Case Analysis: Haldiram India Pvt. Ltd v. Berachah Sales Corporation & Ors. (2024) | Haldiram: A Well-Known Trademark

A decree has been issued declaring the 'HALDIRAM' mark, along with the Oval-shaped mark, as a 'well-known' mark for food items as well as for restaurants and eateries.

Case Title: Haldiram India Pvt. Ltd v. Berachah Sales Corporation & Ors.

Court: Delhi High Court

Citation: CS(COMM) 495/2019

Judges: Justice Prathiba M. Singh

Date of Decision: 02nd April, 2024

Facts of the Case

1. The Plaintiff in the said case, being a company engaged in the Fast Moving Consumer Goods (FMCG) sector of the market was the proprietor of the two marks in question, one being a
   ‘V-shaped logo mark’ and the other being an ‘oval shaped logo mark’ both registered under class 30 with the Registry which was registered in the year 1972 but claimed to be used since the year 1965. The said marks were valid across the entirety of India except the State of Bengal. The relevance of such a fact shall be made observable through the Doctrine of Spillover Reputation application.
2. In the instant proceedings, however, it was the case of the Plaintiff that the Defendants had wrongfully established a company under the name of ‘Haldiram Restro Pvt. Ltd.’ on 27/02/2019, the information of which was obtained by the Plaintiff through the Company Master Data placed on record by it.
3. On account of the same, the Plaintiff's company opted to exercise the remedy made available to it under the same legislation (Companies Act) by Section 16(1)(b) of the Act which relates to the remedy to the proprietor of a Trademark in an attempt to have the Defendants change the name under which they are operating.
4. Subsequently, it was asserted by the Defendants that they had applied for Trademark registrations of the said disputed mark solely under Class 43 - relating to the restaurant, resort, hotel, and banquet hall sector. The said applications were still pending before the Registry, but the Defendant contended that the Petitioner had not even applied for the registration of any marks under the said Class 43. The Defendants also brought to notice before the Court, the fact that there are 36 companies registered under the Companies Act, using the name ‘Haldiram’ and since none of these companies are being assailed, the Defendants too, could not be compelled to change the name under which it is operating.
5. In response to the reply of the Defendants, Plaintiff searched for the applications filed by Defendant Nos. 5 and 6 wherein it was recorded that applications were made before the Registry on 26/11/2018 (marks attempting to be registered - ‘Haldiram Bhujiawala’ and ‘Haldiram Restro’ - Class 43 and further on 22/07/2019 (marks attempting to be registered - ‘Haldiram’s’ and ‘Haldiram Hotels’ - Class 43), all of which were on a ‘proposed to be used’ basis.
6. The Defendants also generated their domain and claimed proprietorship over the domain name www.haldiramrestro.com which was registered on 01/03/2019.
7. After further investigations, a Facebook page was created by the Defendants to advertise their products such as desi ghee, mustard oil, aata etc. was also discovered.
8. It was in light of all such facts and also the surrounding implications/consequences of acts thus committed, that the instant proceedings were initiated through the present suit and vide an order dated 11/09/2019, the Defendants were issued and served a summons and an ex parte injunction was granted in favour of the Plaintiff, ordering the Defendant to cease the usage of such deceptively similar marks while carrying out its business and was also ordered to cease utilising all such social media platforms and domain names that were made in light of/based on such deceptively similar marks.
9. The said ex parte ad interim injunction is continuing and was operative even on the date of the hearing.
10. A Local Commissioner was appointed on 17/09/2019 to conduct searches of the premises of the Defendants and seize all such products of the Defendants that bore deceptively similar marks either by way of packaging, advertisement posters/banners and other such items.
11. The Local Commissioner duly carried out the search and seizure and also filed necessary reports of the same. Through his interaction with the alleged CEO of one of the Defendant Companies - Mr. Rajesh Kumar it was revealed that the said company had been engaging in the selling of such products since the year 2019. However, shockingly, expired products belonging to a sister concern of ‘Haldirams’ (Defendant Company) were found, bearing manufacturing year as 2018, thereby implying that the Defendants had been selling such products even before the year 2019.
12. Further, in December 2019, parties made their admissions/denials to evidence and other documents.
13. On 09/05/2022 the Court recorded the submission of the Defendants stating that they were open to settling the matter but on 29/07/2022 the mediation efforts were regarded as failed and the counsel of the Defendants sought to be discharged from the matter, the application of discharge of which was accepted and fresh Court notices were therefore issued to the Defendants.
14. Vide order dated 16/03/2023, the Court opined that the Defendants were not interested in contesting the matter and therefore the Court was eligible to proceed ex parte under Order IX Rule 6 r.w. Order XVII Rule 3 of the Code of Civil Procedure, 1908.
15. The final submissions of the Petitioner, in response to the case made by the Defendants through their Written Submissions, were heard, and the Plaintiff's evidence was closed on 05/09/2023.

Issues of the Case

(i) Whether the usage of certain marks held by the Defendants amounted to deceptive similarity and therefore infringed the Plaintiff's rights.

(ii) Whether the ad-interim ex parte injunction could be made a permanent injunction restraining the Defendants from carrying out certain acts.

(iii) Whether the said marks could be granted 'well-known marks' status and whether such status could extend to the State of West Bengal.

