Recently one of the parties in R.C. Plasto Tanks and Pipes Pvt. Ltd. v. Ganesh Gouri Industries & Anr. referred to the “Safe Distance Rule”. Discussing what this rule is and its origin, we are pleased to bring to you this post by SpicyIP intern Samridhi Chugh. Samridhi is a final-year student at the Campus Law Centre, Faculty of Law, University of Delhi, and a graduate in Journalism from Lady Shri Ram College for Women. With a passion for the dynamic intersection of law, media and technology, she is particularly interested in exploring intellectual property and tech policy.
Playing from a “Safe Distance”: Analysing the Rule, its Roots and Application in India
By Samridhi Chugh
In today’s age of ever-intensifying market competition and mounting infringement litigation, it is only inevitable that the judiciary finds itself compelled to continually update its enforcement arsenal. From dynamic injunctions, John Doe and Anton Piller orders to the recent interventions in the form of the ‘Safe Distance Rule’, judicial ingenuity has come a long way in addressing novel challenges through a range of ex-post remedies ensuring compliance. The latter propped up once again recently before the Division Bench of the Delhi High Court in R.C. Plasto Tanks and Pipes Pvt. Ltd. v. Ganesh Gouri Industries & Anr. (pdf), wherein while the Court vide its judgment dated August 5, 2024, summarily rejected the argument claiming the applicability of the rule, its pertinent observations on the same, reflecting the gradual emergence of the concept in the legal discourse, warrant an exclusive discussion of their own.
In the instant case where both the parties were involved in manufacturing water storage pipes, the appellant sought the removal of the respondent’s copyright registration for an artistic work titled “Gauri Aqua Plast,” claiming it was deceptively similar to its own registered work “Plasto.” The appellant also alleged that the respondent violated a prior settlement agreement which was entered into before a Nagpur Civil Court wherein the parties had agreed that the respondent would not use any marks similar to “Plasto.” However, the Delhi High Court found that the two works were distinct, with the only common element being the word “Plast,” a derivative of the term “Plastic.” The Court ruled that the respondent’s work, from a bare perusal, was noticeably neither a colourable imitation nor a substantial reproduction of the appellant’s, dismissing the claim of infringement.
The ‘Safe Distance Rule’
The ‘Safe Distance Rule’, which finds its roots in the tenets of fair competition, simply put, follows that a party, once found guilty of anti-competitive practices, including trademark infringement or passing off, is expected by the courts to adhere to what is touted a “safe distance” from the competitor’s realm. Endorsed for its broad ambit of injunctive reliefs, the rule is effective in protecting plaintiffs from future infringements, streamlining enforcement and preventing defendants from benefiting from past infringements through its punitive disposition.
A largely equitable measure, subjecting the party to increased judicial scrutiny until full compliance of the orders is achieved, the rule empowers the courts with enhanced discretion to compel parties to abide by their legal obligations without resorting to circuitous attempts at avoiding them. On the question of the applicability of the rule in the present case, the Court identified it as a tool to prevent the retrial of the entire dispute when a previously defeated party in an infringement suit, poised on the receiving end of an injunction, attempts to circumvent the course of justice by introducing minor alterations or tweaks to the impugned mark. The Court, in such circumstances, can allow itself to interfere through this rule, without getting embroiled in long-drawn proceedings, and ensure the effective enforcement of its original orders.
Roots in American Jurisprudence
According to Cahn and Floum, the rule has vested with the courts amplified discretion to enforce a given remedy, which only increases significantly when the rights in question flow from statute. Applied actively in American jurisprudence across constitutional, antitrust and employment matters, the rule has now gained much currency in intellectual property proceedings, more specifically while dealing with issues of contempt.
The rule, in its all-encompassing reach, prevents the infringer from adopting even those elements which may not necessarily be infringing the plaintiff’s trade-dress but are likely to cause confusion, as concretised in Ambrit, Inc. v. Kraft, Inc., where an injunction against Kraft, restraining it from using polar bear imagery on its ice-cream packaging, was upheld by the Eleventh Circuit. In the case of Conan Properties, Inc. v. Conans Pizza, Inc., the Fifth Circuit ordered a broad-based injunction to restrain the defendant from using even the marks likely to resemble ‘Conan the Barbarian’ in its resolve to prevent any form of infringement by the defendant adopting minor modifications.
