CS(OS) 246-2004 Page 1 of 36 * THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 19.02.2010 CS(OS) No. 246/2004 RICH PRODUCTS CORPORATION & ANR. ..... Plaintiffs Vs INDO NIPPON FOOD LTD. ..... Defendant Advocates who appeared in this case: For the Plaintiffs : Mr Ajay K Gupta, Sr. Advocate with Mr Brijesh & Ms V. Mohini, Advocates For the Defendant : Mr S. K. Bansal, Mr Ranjit Kumar Rana & Mr Anand Vikas Mishra, Advocates. CORAM :- HON'BLE MR JUSTICE RAJIV SHAKDHER 1. Whether the Reporters of local papers may be allowed to see the judgment ? No 2. To be referred to Reporters or not ? Yes 3. Whether the judgment should be reported in the Digest ? Yes RAJIV SHAKDHER, J 1. The plaintiffs have instituted the present suit seeking various reliefs against the defendant, however, at its core is the relief of permanent injunction sought by it, whereby it seeks to prevent the defendant from using the word mark “WHIP TOPPING” as part of its trade mark/label “BELLS WHIP TOPPING”. The reason in nut shell is; the plaintiffs‟ belief that the impugned mark masquarades the plaintiffs‟ registered mark “RICH‟S WHIP TOPPING”. Thus in legal terminology the impugned mark, which is, “BELLS WHIP TOPPING” is deceptively similar to the plaintiff‟s registered trade mark “RICH‟S WHIP TOPPING”. A perpetual injunction has also been sought against the defendant to prevent passing off or infringement of copyright in so far as trade dress, packaging and instructions are concerned, which according to the plaintiffs, are identical and/or similar to its own product. Consequential orders in the form of preliminary decree to render accounts, CS(OS) 246-2004 Page 2 of 36 as also final decree for payment of money found due and payable, and of rendition of accounts is sought as well. Finally, a decree for delivering to the plaintiffs custody of all such products, packing material, boxes, cartons, labels, containers e.t.c., which bear the infringing mark „WHIP TOPPING‟ or the impugned trade dress or get up, is also prayed for. 2. The plaintiffs‟ application being IA No. 1607/2004 under order 39 Rule 1 &2 of Code of Civil Procedure, 1908 (hereinafter referred to as „CPC‟) was dismissed by a single Judge of this Court vide order dated 03.07.2007. Being aggrieved, the plaintiffs had carried the matter in appeal to the Division Bench. The Division Bench by an order dated 10.09.2008 passed in FAO(OS) No. 355/2007 disposed of the appeal with a direction, based on submissions of counsels for both parties, that the suit be put up for disposal by resorting to methodology of filing affidavit of evidence sans cross-examination. Accordingly, the court by its order dated 10.11.2008 framed the following issues: (i) Whether the plaintiff is the proprietor of the Trademark “RICH‟S WHIP TOPPING” in relation to its goods as mentioned in the plaint both under the statutory as well as under the common law? OPP (ii) Whether the plaintiff No. 1 has acquired distinctive goodwill and reputation and secondary meaning in respect of the trademark “RICH‟S WHIP TOPPING” by virtue of its prior, long and continuous user as alleged? OPP (iii) Whether the trademark “RICH‟S WHIP TOPPING” is a trademark possessing transborder reputation? OPP (iv) Whether the registered trademark of the plaintiff “RICH‟S WHIP TOPPING” is deceptively similar to the trademark of the defendants, „BELLS WHIP TOPPING‟ and amounts to infringement, and passing off the plaintiffs‟ impugned product? OPP (v) Whether the defendant‟s packaging is confusingly similar to the tradedressing of the plaintiffs‟ packaging? OPP (vi) Whether the plaintiff is entitled to damages against the defendants and if so, in what sum? OPP CS(OS) 246-2004 Page 3 of 36 (vii) Whether the trademark of the plaintiff is not a coined word? OPD (viii) Whether the trademark of the plaintiff is a descriptive trademark? OPD (ix) Whether the trademark of the plaintiff is a common dictionary word and that the same is common in use? OPD (x) Whether the trademark of the plaintiff is generic in nature? OPD (xi) Whether the plaintiff is guilty of concealment of the fact that its registered trademark is subject to a disclaimer and the effect thereof? OPD (xii) Whether the suit instituted by the plaintiff is barred on account of delay and laches and acquiescence on the part of the plaintiff? OPD (xiii) Relief. 