India: Supreme Court Of India Says That ‘Monopoly' Cannot Be Enjoyed Over Entire Class Of Goods

Last Updated: 23 August 2018
Article by S.S. Rana & Co. Advocates

Trademark are not monopolies, they are just brand names or logos that identify the producers of products or services in the marketplace. Trademarks only increase the competition in the market by giving a stronger foothold to one business in comparison with another, as it would give better recognition to that company in the eyes of the consumer.

Recently, the Hon'ble Supreme Court of India in the case of M/S. Nandhini Deluxe vs. Karnataka Co- Operative Milk Producers Federation Ltd held 'that the proprietor of a trade mark cannot enjoy monopoly over the entire class of goods particularly when he is not using the said trade mark in respect of certain goods falling under the same class.'

Brief Background

  • Karnataka Co-Operative Milk Producers Federation Ltd (hereinafter referred to as 'the Respondents') stated that they adopted the mark 'NANDINI' in 1985 and since then has been producing and selling milk and milk products. The Trademark registration of the mark 'NANDINI' belongs to it in Class 29 and Class 30.
  • Nandhini Deluxe (hereinafter referred to as 'the Appellants') was running restaurants under the mark 'NANDHINI' since 1989. It applied for registration of the said mark in respect of various foodstuff items sold by it in its restaurants.
  • The registration of the same was opposed by the Respondent. However, the objections of the Respondent were dismissed by the Deputy Registrar of the Trade Mark who allowed the registration of the 'NANDHINI' mark in favor of the Appellant.
  • The Respondent's grounds for opposing the registration of the 'NANDHINI' mark were that:

    • It was deceptively similar to the mark of the Respondent and was likely to deceive the public or cause confusion.
    • The Respondent argued that it has maintained a long and sustained use of the mark 'NANDINI', because of which it has acquired a distinctive character and was well-known to the public which associated 'NANDINI' with the Respondent.
    • It further contended that it had exclusive right to use the said mark and any imitation thereof by the Appellant would lead the public to believe that the foodstuffs sold by the Appellant were in fact that of the Respondent.
  • After rejection by the Deputy Registrar, the Respondent filed an appeal with the Intellectual Property Appellate Board, Chennai (hereinafter referred to as 'the IPAB') praying that the registration given accorded to the Appellant should be cancelled.
  • Vide order dated October 4, 2011, the appeal of the Respondent was allowed by the IPAB. Further, vide order dated December 2, 2014 (hereinafter referred to as 'the impugned order), the writ petitions filed by the Appellant in the High Court of Karnataka (hereinafter referred to as 'the High Court'), against the order of the IPAB, were dismissed by the High Court.
  • The reasons for rejecting the writ petitions of the Appellant in the impugned order of the High Court were:

    • The mark NANDINI as held by the Respondent has acquired a distinctive character and has become well-known;
    • The use of another mark is different only in one alphabet but with no difference in spelling or pronunciation in the local language and would very likely to cause confusion in the minds of public if allowed to be registered for the commodities falling in the same class;
    • Argument of the Appellant herein that it was running the business of restaurant since 1989 and the Respondent had started using the mark 'NANDINI' since the year 1985 only for milk and not for other products was rejected on the ground that there is no foundation in facts for the aforesaid argument and no material was produced to substantiate the same.

Competing Marks

Issue

  1. Whether the Appellant is entitled to seek registration of the mark 'NANDHINI' with respect of the goods in Class 29 and 30?
  2. Whether the mark 'NANDHINI' of the Appellant infringed the mark 'NANDINI' of the Respondent?

