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Delhi High Court refuses to restrain Parle from using the ‘For The Bold’ campaign as a label on its ‘B Fizz’ bottle.

  • WHAT WERE THE FACTS OF THE CASE?

CS (COMM) 268 of 2021 was instituted by PepsiCo Inc. (hereinafter referred to as “PepsiCo”), against Parle Agro Private Limited Company (hereinafter referred to as “Parle”), seeking a permanent injunction against Parle using the tagline “For The Bold” in relation to its products and IA 7170/2021 under Order XXXIX Rules 1 and 2 of the CPC was filed seeking an interlocutory injunction. During the pendency of the suit, IA 9591/2021 under Section 124 (1)(a)(ii) was filed by Parle Agro Private Limited under Section 124(1)(a)(ii) of the Trade Marks Act for the grant of leave to file a rectification petition challenging the registration of the PepsiCo’s “For The Bold” trade mark.

  • WHAT WERE THE LEGAL ISSUES RAISED BY PEPSICO?

  1. The DORITO range of tortilla chips, a product of PepsiCo was adopted as the brand name in 1961 when its use commenced in the USA and India, the mark DORITOS stands registered in in Classes 29 and 30 with effect from 08.05.1986. The tagline “For The Bold” was used about the DORITOS range of Tortilla Chips during the global marketing campaign by PepsiCo to draw consumers. The tagline has been used by PepsiCo since 2013 internationally and in India since 2015 when PepsiCo’s DORITOS range of tortilla chips was introduced in this country.
  2. The tagline “For The Bold” stands registered in favor of PepsiCo in Class 30 w.e.f. 21.03.2013 which is still subsisting.
  3. Local manufacturing of the DORITO tortilla chips bearing the tagline “For The Bold” commenced in India in 2017. The return from sale figures brought forth by PepsiCo showed that in the year 2020, till October 2020 alone, sales of DORITOS chips had returned earnings of ₹ 61.1 crores. Also, the expenses incurred by the company for the promotion and publicity of its product between March and October 2020, were to the tune of ₹ 13.1 crores.
  4. In November 2020, PepsiCo discovered that Parle had launched a malt-flavored fruit juice-based drink in India by the name B FIZZ, on 15.10.2020 bearing the tagline “For The Bold” on the label. In furtherance, the tagline was being extensively used by Parle in its advertising campaign and on its social media pages. Use of the “For The Bold” tagline by Parle even for advertising constitutes “use” of PepsiCo’s registered trademark, within the meaning of the Trade Marks Act in terms of 2(2)(b) and Section 29(6) of the Trade Marks Act
  5. On 19.09.2020 Parle applied for registration of the tagline “Be The Fizz! For The Bold” as a trademark on a “proposed to be used basis” which was opposed by PepsiCo, and the said application was pending during the proceeding of the current matter
  6. PepsiCo alleged that Parle by using the tagline “For The Bold” has infringed the registered trademark of PepsiCo within the meaning of Section 29 of the Trade Marks Act and that by using the tagline Parle is seeking to create an artificial inference of association with PepsiCo. The tagline being a registered trademark of PepsiCo it is entitled, as of right, to the presumption of validity under Section 31 of the Trade Marks Act and the presumption of validity, conferred by Section 31(1) would also apply to the rectification proceedings which Parle seeks to initiate.
  • WHAT WERE THE SUBMISSIONS ON BEHALF OF PARLE?

