Introduction

The Delhi High Court (“DHC” or “court”) pronounced a landmark judgment on November 01, 2010 in the case Marico Limited vs. Agro Tech Limited.¹ This judgment deals with the use of descriptive and generic expressions as trade marks and whether registration of such trade marks can prevent the court from granting injunctions. The court examined the scope of granting an injunction in case of an infringement as well as passing off claims.

The present bulletin analyzes the scope of judicial interpretation of the provisions of the Trade Marks Act, 1999 (“Act”) as well as the precedent set by the aforementioned judgment while dealing with generic expressions as trade marks.

1.0 Facts of the case

The plaintiff was a seller of edible oil and the owner of the registered trade marks “LOSORB” and “LO-SORB,” which were used in relation to the edible oil. The plaintiff also used the term “LOW ABSORB” but the same was not registered. The rationale of using these terms on the packaging of the oil was because the oil contained an anti-foaming agent which reduced the absorption of oil during the process of frying food items. Similarly, the defendant was also selling edible oil that contained an anti-foaming agent. The packaging of the defendant’s product contained the expression “LOW ABSORB TECHNOLOGY.” Based upon these facts, the plaintiff filed a case for infringement as well as passing off against the defendant on the ground that the expression “WITH LOW ABSORB” was deceptively similar to the plaintiff’s two registered trade marks “LOSORB” and “LO- SORB” as well as the unregistered mark “LOW ABSORB.”

At this point it is also important to note that the plaintiff was selling its edible oils under the trade marks “Sweekar” & “Saffola,” whereas the defendant was selling it under the trade mark “Sundrop.” These trade marks were in addition to the trade marks mentioned in the above paragraph.

2.0 Issues

Keeping in view the fact that the trade marks “LOSORB” and LO-SORB” were registered and “LOW-ABSORB” was unregistered but had been in continuous use by the plaintiff, the DHC framed the following issues to adjudicate upon the dispute:

1. Whether the registration of the trade marks “LOSORB” and “LO-SORB” gives the plaintiff an exclusive right to use them and consequently an action for infringement is maintainable if the allegedly infringing trade mark is deceptively similar or nearly identical to

the registered trade mark, i.e. does registration confer only prima facie validity and whether, in fact, the court can deny an injunction in spite of registration?

• Whether the use of “LOW ABSORB TECHNOLOGY” by the defendant in relation to edible oil product amounts to passing off the goods of the plaintiff which uses the unregistered trade mark “LOW ABSORB?”

3.0 Observation of the DHC

The court divided its observations under the aforementioned issues framed and first adjudicated upon the issue of passing off alleged by the plaintiff.

3.1 Passing Off

While determining the second issue framed above, the DHC relied on the landmark judgment of Cadila Healthcare Ltd. v. Gujarat Co-operative Milk Marketing Federation Ltd. & Ors.² This case dealt with the use of the trade mark “Sugar Free” as an expression describing the product and not primarily as a trade mark. The makers of “Sugar Free,” an artificial sweetener alleged a case of passing-off against the makers of “D’lite,” a drink that is free from sugar. The court held that “Sugar Free” is not an inherently descriptive word but merely descriptive in nature but at the same time noted that if a maker of an artificial sweetener used the same trade mark, the makers of “Sugar Free” will have a just cause in seeking restraint of use.

Applying the same principles in the instant case, the DHC observed that the expression “LOW ABSORB” is a common descriptive adjective and is a combination of two popular English words that are descriptive in nature. While making this observation, the DHC also took a firm view against persons who are the first to block descriptive trade marks and stated that such persons should be discouraged.

The court observed that section 9 of the Act provides for absolute grounds for refusal of registration of a trade mark and section 9(1)(b) specifically states that any mark which consists of indications which designate a particular kind, quality or other characteristics of the goods shall not be registered. Recognizing the principle envisaged in section 32 of the Act, even though section 32 does not apply to proceedings of a civil court, that if a mark is registered in breach of section 9(1), it shall not be declared invalid if it has attained distinctiveness, the court held that the trade mark “LOW ABSORB” would have acquired a “distinctive character” if the public would immediately and unmistakably co-relate the mark with the source or a particular manufacturer/owner thereof. Based on the facts, the trade mark “LOW ABSORB” had been in use only for a period of seven years, which was not a sufficiently long period of time to establish distinctiveness. Further, it was difficult to assess whether the volume of sales of the plaintiff under the brands “Sweekar” and “Saffola” was due to the trade mark “LOW ABSORB” or due to the trade mark “Sweekar” and “Saffola.” Accordingly, the DHC held that no case of passing off was established as the mark squarely fell under section 9 (absolute grounds for refusal of registration), even though it was not registered.