Laws Involved

(i) Section 2(1)(zg) of the Trade Marks Act, 1999

(ii) Section 11(6) of the Trade Marks Act, 1999

(iii) Section 135(1) of the Trade Marks Act, 1999

(iv) Section 2(c) of the Copyright Act, 1957

(v) Section 16(1)(b) of the Companies Act, 2013

Argument of the Parties

Plaintiff

• Mr. Grover, Ld. Counsel for the Plaintiff highlighted the financial status of the Plaintiff, displaying advertisement expenses of Rs. 3500 Crores and sales surpassed Rs. 5000 Crores. The Plaintiff operated 40 outlets specifically within the Delhi-NCR region. Thereby emphasising that the said mark of the Plaintiff warrants recognition as a well-known mark.
• According to Plaintiff, the mere fact that Plaintiff did not sell the goods or run the restaurants in the State of West Bengal does not in any way cast an impediment on Plaintiff’s ‘HALDIRAM’S’ marks from being declared as ‘well-known’.
• The Plaintiff further prayed for damages to the tune of Rs. 2.05 Crores along with the compensation of actual costs. Additionally, Plaintiff observed that the significant quantum of packaging material and substandard products have severely tarnished and tainted the reputation and image of the company causing harm to their respective marks in similar categories.

Defendants

• The Defendants primarily relied on the fact that the Plaintiff failed to disclose certain oppositions that had been filed by the Defendants u/s 57 of the Trade Marks Act, 1999 and asserted that the said marks are already in dispute by several other entities as well, portraying that if all the litigation were initiated against the Plaintiff, it would indeed be the Plaintiff that is in the wrong since it is the subject of these litigations.
• Defendants also attempted to revive certain past discrepancies relating to the ownership of marks and how Plaintiff succeeded to them after Late Shri Ganga Bishan Agarwal.
• It was contended that Plaintiff was not the exclusive proprietor of the 'HALDIRAM' marks, as these a purportedly owned exclusively by other entities, and Plaintiff's marks lacked distinctive character.

Analysis of the Judgment

The Bench heard the submission of both Parties, until the stage that they were being made, to the very end. The Defendants, however, ceased to appear for the proceedings in the said matter and thereby the court proceeded against them ex parte, which was justified through a synchronised reading of Order IX Rule 6 CPC read with Order XVII Rule 3 CPC.

The High Court of Delhi relied on precedents to justify its ex parte proceedings against the Defendants and primarily placed reliance on the Case of G. Ratna Raj v. Sri. Muthukumarasamy Permanent Fund Ltd. which upheld the stance taken by the Court in the present context.

(i) Additionally, the Court went on to state that the long usage of the Plaintiff's marks, the rights conferred upon him in respect of the same - through common law as well as India-centric legislations, would be severely infringed if the Defendant is allowed to continue to operate in the manner as it currently is.

The Court also assailed the submissions made by the Defendants and thought that a large chunk of the Defendant's submissions had no relevance to the matter at hand and only attempted to draw the attention of the Court away from the core issues prevalent in the matter.

The Court also relied on the ‘Triple Identity Test’ which is a commonly applied/resorted rule whilst assessing matters of deceptive similarity or infringement of trademarks. Accordingly, the Court held that since an identical mark, ‘HALDIRAM,’ is being used for identical services and within identical trade channels or segments, it thus satisfies the triple identity test.

(ii) After examining the previous issue as detailed above, the Court drew a connection to the relief sought by the Plaintiff and thereby granted a decree of permanent injunction in favour of the Plaintiff

(iii) Whilst deliberating upon the last issue of the case, as to whether the plaintiff's marks would qualify as a ‘well known’ mark, the Court applied the relevant sections i.e. Section 2(zg) and Section 11(6) of the trade Marks Act, 1999 to assess the said matter. After a brief perusal of the provisions contained under the said Sections, the Court went on to place reliance on the Case of Tata Sons Ltd. v. Manoj Dodia (Para 5) which laid down essential aspects regarding the qualification of a mark as a ‘well known’ mark and thereby categorically detailing what would and what would not fall under the umbrella term of a ‘well known’ mark.

This Case led to the Court applying the Doctrine of Dilution, which has gained traction in recent years. This Doctrine lays down that a mark may be invalidated even if it does not lead to confusion amongst consumers, but has the potential to damage the goodwill/reputation of the well-known mark, thereby reducing the essential function of a well-known mark of providing grounds to indicate the source/manufacturing company of the goods.

The Court also discussed the test of distinctiveness which regarded ‘distinctiveness’ to be an essential pre-requisite for the registration of a mark. This Test was applied in the case of Disruptive Health Solutions v. Registrar of Trade Marks (Para 10) in semblance with how it is sought to be applied in the present case.

Finally, the Plaintiff, in an attempt to further such a stance, relied on the Doctrine of Spillover Reputation and the cases N R Dongre v. Whirlpool Corporation and Milmet of tho Industries v. Allergan and the decision of this Court in ITC Ltd. (supra) which laid down the legal position on the importance of transborder reputation and its protection being of vital importance to affected entities.

Conclusion

Thus, through the findings of the Court, there exists no doubt that the 'HALDIRAM'S' brand, having its origins deeply rooted in India's rich culinary tradition, has not only established a presence within the national market but has also extended its influence globally, transcending geographical, cultural, and national boundaries.

The case resulted in the grant of 'well-known' mark status to Haldiram. This was determined through the application of various tests and doctrines, establishing that a mark need not be deceptively similar to cause confusion or manifest loss in the business of the aggrieved party; its mere potential to damage the reputation or goodwill of the business is sufficient for it to be considered a violation.

Thus in this context, the claim for 'HALDIRAM' to be recognized as a 'well-known' mark throughout India, inclusive of West Bengal, is a testament to the Plaintiff's cultural and commercial imprint.