  1. The Trademark for the tagline “For The Bold” has been applied by PepsiCo under Class 30 whereas, on the contrary, Parle had applied for a trademark for the tagline “Be The Fizz! For The Bold” under Class 32. The trade dresses of PepsiCo’s DORITOS tortilla chips and Parle’s B Fizz malted beverage are completely distinct, different, and distinguishable. Besides, the name of the manufacturing company is prominently displayed on both labels. Section 29(1) of the Trade Marks Act does not apply as the impugned mark of Parle is not used in respect of the goods in respect of which PepsiCo’s mark is registered.
  2. The allegedly impugned product B Fizz of Parle had earned through sales revenue of ₹ 184 crores during the period September 2020 to March 2021 and ₹ 48.12 crores during April and May 2021 and the expenses incurred by Parle in the promotion and advertising of the product during the year 2021-2022, up to May 2021, amounted to be ₹ 35,55,82,129/–.
  3. Registration of the tagline “For The Bold” by PepsiCo is violative both of clauses (a) and (b) of Section 9(1) of The Trade Marks Act as the tagline is inherently incapable of distinguishing the goods of PepsiCo and the mark “For The Bold” on the reverse of the DORITOS pack is merely a slogan denoting the quality of the product and the intended purpose of the contents of the pack.
  4. The tagline has no distinctive character as the “For The Bold” tagline has become customary in the current language and in the bona fide and established practices of trade as it is also being used by various third parties. The tagline trademarked by PepsiCo does not function as a means to identify the product with PepsiCo also the tagline as the trademark is not used either by PepsiCo or by Parle.
  5. Section 179 of the Trade Marks Act, does not permit dissection of the mark into its parts, unless the individual parts are themselves registered trademarks and therefore PepsiCo’s “For The Bold” registered trademark cannot be compared with Parle’s “Be The Fizz! For The Bold!” by extracting, for such comparison, the latter “For The Bold” part of Parle’s mark.
  6. Parle was not taking any unfair advantage of PepsiCo by using the impugned tagline or seeking to ride on PepsiCo’s reputation as there is no evidence of dilution of PepsiCo’s “For The Bold” mark as the consequence of use, by Parle, of the impugned “Be The Fizz! For The Bold!” tagline. In furtherance, the mark has been used by Parle since September 2020 and the sales of its “B Fizz” beverage of Parle have multiplied manifold, far over the sales of the DORITOS chips of PepsiCo.
  7. A mere registration of “For The Bold” as a trademark in favor of PepsiCo does not, in his submission, ipso facto imply that PepsiCo is using “For The Bold” as a trademark as the same is not being used by PepsiCo as a trademark
  • WHAT WAS THE ANALYSIS DRAWN BY THE HON’BLE COURT?

The Hon’ble Court relying on a catena of judgements made the following analysis:

  1. Section 124 and I.A. 9591 of 2021

IA 9591 of 20021 was filed by Parle under Section 124(1)(ii) praying for framing of an issue regarding the validity of the “For The Bold” trademark of PepsiCo and for Parle to be granted leave to move for rectification of the mark

The Hon’ble Court observed that while exercising its subjective satisfaction in terms of Section 124(1)(a)(ii) the court, was only required to satisfy itself regarding the “prima facie tenability” of the challenge, by the defendant, to the plaintiff’s trade mark – or vice-versa. The task of the suit Court, whether under Section 111(1)(ii) of the Trade Marks Act 1958 or the corresponding Section 124(1)(a)(ii) of the present Trade Marks Act, is only to pronounce on the prima facie tenability of the challenge, by the defendant, to the validity of the plaintiff’s trade mark and once the suit Court finds the challenge to be tenable and frames in issue in that regard, the challenger-defendant would have to move the IPAB for rectification, and it was the IPAB alone which could decide on the aspect of rectification and, therefore, on the validity of the plaintiff’s trade mark, one way or the other.

The court allowing IA 9591 of 2021 enabled Parle to file an appropriate rectification petition to frame an issue regarding validity of the PepsiCo’s “For The Bold” Trademark and framed the following issue:

“Whether the registration of the tagline “For The Bold” as a trademark in favor of PepsiCo is valid?”

As C.O. (COMM. IPD-TM) 5 of 2021 was already filed by Parle before the Court could decide on the prima facie tenability of the challenge the same was allowed to be treated as a rectification petition filed under Section 124(1)(ii) but the same was not permitted to be treated as a precedent.

