S.M. DYECHEM LTD. VERSUS CADBURY (INDIA) LTD.

10th August, 2023 - 12:07 pm Categories: Intellectual Property 0 Comments

Parties

The Appellant-Plaintiff is the registered proprietor of the trademark “piknik” and has been in the business of preparing potato chips, potato wafers, etc. since 1988. The Respondent Defendant Cadbury is a household name in India. They have been marketing chocolates since 1948.

Brief Facts

Brief facts of the case are as follows

• The Appellant-Plaintiff applied for the registration of its trademark “piknik” on 17 the February 1989 in Class 29 and Class 30. The Appellant-Respondent was granted the
  registration on 29 th July, 1994.
• The Respondent-Defendant registered “Cadbury’s picnic” in the year 1977 in respect of dairy milk chocolates, wafer bar dairy milk chocolates etc. falling in Class 30.
• The said trademark was not renewed upon its expiry after seven years.
• When the Appellant-Plaintiff found out that the Respondent-Defendant was using the
  mark “picnic” for chocolates, it gave a notice on 16 th March 1998.
• On 18 th February 1999 the Appellant-Plaintiff filed a suit and sought temporary
  injunction against the Respondent-Defendant for alleged infringement of trademark
  and passing off.
• Soon after, on 19 th March 1999, the Respondent-Defendant applied for rectification of
  Plaintiff’s trademark.
• The Trial Court held that there was a prima facie case in favour of the Plaintiff. The Defendant’s mark was deceptively and phonetically similar to that of the Plaintiff,
  therefore, a temporary injunction was granted in favour of the Plaintiff.
• The Respondent-Defendant preferred an appeal before the Hon’ble High Court of Gujarat which held that there was no deception or passing off on the part of“Cadbury”. The Hon’ble Gujarat High Court set aside the order of the Trial Court.

[Image Sources: Shutterstock]

Issues

Whether the Respondent-Defendant can raise a defence that the registration of the
Appellant-Plaintiff’s mark was itself invalid because it did not satisfy the ingredients of
Section 9(1)?

Whether the Appellant-Plaintiff can argue that the “validity” of the registration of the
mark had become conclusive on the expiry of 7 years long before the defence was raised
in the suit?

Whether the word “piknik” was distinctive?

While granting temporary injunction, should the Court go by the principle of prima facie
case or comparative strength of the case of either parties?

In whose favour is the comparative strength of the case on the question of infringement?
In whose favour is the relative strength of the case?

Whether the High Court was justified in interfering with the decision of the Trial Court?

Applicable Rules:
Section 9 of the Trade and Merchandise Marks Act, 1958;
Section 31 of the Trade and Merchandise Marks Act, 1958;
Section 32 of the Trade and Merchandise Marks Act, 1958;

Arguments on behalf of Appellant-Plaintiff:

The Appellant-Plaintiff argued that Section 31of the Trade and Merchandise Marks Act, 1958
created a presumption of validity of the Plaintiff’s registered mark. It was enough if the
Plaintiff’s mark was distinct on the day of registration. According to Section 32 of the Trade and Merchandise Marks Act, 1958, the argument that Plaintiff’s trademark was not distinct, cannot be made after seven years have elapsed. In this regard, the Appellant-Plaintiff relied on the case of National Bell Co. v. Metal Goods Mfg. Co. (P) Ltd. (1970).
Arguments on behalf of Respondent-Defendant:

The Respondent-Defendant asserted that Plaintiff’s trademark was invalid because the conditions in Section 9 of the Trade and Merchandise Marks Act, 1958 were not met.
Furthermore, it was argued by the Respondent-Defendant that the word “piknik” was akin to
the dictionary word “picnic” and thus was not “distinctive” within the meaning of Section
9(1)(e) of the Trade and Merchandise Marks Act, 1958.

The Respondent-Defendant submitted that the presumption under Section 31(2) of the Trade
and Merchandise Marks Act, 1958 and the bar in Section 32 of the Trade and Merchandise
Marks Act, 1958 did not apply since seven years had not elapsed from “the date of
registration”, when the defence in the suit was raised.

Ratio

The Apex Court did not decide Issues 1, 2 and 3 because it was of a view that any decision on the question of “validity” or “distinctiveness” of the Plaintiff-Appellant & mark would jeopardise the decision of the Hon’ble Bombay High Court in the rectification proceedings pending before it on the same issue.

While deciding issue 4, the Apex Court referred to a myriad of judgments and held that in
the case of trademark matters, it was necessary for Courts to go into the question of
comparable strength of the case of either parties.

The intention to deceive is not relevant in an infringement action. The Apex Court opined
that even if essential features are copied and a false representation is made without an
intention of doing so it is sufficient to hold the infringer liable. In the present case, there
was no infringement and the relative strength of the case is in favour of the Respondent-
Defendant. Issue 5 was decided accordingly.

According to the Hon’ble Supreme Court, the occurrence of the name “Cadbury” on the
wrapper is a crucial factor that has to be taken into account while deciding the question of
passing off. The Apex Court held that the relative strength of the case was in favour of the
Respondent-Defendant. Issue 6 was decided accordingly.

As for issue 7, in light of the facts, the Apex Court opined that Appellate Court’s interference in the Trial Court’s judgment was justified. The Trial Court merely considered the phonetic resemblance between the two marks and did not consider the differences in the essential features. The High Court noticed the dissimilarities in the
essential features.

Author: Sonakshi Pandey, 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.