High Court of Delhi | Justice S. Ravindra Bhat | 7 January 2010 I.A. Nos. 12940/2009, 12941/2009 & 12942/2009 in CS(OS) 1894/2009
BACKGROUND
The plaintiff, ITC Limited, is described in the pleadings as one of India’s largest private sector companies with an annual turnover of Rs. 23,144 crores, engaged in diverse businesses including hotels, paperboards, packaging, agro-business, fast moving consumer goods including cigarettes, foods, confectionery, information technology, branded apparel, personal care and stationery. ITC launched its hotel business in 1975 and claims continuous and extensive use of the “WELCOMGROUP” logo since that year. It operates fourteen hotels under the ITC “WELCOMGROUP” banner across various cities in India, including properties in New Delhi, Bengaluru, Mumbai, Kolkata and Agra. ITC holds trademark registrations in India in classes 8, 30, 34 and 42 in relation to various products and services and also owns trademark registrations in fourteen other countries. It has also obtained copyright registrations in relation to the logos used by different hotels. ITC additionally uses the “WELCOMGROUP” mark on the packaging of its “Kitchens of India” range of ready-to-eat food products. The mark in question described in the judgment as the “W-NAMASTE logo” is a stylised depiction of the Indian greeting “Namaste” and forms part of a larger composite mark that invariably includes the letters “ITC”, the word “WELCOM” or “WELCOMGROUP” and a reference to the specific hotel, resort or restaurant concerned.
The first defendant, Philip Morris Products SA, owns the internationally registered trademark “Marlboro”, first registered in 1956 and currently registered in approximately 118 jurisdictions. The second defendant is a member of the Philip Morris group of companies. The third defendant is an Indian company licensed by the second defendant to market Marlboro cigarettes in India. Marlboro cigarettes have been imported into and sold in India since 2003 and since July 2009, Marlboro Red and Gold cigarettes have commenced local manufacture in India by the third defendant. Marlboro cigarettes in India are sold in the king-size filter segment, priced between Rs. 90 and Rs. 94 for a packet of twenty cigarettes.
The dispute arose when ITC alleged that, in departing from the defendants’ traditional Marlboro roof device logo, Philip Morris introduced a new festive packaging for Marlboro cigarettes featuring what ITC described as a styled letter “M” tilted towards the right and depicted in yellow flames against a dark background referred to in the judgment as “the flaming logo”. ITC alleged that this flaming logo was identical or closely similar to its W-NAMASTE “WELCOMGROUP” logo and that its use constituted trademark infringement and passing off. ITC contended that the W-NAMASTE logo is a permanent and essential feature of all its products and services and that the use of the flaming logo amounted to blurring and dilution of the distinctive character of the W-NAMASTE mark, which had been in continuous use for thirty-four years.
The defendants contested the claim vigorously. Philip Morris argued that the W-NAMASTE logo had never been used by ITC in connection with cigarettes, that the logo formed only an insignificant part of larger composite marks primarily associated with ITC’s hospitality services, that the logo was not independently registered as a stand-alone trademark in India, that the roof device logo was Philip Morris’s own proprietary mark and that the two marks bore no identity or similarity to each other. The defendants also argued that ITC had suppressed material facts, specifically the existence of earlier similar festive packaging used by Philip Morris in 2007 and 2008 and that ITC had thereby acquiesced in the defendants’ use of those designs. The defendants further contended that the suit was commercially motivated, ITC being the dominant player controlling approximately 79% of the total cigarette market and over 98% of the king-size segment in India and that the suit was designed to suppress competition from the globally recognised Marlboro brand.
The present order disposed of ITC’s application under Order 39 Rules 1 and 2 of the Code of Civil Procedure seeking a temporary injunction against the defendants.
ISSUES FOR DETERMINATION
Whether the plaintiff’s W-NAMASTE “WELCOMGROUP” logo and the defendants’ impugned flaming logo were identical or similar to each other within the meaning of Section 29(4) of the Trade Marks Act, 1999, applying the appropriate standard of comparison for a case of alleged trademark dilution in respect of dissimilar goods and services.
Whether, assuming similarity were established, the plaintiff had demonstrated that its W-NAMASTE logo possessed the requisite reputation in India such that the defendants’ use of their mark, without due cause, would take unfair advantage of or be detrimental to the distinctive character or repute of the plaintiff’s registered trademark, as required under Section 29(4).
whether there existed the necessary “linkage” or mental association between the defendants’ mark and the plaintiff’s mark in the minds of the relevant public, so as to satisfy the requirements for trademark dilution under Section 29(4).