3. Following the procedure laid down by the Division Bench, affidavits of witnesses was filed by both parties. This exercise was completed on 19.08.2009; whereupon was listed in the category of finals for hearing, and accordingly, heard on the basis of evidence placed on record. 4. The case set up by the plaintiffs, both in the plaint and the affidavit of evidence filed by their witnesses in support of averments made therein, is as follows: 4.1 The plaintiff no. 1 is a company incorporated in the USA in the State of Deleware. Plaintiff no. 1 has its genesis in a family business which commenced in 1945. Mr Robert E. Rich who is the progenitor of plaintiff no. 1, in a manner of speaking, responsible for the discovery of vegetable based whipped cream, made from soya bean. The research carried out under aegis of Robert E. Rich, led to the discovery that soya bean substance could be frozen, thawed and whipped. Thus came into existence, what the plaintiffs claim a miracle cream made from soya bean; a wholly “non-dairy” product. 4.2 The plaintiffs called the miracle cream RICH‟S WHIP TOPPING. Being a non-dairy topping it spawned various non-dairy products including Rich‟s Bettercreme Icing and Filling, Rich‟s on Top non-dairy dessert, frozen éclairs and CS(OS) 246-2004 Page 4 of 36 cream puffs, coffee Rich; which incidentally is claimed as the first frozen non-dairy creamer. 4.3 The plaintiffs it appears discovered another new product by the name of “Freeze Flo”. It is claimed that this is an all-natural process for soft foods, so that they remain soft while frozen, and hence can be served straight from the freezer. The plaintiffs claim that because of its expertise in manufacture and sale of frozen foods, non-dairy and baking products including frozen sea-foods specialties, soup bases, gravy mixes and powdered coffee, it has mustered an annual sales exceeding U.S. Dollars 1.7 billion, comprising of 2300 products which are available in more than 75 countries including, Australia, Belgium, Canada, Colombia, China, Holland, Israel, Italy, Japan, Mexico, South Africa, Thailand, United Kingdom, Vietnam and of course India. 4.4 Plaintiff no. 2, i.e., Rich Graviss Products Pvt. Ltd. was incorporated on 16.08.1994 as a result of a joint venture initiated by plaintiff no. 1; for an avowed purpose of manufacturing products under the trademark of plaintiff no. 1, based on the technical know-how provided by the plaintiff no. 1. In lieu thereof, plaintiff no. 2 pays royalty to plaintiff no. 1. 5. The plaintiffs, in so far as the present dispute is concerned, have more specifically averred that in India “RICH‟S WHIP TOPPING” was duly registered w.e.f. 13.11.1991, in class 30 specifically for non-dairy topping, icing, filling, and generally for other goods in class 30. Presently, though its renewal is pending consideration before the Registrar of Trade Mark in India. Furthermore, the registration is subject to a disclaimer with respect to the letter „S‟ and word „Topping‟. It is further averred that “RICH‟S WHIP TOPPING”, has enjoyed brisk and consistent sale in countries all over the world, since 1945. In particular, in India the sales have increased exponentially from a figure of approximately Rs 2.1crores in CS(OS) 246-2004 Page 5 of 36 the year 1997-98, to 15.6 crores in the year 2002-03. It is averred that the plaintiff no. 1 also maintains two websites being www.richs.com and www.whiptopping.com. 5.1 As a matter of fact the plaintiffs have stated that the trademark “RICH‟S WHIP TOPPING” as also “WHIP TOPPING” are registered in several countries of the world such as USA, New Zealand, Australia, Germany, Italy, Spain, Switzerland, Malaysia, Singapore, Hong Kong, Thailand, Philippines, Vietnam, Pakistan and Taiwan. It is also averred that the trademark “WHIP TOPPING” in class 29 has been registered vide registration certificate dated 28.03.2007, which is operative w.e.f. 27.06.2005. 