Appellant's Contentions

  • It contended that both the High Court and IPAB grossly erred in interpreting the provisions of Section 11 of the Trademarks Act (hereinafter referred to as 'the Act') to mean that once a Trademark has acquired a distinctive character, then registration of the trade mark is barred and is likely to cause confusion if it is allowed to be registered in the commodities within the same class.
  • It contended that no proper weightage and consideration was given to the fact that goods and services of the Appellant were totally different from that of the Respondent and, therefore, there was no likelihood of confusion or deception among the public.
  • It highlighted the principle of law laid down in Vishnudas Trading Co. v. Vazir Sultan Tobacco Co. Ltd1 wherein it was held that the monopoly under Trademark only extends to the goods which are falling in a particular class and not the entire class of goods and the trade mark which is identical or similar in nature can be registered for the goods which are falling within the same class inasmuch as giving the monopoly to the entire class of goods and services to the registered proprietor would lead to trafficking in the trade mark which is not the object and the purpose of the Trade Mark Act.
  • It argued that since the Respondent was in the business of manufacture and marketing of milk and milk products only and had admittedly not expanded its business to any other items in Class 29 or 30, the case of the Respondent at the highest could be qua milk and milk products only. It further submitted that the Appellant was ready to give concession by not claiming any registration or Trademarks which fell in the category of milk and milk products.

Respondent's Contentions

  • It contended that the IPAB not only concluded that 'the word Nandhini has acquired a distinctiveness' but also that 'there is no doubt that if goods under Class 29 and 30 bearing the Respondent's Trademark come out in the market, the average consumer would conclude that it belongs to the Respondent'.
  • It further contended that all the essential characteristics of a well-known mark as understood under Section 11(2) read with Section 11(8) of the Act were found by the IPAB in the Respondent's mark 'NANDHINI'.
  • It submitted that its mark 'NANDHINI' was a household name in entire South India, and more so in Karnataka. Therefore, there was no doubt as to 'NANDHINI' being a well-known mark. It further submitted that the significance of Nandhini, as a symbol of purity and the source of wholesome milk was the reason for the adoption of that word by the Respondent.
  • It argued that the Appellant's contention regarding honest and concurrent user was untenable as it was well aware of the widespread use of the mark Nandhini by the Respondent and has admitted that they were purchasing Nandhini milk for their restaurant.

Court's Judgement

  • The Court took note of the fact that though the Respondent was a prior user, the Appellant was also using its trade mark 'NANDHINI' for 12-13 years before it applied for registration of the said Trademarks.
  • It held that though the goods of the Appellant as well as Respondent fall under the same Classes 29 and 30, they were different from each other. It further took note of the fact that 'NANDINI/NANDHINI was a generic word, as it represents the name of Goddess and a cow in Hindu Mythology, and not an invented or coined word of the Respondent.
  • Therefore, on question of deceptive similarity it was held that, 'though there is a phonetic similarity insofar as the words NANDHINI/NANDINI are concerned, the trade mark with logo adopted by the two parties are altogether different. The manner in which the Appellant has written NANDHINI as its mark is totally different from the style adopted by the Respondent for its mark 'NANDINI'. Further, the Appellant has used and added the word 'Deluxe' and, thus, its mark is 'NANDHINI DELUXE'. It is followed by the words 'the real spice of life'. There is device of lamp with the word 'NANDHINI'. In contrast, the Respondent has used only one word, namely, NANDINI which is not prefixed or suffixed by any word. In its mark 'Cow' as a logo is used beneath which the word NANDINI is written, it is encircled by egg shape circle. A bare perusal of the two marks would show that there is hardly any similarity of the Appellant's mark with that of the Respondent when these marks are seen in totality.'
  • It also observed that 'the reasoning of the High Court that the goods belonging to the Appellant and the Respondent (though the nature of goods is different) belong to same class and, therefore, it would be impermissible for the Appellant to have the registration of the concerned trade mark in its favour, would be meaningless. That apart, there is no such principle of law.'
  • On the issue of monopoly and Trademarks, the Court held that:

    'The proprietor of a trade mark cannot enjoy monopoly over the entire class of goods and, particularly, when he is not using the said trade mark in respect of certain goods falling under the same class. In this behalf, we may usefully refer to Section 11 of the Act which prohibits the registration of the mark in respect of the similar goods or different goods, but the provisions of this Section do not cover the same class of goods.'
  • Therefore, the impugned order was set aside and restored the Registrar's order allowing registration in favor of the Appellant.

Footnote

1. (1997) 4 SCC 201

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 4012 3000). Our website can be accessed at www.ssrana.in

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