NANDHINI vs NANDINI: When a Restaurant Can Share a Name with a Dairy Giant
Introduction
Trademark law in India constantly grapples with a deceptively simple question: when does one trader's use of a name cross the line into unfair appropriation of another's goodwill? The Supreme Court of India, in its judgment dated July 26, 2018, in Nandhini Deluxe v. Karnataka Co-Operative Milk Producers Federation Ltd., addressed this question in a setting that captured the imagination of intellectual property practitioners across the country. On one side stood a well-known Karnataka dairy cooperative, the force behind the beloved "NANDINI" milk brand that has been a household staple since 1985. On the other stood a Bangalore restaurant chain that had been trading under the name "NANDHINI" since 1989. The case wound its way through the Deputy Registrar of Trade Marks, two rounds before the Intellectual Property Appellate Board (IPAB), the High Court of Karnataka, and finally the Supreme Court of India, before an authoritative answer emerged. The judgment is significant not just for what it decided, but for the clarity it brought to the law on phonetic similarity, class-based monopoly in trademarks, the concept of well-known marks, and the rights of concurrent users.
Factual and Procedural Background
The Karnataka Co-Operative Milk Producers Federation Ltd., the Respondent, is a cooperative body representing milk producers of Karnataka. In the year 1985, the Federation adopted the brand name "NANDINI" along with a distinctive logo depicting a cow, for marketing its milk and milk products such as curd, butter, cheese, ghee, milk powder, flavoured milk, paneer, khoya, ice cream, and milk-based sweets. These products were sold in bottles, sachets, tetra packs, and polythene containers. The Federation registered the mark "NANDINI" under Class 29 and Class 30 of the Trade Marks classification schedule, and also secured copyright registrations as early as 1984 and 1985. Over the years, the brand grew into a widely recognized name across Karnataka and parts of South India, with significant sales turnover and promotional expenditure.
The Appellant, Nandhini Deluxe, is a restaurant business operating in Bangalore. In 1989, it adopted the name "NANDHINI" for its chain of vegetarian and non-vegetarian Andhra-style restaurants, using a distinctive logo featuring a lamp and a particular artistic style of writing the name, along with the tagline "the real spice of life." The Appellant had by then opened six branches across Bangalore and had also obtained a copyright registration for its artistic mark under the Copyright Act, 1957. The Appellant used this name continuously from April 1, 1989, and applied for trademark registration of "NANDHINI DELUXE WITH LOGO (in Kannada)" in respect of goods in Class 29 and Class 30, which included meat, fish, poultry, game, meat extracts, preserved and dried fruits and vegetables, edible oils, salad dressings, eggs, and various food preparations used in its restaurant operations, as well as stationery items falling under Class 16.
When the Appellant's registration applications came up, the Federation filed opposition proceedings. The Deputy Registrar of Trade Marks, by order dated August 13, 2007, dismissed the Federation's opposition and allowed the Appellant's application to proceed to registration, subject to one important condition: the Appellant was directed to delete "milk and milk products" from its application, since the Federation was already an established and well-recognized producer of those specific goods. The Deputy Registrar found that the two marks, although phonetically similar, had entirely different artistic styles and logos, that the actual goods being traded were different even within the same broad classification, and that no evidence had been produced by the Federation to show that the restaurant's use of "NANDHINI" was causing actual confusion or deception among consumers. The Appellant accordingly filed an affidavit deleting milk and milk products from its specification.
Aggrieved, the Federation challenged this order before the IPAB in Chennai. In an appeal decided on April 20, 2010 (OA/4/2008/TM/CH), the IPAB actually agreed with the Deputy Registrar and dismissed the Federation's appeal. Relying on the Supreme Court's judgment in Vishnudas Trading as Vishnudas Kushandas v. Vazir Sultan Tobacco Ltd., the IPAB held that since the Federation traded only in milk and milk products and had no bona fide intention to expand into the other goods applied for by the Appellant, the Federation could not be permitted to monopolize the entire Class 29 spectrum. It also noted that the Federation had failed to prove that allowing registration in favour of the Appellant would cause confusion or deception.
