Delhi Hc’s Subway Judgement: When Is A Trademark Not Seen ‘As Whole’?- Part I

16th March, 2023 - 11:02 am Categories: Legal Issues Trademark 0 Comments

Introduction

Recently a single bench of the Delhi HC gave an order in Subway IP LLC v. Infinity Foods & Ors.^[1] (‘Subway’) using the rule of Anti-Dissection. In this case, although the single bench acknowledged the rule of Anti-Dissection but took a calculated detour to appreciate a dominant element of the two competing marks to give their dictum, holding that there was no case of infringement. However, shortly afterwards, a division bench of the Delhi HC set aside the single bench order since the aspect of bad faith was not given due weightage.^[2] Accordingly, this article is the first in a two-part series covering the dictum given in the two orders. Specifically, this first article serves a two-fold purpose: it apprises the reader of the Subway judgement. Then it elaborates upon the salutary purpose and sublime philosophy, which underscore the principle of Anti-dissection (and deviations therefrom).

In doing so, this article explains the rule of Anti-Dissection without prejudice from the dictum of the appeal order.

Facts & Dictum Of Subway Judgement

Facts: Subway LLC, a company incorporated in the US with several restaurants in India, instituted a trademark infringement suit against the defendants. Their broad contention was that the defendant’s ‘SUBERB’ is deceptively similar to their registered mark ‘SUBWAY’. Before the suit, the defendants offered to change the colour scheme of their mark from yellow & green to a combination of purple, pink, white, or red.^[3] (see illustration 1). However, the plaintiff pressed with their suit and argued that the two marks remained deceptively similar irrespective of the change in the colour scheme.^[4] Importantly, the plaintiff invoked the Slazenger principle, which underscores the aspect of intent to ride on the acquired goodwill of the plaintiff.^[5]

[Image Source: Subway Judgement]

Dictum: The Single Bench, in this case, referred extensively to §17(2) of the Trademarks Act, 1999 (‘Act’), that encapsulates the legal principle of Anti-Dissection.^[6] It holds that individual components of two marks must not be dissected for comparison; instead, they must be seen as a whole.^[7] The raison d’etre is that the impression of a composite mark on a buyer is created as a whole and not in parts.^[8] Notwithstanding the doctrine, the court deviated from it by referring to Indian Beverages Pvt. Ltd. v. General Mills Marketing Inc^[9], wherein a division bench of Delhi HC Court affirmed the possibility of seeing the dominant part of a composite mark by dissecting it from the whole, as a preliminary step to reach the ultimate conclusion.^[10]

The Single Bench, in SUBWAY Judgement, also referred to the concept of Public Juris, which means that words in the public domain cannot be trademarked.^[11] Based on these principles, the Single Bench prima facie observed that the words ‘SUBERB’ & ‘SUBWAY’ are not phonetically similar.^[12] The Single Bench then reasoned that the use of the syllable ‘SUB’ in the defendant’s mark is not invalid since ‘SUB’ is public juris and refers to a type of sandwich called submarine sandwiches.^[13] Therefore, no exclusivity could be granted over ‘SUB’ to the plaintiff.^[14] And since the question of the dominant part of the mark stood answered, and no similarity found between ‘ERB’ & ‘WAY’ (the court relied on previous judgements to reach this conclusion)^[15], it was held that this was not a case of infringement.^[16]

Relevant to note here is that the Single Bench did not deal with the Slazenger principle invoked by the plaintiff, and the order was rendered solely on the rule Anti-Dissection. (This aspect will be covered in the next article.)

The Rule—And Departure From—Anti-Dissection

The established rule in the law of trademarks is that when two trademarks are being checked for deception or confusion, they must always be seen ‘as a whole’, and specific elements must never be dissected while striking a comparison.^[17] This rule is commonly referred to as the Rule of Anti-Dissection.^[18]

Plainly speaking, a composite mark (or a label) is a trade mark which uses more than one means of representation, such as words, numbers, symbols etcetera., which makes the mark a combination of different elements.^[19] For example, the trademarks of McDonalds, Dominos, Starbucks, and Taco Bell are composite marks. All these trademarks have a design with a unique device, accompanied by stylized letters and a distinct colour combination. For instance, the mark of ‘McDonalds’ has three components: the renowned golden arches, the word ‘McDonalds’, and the distinct red colour (see illustration 2). It is the congregation of these individual elements of a mark coming together which makes the mark unique (distinctive) and necessitates these separate elements to be seen as a whole. We may examine this position for a lingering minute.

