Hear Me Out! Assessment of Phonetic Similarity is as important as that of Visual Similarity: An Assessment of INSEAD v. Fullstack Education

Image from here



[ This post is co-authored with SpicyIP Intern Surima Singh. Surima is a 5th-year student pursing B.A. LL.B from Christ Academy Institute of Law, Bengaluru. ]



On May 17, the Delhi High Court revoked Fullstack Education’s (respondent) INSAID mark for being deceptively similar to the Institut Europeen D Administration Des Affaires, Insead, Association’s (petitioner) INSEAD mark. While the revocation is perhaps one of the interesting issues arising out of the case, this post will focus on the court’s finding on phonetic similarity between the mark and it highlights a rare dichotomy between the broad principles for assessing distinctiveness between the competing marks and the practice actually adopted by the Trademarks Registry in applying the above principles, in the context of phonetic similarity. We’ll also explore if any solutions have been prescribed within the existing laws/ practices.



The Principles



In principle, Section 9(1)(a) of the Trademarks Act prohibits registration of marks that are devoid of any distinctive character i.e. not capable of distinguishing the goods of one from that of others. Similarly, Section 11 (1) (b) states that mark that is similar to an earlier trademark and is used on identical or similar goods and services as that of goods/ services of the earlier mark cannot be registered. Thus, after receiving an application, the Trademarks Registry would have to consider the mark as a whole and compare it with the earlier marks before proceeding with the registration. However, the Trademarks Act is not clear on the type of comparison that the examiner has to undertake. Similarly though, the Trademarks Rules, under Rule 33 , states that Registrar may cause examination of the subject mark with the earlier trademarks registered or applied, is not clear on the type of searches that has to be undertaken by the Registry.



If we look at how a mark can be infringed, one can see that Section 29(9) of the Trade Marks Act, expressly explains that a mark can be violated by the spoken usage as well as visual depiction of words. In infringement matters, the Supreme Court has held that when comparing trademarks, the ear and the eye must both be taken into consideration (For instance in Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd ., where the court has observed that phonetic similarity is one of the fundamental tests of comparison.) This emphasis on phonetic similarity makes sense owning to the capability of similar sounding marks to mislead the buyer, threaten trademark owners’ interests, and also jeopardize consumer welfare and market integrity.



But what about assessment of a mark during the prosecution stage? Shouldn’t the same test be applied on the examiner to assess the mark both visually and phonetically before granting the registration? The Delhi High Court order in the present case identifies and highlights this glaring oversight.



The Practice by the Registry



In this case, one of the arguments which was raised by the petitioner was that the mark was registered in violation of Rule 33 of the Trademark Rules. To substantiate its argument, the Petitioner submitted that after conducting a phonetic search on the Trademark Registry’s website, its INSEAD mark was cited as a similar mark to the respondent’s INSAID mark. However, when the court inquired from the Registry about the nature of search conducted by it, it was revealed that the Registry did not conduct a phonetic search for the similar marks and merely a search for similar word marks was conducted. This shows that the registry focused more on the trademarks’ visual or textual similarity than its pronunciation, which could cause confusion among consumers who rely on the pronunciation. To put it in perspective, the website of the trademarks Registry has a feature to conduct a phonetic public search for marks, which can be used by anyone. However, despite this feature being available to all, the Registry itself did not conduct such a search and accepted the mark without any objections! We performed a search on the IP India website and found that the Examination Report issued against the INSAID mark was published directly “as accepted” by the registry. ( pdf ) After a phonetic public search, we found some 672 similar marks, among which INSEAD was one ( pdf ). It is pertinent to note that we are slightly apprehensive if the feature on the website is foolproof and if the mechanism adopted by the registry to conduct such searches is indeed flawless. (For example, how can In Style Jewellery (Label) be similar to INSAID? Similarly, how can Institute of Vedic Astrology be similar to INSAID?)



Coming back to the case, the court did not agree with the petitioner’s argument and held that since none of the parties could draw its attention to any fixed guidelines on the nature of searches that the registry has to conduct, it cannot set aside the registration for being violative of Rule 33 alone. And to avoid any confusion in the future, it directed the registry to conduct both a word mark and a phonetic search, even at preliminary stage, when an application for registration is received. However, the court did clarify that the call whether the mark is actually similar or not is ultimately to be taken by the Registrar.



While this clear-cut direction for sure can be appreciated, it’s unclear if the court was correct in drawing a connection between the lack of guideline to conduct phonetic similarity with violation of Rule 33. Guideline or no guideline, the registry filed an affidavit accepting that it failed to perform a search among the earlier marks and thus violated the mandate of Rule 33. Similarly, guidelines cannot be seen to supersede a Rule and thus lack of same cannot possibly be a leeway to not apply the mandated Rule. Furthermore, we are unclear if the Trademark Act or Rules vests within the court, the power to “direct” the Registry, an executive, to conduct the search in a specific way. Though the court clarifies that the final say will be that of the registry, the Act and the Rules expressly leave it on the registrar to determine the method to conduct a search, as long as the same is within the scheme of the Trademarks Act. And even when the same is not within the scheme of the Act, the court can set aside the impugned order in an appeal.



It is also perplexing to see that the order nowhere mentions the suggestions in the Trademark Manual . As argued above, though the Trademark Act and Rule do not specify the exact nature of the searches that the registry should undertake, the Trademark Manual at page 43, under sr. no. 11.1 explains that for examination of applications for relative grounds of refusal, the examiner “ shall make a search of same or similar earlier trademarks in respect of same or similar description of goods.” And issue either issue an objection or accept the mark . The Manual further states that the search is performed through Trademarks System which enables the examiner to make search with three modes-word mark search, phonetic search and device mark search . Furthermore, the manual explains that in case of phonetic search “ the Examiner may specify one or two phonetic variant of the trademark, and system will fetch all earlier trademarks having phonetic similarity with the trademark applied .” While we agree that the trademark manual is not binding in nature, the clarifications therein should have been mentioned in some way by the court or by the parties, for clarity.



Despite being explicitly mentioned in the trademark manual, the registry’s failure to undertake a phonetic search reveals another weakness in the trademark registry and hopefully after the present order a thorough evaluation of phonetic similarities as part of a complete and standardised approach to trademark application’s analysis will be adopted.