Understanding Through Case Analysis
The purpose of this Note is to analyse the law relating to the trademarks, which are composed exclusively of generic terms or are descriptive of the nature of the goods or services and are in no way distinctive of the manufacturer or the service provider, through the decision of the Hon’ble Delhi High Court in Cadila Healthcare Ltd. vs. Gujarat Co-operative Milk Marketing Federation Ltd. and Ors., relating to the dispute regarding the use of the term ‘Sugar Free’ and to examine its significance in the modern day context. The Note begins with a brief mention of the facts, the procedural history of the Case, contentions of the parties and the decision of the Division Bench of the Delhi High Court. The Decision has been examined in light of the decisions of the Supreme Court and other High Courts. This Note also examines the considerations of the courts while deciding the exclusive usability of a trademark which is composed of terms which are generic in nature or are descriptive of the products.
Facts Of The Case
Cadila Healthcare Ltd. had launched the product ‘Sugar Free’ containing ‘aspartame’, which is a protein derivative and a substitute for sugar, in the year 1988. The product under the trademark ‘Sugar Free’ was originally coined and adopted by Cadila Chemicals Ltd. In 1997, certain assets of Cadila Chemicals Ltd including the trademark ‘Sugar Free’ were transferred to Cadila Healthcare Ltd. and therefore the latter became the owner of the trademark in dispute. The respondents, the Gujarat Co-operative Milk Marketing Federation Ltd. also adopted the term ‘Sugar Free’ for marketing their frozen dessert. This resulted in the dispute.
Procedure Of The Case
A suit was filed before the Single Judge of the Delhi High Court who refused to grant an injunction to Cadila Healthcare Ltd even after coming to the conclusion that its Trade Mark ‘Sugar Free’ had acquired a considerable degree of distinctiveness amongst the traders and consumers of the product and acknowledging that the Trade Mark had achieved a secondary meaning only with respect to the sugar substitute and not other products.
The expression ‘Sugar Free’ is inherently descriptive in nature and has become publicis juris in relation to food and beverages.
However he observed that there may be a possibility that such a consumer may be led into believing that the appellant’s product is an ingredient of the respondent’s frozen dessert. Therefore, he restrained the respondent from using the expression ‘Sugar-free’ in the large font size in which it was conspicuously bigger than its trade mark ‘Amul’. The defendant was allowed to use the expression ‘Sugar-free’ as part of a sentence or as a catchy legend, so as to describe the characteristic feature of its product. The appeal in the instant case was against the aforesaid order.
Contentions Of The Parties
The appellant contended before the Division Bench of the High Court that the trade mark ‘Sugar Free’ is a coined word and an ungrammatical combination of two English words and that even if we assume that it is not a coined word, even then it is not descriptive of the appellant’s product but merely suggestive. It was further contended that at best ‘Sugar Free’ is suggestive of the use to which the chemical compound can be put to. A correct description for such chemical compound is ‘Artificial Sweetener’ or ‘Sugar Substitute’.
The appellant also contended that the Gujarati advertisement of the respondent translated as “India’s First Specially Created Low Fat Diabetic Delight”, but ‘Sugar Free’ continued to be stated as such in Gujarati clearly indicating the use of these words in the trade mark sense. The hoardings show the use of Sugar Free also in slogan ‘Sugar Free Guilt Free Worry Free’ in addition to ‘Sugar Free’ in large lettering clearly indicating use in trademark sense and not in descriptive sense.
The respondent replied that the use of the word ‘Free’ as a suffix to means ‘without’. The combination of the words Sugar and Free is common and used extensively in a wide variety of contexts to indicate a category of food. The respondents also submitted that the term ‘Sugar Free’ is always used along with the trademark ‘Amul’ and so there is no chance of consumers getting misguided or confused and that as regards the issue of ‘passing off’ was concerned, the respondents submitted that there was no evidence of damage or likelihood of damage on account of use of the mark by the respondent. The mere allegation of confusion was insufficient and in the absence of misrepresentation or deception, an action for passing off cannot be maintained.