Why Do We See a Trademark ‘As a Whole’?

As previously noted, the rule says that a composite mark must not be dissected for comparison; instead, the two competing marks must be seen as a whole. There are two reasons for this: recollection & registration.

First is the aspect of recollection. A composite mark has a pack of distinct elements like colours, words, and numbers, among other things. Each such element possesses varying levels of appeal & distinctiveness to the eye and affects recollection in a consumer’s mind. However, each individual element, by itself, is incapable of reminding an individual of a brand. For instance, the colour red can bring to someone’s mind brands like Colgate, Airtel, Coca Cola, Netflix, Pizza Hut, etcetera. But by itself, it does not indicate any brand since it is merely a colour.^[20] Thus, recollection of a composite mark is facilitated not by an isolated element, but when a combination of them is seen ‘as a whole’.^[21] Simply put, the colour red with the golden arches and the words ‘McDonald’s’ completes the mark. Consider this: a modern trademark is like a puzzle where every piece has an individual identity. But the final product, the image the consumer sees (and remembers), could only be seen when every piece is put together.

Furthermore, consumers only partially remember these combinations of elements; instead, they have a hazy image of what they once saw and what the trademark must have looked like.^[22] For example, when a consumer identifies the McDonalds’ restaurant, he identifies it by seeing not the isolated elements, but the entire mark. It is this perusal of the entire mark which serves two functions: bringing to a consumer’s mind an impression of McDonald’s and assuring them that the product they are buying is, in fact, from McDonald’s.^[23] This is also known as the test of an average consumer with imperfect recollection.^[24]

To this position, one might argue that they can recognize ‘McDonald’s’ from the golden arches (or, for that matter, the red colour or smell of their burgers & fries!) without needing to see the entire mark. This could undeniably be the case for two reasons: first, some trademarks, on account of their extended use, leave an indelible impression on the minds of a consumer. And second, some consumers are enthusiasts of the brand; they need not see the mark ‘as a whole’ to confirm its veracity. In the first instance, a single trademark element can also help recollect and distinguish itself from other proprietors. For example, the colour purple of ‘Cadbury’ can bring to recollection their brand.^[25] However, it is relevant to note that this would be an exceptional case since such element would need to acquire distinctiveness, the bar of which would be reasonably higher.^[26] When this condition is fulfilled, the court may grant an exception to seeing the mark as a whole to plead a case of distinctiveness.^[27] However, the second instance has no remedy in trademarks law since the test of recollection is that of an average consumer and not an expert consumer.^[28]

With the aspect of recollection settled, we come to the second facet: registration.

[Image Sources : Shutterstock]

Registration is an essential factor in this analysis since, from a statutory perspective, it is trademark ‘as a whole’ which acquires a registration^[29] unless a specific element thereof is registered separately.^[30] Consequently, in cases of infringement since registration is acquired for the whole mark, it is also seen as a whole.^[31]

For the reasons noted hereinabove, the rule of anti-dissection is a well-established principle in the law of trademarks, as it considers the psychological proclivity for not remembering everything in clear detail. Not to mention, it estops an individual from claiming rights without registration. Having said that, a situation may arise where dissection (to stop infringement) ought to be done.

1. DISSECTION: WHEN IS A TRADEMARK NOT SEEN ‘AS A WHOLE’?

We now know that a variety of elements make a mark. And the question of deception is answered by seeing them in a collection. However, as previously noted, a particular element can also have a higher visual or phonetic appeal than other elements of a mark. For example, the logo of KFC with Colonel Sanders can immediately bring to mind a KFC Restaurant. Similarly, the bell of Taco-bell can bring to mind, well, a Taco Bell Restaurant. This individual element with a higher appeal to eyes and ears vis-a-vis other elements is known as a ‘dominant element’ of the mark.^[32] And these dominant elements of a mark ought to be protected for two reasons: First, it is unreasonable (bordering on irrational) to say conclusively that a single element is void of achieving distinctiveness and appeal on its own, especially when compared to an embezzling mark. And second, if a single element acquired distinctiveness, it would be contrary to the principles of trademark law to allow someone to embezzle this dominant element, sheltering against the argument that two marks must be seen ‘as a whole’^[33].

