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2001 DIGILAW 767 (CAL)

Societe Dos Products Nestle, S. A. v. "Kit-Kat" Food Product

2001-12-19

PINAKI CHANDRA GHOSE

body2001
Judgment P.K. Ghose, J. The petitioner has filed this application inter alia for an injunction restraining the defendant Nos. 1, 2 and 3 from carrying on business in the name and style of Kitkat Food Products or in any other name or style bearing the words "KIT KAT" or in any name or style bearing any word or words either deceptively similar to or identical therewith and further order of injunction be made restraining the defendant Nos. 1, 2 and 3 either by themselves, or through their men, servants or agents from either manufacturing or marketing any product including confectionery items, chocolate, cereals, preparations made from cereals and snacks under the brand name "KIT KAT" and further to disclose particulars of all sales made by them of products under the brand name "KIT KAT". Facts of the case briefly are as follows:- 2. The petitioner No.1 is the registered owner of the trade mark and trade name "KITKAT". According to the petitioner, the said trade mark and trade name is as such the executive property of the petitioner No. 1. The petitioner No.2 is the licencee of the said trade mark and in India. 3. According to the petitioner, the defendant No.1 is carrying on business in a trade name which is exclusive property of the petitioner No. 1. The defendant Nos. 1 to 3 are manufacturing and selling chanachur and nuts under the brand name "KIT KAT", being the registered trade mark of the petitioner No.1 and the defendant No.4 carries on business as a retailer of both chocolates and chanachur and nuts within the jurisdiction of this High Court. 4. Petitioners are engaged in the manufacture and sale of an extensive range of food and other products such as cereals, milk and dietetic products, beverages including instant coffee, culinary products including pasta, noodles, sauces and soups etc. One of the many products manufactured by the petitioners are crisp wafer fingers covered with milk chocolate which the petitioners sell under the trade mark and trade name "KITKAT". 5. KITKAT was launched in the United Kingdom in August, 1935 and in 1949 the said product was recognised simply by the trade mark and trade name "KITKAT". "KITKAT" is sold in over 50 countries around the world and the sale of "KIT KAT" exceeds 225 million pound sterling a year in the United Kingdom alone. 6. 5. KITKAT was launched in the United Kingdom in August, 1935 and in 1949 the said product was recognised simply by the trade mark and trade name "KITKAT". "KITKAT" is sold in over 50 countries around the world and the sale of "KIT KAT" exceeds 225 million pound sterling a year in the United Kingdom alone. 6. In the year 1959 the petitioner No.2 was set up in India. Since then the petitioner No.2 has been engaged in the business of manufacturing and selling milk, products such as condensed milk, infant formulae, cereal foods for infants, chocolates, coffee, tea and other food preparations and beverages. Till 28th March, 1990 the petitioner No.2 was known as Food Specialities Limited. With effect from 29th March, 1990 the name of the petitioner No.2 has been changed to its present name in accordance with the provisions of the Companies Act, 1956. Since August, 1995 the petitioner started manufacturing the selling "KITKAT" in India. Since thereafter, such value has exceeded Rs.264 crores in India. 7. In the year 1998 "KITKAT" was sold in India over Rs.70 crores. The petitioners spend enormous amounts of money every year for promoting and advertising "KITKAT" all around world, including in India. 8. On pt December, 1942 Rowntree and Company Limited obtained the registration of the trade mark "KITKAT" in India in Class 30 in respect of Cocoa, Chocolate Confectionery and Chocolate biscuits under the provisions of the Trade and Merchandise Marks Act, 1940. In the year 1969, the said Company changed its name to Rowntree Mackintosh Limited. Thereafter, the name further changed to Rowntree Mackintosh Confectionery Limited which was taken over by the Nestle Group of Companies in the year 1988. 9. Pursuant to such take-over, the trademark "KITKAT" was assigned by Rowntree Machintosh Confectionery Limited in favour of the petitioner No. 1. The petitioner No.1 also obtained registration of the trade mark "KITKAT" in Class 30 in respect of Cocoa, Chocolates etc. under the provisions of the Trade and Merchandise Marks Act, 1958, and the Registration Certificate No.473754. 10. On 16th June, 1987 the petitioner No.1 filed applications bearing Nos. 473752 and 473753 in India for registration of the said trade mark "KITKAT" in Class 30. The said trade mark was advertised in the Trade Mark Journal No. 1117 dated 16th December, 1987. 