The Division Bench held that the appellant’s trademark ‘Sugar Free’ is a coined word or at best it was held to be a combination of two popular English words. The mere fact that the appellant’s product could not be directly consumed or eaten and was merely an additive does not detract from the descriptive nature of the trade mark.
It was further held that in this connection, merely because the attributes of ‘Sugar Free’ products can be described by other phrases cannot detract from the common usage of the phrase ‘Sugar Free’ as denoting products which do not contain sugar and any trader which adopts such mark in the market place, does so with the clear knowledge of the possibility of other traders also using the said mark.
In today’s world where the society is plagued with diseases like diabetes, high blood pressure, obesity, etc, the people require products like ‘Sugar Free’ so that they can enjoy the luxuries of life while avoiding these diseases at the same time. Hence we need to examine the nature of the terms being used to describe the products or services and the class of the targeted consumers also should be kept in mind while deciding whether the trade mark, the main purpose of which is to ‘distinguish the goods or services of one person from those of others’, is being able to serve its purpose.
Class Of Consumers
Before ascertaining whether the expression ‘Sugar Free’ has acquired a secondary meaning and assumed distinctiveness so as so that the consumers identify the term with the plaintiff, what has to be borne in mind is the specialized nature of the appellant’s product hence we should first see the class of consumers who are likely to purchase the products. Being essentially a sweetener, the popularity of the sugar free range of product will have to be necessarily ascertained to be popular amongst the specific or limited class of consumers. ‘Sugar Free’ is an item, usually consumed by the elite class of consumers who are aware of the utility of such products or by those who by virtue of their affluence acquire weight or sugar related problems such as obesity, diabetes, high cholesterol.
In Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Ltd., it was held that the class of purchasers who are likely to buy the goods bearing the marks should be considered on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods.
In Khoday Distilleries Limited (Now known as Khoday India Limited) vs. The Scotch Whisky Association and Ors., the Supreme Court has observed that in the case of expensive products like whisky, the court was concerned with the class of buyer who are expected and supposed to know the value of money, the quality and content of Scotch Whisky. They are supposed to be aware of the difference of the process of manufacture, the place of manufacture and their origin and so they can distinguish between the products.
Hence we see how important a trademark is in the course of trade as the consumers or the beneficiaries of the services recognise and identify their manufacturer or the service provider with the help of the trademark and therefore the class of the consumers of the services or the goods becomes relevant in determining the nature of the trademark.
Secondary Meaning And Generic Term
The expressions like ‘Sugar Free’ are in public domain and cannot be appropriated exclusively by any one person for highlighting the characteristics of his or her products. Examples of numerous products, including cakes, toffees, biscuits, juices, energy drinks, ice-creams, chocolates, candies, and waffles, all of which use the expression ‘Sugar Free’ prominently, are available in the market.
Even judicial notice had been taken of the fact that the expression ‘Sugar Free’ is commonly used to denote that a particular food article does not contain sugar and/or has been sweetened by using sugar substitutes/artificial sweeteners. This implies that the term is inherently generic for the class of products that are made without using sugar, rather that are made using sugar substitutes which are less harmful for the human body. However, in ‘Sugar free-I’ (the instant case when it was decided by the learned Single Judge), it was observed that ‘Sugar Free’ in relation to sweeteners has attained a certain degree of distinctiveness referring to the plaintiff’s products. It must be reiterated here that the test of “considerable degree of distinctiveness” is related only with the artificial sweeteners/sugar substitutes and is limited to such products. ‘Sugar Free’, prima facie, has not attained any distinctiveness outside the field of sugar substitutes/artificial sweeteners. Therefore, in the instant case the plaintiff is not entitled to appropriate a monopoly in the expression ‘Sugar Free’ in respect of any field of activity beyond its range of artificial sweeteners/sugar substitutes.