However, the story did not end there. In a different set of appeals between the same parties on the same issue, a separate Bench of the IPAB passed an entirely contradictory order on October 4, 2011. This Bench allowed the Federation's appeals and cancelled the Appellant's registration. It held that "NANDINI" had become a well-known mark and a household name in Karnataka, that the addition of the letter "H" made no phonetic difference because both words are pronounced identically, and that even in Kannada script the two marks are spelt the same. It further held that since goods of both parties fell within the same classes, an average consumer would assume that goods bearing the "NANDHINI" mark also originated from the Federation. It found no relevance in the fact that the Federation had not raised any objection to the restaurant's use of the mark for 18 years.
The Appellant challenged the October 2011 IPAB order before the High Court of Karnataka by filing writ petitions. The High Court, by its impugned judgment dated December 2, 2014, upheld the IPAB's October 2011 order and dismissed the Appellant's writ petitions. The High Court agreed that the mark "NANDINI" had acquired a distinctive character, that the phonetic identity of the two marks in Kannada and in pronunciation was enough to cause confusion, and that registration within the same class made confusion inevitable. This led the Appellant to approach the Supreme Court of India, which took up the matter in Civil Appeal Nos. 2937-2942 and 2943-2944 of 2018.
The Dispute
At the heart of the controversy lay a set of interlocking questions. First, were the two marks — "NANDHINI DELUXE WITH LOGO" used by the restaurant, and "NANDINI WITH COW DEVICE" used by the dairy federation — so similar as to be likely to cause confusion or deception in the minds of an average consumer? Second, even if there was phonetic similarity in the two words, did the entirely different nature of the goods, the entirely different logos and artistic representations, and the different channels of trade, eliminate the likelihood of confusion? Third, could the Federation claim monopoly over the entire breadth of Class 29 and Class 30 goods merely because it was a registered proprietor of "NANDINI" in respect of milk and milk products? Fourth, was "NANDINI" a well-known mark under Section 11(2) of the Trade Marks Act, 1999, so as to prevent registration of even a phonetically similar mark for different goods within the same class? And finally, was the Appellant a concurrent and honest user of its mark since 1989, entitled to the benefit of Section 12 of the Act?
The Appellant's counsel, Mr. Sushant Singh, argued that the IPAB and High Court had only compared the words, without comparing the marks in their totality and without properly examining whether the actual goods were similar. He relied on Polaroid Corporation v. Polarad Electronics Corporation (287 F.2d 492, 1961) to argue that likelihood of confusion must be assessed by multiple variables, including strength of the mark, degree of similarity between the two marks, proximity of products, likelihood of the senior user bridging the product gap, evidence of actual confusion, good faith of the adopter, quality of the product, and sophistication of the buyers. He invoked Vishnudas Trading as Vishnudas Kushandas v. Vazir Sultan Tobacco Co. Ltd. (1997) 4 SCC 201 to urge that the proprietor of a mark cannot enjoy monopoly over an entire class when they actually trade in only a part of that class. He argued that the IPAB's October 2011 order also conflicted with and ignored the IPAB's own earlier April 2010 order on identical facts, thus raising the principle of issue estoppel, relying on Bhanu Kumar Jain v. Archana Kumar (2005) 1 SCC 787 and Hope Plantations Ltd. v. Taluk Land Board (1999) 5 SCC 590.