5.2 It is further averred that the plaintiffs became aware only in April, 2003, that the defendant, was selling its product under the infringing mark “WHIP TOPPING”, in packaging carrying an identical trade dress with similar user instructions. 5.3 The plaintiffs being aggrieved issued a cease and desist notice dated 23.04.2003 to the defendant. The defendant, however, refuted the plaintiffs contention vide their reply dated 13.05.2003. The defendant thereupon, filed a suit in the Distt. Court at Tis Hazari being suit no. 53/2003, which, I am informed, stands withdrawn in view of the fact that parties realized that the legal validity of their respective stands would really get determined in the present proceedings. 6. In the background of the aforesaid averments, as stated above, the plaintiffs have led evidence in support of the same by filing affidavits of eight witnesses. Briefly, each of the witnesses have stated as follows: 6.1 Mr Jill K. Bond (PW1) has adverted with respect to: the worldwide market reputation of its trademark “RICH‟S WHIP TOPPING”; which is an invention made under aegis of its founder Robert E. Rich in the year 1945; the trade mark “WHIP TOPPING” is registered in USA and Taiwan, in the form of proof exhibits PW1/5 and PW1/6 are cited; and lastly, the trademark “RICH‟S WHIP TOPPING” is CS(OS) 246-2004 Page 6 of 36 registered in USA, Pakistan, Thailand and Malaysia; reliance in this regard is placed on exhibits PW1/7 and PW1/12. 6.2 In particular, PW1 has deposed with respect to the trademark “RICH‟S WHIP TOPPING” being registered in India w.e.f. 13.11.1991 with a disclaimer with regard to the letter „S‟ and the word „Topping‟ in class 30 in respect of non-dairy toppings, icing, fillings and all other goods falling under class 30. PW1 has also deposed that the same trademark has been registered in class 29 with respect to: meat; fish; poultry and game; meat extracts; preserved, dried and cooked fruits and vegetables; jellies; jams; fruit sauces; eggs, milk and milk products; edible oils and fats. PW1 has also alluded to the fact that because of tremendous goodwill and reputation acquired by its trademark “RICH‟S WHIP TOPPING” and the distinctive packaging adopted for its products in the form of a unique trade dress composed of red, blue and white colours it has, over the years, acquired immense brand value. 6.3 It is also claimed by PW1 that the said trademark “WHIP TOPPING” and “RICH‟S WHIP TOPPING” has been extensively promoted by the plaintiffs in all forms of media including the internet. In this regard reliance is placed on various forms of promotional material being exhibits PW1/15 to PW1/27. A reference is also made by PW1 to its domain name www.whiptopping.com which is claimed to be a popular website; extensively visited by consumers and associates of plaintiffs all over the world. 6.4 PW1 has adverted to the effect that the defendant by using a deceptively similar mark and/or packaging, to that of the plaintiffs, is in fact riding on the plaintiffs‟ goodwill and reputation. It is thus claimed that the defendant‟s action amount to, not only an infringement of the plaintiffs‟ trademark, but also amount to, committing a tort of passing off. PW1 has also proved the cease and desist notice dated 23.04.2003 (Ex. P3) issued to the defendant in that regard, as also the reply of CS(OS) 246-2004 Page 7 of 36 the defendant dated 13.05.2003 (Ex. P4). PW1 has also proved the power of attorney dated 23.10.2003 and 01.03.2004 (Exs. PW1/28 & PW1/29) respectively. 