### Introduction
This case revolves around the contentious use of the phrase "SUGAR FREE" in the context of trademark law, specifically in an action for passing off. It highlights the delicate balance courts must strike between protecting a plaintiff's established brand identity and allowing competitors to use descriptive terms in a fair manner. The dispute pits a pharmaceutical giant known for its artificial sweeteners against a food manufacturer introducing sugar-free products, raising questions about distinctiveness, descriptiveness, and the potential for consumer confusion. The judgment underscores the evolving jurisprudence on generic expressions in trademarks, emphasizing interim relief under the Code of Civil Procedure to maintain equilibrium pending full trial. By examining prior precedents involving the same plaintiff, the court navigates the line between proprietary rights and honest commercial use, offering insights into how courts assess visual prominence in packaging to prevent deception.
### Factual Background
The appellant, Cadila Healthcare Ltd., introduced a low-calorie table-top sweetener under the mark "SUGAR FREE" in 1988, which contained Aspartame and had only 2% of the calories of natural sugar. The product achieved significant market success, with sales amounting to around Rs. 216.40 crores from 1988 onwards, and trademark registration applications were pending. The appellant claimed that "SUGAR FREE" had become synonymous with its products among consumers. The respondent, Diat Foods (India), launched "Sugar Free Cookies" sweetened with Splenda, a competing artificial sweetener. On the respondent's packaging, "SUGAR FREE" was displayed in large, bright red fonts, making it highly prominent, while "Cookies" appeared in smaller, pale brown fonts, and phrases like "SUGARLESS Bliss" and "Sweetened with Splenda" were less emphasized. The respondent had applied for registration of "SUGARLESS" and/or "SUGARLESS Bliss" as its trademark. The appellant alleged that this packaging misled consumers into associating the cookies with its "SUGAR FREE" brand, diluting its mark and constituting passing off.
### Procedural Background
The appellant filed a suit for permanent injunction, damages, rendition of accounts, and delivery up, alleging passing off of its "SUGAR FREE" mark. Along with the suit, an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908, was filed seeking interim injunction. On February 5, 2008, the court granted an ex parte ad interim injunction restraining the respondent from using "SUGAR FREE" or any deceptively similar mark. The respondent contested the application, leading to the impugned order dated July 9, 2008, by a Single Judge, who dismissed the interim injunction with costs of Rs. 50,000, finding sufficient added matter in the respondent's packaging to distinguish it. Aggrieved, the appellant filed the present appeal (FAO (OS) No. 385 of 2008) before the Division Bench of the Delhi High Court. The appeal focused on modifying the interim arrangement, with the respondent proposing a revised packaging during hearings. The Division Bench heard arguments on the descriptive use of "SUGAR FREE" and pronounced judgment on September 29, 2010.
### Core Dispute
At the heart of the dispute was whether the respondent's prominent use of "SUGAR FREE" on its cookie packaging amounted to passing off the appellant's established mark, or if it was merely descriptive of the product's sugar-free nature. The appellant argued that "SUGAR FREE" had acquired secondary meaning and distinctiveness through extensive use and sales, entitling it to protection against dilution. It contended that the respondent's packaging, by emphasizing "SUGAR FREE" over its own marks like "SUGARLESS Bliss" and "Splenda," created confusion, suggesting a connection to the appellant's sweetener products. The respondent defended its use as descriptive and bona fide, pointing to its application for "SUGARLESS Bliss" and the use of a competitor's sweetener, Splenda. The court had to determine an interim balance: whether to restrain the use entirely, allow it without restrictions, or impose conditions on font size and prominence to prevent deception while permitting fair competition.
### Discussion on Judgments
The court extensively discussed prior judgments involving the appellant's "SUGAR FREE" mark to guide its decision. In Cadila Health Care Ltd. v. Gujarat Co-operative Milk Marketing Federation Ltd., 2008 (36) PTC 168 (Del.), a Single Judge examined the use of "SUGAR FREE" on Amul's "Pro Biotic Frozen Dessert" packaging, where it was alleged to be used as part of the trade mark rather than descriptively. The judge found prima facie distinctiveness in "SUGAR FREE" for the appellant's sweeteners but allowed descriptive use by the defendant, restraining only the overwhelming prominence that could confuse consumers into thinking the appellant's sweetener was an ingredient. This was referred to in the context of assessing whether absolute restraint on "SUGAR FREE" was warranted or if conditional use sufficed. The appeal against this, Cadila Health Care Ltd. v. Gujarat Co-operative Milk Marketing Federation Ltd., 2009 (41) PTC 336 (Del.), was analyzed in detail, where the Division Bench held that "SUGAR FREE" was not a coined word but a combination of common English terms, incapable of inherent distinctiveness across all food products. It affirmed the Single Judge's restriction on font size to ensure descriptive use without indicating a connection to the appellant, cited here to support interim restrictions on prominence rather than outright prohibition. In Cadila Health Care Ltd. v. Dabur India Ltd., 2008 (38) PTC 617 (Del.) (DB), the Division Bench addressed "SUGAR FREE" on Dabur's "Chyawanprash" packaging, finding no passing off as it was in smaller fonts compared to the main mark and prominently displayed the defendant's trade mark, referenced to illustrate that equal or lesser prominence avoids confusion. Similarly, Cadila Health Care Ltd. v. Shree Baidyanath Ayurved Bhawan Pvt. Ltd., 2008 (4) RAJ 611, involved "SUGAR FREE" on another "Chyawanprash" product, where the Bench concluded the use was descriptive and not perceived as the appellant's product due to matching font sizes with other descriptors, used in the present case to emphasize that prominence determines deceptive similarity. Finally, Goenka Institute of Education & Research v. Anjani Kumar Goenka, 2009 AIR (Del) 139, was drawn upon for its analysis of Section 12 of the Trade Marks Act, 1999, on honest concurrent use, where the court imposed conditions to prevent public confusion even in descriptive contexts, applied here to justify court-imposed limitations on font and prominence akin to registrar powers.