10. On 16th June, 1987 the petitioner No.1 filed applications bearing Nos. 473752 and 473753 in India for registration of the said trade mark "KITKAT" in Class 30. The said trade mark was advertised in the Trade Mark Journal No. 1117 dated 16th December, 1987. The petitioner No.1 is the owner of the copy right in respect of packaging of the KITKAT under the Copyright Act, 1957. The petitioner No.1 is the proprietor of the artistic work on the packaging of the said product and has the exclusive right to use the said mark and to reproduce the said artistic work in any material form both in India and abroad. The long and continuous user of the said trade mark and artistic work all over the world, including in India since 1995, has conferred on the petitioners substantial reputation and goodwill which the petitioners alone are entitled to exploit. 11. The defendant Nos. 2 and 3 being the partners of the defendant No.1 on 23rd February, 1996 had filed notices of opposition to the petitioners' application Nos. 473752 and 473753 in Class 30. The defendants have also published any purported caution notices alleging that they were the proprietors of the trade mark "KITKAT." 12. It is also stated by the defendants that they have applied the registration of the said trade mark "KITKAT" in Class 30 in application No. 545855 and had also obtained a copyright registration in respect of the artistic work of KITKAT as represented on their products. On 16th December, 1997 the application of the defendant No.1 for registration of "KITKAT" as its trade name and Trade Mark, was published in the Trade Mark Journal No. 1165. 13. According to the petitioner, the defendants have consciously copied the petitioners' trade mark and product packaging to achieve sales. Each and every feature of the petitioners trade mark and packaging has been copied identically by the defendants including:- a) the bright red packaging; b) the mark encompassed by an oval device; c) the words "KIT KAT" in red colour upon a white background; and d) a red line outside the oval device. 14. It is further stated that the use of colour combination of red and white by the defendants only go to increase the likelihood of confusion and deception keeping in mind the class of consumers. 14. It is further stated that the use of colour combination of red and white by the defendants only go to increase the likelihood of confusion and deception keeping in mind the class of consumers. Further the channels of trade and even the counters for sale are common in both these cases. 15. In these circumstances the petitioner filed a suit against the defendant Nos. 1, 2 and 3 being the Suit No. 94 of 1998 in the High Court at New Delhi. The said suit was withdrawn since the said High Court did not have jurisdiction to receive, try and determine the said suit. Accordingly, petitioners have filed this suit in this Hon'ble Court. 16. The defendants are not entitled to use the petitioners trade name and trade mark "KITKAT" either as their trade name and trade mark, which they are wrongfully and illegally continuing to do and the said defendants were well and fully aware of the fact that the "KITKAT" trade mark and trade name is the sole and exclusive property of the petitioners and that the petitioners alone have the right to exploit the same. 17. The defendants are not entitled to use the trade mark and trade name "KITKAT" or any colourable imitation thereof or any other mark deceptively similar thereto either as a part of their trade name or as their trade make. The adoption and use of the said trade mark and trade name "KITKAT" by the defendant Nos. 1, 2 and 3 is wholly illegal and dishonest. 18. It has already been stated that the defendants have no valid reasons or justification to adopt the said trade mark and trade name "KITKAT". The use of the word "KITKAT" by the defendants as the trade name and trade mark is likely and calculated to cause deception and confused. 19. The defendant Nos. 1 to 3 have passed of and are further attempting to pass off both their business and their products as being those of the petitioners or otherwise connected to the same. The defendant Nos. 1 to 3 are denying and further interested to deny further the petitioners' right to exclusively use the trade mark "KITKAT" in relation to their products and business, and there exists no standard for ascertaining the actual damage caused or likely to be caused by such invasion. 20. The defendant Nos. 1 to 3 are denying and further interested to deny further the petitioners' right to exclusively use the trade mark "KITKAT" in relation to their products and business, and there exists no standard for ascertaining the actual damage caused or likely to be caused by such invasion. 