Cadila Healthcare Ltd. vs Diat Foods (India)
2010 Latest Caselaw 4590 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                        Reserved on : 21.09 2010
%                                                  Date of decision : 29.09.2010


+                          FAO (OS) No. 385 / 2008


CADILA HEALTHCARE LTD.
     ...    ...   ...    ...                    ...       ...       ...       ...        ... APPELLANT
                        Through : Ms. Pratibha M. Singh,
                                  Ms. Bitika Sharma and
                                  Mr. Manav, Advocates.

                                     -VERSUS-

DIAT FOODS (INDIA)
     ...   ...     ...                ...       ...     ...       ...       ...      .RESPONDENT
                        Through : Mr. Ashish Mohan,
                                  Advocates.

CORAM :

HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE VALMIKI J. MEHTA

1.        Whether the Reporters of local papers
          may be allowed to see the judgment?                            Yes

2.        To be referred to Reporter or not?                             Yes

3.        Whether the judgment should be
          reported in the Digest?                                        Yes


SANJAY KISHAN KAUL, J.

1. The appellant filed a suit for permanent injunction

restraining passing off of the trademark „SUGAR FREE‟,

its dilution, damages and rendition of accounts, delivery

up, etc. The appellant claimed that in the year 1988, a

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low calorie table-top sweetener without natural sugar

containing an artificial sweetener was introduced under

the trademark „SUGAR FREE‟. This product contained

„Aspartame‟ which contains only 2% of its calories. The

applications filed for registration of the trademark were

pending. The sales have been large and from 1988

onwards, around Rs.216.40 crores sales have occurred.

2. The appellant alleged that the respondent had

introduced „Sugar Free Cookies‟ with „SUGAR FREE‟

written in big size fonts in bright red colour. It is this

„SUGAR FREE‟, which has been emphasized while

„Cookies‟ is written in a small running font size in a pale

brown colour so as to make it almost unreadable. The

respondent is stated to have filed an application for

registration of the trademark „SUGARLESS‟ and / or

„SUGARLESS Bliss‟. The packaging of the respondent

also states that the product had been „Sweetened with

Splenda Brand‟. The „Splenda Brand‟ is actually a

competitor of the „SUGAR FREE‟ product of the appellant.

This „Splenda‟ is also written in small letters.

3. The appellant along with the suit filed an application

under Order XXXIX Rules 1 and 2 of the Code of Civil

Procedure, 1908 ( hereinafter to be referred to as, „the

said Code‟ ) and ad interim ex-parte order was granted

on 05.02.2008 restraining the respondent from using the

trademark „SUGAR FREE‟ as a brand-name or any other

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mark, which is identical or deceptively similar to the

appellant‟s mark.

4. The respondent entered appearance and contested the

suit and the injunction application. The application for

interim injunction has been dismissed with costs vide the

impugned order dated 09.07.2008, which has been

assailed in the present appeal.

5. We may state at this stage that the appellant has

initiated more than one proceeding against different

parties arising from its claim of exclusive right to use the

trademark „SUGAR FREE‟.

6. In Cadila Healthcare Ltd. v. Gujarat Co-operative Milk

Marketing Federation Ltd. & Ors., 2008 (36) PTC 168

(Del.), learned Single Judge of this Court examined the

aspect of the claim for exclusive use of the trademark

„SUGAR FREE‟. The defendant in that suit while

packaging its product, namely, „Pro Biotic Frozen Dessert‟

had used the expression „SUGAR FREE‟. The appellant as

plaintiff alleged that the expression „SUGAR FREE‟ had

been used on the packaging not in a descriptive sense,

but as part of the defendant‟s trademark „Amul‟. The

font size adopted for the expression „SUGAR FREE‟ on the

packaging of the defendant was alleged to be likely to

mislead potential customers into believing that the

product being „Pro Biotic Frozen Dessert‟ is related to the

appellant / plaintiff „SUGAR FREE‟ range of products.

