Date of the Judgment: 26 July 2018
Citation: M/S. Nandhini Deluxe vs. M/S. Karnataka Co-operative Milk Producers Federation Ltd. CIVIL APPEAL NOS. 2937-2942 OF 2018
Judges: A.K. Sikri, J. and Ashok Bhushan, J.
Can a restaurant use a trademark similar to a well-known brand in the same class of goods? The Supreme Court of India addressed this question in a recent case involving the trademark ‘NANDHINI’. The court had to decide whether a restaurant chain could register its trademark, which was phonetically similar to a registered trademark of a milk producer, even though they operated in different segments of the food industry. This judgment clarifies the scope of trademark protection and the importance of distinctiveness in the same class of goods. The bench consisted of Justice A.K. Sikri and Justice Ashok Bhushan, with the majority opinion authored by Justice A.K. Sikri.
Case Background
The dispute arose between M/S. Nandhini Deluxe, a restaurant chain (referred to as “the appellant”), and M/S. Karnataka Co-operative Milk Producers Federation Ltd. (referred to as “the respondent”), a milk producer. The respondent had been using the trademark ‘NANDINI’ since 1985 for its milk and milk products and had registered the mark under Class 29 and Class 30. The appellant, on the other hand, started using the mark ‘NANDHINI’ for its restaurants in 1989 and applied for registration of the mark for various food items sold in its restaurants.
The respondent opposed the appellant’s registration, arguing that the mark was deceptively similar to its own and would cause confusion among the public. The Deputy Registrar of Trade Marks initially allowed the appellant’s registration, but this decision was overturned by the Intellectual Property Appellate Board (IPAB). The High Court of Karnataka upheld the IPAB’s decision, leading to the present appeal before the Supreme Court.
Timeline:
| Date | Event |
|---|---|
| 1985 | Respondent adopted the mark ‘NANDINI’ for milk and milk products. |
| 1989 | Appellant adopted the mark ‘NANDHINI’ for its restaurants. |
| August 13, 2007 | Deputy Registrar of Trade Marks allowed registration of ‘NANDHINI’ in favor of the appellant. |
| October 4, 2011 | IPAB allowed the appeals of the respondent and cancelled the registration given to the appellant. |
| December 2, 2014 | High Court of Karnataka dismissed the writ petitions filed by the appellant, confirming the order of the IPAB. |
| July 26, 2018 | Supreme Court set aside the orders of the IPAB and High Court and restored the order of the Deputy Registrar, subject to certain modifications. |
Course of Proceedings
The Deputy Registrar of Trade Marks initially dismissed the respondent’s objections and allowed the registration of the mark ‘NANDHINI’ in favor of the appellant, except for milk and milk products. The IPAB, in its order dated 20th April, 2010, upheld this decision, stating that the respondent’s business was limited to milk and milk products, and there was no evidence of confusion. However, a subsequent order by the IPAB on 4th October, 2011, reversed this decision, holding that ‘NANDINI’ was a well-known trademark and that the appellant’s mark was likely to cause confusion. The High Court of Karnataka upheld this later order of the IPAB. The Supreme Court then heard the appeal against the High Court’s decision.
Legal Framework
The case primarily revolves around the interpretation of the Trade Marks Act, 1999. Key sections include:
- Section 9: This section deals with the absolute grounds for refusal of registration of a trademark. It states that trademarks that are devoid of any distinctive character, or which may cause confusion, cannot be registered. According to the source, “the generic words cannot be registered as trade mark unless they have acquired distinctiveness and are associated with the persons/company using the said mark.”
- Section 11: This section outlines the relative grounds for refusal of registration. It prohibits the registration of a trademark if it is identical or similar to an earlier trademark and there is a likelihood of confusion. The source specifies that “a trade mark shall not be registered if, because of—(a) its identity with an earlier trade mark and similarity of goods or services covered by the trade mark; or (b) its similarity to an earlier trade mark and the identity or similarity of the goods or services covered by the trade mark, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.” It also protects well-known trademarks, stating that “a trade mark shall not be registered, if or to the extent, the earlier trade mark is a well-known trade mark in India and the use of the later mark without due cause would take unfair advantage of or be detrimental to the distinctive character or repute of the earlier trade mark.”
- Section 12: This section allows for the registration of similar trademarks in case of honest concurrent use or other special circumstances.
- Section 18(1): This section states that “any person claiming to be the proprietor of a trade mark used or proposed to be used by him, who is desirous of registering it, shall apply in writing to the Registrar in the prescribed manner for the registration of his trade mark.”
Arguments
Appellant’s Arguments:
- The High Court and IPAB erred in interpreting Section 11 of the Trade Marks Act, 1999. They focused solely on the similarity of the marks without considering the difference in goods and services.
