The article is written by Nikhil Thakur, a student of Manav Rachna University. The author has touched upon the principles of deceptively undifferentiated trademarks in respect to Nandhini Deluxe v. Karnataka Cooperative Milk Producers (2018).
Table of Contents
Introduction
The instant case, Nandhini Deluxe v. Karnataka Co-operative Milk Producer Federation Ltd. (2018) explicitly deals with the issue of registration of deceptively similar trademarks. A cooperative milk company established in the state of Karnataka registered the mark or stamp “Nandini” under Class 29 and 30 in 1985. Since then, the company has been employing the said mark to deliver and offer milk in the state of Karnataka. Consequently, Nandhini Deluxe, the appellant in the instant case, was indulged in the business of running a restaurant and adopted the mark “Nandhini” for its eatery or restaurant in the year 1989.
Due to the similarity of the trademark between the Nandhini Deluxe and the company, the company put forth the contention that Nandhini Deluxe’s mark is very much similar to that of the company, hence it may create confusion among the society or the consumers. The company deplored/opposed the registration of the trademark of Nandhini Deluxe under numerous sections of the Trademark Act, 1999 {More specifically under; Section 9(2)(a) and 11(1)(b)}. The instant case is a bit tricky and confusing, as it revolves around 4 judicial bodies which are:
- Deputy registrar of the Trademark,
- Intellectual Property Appellate Board (IPAB),
- Karnataka High Court, and
- The Supreme Court of India.
In the current case, there were a plethora of appeals made from both sides and as a result, the appellant and the respondent side changes frequently or more specifically fluctuating.
The best portion in the instant case is that the verdict from the deputy registrar of the trademark and the Supreme Court was very much identical thus, in this way the intervention of the Intellectual Property Appellate Board (IPAB) and the Karnataka High court may well be seen as an inefficient handle.
Another feature of this case is how inefficiently the Karnataka High Court and the Intellectual Property Appellate Board administered/managed the case. The approach availed by them was more or less obsolete and even a bunch of threads of the law were missing. Even the Supreme Court deplored or raised an objection to the IPAB’s deviating behaviour as they earlier refused the appeal of the respondent on a specific issue and later on accepted the same issue and gave the ruling which clearly shows that how IPAB has failed to comply with the principles of estoppel.
Facts of the case
The dispute in the instant case concerns the adoption of the mark “Nandhini” by the Nandhini Deluxe (appellant) who has been operating the commerce of eateries or restaurants under the same mark since 1989. The restaurant applied for the registration of marks nearly after 12-13 years.
But, the respondent “Karnataka Cooperative Milk producer Federation Ltd.” has been operating its milk business under the same name since 1985. Moreover, it has registered the same under classes 29 and 30.
The cause of action arose when Nandhini deluxe (appellant) adopted the registration of the mark “Nandhini” for its restaurant and sought registration of a few products which were sold at the restaurant.
The respondent objected to such registration upon the grounds that such a mark is deceptively similar to their mark and hence it may cause confusion in the mind of the public at large.
Moreover, the respondent argued or contended that the respondent has gained an immense or unique status or character in public, and hence any such food items sold under a similar mark would lead the public to believe that they are sold by the respondent, not by the Appellant. Hence, the exclusive right over the mark resides with the respondent.
All the objections raised by the company (respondent) were dismissed by the deputy registrar of the trademark and in favour of Nandhini Deluxe. Thus, in response, the company moved to the Intellectual Property Appellate Board (IPAB) in 2010, but the respondent’s appeal was dismissed and the restaurant trademark application was allowed to proceed.
But later on, the respondent again filed the appeal in the Intellectual Property Appellate Board in 2011. But now the newer bench completely gave an opposite decision by rejecting the appellant’s application on the ground that the Karnataka cooperative has gained a good status and distinctiveness in the public. And further stated that the milk and milk products sold by the respondent and the products sold by the appellant both come under the purview of class 29 and 30. Hence, there is a high probability that the product may create confusion in the mind of the public at large.
