The Hindu Business Line : Impersonator inside!

Here's a recent case where Intel took a company to the Delhi High Court on charges of impersonation. The text of the judgement also gives interesting details about the Intel brand.

RECENTLY, Intel approached the Delhi High Court, seeking remedy for a trademark violation. The company's case was against one Naresh Narula, who was using the `Intel' trademark on his electronic goods.

On behalf of Intel, its attorney Rahul Sethi submitted that the company has been engaged in business relating to the fields of computers and parts thereof, since its inception in 1968. "Currently it employs an estimated 78,000 people in its various subsidiary companies throughout the world and its global annual turnover for the year 2003 was in excess of $30 billion," said Sethi about Intel, which has business operations in more than 40 countries.

`Corporate Snapshot' on www.intel.com informs: "Year founded: 1968. Number of employees: 91,000. Revenues: $34.2 billion (2004). Products and services: over 450. Fortune 500 ranking: 53. Stock symbol: INTC. Worldwide offices and facilities: 294."

Intel has been using "the mark/name Intel in its corporate name and on its products since 1968, the year it was incorporated," informed Sethi. The mark is `on products beyond computers,' he pointed out. Digital technology is used in the home entertainment environment; so, Intel's microprocessors and other branded products are increasingly used in many consumer electronic products, including set-top boxes, MP3 players, media centres, digital cameras, high definition television sets (HDTV), digital audio and video devices and household appliances such as microwave ovens, said Sethi.

Intel has launched a `digital home' initiative specifically to develop and distribute products and technologies to support new consumer usage models in the digital home, he informed the Court.

Brand history

From the text of the judgment dated October 25, 2005, one learns a few interesting facts about the Intel brand. Such as: that it was `ranked among the top 10 brands by leading independent publications since as early as 1993'; and that in 1969 the company adopted a distinctive style popularly known as INTEL `dropped e logo'. In 1991, the company adopted the `Intel inside', a logo licensing and cooperative advertising program. "Through this program, the `Intel inside' and design logo appears on the front bezel of millions of computers around the world," informed Sethi.

He mentioned that Intel has an estimated 2,000 trademark registrations worldwide `consisting of or incorporating the word Intel.' The company was exporting to India ever since 1972; and Intel's India operations started in 1998 with the opening of a branch in Bangalore. In its complaint before the Court, Intel produced details of outgoings towards advertisements and promotional expenses.

The IP quest

"Intel is ranked in the elite top ten for issued US patents in 2003," reads a posting on www.intel.com. "Since 1976, Intel has received over 8,000 US patents and thousands more worldwide," it adds. Intel scientists and engineers were awarded 1,592 US patents in 2003, an increase of 48 per cent over 2002.

A press release of the World Intellectual Property Organisation (www.wipo.int) dated March 9, 2005, reports that 1,20,100 applications were filed in 2004. "The Dutch multinational Philips Electronics N.V. was again the largest filer, followed by Matsushita (Japan), Siemens (Germany), Nokia (Finland), Bosch (Germany), Intel (US), BASF (Germany), 3M (US), Motorola (Germany) and Sony (Japan)," reads the tally.

`Main fields of technology' according to the International Patent Classification make an interesting reading, because of the presence of IT-related fields in good number: "i) Pharmaceuticals, cosmetics and dental technologies; ii) computers, data processing; iii) organic chemistry - heterocyclic compounds; iv) networking, telecommunications; v) semiconductor devices; vi) analysis materials by determining their chemical or physical properties; vii) diagnosis, surgery; viii) micro-organisms or enzymes; ix) pictorial communication e.g. television; x) organic chemistry - acyclic or carbocyclic compounds; xi) information storage technologies; xii) filters implantable into blood vessels, prostheses, orthopaedic; xiii) telecommunications; xiv) optics; and xv) selecting (switches, relays, selectors, electronic switches).

For the enthusiastic, there is a story dated November 24 and titled `Local inventors at the fore' by Luci Scott on www.azcentral.com. It cites Intel's Dennis O'Connor thus, "When we're in a brainstorming session, a bad idea triggers a really good idea. The process of getting together with other really bright people, analysing a problem and coming up with a new solution is one of the most enjoyable and exciting things I do." And: "We're always challenging assumptions, challenging the way things have always been done. There's a drive to create new ways of doing things." O'Connor's name is on 23 patents, informs Scott. It seems his favourite patent is on "the personal video recorder, a self-contained system similar to a VCR without the videotape." An exhortation on the company's site is of Robert Noyce, Intel Cofounder: "Do not be encumbered by history. Go off and do something wonderful."

The impersonator!

Apart from doing things wonderful, one has to be watchful too. Which is how, in March 2005, Intel came to know about the business activities of Narula, proprietor of Intac Systems. He was "manufacturing and assembling electronic goods including compact kits for colour television, black and white television, VCD players and CD players." The problem was that Narula was selling these products "with a small sticker on each of the kits bearing Intel mark and swirl device around the Intel mark."

There was more: "The sticker and swirl device also had prevalent and visible details of the approving authority and batch number, falsely enunciating that the goods have been certified and passed by the plaintiff." The whole effort was to cash in or/and exploit `the enviable goodwill and reputation' enjoyed by the company, it was found.

The summons of the suit were issued on April 12, 2005 and an interim order was passed restraining Narula from using the word `Intel' as a trade mark or trade name. Since none appeared on behalf of Narula, an ex parte order was passed on May 11, 2005. The Court was shown Narula's products and business card, as evidence of the violation.

Sethi submitted to the court that Narula's unauthorised and illegal activities are resulting in loss of distinctiveness and exclusivity attached to Intel's mark and trade name, and also tarnishing the reputation enjoyed by the company's trademark. Also, the violation was impeding the right of Intel to legitimate and continued expansion of its business to provide additional goods and services, he said.

Court's observations

Justice Anil Kumar, who heard the case, observed that Intel's pleas and contentions remained un-rebutted. The trademark Intel reminds consumers that it is designed with Intel microprocessors, he said. "There is no doubt that in the circumstances the Intel mark serves as the exclusive designation of the origin of plaintiff's products and services and the plaintiff alone is entitled to lawful use of trademark/mark Intel to the exclusion of others unless they are expressly authorised by the plaintiff," ruled the court. It added that Narula had deliberately adopted and used the Intel mark "with the intent of trading and benefiting from the reputation and goodwill associated with the plaintiff and its well known Intel mark."

Such illegal use causes damage to Intel `by dilutions and gradual erosion' of goodwill, `combined with the loss of distinctiveness and exclusivity' of the mark. It will also tarnish the reputation of Intel's trademarks in the absence of stringent quality controls that the company insists in respect of its products, said the court. Therefore, Intel is entitled for a decree of perpetual injunction restraining Narula from using the name Intel and similar swirl device as a trademark, trade name, e-mail address and web site name in any business, manufacture, advertising, selling directly or indirectly, stated the Court.

"The plaintiff is also entitled to take printed matter including stationery, goods, packaging boxes, and plastic covers etc from the defendant having offending Intel mark with similar swirl device so that the defendant may not use them violating the trademark of the plaintiff," said the Court.

Damages

In its petition, Intel had claimed a decree of damages for a sum of Rs 20 lakh. On this, Justice Kumar said that Intel had not provided any evidence to establish that it has suffered damages of Rs 20 lakh or any other amount. "Since the plaintiff has not been able to establish the quantum of damages suffered by him, he is not entitled for any decree for recovery of any amount as damages against the defendant," he ruled, therefore.

Cases@TheHindu.co.in

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