• Shaurya Shukla

Blockchain Technology: Is It The Panacea For Rising Trademark Infringement?


Trademark is an intellectual property right which helps an enterprise to distinguish its products from the products of other enterprises. If a company or organization wants to obtain a trademark it has to file a registration application at the regional/national trademark office and has to pay the required fee. If a trademark gets registered, it confers certain rights on the trademark holder like it can be used exclusively by the trademark holder, it can be licensed in lieu of payment and it makes the position of a trademark holder more strong than others in case of litigation. Trademark is granted for a period of 10 years and its renewal can be done by paying additional fees. Trademark consists of Words, Shapes, way of packaging, drawing, etc.


There is a statutory remedy available when a registered trademark is infringed. So, what is infringement?. When any sign or name identical to the registered trademark is used by a non-assignee of the trademark deceptively to gain profit in the name of another company,s registered trademark, this act of that non-assignee is known as trademark infringement. Section 29 and 30 of the trademark infringement act 1999 deals with the remedies available to the trademark holder in case of infringement. The remedies which are available in case of infringement of trademark are:

  • An injunction can be granted which can be either perpetual or temporary.

  • Damages can be provided to the party whose trademark rights have been infringed

  • According to section 134 of the trademark act 1999, the suit for infringement should be filed in the district court of the local jurisdiction where the business of the person (whose trademark has infringed) is setup.


Despite of these laws being in force, the cases of trademark infringement are on a rapid rise. Such cases have been increased by over 15% in the last two years. Compumark, which is a leading industry in trademark study released data which shows that trademark infringement in the year 2017 was 74% which rose to 81% in 2018 and it again rose to 85% in the year 2019. Trademark infringements are creating various problems and the top three cited problems are:

  • Customers are in a confusion(45%)

  • brands gaining less revenue(38%)  

  • brands are losing their reputation(37%).

Brands had to spend a lot on the legal proceedings too. 40% of the organizations spend $ 50,000 to $ 2,49,999 on legal proceedings and some times trademark infringement often crosses business and infringes the business name(44%), web domain(44%), social media(38%), online marketplaces(38%), advertising campaigns(34%). Apart from the rising trademark infringements the trademark filing also rose, according to WIPO( World Intellectual Property Organization), there was a 15.5% increase in the trademark filings in the year 2018.

There had been various famous trademark infringement cases like:

  • When Paypal which is a payment giant of USA sued Paytm for trademark infringement because both of them use the same color and writing style as their symbol, this case is still pending in the court

  • When London Dairy which is an ice cream company sued Londonderry which is a confectionery company for trademark infringement as they both sounded phonetically same but the court held that there was no misrepresentation on the part of Londonderry because even if they sounded phonetically same, there was no visual misrepresentation.

Now is the time when blockchain should come in the picture. Blockchain is a decentralized ledger that stores the data in a decentralized way and makes sure that no central authority is controlling that data and it was developed by Satoshi Nakomoto in 2008. Each block in which data is stored has a unique code-named hash which makes it less prone to getting breached or hacked. Blockchain is very promising and revolutionary technology because it reduces the risk of getting tampered or hacked and it brings transparency in an effective way.

Hacking a blockchain is difficult because every blockchain is managed by many interconnected computers called nodes. A node solves the hash and adds the new block. The unique code of a block or a hash is a very difficult mathematical problem that can only be solved by very expensive and very advanced computers. Even if a hacker solves one hash then also its efforts will be of no use because for hacking a blockchain one needs to change the hash or code of at least 51% blocks which is practically impossible and it will be futile too because the computer of such calculative skills will cost way more than a hacker will earn from hacking a blockchain. Solving a hash and adding a new block is practiced as a profession by many people to earn bitcoin (which is a cryptocurrency) and this process is known as mining.

Blockchain Technology can help to stop the rising infringements of the trademarks in many ways:

  • Blockchain-based records will be very safe for proofing trademark usage.

  • Blockchain will increase the legitimacy of the goods to prevent counterfeiting.

  • Trademark,s record can be made for any jurisdiction.

  • A distributive ledger can record the use of both registered and unregistered trademark, which will create a thorough and inclusive picture of all trademarks in use and extent of use in a particular jurisdiction.

  • Records of the blockchain will be quick and easy to access.

  • As discussed above blockchain is immune to alteration and hacking. So, fewer cases of trademark infringement will be caused because infringer can be challenged for using a registered trademark on the ground that safe and secure document is saved in the blockchain.

  • Sales of trademark rights will become more safe and secure.

In conclusion, we can conclude by saying that panacea is a word that has an absolute effect and in today’s world of growing technology, there is nothing which is absolute because everything can be hacked or tampered. So, blockchain technology is not the panacea for rising trademark infringements but it does not mean that blockchain technology is futile to stop the rise of trademark infringements, it can surely bring down the rising graph by its decentralized nature and less susceptibility to hackers but it cannot stop the trademark infringements. There is still a long way to go on the way of technological research to find the panacea for trademark infringements but for now, there is no panacea for trademark infringements.

References:

  1. Trademark, What is Trademark, 20 May 2020, 11:19 am, https://www.wipo.int/trademarks/en/

  2. Trade Marks Act, 1999, Act No. 47 of the year 1999 dated 30th.December 1999

  3. Id.

  4. Trademark Infringement is on the rise, 20 May 2020, 12:03 pm, https://clarivate.com/news/trademark-infringement-is-on-the-rise/

  5. Trademark Infringement rising year on year, says compumark report, 20 May 2020, 12:06 pm, https://martechseries.com/technology/trademark-infringement-rising-year-on-year-says-compumark-report/

  6.  Id.

  7. Blockchain, What is Blockchain, 21 May 2020, 11:53 am, https://builtin.com/blockchain

  8. Application of Blockchain technology to Trademark, Protection, Enforcement, and Practice, 20 May 2020, 12:24 pm, https://www.inta.org/INTABulletin/Pages/ApplicationsofBlockchainTechnologytoTrademarkProtection7312.aspx


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