7. Ms Betty Fye (PW2) who is the International Finance Manager of plaintiff no. 1, has supported the case of the plaintiff by seeking to prove the international sale figure of plaintiff non 1 between 2000-2003. In this regard she has proved Ex. PW2/1 and Ex. PW2/2. There is also a reference to random sales invoices of Whip Topping/Rich‟s Whip Topping. In this regard invoices being Ex. PW2/3 to PW2/9 have been proved. PW2 has also deposed that plaintiffs maintain two websites being www.richs.com and www.whiptopping.com wherein it is claimed that information is available with regard to plaintiffs‟ product including product marketed under trademark “whip topping”/ “rich‟s whip topping”. 8. Mr Priyakant Himatlal Shah (PW3), who is a consultant with plaintiff no. 2, has adverted to the effect that plaintiff no. 2 was incorporated on 16.08.1994 for manufacturing products, chiefly „dairy-free topping‟ under the trademark of plaintiff no. 1 as per technical know-how supplied by plaintiff no. 1. For this purpose PW3 has stated that royalty is paid to plaintiff no. 1. PW3 has also alluded to the fact that plaintiff no. 2 is involved in production of non-dairy topping which is ultimately sold to bakers, confectioners, food service outlets, five-star hotels etc. PW3 has also deposed that defendant‟s trade mark “BELLS WHIP TOPPING” is similar to plaintiff no. 1 trademark “WHIP TOPPING” which forms part of the registered trademark of plaintiff no. 1 in India. PW3 has further stated that „WHIP TOPPING‟ on its own is registered in countries such as USA, Italy, France, Saudi Arabia, China etc. 9. Mr Pankaj Jain (PW4), who is the National Culinary Manager of plaintiff no. 2 has proved exhibit PW4/2 in order to establish its product under the trademark “RICH‟S WHIP TOPPING” extensive advertisement carried out in India. To be CS(OS) 246-2004 Page 8 of 36 noted these advertisements carried out in various newspapers are primarily pertaining to 2004 and 2007, that is, post institution of the suit. 10. Mr Sandesha S Laad (PW5), who is the senior Manager (Finance) of plaintiff no. 2, deposed that he had been associated with plaintiff no. 2 since April, 2009. He proved the fact that plaintiff no. 2 has paid royalty to plaintiff no. 1 in consideration of use of technical know-how supplied by plaintiff no. 1. In this regard PW5 has proved the audited balance sheets and profit & Loss accounts for the year 1999- 2000, 2002-2003 and 2003-2004. PW5 has specifically adverted to the fact that in so far as India is concerned the sales of “RICH‟S WHIP TOPPING” has increased from Rs 49.85 lacs (approximately) to Rs 19 crores in the year 2003-04. In this regard reliance is placed on the volume and revenue statement of plaintiff no. 2 (Ex. PW5/4) as also on the audited balance sheets and profit & loss accounts for the year 1999-2000, 2002-2003 and 2003-2004 being exhibits PW5/5, PW5/6 & PW5/7 respectively. In order to demonstrate the increase in profit from Rs 122.25 lacs in the financial year ending 2000 to Rs 545 lacs in the year ending 2003, reliance is placed on Exhibits PW5/8, PW5/9 and PW5/10. PW5 has also proved the sales in India for the years 1996-97, 2001-02. Randomly selected original invoices for the periods 1999 to 2005 were also proved. Reliance in this regard is placed on exhibits PW5/11 to PW5/17. 11. Mr V. Seetharaman (PW6) has deposed that based on the Power of Attorneys (Ex. PW3/1 and PW1/29) he has signed and verified the plaint on behalf of plaintiff no. 1 and 2 in his capacity as the constituted attorney. 12. Mr Prithvi Raj Chaudhary (PW7), who is a partner in M/s Modern Marketing Company has adverted to the effect that his firm had been distributing the product manufactured by plaintiff no. 2 under the trademark “RICH‟S WHIP TOPPING” since 1997. PW7 has deposed that once he purchased the product from plaintiff no. 2 he would supply them to hotels, bakeries, confectioneries, such as Oberoi Group, CS(OS) 246-2004 Page 9 of 36 Taj Flight Kitchen, ITC Group, Surya Crowne Plaza, Nirula‟s etc. in Delhi. He has testified that the quality of the product under the brand of “RICH‟S WHIP TOPPING” is very good and is in great demand. He has specifically adverted to the fact that selling the product under the brand name of “BELLS WHIP TOPPING” had created confusion, in as much as, he verily believed that plaintiff no. 2 had adopted another trademark by the name of “BELLS WHIP TOPPING”. 