ITC loses TM dilution case against Philip Morris

We have an anonymous commentator to thank for pointing out in a recent post a Delhi High Court decision where ITC lost its dilution case against Philip Morris over a stylized logo of the popular Marlboro trademark. (Image from here)

Readers will recall a post in October last year, around Diwali, when we had posted on the early days of the dispute here. I had received at the time a bunch of replies to that post, including one reader, Anshuman Sakle, who stumbled across the disputed logo and was kind enough to scan and send a copy for a future post (which I reproduce here).

Justice S Raveendra Bhat’s decision, which can be downloaded from the HC website here, contains an excellent discussion on trademark dilution in the case of logos. (For those who can’t access it from here, visit the Judgement Information System of the Delhi High Court, under 7 Jan 2010.) case law in India has dealt mostly with the comparison between competing word marks. This decision gives an opportunity to understand the law in the context of visual marks as well.

Four essential elements to be established for dilution

ITC essentially alleged that the festive pack Marlboro logo (belonging to Philip Morris) resembled and diluted the ‘Namaste’, or ‘folded hands’ trademark, made popular by its hospitality brand, WelcomGroup.

The court emphasised that the following four essential elements need to be established in order for a dilution case to succeed, viz.,:
1. The diluting (impugned) mark is identical or similar to the injured (senior) mark;
2. The injured mark has a reputation in India;
3. The use of the impugned mark is without due cause;
4. The use of the impugned mark (amounts to) taking unfair advantage of, or is detrimental to, the distinctive character or reputation of the registered trade mark.

And because there is no presumption of infringement in cases of dilution (i.e., where a mark is infringed by use in connection with dissimilar goods or services), each of these elements needs to be established in order to pull off an allegation successfully. [NB: unlike in cases of infringement in relation to similar goods/services, where there is a presumption of infringement].

Test for similarity in cases of dilution
Discussing the test for similarity of marks laid down by the Supreme Court in Amritdhara Pharmacy v SD Gupta (1963) [– see p. 37 of the judgement for a verbatim reference], Justice Bhat highlighted that the test for dilution was higher than in simple infringement matters. This was because of the design of Section 29(4) of the Trade Marks Act, where it was clear by the use of the conjunction “and” that all four elements (listed above) had to be established. Crucially, it noted that “[i]n the case of logos and other marks, the application of the “identity” or “similarity” test has to result in a conclusion that the rival marks bear a very close resemblance, seen from an overall perspective.”

ITC’s major contention had been the similarity betweem the W-Namaste mark of the Welcomgroup and the “M” on the Marlboro pack which it alleged deceptively appeared like a “W”. However, the court observed that “a “global” look, rather than a focus only on the common elements of the mark, is to be taken, while considering if the impugned or junior mark infringes, by dilution, an existing registered mark.“

In this case,

“the plaintiffs‟ mark is not a “stand alone” mark; it is used with the words WELCOMGROUP, or the name of the resort or service. Moreover, the plaintiffs‟ mark is part of the overall marks and devices which are used in relation to each hotel, restaurant, resort or service it offers, to the consumer… This conclusion is further fortified for the reason that the plaintiff‟s mark, in relation to hospitality industry, is a stylized logo, which has to be juxtaposed with another mark, which, the materials on record prima facie suggest, has its own distinctive market.”

ITC had also put forward the contention of copyright infringement of the artistic elements of the W-Namaste mark. The court on its part was fairly quick to shoot this down, pointing out that both marks were prima facie neither identical nor similar, and the Marlboro festive pack logo had its own artistic elements.

Mark’s reputation in India
It had been argued that the WelcomGroup logo was associated with the ITC group for 30 years, and Philip Morris’s use of the mark in question could mislead customers, and whittle down the distinctiveness and exclusivity associated with the former. The court did make note of the overlapping business interests (in tobacco) of the two parent companies It acknowledged that ITC’s “reputation in its mark contains an aura of luxury could possibly transcend the hospitality business, and may well evoke a broad association with luxury goods.”

However, the court held there was nothing to imply that such association also extended to mid to high priced cigarettes. On the contrary, it said there were significant and fundamental differences between ITC’s hospitality business (which alone apparently use the W-NAMASTE) and Philip Morris’ Marlboro cigarettes.

Specifically, ITC had failed to show that it used the W-Namaste logo for cigarettes. T complimenting the discerning consumer, the court held that there was no possibility of the two goods/services (ITC’s hospitality and Marlboro cigs) being deceptively associated.

So there’s an end to that. This decision was unfortunately overshadowed by the Delhi High Court’s RTI decision of around the same time (recommended read, btw, if you haven’t already). There’s another dilution judgement which will see the light of day soon on this blog. More on that later. (And yes, Topkapi is on my list of to-visit places. Which reminds me, must pick up Ambler again. No question of dilution there…)