In a Trademark Registration Dispute, Supreme Court Arrives at Correct Destination, Albeit By Adopting a Legally Suspect Path

In an interesting judgment delivered late last month, a Supreme Court (“Court”) bench consisting of Justices A.K. Sikri and Ashok Bhushan ruled on the principles to be adopted for resolving trademark disputes concerning goods or services falling within the same class(s).

While the Court appears to have arrived at the correct destination, I share Eashan Ghosh’s view that the Court could have adopted a more legally robust path in arriving at that destination.

[Long post ahead!]

Factual matrix

The Respondent, M/S. KARNATAKA CO-OPERATIVE MILK PRODUCERS FEDERATION LTD., started using its trademark under the name ‘NANDINI’ for milk and milk products in 1985. The Appellant, NANDHINI Deluxe, which runs a chain of restaurants adopted the trademark ‘NANDHINI’ in 1989.

Pertinently, while the Respondent only deals in milk and milk products, the Appellant deals in such products as fish, meat, poultry and game, meat extracts, preserved, dried and cooked fruits and vegetables, edible oils and fats, etc. Further, it bears noting that NANDINI/NANDHINI is a generic word that refers to the name of a goddess or a cow in Hindu mythology.

The genesis of the dispute that eventually worked its way up to the Supreme Court can be traced to an application filed by the Appellant for the registration of the trademark ‘NANDHINI Deluxe’. Contesting this application, the Respondent submitted that the Appellant’s mark was confusingly and deceptively similar to the Respondent’s and aimed at encashing the latter’s goodwill and reputation.

Rejecting the Respondent’s opposition, the Deputy Registrar held that there were several pertinent differences between the Appellant’s and Respondent’s mark, which I shall advert to a little later, and hence granted registration to the Appellant’s mark. While doing so, the Deputy Registrar directed the Appellant to remove ‘milk and milk products’ from the list of goods for which it was seeking registration, as these goods overlapped with the Respondent’s and were not sold by the Appellant in any case.

The Respondent challenged the Deputy Registrar’s decision before the IPAB in two appeals. Curiously, the IPAB arrived at diametrically opposite results in the two appeals. It held in the first appeal that the two parties dealt in different goods and that no likelihood of confusion had been established. As a result, it reaffirmed the Deputy Registrar’s order.

In the second appeal, the IPAB held that the goods that the two parties dealt in were within the same classes (classes 29 and 30). Further, the Respondent’s mark had acquired distinctiveness and hence the registration of the Appellant’s mark could not be permitted.

The Appellant’s writ petition against the IPAB’s second decision was dismissed and the IPAB’s view reaffirmed. This resulted in the filing of the Supreme Court appeal under discussion.

Approach of the court:

The Court commenced its analysis by noting that the singular question that it was called upon to answer was if the registration of the Appellant’s mark was permissible, in light of the fact that the gravamen of the Respondent’s case was that the Appellant’s decision to adopt this mark was aimed at encashing the Respondent’s goodwill.

In order to answer this question, the Court first pointed out 3 critical differences between the Appellant and Respondent’s marks. First, while the classes into which the goods of the parties fell were the same, the goods themselves were different. This difference is further fortified by the fact that, while the Respondent is a cooperative society selling milk products, the Appellant runs a chain of restaurants.

Second, the term ‘NANDINI’ is not a product of the Respondent’s ingenuity; it is a generic term referring to a Hindu Goddess. Finally, and very crucially, there are several pertinent differences between the two marks, such as: (a) difference in manner of writing the name; (b) addition of the word ‘Deluxe’ and the tagline ‘the Real Spice of Life’ to the Appellant’s mark; and (c) the fact that a lamp is depicted in the Appellant’s logo whereas the Respondent’s logo consists of a picture of a cow, below which the word ‘NANDINI’ is written and the whole logo is encapsulated in an egg-shaped circle.

The Court then proceeded to apply the principle spelt out in the 1953 judgment in the case of National Sewing Co as per which such a dispute has to be resolved by looking at the marks from the standpoint of an average man of ordinary intelligence. Reasoning that the 3 differences outlined above make the marks significantly different, the Court held that there is no basis to conclude that there exists a possibility of confusion.

To buttress its conclusion that the goods sold by the parties are of a different character, the Court noted that several products sold by the Appellant fall into classes other than 29 and 30. Further, it relied on its own 1996 judgment in the case of Vishnudas Trading, as an authority for the proposition that registration of a mark qua goods belonging to a particular class does not give the proprietor of the mark monopoly over all goods falling within that class.

Analysis:

While it would be difficult for anyone to dispute the Court’s principal finding that the significant differences between the two marks make any possibility of confusion fairly remote, the Court’s judgment would have rested on a sounder jurisprudential foundation if it had clearly articulated the parameters governing its analysis of the dispute and adhered to the same.

First, the Court adverts to the test laid down in the 1961 Second Circuit judgment in the case of Polaroid Corporation for assessing the scope of trademark protection qua goods for which the trademark has not been granted. The Polaroid Court outlined an illustrative list of 8 parameters, such as the strength of the prior owner’s mark, the quality of the defendant’s product and the sophistication of buyers.

In stead of applying the Polaroid framework to the facts obtaining in the case at hand, however, the Court abruptly jumps to the principle articulated in the National Sewing Co. case which I discussed above.

Thereafter, to conclude its analysis, the Court relies on the tests laid down by the Delhi High Court in the case of Nestle India for the application of Section 11(2) of the Trademarks Act, 1999. For the sake of clarity, it bears mention that Section 11(2)(b) clarifies that a trademark for goods dissimilar to goods for which there is a registered mark is not to be registered if the registered mark is a well known mark. Further, for this embargo to apply, it must also be established that the applicant is seeking to take unfair advantage of the registered mark without due cause.

As the Court notes at para 21, the Nestle Court had outlined 4 conjunctive conditions that must be met for Section 11(2)(b) to apply. Those parameters are a reiteration of the conditions spelt out in Section 11(2)(b) which I described above. Without assessing the facts of this case against the touchstone of those parameters, however, the Court abruptly arrives at a finding at para 32 that : “ The aforesaid discussion leads us to hold that all the ingredients laid down in Section 11(2) of the Act, as explained by the Delhi High Court in Nestle India Ltd., have not been satisfied.” In the discussion preceding this paragraph, all that the Court does is to drive home the point that the marks have several differences and there is no basis to conclude that there is a likelihood of confusion.

To be sure, the Court, after returning this finding at para 32, does observe that the Appellant’s mark was not aimed at extracting an unfair advantage of the Respondent’s reputation. However, it does not examine whether the Respondent had amassed reputation for its mark in India, or whether the Appellant’s adoption of the mark was without due cause.

In fact, at para 23, the Court observes: “We proceed on the presumption that the trade mark ‘NANDHINI’, which is registered in the name of the appellant [sic Respondent] has acquired distinctiveness though the appellant disputes the same.” It is difficult to fathom the basis upon which the Court draws this presumption in the first place. More troublingly, after having done so, it goes on to observe at para 32, as I stated above, that the Respondent has actually not put forth anything to indicate that its mark had acquired distinctiveness by 1989.

Finally, as Sreyoshinotes in this incisive post, the use of the ‘added matter’ test, which is premised upon ascertaining if the (allegedly) deceptively similar mark has any additional features compared to the original mark, may not be an effective parameter in cases like this one. Given that the public consuming these products may lack the capacity to appreciate the additions made to the original mark, it may have been more apposite for the Court to confine the scope of its enquiry to comparing the essential features of the marks.