3.2 Infringement

This was an extremely important question adjudicated upon by the DHC as to whether registration of a trade mark confers an exclusive right to use the expressions “LOSORB” and “LO-SORB” and prevents anyone else from using any trade mark which is identical or deceptively similar to the registered trade marks. The application filed with the trade mark registry for registering “LOSORB” and “LO-SORB” stated that these marks were “proposed to be used.” Based on this, the court concluded that the two trade marks were not distinctive on the date of filing the application. Further, the DHC also stated that the trade marks were only a minor variation of an English word “LOW ABSORB” and would fall within the ambit of section 9(1)(b) of the Act. Since the marks were not distinctive when the application for registration was made, and any distinctiveness was only subject to the “proposed” use, the court concluded that the two marks did not even fall under the proviso to section 9(1) of the Act.³ Based on the aforementioned, the DHC deemed the two registered trade marks as prima facie invalid.

The court further concluded that if the arguments of the plaintiff are accepted, any person who is successful in getting a minor modification of a descriptive English word or expression registered, may prevent a purely descriptive use of a normal word or expression on the ground that it would be identical with or deceptively similar to a registered trade mark. Such situations, according to the DHC, should be struck down with a heavy hand.

3.3 Harmonious interpretation of proviso to section 9(1), section 31(2) and section 32 of the Act

As stated above, since the two registered trade marks “LOSORB” and “LO-SORB” were not distinctive at the stage of registration, the proviso to section 9(1) did not apply and hence the marks could not be registered. However, the DHC also speculated a situation wherein the marks were not distinctive at the time of registration but post-registration, there could be a possible scope of distinctiveness that may justify the registration. In light of this, the court interpreted the provisions of section 9(1), 31(2) and 32 of the Act.

Section 9 pertains to “absolute grounds for refusal of registration” and proviso to section 9(1) states that if before the date of application, the mark has acquired a distinctive character as a result of its use or becomes well-known, it may be registered. Section 31 states that “registration to be prima facie evidence of validity” and section 31(2) specifically states that in all legal proceedings, a registered trade mark shall not be held invalid on the ground that it was not trade mark that could be registered under section 9 unless there is evidence of distinctiveness which was not submitted to the registrar of trade marks (“Registrar”) before registration. Section 32 protects registration on the ground wherein distinctiveness of a trade mark has been obtained after registration but before commencement of any legal proceedings challenging the validity of the registration.

The DHC concluded that proviso to section 9(1) only applies on the date of the application for registration of the trade mark whereas section 31(2) states that a mark may be registered if distinctiveness is acquired after the date of application but before its registration, which in India can be an extremely long drawn process. With respect to section 32 of the Act, the court concluded this even though this section is applicable to all “legal proceedings,” by using the expressions “declared invalid” and “challenging the validity of such registration,” the scope of this section is limited only to cases where an application for cancellation of a registered mark is filed with the Registrar under section 57⁴ of the Act. Accordingly, evidence with respect to distinctiveness under section 32 of the Act can only be filed with the Registrar/appellate board and not in proceedings before a civil court where an infringement action is filed.

4.0 Findings of the DHC

Based on the above analysis, the DHC did not accept the plaintiff’s contentions as the trade mark was not distinctive and also because the defendant was not using the expression “LOW ABSORB TECHNOLOGY” as a trade mark but only as an expression describing the technology in its product. The court concluded that-

• Marks falling under the scope of section 9(1) of the Act should not be offered protection as a registered trade mark. However, in case marks falling under section 9(1) of the Act are registered, the Registrar should ensure that the distinctiveness should be of an undisturbed user for a very large period of time.

• A civil court, in a suit for infringement of a registered trade mark, is entitled to consider the validity of registration for the purpose refusing grant of an interim injunction, but only after the objection as to the validity of registration is taken up by the defendant in the written pleadings.

• While passing interim orders, evidence to determine distinctiveness should only be taken up till the date of registration of the trade mark and not after that. However, in cancellation proceedings, post registration evidence for establishing distinctiveness can be considered as well.

• Most importantly, even if there is finality to the registration of a trade mark, the defendant can, in an infringement suit, take statutory defenses provided under the Act to defeat the infringement action.

Conclusion

The DHC laid down a very important principle that registration of a trade mark is only a “prime facie” evidence of its validity and not “conclusive” evidence. This implies that the basis of registering of a trade mark can be a subject matter of adjudication even after the registration process is concluded by the Registrar. Similar principles were also upheld in a more recent 2011 judgment of the DHC in Bhole Baba Milk Food Industries Limited v. Parul Food Specialties Private Limited.⁵ This judgment should not act as a deterrent for parties to register their trade mark, but warn them of what to expect in case a suit for infringement is filed.

Authored by: Dhruv Suri

1 174(2010)DLT279

2 2009(8)AD(Delhi)350

3 The proviso to section 9(1) states that if a mark has attained distinctiveness on the date of filing the application for registration, then such mark may be registered even though it may be in breach of section 9(1)

4 Section 57 states the power of the Registrar to cancel or vary the registration of a trade mark