Oh, ‘Sweet’ Trademark of Mine!

In an interesting case before the Madras HC, the popular “Sri Krishna Sweets” from Coimbatore became embroiled in a trademarks dispute. As someone unacquainted with this sweets manufacturer/eatery, I was (rather impatiently) schooled – by Google, as well as many of my South Indian friends – on the sheer extent of its popularity and reach. Readers similarly uninitiated may go here and here for a quick fact check.

The company’s popularity was one of the things that made this otherwise ordinary trademarks dispute glittery enough to be featured on national news. The other element that added to the glitter, was that the case involved a trademark dispute between two brothers of the same family.

The facts  

In 1948, Mahadeva Iyer, father of both the plaintiff and the defendant, established a restaurant called Sri Krishna Bhavan in Coimbatore, Tamil Nadu. In 1979, the older son, M. Krishnan started a business known as, ‘Sri Krishna Sweets’ in partnership with his mother and aunt. This partnership was soon dissolved, with M. Krishnan solely taking over the business. He incorporated a company, Sri Krishna Sweets Pvt. Ltd (plaintiff/appellant) to facilitate the same. He also registered three trademarks in his own name: (1) an the image of Lord Krishna (404943); (2) the word Krishna in stylized font (484524); (3) the word Krishna in block letters (484525). All three trademarks are still valid and are registered under Class 30.

In 1990, the younger son, Murali (defendant/respondent) started a restaurant called, SKS Restaurant. There-after, in 1996, the defendant started a business in Chennai, known as “Kovai Sri Krishna Sweets” wherein he used the logo, ‘SKS’ and was also permitted by M. Krishnan to use his business catch phrase, “Divine Sweets, Divine Taste”.

Eventually, in 2002, all of the trademarks owned by M. Krishnan, were assigned to his wife, Mrs. Usha Krishnan. This was also around the time when the defendant was made a director to the plaintiff company. By 2010, the defendant resigned from directorship of the company and started his own company, “M.K. Mahadeva Enterprises Private Limited” – through the functioning of which, he opened up several branches of the common eatery, both in India and abroad.

Come 2015, trouble began to brew. Mrs. Usha re-assigned all the marks to the plaintiff company. Notably, all the shares in the company are owned by M. Krishnan and Mrs. Usha. Once the assignment was complete, M. Krishnan wrote to his brother, the defendant, asking him to formalize the permission granted to him to use the trade name and mark “Sri Krishna Sweets.” The defendant did not receive this very well and countered saying the trade name was their common inheritance from their father, making both the brothers equally entitled to use it in respect of their businesses.

It was this disagreement that brought the plaintiff company to the district court with clams of trademark infringement. The district judge dismissed the plea for interim injunction, which then brought the plaintiff company before the Madras HC, in appeal.

Contentions

The plaintiff contended that the name “Sri Krishna Sweets” was not an inheritance from their late father, but was in fact coined in 1979 by M. Krishnan. What their father had established, was only a restaurant by the name of “Sri Krishna Bhavan”. Further, the partition deed entered into by the family after the death of their father, did not include “Sri Krishna Sweets”. This proved that TM rights in the name could not have been commonly inherited, because even their father had never claimed any rights over the same. They went on to argue that since the word mark “Krishna” had already been registered, the entire coinage “Sri Krishna Sweets” would belong to the plaintiffs. This is because, “Sri” and “sweets” are generic terms, with “Krishna” being the primary, recognizable word, capable of deceiving consumers.

Another interesting argument advanced by the plaintiffs was that – M. Krishnan had orally licensed the defendant to use the trade name and other trademarks in respect of his business since 1996. Further, the Joint Venture agreements entered into between both the parties in order to set up branches of the eatery abroad (USA, Dubai, etc) – stated that all the trademarks belonged exclusively to the M. Krishnan. It was thus clear that the defendant knew and understood the trademarks to belong to the plaintiffs.

These contentions were heavily countered by the defendants. They began with the argument that both the name “Sri Krishna Sweets” and the logo “SKS” written in a stylized form were used by their late father, which then became common inheritance for both the brothers. As such, the defendant derived his rights from this common inheritance instead of from an “oral license” as claimed by the plaintiffs. Further, the mark “Sri Krishna Sweets” was never registered by the defendants – and therefore could not have been assigned or licensed by them. All that was registered was the word “Krishna” and an unregistered mark cannot travel in association with a registered mark. In fact, since the mark was never registered at all, the claim/action could not be one of infringement of trademark to begin with.