13. Mr Shikhil Nagpal (PW8), who is the Operational Manager of Everbake Bakers Pvt. Ltd, has deposed that they had been in the business since the year 2000. He has also testified that the plaintiffs trademark “RICH‟S WHIP TOPPING” along with its trade dress comprising of red, blue and white packaging is “easily recognizable and eye catching”. He further stated that “RICH‟S WHIP TOPPING” is used as a substitute to fresh dairy cream as it has greater shelf life and is easier to manage. 14. The defendant, on the other hand, has emphatically refuted the plaintiffs‟ claim of proprietary rights in trademark “RICH‟S WHIP TOPPING” and “WHIP TOPPING” the trade dress comprising of red, blue and white colour the packaging, the domain name www.whiptopping.com, and lastly, in the use of the expression of „whip topping‟ either by itself or in combination with other marks or as suffix or even as prefix. The defendant‟s stand is that they have been using the expression “BELLS WHIP TOPPING” honestly and openly in the course of their trade since 1995. It is averred, over the years the defendant has built for itself a valuable reputation and goodwill in trademark/label. Resultantly, the defendant, it is stated, has achieved a turnover of Rs 1.75 crores in the financial year 2002-2003. The defendant also claims that it maintains the highest standard of quality and control; and towards this end have invested a large sum of money in research and development. It claims to be in possession of fully equipped laboratory with qualified chemists and microbiologists. It claims that continuous research and CS(OS) 246-2004 Page 10 of 36 development activities have been undertaken in respect of its new products like whippable dairy cream and Ultra Heat Treated Desserts, Custards and Sauces etc. It is averred that research in these areas has been carried out in association with world renowned companies like G.C. Hann & Co., Germany, Danisco Culator, Denmark, Orana A/S, Denmark, Stock Germany etc. It is also claimed that defendant has the state-of-the-art manufacturing and packaging machines. It claims to cater to renowned multi-national companies such as Britannia Industries Ltd., Perfetti India Ltd, Candica (India) Ltd., Nirulas‟ Hotels, Sugar & Spice Restaurants, Taj Sata Air Catering Ltd, Hyatt Regency Hotel etc. 14.1 In defence of its right to use the mark “BELLS WHIP TOPPING” the defendant has stated that the plaintiffs‟ mark is generic in nature and has no trademark significance. It is further averred that, in any event, the plaintiffs trademark, which is registered as one composite whole is, “RICH‟S WHIP TOPPING” with a disclaimer in so far as letter „S‟ and the word „Topping‟ is concerned; therefore, there can be no infringement much less a commission of tort of passing off by the defendant in using the trade mark “BELLS WHIP TOPPING”. This, according to the defendant, is more so in view of the fact that „WHIP TOPPING‟ is a descriptive expression which alludes to the character and quality of the product itself and hence, cannot be protected till it can be demonstrated that it has acquired a “secondary meaning”. The defendant has further averred that the product in issue is „WHIP TOPPING‟ and it cannot be described in any other manner except by using that expression and especially when it is a manufacturer of the said product. It is the defendant‟s stand that the said word/expression „WHIP TOPPING‟ is commonly used in the trade world over. According to the defendant „WHIP TOPPING‟ is an imitation dairy product which is commonly used in making desserts, baked and frozen products by various manufacturers all over the world, and hence is “publici juris”. In this regard example of other manufacturers, which have CS(OS) 246-2004 Page 11 of 36 used the word mark „whip topping‟ in respect of their products, have been referred to in the written statement. For the sake of convenience they are extracted hereinbelow: S. No. Name of the Company Product 1 Lego Foods Co. Ltd. Lego non-dairy Whip Topping 2 Kraft Foods Cool Whip Whipped Topping 3 Flavor Right Foods, Columbus, Ohio 43216, USA Flavor Right Premium ready to whip Topping 4 Elgin Dairy Foods, Inc. Chicago, Illinois, USA 1) Elgin NP Whip Topping 2) Elgin‟s Indenium Whip Topping. 