Such an argument would lack all convincing certitude since a dominant element can also achieve a high commercial value in the sense of being distinctive.^[34] For example, if ‘Mc’ of McDonalds is found to be dominant and such violation is not injuncted, everyone in the fast-food industry will start prefixing their marks with ‘Mc’, demanding shelter under the Rule of Anti-Dissection. Thus, when an impugned mark embezzles a significant element of a registered mark in its label, the dominant part of the mark ought to be found and acted upon. Section §17(2)(a)(i)(ii) & (b) specifically deals with non-registered marks and when the said section is read in conjunction with Section 27 of the Act, exclusivity can be claimed for parts of a composite mark by way of an action of passing off^[35] Therefore, remedy in infringement for a dominant part would only exist if the dominant element is already subject to registration, otherwise passing off remedy shall be resorted to.^[36]

This brings us to the final question: how do we identify the dominant element?

How to identify the Dominant element? And Caution in Dissection

If McDonald’s opposes the mark ‘McLeodganj’ for momos, claiming ‘Mc’ to be the dominant mark therein; first, a comparison shall be struck between both as a whole by taking into account all surrounding circumstances, such as phonetic similarity, class of customers, geographical locations, years of use, channels of distributions, inter alia.^[37] In this analysis, if no cause for deception or confusion is found, the court may compare the dominant parts of the marks.^[38] In this last-part analysis, if a similarity is found and it leads to confusion or deception, keeping in mind the surrounding factors, infringement follows.

Relevant to note here is that a composite mark may have one or more than one dominant element. Ascertainment of the same will depend on facts and a mark’s inherent distinctiveness. For example, if someone uses the mark ‘McKebab’ to sell burgers, Mcdonald’s can claim remedy since ‘Mc’ therein is the dominant part of their mark. Similarly, if someone uses ‘Mash Donald’s’ to sell burgers, in this case, since ‘Donalds’ is the dominant element, infringement follows. In the Subway case, ‘SUB’ in SUBWAY was found to be dominant. On the flip side, on some occasions, a mark may entirely be dominant, on account of being inherently distinctive, such as ‘HAAGEN DAZS’.^[39] Thus, finding the dominant element is a question of facts with a caution appended to it.

Caution in Dissection

Apposite to note here is that finding the dominant part in a mark and comparing it vis-a-vis other elements is not an exception to the rule of anti-dissection. The practice is merely a minor detour (an auxiliary test, if you may) in the ultimate analysis to find deception. In other words, if the court discovers a dominant mark, the conclusion of deception is not mechanical. This is because the ultimate test for the court is to still see the two marks ‘as a whole’.^[40] Thus, if ‘McLeodganj’ is used to sell Momos, the chances of deception or confusion are relatively lower than when it is used to sell burgers.

However, the contrary is also true: if a less-than-dominant part is discovered (against the entire mark), an injunction, in that case, could be granted. The analysis would greatly depend on facts and circumstances.

CONCLUDING REMARKS:

All elements make a mark, and thus all elements are considered in cases of infringement, not giving way to an analysis by dissection. However, when a dominant element of a trademark is slightly more appealing and is embezzled by the impugned mark, an action of passing off could be, keeping in mind all surrounding circumstances, can be granted. It is in these surrounding circumstances that the aspect of bad-faith (as used by the division bench in this case) will also be considered before using the rule of (or deviation from) Anti-Dissection. Thus, in a broader sense, dissection is not done to protect the dominant element, for it is just a part of the puzzle. The motif, then, is to protect the trademark itself since it is this dominant element which represents the entire mark, thereby completing the puzzle.

 The aspect of bad faith shall be discussed in the next article of this series.

Author: Sanchit Sharma, 4^th Year, BBA LLB (Hons.), Himachal Pradesh National Law University, Shimla, 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.

^[1] Neutral Citation: 2023/DHC/000269

^[2] Subway IP LLC v. Infinity Foods & Ors. FAO(OS) (COMM) 26/2023 & CM APPLs. 5204-5206/2023.

^[3] Ibid, at 8.

