Trademark

BigBasket and Daily Basket Row – Confusion or Bullying?


As widely reported in the media, and shared via social media posts, the legal team of BigBasket sent a ‘cease and desist letter’ to Daily Basket on 17th February, 2021 alleging infringement of their trademark. The disparity in the sizes of both the companies was immediately evident to everyone: BigBasket by its own admission is the largest online food and grocery store in India whereas Daily Basket claims to be a tiny bootstrapped Coimbatore-based two-person start-up. Daily Basket is an online/offline grocery startup currently only serving in Coimbatore.

The Notice

BigBasket in its cease-and-desist letter/notice claimed that “…the mere mention or reference of a name containing “basket” in word or logo form for any e-commerce business and related products conjure in the minds of relevant class of consumers and members of trade as that of being associated with our client (BigBasket).”

Thus, BigBasket’s notice would have you believe that it has a monopoly over the word, ‘Basket.’ Here first of all, let’s consider the use of the word “Basket” in relation to grocery store items. The word is arguably descriptive or at least suggestive of the goods and services provided by the company. The point of the e-commerce company is to provide customers an online basket/cart/pantry in which they can add products for ordering, which would then be delivered to the customers. That is why, unsurprisingly Amazon’s online grocery business is called Amazon Pantry, and the word ‘Basket’ has been used for similar services by online grocery store Nature’s Basket since 2005, far before BigBasket even commenced its business. Thus, unlike say Grofers which is a completely arbitrary, fanciful and coined brand name for online grocery services, the use of Basket in its brand name is not as unique and novel as BigBasket’s notice would make it seem. Why is this relevant?

The Law

As per Section 2(1)(zb) of the Trade Marks Act, 1999, a ‘trade mark’ means, “a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others…”

This distinguishing function of trade marks, also known as distinctiveness may be inherent in the mark itself or acquired through use over time. The spectrum of distinctiveness was laid down by Justice Learned Hand in the 2nd Circuit Court of Appeals case of Abercrombie & Fitch Co. v. Hunting World, Inc. [537 F.2d 4 (2nd Cir. 1976)] as follows:

Generic marks— do not qualify for protection

Descriptive marks—may sometimes qualifies for protection

Suggestive marks —qualify for protection

Arbitrary or fanciful marks—qualify for stronger protection than suggestive marks

Invented marks– qualify for the strongest protection

Since the strength of protection of trade marks lies on the aforementioned spectrum, a suggestive or descriptive mark would have to acquire secondary meaning or acquired distinctiveness in the minds of the consumers for it to be protected. This secondary meaning in relation to BigBasket has been acquired by the unique combination of the two descriptive words as a whole. It is therefore, absurd for BigBasket to claim a monopoly over Basket, just as it would be unreasonable for the company to claim proprietorship over the word ‘Big’ and send a notice to say, Big Bazaar for selling groceries online.

Protection is granted to the mark as a whole. The Bombay High Court held in the case of Sky Enterprise Private Ltd. v. Abaad Masala and Co. that the defendant could not use the exact combination as the plaintiff’s registered trade marks ‘White Chinese Pepper Masala’ and ‘Black Chinese Pepper Masala’ in that particular order. However, each individual word in a different order to describe the pepper masala could be used by any trader.

The test to determine confusion with an earlier mark requires the confusion to be real and proximate, and not fanciful and remote, amongst a substantial number of people as per the U.K. Court of Appeals (Chancery Division) in the case of Mitsubishi v Fiat. The Court here allowed the registration of the mark “Lancer” for cars by Mitsubishi as against “Colt Lancer” used by Fiat for its cars, on the ground that the two marks were visually distinguishable.

Image from here

Image from here

In the present case too, apart from the word ‘basket’, there are no similarities in the marks used by Daily Basket and BigBasket. The colours, font, graphics and complete names of the brand are clearly different, leaving no room for confusion. The channels of distribution of the goods for the two companies make it abundantly clear that customers cannot purchase Daily Basket’s products without encountering their trade mark.

Similarly, the Delhi High Court held in the case of Cadilla Healthcare Ltd. v. Dabur India Ltd. that difference in the defendant’s product packaging demonstrated enough added matter to distinguish its products from that of the plaintiff who claimed to be the trade mark owner of ‘Sugar Free’ along with its variants ‘Sugar Free Natura’, ‘Sugar Free Gold’ and ‘Sugar Free D’LIT’. The Court arrived at this ruling despite the use of the words ‘Sugar Free’, by the defendant in relation to its products.