The rule was firmly cemented in the case of Innovation Ventures, LLC v. N2G Distributing, wherein the Sixth Circuit adopted it as a part of the court’s “remedial toolkit” to impede repeated offenders from introducing minute changes to the mark, forcing the court to retry the entire matter in a contempt proceeding over the use of this ‘new format’. More recently, in Mahindra & Mahindra, Ltd. v. FCA US, LLC, the Sixth Circuit vacated and remanded the District Court’s order refusing to apply the safe distance or likelihood of confusion rule with respect to Mahindra’s post-2020 “ROXOR” trade-dress by holding that the court should’ve instead examined whether the new trade-dress was sufficiently removed, to a “safe distance”, from the plaintiff JEEP’s characteristics in order to eliminate any remnant of confusion among the public as to the relation between the two.
Gradual Adoption in India
In India, as early as in 2003, the Bombay High Court in R.R. Oomerbhoy Pvt. Ltd. v. Court Receiver, ruled in favour of the plaintiff in a trademark infringement case, and dismissed the appellant’s request to use the impugned marks after modification, quoting Lord Greene in 1949, who, speaking for the Court of Appeal (UK) in Wright, Layman & Umney Ltd. v. Wright, had said, “Honest men do not attempt to sail near the wind.” The dismissal indicated the court’s early recognition of the rule, as it stands in its present form, albeit in more equitable terms, wherein it considered the bonafides of the appellant as well as the larger circumstances surrounding the dispute, extending the order to all possible forms of future infringements.
In the recent case of Ace Technologies Corp and Ors v Communication Components Antenna Inc., a Division Bench of the Delhi High Court applied the rule and observed that nothing done by the defendant post the order should be construed as infringing the plaintiff’s trademark. The court said “It is not open for the party to try and overcome orders by continuing its infringing activity in another form or manner.” In another recent contempt order, the Bombay High Court adopted the safe distance rule, and held that the modification to the mark in question was not significant enough to warrant fresh proceedings, relieving the court of the obligation to retry the entire matter for each small variation in the mark.
Citing R.R. Oomerbhoy’s case, the Bombay High Court, most recently in KLF Nirmal Industries Pvt. Ltd. v. Marico Limited, affirmed Marico’s claim that the blue packaging of KLF’s coconut oil bottle was deceptively similar to its own, and held that the confusion arising out of a trademark or trade-dress infringement is not “magically remedied” by de minimis fixes.
On the Practical Viability of the Rule
While the rule, in its broadest application, remains an effective judicial instrument to ensure that court orders and decisions reach their logical conclusion, its open-ended nature remains a cause of concern for litigating parties. The exact measure of “safe distance” varies on a case by case basis as an exclusive judicial bastion, but the ambiguity surrounding the precise nature and extent of compliance may, in stark contradiction to its primary objective, increase litigation and cause confusion among parties.
If applied too broadly, the rule also has the potential to exceed its envisaged ambit and thwart bonafide competitive actions, which may or may not be per se infringing. This can be especially common in matters involving well-known marks, where perfectly lawful or remotely similar marks, used by ordinary market players in a non-infringing way, may come under the court’s scanner through the rule’s far-reaching application. Thus, the Court in R.C. Plasto rightly drew the line, acknowledging the impugned mark’s clearly distinctive character, and recognising that such an overly broad approach may not be in consonance with the equitable terms expected to govern the rule in the first place.
What is crucial in such scenarios is that the rule’s application is guided by a holistic analysis paying due regard to the nature and context of the dispute as well as the realistic positions within which each of the disputing parties operate. The fiscal burdens in obliterating every potentially confusing mark or product, which may be bearing the slightest similarity with the plaintiff’s marks, must also be considered by the courts in their stride to ensure full compliance. It should not be taken for granted that the rule may have a disproportionate impact on small-scale entities with limited resources, daring to compete with more well-known brands in an ostensibly equal market.
An effective measure of application would be rooted in practicality, rather than stringent norm-oriented decision making. This would ensure that the arms of justice reach not only the plaintiff, but are considerate of the defendant’s practical circumstances also, with the larger interests of the consumer at the forefront of mind.