^[4] Subway, Supra note 1, at 16.

^[5] Ibid, at 15.

^[6] Subway, Supra note 1, at 20.

^[7] Indian Beverages Pvt. Ltd. v. General Mills Marketing Inc. (2015) 61 PTC 231 at 16. (‘India Beverages’)

^[8] Ibid, at 16.

^[9] (2015) 61 PTC 231.

^[10] Indian Beverages, Supra note 7, at paras 21, 23 & 26.

^[11] See: Geep Flashlight Industries Ltd. vs The Registrar Of Trade Marks AIR 1972 Delhi 179; Hindustan Development Corporation Limited v. The Registrar of Trademarks AIR 1955 Cal 519.

^[12] Subway, Supra note 1, at 23.2.

^[13] Ibid, at  23.2.

^[14] Ibid, at  23.4.

^[15] Ibid, at 23.5-23.9.

^[16] Ibid, at 23.10.[17] Durga Dutt Sharma v. Navaratna Pharmaceuticals Laboratories, (1965) 1 SCR 737.

^[18] Phonepe Private Limited vs Ezy Services & Anr. IA 8084/2019 in CS(COMM) 292/2019 at 26.

^[19] Pinto v. Badman [8 RPC 181 at p 191].

^[20] Apposite to mention here is that a single element, specifically a colour, in certain cases, can bring to mind a brand and can seek protection from infringement. See: Sanchit Sharma, Can A Single Colour Mark Acquire Registration In India? IP & Legal Findings (February. 1, 2023. 11:45 am), https://www.ipandlegalfilings.com/can-a-single-colour-mark-acquire-registration-in-india/

^[21]  See Fruit of the Loom Inc. v. Girouard 994 F.2d 1359, 1362 (9th Cir. 1993)

^[22] India Beverages, Supra note 7, at  50. James Chadwick & Bros. Ltd. vs The National Sewing Thread Co at ¶10.

^[23] Sumat Prasad v. Sheojanan Prasad, AIR 1729 SC 2488.

^[24] James Chadwick & Bros. Ltd. vs The National Sewing Thread Co AIR 1951 Bom 147.

^[25] Sanchit, Supra note 20.

^[26]Manual of Trademarks, 3.2.4. See also: KC Kailasam, Ramu Vedaraman, Anuradha Ramu, LAW OF TRADEMARKS including International Registration under Madrid Protocol & Geographical Indications 305 (LexisNexis, 2017).

^[27] Deere & Company v. Mr. Malkit Singh 2018 SCC OnLine Del 8527; Marico Ltd. vs. Mr. Mukesh Kumar & Ors. 2018(76)PTC168(Del); Colgate Palmolive v. Anchor Health and Beauty Care Pvt. Ltd. (2003) 27 PTC 478.

^[28] Intercontinental Brands v. Parle Products Pvt. Ltd. 2023/DHC/000953 at 45.22.

^[29] § 17(1), Act

^[30] §17(2)(a)(i)(ii), Act; Intercontinental Brands v. Parle Products Pvt. Ltd. 2023/DHC/000953 at 45.25.

^[31] § 17(1), Act

^[32] Indian Beverages, Supra note 7, at 19.

^[33] See Preamble, the Act.

^[34] Three-N-Products Private Limited v. Emami Limited, MANU/WB/0245/2008 at  33. (“Three-N-Products”)

^[35] §17(2)(a)(i)(ii), Act.

^[36] A contra opinion to this position is expressed by Justice Sanjib Banjerjee in Three-N-Products case observing that cases falling under §17(2)(a)(i)(ii) can utilise the remedy of passing-off. However, if a case falls under §17(2)(b), it leaves room for a registered owner to cite some unique, distinctive matter being an element of the registered mark to claim exclusivity and pursue an action of infringement. See 37.

^[37] International Foodstuffs Co. LLC v. Parle Products Pvt. Ltd., 2016 (66) PTC 529 (Bom) at  22.

^[38] Subway, Supra note 1, at 22.

^[39] Indian Beverages, Supra note 7, at 35.

^[40] Indian Beverages, Supra note 7, at 21; Pidilite Industries Limited v. Jubilant Agri & Consumer Products Limited, 2015 (57) 617 (Bom) at  16.2.