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7. Learned Single Judge found that the material placed on

record prima facie established the popularity of the

„SUGAR FREE‟ range of products amongst the traders and

consumers giving a good reason for the Court to assume

that the trademark „SUGAR FREE‟ had acquired a

considerable degree of distinctiveness amongst traders

and consumers. However, the acquisition of a secondary

meaning by a trademark or the distinctiveness

associated with it is not ipso facto conclusive of an action

of passing off. The defendants were found to have used

„Amul‟ as trademark before the expression „SUGAR

FREE‟. There was no perceptible similarity between the

two different packaging, but what caught the attention of

learned Single Judge was the manner in which the

expression „SUGAR FREE‟ had been displayed on the

packaging of the defendant‟s product. Despite the fact

that „Amul‟ was the trademark of the defendant, it was

written in comparatively much smaller font than the word

„SUGAR FREE‟, which was more conspicuous by their

larger fonts. The expression „Pro Biotic Frozen Dessert‟

had again been written in comparatively smaller size.

The entire get up in the defendant‟s packaging was such

that the focus was on the „SUGAR FREE‟ so much so that

the defendant‟s trademark „Amul‟ was completely over-

shadowed. It is in these circumstances that learned

Single Judge found that if the defendant‟s plea that it has

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used the expression „SUGAR FREE‟ only in descriptive

sense was to be believed, then there was no justification

for the defendant to have chosen to focus only on the

expression „SUGAR FREE‟ when the expression „Pro

Biotic‟ could equally be used as a descriptive sense in

relation to its frozen products.

8. We would like to reproduce the following two paragraphs

which summarize the reasoning of learned Single Judge :-

"55. To sum up, even though the petitioner has prima facie been successful in establishing the distinctiveness of its trade mark "Sugar Free" in relation to its products, it has not been able to satisfy this Court why an embargo should be placed on the defendant from absolutely using the expression "Sugar Free", especially when the defendant has prima facie satisfied this Court of its bona fide intention to use the said expression not as a trade mark but only in its descriptive or laudatory sense. However, even as any possibility of the defendant trying to dishonestly pass off its products as those of the plaintiff stands ruled out, I have a predilection that the overwhelming impact of the expression "Sugar Free" on the packaging of the defendant‟s product may lead to some confusion. Such confusion, though not rooted in deception or malice on the part of the defendant, and further, such confusion, though less likely to manifest owing to the well-informed consumer base of the plaintiff‟s products, nevertheless, carries a fair risk of misleading the consumers of the plaintiff into believing that its sweetener has been added as an ingredient in the defendant‟s Pro Biotic Frozen Dessert.

... ... ... ... ... ... ... ...

58. Although a conclusive decision in the present case can be made only after evidence is led and the case is adjudicated upon merits, as of now, I am of the prima facie view that no imminent injury is likely to be caused to the plaintiff if the defendant is allowed to use the expression "sugar free" on the packaging of its product. To balance equities, the only solace which this Court can afford to the plaintiff at this stage is to restrain the _____________________________________________________________________________________________

defendant from using the expression "Sugar Free" in the present manner, which, though prima facie does not appear deceptive, carries a certain tinge of appropriateness in it. Having said that, it is clarified that the defendant is free to use the expression "Sugar Free" in any other manner which allows it to describe the special attributes of its product Pro Biotic Frozen Dessert without leaving any scope for confusion."

(emphasis supplied)

9. The aforesaid judgment has, in fact, been noticed by

learned Single Judge in the impugned judgment while

considering the factum of „SUGAR FREE‟ being a generic

expression and having no claim of distinctiveness by

itself. This judgment had been discussed in detail in the

impugned judgment and learned Single Judge found that

there was no reason to have a relook. Learned Single

Judge, however, found in the impugned judgment that

there was enough added matter therein to distinguish

the respondent‟s products from those of the appellant as

it was the case of passing off while noticing that „SUGAR

FREE‟ was printed on the packaging in large font and is

immediately noticeable. However, the factum of both

„SUGARLESS Bliss‟ and „Sweetened with Splenda‟ having

been used, an adverse finding had been arrived at

against the appellant.

