India: Test of "Common Field of Trade" Applied to Decide Foodworld Injunction

Last Updated: 23 June 2010

The law of passing off deals in cases where a misrepresentation to the public may exist due to some sort of association or similarity between two marks or parties. Where the defendant does something so that the public is misled into thinking the activity is associated with the plaintiff, and as a result the plaintiff suffers some damage, under the law of passing off it may be possible for the plaintiff to initiate action against the defendant. Passing off being a common law offence governs unregistered marks. A recent ruling, viz. Foodworld Vs. Foodworld Hospitality Pvt. Ltd. 2010 (42) PTC 108(Del.) in relation to passing off witnessed the issue of "common field of trade" as being a decisive factor on which a conditional injunction was granted as a relief.

M/s Foodworld had moved to court to restrain Foodworld Hospitality from marketing, advertising or dealing in food products and business under the trademark and trade name "Foodworld". They averred that in the process of doing so, the were passing off their goods and business as those of the Plaintiff.

M/s Foodworld, a registered partnership firm in New Delhi had made an application for registration of the trademark 'Foodworld' in Class 30 under Trade and Merchandise Marks Act 1958.. Applications were also filed for registration under Class 29 and Class 42 under the Trade Marks Act 1999. A claim of exclusive and extensive use in relation to the food business since 1987 has been made on behalf of M/s Foodworld. Apart from Institutional and Outdoor Catering, M/s Foodworld is also involved in the activity of catering services on various trains under the Indian Railways.

The claim of goodwill and reputation was supported by the facts and figures relating to the number of passengers dealt with on a daily basis through various trains or various outlets. The fact of good visibility of the mark was vouched by displaying that the trade name was prominently printed on various sachets of sugar and salt and packaging of toothpicks, cutlery, paper cups etc. It was asserted by Foodworld, notwithstanding the disclaimer, that the device of the globe with 'Food' or the device of the globe in conjunction with the word `World, there was no disclaimer with regard to the trademark FOODWORLD as a whole.

M/s Foodworld stated that they became aware of the adoption of the trademark by Foodworld Hospitality only when a notice of opposition was sent to the firm with regard to their trademark application for the mark Foodworld. However the proceedings relating to this were stated to be pending. It was also asserted that the use of the mark by Foodworld Hospitality was dishonest and mala fide and that a permanent injunction was prayed for along with damages caused due to the illegal action of the Foodworld Hospitality.

It was contented on behalf of Foodworld Hospitality that M/s Foodworld cannot claim any exclusive right over the trademark as the trade mark application of the said mark was advertised in the Trade Marks Journal with a disclaimer condition that the registration of this mark would give no right to the exclusive use of "GLOBE ALONG WITH FOOD & WORLD". It was strongly argued by Foodworld Hospitality that the mark lacked distinctiveness and hence no offence of passing off was attracted.

The Court while dealing with the issues in the case, dealt with the ingredients of passing off in detail. The court referred the decision of the House of Lords in Reckitt and Colman Products Ltd. vs. Borden Inc and others [1990] 1 All ER 873 as the leading modern authority on passing off. The House of Lords thereby explained the "classical trinity" of passing off. The three elements cited to be established for passing off were summarized as having a goodwill or reputation; demonstration that the use will lead the public to believe that the goods or services offered by him are goods and services of the plaintiff; and that the plaintiff should demonstrate that he suffers or is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.

  1. Distinctiveness: The first aspect being distinctiveness, the Court opined that FOODWORLD is a combination of two descriptive words, "food" and "world". In order to prove distinctiveness, it was contended by FOODWORLD that a descriptive and laudatory trademark is entitled to protection if it assumes a secondary meaning. To corroborate this argument Foodworld states that it has been using the mark FOODWORLD continuously since 1987 in relation to the food catering business. Evidence in the form of invoices of Foodworld since 1987, assessment orders in the name of M/s Foodworld, turnover figures and also the feedback of customers were brought forward to establish its mark's distinctiveness as well as reputation.The Court therefore came to a conclusion that the aspect of distinctiveness was established on account of long usage.
  2. Reputation and Goodwill: The second requirement being of Goodwill and Reputation, the Court opined that the plaintiff was able to prove that Foodworld has a reputation and goodwill in relation to catering services.
  3. Deception and Confusion: The third aspect being the key essential, the burden was on the plaintiff to prove that the use of the identical mark by the Defendant has caused deception and confusion amongst the consumers and the trade. The Court asserted that the evidence of actual deception and confusion had to be tabled before the Court, as the mere likelihood of deception and confusion is not sufficient at the final stage of hearing. The Court observed that while M/s Foodworld was able to lead evidence to prove his reputation and goodwill, there was really no evidence of deception and confusion. The Court found it difficult to just go by the mere likelihood of deception or confusion when both the plaintiff and the defendant had been co-existing in their respective fields of business for several years without there being anything to show that M/S Foodworld's business was harmed by the use of an identical mark by Foodworld Hospitality. Therefore actual damage to reputation and business has not been proved.

Further, M/s Foodworld raised the plea of common field of activity stating that as Foodworld Hospitality was in the same field of activity, being in the restaurant business, there was a greater prospect of confusion since the mark used by both of them was identical. However to this Foodworld Hospitality pleaded that Foodworld was involved only in the business of catering whereas they were in the hospitality business, operating restaurants so there was no "common field of activity" that could as such that could lead to any confusion.

The Court in this regard observed the evidence and stated that M/s Foodworld essentially provides catering services for the Railways by providing packaged food on trains. The Court noted that they did not seem to have entered into any other business activity during these years. On the other hand, Foodworld Hospitality had not entered in to the field of outdoor and institutional catering and none of its restaurants are using the name FOODWORLD. Therefore no common field of activity existed.

Concluding the various issues raised and arguments advanced, the Court as a final conclusion stated that as long as Foodworld Hospitality did not enter the fields of business of institutional and outdoor catering services, they could continue to use its present corporate name and can conduct its business, as at present. The Court further held a condition that in case Foodworld Hospitality entered the business of institutional and outdoor catering services, they will be liable to be restrained from using the mark as part of their corporate name and as part of its business and services. .

© Lex Orbis 2009

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