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ITC Ltd Vs. Britannia Industries Ltd - Court Judgment

LegalCrystal Citation
CourtDelhi High Court
Decided On
Case NumberCS (COMM) No. 1128 of 2016
Judge
AppellantITC Ltd
RespondentBritannia Industries Ltd
Excerpt:
1. the plaintiff, itc limited ( itc ), has filed the accompanying suitagainst the defendant, britannia industries limited ( britannia ), forpermanent injunction seeking to restrain britannia from violating its rights in the plaintiff s packaging/trade dress of sunfeast farmlitedigestive - all good biscuit by using a deceptively and confusinglysimilar trade dress for its nutri choice digestive zero biscuit. the relief claimed in the suit is also for an injunction to restrain britannia from (a) passing off itc s rights in the trade dress/ packaging/ label, (b) dilutingthe mark, (c) infringing itc's copyright in the said packaging and for delivery up, damages and rendition of accounts etc. by this application under order xxxix rules 1 and 2 of the code of civil procedure 1908 (cpc), itc.....
Judgment:

1. The Plaintiff, ITC Limited ( ITC ), has filed the accompanying suitagainst the Defendant, Britannia Industries Limited ( Britannia ), forpermanent injunction seeking to restrain Britannia from violating its rights in the Plaintiff s packaging/trade dress of Sunfeast FarmliteDigestive - All Good biscuit by using a deceptively and confusinglysimilar trade dress for its Nutri Choice Digestive Zero biscuit. The relief claimed in the suit is also for an injunction to restrain Britannia from (a) passing off ITC s rights in the trade dress/ packaging/ label, (b) dilutingthe mark, (c) infringing ITC's copyright in the said packaging and for delivery up, damages and rendition of accounts etc. By this application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure 1908 (CPC), ITC seeks an interim injunction to restrain Britannia from continuing to use the impugned packaging for its Nutri Choice Digestive Zero biscuit.

2. The packaging of ITC s Sunfeast Farmlite Digestive All Good biscuit which was launched in February 2016 is as under:

IMAGE

3. In July 2016, Britannia launched in the market its Nutri Choice Digestive Zero biscuit, the packaging of which is as under:

IMAGE

4. According to ITC, Britannia s impugned packaging for its NutriChoice Digestive Zero Biscuit is an imitation of ITC s packaging forSunfeast Farmlite Digestive All Good. When placed next to each other, they are indistinguishable to the unwary customer.

5. The photographs depicting the manner of the products being displayed in the market place/stores when placed next to each other have been placed on record. It is pointed out that Britannia has been marketing and selling digestive biscuits under the mark Nutri Choice for the last several years. According to ITC, after the launch of its Sunfeast Farmlite Digestive All Good' biscuit with No Added Sugar and No Maida , Britannia filed a complaint before the AdvertisingStandards Council of India ( ASCI ). After failing attempt to the said complaint, Britannia, in July 2016, introduced Nutri Choice Digestive Zero biscuit claiming 0% Added Sugar and 0% Maida in packagingwhich is nearly identical and/or deceptively similar to that of ITC spackaging.

6. At the first hearing of 22nd August, 2016, Mr. Sudhir Chandra, learned Senior counsel, instructed by Ms. Ishani Chandra and Mr. Sagar Chandra, Advocates appeared. Summons in the suit and notice in this application were accepted on that date itself. After the case was heard for some on that date, Mr. Chandra stated that he needed some time to take instructions on the suggestions made for possible variation in the impugned packaging. Therefore, no interim order was passed and the case was adjourned to 24th August, 2016 on which date both parties agreed, without prejudice to their respective rights, to sit down and explore the possibility of settling the dispute pertaining to the wrapper in respect of the Nutri Choice Digestive Zero biscuits of Britannia. The case was then listed for 31st August, 2016.

7. An offer was made by Britannia that they would substitute the blue colour in the impugned packaging with dark or navy blue. This was not acceptable to ITC. It was pointed out that Britannia has been using a different packaging for the same version of its Nutri Choice Digestive zero sold internationally. The Court was shown the said packaging which is as under:

IMAGE

8. It was stated on behalf of ITC that as long as Britannia adopts the above packaging for its Digestive Zero biscuits in India, it would have no objection. Alternatively, it was suggested that if the blue colour in the impugned packaging is substituted by any other colour (other than a different shade of blue), ITC would have no objection.

