Author: Kunal Peelwan
Introduction: When Trademarks Deceive, Who Bears the Blame?
Trademarks play a vital role in a market as they act as a brand’s representatives when consumers buy any products or services, and that’s why bona fide use of trademarks becomes so essential for the benefit of both brands and consumers. But many times, many manufacturers and sellers put marks of famous brands on their products might be similar looking or might be a whole different product, even if the brand doesn’t deal with it, just to gain consumer’s trust in their products and because the marks of renowned brands are famous, they get the costumer’s attention.
Many times, companies themselves do deceptive packaging to exaggerate a product’s features like quantity, size or content.[1] For example, A company may label their food product as “100% natural” or “organic” to deceive the consumers, even when the product contains artificial additives or non-organic components. These types of companies exploit trademarks to create a false perception of quality or authenticity associated with their product.
But when those goods and services don’t match the quality level associated with the brand, whose mark or trade description they deceitfully applied, causing some harm to the buyer, then these questions arise: who is actually responsible? or who will bear the blame? Is it the seller, the manufacturer or the brand whose mark was applied on the product, which made the customer trust the product based on the goodwill associated with the Trademark?
Understanding False Marks and Deceptive Descriptions under Trademark Law
False Marks means those marks that are falsely applied on goods and services without the consent of the proprietor, as per Section 102 of The Trade Marks Act, 1999. Deceptive Descriptions are referred to as any trade description associated with any kind of goods or services that is deceptive or misleading to the consumers in a material way, as per Section 2(i) of The Trade Marks Act, 1999.[2]
These False Trademarks and Deceptive Trade Descriptions often mislead consumers, eventually causing financial loss and emotional distress to them, leading to damage to consumers’ trust in brands and also in the market. Companies are also accountable for such fraud, whether through their direct involvement or poor oversight.
Section 126: Implied Warranty and the Unseen Hand of the Brand
When any goods or services that are marked with a trademark or trade description are sold in the market, Section 126 of The Trade Marks Act, 1999 ensures that those marks and trade descriptions are valid and not deceitfully applied. This provision says that a seller (or even distributor/retailer) of the trademarked product is presumed to provide an implied warranty to the buyer that the mark and product are genuine and fit for the desired use it is bought. This acts as legal support for consumers to hold brands accountable, even if the wrongful act was committed down in the supply chain, as this section not only regulates false trademarks and Deceptive trade descriptions, but also challenges brands to honour the unspoken agreement they have with their consumers.
Shared Accountability: Brands Cannot Escape Responsibility
When any harm is caused by the deceitfully applied trademark or trade description and the consumers are defrauded, the accountability lies with the seller (or even distributor/retailer), but the brands can not escape the fact that these kinds of wrongful acts are happening in the market on their name and ignoring this fact and not taking serious action towards this from their side can not only create ripple effects that harm consumers but also distort market trust.
In a very famous case, Keskinäinen Vakuutusyhtiö Fennia V Koninklijke Philips NV(2022), that arose before the Court of Justice of the European Union (CJEU)[3] It was upheld in the judgment that the trademark owner could be held liable as a “producer” as per Article 3(1) of the EU Product Liability Directive, for an accident if their name, trademark or distinguishing feature was associated with the product. The Court of Justice ruled that there is no direct involvement of the trademark owners required in the manufacturing process of the product to be held liable for the harm caused.
Similarly, under the Indian laws, Section 2(36) of the Consumer Protection Act, 2019 also describes the term “product manufacturer” as anyone who:
- produces,
- assembles,
- or imports goods,
- or uses their name, trademark, or mark in connection with the product.
This aligns with Section 126 of The Trade Marks Act, 1999, thatholds brands or trademark owners accountable when any consumers face financial loss and emotional distress because of a violation of the implied warranty on marked goods or services, even when they were not directly involved in the manufacturing process.
Conclusion: Responsibility Must Follow Reputation
Trademarks provide brands the privilege of recognition, but along with that comes the responsibility of safeguarding consumers’ trust. Brands are the custodians of their trademarks and must realise that it is their responsibility to ensure that their name and reputation are not misused in the market to deceive the public. But ignoring their responsibility cannot release them of accountability when a falsely applied trademark or deceptive trade description causes harm to the consumers.
Shared accountability is the key. Though the sellers and manufacturers are primarily responsible for these illegal and fraudulent activities, it is still the duty of the brands to take the first step by encouraging the genuine use of their trademarks and by wiping out any deceptive practices in the channel of distribution. By fulfilling this commitment, they will not only comply with the law, such as the Trade Marks Act, 1999, and the Consumer Protection Act, 2019, but they will also cultivate a stronger sense of accountability between businesses and their customers.
Ultimately, a brand’s reputation is built on trust and protecting that trust requires consistent oversight, transparency, and accountability at all levels of the market supply chain. Brands must honour the promise their trademark represents for the sake of their legacy and the well-being of the customers they serve. Responsibility, after all, must follow reputation.
[1] Team, M.S. (n.d.). Deceptive Packaging Meaning & Definition. [online] MBA Skool. Available at: https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/11912-deceptive-packaging.html.
[2] Ipindia.gov.in. (2025). TRADE MARKS ACT, 1999. [online] Available at: https://ipindia.gov.in/writereaddata/Portal/ev/TM-ACT-1999.html#s101.
[3] Keskinäinen Vakuutusyhtiö Fennia V Koninklijke Philips NV [2022] (Court of Justice EU) Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62021CJ0264.