8PM v. PALONE 8: Delhi HC on law on numeral trademark

The Delhi High Court, in its interim judgment in Radico Khaitan Ltd v. Carlsberg India Pvt Ltd., inter alia examined the law on numeral trademark.

[slightly long post]

The plaintiff, Radico Khaitan Ltd, a leading manufacturer of alcoholic beverages, markets its products under inter alia “8PM”. The mark “8PM” was registered under both Class 32 (mineral water) and Class 33 (wines, liquors, whisky and alcoholic drinks).

[Note: Though Class 32 inter alia contains beer, the plaintiff registered “8PM” in respect of mineral water and notbeer.]

The defendant inter alia uses “PALONE 8” for marketing its beer. It was alleged that the use of numeral “8” as a primary mark in its brand amounted to mala fideuse of plaintiff’s mark by the defendant. It was, therefore, prayed that the defendant should be restrained from using the numeral “8” in relation to their products.
The Court was called upon to determine whether a single-numeral “8” in the facts and circumstances of the present case could be protected while comparing the two marks of the parties – “8 PM” and “PALONE 8” and the two sets of goods – whisky and beer.
S.2(l)(m) of Trade Marks Act, 1999 (“Act”) defines “mark” which includes numeral. A numeral lacks inherent distinctiveness on account of common use. The prima facie registration of numerals depends upon its distinctive character. Considering the extant facts, Court arrived at the following conclusions: 
     a) The number 8 enjoyed nexus with the concerned beverages. It was a bona fide description of character of  goods viz., representation of Alcohol By Volume (ABV) in beer.
      b) The plaintiff held trademark registration for “8PM” and not 8 per se.
c    c) “8PM” was registered in Part B of the Trademark Register (under the Trade Marks and Merchandise    Act, 1958). A mark in part B was perceived as prima facie non-descriptive.
In the light of aforesaid determination, Court accepted the prima facie non-distinctive character of numeral mark “8”.
S. 29 of the Act
The plaintiff obtained registration for “8PM” under Class 32 & Class 33 (Whisky & Mineral water) and not beer. The impugned mark “PALONE 8” was used by the defendant for marketing beer. Beer is only a dilution of alcohol and not as such alcohol. Applying the test of identity of composition, identity of consumers, price range and class of consumers, Court held beer and whisky to be dissimilar goods. Therefore, Ss. 28, 29 (1), (2) & (3) were held to be inapplicable.
The Court thereafter examined S. 29(4) which protects the marks of dissimilar goods. S. 29(4) reads as follows:
A registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which –

(a) is identical with or similar to the registered trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and
(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

As evident from above, the provision could be invoked only if the mark is “reputed”. The numeral “8” could not be treated as a reputed mark considering its extensive use in the beverage industry for describing the character of the product. Therefore, S. 29(4) was held to be inapplicable.
Interpretation of S. 30
Section 30 acts as an exception to Section 29. According to the provision, if the use is (a) in accordance with honest practices in industrial or commercial matters and (b) not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark, it shall not infringe S. 29 of the Act
It was held that the “honest practices” in commercial/industrial matters had to be objectively perceived: firstly, from the perspective of a reasonable person having knowledge in the trade and secondly, from the perspective of prevalent practices in the industry. In the instant case, “8” enjoyed nexus with the industry. Therefore, the use of numeral by any other person including defendant was not “dishonest” and protected under S. 30 of the Act.
Considering the aforesaid grounds, the Court refused to grant injunction in favour of the plaintiff. It was noted that the defendant would incur irreparable loss if he was directed against using “8” especially when the plaintiff did not carry a similar business. Further, the plaintiff failed to make out a prima facie case in its favour. However, the Court directed the defendant to use the marks “PALONE” and numeral “8” together in the same line to avoid any confusion. Further, the numeral should be used in a different style.
The Court rightly articulated the requisite high threshold for acquiring distinctiveness especially in case of a numeral mark. Unless the prominent feature of the mark was proved to be prima facie enjoying high degree of distinctiveness, it could not claim the benefits of statutory protection.
While interpreting S. 29(4), Court held “whisky” and “beer” to be dissimilar goods. But couldn’t they be treated as allied / similar products? I find the test of ‘identity of composition and identity of consumers’ to be inapposite for the determination of similarity. For instance, similar goods may not have identical composition. On the other hand, they may have similar composition. Therefore, determination of similarity on the yardstick of identical composition is not an apposite standard. The judgment candidly admitted the absence of an articulated yardstick viz: “The goods more specifically beers and whisky are not identical and again they are either same descriptions of the goods or allied or cognates or different. The judicial opinion in this respect is also not consistent as to whether the said goods are actually the goods of the same description.”(para 68)
The judgment did not examine the concept of “trademark dilution” while interpreting the provision. As noted by Dr. Dev Ganjee in his guest post, dilution is different from the traditional Likelihood of Confusion (LoC) test which has been the foundation of trade mark law for over a century and a half [covered here]. “Dilution” protects a mark even where there is no LoC. However, as rightly held by Delhi HC in Kamadhenu Ispat Ltd[covered here], the aforesaid protection can be availed only if the plaintiff conclusively establishes the transcendence of reputation beyond the main business of the plaintiffs. In the instant case, the plaintiff evidently failed to satisfy the aforesaid requisite standard. Further, the plaintiff enjoyed registration for “8PM” and not “8” per se. It was, therefore, not an inexplicable result!
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