The last couple of months have been quite exciting for SpicyIP. From patent disputes (Novartis & Bajaj – TVS) to copyright disputes (Sholay) to trademark disputes (Sholay again) we’ve experienced the ‘holy trinity’ of intellectual property laws. This however seems to be only the beginning of an IP conscious
after failed settlement talks.
Before going into the dispute it is necessary to first explain the status of the relationship between Britannia – a company held almost equally by the Wadia Group and Danone – a French Food giant. Danone is currently trying to enter the Indian market on its own and was on the verge of parting ways with Britannia. Under the current agreement with Britannia, Danone cannot market any new products in the Indian market without the prior permission of Britannia. There have been persistent new reports that the Wadia-Danone marriage has been on the rocks for some time and the current suit may just be the final blow.
Coming to the facts, first launched in 1997, Britannia’s ‘Tiger’ biscuits are undoubtedly one of the most popular biscuit brands across India especially amongst drowsy, sleep deprived students attending those boring morning classes in law school. Nothing else in the market (except for Parle-G perhaps) pumps your body with so much glucose, for just Rs.4! Given the thumping success of the ‘Tiger’ brand Britannia obviously sought to tap the export market as well. So when Britannia decided to export ‘Tiger’ biscuits the first thing they did, as any proud owner of a reputable trademark would do, was to register their trademark in the foreign markets. Imagine their shock when they found out that their business partners – Danone – had usurped their ‘Tiger’ trademark in 40 countries as reported by BS!
If what Britannia is saying is true, that is, Danone indeed used the ‘Tiger’ trademark without first entering into a licensing agreement with Britannia, then Britannia would have quite a strong case against Danone only if it can prove that the ‘Tiger’ trademark has some market or reputation in those countries where it is claiming infringement. Danone is yet to comment on the issue and I’m sure there must be some finer nuances to the dispute which have not been yet been reported in the mainstream media. However there were news reports in April suggesting that Danone was going to return the trademark to Britannia. Considering the matter has reached litigation, with Britannia announcing the suit against Danone at their AGM, the point to be examined is the chances of Britannia winning the case.
Prima facie, as of the facts reported to date, it seems that Britannia is going to win this case hands down in the
. Overseas trademark reputations are recognized by most jurisdictions. For example in India it was the 1996 case of N.R. Dongre v. Whirlpool where the Supreme Court held that trans-border reputation could be the basis for claiming ownership over a trademark. In that case Whirlpool was able to prove that its trademark was popular in India, although it was not registered or sold, because of the fact that it was advertised in several international magazines which had a circulation in the target consumer group in India.
In the current case apart from the trademark issue there is also a copyright issue. The ET quoted the MD of Britannia as saying :
Danone’s actions amount to a breach of trust. The brand’s IPR include recipe, package design, pnuemonics, colour schemes and brand positioning. The copyright resides in the IPR and that has been violated.
What remains to be seen is whether the Wadia Group is using this as a hard-nosed negotiating tactic to ensure that its business partner – Danone – sells its stake in Britannia to the Wadia Group at a favourable price or whether it is doing so to actually recover its trademark.
I think this is more than just a reputation issue, but also a case of bad faith by Danone for having registered/applied for the Tiger trade marks abroad (that’s if the facts are true that Britannia/Wadia are the proprietors as reported). Singapore, like the UK (section 3(6) has a provision that allows a mark to be invalidated if applied for in bad faith.
Thanks a lot for that update Tahir. I was wondering whether you could clear another doubt for me. Most newspapers have reported Court battle but I’m guessing it could be even an arbitration case – otherwise why would they file it in Singapore?
Is it Singaporean law that is going to apply to this dispute or is it a case of arbitration which is being conducted under an arbitration clause of the Danone-Britannia JV agreement. If indeed its an arbitration case then the question of which countries trademark law (i.e. Indian, Singaporean) is going to depend on the choice of law provision in the agreement. I have a conflict of laws exam in a week and hence all the jazz on the proper law of contracts. So it would be great if any body could drop in with updates on this. Of course if I’m talking trash please do let me know.
Hi Prashant,
To be honest I haven’t been following the reports – was just making a particular legal point based on the facts given. That said, it did strike me that this seems an arbitration matter – as you say, why file in Singapore? As you will know Singapore is a hot spot for arbitration, especially amongst Indian companies.
If it is arbitration then, depending on the issue(s), i believe the law of the relevant country to which the issue(s) relate will apply – which seems to be India. It seems this is first a commerical contractual issue more than simply trade mark.
I suspect based on the decision of the arbitration panel one party will have right to the marks in whichever countries they were filed and assignments would have to be made. Alternatively, if the arbitration is not successful in determining this then Britannia would have to go to each country where applications for the mark were filed/registered and try and cancel them i.e on bad faith.
Tahir Amin
Prashant,
forgot to mention – the jurisdiction to which all disputes will be settled under arbitration will have been stated in any commercial agreement Britannia and Danone entered into – it could be both parties went for the ‘neutral’ territory of Singapore so Singaporean law would apply. But you have to see the agreement to know this. Usually in such agreements the party with the strongest position puts in the jurisdiction of their choice.
Tahir Amin
Hi Prashant
This is a really interesting post.
One of the really striking things about this dispute is that Danone are in a very similar situation in China in their litigation against Wahaha.
Here’s a link to my blog post “Chinese JV’s – what not to do” – http://duncanbucknell.com/blog/131/Chinese-JVs—what-not-to-do
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best regards
Duncan
@ Tahir,
please clarify a point for me: even if parties have chosen a neutral territory for arbitration, wont it be unjust to apply the laws of that neutral territory on the parties – as not only the has the cause of action not arisen in such neural teritoty but also the issue in the dispute has no relevant nexus with that territoty!
From whatever facts are available, what it appears to me is that there can be 2 reasons why the case is filed in Singapore:
1. There was an arbitration clause in the agreement which provided for neutral territory of singapore. In such a situation, the laws which would be applicable would either be already agreed or will have to be decided.
2. Britannia applied from TM registration in Singapore and found that Danone already hs a registration there.
you may check out this site for a third reason. http://www.myiris.com/newsCentre/newsPopup.php?fileR=20070920081806126&dir=2007/09/20&secID=livenews
@ Prashant
I had a questions some questions for you.
1.you mentioned that the recipe would be covered by trade secret or patent. About patent, I am not too sure but as for trade secret, India hasn’t got any substantive law on trade secret. so could you throw some light on how such a protection of recipe as trade secret could be argued out in the court?
2. correct me if i am wrong but isnt the colour scheme as mentioned in the trade mark law pertains to the colour scheme used for the distinguishing the trade mark only? If such is the case then wont the package designs (layout and artistic style of font, font placement, colour, etc.), mnemonics and colour scheme of the font or the package be protected by copyright law?
You are right Sneha. Package designs can be covered even under copyright law although I think it can be covered even under Trademark Law.