• TIPLPR

WHEN MAGIC BECAME ORDINARY: ANALYZING ITC LIMITED VS. NESTLE INDIA LIMITED

Introduction

Trademarks seek to protect the unique representations of a brand or business. A key requirement for trademark registration is that the proposed mark should distinguish its good or service from that of other undertakings, as can be inferred by Section 2(zb) of the Trademarks Act, 1999. Section 9(1) of the Act refers to the absolute grounds for refusal of registration and provides that the trademarks devoid of distinctiveness, those merely indicative or descriptive, or those which have become customary in the current language will not be registered. These provisions give a fair idea as to the requirement of uniqueness, the exception to which is an instance of monopoly in common words. Since the objective is to preserve ideas and protect unique expression, such exception succeeds cases of well-known trademarks as well. In this light, the article discusses the case of ITC Limited vs. Nestle India Limited, wherein the question before the Court was the determination of trademark rights in ‘magic masala’. The author analyses the judgment and speculates on the general trend followed by Indian courts when it comes to trademark protection in common words.

Factual Background

The dispute was centered around the mark ‘magic masala’ which was used by ITC Limited for its product ‘Sunfeast Yippie Noodles’. The suit of infringement and passing off was filed against Nestle India Limited with respect to usage of the mark ‘magical masala’ for their product – Maggie Noodles. Though ITC Limited had not procured registration for the mark, it was claimed that ‘Magic Masala’ formed an essential feature of their composite trademark ‘Sunfeast Yippee! Noodles Magic Masala’. The plaintiff, therefore, contended ‘magical masala’ is an offending mark premised on the contention that it was deceptive and phonetically similar to their mark. It was further argued that since the disputed marks pertain to the same business (the sale of instant noodles) it generates deception and confusion among the public. A permanent injunction was consequently sought against the use of ‘magical masala’ or any other expression similar to ‘magic masala’.


Conversely, the defendant sought to exclude the consideration of trademark protection altogether. They contended that both the marks - ‘Magic Masala’ and ‘Magical Masala’ - were merely flavour descriptions. Since ‘magic’ (and its derivative ‘magical’) and ‘masala’ are expressions that are commonly used in the Indian culinary industry, they cannot be reduced in the form of a proprietary right to the exclusion of others. Consequently, as a descriptive mark, neither was capable of receiving protection, and the suit was liable to be dismissed.

The Court’s Judgement

Upon investigating the contentions of both the parties, the Bench comprising of C. Saravanan, J. went on to address the purpose of a trademark, which is to identify the goods of the proprietor. It is intended to catch the attention of the consumer instantly in order to make an ‘on the spot’ decision to buy the goods or services of a proprietor. In doing so, the judge identified that it becomes necessary that a trademark be unique or distinctive to render a good or service, deception and confusion-free. The Court went on to state that a generic or descriptive mark on the other hand, basically describes the quality or nature of a service or product. Therefore unlike trademarks, they should neither be monopolized nor registered. Protection may be afforded to such marks only in exceptional cases where it takes the position of a well-known mark, i.e. when it has assumed a secondary meaning and identifies a particular product or as being from a particular source. However, till such time, a merely suggestive or descriptive mark does not distinguish a product or service and accordingly, should not receive registration or be monopolized.

The Court further observed that ITC Limited itself had not procured registration for the disputed mark, and only used it to illustrate their product. The Court was of the opinion that ITC had used the expression “Magic Masala” in a laudatory manner to praise the “Masala” in the sachet. Laudatory epithet cannot be given monopoly or protection as has been held by Courts... and since it is a laudatory word, it can never be monopolized. The Court opined that the word ‘Magic’ is commonly used in various segments of the food and cosmetic industry. Moreover, even the word ‘masala’ was identified as a word commonly used in various products across the Indian food industry. The Court, to substantiate common usage, also exemplified the product of Blue Lays, and pointed out that they had been using ‘magic masala’ even before ITC Limited. Thus, where usage by ITC Limited was itself inspired by common trade, the same action by Nestle should not be purported as a malicious practice of infringement. In noting that neither ‘magic’ nor ‘masala’ is invented or inherently distinctive words, the Court felt that it would be unfair to confer a monopoly of usage through trademark registration to either one. Additionally, the Court also identified that there was no scope for confusion with regard to the product itself, since the competing brands, i.e. ‘Sunfeast Yippee!’ and ‘Maggi’ were distinctly well known and were completely different from each other. Therefore, the Court dismissed the suit and held that ITC’s claim of a permanent injunction is unsustainable – thereby ending the 7-year long legal battle.

Analysis and Conclusion

This judgement is a resounding acknowledgement of the principle that generic or descriptive marks cannot receive protection under intellectual property law as trademarks. Indian courts have a history of generally disfavoring generic or common names that attempt to seek protection as trademarks by way of registration, or under common law. For instance, in the case of Himalaya Drug Company vs SBL Limited, the Delhi High Court opined that nobody could claim exclusive right to use any generic word, abbreviation, or acronym which has become ‘publici jurisdiction.’ In the trade of drugs, it is common practice to name a drug by the name of the organ or ailment which it treats or the main ingredient of the drug. Such an organ ailment or ingredient being public jurisdiction or no one can own generic for use as a trademark. The decision resonates to the simple principle that the chief function of a trademark is to distinguish a good or service, and the same is not possible where a generic term is proposed to be registered as a trademark.

Another notable, and a rather similar case is that of Three-N-Products Private Limited vs. Emami Limited, wherein the Calcutta High Court adjudicated that the plaintiff in the instant case, could not be afforded a monopoly with respect to the use the word ‘Ayur’. The Court further reasoned that the term hinted towards, and was linked to, the Sanskrit word of ‘Ayurveda’ which had identified as a ‘fashionable term’ in the present day. Consequently, everyone sought to use and associate the term with their products or services and therefore, it cannot be monopolized. In lieu of this, the Court observed that the more descriptive a word, the closer the resemblance of the word to the efficacy or the nature of the associated product, the more remote would be the presumption as to its exclusivity and more demanding will it be on the plaintiff to establish distinctiveness. The Court thus held that no one can claim the exclusive use of a trademark if it merely comprises an indication that serves to designate the nature of the goods. Even in the case of U.S. Patent and Trademark Office v. Booking.com, the court reiterated that under 15 U.S.C. § 1051 of the Lanham Act, generic terms may not be registered as trademarks.

The ITC Limited vs. Nestle India Limited decision was, therefore, one of sound reasoning and can be backed up by strong precedent. If generic or common words in industry began receiving trademark registration and protection, the very purpose of the rights would stand diluted. The reason that distinctiveness in the particular course of trade is a significant requirement is in order to ensure that trademark protection is afforded only in genuine cases, i.e. wherein the mark does not merely exhibit the primary meaning of the good or service. While descriptive words or expressions also enlighten a consumer regarding the nature of goods, in today’s world of high demand and competition, according to trademark registration to common words would be unfair and restrictive. This judgement is, therefore, another step in the right direction and would hopefully encourage parties to take away some learning to avoid unnecessary and delayed litigation in the future.


Title Image Source: The Print


This article has been written by Manvee Kumar Saidha. Manvee is a 5th year law student at School of Law, Christ University, Bangalore.