Nandhini Deluxe Vs. Karnataka Cooperative Milk Producers Federation Ltd.

Section 11(2) requires proof of unfair advantage or detriment, not mere reputation

Introduction

The case of Nandhini Deluxe vs. M/S. Karnataka Cooperative Milk Producers Federation Ltd. is a significant trademark dispute adjudicated by the Supreme Court of India on July 26, 2018. The central issue revolved around the use and registration of the trademark "NANDHINI" by the appellant, a restaurant business, in the face of opposition from the respondent, a cooperative federation known for its milk and milk products sold under the phonetically similar trademark "NANDINI." This case exemplifies the application of trademark law principles under the Trade Marks Act, 1999, particularly concerning distinctiveness, likelihood of confusion, and the scope of monopoly over a class of goods. It underscores the balance between protecting established trademarks and allowing fair use by others in different trade contexts.

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Detailed Factual Background

• Respondent’s Business and Trademark: The respondent, Karnataka Cooperative Milk Producers Federation Ltd., adopted the trademark "NANDINI" in 1985 for its milk and milk products. The mark, registered under Classes 29 and 30 of the Trade Marks Rules, 2002, featured a logo of a cow with the word "NANDINI" in an egg-shaped circle. Over the years, the respondent claimed that "NANDINI" had become a well-known mark and a household name in Karnataka, akin to "Amul" in Gujarat, due to its extensive use and promotion.
• Appellant’s Business and Trademark: The appellant, M/S. Nandhini Deluxe, began using the trademark "NANDHINI" in 1989 for its restaurant business in Bangalore and one location in Tamil Nadu. The mark was stylized as "NANDHINI DELUXE" with a lamp device and the tagline "the real spice of life," applied to foodstuffs like meat, fish, poultry, fruits, vegetables, edible oils, and spices sold in its restaurants. The appellant sought registration of this mark under Classes 29 and 30, among others, but explicitly excluded milk and milk products from its claim.
• Nature of the Marks: Both "NANDINI" and "NANDHINI" are phonetically similar, differing only by one letter ("H"). However, their visual representations, logos, and business contexts were distinct. "NANDINI/NANDHINI" is a generic term in Hindu mythology, referring to a goddess and a cow, and is not an invented word.
• Timeline: The respondent’s use predated the appellant’s by four years (1985 vs. 1989). By the time the appellant applied for registration in the early 2000s, it had used "NANDHINI" for over a decade.

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Detailed Procedural Background

• Initial Application and Opposition: The appellant applied for registration of "NANDHINI DELUXE WITH LOGO (Kannada)" under Class 29 and related marks under Class 30. The respondent opposed these applications, arguing that "NANDHINI" was deceptively similar to its registered mark "NANDINI," likely to cause confusion, and that it had acquired distinctiveness through long use.
• Deputy Registrar’s Decision (August 13, 2007): The Deputy Registrar dismissed the respondent’s objections, finding no likelihood of confusion due to the differences in goods (restaurants vs. dairy products) and the distinct visual styles of the marks. Registration was granted to the appellant, excluding milk and milk products, under Sections 9, 11, and 18 of the Trade Marks Act, 1999.
• IPAB Appeals:
  • Order of April 20, 2010: In one appeal (OA/4/2008/TM/CH), the Intellectual Property Appellate Board (IPAB) upheld the Deputy Registrar’s decision, citing Vishnudas Trading to argue that a trader should not monopolize an entire class of goods if they only deal in specific items (milk vs. restaurant foodstuffs).
  • Order of October 4, 2011: In subsequent appeals, a different IPAB bench reversed the earlier ruling, allowing the respondent’s appeals. It held that "NANDINI" was a well-known mark, and the phonetic similarity with "NANDHINI" would confuse consumers, despite the appellant’s different goods.
• High Court Decision (December 2, 2014): The Karnataka High Court dismissed the appellant’s writ petitions, affirming the IPAB’s October 2011 order. It emphasized the distinctiveness of "NANDINI" and the potential for confusion within the same classes (29 and 30).
• Supreme Court Appeals: The appellant appealed to the Supreme Court (Civil Appeal Nos. 2937-2942 & 2943-2944 of 2018), challenging the High Court and IPAB’s findings.