9. On the side of Britannia, it is stated that yellow colour of Britannia spackaging was an essential and prominent feature and formed part of a colour scheme that identified a range of Britannia's digestive biscuits. Mr. Chandra pointed out that there were three variants in Britannia's digestive biscuit segment. Two of the variants i.e., Nutri Choice Digestive Hi-Fibre biscuits and Nutri Choice Digestive 5 Grain biscuits were introduced in October 2014 and the third variant was the Nutri Choice Digestive Zero biscuit. The packaging of the three variants are:

IMAGE

10. It was submitted that the blue colour has been used by Britannia for a wide variety of its biscuits. Moreover, the colour blue is supposed to reflect the 'World Diabetes Day'. Britannia has been using the colour blue on its other range of zero per cent added sugar Nutri choice Essentials Oat and Ragi cookies at least since November 2010. The current packaging of the said biscuits retaining the colour blue was launched in November 2014. Apart from Britannia s own Nutri ChoiceNice Bite Biscuit, a reference is made to the packaging of Britannia Coconut Crunchees, Nice Time, Marie Gold, which has been marketing its products to show that the combination of yellow and blue packaging finds place in all these biscuits.

11. Britannia pointed out that ITC had earlier adopted for the Sunfeast Farmlite Digestive All Good Biscuits a packaging which was a combination of lemon green and blue. Therefore, if ITC was prepared to give up the yellow colour, Britannia would replace the blue colour on its packaging for some other colour.

12. Since there was no meeting ground between the parties as far as the above suggestions were concerned, the Court on 2nd September, 2016, proceeded with the matter on merits.

Submissions on behalf of ITC

13. Appearing for ITC, Mr. Rajiv Nayar, Mr. Sandeep Sethi and Ms. Pratibha M. Singh, learned Senior counsel submitted that ITC spackaging Sunfeast Farmlite Digestive All Good had certain uniquedistinctive features, as under:

(a) The brand name Sunfeast is written on the top-left hand side of the label on the yellow coloured portion with the trade mark Farmlite below it and the mark Digestive All Good appearingbelow Farmlite .

(b) The colour scheme used in the trade dress is Yellow and Blue. The left part of the packaging is in a yellow background and the right side of the packaging is in blue and both colours are separated by a curved line.

(c) The picture of the biscuits appears on the right front side of the label which is depicted with a wheat spike/sheaf of wheat with grains lying at the bottom of an individual wheat biscuit with the words No Added Sugar/Maida written on the biscuit in a bold white font. The words Sugar and Maida are separated by a white horizontal dividing line between the two words.

14. It is further submitted that ITC, which is a major private sector company, is engaged in manufacturing and marketing of its diverse categories of products. It had a turnover as of 2015-16 of Rs. 51,582 crores. Its branded packaged foods business is one of the fastest growing foods businesses in India. It is stated that it entered the biscuits segment in the year 2003 with the launch of Sunfeast and in the year 2005, ITC launched cream biscuits under Sunfeast Dark Fantasy. It is further stated that thereafter ITC launched branded snacks, juices etc. and products in the dairy and that its foods business has grown to a significant size. It is pointed out that ITC has made sales of its Sunfeast Farmlite Digestive All Good since its launch in February 2016 until July 2016 to the extentof over Rs. 5 crores and has invested over Rs. 14 crores towards marketing expenditure with respect to Sunfeast Farmlite Digestive All Good . The copy of the certificates issued by the Chartered Accountantto the above fact has been placed on record.

15. The case of ITC is that Britannia was aware of ITC's packaging since February 2016 and chose not to enter the market till July 2016 with its competing product. It is pointed out that Britannia made no grievance in the first place about ITC's packaging since it first went with a complaint against ITC about this very product (and not its packaging) before the Advertising Standards Council of India (ASCI) and it was only after it was unsuccessful there it decided to launch the Nutri Choice Digestive Zero biscuit by imitating ITC's packaging for the Sunfeast Farmlite Digestive All Good biscuit. It is further pointed out that Britannia s Nutri Choice Digestive Zero biscuit has, in the packagingin small font, stated that this biscuit contains sucralose not recommended for children . This would tarnish the image of ITC inasmuch of ITC products, including Sunfeast Farmlite Digestive All Good biscuits as they are suitable for consumption including childrenand an unwary consumer is like to pick the Britannia s product thinkingthe same to the ITC s product. This would also dilute ITC's brand andharm its reputation since ITC's biscuit in fact has no added sugar or maida and is suitable for children and adults alike.