In the celebrated case, Proctor & Gamble vs. Office of Harmonisation in the Internal Market (OHIM) , famously known as “the Baby Dry case”, it was held that there was an unusual juxtaposition of two independent English words which is unlikely to acquire a secondary meaning. But the judgment in the aforementioned case of ‘Baby Dry’ is inapplicable since the combination was permitted for registration in view of its ‘syntactically unusual juxtaposition’ and as it was not a familiar expression in the English language and was a ‘lexical invention’.
As also submitted by the respondent, it is settled law that unless the plaintiff shows that the words have acquired a secondary significance, such that it has displaced the primary significance and meaning of the word, the defendants should not be prevented from using similar words which are part of common language.
In another case concerning the same plaintiffs, Cadila Health Care Limited vs. Diat Foods (India), the Delhi High Court held that the manner in which the expression was being used by the defendant did not give an impression that it was linked with the plaintiff’s product and the expression ‘Sugar Free’ can be used by anyone as it is a common term.
Therefore, by drawing an analogy, it can be inferred that in the instant case also the use of the term ‘Sugar Free’ in a large font size does no legal damage to the plaintiff, as their products are totally different from the products launched by the respondent and the latter has also used his own trade name ‘Amul’ along with the term, which has solely been used to attract the diet conscious customers who do not wish to take sugar and would prefer having food items which are devoid of harmful contents of sugar and made using sugar substitutes.
In Kaviraj Pandit Durga Dutt Sharma vs. Navaratna Pharmaceutical Laboratories, the apex court confirmed the order of the High Court and held that the word ‘Navaratna’ was a common term in the ‘Ayurveda’ phraseology and so the plaintiff could not be allowed the exclusive use of the term.
In J. R. Kapoor vs. Micronix India, the plaintiff’s mark was ‘Micronix’ while the defendant was using the mark ‘Microtel’. The Supreme Court held that the term micro was descriptive of the products which were produced using a particular technology and it being a common word of the English language, nobody could claim exclusive use over it.
In Competition Review (P) Ltd. vs. N.N. Ohja, the Delhi High Court refused to grant interim injunction as it held that the word “competition” is a word of English language and is a generic term and hence the plaintiff was not entitled to any injunction against the defendant for using the word. It was held that no protection can be given to anyone for using such common words of the language as their trade names.
The Delhi High Court in Rupee Gains Tele-Times Private Ltd. vs. Rupee Times held that the word ‘Rupee’ is synonymous with money. It has been noticed that almost all the financial journals and publications have been using either the word business or financial or money for their journals and newspapers. Merely because one of the companies has used the word ‘Rupee’ to name its financial journal will not mean that the said word cannot be used by any other journal nor it can mean that the journal first using the said word ‘Rupee’ has acquired trademark in the said word. It was further held that ‘Rupee’ is a descriptive word not a distinctive word. The Court observed that everything connected with trade and business is described by money, finances & rupee and it is for this reason that these words are repeatedly used by all the financial journals. Therefore, an injunction was refused.
In SBL Limited vs. Himalaya Drug Company, it was held that:
“nobody can claim exclusive right to use any generic word, abbreviation, or acronym which has become publici jurisdiction. In the trade of drugs it is common practice to name a drug by the name of the organ or ailment which it treats or the main ingredient of the drug. Such an organ ailment or ingredient being public jurisdiction or generic cannot be owned by anyone for use as a trademark”.
The Delhi High Court in the case, Online India Capital Co. Pvt. Ltd. and Anr. vs. Dimensions Corporate, refused to grant interim injunction to the plaintiff for the words ‘Mutual Fund’ as part of domain name ‘www.mutualfundsindia.com’, as it was in its opinion a descriptive/ generic word and no monopoly could be claimed in relation thereto by any person. It was also observed that the words ‘mutual funds’ forming part of the plaintiffs’ domain name of ‘www.mutualfundsindia.com’ was the description of the character of the services offered by it. Finally the Court concluded that to the material placed on record by the plaintiffs prima facie fell short of indicating that the aforesaid word had acquired a secondary meaning which is a pre-condition for granting protection to a descriptive name.
