

·         Under the Access to Justice Program, the review of Arbitration Act represents a significant policy action. This review needs to be undertaken and capacity building initiatives put in place to promote effective arbitration regime in Pakistan.

·         A new local government system has been introduced in Pakistan, establishing elected local governments at the level of Union Council, Tehsil (Sub District Level) and the District level. The institution of Musalihat Anjuman (literally meaning conciliation forums) has been provided at the level of Union Councils for dispute resolution through ADR (including conciliation, mediation and arbitration). The finalization of the rules of Business for these bodies is essential to popularize the use of ADR.

In WAPDA v. Kot Addu Power Company[1] – Provisions of section 290 of the Companies Ordinance, 1984 vested statutory jurisdiction in High Court to take certain measures described there and ordered to resolve dispute inter-se shareholders or directors of a company – High Court dismissed the petition made under section 3 of the Arbitration (Protocol & Convention) Act, 1937 for reference of the dispute under the Act of 1937.

Pakistan has entered into Bilateral Investment Treaties with 36 countries which include dispute settlement mechanism between the host country and foreign investor, failing this through mutual consultations, where after the investor can refer the dispute to a competent court of the respective country or an ad-hoc arbitration panel established under rules of the UN Commission on International Trade Law (UNCITRAL) or to the Court of Arbitration of Paris International Chamber of Commerce (ICC). These mechanisms provide transparent, inexpensive, speedy and accessible dispute resolution to foreign investors. The International Center for the Settlement of Investment Disputes (ICSID) also provides facilities for conciliation and arbitration of investment disputes between contracting states and nationals of other states under the Convention for the Settlement of Investment Disputes and Pakistan is a member of the Center.

The Conciliation Courts (West Pakistan Amendment) Ordinance, 1966:

An Ordinance further to amend the Conciliation Courts Ordinance, 1961, in its application to the Province of West Pakistan.“(2-A)   Cases relating to matters falling under Section A of Part I and Section A of Part II of the Schedule, against any Government servant, shall be excluded from conciliation except where a certificate is granted by Government or an officer authorised by Government in that behalf to the effect that the Government servant had not acted in the discharge of his official duties”.

Alternative Dispute Resolution mechanisms and Arbitration provide alternate to litigation by avoiding lengthy and costly proceedings. They are best suited for commercial disputes as the relationship between the parties is expected not to suffer after exhausting such methods and the parties are more likely to settle their differences in a relaxed and friendly manner. In Pakistan, a more frequent use of such methods poses numerous problems which can be overcome by a collective effort by the Government, Judiciary and the Bar Councils.

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[1] 2002 MLD 829

Every Clause For Finality Of Decision Isn’t The Arbitration Clause, There Is No Format For Arbitration, Intention Of Parties Is Important

The Recent decision on the matter of State of Orrisa and Others v Bhagyadhar Dash (4th July, 2011, SC Decision) brings an interesting compilation of the arbitration clause identification in the judgment. The division bench took notice of various prior cases to set the test for the determination of arbitration clause. While going through various decisions, the bench wrote comprehensive judgment and gave opinion on different matter.

Essentials of Arbitration Agreement.

Taking the reference from KK Modi Case, and then Bihar State mineral Corporation v Encon Builders (2003 7SCC 418), court stated following four categories.

(i) There must be a present or a future difference in connection with

Some contemplated affair;

(ii) There must be the intention of the parties to settle such difference

By a private tribunal;

(iii) The parties must agree in writing to be bound by the decision of

Such tribunal; and

(iv)The parties must be ad idem.

The Court also took the principles laid down in Jagdish Chandar v Ram Chandar, which broadly can be stated this

1. The intention of parties to go into the arbitration is to be gathred from the terms of the agreement. A mere possibility doesn’t constitute the arbitration clause or agreement. There should be firm determination.

2. Attributes of arbitration are important, it might not necessarily be using terms connected with arbitration like arbitration per se or arbitral tribunal. The attributes are that the agreement should be in writing, it should have the agreement between parties to go to a private tribunal for adjudication, the private tribunal should be empowered to adjudicate in impartial manner, following natural justice and there should be binding effect as agreed by the parties.

3. Any settlement which excludes any of the attributes of arbitration can’t be called as arbitration. The court however didn’t state the case if the clause states it to be arbitration agreement but it specifically excluded any of the attributes (say hearing) from the process. It is submitted that from the quasi judicial nature of arbitration, such clause might be held to be void. However, it again has to be gathered from the terms and this intention of parties.

4. The contingency on the clause for arbitration would not make it an arbitration clause unless the clause is further approved by the parties.