16. The central thrust of ITC's submissions is that Britannia has copied the unique colour scheme and combination, and the method and placement of the various elements of ITC s trade dress. The products areidentical. The trade channels are identical. Thus, this is a case of triple identity and it is bound to lead to confusion and deception. It is submitted that Britannia being a subsequent adopter of the packaging, was aware of ITC s products, including Sunfeast Farmlite Digestive All Good, and has copied the packaging, get up, lay out, colour scheme, concept, overall appearance etc. in order to pass off their Nutri Choice Digestive biscuit products as another product of ITC itself. It is stated that even the pricing of the competing products is identical. Each pack is priced at a maximum retail price ( MRP ) of Rs. 25. It is further statedthat there is bound to be confusion at the retailer level as well as at the level of the purchaser. Packaging is said to play an important role in this category of food products and the consumer is bound to be confused between the two competing packets of biscuits.

17. In the plaint, it is averred that there is also a copyright infringement by Britannia. It is stated that a mere glance at the impugned packaging would show that Britannia could not have designed it without having ITC s impugned product packaging/label of Sunfeast Farmlite Digestive All Good in mind. It is stated that the use by Britannia of a deceptively similar packaging for an identical product constitutes infringement of the original artistic work in the unique product packaging/label of ITC under Section 51 of the Copyright Act, 1957. It is stated that the illegal act of Britannia constitutes misrepresentation and unfair competition and is likely to dilute the distinct character of ITC s brand. However, itrequires to be noticed that during the hearing, the aspect of copyright infringement was not touched upon by counsel for ITC.

Submissions on behalf of Britannia

18. Mr. Sudhir Chandra for Britannia began by pointing out that Britannia is the market leader and had over 66% of the market share (in both volume and value) whereas ITC had only 1.8%. He pointed out that Britannia has been manufacturing and marketing the above range of Nutri choice Digestive biscuits with the primary/predominant colour of the product packaging below yellow along with a secondary colour to indicate the variant since 2008.

19. Mr. Chandra debunked ITC's submission that only after Britannia scomplaint before ASCI was dismissed, it decided to introduce Nutri Choice Digestive Zero biscuits. It is pointed out that the complaint was rejected by ASCI by its order dated 12th July, 2016 whereas the date of manufacture of the Nutri Choice Digestive Zero biscuit as shown in the packaging placed on record by ITC itself is 30th June, 2016. It is pointed out that Britannia's nutri choice biscuits have been in the market since 2008. However, it was not disputed by Mr. Chandra that this particular variant viz., Nutri Choice Digestive Zero biscuit was introduced only in July 2016.

20. Referring to the decision in Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories PTC (Suppl) (2) 680 (SC), Mr. Chandra submitted that there was a distinction to be drawn between the action and infringement of action for passing off. In an action for passing off, it had to be demonstrated that the added matter in the defendant's mark was insufficient to distinguish its goods from that of the Plaintiff. Mr. Chandra enlisted what he considered to be the distinctive features of the impugned packaging. First, the word Britannia' itself appeared prominently against a red background in one corner of the impugned packaging. Secondly, the word Nutri Choice featured prominently and this was not present in ITC's packaging. Further, the shades of blue and yellow were different. Lastly, the entire get up was itself distinct. Mr. Chandra stated that while there might be a similarity in the two packagings, when viewed as a whole there was no case made out for passing off.

21. Mr. Chandra referred to the decision in Reckitt and Colman Products Limited v. Borden Inc. (1990) 1 All ER 873 and emphasized that of the three essential elements which had to be established by the Plaintiff in an action for passing off, ITC here had failed to show that it had a formidable goodwill or reputation in the particular brand i.e., Sunfeast Farmlite Digestive All Good biscuit relatable to its packaging. Having launched the said product in February 2016, ITC cannot possibly claim that it had built a reputation in that particular biscuit already by July 2016. Reputation, according to Mr. Chandra, had to be built over several years and not in a few months. He also referred to the passage from Kerly s Law of Trade Marks and Trade Names.

