By Anmol Sinha, Symbiosis Law School, Pune.
One of the most important assets of any business organization is goodwill. The reputation of a company in the market helps it to be the frontrunner in the industry in which it operates. A good name in the business is something which is very beneficial in the long run. Goodwill creates reliability in the minds of the customers that goods or services provided by a particular company is something which can be trusted on. It inevitably leads to increase in consumer base, which ultimately leads to increase in profits.
It also serves as a motivational factor for the companies. It helps them to improve their product or services, in order to maintain the reputation in the market. However, establishing goodwill is a herculean task. It takes a lot of time and effort on the part of a company or a business organization to build it. It is not something which is developed in one day. An organization has to take care of lot of things. Starting from, the quality of goods, the quality of services provided, attention to the problems of the customers, dealing with the problems in the goods and may more aspects has to be catered to. It is only after this approach is followed by the company for several years that they develop a name in the market on which they can cash upon. It is a slow and continuous process.
However, there is a range of crimes, which deals with the exploitation of this goodwill of the other business organization. There are various forms of it.
One form is called Passing Off. In this crime, a person passes the goods or services (Extended Passing Off) representing that he has some association or connection with some other person or organization. This leads customers to believe that the quality of goods and services are at par. Three conditions needs to be satisfied for Passing Off[1], there should be goodwill owned by a trader. Someone should have misrepresented, which resulted in the damage of goodwill.
Another form is Trademark Infringement. Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the license). Infringement may occur when one party, the “infringer”, uses a trademark which is identical or confusingly similar to a trademark owned by another party, in relation to products or services which are identical or similar to the products or services which the registration covers[2].
According to International Trademark Association, it is defined as:
“Trademark Infringement is use by another of same or similar marks which violates the prior trademarks rights of another in the jurisdiction where such use occurs. The legal definition of infringement varies from one jurisdiction to another. The most common standards for infringement are: (a) close similarity of a mark and its associated goods and/or services to a prior mark and its associated goods and/or services; or (b) use of a mark which creates likelihood of confusion with a prior mark among the relevant customers. Trademark law in some jurisdiction incorporates both concepts”[3]
FactsIn this instant case the goodwill established by Microsoft was exploited upon by infringement of its trademarks.
Following are the facts[4] of the case.
C Cubed Solution is an Indian subsidiary of Customer Focus Services (CFS), a Nevada Limited Liability Corporation headquartered in Los Angeles[5]. It has a wholly owned center in Bangalore, India, serving as the base for all our customer interactions. It provides offshore business outsourcing.
A case was filed by technology giant Microsoft against C-Cubed Solutions, along with several other entities alleging that they misused its name and registered trademarks while providing fraudulent technical support services to unsuspecting consumers
Microsoft’s Digital Crimes Unit filed a civil lawsuit in December 2014, in federal court in the Central District of California for unfair and deceptive business practices and trademark infringement against C-Cubed Solutions, which described it as a “private business company formed under the laws of India”. Its directors include Marc Haberman, Rachel Eilat Haberman and Jay Wurzberger.
The company demanded a jury trial and seeking permanent injunction to restrain and enjoin the defendants from infringement of Microsoft’s registered trademarks and from directly or indirectly engaging in false advertising or promotions regarding the quality or security of Microsoft software. They used their enhanced credibility to convince consumers that their personal computers are infected with malware in order to sell them unnecessary technical support. In some instances, the defendants actually created security issues for consumers by gaining access to their computers and stealing information stored on them, the lawsuit alleges.
“Many of these technical support companies are able to gain victims’ trust by claiming they work for Microsoft, are a Microsoft Certified Partner or somehow affiliated with Microsoft,” Microsoft Digital Crimes Unit Senior Attorney Courtney Gregoire said in a blog post.
Since May 2014, Microsoft has received over 65,000 customer complaints regarding fraudulent tech support scams. It said tech support scammers do not discriminate and will go after anyone and not surprisingly senior citizens have been among the most vulnerable.
The matter is still sub-judice.
Conclusion
At this point of time, since there is no decision taken by the judicial system, of the country, it cannot be said, which party is right or which party is wrong. There is a chance that the allegations raised by Microsoft are not accepted by the judiciary, and there is also a chance that there has been actual infringement of the trademark. However, assuming that the allegations made by Microsoft are true, it brings us face to face with several aspects of the problems. What are the steps which can be taken at international levels, to prevent such infringements? How law could be made more stringent, to avoid such complications? What remedy should be given to sixty five thousand customers, who have suffered already due to this? All these questions have to be taken into considerations by the courts. This is an interesting case, as not only the facts are complicated, but it would also lead to modification of laws relating to trademark.
[1] Erven Warnink v. Townend & Sons Ltd. (1979 AC 731, 742 (HL))
[2] Trademark Infringement, Wikipedia, Available At – http://en.wikipedia.org/wiki/Trademark_infringement (Last seen 11th March, 2015)
[3] Fact Sheets Protecting a Trademark, International Trademark Association, Available at http://www.inta.org/TrademarkBasics/FactSheets/Pages/TrademarkInfringement.aspx (Last seen 11th March, 2015)
[4] Microsoft sues C-Cubed Solutions for Technical Support Scam, DNA, Available At http://www.dnaindia.com/scitech/report-microsoft-sues-c-cubed-solutions-for-technical-support-scam-2048474 (Last seen 11th March, 2015)
[5] C-Cubed Solutions, Available at http://www.ccubedindia.com/index.php (Last seen 11th March, 2015)