20. In these facts and circumstances the petitioners further stated that the defendant Nos. 1 to 3 are acting with the mala fide intention and objected of passing of their products. 21. Learned Senior Counsel appearing on behalf of the petitioners contended before me that the defendants as stated in their affidavit that the petitioners have been using the name "KITKAT" since 1991. But the invoices of local sales disclosed by the defendant Nos. 1, 2 & 3, however, do not mention the name "KITKAT". He further submitted that only one export invoice has been disclosed by the said defendants showing export to a Japanese party. He also contended that neither the order of the Japanese party nor any correspondence exchanged with it has been disclosed by the said defendants. 22. He also submitted that a large number of invoices have been discolsed by the defendant Nos. 1, 2 and 3 showing purchase of PVC Sheets, banners etc. and the incurring of other promotional expenses. He further contended that it is difficult to believe that such large advertisement cost can be incurred for the sale of chanachur. He also contended that the only explanation given by the defendant Nos. 1 to 3 for using the said name "KITKAT" in the affidavit-in-opposition that the defendants have been manufacturing and selling chanachur under the trade name "KITKAT" as the same is a 'typically Indian salted chitchat snack which falls in the category of a hotch potch product.' He further contended that such explanation on the fact of it, is no explanation at all. 23. He further contended that the petitioner is entitled to get protection since it is continued to use the said Kitkat since 1947. He also relied upon the judgment reported in AIR 1995 Delhi 300 (N.R. Doggre & Ors. vs. Whirlpool Corporation & Ors.) and contended that in today's world it cannot be said that a product and the trade mark under which it is sold or bought does not have a reputation or goodwill in countries where it is not available. He also relied upon the judgment reported in AIR 1995 Delhi 300 (N.R. Doggre & Ors. vs. Whirlpool Corporation & Ors.) and contended that in today's world it cannot be said that a product and the trade mark under which it is sold or bought does not have a reputation or goodwill in countries where it is not available. He also relied upon judgments reported in 1999 PTC (19) (DB) 123 (Caesar Parh Hotles and Resorts Inc. vs. West Inn Hospitality Services), 1993 IPLR 63 (Apple Computer Inc. vs. Apple Leasing and Industries), 1998 PTC (8) 1 (Kamal Trading Co. Bombay & Ors. vs. Gillette U.K. Limited, Middle Sex, England). 24. He further contended that the defendant Nos. 1, 2 & 3 are selling, of chanachur are restricted to only around in Calcutta and its suburbs. He also relied upon a judgment reported in AIR 1990 Delhi 19 (Hindustan Pencils Private Limited vs. India Stationary Products Company) and submitted that it is now well settled that the user of a mark is not bona fide, the delay is of no consequence. He further relied upon judgments reported in 1999 PTC 1981 (Automatic Electric Limited vs. R.K. Dhawan & Anr.), 1999 (2) ALR 174 (Prakash Roadlines Limited vs. Prakash Parcel Service (P.) Ltd.), 53 (1994) Delhi Law Times 742 (P.M. Diesels vs. S.M. Diesels), 1999 PTC (19) (DB) 160 (Allergan Inc. vs. Millment Oftho Industries & Ors.), 1999 PTC (19) 334 (Rupa & Co. Ltd. vs. Dawn Mills Co. Ltd.), and 1999 PTC (19) 118 (Luping Laboratories Limited vs. Jain Products). 25. He further relied upon a judgment reported in AIR 1965 SC 980 (Kaviraj Pandit Durga Dutt Sharma vs. Navaratna Pharmaceuticals Laboratories) and contended that only the question that the petitioner must, no doubt, make out that the use of the defendant's mark is likely to deceive the public. He also relied upon another judgment reported in AIR 1970 SC 1649 (Ruston & Hornbey Limited vs. Zamindara Engineering Co.) and .contended that the defendant's trade mark is identical with the petitioner's mark, the Court will not enquire whether the infringement is such as is likely to deceive or cause confusion. 26. He also relied upon another judgment reported in AIR 1970 SC 1649 (Ruston & Hornbey Limited vs. Zamindara Engineering Co.) and .contended that the defendant's trade mark is identical with the petitioner's mark, the Court will not enquire whether the infringement is such as is likely to deceive or cause confusion. 26. He further contended that the proof of fraudulent intention is not a necessary element in a case of action of passing off and he relied upon a judgment reported in 1990 RPC 34 (Reckitt & Coleman Products Limited vs. Borden Inc. & Ors.). 