The Supreme Court, while considering the definition of the expression ‘brand name’, in Tarai Foods Ltd. vs. Commissioner of Central Excise, held that the term ‘New Improved Quick Frozen French Fries’ cannot be said to be a trade mark or a brand name as it did not establish the link between the manufacturer and the product and was merely descriptive of the nature and characteristics of the product. The term ‘brand name’ connotes such a mark, symbol, design or name which is unique to the particular manufacturer which when used on a particular product would establish a connection between the product and the manufacturer. The court held that the brand name or the trade mark etc. cannot, therefore, be the identity of a person itself. It has to be something else which is appended to the product and which establishes the link.
In Rich Products Corporation vs. Indo Nippon Foods Limited, the Delhi High Court had declined an injunction in respect of Whip Topping, holding it to be generic term. The use of the words Rich’s and Bells preceding Whip Topping in its opinion removed any possibility of similarity or confusion.
In I.T.C. Limited vs. G.T.C. Industries Ltd. and Ors., the Bombay High Court held that the word ‘Magnum’, can serve as an indication of character or quality or value of the goods since one of its laudatory and descriptive meaning is ‘great’ and that such words/ marks in the present facts and circumstances even otherwise could not have been registered. The Court was of the view that the word ‘Magnum’ is of common usage and purely descriptive and that one could not overlook the facts and circumstances of the case the nature of the product and the class of consumers. The purchasers of these products are common men of all ages which include the persons of having knowledge of English language and hence it was held to be descriptive and not distinctive.
The Calcutta High Court, in Three-N-Products Private Limited vs. Emami Limited, held that the plaintiff could not be allowed a monopoly to use the word ‘Ayur’ as it hinted to the Sanskrit word ‘Ayurveda’ which has these days become a fashionable term which everyone wants to use in order to associate it with their products. The court observed that ‘the more descriptive a word, the closer the resemblance of the word to the efficacy or the nature of the associated product, the more remote will be the presumption as to its exclusivity and more demanding will it be on the plaintiff to establish distinctiveness’. The court held that a person cannot claim the exclusive use of a trademark if it exclusively consists of an indication which serves to designate the nature of the goods.
In I Plus Inc. vs. Consim Info Private Limited and Network Solution Inc, the Bombay High Court held that the terms ‘IndiaProperty’ or ‘Properties’, individually or conjunctively, are common words and there is no element of distinctiveness in these words. The Court observed that normally the owners select the domain name for the business/service they want to provide and/or to attract the customer/business. Therefore to provide service/business on estate property, houses and/or related business in India, the domain name referring to words ‘India’ and ‘Property’ are very common. We can understand that no right can be claimed on these words. Such words cannot be said to be trademark names or brand names.
Thus we see that the person, who chooses a word which describes the product or service or a word which is a generic in nature, should do it at his own peril as he would not get any protection for his trademark. The words which are commonly used in any language or are well known or do not require any effort on part of the plaintiff to be ‘invented’ cannot be used by the plaintiff exclusively unless the word has acquired a secondary meaning, such that the consumers associate the term with the plaintiff and the term has lost its primary meaning. Hence the burden/onus is on the plaintiff to prove that the word has become distinctive with the products or services of the plaintiff.
Provisions Of The Trademarks Act, 1999
Section 9(1) of The Trade Marks Act, 1999 which lays down the law related to the absolute grounds for refusal of registration provides that the trademarks devoid of distinctiveness or those which are solely indicative of the kind or the quality of the goods or services or the trademarks which consist of words customary in the current language shall not be registered.
