India: Parle Group Engaged In A House Marks Dispute

Last Updated: 15 June 2009

Large business facilities in India have often sprung from family collaborations and partnerships. In doing so, the family name often plays a key role and gains a prominent place as a "house mark" often inviting litigation. The case of Parle Products v. Parle Agro 2009 (39) PTC 405 revisits the dicta behind the use and sharing of "house marks".

Parle Products and Parle Agro, parties to the suit are Companies incorporated by two Groups of the family of Mohanlal Dayal Chauhan who had been carrying on business in the name of "Parle" as a part of their corporate name in respect of products for which each of these companies obtained registered trademarks, for the use of the word "Parle" singly or in conjunction with other words. Parle Products deals in biscuits and confectioneries, while Parle Agro is engaged in the business of beverages as also confectioneries which are manufactured and marketed by them. Parle Products contended that the two groups being part of the same family, hailing from Vile Parle, Mumbai were carrying on business in distinct and separate fields and that neither of them could trample upon the field of business activity of another so as to use any trade name or market any product which would be similar to the registered trademarks of that other.

Elucidating facts regarding their inception and the incorporation of the companies, it was accepted by both parties that each of them were entitled to use the word "Parle" for the specific products which each group was initially manufacturing or looking after. Parle Products expressed no grievance regarding the use of the word "Parle" by Parle Agro in respect of its beverage products. The same position is propounded by Parle Agro with the use of the mark in respect of confectioneries and biscuits by Parle Products. Each of these corporations was observed to have used separate names /marks / brands for each of their separate products.

The Court noted that the initial business being in the nature of a Partnership Firm, expanded and diversified to form a Limited Company which later was split to form another Company, leading to the division of the management and shares held amongst the brothers being sold so as to "exit" from one of the Companies. Their trademarks using the word "Parle" have been registered under Classes 29, 30 and 32 of the Trade Marks Act, 1999.

The Court noting the expansion and diversification into the confectionery arena observed that Parle Agro used their product identification mark and brand name "Mintrox" and "Buttercup" in conjunction with the words "Parle" or "Parle Confi" on the labels of the products.

The Court noted that there was no Agreement between the parties, by which either of the groups was restrained from carrying on business of the other group for any period of time or within any place upon the "exit" of the partners. Parle Products did not dispute Parle Agro' right of carrying on business in confectioneries or biscuits. Parle Products' contention was only with respect to the use of the trademark "Parle" singly or in conjunction with its product identification marks such as "Buttercup" or "Mintrox".

In response, Parle Agro contended that Parle was a "house mark" and that the same could be used by members of the family of Parle to denote the lineage for any business – confectionery and biscuits or beverages. They further stated that they could carry on the business of confectioneries and biscuits by virtue of the object clause in its Memorandum of Association. It was argued that initially all the brothers were partners and later as Directors of the Limited Company formed, being Parle Bottling Company Private Limited, had knowledge of the object. They also averred that one division of their company was called "The Parle Confi Company" which belonged to the Parle Group of Companies. Therefore they contended that use of the word "Parle" for products manufactured by their confectionery division was honest and bona fide. They also contended that they had acquired enormous reputation and goodwill in its product identification mark under the house mark "Parle" and confusion or likelihood of confusion was said to be absent.

The Court noted that the trademarks of the Parle Products must be first seen and appreciated. The earliest registration of 1940s in the name of "Parles" and "Parle" continued until about 2001 for various products showing Parle on their labels. In 2005, Parle had registered the trademark "Parle Mint" and had also registered the mark "Parle Logo". Parle Products admitted that they manufactured various biscuits such as Glucose, Monaco, Krackjack, etc but the names of these were not shown as separate trademarks. The Court opined that these were identification marks of those products which Parle Agro stated to be "product identification marks." The Court noted that Parle Products' business upon its expansion could not continue selling the products only in the name of Parle or Parles since the products were being sold under a host of brand names.

The Court opined that a Company or a business house which manufactures an array of products would require separate brands for each product to give an identity to the product, which in turn would enhance the recognition of the product and distinguish it from the others. The fact that the two groups hailed from a single seminal partnership were said to be entitled to carry on both the businesses of the partnership Firm was not disputed. The Court stated that the aspect that needed to be looked into was if the use of the word "Parle", be it a house mark or otherwise along with a new word "Confi" was feasible.