27. He also relied upon a judgment reported in AIR 2000 SC 2114 [M/s. S.M. Dyechem Limited vs. Cadbury (India) Ltd.] where he contended that where the injunction was sought by the petitioner to restrain the defendant from using the word PICNIC as it allegedly amounted to infringement of the petitioner's registered trade mark for the use of the word PICNIC, on the basis of passing off action and the defendant's "Tapper contained the word "Cadbury" above the word PICNIC and there was no scope for a purchaser being misled, the relative strength would be more in defendant's favour and petitioner would not be entitled to injunction. 28. He also relied upon another judgment reported in 2001 (4) JT 243 (Cadila Health Care Limited vs. Cadila Pharmaceuticals Limited) and submitted as follows:- "18. ...As far as this Court is concerned, the decisions in the last four decades have clearly laid down that what has to be seen in the case of a passing off action is the similarity between the competing marks and to determine whether there is likelihood of deception or causing confusion..." "19. ...We are unable to agree that the principle of phonetic similarity has to be jettisoned when the manner in which the competing words are written is different... " 29. He further contended that both the products manufactured by the petitioners and the defendant Nos. 1, 2 & 3 come under class 30, are likely to be sold from the same outlet and displayed on the same shelf and to be bought by people of the same class. 30. He further contended that the restriction of goods will not stand in the way of grant of an injunction in favour of the petitioners and he relied upon the following judgments:- 1988 (8) PTC 1 (Kamal Trading Co. Bombay & Ors. 30. He further contended that the restriction of goods will not stand in the way of grant of an injunction in favour of the petitioners and he relied upon the following judgments:- 1988 (8) PTC 1 (Kamal Trading Co. Bombay & Ors. vs. Gilletee U.K. Limited, England) where the trade mark 7 O'clock registered for safety blades, safety razors, saving brushes etc. was being used by the petitioner while the same trade mark was being used by the defendant for tooth brushes Injunction granted. In 16 RPC 12 (The Dunlop Pneumatic Tyre Co. Ltd. vs. The Dunlop Lubricant Co.) where the Dunlop mark was being used by the petitioner for pneumatic tyres for cycles and other accessories such as pumps, inflators etc. and the same mark was being used by the defendant for lubricants for cycle chains and other parts of cycles-Injunction granted. Accordingly, he submitted that this application should be allowed. 31. Learned Counsel appearing on behalf of the defendants contended that ever since 1991 the respondent No.1 is a firm was and still dealing with the business of manufacturing and marketing various kinds of chanachurs, Indian snacks foods under the trading style of Kitkat Food Products. The firm was duly registered with the Sales Tax Authorities in West Bengal. The firm also applied for registration in the Trade Marks Office, being application No. 545855 as of 21st February, 1991 in Class 30, obtained copyright registration in respect of the artistic work in the label in the copyright office under No. A-52555/94 dated 29th March, 1994 (document annexed to the affidavit-in-opposition). 32. He also submitted that the firm has also called legal notices to be served on various imitators time to time, which are also annexed to the affidavit-in-opposition to which my attention was drawn by the learned Counsel. 33. The defendant No.1 had also given and caused to be given caution notices and advertisements in various leading newspapers since 1993 which are also produced and annexed to the affidavit-in-opposition to which my attention was drawn by the learned Counsel. 34. He further contended that the defendants have made extensive use of the marks since 1991 whereas the petitioners started marketing in India under the trade-name Kitkat on or about August, 1995. 34. He further contended that the defendants have made extensive use of the marks since 1991 whereas the petitioners started marketing in India under the trade-name Kitkat on or about August, 1995. The petitioner No.1 has also obtained registration of a label mark comprising the word Kitkat and a device showing part of the chocolate wafer biscuits, under No. 473754 in class 30 in respect of cocoa, chocolate, chocolate products, confectionery, candy chewing gum etc. The defendant No.1 firm filed applications for rectification and/or cancellation of both the registered trade marks viz., trade mark No. 8982, in the Trade Marks Registry, Calcutta and trade mark No. 473754 in the Hon'ble High Court at Calcutta which are still pending. 35. The applications which have been filed by the petitioners being 473752 and 473753, both in Class 30 which was duly opposed by the defendant No.1 under Nos. Cal-2861 and Cal-2862 and after hearing the parties learned Assistant Registrar of Trade Marks, Calcutta passed an order which was produced before me and which is reproduced hereunder :- "However the impugned marks can be considered for registration, if the applications so desire, for the specification of goods excluding preparations made from cereals, foodstuffs prepared in the form of snacks, mentioned in the application, as also agreed by the opponent." 