Test for the Arbitration Agreement:

In KK Modi, it is enunciated, that for the arbitration agreement, emphasis is on

1. The existence of dispute not avoidance of dispute.

2. The judicial action of tribunal in which the dispute is referred.

3. The decision should bind the parties.

In three bench decision of State of Orissa v Damodar Das(1996 (2) SCC 216), Court stated

It would, thereby, be clear that this Court laid down as a rule that the arbitration Agreement must expressly or by implication be spelt out that there is an agreement to refer any dispute or difference for an arbitration and the clause in the contract must contain such an agreement. We are in respectful agreement with the above ratio. It is obvious that for resolution of any dispute or difference arising between two parties to a contract, the agreement must provide expressly or by necessary implication, a reference to an arbitrator named therein or otherwise of any dispute or difference and in its absence it is difficult to spell out existence of such an agreement for reference to an arbitration to resolve the dispute or difference contracted between the parties.

In this decision, Court had to consider the construction of clause

“that if the contractor disputes the rate fixed by the Engineer-in-Charge, the decision of the Superintending Engineer in regard to rate for such non-scheduled item shall be final”

Court going through all the above decisions held that though the clause passes the test laid down from prior decisions, the intention of parties can be gathered from the fact that the government deleted the arbitration clause from the agreement and amended the standard form of agreement. Court held that the clause only provided the limited sphere of determination of the rates to avoid the dispute. There is no reference to the tribunal in regard to dispute between parties, the clause is rather unilateral where contractor disputes the rate and then it shall be finalized by the Superintendent Engineer.

Passing off, Extended Forms of Passing off and Reverse Passing Off

Passing off

This means doing business by presenting goods or services as someone else's, where the products may be of the same standard or be of substandard. The tort is known as "passing off". For most of the Commonwealth countries, "palming off" in the USA and unfair competition elsewhere. Passing off is a judge made law. In some countries they have incorporated a kind of passing off in their legislation as a type of infringement. There is an international obligation to assure effective protection against unfair competition under art 10 bis of the Paris Convention.

Classic Trinity Test:

The Honourable courts have developed a classic test to identify the tort of Passing off.

# In Reckitt & Colman Products Ltd. v Borden Inc [1990] RPC 341, it was held that: A claim may be bought:

	· The claimant’s goods or services have acquired a goodwill or reputation in the market and are known by some distinguishing feature;
	· There is a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by the defendant are goods or services of the claimant; and
	· The claimant has suffered, or is likely to suffer, damage as a result of the erroneous belief engendered by the defendant’s misrepresentation. # In Consorzio del Prosciutto di Parma v Marks & Spencer [1990] FSR 530, famously Known As The classical trinity, as the Parma ham case; In this case Court confirmed the three test as been laid down in Reckitt & colman case.Court also affirmed the stand as observed in the Pub Squash case (Cadbury Schweppes Pty Ltd. & ors. v. Pub Squash Co. Pty Ltd. (1981) RPC 429), the tort of passing off is no longer confined to early 19th century formulation, i.e. to the name or trademark or a product or a business. It is now recognised that the tort can encompass other descriptive material, such as slogans or visual images or advertisement campaigns that imply an association with the plaintiff's product, provided always that such descriptive material has become part of the goodwill of the product. The Ambit of passing of has been increased as been interpreted in famous “champagne case”. # In Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited, 2001, In this case Court laid down several points which needs to be considered for action of passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity: · 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. · The degree of resembleness between the marks, phonetically similar and hence similar in idea. · The nature of the goods in respect of which they are used as trade marks. · The similarity in the nature, character and performance of the goods of the rival traders. · 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. · The mode of purchasing the goods or placing orders for the goods and · Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks. Court also held that weightage of various factors need to be considered on case to case basic. A fixed criteria on each factor cannot solve the purpose. Every case should be dealt on case to case basic, but court must consider these criteria in mind before considering the case for passing off. # In AG Spalding & Bros v A W Gamage Ltd and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) Which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. # In Bristol Conservatories Ltd v Conservatories Custom Built Ltd the defendants’ salesmen showed prospective customers a portfolio of photographs of ornamental conservatories as if constituting a sample of the defendants’ goods and workmanship. In fact these were photographs of the plaintiff’ ornamental conservatories. This was held to amount to passing-off as the defendants had misrepresented that they were the commercial source of those conservatories. By showing the photographs to prospective customers goodwill arose towards the supplier of those conservatories and was simultaneously misappropriated by the defendants. [This case might be considered as reverse passing off also] # In John Henderson & Sons v Alexander Munro, In that case the defendant had issued circulars and claimed that a certain Mr Munro had experience in drilling artesian wells. However the circular did not state that Mr Munro had drilled the wells whilst working as managing director of the plaintiff’s company, not the defendants’. The Scottish House of Lords held that this amounted to passing off. # The landmark passing off case J Bollinger v The Costa Brava Wine Co Ltd (Spanish Champagne) created 'extended passing off'. This enables a class of traders to prevent rivals from incorrectly applying descriptive terms. While the class cannot prevent rivals applying the term correctly, they can prevent its incorrect application. Other cases about products made in geographical areas followed, for example Scotch Blended Whiskey, and Spanish Sherry. It was widely believed that extended passing off required the plaintiff to prove that consumers associated the disputed term with a particular location. “The usual remedies are injunctions, delivery up of offending items and inquiries as to damages or accounts of profits”.