22. On the aspect of deception and confusion, Mr. Chandra referred to the decision of the U.S. Supreme Court in Wal Mart Stores Inc. v. Samara Brothers Inc. 54 USPQ2d 1065 to urge that colour per se was not an element of distinctiveness for identifying the source of the products. Referring to the decision in Laxmikant v. Patel v. Chetanbhat Shah 2002 (24) PTC 1 (SC) which in turn referred to the decision in Oertli v. Bowman (1957) RPC 388, he submitted that ITC failed to show that the get up or trade dress was distinctive of its goods and had acquired a 'secondary meaning' deserving of protection in an action for passing off. He referred to extracts from the 'Law of Passing Off: Unfair Competition by Misrepresentation' by Christopher Wadlow. Mr. Chandra submitted that in the advertisements for its product, ITC was actually projecting its trademarks i.e. ITC, Sunfeast and Farmlite. It was not selling the product on the basis of its packaging. He submitted that ITC should be prepared to fight Britannia in the market place by a superior quality product and not resort to litigation. He maintained that it was ITC that was coming closer to Britannia by adopting the yellow colour as a prominent feature of its packaging rather than the other way around. There was no need for Britannia, being the market leader, to adopt anyone else's packaging.

Rejoinder submissions of ITC

23. Replying to the above arguments, Mr. Rajiv Nayar, learned senior counsel for ITC, first pointed out that the lemon green that was contemplated by ITC as a possible colour on the packaging for Farmlite Digestive All Good biscuits was, in fact, only used at the planning stage. The product was never launched with that colour combination in the packaging. He pointed out that ITC was in the market with Farmlite Digestive All Good biscuits since February 2016 whereas Britannia entered with Nutri Choice Digestive Zero only in July 2016. Relying on the decision in Ishi Khosla v. Anil Aggarwal 2007 III AD (Del) 421, Mr. Nayar pointed out that reputation could be built, not necessarily over a large number of years, but even overnight . The fact that since itslaunch in February 2016, ITC has been able to sell Rs. 5 crores worth of Farmlite Digestive All Good biscuits reflected its growing reputation. Further, the fact that Britannia chose to file a complaint to the ASCI and then in July 2016 introduced its own variant imitating ITC s packagingalso showed that ITC was posing a good competition with the growing popularity of its product. He submitted that if indeed Britannia had a 66% market share, it should really not be worried about a competitor who had less than 3% market share. By trying to stymie healthy competition by imitating the packaging, Britannia was indulging in unfair trade practice.

24. Adverting to the aspect of confusion in deception, Mr. Nayar referred to the decision of the learned Single Judge in Baker Hughes Limited v. Hiroo Khushalani ILR (1999) I Delhi Page 41, where the Court elaborated on the concept of 'initial interest' in a product. If the initial interest is based on confusion and deception, it can give rise to a cause of action for a tort of passing off. He pointed out that although the decision of the learned Single Judge was reversed by the Division Bench, the Supreme Court, ultimately affirmed the Single Judge in Baker Hughes Limited v. Hiroo Khushalani (2004) 12 SCC 628. Referring to the decision in Ruston and Hornsby Ltd. v. The Zamindara Engineering Co. (1970) 2 SCR 224, he submitted that in an action of passing off, the question required to be addressed was whether the defendant was selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiff s goods? He also referred to thedecision of the Bombay High Court in Gorbatschow Wodka KG v. John Distilleries Limited 2011 (47) PTC 100 to urge that merely because the purchaser may be educated and have greater discerning capacity, the likelihood of deception is not minimised. He also referred to the decision in Parle Products (P) Ltd v. J. P. and Co. Mysore (1972) 1 SCC 618.

The aspect of reputation

25. The Court proposes to begin the discussion by recapitulating the difference between an action for infringement and that for passing off. The decision of the Supreme Court in Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories (supra) is considered a classic in this context. The relevant extract of the said decision, which has been reiterated in many subsequent judgments reads as under:

The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable imitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. But there the correspondence between the two ceases. In an action for infringement, the plaintiff must, no doubt, make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendants mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated. Expressed in another way, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the getup, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial; whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff.

