By,  Sabreen Hussain

Introduction

In 2013, ITC Limited, an Indian multinational corporation, had filed an application in the High Court of Madras, seeking a permanent injunction to stop Nestle India from using the mark ‘Magical Masala’ for its instant noodles[i]. The contention put forth by ITC was that it had introduced ‘Sunfeast Yippee! Noodles’ with ‘Magic Masala’ flavour in 2010 and Nestle India’s adoption of a misleadingly similar expression ‘Magical Masala’ in 2013 to market their noodles, amounted to passing off.

Infringement or passing off occurs when another trader copies the essential features of the trademark but sells the goods in his name. If a mark is confusingly similar to a registered trademark used on similar goods or services, it constitutes infringement. If the trademark offended is unregistered, the only available remedy is an action for passing off. Infringement is a remedy based on the violation of statutory laws whereas passing off is based on common law.[ii]

Prior Judicial Interpretation

For an action of passing off ‘The Classical Trinity’ test postulates that the following must be proven: (1) goodwill owned by the claimant; (2) misrepresentation by the defendant; and (3) the actual or likelihood of damage to that goodwill.[iii]

In addition, the Delhi High Court in the case of Micolube India Ltd. v. Maggon Auto Centre,[iv] held that in a passing off proceeding, it is essential to prove that the consumer was misled into believing that the impugned goods are the goods of or are connected with the goods of a prior user of the trademark.

In a recent decision, a Division Bench of the Supreme Court[v] held that “though passing off is, in essence, an action based on deceit, fraud is not a necessary element of a right of action, and that the defendant’s state of mind is wholly irrelevant to the existence of a cause of action for passing off, if otherwise the defendant has imitated or adopted the Plaintiff’s mark.”[vi]

Contentions of the Parties

The contention put forth by ITC was that ‘Magic Masala’ had become a source identifier and had gained immense goodwill and popularity amongst the consumers. ITC felt that in light of its geographical reach and reputation, ‘Magic Masala’ itself had attained distinctiveness. Thus, changing the mark from ‘Magic Masala’ to ‘Magical Masala’ was a deliberate attempt by Nestle to reap the benefits of the goodwill generated by ITC and pass-off its product as that of ITC to the customers.[vii]

Countering ITC’s contentions, Nestle argued that its trademark was ‘Maggi’ and that the expression ‘Magical Masala’ was only used as a “flavour descriptor” of the instant noodles. Nestle further contended that ‘Magical’ & ‘Masala’ were expressions common to the trade and no single entity could claim proprietary rights over them. Nestle justified this contention by explaining that the word ‘Magic’ meant ‘marvellous’ or ‘exciting’, and the word ‘Masala’ referred to “a mix of spice for food preparation known to the Indian culinary.” Thus, when used together, one could not claim exclusive rights since the laudatory word ‘Magic’ was being used to describe the ‘Masala’. Nestle claimed that its use of the term ‘Magical Masala’ was merely to describe the ‘wonderful/excellent’ taste the masala would bring to the bland noodles in the pack. Additionally, Nestle also submitted that it had used the term ‘Magic’ for non-noodle food products before ITC and thus, ITC’s claim of proprietary rights over the term was contended to be baseless. Moreover, Nestle reasoned that both the parties were selling their noodles under their respective brands namely, ‘Sunfeast Yippee! Noodles’ and ‘Maggi’, and not ‘Magic Masala’ or ‘Magical Masala’. Therefore, no grounds for confusion arose, especially since the products were being sold in entirely different packaging.

Analysis

The entire suit is based on the usage of the term ‘Magical’ and the controversy caused due to its similarity with ‘Magic.’ The case on the face of it appears to tilt in the favour of ITC, considering that there seems to be a violation of the term ‘Magic’. However, there are numerous factors to be weighed in before arriving at a decision.

The author believes that while ITC did make waves in the instant noodles industry, they generated goodwill and reputation on the basis of their brand name Sunfeast Yippee! Noodles and not on the basis of their flavours. ‘Magic Masala’ was merely a flavour and not a sub-brand. Moreover, there were two other flavours namely ‘Classic Masala’ and ‘Chinese Masala’. Any buyer while distinguishing the two products, would look at the brand names ‘Sunfeast Yippee! Noodles’ and ‘Maggi’, as opposed to the flavours. Hence, a claim of trademark violation on the basis of a mere flavour identifier should not suffice.