Thereby, the ruling of the deputy registrar was turned down and objections raised by the respondent were upheld and a similar view was upheld in Karnataka High Court. Then, finally, the parties to the suit moved to The Supreme Court where the orders of Karnataka High Court and IPAB (2011) were turned down and allowed for the registration.
Parties involved
Nandhini Deluxe is the appellant represented by Advocate Sushant Singh. He contended that the products were entirely different from that of the Company and hence there was no chance of confusion.
Karnataka Cooperative Milk producer Federation Ltd. is the respondent represented by S.S Naganand. He contended that beyond Bangalore the public is not aware of the Nandhini Deluxe (Appellant) and the company (Respondent), though it may not create confusion in Bangalore but maybe outside it.
In the instant case, the bench comprises of:
- Justice, AK Sikri; and
- Justice Ashok Bhushan.
Issues raised
The predominant and most important issue raised in the instant case was “whether or not a comparable trademark or a similar trademark can be utilized by two diverse companies for un-identical and distinctive items”.
Arguments put forth
On behalf of the Appellant
The petitioner stated that the products and services rendered by the restaurant were entirely distinct from that of the products and services rendered by the company (respondent) and hence there is no possibility of creating confusion or deceptiveness among the public at large.
At deputy registrar of trademark
The appellant contended that it has obtained the mark honestly without any kind of copying from others and hence it has a particular artistic work, design, etc.
Besides this, the appellant has obtained the copyright of the “Nandhini” as accordant with the Copyright Act, 1957.
Further, the appellant contended that the products are different and hence they shall be creating no confusion in the mind of the public at large.
The Intellectual Property Appellate Board Observation (2010)
The Intellectual Property Appellate Board observed that the respondent did not have any intention to expand his business and the product line falling beneath the class 29 and 30 while the appellant was given the registration of such items though falling under class 29 and 30 but specifically excluded the milk and milk products sold by the respondent. Hence there was nothing wrong in allowing registration of the mark of the appellant by referring to Vishnudas v. The Vazir sultan Tobacco Ltd (1996).
The Intellectual Property Appellate Board Observation (2011)
It was observed that the products of both the parties fall under the class 29 and 30 and the marks are very much similar hence the public would believe that the goods sold by the appellant had belonged to the respondent.
Moreover, it was said that the respondent has been using the said mark since 1985 and the appellant has been using the same since 1989. So, the respondent has been using the trademark before the appellant hence registration of the trademark in favour of the appellant was rejected.
Karnataka High Court Observation
The Karnataka High Court accepted the ruling and observation put forth by the Intellectual Property Appellate Board order 2011 and dismissed the appellant’s appeal.
At Supreme Court
The appellant contended that the Karnataka High court, as well as the Intellectual Property Appellate Board, had grossly erred in law by wrongly interpreting Section 11 of the Trademark Act, 1999.
The appellant further contended that no due consideration was allowed on the fact that the products sold by both parties are entirely different. And even cited cases for its support; Eco Lean Research and Development A/S v. IPAB and Asst. Registrar of Trademark (2011), British sugar Plc v. James Robertson & Sons Ltd. (1996), London Rubber Co. Ltd v. Durex Products Incorporated & Anr. (1963).
Further, the appellant said that the Karnataka High court order of dismissing the appeal and allowing the registration of marks goes against the law as laid down in Vishnudas v. The Vazir sultan Tobacco Ltd. 1996.
It was even contended by the appellant that Section 12 of the Trademark Act, 1999 is a special provision as it allows the registrar of the trademark to register similar or identical trademarks in respect of alike goods and services which are already registered.
Answering the question of a well-known trademark which was raised at the Intellectual Property Appellate Board 2011 order, the appellant contended that there are few parameters to be followed to conclude the well-known trademark and cited Nestle India Ltd v. Mood Hospitality Pvt. Ltd. (2010)
The appellant said that the respondent was not having any intention to expand his business and hence the case of the respondent at any point could be qua milk and milk products and nothing else.