26. It is this very distinction that has been reiterated subsequently by the Supreme Court in Ruston and Hornsby Ltd. v. The Zamindara Engineering Co. (supra) where it observed as under:

In an action for infringement where the defendant's trade mark is identical with the plaintiff's mark, the Court will not enquire whether the infringement is such as is likely to deceive or cause confusion. But where the alleged infringement consists of using not the exact mark on the Register, but something similar to it, the test of infringement is the same as in an action for passing off. In other words, the test as to likelihood of confusion or deception arising from similarity of marks is the same both in infringement and passing off actions.

27. The question that had to be asked as far as passing off action, according to the Supreme Court was:

Is the defendant selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiff's goods?

28. The present case is focused on trade dress and getup in the packaging of the competing products which are identical products inasmuch as both are digestive biscuits and are sold in the same trade channels and are at the same retail price. What is the extent to which, in the passing of action, the trade dress and getup can have an impact was examined by the House of Lords in Reckitt and Colman Products Ltd. v. Borden Inc. (supra).

28.1 The facts of the case were that the appellants, a company in the USA, and its Belgium subsidiary began marketing lemon juice in conventional bottles in 1975 and by the end of 1980 their sales were at 25% of the total sales of lemon juice in the United Kingdom (UK). The Respondents, on the other hand, marketed lemon juice in convenient plastic squeeze packs from 1956 onwards. With the growing sales of the Appellants, the Respondents launched sales of their products in conventional bottles. The Appellants then responded by selling their juice in plastic lemon shaped squeeze containers. The case brought forth by the Respondent was that the Appellants were passing off their lemon juice as that of the Respondents by using a getup deceptively similar to the one used by the Appellants. The Court of the first instance granted an injunction in favour of the Respondents which was upheld by the Court of Appeal.

28.2 The House of Lords dismissed the further appeal by holding that the plastic lemon container was not an object in itself but was part of the getup under which the Respondents product was sold. Although theprotected get-up consisted of both the container and the label, there was no reason why a part of the get-up viz. the container could not be separated from the subject matter of protection in its own right. Once it was established that what the Appellants were doing constituted a misrepresentation which effectively deceived the public into an erroneous belief regarding the source of the product, it was immaterial whether that resulted from the similarity of their get-up to the whole of the Respondents get-up or only to the most striking part of it.

28.3 It was observed: "the essence of the action for passing off is a deceit practised on the public and it can be no answer, in a case where it is demonstrable that the public has been or will be deceived, that they would not have been so deceived if they had been more careful, more literate or more perspicacious. Customers have to be taken as they are found; there is no principle of law that there must always be assumed to be a literate and careful customer .

28.4 Immediately relevant to the case at hand are the three elements that must be shown to exist for a Plaintiff to succeed in an action for passing off:

These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff.

29. In a concurring opinion of Lord Jauncey of Tullichettle in the same decision, it was observed:

However, it is a prerequisite of any successful passing off action that the plaintiff's goods have acquired a reputation in the market and are known by some distinguishing feature. It is also a prerequisite that the misrepresentation has deceived or is likely to deceive and that the plaintiff is likely to suffer damage by such deception. Mere confusion which does not lead to a sale is not sufficient. Thus, if a customer asks for a tin of black shoe polish without specifying any brand and is offered the product of A which he mistakenly believes to be that of B, he may be confused as to what he has got but he has not been deceived into getting it. Misrepresentation has played no part in his purchase.

30. In Kerly s Law of Trade Marks and Trade Names, on the aspect ofthe plaintiff having to prove reputation it is said:

As in any other passing off case, a claimant relying upon getup must prove his reputation: he must prove, that is, that the get-up concerned indicates his goods and no one else s. Inparticular, he must show that distinctiveness lies in the get-up and not (for instance) in his name or trademarks, if those appear on the goods. Thus, if a claimant by his cautions and advertisements shows that he relies wholly or mainly on his trade mark or business name, he makes his case on general get-up, apart from trade mark or business name, more difficult to establish. A trader who introduces a new feature into the get-up of his goods does not thereby acquire any proprietary interest in it, so as to be able to prevent its use by competitors, until it has become so identified with his goods that its use by others is calculated to deceive. No case can be made merely by showing an imitation of the parts of the get-up of goods which are common to the trade. But very little evidence of user may be sufficient to establish distinctiveness where the get-up is not only novel but striking, even though its consists of a combination of commonly used parts.