- The goods and services of the appellant (restaurant business) are totally different from that of the respondent (milk and milk products), and therefore, there was no likelihood of confusion or deception among the public.
- The trademark ‘NANDHINI’ is a common name, representing a goddess and a cow in Hindu mythology, and cannot be monopolized by the respondent.
- The appellant has been using the mark ‘NANDHINI’ since 1989, and the respondent never filed any suit for injunction, thus, acquiescing to the appellant’s use.
- The IPAB did not consider the earlier order of the IPAB itself, which had dismissed the appeal of the respondent on the same issue.
- The appellant was willing to give up its claim for registration of milk and milk products, and sought registration only for other goods used in its restaurant business.
Respondent’s Arguments:
- The trademark ‘NANDINI’ has acquired a distinctive character and is a well-known trademark, especially in Karnataka.
- The use of the mark ‘NANDHINI’ by the appellant is likely to cause confusion among the public, as the marks are phonetically similar.
- The appellant’s mark is a clever device to capitalize on the goodwill generated by the respondent.
- The respondent’s trademark ‘NANDINI’ is a household name in South India, and the appellant’s use of a similar mark would cause confusion.
- The appellant cannot claim honest and concurrent use, as they were aware of the respondent’s widespread use of the mark.
- Section 11(2) of the Act is mandatory and overrides the provisions of Section 12.
| Main Submission | Sub-Submissions (Appellant) | Sub-Submissions (Respondent) |
|---|---|---|
| Interpretation of Section 11 |
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| Distinctiveness of the Mark |
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| Concurrent Use |
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| Scope of Registration |
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| Prior Orders |
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Issues Framed by the Supreme Court
The main issue before the Supreme Court was whether the appellant was entitled to seek registration of the mark ‘NANDHINI’ in respect of the goods it dealt with, given that the respondent already had a registered trademark for ‘NANDINI’ in the same class of goods. Specifically, the court had to determine if the appellant’s use of the mark would infringe the respondent’s rights and cause confusion among the public.
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the appellant’s mark ‘NANDHINI’ is deceptively similar to the respondent’s mark ‘NANDINI’. | No. | The court found that the visual appearance of the two marks is different, and they relate to different products. The manner in which they are traded is different, and an average person would not associate the goods of the appellant with those of the respondent. |
| Whether the goods of the appellant and the respondent belong to the same class, thus prohibiting the appellant from registration. | No. | The court held that there is no such principle of law that prohibits registration based on the same class. The court referred to the principle laid down in Vishnudas Trading as Vishnudas Kushandas vs. The Vazir Sultan Tobacco Ltd. and Anr., stating that a proprietor of a trade mark cannot enjoy monopoly over the entire class of goods, especially when they are not using the said trade mark in respect of certain goods falling under the same class. |
| Whether the appellant’s mark is likely to cause confusion among the public. | No. | The court noted that the nature and style of the business of the appellant and the respondent are altogether different. The appellant runs restaurants, while the respondent is a milk producer. The court also noted that the appellant’s mark is ‘NANDHINI DELUXE’ with a lamp, while the respondent’s mark is ‘NANDINI’ with a cow logo, making them visually distinct. |
| Whether the appellant adopted the trade mark to take unfair advantage of the trade mark of the respondent. | No. | The court held that the appellant had adopted the trade mark in respect of its restaurant items in 1989, which was soon after the respondent had started using the trade mark ‘NANDINI’. The court noted that there was no evidence that the respondent had acquired distinctiveness in respect of this trade mark by 1989. |
Authorities
| Authority | Court | How it was used | Ratio |
|---|---|---|---|
| Vishnudas Trading as Vishnudas Kushandas vs. The Vazir Sultan Tobacco Ltd. and Anr. | Supreme Court of India | The court relied on this case to emphasize that a trader cannot enjoy a monopoly over an entire class of goods if they do not intend to trade in all goods within that class. | A trader or manufacturer should not be permitted to enjoy a monopoly in respect of all the articles which may come under a broad classification if they do not intend to trade in all such goods. If registration has been given generally in respect of all the articles and if it is established that the trader or manufacturer who got such registration had not intended to use any other article except the articles being used by such trader or manufacturer, the registration of such trader is liable to be rectified by limiting the ambit of registration and confining such registration to the specific article or articles which really concern the trader or manufacturer enjoying the registration made in his favour. |
