Nuvoco Vistas Corporation Limited Vs. JK Lakshmi Cement Limited

Registration under Section 28 grants exclusive rights, irrespective of packaging differences, if essential features are copied

Introduction:

In the bustling world of India's cement industry, where brand identity can make or break a company, a fierce legal battle unfolded between Nuvoco Vistas Corporation Limited and JK Lakshmi Cement Limited. This case, decided by the High Court of Delhi on April 15, 2019, revolves around the contentious issue of trademark infringement, pitting the plaintiff’s registered mark "CONCRETO" against the defendants’ allegedly similar mark "CONCRETA." What began as a dispute over phonetic and visual similarity escalated into a complex examination of ownership, bad faith, and statutory rights under India’s trademark law. This case study delves into the intricate details of the factual and procedural background, the legal issues at stake, the arguments presented by both parties, the judicial reasoning, and the final outcome, offering a comprehensive look at a landmark trademark dispute.

Detailed Factual Background

Nuvoco Vistas Corporation Limited, the plaintiff, is a prominent player in India’s cement industry, tracing its lineage to Lafarge India Limited, a subsidiary of the French company Lafarge SA. The plaintiff claimed ownership of the trademark "CONCRETO," registered since November 30, 2005, under Registration No. 1402591 in Class 19 for cement and building materials. Additionally, Nuvoco held registrations for various labels featuring "CONCRETO" as the dominant element, including a distinctive slanting roof design, with usage dating back to 2002. The company asserted that it had invested heavily in promoting "CONCRETO," achieving significant sales and establishing it as a well-known mark, bolstered by prior legal victories against infringers.

The defendants, JK Lakshmi Cement Limited, another major cement manufacturer, introduced a product under the mark "CONCRETA," accompanied by a label design that Nuvoco alleged mimicked its own. The plaintiff argued that "CONCRETA" was deceptively similar to "CONCRETO," both visually and phonetically, and that the defendants’ adoption of this mark for identical goods—cement—constituted infringement, passing off, and unfair competition. The defendants, however, countered that "CONCRETO" was a descriptive term derived from "concrete," a generic word interchangeable with "cement," and thus incapable of exclusive appropriation. 

They further challenged Nuvoco’s ownership of certain marks due to a divestment process mandated by the Competition Commission of India (CCI). The backdrop to this dispute includes a significant corporate restructuring. In 2015-2016, following the global merger of Lafarge SA and Holcim, the CCI ordered the divestment of Lafarge’s Indian business to prevent monopolistic practices. This led to the creation of Nuvoco Vistas Corp. Ltd. through a Share Purchase and Transitional Agreement dated October 4, 2016, between LafargeHolcim and Nirchem Ltd. The agreement allowed Nuvoco to use certain "Corporate Marks" (including those with "Lafarge") during an 18-month phase-out period ending March 25, 2018, but explicitly recognized Nuvoco’s ownership of standalone marks like "CONCRETO."

Detailed Procedural Background:

The legal proceedings commenced with Nuvoco filing a suit (CS(COMM) 256/2017) in the High Court of Delhi, seeking a permanent injunction, damages, and other reliefs against JK Lakshmi for trademark infringement and passing off. On April 11, 2017, the court granted an ex parte ad interim injunction restraining the defendants from using "CONCRETA." Subsequently, Nuvoco filed I.A. No. 4261/2017 under Order 39 Rules 1 & 2 of the Code of Civil Procedure (CPC) to confirm this interim relief, while JK Lakshmi filed I.A. No. 5564/2017 under Order 39 Rule 4 CPC to vacate the injunction, arguing misrepresentation by the plaintiff.

The case was reserved for judgment on March 25, 2019, after extensive hearings involving arguments, rejoinders, and sur-rejoinders. Both parties submitted detailed pleadings, affidavits, and documentary evidence, including trademark registration certificates, CCI orders, and the Transitional Agreement. 

Issues Involved in the Case:

Whether Nuvoco had valid ownership and exclusive rights over the "CONCRETO" trademark, particularly in light of the CCI divestment orders and the Transitional Agreement? Whether the defendants’ mark "CONCRETA" was deceptively similar to "CONCRETO," constituting infringement under Section 29 of the Trade Marks Act, 1999? Whether "CONCRETO" was a descriptive term incapable of trademark protection, and if the defendants’ use of "CONCRETA" was in bad faith?

Plaintiff’s Submissions:

Nuvoco argued that it was the registered proprietor of "CONCRETO" since 2005 and had used it since 2002, establishing it as a well-known mark through extensive promotion and sales. The plaintiff highlighted seven registrations listed in paragraph 8 of the plaint, emphasizing "CONCRETO" as the essential feature. It contended that "CONCRETA" was visually and phonetically similar to "CONCRETO," with the defendants’ label mimicking its slanting roof design, suggesting bad faith given their shared industry. Nuvoco cited Laxmikant V. Patel vs. Chetanbhat Shah [2002 (24) PTC 1] to argue that even innocent infringement is actionable, though it asserted the defendants’ actions were deliberate. Regarding ownership, Nuvoco clarified through an affidavit dated November 30, 2018, that the CCI orders and Transitional Agreement preserved its rights over "CONCRETO," distinct from "Lafarge" marks, and accused the defendants of shifting to "PLATINUM" post-injunction, indicating guilt.