31. On the aspect of reputation, there is merit in ITC's contention that it is not practicable and in fact not necessary, particularly when a new product with a distinctive packaging is introduced in the market for the Plaintiff to show that it has established a formidable reputation in that product for a number of years. The averment of ITC that the sales of Sunfeast Farmlite Digestive All Good biscuits has been to the extent of Rs. 5 crores in a period of over five months since it was first introduced in February, 2016 is a significant factor in examining the reputation of the product. It has further been averred by ITC that it has incurred over Rs. 14 crores as marketing expenditure. It has placed on record the certificates of its Chartered Accountant in support of the said averments. In reply to the said averment, Britannia states that contents thereof are wrong and ITC should be put to strict proof of the same. Therefore, there is no specific denial as such.

32. It is not impossible that a consumer product, which is a new biscuit, can acquire popularity in a short span of time. The trend of sales over say six months can be indicative of whether the popularity is growing. While, these would be matters of evidence, it cannot be said that the reputation attached to a product can develop only if it has been in the market for a number of years. In the particular segment of consumer durables and eatables, it is not unknown that a product that caters to a particular taste or choice of a consumer can become popular in a short span of time. As observed by this Court in Ishi Khosla v. Anil Aggarwal:

"To acquire secondary meaning/distinctive meaning it is not necessary that product is in the market for number of years, as observed earlier. If a new idea is fascinating and appeals to the consumers, it can become a hit overnight.

33. Health conscious consumers are likely to be discerning on their choice of food, including biscuits. A high fibre content or a variety of grains present in the biscuit would make it a likely choice. It is this category of consumers that is being targeted by the food industry, which now includes ITC and Britannia. What is of interest here is the clear announcement on the packaging that there is no Sugar or no Maida. This was not a prominent element of Britannia's earlier variants of Nutri choice Digestive Biscuits. It appears that the clear indication on the packet that there is no sugar or maida obviously has an impact on the discerning health conscious consumer. The fact that Britannia for some reason did not think of introducing the Digestive Zero variant till six months after ITC introduced it is a factor that weighs in favour of ITC. It is arguable that Britannia woke up a bit late to the potential after realising that there is a niche market for this variant of zero sugar and zero maida digestive biscuits.

34. It is in the above background that the question whether this particular product of ITC has acquired a reputation requires to be addressed. The question whether the packaging of Sunfeast Farmlite Digestive All Good biscuits has become identified with the product is a matter for evidence. However, the fact that sales of the said biscuit had picked up to an extent of Rs. 5 crores in a short span of over five months should be an indicator of its growing reputation. Consequently, this Court is satisfied that ITC has been able to establish prima facie that its product Sunfeast Farmlite Digestive All Good biscuit has acquired a growing reputation in a short span which is deserving of protection.

The aspect of deception and confusion

35. Turning next to the aspect of deception, it must be noticed at the outset that during the course of arguments counsel on both sides who had brought their respective competing products to the Court were themselves confused as to which was their client s product. At one stage,Mr. Chandra picked up ITC's product when in fact he meant to show how Britannia's packaging was distinct and not similar to ITC's packaging. However, this by itself cannot be determinative of there being deception and/or confusion as a result of both packets being juxtaposed.

36. Biscuits are normally stacked on shelves in a grocery shop or a supermarket. Usually there is an entire section where the biscuits of different manufacturers are arranged side by side. Where the product is an eatable like a biscuit, the colour and the colour scheme of the packaging plays an important role in the consumer making an initial choice and in enabling a discerning consumer to locate the particular brand of a manufacturer. The aspect of 'initial interest' was explained by this Court in Baker Hughes Limited v. Hiroo Khushalani as under:

In some case, however, it is also possible that such a purchaser after having been misled into an initial interest in a product manufactured by an imitator discovers his folly, but this initial interest being based on confusion and deception can give rise to a cause of action for the tort of passing off as the purchaser has been made to think that there is some connection or nexus between the products and business of two disparate companies.