3) Elgin‟s ready-to-whip D-lux Whip Topping 5 Morningstar Foods Inc., USA 1) Frozen Whipped Toppings 2) Dairy Fresh Aerosol Whipped Toppings. 6 Hanan Products Co. Inc. Hanan‟s Whip Topping 14.2 According to the defendant the words „Whip Topping‟ are neither distinctive nor invented being part of common usage in trade, they cannot be protected. The defendant has refuted the charge of infringement and passing off as it has claims the use of the word/expression „Whip Topping‟ in conjunction with „BELLS‟ has over the years had distinctiveness associated with the products manufactured by the defendant. The packaging and the presentation of the colour scheme also being different both visually and in presentation, there is no deception or confusion as alleged or at all in the defendant‟s use of the expression “BELLS WHIP TOPPING” along with its own trade dress. The defendant claims the use of the expression „whip topping‟ is bonafide as it describes the character and quality of the goods which are manufactured by it and hence, protected by the provisions of Section 35 of the Trade Marks Act, 1999 (hereinafter referred to as „Trade Marks Act 1999‟). CS(OS) 246-2004 Page 12 of 36 SUBMISSIONS OF COUNSELS 15. Mr A.K. Gupta, learned senior counsel, who appeared for the plaintiff, elaborated on the challenge laid to the defendant‟s mark in the pleadings by adverting to the following actions of the defendant which according to him trenched upon both the statutory as well as common law right of the plaintiff. : (i) first, the use of words/expression “WHIP TOPPING” in the defendant‟s mark resulted in the infringement of the plaintiffs mark “RICH‟S WHIP TOPPING”; (ii) second, the adoption by the defendant of a similar packaging /trade dress; (iii) third, the infringement of copyright in the instructions accompanying the product; and, (iv) lastly, commission of tort of passing off by the defendant. 16. In support of his charge Mr Gupta made the following submissions: (i) Notwithstanding the fact that at the time of registration of the plaintiffs‟ trademark “RICH‟S WHIP TOPPING” a disclaimer was entered with respect to the letter „S‟ and the word „Topping‟; the defendant‟s mark “BELLS WHIP TOPPING”, (which is unregistered) is; deceptively similar to the plaintiffs registered trademark. (ii) plaintiff no. 1 as far back as on 1945 was responsible for inventing a “non- dairy” product which is capable of being whipped into foam for use in desserts, salads and confectionaries items e.t.c., which resulted in the product acquiring the name „whip topping‟. In short it is the invention in which plaintiff no. 1 has legal rights. (iii) In the country of its invention, i.e., U.S.A. „Whip Topping‟ is registered with the plaintiffs‟ name. (iii) In India, the plaintiffs‟ registration of the mark “RICH‟S WHIP TOPPING” dates back 13.11.1991, and thus carries with it a superior right qua the defendant by virtue of prior user. CS(OS) 246-2004 Page 13 of 36 (iv) On discovering the defendant‟s use of the infringing mark in April, 2003, a notice was issued on 23.04.2003, which, as indicated above, was replied by the defendant vide its reply dated 13.05.2003. The defendant instituted a suit only thereafter in the Distt. Court being suit no. 53/2004 in March, 2004. This was followed by the defendant making an application for registration of its mark only on 29.05.2003. In the defendant‟s application user is claimed from 1995. (iv) The plaintiffs have rights both in the composite as well as a part of the trade mark, i.e., in both “RICH‟S WHIP TOPPING” as well as in “WHIP TOPPING”. The defendant‟s use of the infringing mark is violative of the plaintiffs‟ proprietary right in a registered mark;