As we can see that the section very clearly mentions that those marks which completely lack any distinctive characteristic and cannot distinguish between the goods or services of one person from another and those marks which are customary in the established practices of trade shall not be registered as trademarks.
It is clear from Section 9(1)(b) that the mark or indication which serves to designate the quality of the goods, which indeed the phrase ‘Sugar Free’ does, would be an absolute ground for refusal of registration of a mark unless it has acquired a distinctive character. The expression can at best be said distinctive as far as the artificial sweetener of the appellant is concerned and mere starting of the marketing of the drink ‘Sugar Free D’lite’ does not give the appellant the right to claim distinctiveness in the expression ‘Sugar Free’ in relation to all the food products.
Section 6(d) of the Trade Marks Act 1940, also provided that the marks having direct reference to the character or quality of the goods shall not be registered. Therefore the intention of the legislature has remained clear throughout the history of the trade marks law.
It can be concluded that the term ‘Sugar Free’ describes an aspect of the product and is an unprotectable generic name. Thus, ‘Sugar Free’ is a simple word extensively and commonly used, which by its very nature is incapable of losing its primary meaning.
The jural message, therefore, is clear and unequivocal. If a person chooses to use a generic, descriptive, laudatory or common word, he must be aware of the fact that he shall not be allowed the exclusivity in the use of such words. He may at the most bring a suit for passing off and the Court would then look at the labels/ packaging/ trade dresses of the two products in order to determine whether a customer possessing a modicum memory and ordinary intelligence may be so confused as to purchase one product believing it to be the other.
In the instant case regarding ‘Sugar Free’ we find that the plaintiff’s product could have assumed a certain degree of distinctiveness in the market for sugar substitutes but it cannot be held to have assumed a distinctive meaning with regard to other products. Hence we can say that the consumers of the products of the plaintiff and the respondent will not mistake one’s product for the others.
The aforementioned case has been followed in another decision of the Hon’ble Delhi High Court in Rhizome Distilleries P. Ltd vs. Pernod Ricard S.A. France, it has been held that no exclusive or proprietary rights can be claimed by either of the parties in respect of the word ‘IMPERIAL’ which was held to be not only in common parlance to be found in every dictionary, but also as laudatory in nature as it alluded to royalty or grandeur. The court further observed that ‘llusions of royalty and grandeur are one of the sentiments resulting from imbibing spirits, and, therefore, IMPERIAL may justifiably be seen as descriptive’.
A valid trademark can become generic if the consuming public misuses the mark sufficiently for the mark to become the generic name for the product. The prime examples of former trademarks that became the generic name for a product are Aspirin and Cellophane. Current trademarks that were once considered for becoming generic are Xerox and Kleenex. Xerox has spent a lot of money in advertising in order to prevent the misuse of its mark.
Thus we can say that this judgment should put to an end all the controversies, specially related to the term ‘Sugar Free’, which the plaintiffs have been pursuing for some years and all other such trademarks which are generic terms or descriptive of the goods or services. This case in a way upholds the Utilitarian philosophy of Jeremy Bentham by upholding the principle of the maximum benefit to maximum people. The court has taken the view that in public interest and taking into consideration the requirement of the sugar free edible items in the market for the people who are suffering with sugar related diseases, it was necessary to allow the companies to use the term ‘Sugar Free’ in order to make them attractive. If the court disallowed this use the companies would have suffered as they could not have availed the benefit of such a catchy term in order to market their products.
In the current global economic scenario, there is cut-throat competition between the companies in order to lure customers and sell their product so it is absolutely necessary for the court to consider the facts and unless it can be proved that the mark of the plaintiff is well established, i.e., it has acquired a secondary meaning or is distinctive of the plaintiff’s goods and is not a generic or a descriptive term and also that allowing someone else to use it would not cause damage to anyone, it should allow the usage of such terms as the common words in the language are the ‘common heritage of man’ and cannot be exclusively appropriated by any one person.
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