On behalf of the Respondent
The respondent stated that both the parties, whether Nandhini deluxe or the company, are not much popular beyond Bangalore or specifically Karnataka. Hence, upon such a fact the Company “Karnataka Cooperative Milk producer Federation Ltd.” shall have the exclusive right to the mark in Karnataka at least.
At deputy registrar of Trademark
The respondent contended that the mark utilized by the appellant shall not be used because the company has been using such a mark for a long time and hence established a distinctive character in society.
Hence, the company shall have the exclusive right over the mark and any form or kind of imitation by the appellant would deceive the public to believe that the food items which are sold by the appellant are sold by the company.
That appellant has cleverly attempted to sell its items and take the benefits from the reputation of the company which it has created for the past so many years.
IPAB Observation (2010)
Citing Vishnudas v. The Vazir sultan Tobacco Ltd. 1996 the Intellectual Property Appellate Board held that the respondent had been doing business with limited items falling under class 29 and 30 with no intention of augmenting the business.
Further, the respondent has failed to acknowledge the fact that the appellant’s mark would create confusion in public.
IPAB Observation (2011)
The Intellectual Property Appellate Board (2011) accepted the fact that the respondent’s mark is a well-known mark in Karnataka.
Further, it was observed that the respondent has not raised any objection against the appellant for the past 18 years and has no relevance.
In respect to the Mark “Nandini” acquired by the respondent has gained or acquired a distinctive character in the society or even has become a household brand in Karnataka.
Further, the IPAB stated that the appellant’s mark is different from that of the respondent only in one alphabet but there lies no difference in the pronunciation in the local language (Kannada), hence it would create confusion in the mind of public.
Karnataka High Court Observation
The Karnataka High Court accepted the ruling and observation put forth by IPAB order 2011 and dismissed the appellant’s appeal.
At Supreme Court
The respondent contended that the observations of IPAB are correct and are determined properly with due consideration.
The respondent said that the IPAB has even considered the well-known criteria as mentioned in Sections 11(2) and 11(8) of the Act.
The respondent said that the Karnataka High court affirmation of IPAB order 2011 is completely fine and correct.
Moreover, it was contended that the respondent’s trademark in the instant case falls outside the purview of Section 9(2)(b) of the Trademark Act, 1999. Further, there is no prohibition under any law that prohibits the god’s name from being a part of the trademark. Hence, if any mark has gained a secondary distinctiveness the same shall be registered and protected.
The respondent even took the help of Nestle India Limited v. Mood Hospitality Pvt. Ltd 2010, where Nestle had rejected the registration of “YO” as it was utilized by the respondent.
Moreover, it was said that Nandhini Deluxe cannot claim as a matter of right to be an honest or concurrent user because in such a situation the evidence or records placed before by the appellant would go contrary to the same.
Supreme Court’s contention
The divisional Supreme Court bench comprising Justice Ashok Bhushan and Justice A.K Sikri carefully examined the marks of both the parties and came to a conclusion or observation that both the marks though phonetically alike but are not of nature which may cause deception among the public.
Upon such grounds, the Supreme Court turned down the orders as passed by the IPAB (2011) and of the Karnataka High Court which observed that these marks are alike, hence no registration should be allowed and ordered against the Nandhini Deluxe (appellant).
Referred case laws
Although a plethora of case laws were referred in the instant case few of the important ones referred are:
- Vishnudas v. Vazir Sultan Tobacco Ltd. 1996 (where the Hon’ble court held that if the holder of the trademark has no intention to expand his/ her business the same cannot monopolize over the complete set of goods mentioned under the broad classification).