The Court to address this question, drew an analogy between the UK case of Anderson & Lembke Limited vs. Anderson & Lembke Inc., (1989) R.P.C. 124 dealing with the rights of the parties having a common origin but trading under dissimilar names using the word of the original Company. The Court noted that Parle Agro manufactured toffees which are confectionery items under identifiable product names but in smaller print referred to, its own Company division looking after the confectionery business. Further, in the absence of Parle Products having a registered trademark "Parle Confi" the use of that mark by Parle Agro could not per se be forbidden. The Court stated that the question of any misrepresentation being caused vide the use of such a mark would have to be examined.

The Court noted that in a situation where a third party were using the word "Parle", they would be restrained by the Court from doing so, however, in the present scenario where Parle Agro was entitled to enjoy the mark by virtue of lineage, is "stating no more than the truth". Since Parle Agro's product name was noted to be entirely different, the words "Parle Confi" were said to at best include additional truthful information that it was a division, of the beverage manufacturing company. As in the case of Anderson, the Court stated that the words "Parle Confi" were merely a reference to the parent Company, but the fact that they held a distinct corporate name made it clear that it does not refer to Parle Products or its business. The Court stated that two concepts i.e. the "product name" or the "brand name" and the "house name" were existent : Parle being the house name is Parle and the different product names being brand names for each of their products.

Parle Products asserting their contentions cited and discussed several precedents including the case of Ramdev Food Products Pvt. Ltd. vs. Arvindbhai Rambhai Patel & ors., 2006 (33) PTC 281(SC) and the three- fold test for confusion in the case of Canon Kabushiki Kaisha vs. Metro-Goldwyn-Mayer Inc., (1999) RPC 117 referred therein. The considerations under the test aid down are:

  1. The public would confuse the sign and mark in question. (Direct confusion).
  2. The public would make a connection between the proprietor of the sign and the mark and confuse them. (Indirect confusion)
  3. The public would consider the sign to be similar to the mark although the two are not confusing. (Association)

The Court differentiating the cases, the Court stated that the ambit set out in the case of Ramdev was correct upto the point that if Parle Agro entered the business of confectioneries and biscuits, it would do so without using a trademark deceptively similar to that of Parle Products' mark but that it could not do so by infringing Parle Products' mark, i.e. it could not "traffic in trade" as coined in Ramdev. The Court also observed that the mark "Parle Confi" was not deceptively similar to any of the Parle Product's trademarks.

The Court also noted that in the present case no restrictive MOU between the parties existed that that in spite of the parties' "exit" from each others' businesses by sale of their shares, they never ceased to be members of the house of Parle.

Parle Agro brought to the notice of the Court, the Judgment of Astra Pharmaceuticals (P) Ltd. vs. Collector of Central Excise, Chandigarh, (1995) 2 SCC 84 whereby the notion of a house mark depicted that:

"677- A. House mark and product mark (or brand name). - In the pharmaceutical business a distinction is made between a house mark and a product mark. The former is used on all the products of the manufacturer. It is usually a device in the form of an emblem, word or both. For each product a separate mark known as a product mark or a brand name is used which is invariably a word or a combination of a word and letter or numeral by which the product is identified and asked for. In respect of all products both the product mark and house mark will appear side by side on all the labels, cartons etc. Goods are ordered only by the product mark or brand name. The house mark serves as an emblem of the manufacturer projecting the image of the manufacturer generally."

The Court stated that the word "Parle" did constitute a house mark, vis-ŕ-vis the parties in dispute. Several precedents and authorities were taken note of in concluding so. The Court opined that in Parle Agro would have complied with the procedure under the Companies Act, 1956 and in this pursuance; Parle Products could hold no objection in the use of the same in the absence of any objections taken by them under Section 21 of the Companies Act, 1956. In view of being a house mark, Parle Agro urged that it must be entitled to use the same. The Court held that the same could not be restrained and permitted the same upon certain directions issue by them.

© Lex Orbis 2009

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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