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Issues Involved in the Case

1. Likelihood of Confusion: Whether the appellant’s use of "NANDHINI" was deceptively similar to "NANDINI," likely to cause confusion or deception among consumers?
2. Distinctiveness and Well-Known Status: Whether "NANDINI" had acquired such distinctiveness or well-known status under Section 11(2) that it precluded registration of "NANDHINI" for different goods in the same classes?
3. Scope of Monopoly: Whether the respondent’s registration under Classes 29 and 30 entitled it to a monopoly over all goods in those classes, or only the specific goods it traded (milk and milk products)?
4. Honest Concurrent Use: Whether the appellant’s long use of "NANDHINI" since 1989 qualified as honest concurrent use under Section 12, overriding the respondent’s objections?
5. Application of Trademark Law: Whether the IPAB and High Court correctly applied Sections 9, 11, and 12 of the Trade Marks Act, 1999?

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Detailed Submission of Parties

• Appellant’s Submissions:
  • No Confusion: The goods (restaurant foodstuffs) and trade channels (restaurants vs. dairy sales) were distinct, negating any likelihood of confusion under Sections 9 and 11. Cited British Sugar Plc v. James Robertson & Sons Ltd. ([1996] RPC 281) to argue that similarity of goods and confusion are separate inquiries.
  • Limited Monopoly: Per Vishnudas Trading v. Vazir Sultan Tobacco Ltd. ([1997] 4 SCC 201), a trademark owner’s rights extend only to goods they trade, not an entire class. The respondent’s business was confined to milk, not the appellant’s goods.
  • Not Well-Known: The respondent failed to prove "NANDINI" met the criteria for a well-known mark under Section 11(2), as laid out in Nestle India Ltd. v. Mood Hospitality Pvt. Ltd. ([2010] 42 PTC 514 (Del)).
  • Honest Use: The appellant’s use since 1989 was honest and concurrent, supported by the Deputy Registrar’s findings and Section 12.
  • Generic Name: "NANDHINI" being a common deity name weakened the respondent’s claim to exclusivity.
  • Concession: The appellant offered to exclude milk and milk products from its registration, addressing any overlap.
• Respondent’s Submissions :
  • Well-Known Mark: "NANDINI" was a household name in Karnataka with distinctiveness, meeting Section 11(2) criteria (Nestle India Ltd. applied). Its use since 1985 predated the appellant’s.
  • Confusion Likely: Phonetic identity ("NANDINI" vs. "NANDHINI") in the same classes (29 and 30) would confuse consumers, per IPAB and High Court findings.
  • Dishonest Use: The appellant knowingly adopted "NANDHINI" despite awareness of the respondent’s mark (evidenced by purchasing "NANDINI" milk), negating honest concurrent use under Section 12.
  • Religious Argument Counter: The appellant’s claim that "NANDHINI" as a deity name cannot be registered undermined its own application, but Section 9(2)(b) did not bar registration unless it hurt religious sentiments, which it did not.
  • Override by Section 11(2): The mandatory nature of Section 11(2) trumped Section 12’s discretionary provisions.

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Detailed Discussion on Judgments Cited by Parties