Consequential to the above, was whether the plaintiff was entitled to a temporary injunction restraining the defendants from using the impugned flaming logo on their Marlboro cigarette packaging.
KEY HOLDINGS OF THE COURT
- The court held that the appropriate standard for comparing marks in a trademark dilution action under Section 29(4) of the Act is more stringent than the “deceptively similar” standard applicable to infringement claims under Sections 29(1) and (2). The court reasoned that Parliament had consciously excluded the “deceptively similar” standard defined in Section 2(1)(h) from the language of Section 29(4), substituting instead a requirement of identity or similarity. This meant that the claimant is required to prove that the two marks are identical or very closely similar to each other. A global assessment of the overall marks was to be made, rather than a minute cataloguing of individual similarities or dissimilarities.
- The court held that prima facie the two marks were neither identical nor similar to each other. The court noted that the plaintiff’s W-NAMASTE logo is a stylised depiction of the Namaste greeting resembling a “W” and is invariably used in conjunction with the words “WELCOMGROUP” or the name of the specific hotel, resort or service, forming part of a larger composite mark. The defendants’ impugned flaming logo, on the other hand, features a broad “M” shape stylised in flames against a dark background, accompanied by the word “MARLBORO”. Considering the marks globally, the court discerned no identity or similarity in their overall presentation. This conclusion also governed ITC’s copyright infringement claim, as the court found the W-NAMASTE logo and the flaming logo to be quite different, with the latter possessing its own distinct artistic elements.
- The court held that even assuming the plaintiff had established the requisite similarity, it had not demonstrated the further elements required under Section 29(4), specifically that the use of the defendants’ mark would be detrimental to the distinctive character or repute of the plaintiff’s mark or that it would amount to the defendants taking undue advantage of the plaintiff’s mark. The court found that the W-NAMASTE logo was associated primarily with ITC’s hospitality services and that while the aura of the mark might conceivably extend to luxury goods generally, there was nothing to suggest that such an association extended to mid- to high-priced cigarettes. The court further found that the class of users of ITC’s hospitality services and the consumers of the defendants’ cigarettes were not the kind who would associate the defendants’ mark bearing the word “MARLBORO” prominently with ITC’s products. The plaintiff had also not used the W-NAMASTE logo for its own cigarette brands. Accordingly, the court concluded that there was no prima facie linkage between the defendants’ mark and the plaintiff’s services sufficient to cause detriment to the latter or undue advantage to the former.
- The court held that the plaintiff was not entitled to a temporary injunction. The application I.A. No. 12940/2009 under Order 39 Rules 1 and 2 was dismissed. The remaining applications, I.A. Nos. 12941/2009 (under Section 151 CPC) and 12942/2009, were also disposed of. Costs of hearing the application were imposed on the plaintiff and quantified at Rs. 75,000, to be paid to the defendants within four weeks.
STATUTORY PROVISIONS
Section 29(4) of the Trade Marks Act, 1999 was the primary provision in issue. It provides that a registered trademark is infringed by a person who, not being the registered proprietor or a person using the mark by way of permitted use, uses in the course of trade a mark which is identical with or similar to the registered trademark and is used in relation to goods or services which are not similar to those for which the trademark is registered, where the registered trademark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to the distinctive character or repute of the registered trademark. The court analysed this provision at length and held that it represents the statutory enactment of the concept of trademark dilution in Indian law. The court observed that unlike Sections 29(1) and 29(2), which govern infringement in relation to identical or similar goods, Section 29(4) operates in respect of dissimilar goods or services and that Parliament had deliberately omitted the “deceptively similar” and “likelihood of confusion” standards from this provision. All four elements prescribed identity or similarity of the marks, reputation of the senior mark in India, use without due cause and detriment to or unfair advantage of the distinctive character or repute of the registered mark must be cumulatively established, as they are joined by the conjunctive “and”. The court also noted that unlike Section 29(3), there is no statutory presumption of infringement under Section 29(4), even where identity of the two marks is established.
Section 29(1) and Section 29(2) of the Act were also referenced, being the provisions governing infringement in relation to goods or services that are identical or similar to those in respect of which the trademark is registered. The court explained the distinction between these provisions and Section 29(4), noting that the likelihood of confusion standard and the presumption under Section 29(3) were confined to the former and did not apply to dilution claims.