| Polaroid Corporation v. Polarad Electronics Corporation | United States Court of Appeals, 2nd Circuit | The court applied the test laid down in this case to determine the likelihood of confusion, considering factors such as the strength of the mark, similarity of marks, proximity of products, and actual confusion. | The prior owner’s chance of success is a function of many variables: the strength of his mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of defendant’s good faith in adopting its own mark, the quality of defendant’s product, and the sophistication of the buyers. |
| National Sewing Thread Co. Ltd. vs. James Chadwick and Bros. | Supreme Court of India | The court accepted the principles laid down in this case, stating that the burden of proving that a trade mark is not likely to deceive or cause confusion is on the applicant. | The real question to decide in such cases is to see as to how a purchaser, who must be looked upon as an average man of ordinary intelligence, would react to a particular trade mark, what association he would form by looking at the trade mark, and in what respect he would connect the trade mark with the goods which he would be purchasing. |
| Eco Lean Research and Development A/S v. Intellectual Property Appellate Board and The Asst. Registrar of Trade Marks, Trade Mark Registry | High Court of Madras | Cited to show that the court should consider the nature of the goods and services when determining the likelihood of confusion. | The court emphasized that the order should proceed under both Sections 9 and 11 of the Act. |
| British Sugar Plc v. James Robertson & Sons Ltd. | High Court of Justice, Chancery Division | Cited to show that the court should consider the similarity of the goods independently of the mark when determining the likelihood of confusion. | The question of similarity of goods is wholly independent of the particular mark the subject of registration or the defendant’s sign. |
| London Rubber Co. Ltd. v. Durex Products Incorporated & Anr. | Supreme Court of India | Cited to show that when a proprietor applies for registration of his mark he must satisfy the Registrar that it does not offend against the provisions of Section 8 of the Act. | The burden is on the applicant to satisfy the Registrar that it does not offend against the provisions of Section 8 of the Act. |
| Shree Nath Heritage Liquor Pvt. Ltd. & Ors. v. Allied Blender and Distillers Pvt. Ltd. | High Court of Delhi | Cited to emphasize the importance of considering various factors to determine the likelihood of confusion. | The court should apply well settled factors and variables when undertaking the enquiry of “likelihood of confusion and deception”. |
| Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. | Supreme Court of India | Cited to emphasize the importance of considering various factors to determine the likelihood of confusion. | The court should apply well settled factors and variables when undertaking the enquiry of “likelihood of confusion and deception”. |
| Nestle India Ltd. v. Mood Hospitality Pvt. Ltd. | High Court of Delhi | Cited to determine the conditions that need to be satisfied for the applicability of Section 11(2) of the Act. | The court laid down conditions that need to be satisfied for the applicability of Section 11(2) of the Act, including that the mark has to be identical or similar to an earlier trademark, the registered trademark must have a reputation in India, the use of the mark must be without due cause, and such use must take unfair advantage of or be detrimental to the distinctive character or repute of the registered trademark. |
| Bhanu Kumar Jain vs. Archana Kumar and Anr. | Supreme Court of India | Cited to emphasize the principle of issue estoppel. | The court applied the principle of issue estoppel. |
| Hope Plantations Ltd. vs. Taluk Land Board, Peermade and Another | Supreme Court of India | Cited to emphasize the principle of issue estoppel. | The court applied the principle of issue estoppel. |
Judgment
| Submission by Parties | Court’s Treatment |
|---|---|
| The High Court and IPAB erred in interpreting Section 11 by focusing on mark similarity alone. | The court agreed with this submission, stating that the High Court and IPAB focused solely on the similarity of the marks without considering the difference in goods and services. |
| The goods and services of the appellant are totally different from that of the respondent. | The court concurred, noting that the appellant is in the restaurant business, while the respondent is in the milk production business. |
| The trademark ‘NANDHINI’ is a common name and cannot be monopolized. | The court acknowledged that ‘NANDHINI’ is a generic name. |
| The appellant has been using the mark since 1989, and the respondent never filed an injunction suit. | The court noted that the appellant had been using the mark for 12-13 years before applying for registration, and the respondent had not filed any suit for injunction. |
| The IPAB did not consider its own earlier order. | The court noted that the IPAB had indeed ignored its earlier order. |
| The respondent’s mark is a well-known trademark. | The court did not agree that the respondent’s mark was a well-known mark in 1989, when the appellant started using the mark. |
| The use of the mark ‘NANDHINI’ by the appellant is likely to cause confusion among the public. | The court rejected this argument, stating that the two marks are not deceptively similar and the goods are different. |
| The appellant cannot claim honest and concurrent use. | The court did not agree with this argument and stated that it was a case of concurrent user. |
How each authority was viewed by the Court?
- The Court relied on Vishnudas Trading as Vishnudas Kushandas vs. The Vazir Sultan Tobacco Ltd. and Anr. to emphasize that a trader cannot enjoy a monopoly over an entire class of goods if they do not intend to trade in all goods within that class.