10. Learned Single Judge, however, in the impugned order

did not have the benefit of consideration of the judgment

of the Division Bench of this Court in appeal directed

against the judgment of learned Single Judge in Amul‟s

case - Gujarat Co-operative Milk Marketing Federation _____________________________________________________________________________________________

Ltd. & Ors.‟s case (supra). The impugned judgment was

delivered on 09.07.2008, while the Division Bench

subsequently pronounced the judgment in appeal in

Amul‟s case on 08.09.2009. However, before we discuss

that judgment in appeal, we may notice that the

consequence of adoption of the mark „SUGAR FREE‟ by

other parties form the subject matter of discussion in two

other orders of the Division Bench. Both these orders

have been passed on 12.09.2008. These are Cadila

Health Care Ltd. v. Dabur India Ltd., 2008 (38) PTC 617

(Del.) (DB) and Cadila Health Care Ltd. v. Shree

Baidyanath Ayurved Bhawan Pvt. Ltd., 2008 (4) RAJ 611.

In both these appeals, a finding was reached that the use

of the expression „SUGAR FREE‟ was not carried out in

such a manner as for the purchasing public to perceive it

as a product of the appellant. The expression „SUGAR

FREE‟ was written in smaller font as compared to the

expression „Chyawanprash‟ in Dabur India Ltd.‟s case

(supra) and the trademark of the respondent Dabur India

Ltd. was prominently displayed. Similarly, the expression

„SUGAR FREE‟ was written in the same font as the

expression „Chyawanprash‟ with „Special Granules‟ in

Shree Baidyanath Ayurved Bhawan Pvt. Ltd.‟s case

(supra).

11. Now, coming to the judgment in appeal against the

Amul‟s case aforesaid, a Division Bench of this Court in

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Cadila Healthcare Ltd. Vs. Gujarat Co-operative Milk

Marketing Federation Ltd. & Ors. 2009 (41) PTC 336 (Del)

has analysed in detail the judgment of learned Single

Judge. A finding was reached that the appellant‟s

trademark „SUGAR FREE‟ cannot be said to be a coined

word and was at best a combination of two popular

English words. Such adoption naturally entails the

reason that others in the field would also be entitled to

use such phrases provided no attempt is made to ride on

the band wagon of the appellant‟s indubitably market

leading product „SUGAR FREE‟. The expression „SUGAR

FREE‟ was, thus, held to be at best distinctive qua the

artificial sweetener of the appellant and the appellant

could not claim distinctiveness in the expression „SUGAR

FREE‟ in relation to all its products as it was inherently

incapable of becoming distinctive of the product of the

appellant. The Division Bench also considered the aspect

whether the expression „SUGAR FREE‟ could be said to

have acquired a secondary meaning and came to the

conclusion that it could not be held to have acquired

such distinctiveness qua the food products in general,

which may bar its user at least in a descriptive sense by

any other competitors in the field of food products.

Though learned Single Judge had found the

distinctiveness acquired qua the artificial sweetener of

the expression „SUGAR FREE‟, the same was not

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sufficient enough to deny the respondent the descriptive

use of the phrase „SUGAR FREE‟. Thus, a conclusion was

reached that the respondent could not be restrained from

absolutely using expression „SUGAR FREE‟ particularly in

the descriptive sense. Simultaneously, it was made clear

that if any party enters into the domain of an artificial

sweetener with the trademark „SUGAR FREE‟, the

appellant may have a just cause in seeking restraint.

12. The important aspect is that the Division Bench found

that the grievance of the appellant had been adequately

redressed by the restriction on the size of the font by

learned Single Judge, which adequately insured that no

connection with the appellant was indicated and the

possible figuring of the appellant‟s product as the

ingredients of the respondent‟s product is discounted and

the usage of appellant limited to the descriptive sense.

