• TIPLPR

THE FACE-OFF BETWEEN BIG BASKET AND DAILY BASKET: TRADEMARK BULLYING OR ENFORCEMENT OF IP RIGHTS

Introduction

Big Basket is at loggerheads with yet another company over the use of term ‘basket’. The Indian online grocery store served a ‘cease and desist’ to a start-up, Daily Basket that works along similar lines on 17th February, 2021. Big Basket has alleged the use of word ‘basket’ in Daily Basket’s brand name conjures trademark infringement and violation.

However, one cannot help but notice the disparity between the sizes of both the companies as one is the largest online food and grocery story in India whilst at the other end is just a nascent start-up that serves only in Coimbatore via the online/offline medium. It has raised presumptions whether this threat of litigations is a typical strategy of applying economic pressure to force a considerably smaller business into compliance.

The author in this article, attempts to unravel the line between trademark bullying and rightful enforcement of Intellectual Property Rights in the light of this present case.

The Notice

BigBasket alleged that Daily Basket was an e-commerce business and offering identical products and services through a similar and conflicting domain name. They have claimed that mere addition of the word ‘daily’ with basket did not give their name a distinctive characteristic and could conjure confusion in the minds of customers about their association with Big Basket.

These allegations raised by Big Basket have the undertones of the belief that it has a monopoly over the usage of the word ‘basket’ in relation to grocery store shopping. The word ‘basket’ prima facie alludes and harmonises with the real purpose of an e-commerce business that provides an online cart/pantry/basket to customers to store their grocery item.

Premised on this understanding, we have to understand the relevancy of existing trademark to decipher the claims of Big Basket about the uniqueness of their brand name as they have specified in this notice.

Understanding the Spectrum of Distinctiveness

Trademarks serve the ultimate purpose of distinguishing the goods and services of one person or organisation from that of the other. This understanding has been precisely delineated in Section 2(1)(zb), the Trademarks Act, 1999 while defining trademark. This distinguishing characteristic is also known as distinctiveness and a particular spectrum of such trademark distinctiveness was established in the 1976 case of Ambercombie & Fitch Co. v. Huntington World Inc.. The United States Court of Appeals for the Second Circuit established that the spectrum ranges from generic marks to descriptive marks to suggestive marks to arbitrary or fanciful marks and to invented marks. The strength of marks and scope of protection varies across the spectrum as higher the degree of mark; the stronger it qualifies for protection.

The Supreme Court of India in the Godfrey Philips India Ltd v. Girnar Food & Beverages (P) Ltd. were of the view that a descriptive trademark could be entitled to protection “if it has assumed a secondary meaning which identifies it with a particular product as being from a particular source”. The mark of Big Basket is a combination of two descriptive marks, which has hence acquired a secondary meaning due to this unique union of ‘Big’ and ‘Basket’ as a whole in the brand name. This was settled by the Bombay High Court in the case of Sky Enterprise Private Limited v. Abaad Masala and Co. where the exact combination of words as he registered trademarks was held to be an infringement. However, each individual word could be used in different order by another person. This certainly has helped the company get the trademark protection and it appears quite preposterous that Big Basket has now raised claims over the usage of word ‘Basket’, when clearly the other descriptive mark is also used by other companies such as that of Big Bazar, which is also involved in the business of selling groceries (online and offline).

An Attempt to Monopolise Common Words or Assuage the Consumer’s Confusion?

In the present case, the possibility of alleged confusion by BigBasket between their company and that of the start-up Daily Basket regarding their mark usage actually seems thin here. Both the marks bear no similarity apart from the word ‘basket’ and moreover the colour, font, graphics and the whole combination of names of the brand are significantly different. The confusion should be real and proximate and not remote, so much so that both the marks should not be distinguishable in the eyes of the registered owner’s customers. That is to say there must be secondary distinctiveness. However, the usage of common word such as ‘basket’ here in a different combination does not entail secondary distinctiveness as was discussed in Bhole Baba Milk Food Industries Ltd v. Parul Food Specialities (P) Ltd. Here, the word ‘Krishna’ was held to be a word that was in usage in common parlance and one that could not be automatically associated with the said product.

BigBasket’s profitability, and brand popularity justifies their protective stance towards their mark but it cannot resort to monopolise generic words such as ‘basket’ which is commonly used in the online grocery business.

The High Court of Madras whilst determining that M/s ITC Limited and Nestle India both could not claim monopoly over respective laudatory words such as “Magic” or “Magical” along with the common word “Masala” had made an important observation in this regard. That is the common word in contention here was not an invented word or an inherently distinctive word. Applying this understanding to the present case, the word basket does not fall under this umbrella; it is not unique or novel as one might say is the brand name of another online grocery store, Grofers.

The Transition of Enforcement to Bullying

There are certain factors that one considers before to determine the infringement of trademark as has been discussed above. However, there are times when certain audacious entities issue cease-and desist letter by exaggerating the scope of protection that is attached with the mark and misrepresents the likelihood of confusion that might arise in the consumer’s mind. Potential involvement in an expensive lawsuit is enough to put a small-scale business in a perilous position.

Judicial sanctions are available in the form of Section 142 of the Indian Trademarks Act 1999, which provides for protection against such frivolous litigation proceedings. It mentions that if an individual that employs circulars, advertisements threatens another person with initiation of legal proceedings for alleged infringement of the registered trademark, then the threatened person can file a suit for the unjustified threats and obtain a declaration to the extent that such threats were unjustified. However, as we mentioned before, the smaller entity is often in no position to engage in high cost litigations which might be a step towards their irreparable loss.

This vexatious business tactic is called “trademark bullying” which the United States Patent and Trademark Office in its Report on Trade Mark Litigation Tactics defined as when trademark rights are used to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.

It has to be determined whether the actions of BigBakset here, could be inferred as an abuse of its clear position of dominance to force the start–up into subservience. In this context we should also look into the fact that BigBakset has had a history of opposing trademark with the name ‘basket’, many of which are a retail services, groceries and food products.

Conclusion

Daily Basket in the present case fought off the allegations of Big Basket by making a website called bbisabully.com which has successfully helped in launching a social media campaign against the BigBasket. That is to say, David has attacked Goliath with the most lethal weapon of mass media the effect of which might be long-term stigmatisation. Big Basket too has clapped back against the allegations of being a trademark bully to its smaller rival, by justifying their actions as a measure to protect their trademark as the largest online grocery business in India. However, we must keep in mind that the line between trademark bullying and Trademark enforcement rights is not black and white. Hence, a through enquiry must be conducted by the company.


Title Image: IBI Times


This artcile has been written by Ilina Peehu. Ilina is a fourth year law student at Gujarat National Law University.