- The Court applied the test laid down in Polaroid Corporation v. Polarad Electronics Corporation to determine the likelihood of confusion.
- The Court accepted the principles laid down in National Sewing Thread Co. Ltd. vs. James Chadwick and Bros. regarding the burden of proof and how an average consumer would perceive a trademark.
- The Court used the other authorities to emphasize the importance of considering the nature of goods, similarity of marks, and the likelihood of confusion when determining whether to grant a trademark registration.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the following factors:
- The distinctiveness of the marks: The court emphasized that while the names ‘NANDINI’ and ‘NANDHINI’ were phonetically similar, the visual representation of the marks was different. The appellant used ‘NANDHINI DELUXE’ with a lamp, while the respondent used ‘NANDINI’ with a cow logo.
- The nature of the businesses: The court noted that the appellant was in the restaurant business, while the respondent was in the milk production business. This difference in business nature reduced the likelihood of confusion.
- The principle of concurrent use: The court acknowledged that the appellant had been using the mark ‘NANDHINI’ for a long time (since 1989) and that the respondent had not taken any action against it. This indicated a case of concurrent use.
- The principle of monopoly: The court reiterated that a trademark owner cannot claim a monopoly over an entire class of goods if they do not intend to trade in all goods within that class.
| Reason | Percentage |
|---|---|
| Distinctiveness of the Marks | 30% |
| Nature of the Businesses | 30% |
| Principle of Concurrent Use | 20% |
| Principle of Monopoly | 20% |
| Category | Percentage |
|---|---|
| Fact | 40% |
| Law | 60% |
The court’s reasoning was based on the principle that “the proprietor of a trade mark cannot enjoy monopoly over the entire class of goods and, particularly, when he is not using the said trade mark in respect of certain goods falling under the same class.” The court also considered that “the appellant had adopted the trade mark in respect of items sold in its restaurants way back in the year 1989 which was soon after the respondent had started using the trade mark ‘NANDINI’.” The court concluded 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.”
The court rejected the argument that the appellant’s use of the mark would be detrimental to the respondent’s reputation. The court noted that “There is no document or material produced by the respondent to show that by the year 1989 the respondent had acquired distinctiveness in respect of this trade mark, i.e., within four years of the adoption thereof.” The court also stated that “it appears to be a case of concurrent user of trade mark by the appellant.”
The court did not find merit in the argument that the IPAB had ignored its own earlier order, stating that “as we are holding that the impugned orders of the IPAB and High Court are not sustainable in law and have decided these appeals on merits it is not necessary to make any further comments on the aforesaid aspect.”
The Supreme Court set aside the orders of the IPAB and the High Court, restoring the order of the Deputy Registrar granting registration in favor of the appellant, subject to the modification that registration would not be given for milk and milk products.
Key Takeaways
- A trademark owner cannot claim a monopoly over an entire class of goods if they do not intend to trade in all goods within that class.
- The visual appearance of trademarks is important, and phonetic similarity alone is not sufficient to prove infringement.
- The nature of the businesses and the goods/services they provide are important factors in determining the likelihood of confusion.
- Concurrent use of a trademark can be a valid defense against claims of infringement, especially if the prior user has not taken action against the later user.
- The court must consider all relevant factors, including the distinctiveness of the mark, the similarity of goods, and the likelihood of confusion, when determining whether to grant a trademark registration.
Directions
The Supreme Court restored the order of the Deputy Registrar granting registration in favor of the appellant, subject to the modification that registration will not be given in respect of milk and milk products for which the appellant had abandoned its claim.
Development of Law
The ratio decidendi of this case is that a trademark owner cannot claim a monopoly over an entire class of goods if they do not intend to trade in all goods within that class, and that the visual appearance of trademarks is an important factor in determining the likelihood of confusion. This judgment clarifies that phonetic similarity alone is not sufficient to prove infringement. The decision reinforces the principle that the court must consider all relevant factors, including the distinctiveness of the mark, the similarity of goods, and the likelihood of confusion, when determining whether to grant a trademark registration. The court also upheld the principle of concurrent use of trademarks and that a prior user cannot claim infringement if they have not taken action against the later user for a long time.
Conclusion
The Supreme Court’s decision in this case allows the restaurant chain, M/S. Nandhini Deluxe, to register its trademark ‘NANDHINI’ for its restaurant business, except for milk and milk products. The court clarified that trademark protection is not absolute and that the nature of the goods and services, as well as the visual distinctiveness of the marks, must be considered. This judgment provides important guidance on the interpretation of trademark law in India, particularly regarding the scope of protection for registered trademarks and the importance of considering the specific context of use.