The defendants then produced screenshots of the plaintiff’s website and invoice copies before the court, to prove that “Sri Krishna Sweets” had in fact been in use since 1948, and the plaintiffs themselves attributed its origin to the late Mahadeva Iyer.

They wrapped up their arguments by finally citing acquiescence on the part of the plaintiffs. They contended that the plaintiffs had allowed the usage of the mark by the defendant for 20 years, and thus, an injunction at this point would severely jeopardize their business practices. The balance of convenience was clearly in their favour, thereby plugging the possibility of an interim injunction.

Court’s holding

The Court ruled in favour of the defendants, dismissing the appeal. At the outset, the court clarified that the appeal had been preferred against the interim order of the district judge. Therefore, the court would restrict its considerations to see if the district judge had exercised his decision arbitrarily or perversely or in ignorance of settled principles of law. (Settled principles for grant of interim injunction being: establishment of prima facie case, favourable balance of convenience and injury caused by grant of injunction; see here and here)

Family Trademarks

The Court opined that it was clear from the evidence on record (i.e. the website screenshots, invoice copies and advertisements) that the name “Sri Krishna Sweets” had been established and used since 1948 by the late Mahadeva Iyer. The Court struck down the plaintiff’s argument that any and all association of the business name with the late Mahadeva Iyer was out of reverence. Relying on Narasus’s Coffee Company v. Narasu’s Roller Floru Mill, it held that in cases of trademark disputes between families, the court will treat it as a family dispute instead of a trademark dispute simpliciter.

A similar observation was made by the Bombay HC in Parle Products v. Parle Agro, where the court identified the distinction between a trademark action against the world at large, and one against family members. The court allowed the defendants to use the “house mark” “Parle” in relation to their goods because they were differential goods, and because nothing on record ousted the rights of the defendant to use his “housemark” in a way that was not deceptively similar to the mark and products of the plaintiff. The court, however insisted that the distinction between the source of the parties’ goods, be clearly spelt out in the packaging. In doing so, the Bombay HC followed the principle laid down in Ramdev v. Arvindbhai, where the Supreme Court approached a trademark dispute among family members from the lens of an existing MoU that clearly outlined the TM rights of each of the members.

Oral license

Both these cases, however, had documents (either settlements, partition deeds or even MoUs) in place, clearly setting out the rights of parties with regard to the disputed trademark or house mark. The absence of any document in the present case or even the alleged existence of an “oral license” makes things arguably murky.

The Court was largely unimpressed with this particular argument advanced by the plaintiffs. In a case where the parties had documented each and every license, lease or even assignment during the course of their business dealings, it was difficult to believe prima facie that this particular license was orally dispensed. The Court found this claim to be merely a tool of convenience and largely without weight.

Balance of convenience & status quo

Another compelling consideration in family trademark disputes, (as common to most trademark suits) at least in the interim stage, is the maintenance of status quo with regard to the business concerns of the members. In cases like Shri Ram Educational Trust v. SRF  (2016), the Delhi HC refused to interfere with the status quo with regard to the use of the disputed trademark by warring members of the same family. This is especially because in most cases involving trademark disputes between families, the disputed mark would have been used concurrently by the members/parties for several years at a stretch. Therefore, the balance of convenience determination (one that is key to the grant of interim injunction) would be heavily influenced by the need to simply maintain status quo.

This is also supported by the fact that in this case (as well as the ones cited above), there was acquiescence on the part of the plaintiff for nearly 20 years – through which they had not objected to the use of the “Sri Krishna Sweets” mark by the defendant for his business. Thus, granting an interim injunction in this case, would severely affect the defendant’s business.

Other considerations

Regarding the Joint Venture agreements, the court observed that the agreements were executed in the years 2004 and 2005. As such, by then M. Krishna had already assigned the marks to his wife. Therefore, they could not be licensed/retained by him through these agreements. The agreements would only allow M. Krishna, exclusive rights in the territories of USA and/or Dubai, but none in India.

In view of all these considerations, the court found the balance of convenience to be tilting in favour of the defendant. Finding no perversity in the district judge’s order, the court thus refused to interfere – much less grant an injunction against the defendant.

The Madras HC, at least prima facie, found the case to be an example of sibling rivalry blown way out of proportion. In any case, at present, status quo stands uninterrupted. Much, I’m sure, to the (sweet) pleasure of the popular eatery’s many customers.

The order may be accessed here. 

Image from here.