1. Vishnudas Trading v. Vazir Sultan Tobacco Ltd., [1997] 4 SCC 201:
   • Context: The Supreme Court held that a trademark owner cannot claim monopoly over an entire class if they only trade in specific goods within it.
   • Appellant’s Use: Argued that the respondent’s rights were limited to milk products, not all goods in Classes 29 and 30.
   • Court’s Application: The Supreme Court relied on this to reject the High Court’s broad class-based monopoly reasoning.
2. British Sugar Plc v. James Robertson & Sons Ltd., [1996] RPC 281 (CH):
   • Context: The UK court distinguished between similarity of goods and likelihood of confusion, rejecting the notion that a strong mark automatically protects dissimilar goods.
   • Appellant’s Use: Emphasized that confusion requires both similarity of marks and goods, not just phonetic similarity.
   • Court’s Application: Supported the finding that different goods and trade channels reduced confusion risk.
3. Nestle India Ltd. v. Mood Hospitality Pvt. Ltd., [2010] 42 PTC 514 (Del) (DB):
   • Context: The Delhi High Court outlined criteria for a well-known mark under Section 11(2): reputation, unfair advantage, and detriment.
   • Respondent’s Use: Argued "NANDINI" met these criteria, justifying broader protection.
   • Appellant’s Use: Contended insufficient evidence existed for such status.
   • Court’s Application: Found the respondent failed to prove unfair advantage or detriment by the appellant’s use.
4. Polaroid Corporation v. Polarad Electronics Corporation, 287 F.2d 492 (1961):
   • Context: The US court listed factors for assessing confusion (mark strength, similarity, product proximity, etc.).
   • Appellant’s Use: Applied these to argue no confusion due to different products and visual distinctions.
   • Court’s Application: Adopted this test, finding minimal confusion risk.
5. National Sewing Thread Co. Ltd. v. James Chadwick and Bros., AIR 1953 SC 357:
   • Context: The Supreme Court held that confusion is assessed from an average consumer’s perspective, not just mark comparison.
   • Appellant’s Use: Argued an ordinary person would not confuse restaurant goods with dairy products.
   • Court’s Application: Reinforced that visual and contextual differences negated confusion.
6. London Rubber Co. Ltd. v. Durex Products Inc., (1964) 2 SCR 211:
   • Context: Discussed the burden on an applicant to prove no deception under the Trade Marks Act.
   • Appellant’s Use: Asserted it met this burden with distinct goods and honest use.
   • Court’s Application: Implicitly supported the appellant’s discharge of this burden.

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Detailed Reasoning and Analysis of Judge

• Key Facts Recap: Highlighted the respondent’s prior use (1985) vs. the appellant’s long use (1989), different goods, generic nature of "NANDHINI," and visual distinctions in logos.
• Core Issue: Focused on whether "NANDHINI" infringed "NANDINI" by causing confusion or leveraging goodwill, rather than presuming the respondent’s distinctiveness (though assumed for argument’s sake).
• No Deceptive Similarity: Applying Polaroid and National Sewing Thread, the court found no confusion due to:
  • Different visual marks (lamp vs. cow logo).
  • Distinct goods (restaurant items vs. dairy) and trade channels.
  • An average consumer’s ability to differentiate based on context.
• Class Monopoly Rejected: Citing Vishnudas Trading, the court ruled that trademark rights extend only to goods traded, not entire classes. The respondent’s milk focus did not preclude the appellant’s registration for other Class 29/30 goods.
• Section 11(2) Analysis: Per Nestle India Ltd., the respondent failed to show the appellant’s use was unfair or detrimental to "NANDINI’s" repute, especially given the appellant’s early adoption (1989) before "NANDINI" arguably became well-known.
• Concurrent Use: The appellant’s 12-13 years of use before applying for registration suggested honest concurrent use under Section 12, unchallenged by the respondent via injunction.
• IPAB Inconsistency: Noted the IPAB’s April 2010 order (upholding registration) was ignored in its October 2011 reversal, hinting at issue estoppel, though not decisive given the merits ruling.
• Conclusion: Overturned the IPAB and High Court, restoring the Deputy Registrar’s order with the appellant’s concessions on milk products.

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Final Decision

The Supreme Court allowed the appeals, set aside the High Court (December 2, 2014) and IPAB (October 4, 2011) orders, and restored the Deputy Registrar’s registration grant, excluding milk and milk products as per the appellant’s concessions. No costs were awarded.

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Law Settled in This Case

1. Likelihood of Confusion: Assessed holistically (mark similarity, goods, trade channels), not just phonetically or by class overlap.
2. Class Monopoly: A trademark owner’s rights are limited to goods they trade, not an entire class (Vishnudas Trading affirmed).
3. Well-Known Mark: Section 11(2) requires proof of unfair advantage or detriment, not mere reputation.
4. Honest Concurrent Use: Long, unchallenged use can support registration under Section 12, even with phonetic similarity.

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Case Details

• Case Title: Nandhini Deluxe Vs. Karnataka Cooperative Milk Producers Federation Ltd.
• Date of Order: July 26, 2018
• Case No.: Civil Appeal Nos. 2937-2942 of 2018 with Civil Appeal Nos. 2943-2944 of 2018
• Neutral Citation: AIR 2018 Supreme Court 3516, (2018) 9 SCC 183
• Name of Court: Supreme Court of India
• Name of Judge: Hon'ble Justices Shri A.K. Sikri and Shri Ashok Bhushan)

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