Extended Forms of Passing off

The extended forms of passing off are one kind of passing off. These basic principles have been refined over the years to protect appellations of origin, such as Swiss chocolate.

In the most famous Case, The UK’s biggest vodka supplier, Diageo, has succeeded in an action against the manufacturers of VODKAT, Intercontinental Brands, on the basis of “extended” passing off. VODKAT is a mixture of vodka and fermented alcohol, and has 22.5% of alcohol by volume (ABV).

“Extended” passing off applies where:

A) A particular sign has obtained some distinctiveness in relation to goods of a particular quality;

B) Goods not having that quality are sold under that sign (or a confusingly similar one); and,

C) Any business having goodwill from dealing properly in those goods under that sign has, or is likely to, suffer damage.

In this case, Court considered that the term “vodka” denotes a clearly defined class of goods (i.e. clear and substantially flavourless spirits with at least 37.5% ABV), having sufficient reputation to give rise to protectable goodwill. It was held that there is an assumption among consumers, retailers and wholesalers that VODKAT and vodka are the same thing, which was considered to be exacerbated by the nature of VODKAT's labelling and marketing. This was considered to amount to the misrepresentation of VODKAT as vodka, rather than a drink containing vodka, leading to the deception of consumers.

“The decision puts vodka in the same class of protectable product descriptions as champagne, sherry, Scotch whisky, and Swiss chocolate.”

# In Erwen Warnick B V vs. J Townend & Sons (Advocaat) the House of Lords dispelled that popular conception by preventing incorrect application of the descriptive term 'Advocaat', which was associated with specific ingredients rather than a geographical location. Thus extended passing off protects use of a descriptive term associated with a distinctive and recognisable product; geographical association is not required.

Reverse Passing Off

“A wrongdoer commits the tort of ‘reverse passing off’ when ‘the producer misrepresents someone else's goods or services as his own.’ That is, ‘X’ copies ‘Y's’ work without permission and claims it as ‘X's’ own.’ Or in other words when X puts his Mark, logo or sticker, on the product of “Y” which goes to prove that the product is of “X”, it is considered as reverse passing off. In this case actually the wrongdoer is not producing any new product and selling it in order to hamper the goodwill and reputation of others and to secure benefit. Basically he is using others product, by just giving it his name or brand, so the customer gets to know that it’s his product. In other words we can say that he is not creating any substandard product, but he is selling the product of same standard as of original one. Sometimes removing the label or removing the label and putting any other label is also considered as reverse passing off.

# In Bristol Conservatories Ltd. v Conservatories Custom built [1989] RPC 455), Court held that when defendant claims the claimant's work as his own; it can be condered as a case of reverse passing off.

# In Roberts Powers School v Tessensohn [1995] FSR 947), It will be recalled that orthodox passing off entails the defendant representing that his product is the plaintiff's product.

In many cases, reverse passing off can be explained under the ordinary rules: for example where a defendant may represent that he or she made goods which were in fact made by the plaintiff so as to pass off his own business as a branch of the plaintiff's. The classic example of passing off takes place when one trader represents his goods to be those of another trader with a better reputation. However modern cases show that passing off is also possible when one trader represents the inverse: that the goods of another trader are his own.

Reverse Passing off in China:

This is the first case in China about trademark reverse passing-off. On May 1994, a dealer of Singapore Crocodile bought some western-style garment with trademark “Maple Leaf” from Beijing Garment Factory with unit price RMB 230. Then it removed the logo of “Maple Leaf” and replaced it with the trademark “Crocodile” and resold to customers with unit price RMB 560 at Beijing Parkson Shopping Center. This was found by Beijing Garment Factory and a lawsuit was filed. The court finally recognized as unfair competition and the defendant was ordered to stop the infringement and liable to pay compensation.