The Respondent's senior counsel, Mr. S.S. Naganand, countered that the IPAB had correctly found "NANDINI" to be a well-known mark under Section 11(2) read with Section 11(8) of the Act, and had rightly held that the average consumer would associate any goods in Class 29 or 30 bearing that name with the Federation. He argued that "NANDHINI is to Karnataka what Amul is to Gujarat," and that the Appellant's restaurants were confined only to Bangalore and one town in Tamil Nadu, while "NANDINI" was recognized across all of Karnataka. He also submitted that the Appellant could not claim honest and concurrent use because the Appellant had itself admitted to purchasing NANDINI milk for use in its restaurants, demonstrating awareness of the Federation's mark.
Reasoning and Analysis of the Judge
Justice A.K. Sikri, writing for a Bench comprising himself and Justice Ashok Bhushan, began by carefully laying down the undisputed facts before proceeding to analysis. He noted that the Respondent had started using "NANDINI" in 1985, while the Appellant had adopted "NANDHINI" in 1989. The Appellant had thus used its mark for 12 to 13 years before even applying for registration. The goods of both parties fell under Classes 29 and 30, but the actual goods were entirely different in nature: the Federation sold only milk and milk products, while the Appellant's goods were meat, fish, poultry, game, preserved fruits, edible oils, salad dressings, and restaurant food preparations. The Appellant had already surrendered its claim to milk and milk products, which took away the only real zone of overlap. The word "NANDINI/NANDHINI" was acknowledged to be a generic mythological name representing a goddess and a sacred cow in Hindu tradition, not an invented or coined word belonging exclusively to either party.
On the crucial question of whether the two marks were deceptively similar when viewed in their totality, the Court was emphatic. It noted that while the two words were phonetically similar, the marks as a whole were visually and stylistically entirely distinct. The Appellant's mark featured the word "NANDHINI" written in a particular artistic style with a lamp device, supplemented by the word "DELUXE" and the tagline "the real spice of life." The Respondent's mark featured the word "NANDINI" in plain lettering, accompanied by the image of a cow standing on a grassland with a rising sun in the background, enclosed in an egg-shaped circle. The Court held that a bare perusal of the two marks would reveal that there was hardly any visual similarity when the marks were seen in their totality. This observation was central to the Court's reasoning, because Indian trademark law requires the marks to be compared as wholes, not dissected letter by letter.
The Court then applied the principles settled in National Sewing Thread Co. Ltd. v. James Chadwick and Bros. AIR 1953 SC 357, where the Supreme Court had held that the real question in trademark confusion cases is how an average purchaser of ordinary intelligence would react to a particular trademark — what association he would form upon seeing it, and with what goods he would connect it. Applying this test, the Court found it difficult to imagine that an ordinarily intelligent consumer would associate goods sold at a restaurant under the mark "NANDHINI DELUXE — the real spice of life" with the milk sold in sachets and tetra packs by the cooperative under the mark "NANDINI with a cow device." The channels of trade, the manner of display, the nature of the buying experience, and the context of purchase were entirely different.
The Court also spotted a significant factual error in the reasoning of both the IPAB and the High Court. They had proceeded on the assumption that all the goods of the Appellant fell within Class 29 or 30. In reality, the Appellant had applied for registration in respect of restaurant-related goods such as coffee, tea, cocoa, sugar, rice, tapioca, sago, flour preparations, bread, pastry, spices, and stationery items like bill books and visiting cards, which did not fall under Class 29 or Class 30 at all. Stationery items were relatable to Class 16. The Court found that neither the IPAB nor the High Court had addressed this aspect, and that it further eliminated any real scope for confusion between the two marks.
On the law of class-based monopoly, the Court emphatically reaffirmed the principle laid down in Vishnudas Trading as Vishnudas Kushandas v. Vazir Sultan Tobacco Co. Ltd. (1996 SCALE (5) 267 / (1997) 4 SCC 201). In that case, the Supreme Court had held that a trader who actually deals in only one or some articles within a broad classification, and has no bona fide intention to deal in other articles within the same class, cannot claim monopoly over all goods in that class. If such a broad registration is given, the registration must be rectified to confine it to the specific articles actually in use. Allowing otherwise would amount to trafficking in a trademark, which the Trade Marks Act does not permit. In Vishnudas, the mark was "Charminar" used for cigarettes, and the Court there held that the registration could not extend to block all tobacco products in Class 34. The Supreme Court in the present case applied the same principle: since the Federation traded only in milk and milk products and had never expanded to other goods in Class 29 or 30, it could not prevent registration of the Appellant's mark for goods like meat, fish, preserved vegetables, and edible oils simply because they fell within the same broad classification.