37. Therefore, when another competing variant of the biscuit is introduced six months later and a consumer on the basis of the popularity of a product that has recently been introduced makes a mistake as to which packet of biscuit he is picking up, it can be argued that the initial interest was based on confusion and deception and, therefore, gives rise to a tort of passing off. In Wal Mart (supra) it was observed that the product s trade dress can be protected only if it is shown that it hadacquired a secondary meaning since design, like colour, is not inherently distinctive. However, the product in that case was a certain kind of clothing. In that context, it was said that the colour by itself does not identify the source of the product. However, that may not be entirely true when it comes to products like biscuits. The packaging of a biscuit does become associated with the manufacturer or brand. The colour on the wrapper would certainly play an important part.

38. Similar marks or features used in wrappers of competing biscuits was the subject matter of Parle Products (P) Ltd. v. J.P. and Co. (supra). The Appellants there owned certain registered trademarks one of which was Glucose and was used on their half pound biscuit packets. Another registered trade mark was a wrapper with its colour scheme, general set up and entire collocation of words. The wrapper was of buff colour and depicted a farm yard with a girl in the centre carrying a pail of water and cows and hens around her on the background of a farmyard house and trees. The Respondent's wrapper contained a picture of a girl supporting with one hand a bundle of hay on her head and carrying a sickle and a bundle of food in the other, the cows and hens surrounding her. The trial court declined the injunction. The High Court looking at the broad features did not think that they were so similar so as to deceive an ordinary purchaser. Since it was an action for infringement, the Supreme Court declined to treat it as a case of passing off. Nevertheless, it explained that in order to come to a conclusion whether one mark is deceptively similar to another the broad and essential features of the two are to be considered. It was further explained as under:

They should not be placed side by side to find out if there are any differences in the design and if so, whether they are of such character as to prevent one design from being mistaken for the other. It would be enough if the impugned mark bears such an overall similarity to the registered mark as would be likely to mislead a person usually dealing with one to accept the other if offered to him. In this case we find that the packets are practically of the same size, the colour scheme of the two wrappers is almost the same; the design on both though not identical bears such a close resemblance that one can easily be mistaken for the other. The essential features of both are that there is a girl with one arm raised and carrying something in the other with a cow or cows near her and hens or chickens in the foreground. In the background there is a farm house with a fence. The word "Gluco Biscuits" in one and "Glucose Biscuits" on the other occupy a prominent place at the top with a good deal of similarity between the two writings. Anyone in, our opinion who has a look at one of the packets to-day may easily mistake the other if shown on another day as being the same article which he had seen before. If one was not careful enough to note the peculiar features of the wrapper on the plaintiffs goods, he might easily mistake the defendants' wrapper for the plaintiffs if shown to him some time after he had seen the plaintiffs'. After all, an ordinary purchaser is not gifted with the powers of observation of a Sherlock Holmes. We have therefore no doubt that the defendants' wrapper is deceptively similar to the plaintiffs' which was registered. (emphasis supplied)

39. When the above approach is adopted in the present case, several features as explained in a tabular form as under by the ITC, are visible:

BasisPlaintiff s productDefendant s product
Packaging IMAGE IMAGE
Color combinationYellow and BlueYellow and Blue
Image of biscuitsDigestive biscuit with wheat spike/sheaf of wheat and grainsDigestive biscuit with wheat spike/sheaf of wheat and grains
Placement of special benefitNo added sugar/maida mentioned on the pictorial depiction of the biscuit on the right side of the packaging0% added sugar/maida mentioned on the pictorial depiction of the biscuit on the right side of the packaging
Manner of writing of writing special benefit IMAGE No printed in a large font with added sugar written on the right hand side on the depiction of the biscuit with maida written underneath added sugar with awhite coloured dividing line between ADDED SUGAR and MAIDA IMAGE 0% printed in a large font with Added Sugar written on the right hand side on the depiction of the biscuit with Maida written under Added Sugar with a white coloured dividing line between Added Sugar and Maida .