- Eco Lean Research and Development A/S v. IPAB and Asst. Registrar of Trademark (2011)
- British sugar Plc v. James Robertson & Sons Ltd. (1996)
- London Rubber Co. Ltd v. Durex Products Incorporated & Anr. (1963)
- Nestle India Ltd v. Mood Hospitality Pvt. Ltd. (2010)
- National Sewing thread Co.Ltd. v. James Chadwick and Bros. (1953)
Judgment
Judgment by the Deputy Registrar of Trademark
The registrar observed that the mark of both the company and the Nandhini Deluxe are not identical as the company’s mark involves a cow while the appellant’s mark involves a lamp on it. Hence, registration was allowed.
The registrar even highlighted the nature of the product difference in which both parties are involved. As the respondent was trading in the business of milk while the appellant was trading in other things like coffee, tea etc. therefore, the registrar held that the respondent’s objection under Section 11 of the act is not permissible.
Judgment by the Intellectual Property Appellate Board (IPAB)
In 2010, the Intellectual Property Appellate Board upheld the decision of the deputy registrar and relied upon the Vishnudas v. The Vazir sultan Tobacco Ltd. 1996 where the court believed that “if anyone trades or manufactures a particular good which forms a part of broad classification and the same had no intention to augment his/ her business or product line under the said broad classification, that person shall not be allowed to monopolize the goods which he/ she didn’t even manufacture or trade-in.” Hence, upon such grounds, the IPAB allowed for the registration of the mark.
In 2011, the respondent again filed the appeal at the Intellectual Property Appellate Board, but this time IPAB took a reverse action by accepting the fact that the company’s (Respondent) product is a household brand in Karnataka. Therefore, the Intellectual Property Appellate Board concluded that the words “Nandhini” and “Nandini” are deceptive, as the addition of mere “H” by Nandhini Deluxe is not sufficient to make a difference in the mark, and even when they are pronounced they are identical and will surely be creating confusion or deception among the people at large.
The Intellectual Property Appellate Board relied upon Cadila Healthcare Limited v. Cadila Pharmaceuticals Limited (2001) where the hon’ble court held that if two words are phonetically very much similar it would be very difficult to determine or distinguish the distinction between them. So, whether it is “Nandhini” or “Nandini” the pronunciation of both the phrases is similar.
Therefore, the Intellectual Property Appellate Board (2011) turned down the orders of the deputy registrar as well as its order pronounced in 2010 and rejected the registration of the trademark, and gave the ruling in favour of the Respondent.
Judgment by the Karnataka High Court
In this arrangement, no insertion, addition, increment, deletion etc. were executed by the Karnataka high court. The high court maintained or upheld the verdict/ order of the Intellectual Property Appellate Board (2011) and dismissed the appeal filed by the appellant.
Judgment by the Supreme Court
The Supreme court stated that the burden of proof (BOP) lies on the party who is seeking the registration of the mark and the same shall show that his/ her mark is not identical with that of an already existing trademark and hence it may not create any kind of confusion or cause deception among the public.
While deciding the issue of identicalness, the Supreme Court held that the new mark shall not be compared with the already existing one side by side. In such a case, to determine the identicalness of the marks it is important to look upon the marks as an average man with common intelligence and how it will react.
The Supreme Court of India dismissing the Karnataka High Court order and IPAB order 2011 relied on its previous judgment of Vishnudas v. Vazir Sultan Tobacco Ltd. 1996 which explicitly held that “the trademark proprietor cannot enjoy monopoly or appreciate imposing business models over the complete class of goods in particular when the same is not utilizing the said trademark in regard to certain products falling beneath the same course”.
Further, the Supreme Court observed that the appellant has been using the marks since 1989 and the respondent since 1985 woefully the respondent has failed to show any record by the year 1989 that it has acquired a significant character in the society. Subsequently, it has been seen by the appellant and the Supreme Court as a concurrent user of a mark.
Moreover, the Supreme Court believed that not only are the products of both the parties different, indeed the marks of both the parties are dissimilar, unalike, or non-identical. Even the nature of trade among both parties is so different that it may not cause any kind of confusion in the minds of people that the product belongs to the company and not to the appellant. Hence, in conclusion, the Supreme Court held that both the marks are different and shall not cause any form of deceptiveness among the public at large.