The Court also addressed the Section 11(2) argument about well-known marks with care. It referred to the conditions laid down by the Delhi High Court in Nestle India Ltd. v. Mood Hospitality Pvt. Ltd. (2010) 42 PTC 514 (Del) (DB) for invoking Section 11(2): the mark seeking registration must be identical or similar to an earlier trademark; the goods or services for which registration is sought must be different from those of the earlier mark; the earlier mark must have a reputation in India; the use of the later mark must be without due cause; and such use must take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier mark. The Court held that on the facts of this case, the Appellant had adopted "NANDHINI" for its restaurants as early as 1989, very shortly after the Federation began using "NANDINI" in 1985. There was no material on record to show that by 1989, within just four years of the Federation's adoption, the mark had already acquired such distinctiveness as to put the Appellant on notice that its adoption was dishonest. The Court therefore found that the use by the Appellant appeared to be a case of honest concurrent use, and that the Appellant had not sought to take unfair advantage of the Federation's goodwill. Accordingly, not all the ingredients of Section 11(2) were satisfied, and the provision could not be invoked to cancel the Appellant's registration.
The Court also noted with concern that the IPAB's October 2011 order had simply ignored its own earlier order of April 20, 2010, passed by a Coordinate Bench between the same parties on the identical issue, in which the Respondent's appeal had been dismissed. The Court found that this prima facie raised an issue of estoppel between the parties, citing Bhanu Kumar Jain v. Archana Kumar and Anr. (2005) 1 SCC 787 and Hope Plantations Ltd. v. Taluk Land Board, Peermade and Anr. (1999) 5 SCC 590. However, since the Court was deciding the matter on merits in favour of the Appellant, it did not find it necessary to decide the estoppel point formally.
The Court also drew support from the test in Polaroid Corporation v. Polarad Electronics Corporation (287 F.2d 492, 1961) for assessing trademark confusion where the products are different. That test, which has been widely adopted in Indian trademark jurisprudence, requires examination of the strength of the mark, the degree of similarity between the marks, the proximity of the products, the likelihood that the senior user will bridge the gap into the junior user's product territory, evidence of actual confusion, the good faith of the junior adopter, and the sophistication of the buyers. Applying these variables, the Court found that while the mark "NANDINI" was undeniably strong, the goods were separated by a considerable commercial distance, there was no evidence of actual confusion over a span of more than two decades of parallel use, the Appellant appeared to have adopted the name in good faith, and the buyers of restaurant food and packaged dairy products were likely sophisticated enough to distinguish between the two.
On the question of the London Rubber Co. Ltd. v. Durex Products Incorporated and Anr. (MANU/SC/0134/1963 : (1964) 2 SCR 211) and the British Sugar Plc v. James Robertson & Sons Ltd. (1996) RPC 281 decisions cited by the Appellant, the Court acknowledged the settled principle that similarity of goods and likelihood of confusion are independent inquiries — a strong mark does not automatically get protection over an ever-wider range of goods, because the question of whether the goods are similar must be determined independently of the strength of the mark.
Final Decision of the Court
The Supreme Court, by its judgment dated July 26, 2018, allowed the civil appeals filed by Nandhini Deluxe and set aside the orders of both the IPAB (October 4, 2011) and the High Court of Karnataka (December 2, 2014). The order of the Deputy Registrar of Trade Marks dated August 13, 2007, which had granted registration to the Appellant, was restored. The restoration came with one modification: registration would not be granted to the Appellant in respect of milk and milk products, which the Appellant had already voluntarily abandoned and deleted from its specification by filing the requisite affidavit and Form 16 as directed. No costs were awarded by the Court given the peculiar facts of the case.