  1. A. 7170 of 2021
  • Scope of Section 124(5) Validity of the plaintiff’s trademark being an inalienable pre-requisite for relief against infringement, under Section 124(5), read with Order XIX of the CPC, the court while doing so can only examine the allegation, if any, of passing off, which is not conditional on the trade mark being validly registered or, registered at all. The Court, under Section 124(1)(ii) of the Act merely opines on the prima facie tenability of the challenge to validity. Once a trademark is considered to be registered in terms of Section 31(1) of the Trade Marks Act the initial onus on the plaintiff to establish that the mark which it seeks to assert is prima facie valid stands discharged
  • The Aspect of Infringement – An infringement can only be said to exist where the ingredients for infringement, as set out in Section 29 of the Trade Marks Act, are found to be satisfied. Infringement is a tort manifested by a physical act, which the innocent trademark is incapable of performing. The mere similarity between the marks and identity or similarity between the goods or services in respect of which the marks are used would not, therefore, even if they are found cumulatively to exist, justify a finding of infringement. The likelihood of the trademark has to be assessed by comparing the marks as wholes. Parle uses PepsiCo’s registered “For The Bold” tagline in two ways – as part of its label and in its advertising campaign – one of which is infringing, and the other non-infringing in nature, and since it is only the infringing use of the mark which can be injuncted Parle was disallowed to use “For The Bold” tagline in its advertising campaign on Social Media
  • Passing Off – Passing off is a common law tort, which is committed only where the defendant, by use of the impugned mark, is seeking to pass off its product as the product of the plaintiff. A finding of passing off can be returned only if the plaintiff, in the first instance, proves the existence of sufficient goodwill and reputation of the mark that it seeks to assert. The reputation which is required to be established, to sustain a plea of passing off, is the reputation of the mark and not the reputation of the product bearing the mark. The plea of PepsiCo that Parle is trying to pass off its product as a product of PepsiCo was found to be unsustainable considering the reputation of the Company Parle and also the sales figure of the B-Fizz product of Parle which was far more compared to PepsiCo

Balance of convenience and irreparable loss – The interlocutory injunction sought by PepsiCo was not found to be in the interest of justice, but rather the court directed Parle to place on record the entire returns earned by the sales of its “B Fizz” beverage, using the label which contains “For The Bold” from the time the use of the said label commenced, duly certified by a Chartered Accountant and continue to file, every two months, duly certified figures of returns of sales from its “B Fizz” beverages, during the pendency of the suit considering the same to be adequate in terms of interests of justice.

  • WHAT WAS THE FINAL JUDGMENT?

  1. IA 9591/2021 was allowed by the Hon’ble Court based on the following terms:
  • The challenge, by Parle, to the registration of the “For The Bold” trademark of PepsiCo was found to be tenable, but the Court by stating so only intended to convey that the challenge is arguable and requires consideration and the merits of the challenge will be examined while adjudicating C.O. (COMM. IPD-TM) 5/2021, uninfluenced by any observation contained in the judgment laid down in ____

. For the said purpose, and without intending it to operate as a precedent, C.O.(COMM.IPD-TM) 5/2021 is treated as an application under Section 124(1)(a)(ii) of the Trade Marks Act. Notice is deemed to have been issued thereon and accepted by Mr Manish Jha, learned counsel for PepsiCo.

  • The Court, framed the following issue: “Whether the registration of the tagline “For The Bold”, as a trademark in favor of PepsiCo is valid?”
  • The trial of the suit given Section 124(2) of The Trade Marks Act was stayed until disposal of C.O.(COMM.IPD-TM) 5/2021 and the same was ordered to be taken up for hearing and disposal at 2:30 PM on 25 September 2023 and no request for adjournment was sought to be entertained.
  • The ground of challenge by Parle, to the “For The Bold” trademark of PepsiCo was found to be purely legal and no additional evidence was permitted to be led by the parties except for those already on record.
  1. IA 7170/2021 was disposed of by the Hon’ble Court on the following terms:
  • The prayer for interlocutory injunction by PepsiCo against the use, by Parle, of “For The Bold” as part of the label on its “B Fizz” bottle/can was rejected but Parle was restrained, pending disposal of the suit from altering the label on its “B Fizz” beverage bottle/can without prior approval of the Hon’ble Court.
  • Parle was restrained, pending disposal of the suit, from using the tagline “For The Bold” as the predominant part of any advertising campaign for its “B Fizz” beverage and also restrained from airing or continuing the Facebook advertisements and taking and discontinuing any continuing advertisement. In the event of any fresh advertising campaign, or advertisement, by Parle, which uses “For The Bold” as its dominant/predominant part, PepsiCo was entitled to move to the Court using an interlocutory application in the present suit, seeking injunctive relief
  • Parle was directed to place on record the entire returns earned by the sales of its “B Fizz” beverage, using the label which contains “For The Bold” from the time the use of the said label commenced, duly certified by a Chartered Accountant and was ordered to continue to file, every two months, duly certified figures of returns of sales from its “B Fizz” beverage, during the pendency of the suit.

Judgment reviewed by: Kavya Kapoor, Legal Intern at Aggarwals & AssociatesMohali

 

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