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Trademarks provide legal protection for certain terms, logos, graphics and other symbols used by companies for carrying out their business. They provide the trademark holders with the rights to take legal action against the infringers or counterfeiters of their mark and at the same time prevent the consumers from falling into the trap of fake products available in the market.

Laws of trademark provide for legal action in case of dilution of trademark of an established company and when there is a significant possibility of causing confusion in the minds of the customers.

The infringement leading to dilution of the trademark includes actions on part of other firms or manufacturers that will lead to affecting the uniqueness of the trademark of an established firm, which in turn would reduce the reputation of its products in the market. For instance, if the trademark of a shoe polish manufacturer significantly resembles that of a well known food manufacturer, customers might believe that the firm is moving away from its core product, which might affect its quality of products.

As far as the possibility of confusion is concerned, it is based on the deceptive similarity of the two marks, making it hard for the consumers to differentiate between the items. The misunderstanding could be related to the source of the product, its sponsors, or to any other factor related to it. The underlying assumption behind this confusion is that an ordinary customer would not be able to recollect the exact details of an item. In such a situation, the real trademark holder is at a risk of significant financial and credibility loss due to a deliberate infringement by another company.

These are not the only claims of violation that can be brought with respect to trademarks. The trademark owner can also bring an action for pass off, which implies that some other company is trying to market its products claiming to be coming from him. Similarly, legal action can also be taken for unhealthy competition and other such claims.

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