Section 2(1)(h), defining “deceptively similar”, was referred to in the context of the court’s holding that the deceptive similarity standard does not apply to infringement claims under Section 29(4).
Section 17 of the Act was raised by the defendants in argument, to the effect that registration of a composite mark does not confer exclusive rights over a component of that mark which is not independently registered. However, the court’s ultimate decision rested on the findings regarding similarity and linkage and no specific ruling on Section 17 as a distinct ground is set out in the judgment.
REASONING OF THE COURT
The court’s reasoning proceeded through two distinct analytical stages, corresponding to the first two elements of the Section 29(4) test and also addressed the question of linkage as a component of the detriment enquiry.
On the question of similarity, the court recognised that Section 29(4) contemplates a higher standard of comparison than that applicable in ordinary infringement cases. The “deceptively similar” test applicable under Section 29(1) requires only that the mark so nearly resembles the registered mark as to be likely to deceive or cause confusion. Section 29(4), by contrast, requires the plaintiff to establish identity or a very high degree of similarity between the marks. The court endorsed a global approach to the comparison, looking at the overall presentation of each mark rather than isolating and cataloguing individual features. Applying this approach, the court noted that the plaintiff’s W-NAMASTE logo is inherently a Namaste gesture rendered in a stylised “W” form, but is never used as a stand-alone mark it invariably appears as part of a larger composite mark prominently featuring the words “WELCOMGROUP” or the name of a specific hotel. The defendants’ impugned flaming logo, on the other hand, is the defendants’ existing broad roof device depicted in yellow flames against a dark background, prominently accompanied by the word “MARLBORO”. The court found no identity or significant similarity in the overall presentation of these two marks. This finding also disposed of the copyright infringement claim, since the two marks were sufficiently different in artistic conception.
On the question of reputation and linkage, the court accepted for the purposes of the application that the plaintiff’s W-NAMASTE logo had acquired prima facie reputation in the hospitality sector and that the aura of the mark might extend to luxury goods more broadly. However, the court found no basis to conclude that this association extended to cigarettes, whether at the mid-priced or high-priced end of the market. Critically, the court noted that ITC itself does not use the W-NAMASTE logo on any of its cigarette brands its cigarettes are sold under entirely different marks and logos. The consumers of ITC’s luxury hospitality services and the consumers of Marlboro cigarettes are persons who would be well aware of the identity of the respective brands and the word “MARLBORO” prominently appearing on the defendants’ packaging would preclude any mental association between the defendants’ mark and ITC’s W-NAMASTE logo. In the absence of this linkage the mental association between the two marks in the mind of the relevant consumer the plaintiff could not establish detriment to the distinctive character or repute of its mark or that the defendants were taking undue advantage of it. The court drew on English, European, US and Canadian authorities to underline that the dilution remedy is powerful and must not be overextended; each element must be rigorously proved. Given the failure to establish either the requisite similarity or the necessary linkage, the application for temporary injunction was refused.
DOCTRINAL SIGNIFICANCE
This judgment makes a significant contribution to Indian trademark law in its authoritative analysis of the standard of comparison applicable to trademark dilution claims under Section 29(4) of the Trade Marks Act, 1999. The court clearly articulates that the identity or similarity standard prescribed by Section 29(4) is more demanding than the “deceptively similar” standard applicable in ordinary infringement actions under Sections 29(1) and (2). By holding that Parliament consciously excluded the “deceptively similar” definition from Section 29(4) and that a global, overall comparison of the rival marks must be made, the judgment lays down a workable and principled framework for assessing the first element of the dilution test.
The judgment is also significant for its clear statement that all four elements of Section 29(4) must be established cumulatively similarity or identity, reputation in India, use without due cause and detriment to or unfair advantage of distinctive character or repute and that there is no statutory presumption of infringement even where identity of marks is proved, distinguishing the position under Section 29(3). The court’s emphasis on the “linkage” requirement the mental association between the junior and senior marks in the minds of the relevant consumers as a component of the detriment analysis is consistent with then-contemporary European Court and Canadian Supreme Court jurisprudence and the judgment provides a useful synthesis of these comparative authorities in the Indian statutory context. The case further establishes that a mark used exclusively in one industry sector cannot, without more, claim dilution protection against use of a dissimilar mark in an entirely different commercial field, even where the senior mark has acquired significant reputation.
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