It was held that the appellant applied for the registration for the products namely coffee, tea, sugar, etc. which do not belong to class 29 and 30 of the Trademark Act. Thus, confusion or deceptiveness is hard to decide.
Finally, the Supreme Court allowed the registration of Nandhini deluxe, subject to a condition that it shall not indulge in the business of milk and milk products as utilized by the respondent.
Besides these, the Supreme Court observed that the case does not satisfy the ingredients enshrined under Section 11(2) of the Act. Therefore, the company or the respondent is not allowed or has the right to seek the protection of the mark on the ground of a well-known mark. The Hon’ble court even rejected the contention of the respondent that the appellant had cleverly taken unfair advantage of the respondent’s mark to enter the market.
Critical analysis of the judgment
The Supreme Court cited Vishnudas v. The Vazir sultan Tobacco Ltd. 1996 to defend the observation put forth by the Karnataka High Court that the products sold by the appellant and the respondent come under the same class and hence the appellant was denied registration of the Mark.
Although there was no such guideline of law in this regard, within the above-mentioned case the title “Charminar” was in issue as the respondent was within the trade of tobacco and the appealing party made an application for enrollment of quiwam and zarda beneath the same brand title “Charminar”, but as per the Section 12 of the Trademark Act, 1999 the registration was allowed.
Hence, the Supreme Court relying upon the above-mentioned verdict stated that the mark “Nandhini” utilized by the appellant for different products shall not be detrimental to the status or distinctiveness of the Karnataka Co-operative Milk Producer Federation Ltd.
The Hon’ble court objected to the IPAB for not relying upon its judgment pronounced previously and hence defying the principle of estoppel. Therefore, the orders of both the Intellectual Property Appellate Board (2011) and of Karnataka High Court was set aside or turned down and consequently, Nandhini Deluxe was allowed registration of its mark with a condition attached to it that the appellant shall not indulge in the business of milk and milk product because in that case confusion is a possibility.
The Supreme court even observed the fact that the case would have been solved merely by referring to its previous judgment of Vishnudas Kushandas v. the Vazirsultan Tobacco Ltd. and Anr 1996 but both the Karnataka High Court and the Intellectual Property Appellate Board had made a blunder and held that even if the manufacturer had no intention to expand its business, it still has the right over all the products falling under the broad classification. If both the above-mentioned bodies have referred to the Vishnudas case, the instant case would have been solved without any issue or must have been disposed of in a timely manner.
Just mere identicalness among two marks is not sufficient to prove an infringement. The registration of a mark in one class would grant no confirmation that the comparative mark cannot be enrolled or registered within the same class for distinct products.
Conclusion
The instant case of Nandhini Deluxe v. the Karnataka Co-operative Milk Production Federation Ltd. 2018, is a judgment of its kind and shall be considered as a landmark case in respect to the trademark which has ensured a green chit to free trade and even it has in one or the other sense has ruptured the rule relating to the monopoly of the businesses who are not under the intention of expanding their business but attempts to keep with them the trademark right over the entire set of product which was basically against the principles of business ethics and even were in contravention to Section 4 of the Competition Act, 2002 which deplores the companies using their dominating power to exploit and manipulate the market and not giving way to newcomers or freshers.
The current case even highlighted the non-efficiency of Indian judicial bodies in dealing with trademark cases as it was evident from the fact that the Karnataka High Court and the Intellectual Property Appellate Board (IPAB) has made numerous blunders or flaws while dealing with the same but the Supreme court as the name suggests supreme has eventually taken care of all the important facts which were missed by the Karnataka High court as well as by the Intellectual Property Appellate Board.
Since the initiation of the case, the deputy registrar was on the right track and they had a similar view and opinion with that of the Supreme Court. Hence, the Supreme court decision was a replica of the Deputy registrar’s decision.
The judgment will surely be a relief to dealers, traders, and businessmen who are in the commerce for a longer period and have comparable trademarks to those of already existing ones.
References
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