Trade-dress Infringement - It’s all about the looks

The Indian Trade Marks law has no explicit provision relating to trade dress. However, the same is impliedly incorporated within the meaning of “mark” in Section 2(1)(m) of the Trade Marks Act, 1999 which includes the shape of goods, their packaging and combination of colours. The Delhi High Court, in a recent case, dealt with the concept of trade dress infringement.

ITC Ltd. (ITC) filed a suit against Britannia Industries Limited (‘Britannia’) before the Hon’ble Delhi High Court for permanent injunction restraining Britannia from passing off ITC’s rights in the trade dress of its ‘Sunfeast Farmlite Digestive - All good’ biscuits by using a confusingly similar trade dress for its ‘Nutri Choice Digestive Zero’ biscuits. A Single Judge of the Delhi High Court vide order dated September 6, 2016, held that ITC established that its biscuit product acquired a growing reputation in a short span of time and also held that Britannia’s biscuit product’s packaging is deceptively similar to the packaging of ITC’s biscuit product such that consumers of such biscuits would be confused as to the origin of the two biscuit products. In light of the above, the Single Judge held that the conditions for granting an interim injunction in an action of passing off were fulfilled and thus restrained Britannia from using the impugned packaging/get-up/wrapper for its biscuit product during the pendency of the instant suit.

Factual background

ITC launched the packaging of the biscuit ‘Sunfeast Famlite Digestive- All Good’ in February 2016; whereas Britannia launched the impugned packaging in July 2016 claiming ‘0% Added Sugar’ and ‘0% Maida’ in their packaging. ITC alleged that the impugned packaging of Britannia, for its ‘Nutri Choice Digestive Zero Biscuit’ is an imitation of ITC’s packaging for ‘Sunfeast Farmlite Digestive- All good’.

During the initial stages of the hearing, Britannia made an offer to substitute the blue colour in the impugned packaging with dark or navy blue. However, the same was not acceptable to ITC. ITC instead suggested that Britannia could use the packaging of the biscuits that it sold internationally, and that so long as the impugned packaging does not have any shade of blue colour in it, ITC would have no objections.

Britannia pointed out that it was using the colour yellow for a wide variety of biscuits since at least November 2014. It also stated that it would stop using the blue colour if ITC stopped using the yellow colour and adopted their earlier packaging comprising the colour combination of lemon green and blue.

Since the parties did not arrive at any settlement, the Single Judge proceeded with the matter on merits.

Contentions of the parties

ITC submitted that its packaging had certain unique and distinctive features like the placement of the items on the packaging, which they alleged was imitated by Britannia and used in their packaging which hit the markets much later than that of ITC. It was also asserted by ITC that within the 5 months of launch, ITC’s product had made sales of over Rs.5 Crores and had invested over Rs.14 Crores towards marketing expenditure.

ITC also contended that Britannia’s ‘Nutri Choice Digestive Zero Biscuit’ packaging comprised a statement that “this biscuit contains sucralose not recommended for children”. This statement was asserted by ITC to have the propensity to tarnish its reputation as ITC contended that its product was suitable for consumption by all age groups including children.

ITC essentially alleged that the products sold by both parties -- digestive biscuits - were identical, that the colour scheme adopted by both parties were identical, that the method and placement of various elements on the packaging by both parties were identical and that the trade channels were identical; thus causing confusion and deception in the minds of the consumers.

On the other hand, Britannia submitted that it was using the colour yellow with a secondary colour to indicate the variants since 2008. However, the main argument advanced by Britannia was that for an action of passing off, goodwill and reputation of the aggrieved party was to be necessarily established. Britannia contended that ITC failed to establish said goodwill and reputation as they were in the market only since February 2016 and contended that such a short period of time was not sufficient to establish goodwill and therefore, there was no case of passing off made out.

Britannia also contended that nobody can claim rights over a colour and relied upon a U.S. Supreme Court judgement [see end note 1] to assert that colour per se was not an element of distinctiveness for identifying the source of the products.

Decision of the Court

The main issue in this case was whether the essential elements of passing off were fulfilled. The Single Judge referred to the landmark judgment of the House of Lords in Reckitt & Colman Products Ltd. v. Borden Inc [see end note 2], wherein the essential elements of passing off were established as:

1. Establishing Goodwill/ reputation;
2. Demonstrating misrepresentation by defendant to public and;
3. Likelihood of damage

With respect to the element of reputation, the Single Judge observed that it is not necessary that a product ought to have been in the market for a number of years to establish reputation of said product. The Single Judge specifically noted that in the segment of consumer durables and eatables, it is not uncommon for a product that caters to the particular taste of certain consumers to gain popularity in a short span of time. The Single Judge also observed that Britannia thought of introducing the Digestive Zero variant only after six months from the launch of ITC’s product. The Single Judge held that although ITC had been selling their biscuits only since February 2016, ITC had sales of Rs. 5 crores along with the marketing expenditures of Rs. 14 crores and this was held by the Court to be indicative of the growing popularity and thereby evidence of reputation.

The Single Judge while dealing with the aspect of deception and confusion relied on various judgements that explained the aspect of ‘initial interest’ wherein the initial interest is based on confusion and deception which leads a consumer to pick up a package which has been recently introduced. The Single Judge observed that Britannia’s package was sure to cause confusion in the minds of consumers as there was a striking similarity for the following reasons:

1. The colour combination of both the products were same – Yellow and Blue;
2. An image of a biscuit with a white spike/ sheaf of wheat and grains – on both products;
3. The placement of ‘NO added sugar/ maida’ and ‘ 0% added sugar/maida’ mentioned on the biscuit by the ITC and Britannia respectively on the right side of the packaging;
4. ‘NO’ and ‘O%’ printed in large font with a white line dividing sugar and maida in the packages of ITC and Britannia respectively.

The final element pertaining to the likelihood of damage was also ruled in favour of ITC. The Single Judge observed that Britannia with a whopping 66% market share could swing ITC’s customers away by the use of a deceptively similar packaging.

The Single Judge held that ITC was able to satisfy the three elements for an action of passing off and therefore, a prima facie case of passing off was made out against Britannia. The Single Judge thus granted an interim injunction restraining Britannia from using the impugned packaging during the pendency of the instant suit and granted 4 weeks’ time to Britannia to phase out the existing stocks of Nutri Choice Digestive Zero biscuits with the impugned packaging.

Britannia appealed against this order of the Single Judge. While the Division Bench did not stay the order of the Single Judge, it reserved its judgement as on September 22, 2016. Although only an interim order, this judgement adds to the growing precedents pertaining to trade dress infringement and passing off actions involving trade dress. Such decisions contribute in establishing the essential ingredients for infringement or passing off actions relating to trade dress.

[The author is a Junior Associate, IPR Practice, Lakshmikumaran & Sridharan, Delhi]