After this case, China revised its trademark law in 2001 and reverse passing-off was officially listed as a type of trademark infringement.

If a person, without permission of the trademark holder, replaces the trademark with another one and resells the product in the market, his behavior may infringe the trademark right of the holder. To be simple, trademark reverse passing-off means a person buys another one’s goods, removes the trademark on the goods and replaces it with his trademark. And then he resells the goods to customer.

Following features for trademark reverse passing-off:

· The trademark infringed shall be a registered trademark. That is, the trademark must be registered;

· The product is acquired in a legal way. It may be manufactured or sold by the trademark holder;

· The purpose for reverse passing-off is to make use of the good quality reputation of other person’s product and therefore to make illegal profit by disguising the true source of the product.

" If goodwill, misrepresentation and damage can be proved an action will lie regardless of whether the wrongdoing was intended and there is no threats action to protect those accused of passing off from intimidation of their customers."

Stealing Trade Secret With Zeal: May Make You Reel

A federal jury in the State of Virginia gave, which is undoubtedly the biggest verdict till date in a case of 'misappropriation of trade secret' till date. The Jury awarded a whopping $919.9 million verdict in favor of DuPont in the case of E.I. du Pont de Nemours v. Kolon Industries. The verdict marks the end of the two-and-a-half year battle that DuPont waged against Kolon Industries (a relatively new comer to the industry of rubber/tyre manufacturing) claiming that Kolon had willfully misappropriated key aspects of its formula for Kevlar®, a high strength synthetic fiber used in applications as diverse as bicycle tires and body armor.

(Image from here)

Such huge verdict was a result of twofold wrongs:

a. of 'stealing' of the trade secrets through a former DuPont employee (who had supposedly stored the data in his home computer, who later confessed the theft and hence was separately sentenced to 18 months of imprisonment)

b. of willful destruction of evidence by deletion of several emails and related documents by Kolon which was caught by the forensic experts employed by DuPont.

Though some of those evidences were recovered on backup tapes after extensive computer forensic analyses, much of it remained missing. This led Judge Robert Payne to provide a so-called adverse inference instruction to the jury, meaning that the jury was free to assume that the missing evidence would have weighed against Kolon.

Hence, due to such serious 'bad faith' conduct by the employees of Kolon, the award included if not punitive damages, but atleast sanctions. Further, the Judge refused to give a default award in favor of DuPont, so this position of law may still be open to reviews, though prima facae it is a open and shut case, hence the Jury was allowed to infer adversely (against Kolon).

What is learnt from this case is that, it is not only the duty of any organisation to protect its trade secret, but also be aware of any potential theft of other's trade secrets by its own employees. Moreover, in case any such theft is brought into notice of the employer, proper measures should be taken, not to effect any damage to the evidences so that such theft is undetectable, but to ensure that all the employees, including the IT team and the IP teams are set at high alert thereby tracing all the subsequent steps so as to preserve all the evidences in favor of such employer being sued.

America (re)Invents its 'Acts' !!

After lot of contemplations and lobbying, the 4th round of Patent Reforms have finally happened in the USA.
With the passing of the Bill by Senate with an overwhelming majority, the US Patent Law has after a long time, undergone a substantial changes. Changes, which has brought US now in the same lines of most of the other patent systems in the world.

The major reforms are listed below:
1. first and foremost, US, from now on, would be having the 'first to file' system, replacing the controversial and time (and ofcourse money) consuming 'first to invent' system, thereby changing the definition of 'prior art' substantially and also repealing the interference proceedings.
2. The opposition procedures have been revised and several other features been added, like inter partes review, post-grant review and also tools to oppose patent applications with expanded discovery and to file multiple oppositions.
3. Several enforcement and related issues are now eligible to be decided by USPTO, without going to the Court.

Though the opponents of the Bill are many, but with its signature scheduled on 16th Sept, 2011, the Act would be coming into effect almost immediately.

With several critiques of the Act in the federation, one may have read several complaints/grudges about this Bill. But, we would try to tell you the story from the other side, as to, how the Act would indeed help the small innovators and foster healthy research. An exhaustive reading of the Act would probably throw some more light on this.

Till then, keep reading and waiting for the detailed analysis !!

Initial Interest Confusion

Initial interest confusion

Have you ever faced a situation where you went to the market to buy your favourite deo and ended up picking something similar to it, but as soon as you reached the counter to pay the bill you realize it is not what you were looking for? If yes, then I must tell you that you have just experienced of what is known as “Initial interest confusion.”

