How ‘Deceptively Similar’ back kicks Sardarbuksh
Penalties come along when; domestic Companies use names of big brands in a funnier manner to promote their product. This time it is a coffee company, SardarBuksh, that sound deceptively similar to the very famous Starbucks. Started with a business from cart and now after opening five outlets throughout Delhi the brand SardarBuksh now have to pull it all back and change it to Sardarji-Buksh in order to make it distinctively separate from Starbucks as per an interim order of Delhi High Court.
The real issue behind the whole controversy is; whether trademark of Sardarbuksh is deceptively similar to Starbucks trademark phonetically or visually?
The analogy behind deceptively similar stems from Section 2(1)(h) read with Section 11 of the Trademarks Act, 1999 that states; when two marks are placed beside each other causes confusion or deceive the spectators it would be deceptively similar and hence cannot be registered.
As the Trademark Act do not set out fixed criteria for the concept of deceptive similarity, the plethora of judgments by Supreme Court and High Court does. According to judgments several principles are to be considered for deciding the scope of deceptive similarity such as Principle of phonetic and visual similarity, rule of entirety, test of likelihood and confusion, goodwill etc. are some of the important tests. Also in the cases of Polaroid Corporation vs. Polarad Electronics Corporation 287 F.2d 492 (1961) and National Sewing Thread Co. Ltd. vs. James Chadwick and Bros AIR 1953 SC 357 it was held that the controversy of deceptively similar can only be decided by stepping in the shoes of purchaser, who is considered to be a man with ordinary intelligence. If the identification of two brands causes confusion to the purchaser then it would be right to say they are deceptively similar.
Putting these tests on the image above it would make Sardarbaksh deceptively similar to Starbucks without any doubt. As Starbucks is a globally recognized trademark registered across borders compared to trademark Sardarbuksh dealing in similar products, it would be unfair on Starbucks if such trademarks are allowed.
Although in cases, where the business or products dealt under trademarks are distinct the Supreme Court seems to have no problem, such as in the case of M/s Nandhini Delux v. M/s Karnataka Co-operative Milk Producers Federation Ltd. CIVIL APPEAL NO. 2943-2944 OF 2018 where due to difference in the variety of products traded and difference in visuals of both companies the Court opined trademarks ‘NANDINI and NANDHINI’ to be non-infringing.
As the registration of deceptively similar names are prohibited as per Section 11 of the Trademarks Act 1999. By looking at the name Starbucks and SardarBuksh it might sound a little bit different but not entirely, leaving a room for confusion. While deciding the issue related to ‘deceptively similar’, usage of names or logos, the Courts tend to delve deep to figure out the class of products dealt and the quantity of harm on the market of either company or unfair competition in the market. Although, figuratively looking at the opinions of Apex and High Courts stands clear that usage of such deceptively similar trademarks are prohibited and will be taken down if it causes confusion.
Leaving the legality of the trademarks aside and talking about the effect of such deceptively similar trademarks on the market would be an identical stance. Starbucks having a more global image compared to SardarBuksh would affect not only the image of Starbucks in India but also globally. Taking Pakistan as an example, there already exist Sattarbucks café with a different logo, poses a threat to Starbucks sale if it decides to start a business their. According to the sources the name of SattarBucks Café was changed on receiving a notice from Starbucks of an infringement. It would not be wrong to say that Sardarbuksh have entered in a economies of scale by sounding similar to Starbucks. As the company that started with a coffee on cart in 2015 now expects to open almost 20 outlets all over Delhi, it must have saved allot by branding its product familiar to a global brand.
Similar discussion happened in the recent past, about burgers, where Mr. Singh Burger King (domestic) and Burger Kind (Global brand) came across tables. Burger King brought a law suit against Mr. Singh Burger King being deceptively similar phonetically and visually. Mr. Singh Burger King by an order of Court had to change its name to Mr. Singh Food King. Well it would not be wrong to say that domestic entrepreneurs are honest concurrent user but when a global brand have registered their trademark prior to domestic user preferences will be given to the global brand. Also it cannot be denied also that several domestic entrepreneurs register their trademark similar to that of global brand to get market attention rapidly. Although, Starbucks first came in 2012 to India (Mumbai), Sardarbuksh entered the market in 2015 from Delhi (India) where more than 20 plus outlets already which would have got Sardarbuksh’s attention. Also looking at the circular logo and the writing style on Sardarbuksh products would stand similar to Starbucks to an ordinary person with sound mind.
As the products that will be served at Sardarbuksh and Starbucks belong to similar classes it would confuse the consumer as if Starbucks is trying to come up with another concept. The social media platform also takes hit over these issues and spread it across the globe rapidly resulting in injuring the prolonged repo of Starbucks. Also looking at the online platforms where both the products are sold such as Zomato, UberEats etc. the two branding are similar along with similar products. Starbucks might face a global loss, for such a tricky branding from domestic companies, as many people globally might take this as a business tactic to promote their products initially and when sued change it to something else.
Ultimately, the two companies have employed there best resources to get a winning deal but, it is tougher to convince the court that using deceptively similar trademarks would not effect the other companies market. Through an interim order the court opined in favor of Starbucks by making changes in SardarBuksh to Sardarji-Buksh for any future business.
Legal Trainee at Nishith Desai Associates