India: The Division Bench of the Delhi High Court reverses the interim injunction granted to ITC

On September 02, 2016 ITC  Limited (hereinafter referred to as the ITC) filed a suit to the single Judge of the Delhi High Court against Britannia Industries Limited (hereinafter referred to as the Britannia) to permanently injunct the latter from violating the packaging/trade dress rights of the ITC Limited products. The Single Judge granted interim injunction against Britannia for “deceptively similar” packaging. Aggrieved by the Order of the Single Judge the ITC appealed to the Division Bench of the Delhi High Court for setting aside the order of the Single Judge.

Brief facts and background of the case

ITC Limited had launched a new product called “Sunfeast Farmlite Digestive – All Good” biscuit in February 2016. The packaging consisted of a combination of the colors yellow and blue.. Thereafter Britannia launched a similar product under the name “Nutri Choice Digestive Zero” biscuit a few months later in July 2016. The packaging of the aforesaid product was also done in yellow and blue . The parties to this suit have previously been entangled in legal wrangles too. Britannia had filed a complaint against the ITC Limited before the Advertising Standards Council of India (ASCI).

In the present case, Britannia had offered to replace the blue color in their packaging by another shade of blue, and the same was deemed unacceptable by ITC Limited. Britannia stated that the color blue is an integral part of their packaging, as it supposedly reflects the theme of “World Diabetes Day”. As there was no consensus between the parties regarding the issues at hand, the suit went to trial on September 2, 2016.

ITC’s Submissions before the Single Judge Bench

The ITC Limited asserted three unique and distinctive features of their packaging. Details of the same are as under:

• The brand name “Sunfeast” is written on the top-left hand side of the label on the yellow colored portion with the trade mark “Farmlite” underneath it, alongwith the mark “Digestive - All Good” situated below “Farmlite”.
• The color scheme used in the trade dress is Yellow and Blue. The left part of the packaging is in a yellow background and the right side of the packaging is in blue and both colors are separated by a curved line.
• The picture of the biscuits appear on the right front side of the label which is depicted with a wheat spike/sheaf of wheat with grains lying at the bottom of an individual wheat biscuit with the words "No Added Sugar/Maida" written on the biscuit in a bold white font. The words Sugar and Maida are separated by a white horizontal dividing line between the two words.

The ITC averred that Britannia has copied various elements of their trade dress, including the color combination. They also submitted that the trade channels were identical and in furtherance to that also submitted sales and revenue as well as advertising figures to substantiate their claims.

Britannia’s Submissions before the Single Judge Bench

Britannia claimed that they held 66% of the market share, whereas ITC had a meagre 1.8%. They also averred that the predominant color of the packaging of their product is yellow, and that blue is merely a secondary color used to indicate a connection to diabetes.

Britannia stated that while there might be a similarity in the packaging of the two, when viewed as a whole there was no case made out for passing off. To that end, the Britannia distinguished their packaging as follows:

• The word “Britannia” itself appeared prominently against a red background in one corner of the impugned packaging.
• The word “Nutri Choice” is featured prominently in their packaging, and the same is not present in the ITC’s packaging.
• That the shades of blue and yellow used in the impugned packaging are different from that of ITC’s.
• The Britannia averred that a distinction has to be drawn between an action for infringement, and an action for passing off.

They claimed that the three essentials of passing off (establishing goodwill, demonstrating misrepresentation by Britannia to public, and establishing the loss suffered) were not demonstrated by ITC. They further averred that color per se is not an element of distinctiveness for identifying the source of the products. It was also averred that the ITC had failed to establish distinctiveness and secondary meaning with respect of their packaging. 

Issues Involved

• The difference between an action for infringement, and that of passing off.

The Hon’ble Court referred to the landmark judgement of Kaviraj Pandit Durga Dutt Sharma v Navaratna Pharmaceutical Laboratories to elucidate on this issue – the difference being that the use by Britannia of the trade mark of ITC is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement.

• The elements of Passing Off.

With regard to this issue, the Court referred to the landmark judgment of the House of Lords in Reckitt & Colman Products Limited. v. Borden Inc, wherein the elements of passing off were definitively established as - 

• Establishing goodwill,
• Demonstrating misrepresentation by Britannia Industries Limited to public
• And establishing the loss suffered

Decision of the Single Judge

The Court observed that the sales and turnover figures submitted by ITC in support of their claims is a significant factor whilst examining the reputation of ITC’s product. 