In 2006, the International Trademark Association adopted the definition of an expression “initial interest confusion” which is largely derived from US trademark law. The resolution defines the expression as:

"initial interest confusion is a doctrine which allows for a finding of liability where a plaintiff can demonstrate that a consumer was confused by a defendant's conduct at the time of interest in a product or service, even if that initial confusion is corrected by the time of purchase."

In simple terms "initial interest confusion" is a confusion on the part of the public as to the trade origin of the goods or services in relation to which the impugned sign has been used arising from use of the sign prior to purchase of those goods or services, and in particular confusion arising from use of the sign in advertising or promotional materials.[1]

It is a very good defence which can be taken by the person who claims that his trademark is being infringed by the other where both belong to a similar class of goods and the similarity between the goods is the way they are packed. Moreover, in cases where this doctrine is used, the plaintiff does not have to prove that there exists a likelihood of confusion, all he needs to prove is that the similar mark/ packaging grabbed the initial attention of the consumer.

The first case which discussed this doctrine is Grotrian v Steinway & Sons[2], even though the exact phrase is not used but one could sense that it is in this case the doctrine first came into existence. In this case the plaintiff imported pianos in US labelled “Grotrian-Steinweg" and advertised under the mark "Steinweg". The founder of Steinway & Sons was initially making pianos labelled “Steinweg” in Germany. When he immigrated to New York, the business was sold to the three employees Grotrian, Helfferich and Schultz, with the permission to use the "Steinweg" mark. Consequently, Steinway filed an infringement suit against Grotrian.

On appeal the court held that the name “Grotrian-steinweg” would "misled into an initial interest, a potential Steinway buyer who may satisfy himself that the less expensive Grotrian-Steinweg is at least as good, if not better, than a Steinway". And thereby attract potential consumers based on the reputation built by Steinway in US for many years.

Similarly, in Mobil Oil Corp. v Pegasus Petroleum Corp^[3] case, Mobil the holder of a registered trademark in both the flying horse symbol representing the Greek mythological figure of Pegasus and the name "Pegasus" sued Pegasus Petroleum, an oil trading company, on the basis of a trademark infringement concerning the "Pegasus" name. Even though the logo of Pegasus Petroleum did not represent any sort of flying horse and solely consisted of two interlocking letters "P" the Court held that "there is a sufficient likelihood of confusion between Mobil's flying horse symbol and Pegasus Petroleum's use of the 'Pegasus' mark to grant Mobil relief under the Lanham Act." Further, the 2^nd Circuit Court clarified on Appeal that the likelihood of confusion had to be understood as a "likelihood that Pegasus Petroleum would gain crucial credibility during the initial phases of a deal". The Court concluded that Pegasus Petroleum was misleading potential customers because of their initial interest suggested by the Pegasus mark and holds that this initial confusion alone constitutes a sufficient trademark injury.

In recent times where the marketing strategy is stronger than ever before, the Courts have relied on the doctrine of “initial interest confusion” and held that the displaying the trademark logo of the competitor in ones advertisement also leads to infringement. Storus Corp v. Aroa Marketing Inc.[4], one of the first case related to comparative advertising dealing with this doctrine, the Federal Court held that “displaying a competitor's trademark in Adwords ad copy constitutes impermissible initial interest confusion”, leading to a summary judgment win for the trademark owner.

In one of the recent cases, the issue rose whether initial interest confusion claim is actionable or not? Answering in affirmative Court in case of Och-Ziff Management Europe v Och Capital[5], held that the claim based on the aforesaid doctrine in actionable both in case of trademark and passing off.

Thus, by looking at the cases mentioned above, one can say that this doctrine works as a relief to the registered owner where all he needs to show is that the product of another person creates initial confusion in minds of the consumer and he will win the case even without proving the likelihood of confusion. It would be especially useful in cases where the relevant market for the product of the claimant lies in rural areas where the consumers identifies the product by the way it is packed/ way the logo looks. It still remains to be seen how this doctrine will be adopted in India as rural India forms a substantial portion of the consumers.

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[1] Och-Ziff Management Europe Ltd & Anor v Och Capital LLP & Anor [2010] EWHC 2599 (Ch)

[2] Grotrian, Helfferich, Schults., Th. Steinweg Nachf. v. Steinway & Sons, 523 F.2d 1331 (2d Cir. 1975), Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons, 365 F. Supp. 707, 717 (S.D.N.Y. 1973).

[3] Mobil Oil Corp. v Pegasus Petroleum Corp., 818 F.2d 254

[4] 2008 WL 449835 (N.D. Cal. Feb. 15, 2008)

[5] [2010] EWHC 2599 (Ch)