Examining Calcutta High Court’s Decision on Infringement in the “Amul” Trademark Conflict

24th February, 2023 - 7:35 am Categories: Legal Issues Trademark 0 Comments

Introduction

In the recent case of the Calcutta High Court granted an interim relief in an issue about trademark infringement in favour of the well-known brand “Amul”. As per the facts of the case, the local cake/bakery shop is giving complimentary candles which are duly packed in a box having a similar logo to that of the brand Amul. Thus, the suit for infringement has been instituted against the local cake shop in Kaira District Cooperative Milk Producers Union Ltd. v. Maa Trading Co.[i]

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This case deal with the issue of trademark infringement by non-competitors vide section 29(4). However, the Calcutta HC applied the first test as contained under s.29(4)(a) regarding determining the extent and viability of impugned infringement in response to the existing trademark through various tests laid down by different courts from time to time. And, even it can be said that the threshold criteria of s.29(4)(b) have been met in response to the requirement of goods of non-similar nature which has been met. But, the court instead of going through other requirements laid down in sub-clause (c), it simply jumped to the test of “passing off” to establish the infringement of the trademark.

Pre-Conditions for the Establishment of “Passing Off”

In Reckitt & Colman Products Ltd. v. Borden Inc.,[ii] the Court held that devised three essential ingredients to establish the test of “passing off”, these are;

1. Plaintiff should have goodwill vis-à-vis reputation in the market.
2. There should be misrepresentation from the side of the defendant which made people believe that the alleged good belongs to the plaintiff.
3. Plaintiff suffered or in all probable circumstances, he is likely to suffer damages as an obvious corollary.

The court in Amul’s case relied on ‘passing off’ to establish trademark infringement claim, and this is where the court can said to be faltered as the threshold set to satisfy passing off is lower than that of infringement. Passing off and infringements are two different claims in toto, but the court has used passing off to test the claim of trademark infringement.

In claims for infringement under s.29(4)(c), a claimant needs to establish that the defendant has gained some unfair advantage or there has been a detrimental impact on the plaintiff’s reputation due to such infringement. And, the actuality of the consequence on the reputation of the plaintiff needs to be established and not the mere probability as in case of passing off.

Essential Ingredients for Establishment of Claims of Trademark Infringement

(i) Detrimental Impact: This is one of the necessary prerequisites that the alleged mark must be causing a negative impact on the reputation of the already existing trademark, and also that the concerned mark should have a similarity with the established trademark which is blurring the distinct characteristics between the two.

Tarnishing/detrimental impact can said to be occurred when the ‘ability of the mark to stimulate the desire to buy those goods is impaired’ meaning thereby that the impugned mark is suggestive about the product but with a negative correlation to quality which must negatively impact the plaintiff’s reputation/goodwill. Proving an actual “detrimental” impact on the reputation of any product/mark is a higher threshold that has been set to eradicate the possibility of mere speculation. But, in Amul’s case, the court ignored this aspect by looking into speculative harm to Amul which might be caused due to alleged infringement by the local cake shop.

Moreover, though the test of tarnishing or blurring the dissimilarity is not confined to the particular sector in which the existing established trademark works, it is imperative for the courts to gauge the possibility of confusion especially when the alleged mark is functioning in an altogether different field without having any possible correlation with the established trademark.

(ii) Deriving Unfair Advantage: L’Oreal v. Bellure[iii] case is essential to understand the nature and extent of the term “unfair advantage” which is another ground for the establishment of trademark infringement vide s.29(4). In this case, the court interpreted “unfair advantage” in its widest sense by holding that whenever a company/establishment uses the same/similar mark as that of an already established mark having a considerable level of goodwill/reputation due to its quality and investment, to derive profit out of the hard work of established mark, unfair advantage can said to be derived in such situations who is using the established mark for its advantage.

But, the “direct advantage” must be proved to be derived by the defendant(s) in such a situation, and when it comes to the Indian jurisdiction, the threshold limit has been set higher through the case of “Raymond Ltd. v. Raymond Pharmaceuticals”[iv] which requires that “substantial gain” must be getting derived by the alleged infringer and not the mere de minimus.

And, in the case of Amul, the defendant was allegedly using the Amul’s mark for giving complementary candles to the customers, which fails to satisfy the threshold of “unfair advantage”, thus, the defendant cannot be accused for deriving some sort of direct or substantial profit out of the same.

(iii) Without Due Cause: “Due Cause” under s.29(4) is an exception to the trademark infringement which sets forth that in situations of ‘absolute/unavoidable’ compulsion, the claim of infringement can be set aside. But again, the parameter set by the courts is high to ensure a certain standard for trademark infringement.

The case of “Nestle India Ltd. v. Mood Hospitality”[v] though not establish the objective test for the application of exception of due cause, but lays down that there should be some “tenable explanation” for the use of the same/similar mark. And in situations where the TM is used in an ancillary fashion by the brand having its own distinct and established reputation. Then, the claim for infringement against the defendant cannot be sustained. However, the HC in Amul’s case, failed in its investigation of finding out the possible reason/explanation behind the use of the alleged similar mark by the cake shop.

Conclusion

The foregoing analysis exposes how the Calcutta HC failed to examine the holistic application of s.29 especially by overlooking the essential ingredients of sub-clause (c) in totality. The court failed to meet the threshold requirements of trademark infringement instead it applied the test of passing off to admit the claim of infringement against the defendant. By overlooking the requirements of constituting the claim of infringement, there should be a proper analysis of cause and effect based on the principle of actuality and not mere probability. Thus, infringement vide s.29 sets the test at a higher pedestal which can be satisfied by proving the consequences of the alleged infringement which is why the speculation has no place in the admission of the claim of trademark infringement, which the court in Amul’s case failed to acknowledge.

Author: Kumar Aditya, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

REFRENCES

[i] 2022 SCC OnLine Cal 2516.

[ii] [1990] 1 WLR 491.

[iii] [2010] ETMR 47.

[iv] Suit (L) No. 957 of 2014, Bombay HC.

[v] FAO (OS) 255/2009, Delhi HC.