The Court also opined that secondary meaning or distinctiveness can be acquired in a short span of time. Even more so for eatables. They also observed that with respect to eatables like biscuits, the color scheme of the packaging plays an important role in the consumer making an initial choice and in enabling a discerning consumer to locate the particular brand of a manufacturer.

It was held that the packaging of Britannia was deceptively similar to that of ITC’s, and that the three elements of passing off are fulfilled in the present case.

As per the Court’s reasoning, the balance of convenience is in favor of ITC, and that granting an interim injunction would cause far less damage to Britannia as their product has been in the market for only two months.

The Court thereby granted an interim injunction, and restrained Britannia from using any variant of color blue in the packaging. But they allowed Britannia to use any other distinctive color instead or to use the same packaging as used in the international markets for the same product.

Aggrieved by the order of the Single Judge Britannia appealed to the Division Bench of the Delhi High Court. On March 10, 2017 the Division Bench of the Delhi High Court turned the table around and ruled in favor of Britannia, setting aside the order of the Single Judge.

Britannia’s Submission before the Division Bench:

1. Britannia submitted that the predominant color of the packaging of its product was yellow, and that blue is merely a secondary color used to indicate a connection to diabetes.
2. Britannia further submitted that they have been using yellow as the primary color in combination with red and green for its earlier products and therefore started using a combination of yellow and blue for the Digestive Zero product
3. Britannia contended that the color blue was being used worldwide in relation to sugarless or zero sugar products.
4. Britannia further contended that the word ‘Britannia’ itself appeared prominently against a red background in one corner of the impugned packaging. Further, the words ‘Nutri Choice’ featured prominently in its packaging, and the same was not present in ITC packaging.
5. Britannia averred that color per se was not an element of distinctiveness for identifying the source of the products. It was also averred that ITC failed to establish distinctiveness and secondary meaning with respect to its packaging.

ITC’s Submission before the Division Bench:

1. ITC asserted that its brand name ‘Sunfeast’ was written on the top-left hand side of the label on the yellow portion with the trademark ‘Farmlite’ underneath it, along with the mark ‘Digestive - All Good’ situated below ‘Farmlite’.
2. ITC further asserted that the color scheme used in the trade dress was yellow and blue. The left part of the packaging was in a yellow background and the right side of the packaging was in blue, and both color were separated by a curved line.
3. ITC contended that the picture of the biscuits appeared on the front-right side of the label, which was depicted with a wheat spike/sheaf of wheat with grains lying at the bottom of an individual wheat biscuit with the words ‘No Added Sugar/Maida’ written on the biscuit in a bold white font. The words ‘Sugar’ and ‘Maida’ were separated by a white horizontal dividing line between the two words.
4. ITC submitted that there are many sugarless or zero sugar products which do not use the color blue in their packaging.
5. ITC submitted that Britannia had copied various elements of its trade dress, including the color combination. Further the trade channels were identical and in furtherance to that also submitted sales, revenue and advertising figures to substantiate its claims.

Decision of the Division Bench

The Division Bench made the following observations-

• The get-up (the yellow - blue combination of the package) was not exclusively and distinctively associated with the ITC

The Court observed that ITC had failed to establish that the get-up in the form of the yellow-blue combination employed by ITC had become so distinctive of its products that whenever any person saw the yellow-blue combination on a package of digestive biscuits, he/she would associate it with ITC.

•  Reliance on Trade Marks and Business Name in its advertisement

The Court further observed that ITC in its advertisements mainly relies on its Trade Marks and Business Name. In such a situation ITC had a greater difficulty in establishing its claim based on general get-up and in the present case, on the combination of yellow and blue.

• Introduction of a new feature into get up of goods does not automatically acquire any proprietary interest

The Court further observed that in the short span of time of 6 months the yellow and blue combination in the packaging of ITC’s biscuits could not have become so identified with ITC so as to enable it to prevent its use by competitors.

• Distinctiveness is acquired in get-up when it is not only novel but also striking

The Court further observed that the get-up and specifically the yellow-blue combination, does not fall in this category.

On the basis of the above observations the Division Bench held that the combination of yellow and blue as used by ITC for its “Sunfeast Farmlite Digestive – All Good” biscuits – has not become so identified with its goods as to become a “badge” of its goodwill and the element of passing off was not established. Accordingly the Court set aside the order of interim injunction.