India: Dispute Over LIA and DIA Resolved by Delhi High Court

Last Updated: 23 March 2006
Article by Manisha Singh Nair

Ranga Rao & Sons is a registered partnership firm, engaged in the business of manufacture of incense sticks. The firm is stated to be a part of the Rangsons group, which was started as a proprietorship concern in 1948. The group has diversified into various fields including electronics and education. They are also manufacturers of the largest brands of incense sticks, namely Cycle Brand Agarbathies and Cycle Three-In–One Agarbathi, apart form several other brands.

The Company claims to be a pioneer in the industry with innovative marketing and packaging techniques. They claim to have introduced the concept of three fragrances in one pack, unique hexagonal and rectangular packaging, and professional marketing and management. They also claim to have spent a considerable amount of money on consumer awareness and brand building. The company’s strength is said to lie in its innovativeness and originality of fragrance, keeping in mind, the preferences and requirements of consumers. In this process, the LIA range of products was launched in the market, which included unique fragrances such as fresh/seashore, nature’s gift and spice world.

The brand name LIA was stated to be distinctive and arbitrary, unlike other brands, named after Gods or associated to rituals or worship. The name is claimed to be contemporary having a sophisticated ring to it. Introductory packs of the brand were sold at Rs. 15 for 35 sticks while, the others sold 20-22 sticks at Rs. 10 per pack. The packaging cartons of the agarbathies are said to be distinctive in style with different colours, each corresponding to a fragrance. The various fragrances are packed in cartons uniform in design and layout, which vests under the Ranga Rao & Sons, under section 17 of The Copyright Act, 1957.

Ranga Rao & Sons claims to have a large presence in the Delhi market apart from the rest of the country. The products have been widely advertised and sales have been observed to be on the rise. Ranga Rao & Sons claim that the uniqueness in name and packaging is the single source identifier of the said product.

Anil Garg & Ors. market their products under the brand name DIA in cartons identical to that of the Ranga Rao & Sons, in respect of six of varieties of LIA. The mark is deceptively similar to that of the Ranga Rao & Sons’ mark, both phonetically and visually. There appears to be a commonality in the choice of names, price, and quantity per pack, theme and layout, which are beyond mere coincidence.

N. Ranga Rao & Sons contended that the address printed on the pack was found to be non-existent, but that at the said address a different enterprise existed. The goods are stated to be manufactured in Noida, and a showroom to be in Ghaziabad. In spite of sales being primarily in Delhi and U.P., the packages were found to bear Devnagri, Tamil, Kannada and Telugu scripts. This is stated to have been a deliberate attempt, in order to deceive the consumers, so that they may perceive their products to be that of Ranga Rao & Sons. Moreover, Anil Garg & Co., trading under the name ‘Divya Incense (India) Pvt. Ltd’, would have chosen the name because of its of phonetic similarity to Ranga Rao & Sons’ product. The pricing and quantity of the product are also the same.

Ranga Rao & Sons contended that the test of an unsuspecting consumer of average intelligence and imperfect recollection be applied and in such a case he would be deceived. They further contended that the similarity was not merely coincidental but was rather a deliberate act of copying, to confuse customers. They further contended that it is not the copy of just one product but a whole range. Ranga Rao & Sons alleged Anil Garg & Co.’ act to be an attempt to pass off goods as that of Ranga Rao & Sons’, an act of unfair competition and infringement of copyright They also alleged that the similarity in packaging would stimulate ‘initial interest confusion’ which is a species of passing off. Anil Garg & Co. was also accused of utilization of the Ranga Rao & Sons’ goodwill, diluting their brand-name equity in the products.

The Ranga Rao & Sons prayed for a decree of permanent injunction in respect of the six DIA packages in question, a decree for delivery up and for damages worth Rs. 21,50,000.

Interim relief was granted in favour of the Ranga Rao & Sons and Local Commissioners were appointed. They visited the premises to find that M/s Keerti Parimala Works, also manufacturers of agarbathies did job work for M/s Divya Incense, which held its office at that site. They learnt that the Anil Garg & Co. were situated elsewhere. The new premises were also visited, where the six brand names were manufactured and thereafter the goods were shipped to Noida. The Local Commissioner recovered the infringed goods both from Noida and Ghaziabad.

Anil Garg & Co. contested the suit, saying that their trademark was not DIA but LOTUS DIA, which is a composite mark and hence no question of deception arose. It also claimed that LIA was not a trademark but a quality mark. They claimed to have adopted the trademark LOTUS DIA bona fide during the course of business, while DIA referred to small earthen lamps used commonly on religious occasions. They also claimed the trade dress and artistic features of the two to be completely different. Anil Garg & Co. further denied the allegation of passing off and claimed that Ranga Rao & Sons were pressing for higher damages than suffered. Further, they had engaged an artist at Bangalore to create the copyright and the labels/packaging. It was thus stated that the Ranga Rao & Sons is not entitled to injunction or damages.

Eight issues were framed during the pleadings of the parties. The learned counsel for the parties agreed that Ranga Rao & Sons would not claim damages and that Anil Garg & Co. would not press them on the issue relating to the competency of institution of the suit. It was also agreed that the documents read by both the parties were to be read without formal proof and that no oral testimony was acquired for adjudication of the suit.

The first issue raised was whether Ranga Rao & Sons is a registered partnership firm and that if the suit was filed and to what effect had it been instituted. Anil Garg & Co. did not press the issue and the fact that the suit had been properly instituted was not disputed. The details in respect to partnership were set relevant with supporting documents and the issue was answered in favour of Ranga Rao & Sons.

The findings arrived with regard to the second and third issue show that Anil Garg & Co. had deliberately tried to pass off the goods and if all the features were taken together, it constituted a clear case of deception. The defence of honest concurrent use was made unavailable to Anil Garg & Co..

The next issue dealt with Ranga Rao & Sons’ guilt of suppressing material facts and making false statements, which was answered in favour of Ranga Rao & Sons. The next two issues were linked to the Anil Garg & Co.’ claim of having honestly adopted and used the trademark or at least be entitled to the benefit of an honest concurrent user. This issue was answered against Anil Garg & Co., with reference to the opinion held in the matter of the second and third issue.

The issue regarding barring on the suit on account of delay, acquiescence, laches, estoppel and waiver, was also answered against Anil Garg & Co. since they did not refer to this aspect in their written synopsis. Ranga Rao & Sons themselves gave up the issue regarding relief.

Ranga Rao & Sons, in view of the above was granted a decree of permanent injunction against Anil Garg & Co. and anyone acting under them. including retailers, agents, etc. The decree was made operational in respect of the offending packaging in question or any deceptively similar packaging to that of Ranga Rao & Sons’ product range LIA.

© Lex Orbis 2006

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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