### Reasoning and Analysis of the Judge
The Division Bench, comprising Sanjay Kishan Kaul and Valmiki J. Mehta, JJ., reasoned that "SUGAR FREE" is a generic expression combining common words, not inherently distinctive across all products, but had acquired secondary meaning limited to the appellant's artificial sweeteners. Drawing from prior cases, the judges noted that absolute restraint was inappropriate for descriptive use, but unrestricted prominence could deceive consumers into associating the respondent's cookies with the appellant's brand, especially since Splenda, a competitor, was used. They analyzed the packaging visuals, finding the original and proposed modified cartons gave undue emphasis to "SUGAR FREE," overshadowing "SUGARLESS Bliss" and "Sweetened with Splenda," indicating dishonest intent rather than pure descriptiveness. Invoking the principle of balancing equities under Order 39 Rules 1 and 2, the court emphasized maintaining status quo pending trial, where public interest in avoiding confusion is paramount. Analogizing to honest concurrent use under Section 12 of the Trade Marks Act, they held that courts can impose conditions like equal prominence to ensure the expression conveys sans sugar without implying a brand connection. The judges rejected the respondent's unwillingness to equalize prominence, concluding that extra emphasis on "SUGAR FREE" conveyed a false association, warranting modification of the impugned order to prevent deception while allowing use.
### Final Decision
The appeal was allowed to a limited extent, modifying the impugned order. The court held there would be no restraint on the respondent using "SUGAR FREE," but it must not be used with greater prominence or larger font size than "SUGARLESS Bliss" and "Sweetened with Splenda." The grant of Rs. 50,000 costs in the impugned judgment was set aside. The respondent was granted 30 days to exhaust existing packaging stock. The court clarified that its observations were for interim purposes only and would not influence the final trial.
### Law Settled in This Case
This case reinforces that generic expressions like "SUGAR FREE" cannot be monopolized absolutely but may acquire limited secondary meaning, entitling protection against passing off if used deceptively. It settles that in interim proceedings under Order 39 Rules 1 and 2 of the Code of Civil Procedure, courts can impose conditions on font size and prominence in packaging to balance proprietary rights with fair descriptive use, preventing consumer confusion. Drawing from Section 12 of the Trade Marks Act, 1999, it establishes that even in passing off actions, analogous powers allow restrictions to ensure honest use without deception, particularly when prominence suggests a false brand connection.
### Case Details
Case Title: Cadila Healthcare Ltd. Vs. Diat Foods (India)
Date of Order: September 29, 2010
Case Number: FAO (OS) No. 385 of 2008
Neutral Citation: 2010 SCC OnLine Del 3445
Name of Court: High Court of Delhi
Name of Judge: Sanjay Kishan Kaul and Valmiki J. Mehta, JJ.
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
Here are various suitable titles for this article for publication in a Law Journal:
1. Balancing Descriptiveness and Distinctiveness: Interim Relief in Passing Off Actions Involving Generic Trademarks – A Study of Cadila Healthcare Ltd. v. Diat Foods (India)
2. The Prominence Paradigm: Judicial Restrictions on Font Size in Trademark Packaging under Order 39 CPC
3. "SUGAR FREE" Saga: Evolving Jurisprudence on Secondary Meaning and Honest Concurrent Use in Indian Trademark Law
4. Preventing Deception through Design: Analyzing Division Bench Interventions in Descriptive Mark Disputes
5. From Amul to Diat: Comparative Insights into Conditional Injunctions for Generic Expressions in Passing Off Cases
6. Trademark Dilution and Consumer Confusion: The Role of Visual Prominence in Interim Trademark Protection
7. Honest Use or Hidden Deception? A Critical Examination of Packaging Elements in Cadila's "SUGAR FREE" Litigation
8. Section 12 Trade Marks Act in Passing Off Contexts: Judicial Analogies for Equitable Interim Arrangements