36. He further contended that the trade mark application filed by the defendant No. 1, for the registration of the trade mark KITKAT with the device of a Chef in special and artistic manner, under No. 545855 as of 21st February, 1991 in Class 30 in respect of chanachur, etc., has been opposed by the petitioner No. 1, and the said opposition is pending. 37. He also contended that the petitioners filed a suit in or about January, 1998 before the Hon'ble Delhi High Court and same order was passed and the same was withdrawn since the Hon'ble High Court had no jurisdiction in the said matter. 38. 37. He also contended that the petitioners filed a suit in or about January, 1998 before the Hon'ble Delhi High Court and same order was passed and the same was withdrawn since the Hon'ble High Court had no jurisdiction in the said matter. 38. He further contended that the defendants mark is not infringing the mark of the petitioner and he drew my attention to the following facts:- i) The word mark was registered on 1st December, 1942 (No. 8982) and such registration is only in respect of chocolates, not cereals or preparations made from cereals or snack foods, ii) Label mark which was registered only in 16th June, 1987, and iii) The registration includes cereals and preparation made from cereals, snack foods included in class 30. 39. Such mark has been used in relation to a pictorial representation of a bar of chocolate. Therefore, he contended that the marks are not identical or deceptively similar and he draw my attention to section 29 of the Trace and Merchandise Marks Act, 1958. He further contended that the respondents applied for rectification and/or cancellation of both the registrations of the respondents are pending. 40. He further contended that the respondent is not passing off its mark as that of the petitioner. He further contended that in a passing off action, a common law right accrues in respect of a mark which is used in respect to a particular product is a particular class, not the entire range of the goods in that class. He also submitted that the monopoly cannot cover the entire range of goods. In support of such submissions he relied upon a judgment reported in 1997 (4) SCC 201 (Vishnudas Trading vs. Vazir Sultan Tobacco Company Limited, Hyderabad and Anr.). 41. He further contended that there is no evidence to sustain in a passing off action prior to that date in the petition. The following facts that the petitioners' first use in India in 1995. There was no goodwill established prior to 1991. Therefore, according to him, subsequent use in relation to petitioner's mark cannot entitle the petitioner to stop the respondent's business, particularly when the rival goods are different. He further submitted that there has been prior use in the respondents mark and he relied upon the following judgments:- AIR 1965 Bom. 35 (Consolidated Food Corporation vs. Brandan & Company Private Limited). AIR 1992 Del. He further submitted that there has been prior use in the respondents mark and he relied upon the following judgments:- AIR 1965 Bom. 35 (Consolidated Food Corporation vs. Brandan & Company Private Limited). AIR 1992 Del. 234 (Smt. Vinnay Chawla vs. M/s. Chandamand Toytronix Private Limited). 42. He further submitted that there is no scope for granting an interim order in favour of the petitioner as the balance of convenience lies in favour of the petitioner and further the petitioner is carrying on business. If injuction is granted to maintain status quo, would amount to stoppage of the respondents' business. In support of such contention he relied upon a judgment reported in 1990 Supp. SCC 727 (Wander Limited and Anr. vs. Aptex India Private Limited). 43. He further contended that on the ground of delay injunction should not be passed in favour of the petitioner. 44. The reason for the same as contended by learned Counsel that this word "KITKAT" was used by the respondent since 1993. Since 1991 the petitioner is in business and further the petitioner had constructive knowledge as they themselves produced the cash memo of the respondents and further the suit was filed in Delhi High Court in 1998. Accordingly, he contended that on the ground of delay this application must be dismissed. He further relied upon a judgment reported in (1994) 2 SCC 448 (M/s. Power Control Compliances & Ors. vs. Suneet Machines P. Ltd.). 45. It is further contended that the petitioner failed to obtain any injuction before the Hon'ble Delhi High Court. 