The contention of the respondent that there can be no

restraint of any kind on the font for the use of the phrase

„SUGAR FREE‟ was not accepted at the interim stage.

13. We have discussed the past precedents in respect of the

expression „SUGAR FREE‟ because we are faced with a

similar situation in the present case while considering

what interim arrangement has to be arrived at. It goes

without saying that the objective of an interim

arrangement under Order XXXIX Rules 1 and 2 of the

said Code is to have a balanced arrangement till trial is

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complete. The trial in the present case is stated to be

going on. We are, thus, of the considered view that we

should be guided by the orders of the Division Bench and

learned Single Judge referred to aforesaid (Amul‟s case) -

Gujarat Co-operative Milk Marketing Federation Ltd. &

Ors.‟s case (supra).

14. Learned counsel for the appellant faced with this position

could not really submit anything beyond contending that

even at this interim stage, the use of the expression

„SUGAR FREE‟ should be in such a manner as to be

descriptive as is the case of the respondent. We, thus,

put to learned counsel for the respondent as to whether

the respondent was willing to change the carton in a

manner where equal prominence could be given to the

mark „SUGARLESS Bliss‟ and „Sweetened with Splenda‟

as was sought to be given to „SUGAR FREE‟ so that

„SUGAR FREE‟ was used really in a descriptive sense.

The respondent was, however, only willing to reduce the

size of „SUGAR FREE‟ slightly and further agreed that the

word „SUGAR FREE‟ would be used in the same colour

scheme as the remaining packaging and not in a

separate prominent colour, but categorically stated that

the respondent was not willing to put the three

expressions at par or give equal prominence to the three.

In these circumstances, we have analysed the limited

aspect in appeal.

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15. In order to appreciate the aforesaid, we are first

reproducing the original cartons, which are as under :-

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16. The respondent brought to us a modified carton, which

gave a greater prominence to the trademark

„SUGARLESS Bliss‟, while reducing the expression _____________________________________________________________________________________________

„Sweetened with Splenda‟ and not making a major

change in the expression „SUGAR FREE‟. The said carton

is as under :-

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17. We are of the considered view that following the line of

the judgements of the Division Benches in the cases

referred to aforesaid that the use of the word „SUGAR

FREE‟ in descriptive sense or otherwise cannot be

restricted though it should be used in a manner so as to

avoid confusion by not indicating a connection with the

product of the appellant. The Division Bench in Cadila

Healthcare Ltd. case (supra) found that there could not

be any restraint on the expression „SUGAR FREE‟,

particularly, in the descriptive sense but simultaneously

came to the conclusion that the grievance of the

appellant had been adequately redressed by the

restriction on the size of font by the learned single Judge

so as to ensure that no connection with the appellant was

indicated and the possible figuring of the appellant‟s

product as the ingredient of the respondent‟s product is

discounted. The claim of the respondent to be able to

use the phrase „SUGAR FREE‟ in any font whatsoever was

not accepted at the interim stage. We are not able to

agree with the conclusion arrived at in the impugned

judgement that the packaging as made had enough

added matter to distinguish the respondent‟s product

from those of the appellant. The use of the word „SUGAR

FREE‟ in the packaging of the respondent cannot be said

to be purely descriptive sense when on the one hand the

respondent is using a competitor low calorie Sweetner

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„Splenda‟ for cookies and claims to have applied for

registration of its trademark „SUGARLESS Bliss‟ and

simultaneously the only thing prominent in the packaging

is „SUGAR FREE‟. The respondent cannot be said to have

been motivated by bonafide commercial considerations

as even in the modified packaging it only seeks to

balance „SUGARLESS Bliss‟ and „Splenda‟ by increasing

the size of one and decreasing the other‟s while

maintaining the prominence of „SUGAR FREE‟ in more or

less similar font size. In our view, it would clearly convey

a connection with the product of the appellant and not to

merely use it in a descriptive sense. There can‟t, thus,

be a premium to a dishonest commercial intention by

seeking to cause confusion and deception. The balance

would have to be maintained, thus, in the font size and

prominence of „SUGAR FREE‟ to ensure what the

customer perceives that these are cookies of the brand

„SUGARLESS Bliss‟ with „Splenda‟ used as an ingredient

and the expression „SUGAR FREE‟ only indicates that it is

sans sugar.