The court also noted the defendant’s submission that ‘Magic Masala’ was widely used not only by Nestle, but also by other others. Some examples include: Lay’s Magic Masala, Balaji Magic Masala, Hello Just 2 Good! Magic Masala, Samrudhni Kitchen Magic Masala, SDS Magic Masala, and Bindass Masala Magic. Therefore, we can conclude that the term ‘Magic Masala’ is fairly common and that ITC cannot claim a monopoly over this term.

Lastly, the author also finds that ITC has not used the term ‘Magic Masala’ for a long enough period to assert a claim over it and since its usage is fairly recent, it appears that there is no trademark violation in the present case.

The Verdict

Finally, after seven years, the High Court of Madras disposed of the suit and held that there was no passing off. In doing so, the Court made the following observations:

  1. The expression ‘Magic Masala’ was not a flavour descriptor of the product due to the non-existence of a flavour called magic. Rather, the expression ‘Magic Masala’was used by ITC to praise the ‘Masala’ in the sachet. This made it a laudatory expression, incapable of being monopolised.
  2. The expression ‘Magic Masala’ were adopted by ‘Lays’, even before its adoption by ITC. Thus, both words were common to the packaged food industry and could not be attributed to any particular trader. The court further went on to add that though ‘Magical Masala’ was inspired by ‘Magic Masala’, it amounted to legitimate adoption as the said words were common and laudatory, and could not be adopted by any single person.
  3. Trademark Law does permit a proprietor to claim exclusive rights over a laudatory/descriptive word only if such a word has acquired a secondary meaning which “identifies it with a particular product or as being from a particular source.” However, in this case, the court held that the expression ‘Magic Masala’ was used to help the consumer “to discern between different flavour under its brand ‘Sunfeast Yippee!’” and were not intended to be used as a trademark or a sub-brand.
  4. The packaging and branding of the two products were substantially different in 3 key aspects;
  5. a) Packaging Colours: Sunfeast Yippee primarily made use of the colours red and orange in the background whereas Maggi made use of yellow, green, and red.
  6. b) Trademark: The trademark for ITC’s product was prominently mentioned at the top as ‘Sunfeast Yippee’ while for Nestle’s product, it was ‘Maggi.’
  7. c) Description of Sachet: ‘Magic Masala’ was written for the sachets inside Sunfeast Yippee packs, whereas ‘Xtra Delicious Magical Masala’ was written for the sachets inside Maggi packs.

Conclusion

On a prima facie reading of the case, there seems to be a clear case of passing off by Nestle. However, a detailed analysis of the same would reveal a different story. Further, the case shows that a descriptive mark may be registered and protected if it helps to identify the particular product or the source of the product. However, the proprietor must prove that the trademark has over a period of time, become distinctive through use to the exclusion of others.

In ITC’s case, there was a need to establish “long and arduous uninterrupted use” over the ‘Magic Masala’ expression.[viii] However, the challenge for ITC was that their trademark only dated back to 2010, as against Nestle’s first use in 2013. Additionally, for any trademark claim to be successful, it is integral to prove that its use was unique to the “exclusion of others[ix] in the market. In ITC’s case, the expression ‘Magic Masala’ was used by several food brands and was not unique to them.

[i] ITC Limited v. Nestle India Limited, C.S.No.231 of 2013.

[ii] Ramdev Food Product vs. Arvindbhai Rambhai Patel, (2006) 8 SCC 726.

[iii] Reckitt and Colman Products Limited v. Borden Inc., (1990) 1 W.L.R. 491.

[iv] Micolube India Ltd. v. Maggon Auto Centre, 2008 (36) PTC 231 Del.

[v] Wockhardt Limited vs. Torrent Pharmaceuticals Ltd., 2018 (76) PTC 225 (SC).

[vi] Prarthana Patnaik, SC on Passing Off and Delays, Spicy IP (Oct. 05, 2018), https://spicyip.com/2018/10/sc-on-passing-off-and-delays.html.

[vii] RK Dewan & Co., Magic: Magical | Potato: Potahtoh, Lexology (June 19, 2020), https://www.lexology.com/library/detail.aspx?g=0965b9f2-0612-4176-9a4b-4d31d694164d.

[viii] Supra note 1.

[ix] Id.

Image source: Photo by Miguel Andrade on Unsplash