Point of Law Settled in the Case
This judgment settled several important principles of Indian trademark law. The most significant is that registration of a trademark within the same broad class does not automatically confer upon the senior registrant a monopoly over all goods in that class. The test for deceptive similarity requires the competing marks to be compared as wholes — in their totality, including their visual appearance, artistic style, logos, additional words, and overall commercial impression — and not merely by comparing the dominant word in isolation. Phonetic similarity alone is insufficient to establish deceptive similarity if the overall trade dress and context of use are entirely different. The nature and character of the goods actually being traded, the channels of distribution, and the profile of the average buyer are all relevant in assessing likelihood of confusion. A well-known mark under Section 11(2) of the Trade Marks Act, 1999, does not automatically trump a concurrent user's claim, particularly if the concurrent use predates the acquisition of distinctiveness by the earlier mark. Finally, honest concurrent use of a mark by a party since a period when the other party's mark had not yet acquired widespread distinctiveness is a valid defence, and the senior user who seeks to displace the concurrent user must show clear evidence of dishonesty or unfair advantage.
Case Details
Title: Nandhini Deluxe Vs. Karnataka Co-Operative Milk Producers Federation Ltd. Date of Order: July 26, 2018 Case Number: Civil Appeal Nos. 2937-2942 and 2943-2944 of 2018 Neutral Citation: MANU/SC/0779/2018; 2018(9)SCALE202 Court: Supreme Court of India Hon'ble Judges: Justice A.K. Sikri and Justice Ashok Bhushan
Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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Headnote
Nandhini Deluxe v. Karnataka Co-Operative Milk Producers Federation Ltd., Civil Appeal Nos. 2937-2942 and 2943-2944 of 2018, decided July 26, 2018, Supreme Court of India (Justice A.K. Sikri and Justice Ashok Bhushan) — Trade Marks Act, 1999, Sections 9, 11, 12, 18 — Deceptive Similarity — Class Monopoly — Well-Known Mark — Honest Concurrent Use — The Appellant, a Bangalore restaurant chain, adopted the mark "NANDHINI DELUXE WITH LOGO" in 1989 for food items sold in its restaurants. The Respondent, a dairy cooperative, had been using the mark "NANDINI WITH COW DEVICE" since 1985 for milk and milk products, with valid registrations under Classes 29 and 30. The Deputy Registrar granted registration to the Appellant (excluding milk and milk products) in 2007. The IPAB reversed this in October 2011, and the High Court upheld the reversal in December 2014. Held by Supreme Court: (i) Competing marks must be compared in their totality, including visual style, logo, additional words, and overall impression; phonetic similarity in one component word is insufficient to establish deceptive similarity where the overall marks are visually and commercially distinct. (ii) Registration of a mark within a broad classification does not grant the senior registrant monopoly over all goods within that class; protection extends only to the goods actually being traded by the registrant, following Vishnudas Trading v. Vazir Sultan Tobacco (1997) 4 SCC 201. (iii) Section 11(2) of the Trade Marks Act, 1999, requires proof that the later mark was adopted without due cause and to take unfair advantage of the earlier mark's reputation; where adoption of the later mark predates the acquisition of distinctiveness by the earlier mark, honest concurrent use is established. (iv) An average consumer of ordinary intelligence who purchases restaurant food is unlikely to confuse it with packaged dairy products merely because of phonetic similarity in the brand names, especially when the logos, trade dress, and context of sale differ entirely. The orders of the IPAB and High Court were set aside, and the Deputy Registrar's order granting registration to the Appellant was restored, subject to exclusion of milk and milk products. Appeals allowed. No costs.
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