46. He further contended that the goods of the respondents sold totally in different trade channels-small outlets, ordinary shops etc. whereas the petitioner's goods sold for the higher end of the market and further the price of the respondents goods are much lower in price compared to those of the petitioners. Accordingly, he submitted that this application should be dismissed. 47. After considering the facts, and circumstances of this case and the judgments cited before me the admitted facts of this case that the respondents are in prior user of the trade mark "KITKAT" and further using the same in Cereals and the petitioners are using the said trade mark KITKAT in respect of their chocolate etc. 47. After considering the facts, and circumstances of this case and the judgments cited before me the admitted facts of this case that the respondents are in prior user of the trade mark "KITKAT" and further using the same in Cereals and the petitioners are using the said trade mark KITKAT in respect of their chocolate etc. Therefore, the goods are totally different and it is also admitted fact that the respondent No.1 applied for registration in the trademark office on 21st February, 1991, obtained copyright registration in respect of artistic work in the label on 29th March, 1994 whereas the petitioner is using the word "KITKAT" in respect of his product. In the year 1995 it also appears that advertisements, publicities and caution notices in respect of the respondent's trade mark "KITKAT" was published in the leading newspapers and further the petitioner did file suit before the Hon'ble Delhi High Court in the year 1998 and the injunction application was refused by the Hon'ble Delhi High Court and thereafter the petitioner did not take any step in the matter for last 2 years when the respondents were dealing with the said business and in fact in the year 2000 the petitioners have failed this suit in this Hon'ble Court asking for injunction against the respondent. Such fact in my opinion will stand in the way of granting injunction in favour of the petitioner at this stage. 48. The other consequence also must be considered in this case that the balance of convenience also lies in favour of the respondent at this stage in view of the fact that the injunction was granted by the Delhi High Court to maintain status quo in respect of the suit filed by the petitioner and further any injuction passed restraining the respondent to use such word "KITKAT" in respect of their product, would amount to stoppage of the respondent's business. In my opinion rendering business cannot be stopped in the facts and circumstances pleaded in this petition. In my opinion, further the applications are also pending before the authorities. It further appears that in the matter of the opposition filed by the petitioners before the Assistant Registrar of Trade Marks, the Assistant Registrar of Trade Marks came to the conclusion which may be reproduced hereunder:- "...In view of the foregoing and on consideration of the overall circumstances of the case, the opposition Nos. It further appears that in the matter of the opposition filed by the petitioners before the Assistant Registrar of Trade Marks, the Assistant Registrar of Trade Marks came to the conclusion which may be reproduced hereunder:- "...In view of the foregoing and on consideration of the overall circumstances of the case, the opposition Nos. CAL-2861 & CAL-2862 to application Nos. 473752 & 473753 respectively are allowed to the extent that the applicants are not entitled to the registration of the impugned marks for the specification of the goods as sought for in their impugned application numbers. However the impugned marks can be considered for registration. If the applicants so desire, for the specification of goods excluding preparations made from cereals, foodstuff prepared in the form of snacks mentioned in the application as also agreed by the opponents. The parties are left to bear their own costs of these proceedings." 49. Such order was passed in the matter of Application Nos. 473752 & 473753 in class 30 in the name of Societe Dos Products Nestle S.A., 1800 Vevey, Switzerland, C/o, De penning & De Penning of 10, Government Place East, Calcutta-700 069 and in the matter of Opposition Nos. CAL-2861 (application No. 473752) & CAL-2862 (application No. 473753) thereby M/s. KIT KAT Food Products of 68/26, Haripada Dutta Lane, Calcutta-700 033. 50. In these facts and circumstances of this case in my opinion it would be proper for me to direct the respondent to keep a separate account for the sale of their products and to furnish the same to the petitioner month by month until the suit is finally disposed of by this Hon'ble Court. 51. Accordingly, for the reasons stated hereinabove, this application is disposed of. Application disposed of with direction.