In 1970, the National Dairy Development Board of India launched Operation Flood (OF), which would become the one of biggest dairy development programmes in the world. By the late 1990s, India overtook the United States to become the world’s largest milk producer. Operation Flood intended to make Indian dairy farmers self-sufficient. It did this through facilitating the setting up of cooperative federations in different parts of the country, where the ownership of the production line of milk and milk products lay with the farmers themselves. Along the way, the “white revolution”, as the movement was also known, spawned iconic brands associated with cooperative federations from different parts of the country, such as Amul, Mother Dairy and Nandini. One of these brands – Nandini – with its primary market presence in the state of Karnataka, and in the south generally, was the subject of a complex trademark infringement suit recently decided by the Supreme Court (see).
The allegedly infringing mark, which was first used four years after the cooperative federation’s first use, had the same name, but a different device, and was registered in the same classes (29 and 30), but for different goods. In a nutshell, the Supreme Court allowed the second mark to stay on the register on grounds of being a concurrent user, while also holding that the older mark had not acquired the status of a well-known mark.
“Nandini” has been used as a trade mark by the Karnataka Cooperative Milk Producers Federation (KCMPF) for milk and milk products since 1985, and received registrations for this under Class 29 and 30. On the other hand, a restaurant by the name of “Nandhini Deluxe” came up in 1989, operating in Bangalore (the capital city of Karnataka state). The restaurant used its mark for 12-13 years, before it applied for registration under Classes 29 and 30. KCMPF opposed the registration, but its objections were dismissed, and the restaurant’s trademark was registered in 2007. KCMPF appealed the grant through multiple applications before the Intellectual Property Appellate Board (IPAB).
In a 2010 order, the IPAB dismissed one such appeal filed, and allowed the restaurant’s trademark application to proceed, subject to deleting the items “Milk and Milk products” from the specification of goods. An affidavit deleting the items was duly filed by the restaurant.
Strangely, a separate (but coordinate) bench of the IPAB passed a polar opposite order in 2011 on another appeal filed by the KCMPF, rejecting the restaurant’s trademark registration, on grounds that KCMPF mark was well-known and had acquired distinctiveness. The IPAB further held that “since milk and milk products fall under Classes 29 and 30 and the goods registered in the name of the appellant also fall in the same class, the average consumer would conclude that goods manufactured by the appellant belonged to the respondent and, therefore, there is likelihood of confusion. Further, the respondent was using the trade mark prior to the appellant in the same class of goods and, therefore, registration of the appellant’s mark could not be permitted.”
On the appeal filed by the restaurant, the High Court decided in KCMPF’s favour, by upholding the 2011 order of the IPAB. Among other things, the High Court reasoned that the goods belonging to the two parties (though the nature of the goods being different) belong to same class and, therefore, it would be impermissible for the restaurant to have the registration of the trade mark in its favour. The restaurant further appealed to the Supreme Court, which reversed the High Court’s decision as well as the 2011 IPAB order, and restored the state of affairs to the earlier 2010 IPAB order, where trademark registration was allowed, subject to deleting “milk and milk products” from the registration.
Two key factors appear to have gone against the KCMPF in this case. Firstly, the fact that the word “Nandini” itself was not an invented or coined word, but a name from a character/goddess in Hindu mythology. The second was the fact that the even though the words Nandini/Nandhini (with only an “h” distinguishing the two in English) were phonetically identical, the trademark with logo adopted by the two parties were completely different. The restaurant used and added the word ‘Deluxe’ (making its mark “Nandhini Deluxe”), followed by the words ‘the real spice of life’, and the device of a lamp. KCMPF used only the word “Nandini” with a ‘cow’ as a logo encircled by an oval. The tagline and the device were sufficient to convince the Supreme Court that they was hardly any similarity between the marks.
Additionally, the Supreme Court was of the view that the goods of two parties were clearly different, besides the fact that the application for registration of the milk and milk products was not granted to the restaurant. The Court found that “not only visual appearance of the two marks is different, they even relate to different products. Further, the manner in which they are traded by the appellant and respondent respectively, highlighted above, it is difficult to imagine that an average man of ordinary intelligence would associate the goods of the appellant as that of the respondent.”
The Supreme Court took particular issue with the conclusions arrived at by the IPAB and the High Court regarding the goods associated with the trademarks. It noted that the restaurant had applied the trademark in respect of goods like coffee, tea, sugar, cereal, spices, and so on, which are used in the restaurant business, which did not belong to Class 29 or 30. In the circumstances, “there was hardly any question of confusion or deception”.
Most critically, the Supreme Court concluded that the facts of the case did not satisfy the conditions of Section 11(2) of the Trademarks Act, and therefore, KCMPF’s mark could not claim to seek protection as a well-known mark. In this regard, it drew attention to the ingredients laid down by the Delhi High Court in Nestle India Limited vs Mood Hospitality Private Limited on 10 February, 2010 (FAO (OS) 255/2009). For example, the Supreme Court was not convinced that the restaurant had adopted the trade mark to take unfair advantage of KCMPF’s trade mark; or that the former’s use would be detrimental to the purported distinctive character or repute of the trade mark of the respondent. In the four years between KCMPF’s first use and the restaurant’s first use of their respective marks, the Supreme Court observed that there was no document or material to show that KCMPF had acquired distinctiveness. On the contrary, the Court held that this appeared to be a case of “concurrent user of trade mark”.
This decision has thrown up many issues for the consideration of business owners. Registering a mark in a particular class is no assurance that a competing mark will not be allowed in the same class. The mere similarity of the word is not sufficient to deem a mark infringing. And finally, establishing a mark as a well-known mark is clearly a difficult task, and requires a complex test to be satisfied. The issue of well-known marks has come up time and again in Indian trademark jurisprudence, particularly recently, and is worthy of a separate discussion altogether.