18. We also draw support for this course of action from the

judgment of a Division Bench of this Court in „Goenka

Institute of Education & Research v. Anjani Kumar

Goenka & Anr.‟ 2009 AIR (Del) 139wherein the dispute

related to use of the expression „Goenka‟ as trademark

and / or trade-name. The aspect of honest concurrent

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use was examined. Section 12 of the Trademarks Act,

1999 reads as under :-

"12. Registration in the case of honest concurrent use, etc. -- In the case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do, he may permit the registration by more than one proprietor of the trademarks which are identical or similar (whether any such trademark is already registered or not) in respect of the same or similar goods or services, subject to such conditions and limitations, if any, as the Registrar may think fit to impose."

Analysing the aforesaid section, it was observed that the

doctrine of honest concurrent use requires that (i) the

adoption must be honest; and (ii) the concurrent use of

the trademark with another trademark. Apart from these

two aspects, there is also third salient feature for

applicability of this doctrine which is that the conditions

and limitations can be imposed by the Registrar of

Trademarks while allowing registration of one or more

trademark, which is identical or similar in case there is

found a case of honest concurrent use. The object is that

if there are similar trademarks in the market, then in

such circumstances, in order to ensure that there is no

confusion amongst the public, directions can be issued to

ensure that the public in general do not confuse the

goods and services of one trademark with that of another

at the same time allowing rival traders, who have carried

on their business under their trademarks because such

trademarks have been used by both such persons for

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such time that it has become distinctive qua such

traders. The aforesaid logic will also apply afortionari

when the mark of the plaintiff is used by the defendant

though not as trademark, and allegedly in the descriptive

sense, but since qua the market of goods, the purchasing

public is a vital stakeholder, this Court can akin to the

powers under Section 12 give directions for use so that

there is no confusion exists for the public.

19. The endeavor of this Court is also to ensure that while

„SUGAR FREE‟ can be used as a descriptive word or

otherwise without any hindrance, appropriate restrictions

are put so that there is no chance of deception or

confusion with the plaintiff‟s products.

20. We are, thus, of the view that the three expressions -

„SUGAR FREE‟, „SUGARLESS Bliss‟ and „Splenda‟ should

be used in equal prominence and no extra prominence

should be given to „SUGAR FREE‟. The font size of

„SUGAR FREE‟ can hardly be expected to be larger than

of „SUGARLESS Bliss‟ or the expression „Sweetened with

Splenda‟. We are not insisting that all the three must be

used in identical font size as in designing a packaging an

artistic balance has to be maintained, but suffice to say

that in whatever prominence and font size „SUGARLESS

Bliss‟ and „Sweetened with Splenda‟ are used (they can

be of different prominence or sizes), „SUGAR FREE‟

should not be used in a more prominent manner / font

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size as is sought to be done even in the proposed

modified carton.

21. The result of the aforesaid is that the impugned order is

modified in the following terms :-

(i) There is no restraint on the respondent using the

expression „SUGAR FREE‟.

(ii) The expression „SUGAR FREE‟ should not be used with

greater prominence and a larger font size than the

trademark „SUGARLESS Bliss‟ and „Sweetened with

Splenda‟.

(iii)The grant of costs of Rs.50,000/- in the impugned

judgment is set aside.

22. The respondent is granted 30 days‟ time to exhaust the

existing stock of the packaging.

23. The appeal is accordingly allowed to the limited extent

aforesaid leaving the parties to bear their own costs.

24. Needless to say, any opinion expressed in this Order is

only for the purpose of disposal of the interim application

and will not influence the final judgment in any manner.

SANJAY KISHAN KAUL, J.

September 29, 2010                                       VALMIKI J. MEHTA, J.
madan

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