40. The Court would here also like to observe that the very colour scheme of the wrapper with yellow colour on the left and blue on the right, the positioning of the letters 'No Sugar' above and 'No Maida' below are strikingly similar. The words Nutri Choice merges with the background. As a result what strikes the eye from a distance of say even 10 ft. is the colour combination of yellow on the left and blue on the right. The Court is, therefore, satisfied that the impugned packaging for the Nutri Choice Digestive Zero Biscuits launched by Britannia is deceptively similar to the packaging of ITC s Sunfeast Farmlite Digestive All Good biscuits and such deception is likely to confuse the consumers of such biscuits, even the discerning health conscious ones, into thinking that Britannia's biscuits are that of ITC s.

Likelihood of damage

41. As regards the third element of damage that is likely to be caused to ITC if Britannia were not injuncted, it is possible that Britannia being a 66% market holder can swing ITC's customers away from ITC's competing product as a result of the deceptive packaging. The packaging of Britannia's earlier two variants of digestive biscuits did not contain the blue colour. They were a combination of yellow and red and yellow and green. Those variants were introduced in October 2014. ITC was the first as far as the 'No sugar' and 'no maida' variant is concerned. ITC's product was launched in February 2016. Britannia was aware of and lived with the yellow and blue packaging of ITC's Farmlite Digestive All Good biscuits for about six months. Even if it were to be accepted that yellow colour is integral to Britannia's packaging scheme for Digestive biscuits, Britannia's purpose would well be served by adopting a colour, other than blue, to combine with the yellow colour of its packaging. Further, even if Britannia insists on having both yellow and blue as part of its packaging, then ITC's suggestion that Britannia can use for its Indian market the same wrapper it uses for the same product in the international market appears reasonable. Britannia's rejection of these suggestions has brought about a situation where the deception and confusion in the mind of the average health conscious consumer is likely to persist.

42. The question whether a deception of this kind will affect the consumer's choice cannot be answered in the abstract. It will depend on the type of product, the marketing practice peculiar to the industry and trade, the profile of the targeted consumers and so on. While it is true that superior quality of ITC's biscuit will ultimately determine its popularity in the market, if the initial choice that a consumer makes of this particular brand of biscuits gets altered on account of the possible deception and confusion, because the packaging of the two products resemble each other too closely, then it gives rise to an actionable tort. There is also merit in the contention that while ITC's variant is suitable to all age groups, Britannia's is not on its own admission on the packaging suitable for children because it has sucralose added. This can lead to possible dilution of the reputation and goodwill attached to ITC's product. So long as the deception persists, it would have an adverse impact on sales of this particular product of ITC. A market leader like Britannia can certainly eat into the market share of a relatively smaller player like ITC in the biscuit trade by adopting a deceptive variant of the latter's get up and trade dress but the converse may not be true. The new entrant with a product that enjoys a growing popularity might require protection.

43. The three elements for an action of passing having shown to prima facie stand fulfilled, the Court is satisfied that ITC has a prima facie case in its favour and that the balance of convenience in granting an interim injunction is in its favour. Since it is just about two months since Britannia has introduced its variant with the impugned packaging, it is likely to suffer a far less damage if the injunction were to be granted when compared to the damage that ITC is likely to suffer if it is not granted. Without such interim protection, ITC is likely to suffer irreparable hardship since the loss of market share cannot adequately be compensated later.

44. An interim injunction is, accordingly, issued restraining Britannia from using the impugned packaging get-up/wrapper for its Nutri Choice Digestive Zero biscuits in the present form during the pendency of this suit. It will however be open to Britannia to adopt the packaging it uses for the product internationally or while retaining the yellow colour, substitute the blue colour in the impugned packaging with any other distinctive colour other than variants of blue. In sum, it can adopt any packaging which is distinctively different from the packaging that is currently used by ITC for its Sunfeast Farmlite Digestive All Good biscuits.

45. The Court grants Britannia four weeks' time to phase out the existing stocks of Nutri Choice Zero Digestive biscuits with the impugned packaging. Britannia will maintain true accounts of its sales of Nutri Choice Zero Digestive biscuits with the impugned packaging from its launch till the date of discontinuance in terms of this order.

46. The observations in this order touching on the merits are not intended to influence the final decision that will be taken on an independent assessment of the evidence led by the parties. The application is disposed of.


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