Further, it has been held in the case of 1A Pharma GMBH v. The Joint Registrar Trade Marks by the IPAB (citing English precedent) that while comparing marks, it is not correct to take a part of the word and compare it with a part of the other word; the entire mark must be considered as a whole and compared with the other mark as a whole. This principle of considering the overall impression of the mark instead of the similarity/dissimilarity of one word within it applies to the case at hand since it is extremely unlikely that BigBasket and Daily Basket would either appear or sound confusingly similar to the average consumer.

Image from here.

The Confusion

As per Section 29(2) of the Indian Trade Marks Act, a trade mark is considered to be infringed by a person who uses a mark which “is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark.” This extends the test of classic form confusion regarding the source or origin of goods or services to also include situations where- a person will be confused if they wrongly assume some broader economic connection between the user of marks. However, likelihood of association should not be considered as an alternative to likelihood of confusion, but as a test that defines the scope of confusion.

Mark Lemley and Mark McKenna have argued that trade mark law’s extension of actionable confusion to sponsorship or affiliation confusion has taken a life of its own, resulting in overprotection of trade mark monopolies even when the confusion is not detrimental to consumers’ decision-making process.

However, apart from preventing consumer confusion, trademark law’s development over time may also extend to protecting the trademark owner’s interest in certain cases. The recognition of ‘well known’ marks and the doctrine of dilution reflect this orientation. This stems from the belief that consumer confusion may be heightened in cases where the mark that is used unauthorizedly, is well-known. At the same time, it was noted by the IPAB in the case of Jones Investment Co v. Vishnupriya Hosiery Mills (covered on the blog here), that quantum of sales of the plaintiff company was immaterial as long as the applicant company was able to prove that the registration of their trademark would not cause confusion in the minds of consumers. This sent out an unequivocal message that trade mark law should not be weaponised by big corporations to grow bigger at the expense of smaller firms.

Therefore, BigBasket’s size, profits, popularity and presence throughout the country justify the protection of its mark but they cannot extend its monopoly to words like basket, which may be commonly used in trade and combined with other words by proprietors to brand their own goods under a different mark.

The Bullying

BigBasket’s accusations against Daily Basket are akin to trade mark bullying (covered on the blog here). The notice requires Daily Basket to cease all its operations and accuses it of dishonestly adopting its mark to deceptively make it similar to BigBasket, among other things. As per the United States Patent and Trademark Office’s Report on Trade Mark Litigation Tactics, a trade mark bully is someone “that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.” (footnote 51)

Indian Law

Section 142 of the Indian Trade Marks Act provides for the law against groundless threats of legal proceedings. It notes that when a person via circulars, advertisements or some other means threatens another with legal action for infringement of a registered trademark, the person so threatened may bring a suit against such person for the purpose of obtaining a declaration to the effect that such threats are unjustified. The remedies for the aggrieved party include an injunction restraining the other person from continuing to make the said threats or recovery of damages.

Image from here

The Psychology Behind the Bullying

Judicial remedies and sanctions against the same may be ineffective since the smaller entity could lack the wherewithal to engage in the ruinous litigation at all. This makes public shaming an option that smaller entities can use with some success. In the present case, Daily Basket chose to hit back by providing an interactive website, bbisabully.com, countering each of BigBasket’s claims to demonstrate that the company was engaging in corporate bullying. Many social media posts against BigBasket also generated significant online traction supporting Daily Basket’s online campaign.

BigBasket issued a statement in response to this clarifying that it raised an objection to the mark with the trade mark registry to protect its brand and it intends to resolve the issue with Daily Basket in an amicable manner. They also noted that this was part of brand owners’ overall trade mark strategy, which entails steps undertaken for enforcing their marks, including sending cease and desist notices to potential infringers.

Reportedly, this is not the first time that BigBasket has opposed trademarks with the term ‘basket’. It has previously opposed marks such as Daily Basket (filed by another Delhi based entity), ‘Wow Basket’, ‘Smart Basket’, ‘Fresh-o-Basket’, ‘Kitchen Basket, ‘Bada Baskets’, ‘Budget Basket’ and even a trademark application for only the word ‘basket’. Many of these applications were filed in the context of retail services, food products and groceries.  BigBasket’s response to the controversy brings to mind Jessica Kiser’s attribution of trade mark bullying to the mark owner’s vague and uncertain duty to police third party trade mark use for potential infringement as well as inherent cognitive biases such as loss aversion which result in systematic judgment errors and overestimation of risk, eventually culminating into aggressive enforcement of trade marks.

Conclusion

Finally, this dispute comes ahead of BigBasket’s $200-250 million dollar acquisition by Tata Sons Ltd. If organisational cultures are anything to go by, the trade mark strategies of both companies are already suited for alignment, given TATA’s infamous and aggressive enforcement of its trade marks (covered previously on the blog here).

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