Defendants’ Submissions:

JK Lakshmi, argued that "CONCRETO" was descriptive, derived from "concrete," a generic term for cement in multiple languages, and thus lacked distinctiveness, citing J.R. Kapoor vs. Micronix India [1994 Supp (3) SCC 215]. They challenged Nuvoco’s ownership of five marks containing "Lafarge," excluded from the divestment business per the CCI order of February 2, 2016, asserting that Nuvoco lacked locus standi as a mere permitted user, not a proprietor. The defendants accused Nuvoco of suppressing the Transitional Agreement and CCI orders, violating the duty of utmost good faith (Morgan Stanley Mutual Fund vs. Kartick Das [1994] 4 SCC 225]), and sought vacation of the injunction. They further argued that "CONCRETA" and "CONCRETO" targeted different cement types and markets (East India vs. Rajasthan), minimizing confusion.

Detailed Discussion on Judgments Cited by Parties and Their Context:

Laxmikant V. Patel vs. Chetanbhat Shah [2002 (24) PTC 1]: Cited by the plaintiff to argue that even innocent infringement is actionable, though bad faith was evident here. The court used this to infer the defendants’ knowledge of "CONCRETO" given their industry overlap, rejecting any defense of innocence. J.R. Kapoor vs. Micronix India [1994 Supp (3) SCC 215]: The defendants relied on this Supreme Court ruling to assert that descriptive prefixes like "concrete" cannot be monopolized. The court, however, distinguished this by noting the defendants’ own registration application for "CONCRETA," undermining their argument. Morgan Stanley Mutual Fund vs. Kartick Das [1994] 4 SCC 225]: Cited by the defendants to emphasize the plaintiff’s duty of utmost good faith in seeking ex parte relief. The court rejected this, finding no material suppression given the confidential divestment process and sufficient disclosure in the plaint. Amritdhara Pharmacy vs. Satyadeo Gupta [1963 SCR 484]: Referenced by the court to assess phonetic and visual similarity, emphasizing overall impression over minute differences, supporting the finding of deception between "CONCRETO" and "CONCRETA." K.R. Chinna Krishna Chettiar vs. Shri Ambal and Co. [1969] 2 SCC 131]: Used by the court to affirm that resemblance in sound and sight suffices for infringement, reinforcing the phonetic similarity argument.Kaviraj Pandit Durga Dutt Sharma vs. Navaratna Pharmaceuticals Laboratories [AIR 1965 SC 980]: The court relied on this to distinguish infringement (statutory right) from passing off (common law), holding that essential feature adoption trumps packaging differences. Ramdev Food Products Pvt. Ltd. vs. Arvindbhai Rambhai Patel [AIR 2006 SC 3304]: Cited to counter the defendants’ claim that corporate name use diluted "CONCRETO," affirming its prominence in branding.Pankaj Goel vs. Dabur India Ltd. [2008 (38) PTC 49 (Del) DB]: Used to dismiss the defendants’ argument of third-party use, holding that inaction against minor infringers does not waive rights.P&G Manufacturing vs. Anchor Health & Beauty Care [FAO(OS) 241/2014]: Applied to reject the defendants’ descriptive claim, as their registration application for "CONCRETA" contradicted their stance.

Detailed Reasoning and Analysis of Judge:

The court first tackled ownership, finding no falsehood or suppression by Nuvoco. The court noted that all seven marks in paragraph 8 of the plaint were registered to Lafarge India (Nuvoco’s predecessor) at filing, and the Transitional Agreement permitted "Lafarge" use during the phase-out period, ending March 25, 2018. Crucially, "CONCRETO" was not a Corporate Mark, and Nuvoco retained exclusive rights post-phase-out, supported by unchallenged registration certificates.

On infringement, the court found "CONCRETA" visually and phonetically similar to "CONCRETO," differing only by one letter ("O" to "A"), satisfying Section 29 of the Trade Marks Act, 1999. Citing Amritdhara and Kaviraj Pandit, it emphasized overall impression over technical differences, dismissing the defendants’ "hammer and hand" logo as irrelevant to the essential feature’s similarity. The goods (cement) being identical further bolstered this conclusion.

The judge inferred bad faith from the defendants’ industry knowledge and lack of justification for adopting "CONCRETA," aligning with Laxmikant V. Patel. He rejected equity-based defenses (Morgan Stanley), noting infringers cannot claim good faith. The court also dismissed arguments about different trade channels or third-party use, citing Pankaj Goel and the broad scope of "cement" registration under Section 28. Finally, the defendants’ own application for "CONCRETA" registration (P&G Manufacturing) estopped their descriptive claim, showcasing their inconsistent stance.

Final Decision:

The court dismissed JK Lakshmi’s I.A. 5564/2017, refusing to vacate the April 11, 2017 injunction, and confirmed it via I.A. 4261/2017 until the suit’s final disposal. These findings were prima facie, preserving the parties’ rights at trial.

Law Settled in This Case:

Registration under Section 28 grants exclusive rights, irrespective of packaging differences, if essential features are copied.Phonetic and visual similarity suffices for infringement, judged by overall impression.Bad faith can be inferred from industry knowledge and lack of justification.Third-party use or inaction against minor infringers does not waive rights.A party cannot claim a mark is descriptive while seeking its registration.

Case Title: Nuvoco Vistas Corporation Limited Vs. JK Lakshmi Cement Limited

Date of Order: April 15, 2019

Case No.: CS(COMM) 256/2017

Neutral Citation: AIRONLINE 2019 DEL 630

Name of Court: High Court of Delhi at New Delhi

Name of Judge: Hon’ble Mr. Justice Manmohan

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi