FAO (OS) 255/09 Page No. 1 of 36 THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 10.02.2010 + FAO (OS) 255/2009 NESTLE INDIA LIMITED ... Appellant - Versus - MOOD HOSPITALITY PRIVATE LIMITED ... Respondent Advocates who appeared in this case:- For the Petitioner : Mr Sudhir Chandra, Sr Advocate with Mr Hemant Singh, Ms Mamta R. Jha and Mr Manish K. Mishra For the Respondent : Mr Rajiv Nayar, Sr Advocate with Mr Ashish Wad with Mr Suchinto Chatterji, Mr Chirag Dave, Mr Sameer Abhyankar, Ms Surbhi Aggarwal and Mr Sanjay Samdarshi CORAM:- HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON’BLE MS. JUSTICE VEENA BIRBAL 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporter or not ? Yes 3. Whether the judgment should be reported in Digest ? Yes BADAR DURREZ AHMED, J 1. This appeal is from the order dated 01.07.2009 passed by a learned Single Judge of this court in IA No.7040/2008, which was an application under Order 39 Rules 1 & 2 of the Code of Civil Procedure, 1908 (hereinafter referred to as ‗the CPC‘) in a civil suit [CS(OS) 1122/2008]. By virtue of the impugned order, the appellant (defendant) has been restrained, till the disposal of the suit, from ‗infringing‘ the respondent‘s (plaintiff‘s) registered trademark ―Yo!‖ per se or in conjunction with any FAO (OS) 255/09 Page No. 2 of 36 logo/mark/letters, or otherwise trading under the mark ―Yo!‖ or any other deceptively similar mark thereto or colourable imitation thereof, whether by using the expression by itself or as part of any other mark/name in respect of goods covered by the registration obtained by the respondent. The appellant has also been restrained from, in any manner, using the mark ―Yo!‖ per se or in conjunction with any other logo/mark/letters or any other mark deceptively similar thereto, so as to pass-off or enable or assist others to pass-off their business and products as those of the respondent. 2. The respondent claims to have the following registered trademarks: Trademark Trademark No. Class Description of Goods/ Services Registration Date YO! 1345481 25 Readymade garments, T-Shirts included in class 25 02.06.2007 YO! (device of exclamation mark) 1345478 42 Restaurant included in class 42 30.05.2007 YO! China (Label) 1194649 30 Coffee, tea, cocoa, sugar, rice, tapioca, sago, coffee substitutes, flour and preparations made from cereals bread biscuits, cakes, pastry and confectionery, ice, honey, treacle, yeast, baking powder, salt, mustard, pepper, vinegar, sauces, spices, ice. 13.08.2005 YO!China (Label) 1194647 32 Beer, ale and port, mineral and aerated waters and other non- alcoholic drinks, syrups and preparations for making beverages. 25.05.2005 FAO (OS) 255/09 Page No. 3 of 36 YO!China 1194648 29 Meat, fish, poultry extracts, preserved dried and cooked fruits and vegetables, jellies, egg, milk and dairy products, edible oils and fats, preserve, pickles. 24.08.2005 3. According to the respondent, the marks ―Yo!‖ and ―Yo! China‖ have become distinctive of the respondent and the word ―Yo‖ has acquired a secondary meaning. Consequently, the respondent claims exclusive right to use the marks ―Yo!‖ and ―Yo! China‖. The respondent is primarily in the business of establishing and running Chinese food restaurants. The first ―Yo! China‖ restaurant is said to have been setup by the respondent in May, 2003 in a Mall in Gurgaon. The respondent now claims to have a chain of about 40 such restaurants operating under the mark ―Yo! China‖, spread over 15 cities across India. Apart from these restaurants, it is alleged by the respondent that there are a number of kiosks and take-away points where the repondent‘s products are sold under the said trademark. According to the respondent, besides being independently registered, the trademark "Yo!' also forms an essential feature of the trade mark, trade dress and product descriptor of the products and services offered as "Yo! China". The trademark "Yo!" travels with the respondent in all its advertisements and expanded forms of business viz. "Yo! Dimsum", "Yo! On the Go" etc. It is also alleged that in the year 2005-2006, the respondent innovated its product line to offer "Yo! on the Go", which was essentially chowmein served in take-away boxes. Allegedly, the idea is a big hit with the consumers as they FAO (OS) 255/09 Page No. 4 of 36 are able to have quality Chinese food (particularly chowmein i.e., ready to eat noodles) at reasonable prices. Recently this product offering has been renamed as "Yo!Box". 4. The Respondent claims to have coined and adopted the expression "Yo! China" in the year 2002 in order to distinguish its business, trade identity and products/services from those of others. It is contended by the respondent that today "Yo! China" has become a brand name associated with quality "Chinese Food at Chinese Prices" and that the target market for the Respondent has been the market segment which comprises primarily of the youth, for reasons of affordability. It is further contended that in the last financial year (2008-09) the sales of the respondent were around Rs 30 crores. It is submitted on behalf of the respondent that the word 'Yo' (without the exclamation mark) is primarily American Slang used for calling attention and the trademark "Yo!" (Yo with an exclamation mark) is coined and arbitrarily applied (not being descriptive in nature) by the respondent to its goods and services making it inherently distinctive. 5. The respondent is aggrieved by the fact that the appellant is manufacturing and marketing, inter alia, noodles (chowmein) under the name and style of ―Maggi Cuppa Mania‖ in two flavours ―Masala Yo!‖ and ―Chilly Chow Yo!‖. It is alleged that around April 2008, the appellant launched a product under the name and style of "Maggi Cuppa Mania Instant Noodles" in two flavours i.e., "Masala Yo!" and "Chilly Chow Yo!". The packing of the appellant's product also displays the words "Open, Fill, Go!", FAO (OS) 255/09 Page No. 5 of 36 which, according to the respondent, makes the appellant‘s product a direct take-off on the respondent's product "Yo! On the Go". It is alleged that the concept of selling noodles in a takeaway tumbler leans heavily on the market segment comprised mainly of young people, which is a time, price and taste sensitive market and which is the prime market of the respondent for its products -- "Yo! On the Go" or "Yo! Box". 6. The respondent filed the said suit alleging that the use of the mark "Yo!" by appellant in the same manner as the registered trade mark "Yo!" of the respondent was a clear case of infringement. Moreover, it was alleged that the products of the appellant resemble those of the respondent in many ways:-- (i) the appellant is using the mark "Yo!' on the packaging of its products; (ii) the respondent's product is named "Yo! on the Go", and the appellant adopted a similar tagline on its product i.e., "Open, Fill, Go!"; (iii) both products are ready-to-eat noodles. According to the respondent, these facts are not mere coincidences, but, clearly establish that the appellant has infringed the mark of the respondent and is trying to pass off its products as those of the respondent. 7. The appellant, on the other hand, alleges that it is engaged in the business of manufacturing and selling packaged noodles, under the well known and registered trade mark MAGGI, having an annual turnover of Rs. 493 crores and 91% of the market share in respect of packaged noodles. It is alleged that the trade mark MAGGI is extensively used in India since 1974 for culinary products. The appellant introduced packaged instant noodles in FAO (OS) 255/09 Page No. 6 of 36 a cup under the trade mark MAGGI in two flavours, namely "MASALA" and "CHILLY CHOW". The appellant contended that in order to attract attention and add excitement, the flavours were accompanied with the exclamation "YO!", which has become customary in the trade as an expression of "excitement and attention" identified with the youth. It was submitted that the respondent had itself pleaded that "Yo" is an American slang expression and is used for "calling attention/expressing excitement.‖ 8. The appellant claimed that ―Yo!‖ was commonly used by numerous businesses. As examples of the usage of ―Yo!‖, the appellant has placed on record printouts from various websites of businesses all over the world, which use the said expression ―Yo‖ with or without an exclamation mark. They are — ―Yo! Youth Outlook‖ which has two further products/ services ―Yo! Radio‖ and ―Yo! Blogs‖. The said websites essentially cater to the youth and provide news etc. concerning the youth. Then, there is the website www.yofun.net, which has a product ―Yo!Fun‖. Similarly, there are products and services carrying the names — ―Yo Mart‖, ―Yo la‖, ―Yo Gabba Gabba‖ etc. There is also a site of software developers called ―Yo! Creations‖. Another voice solution and software development site does business under the name of ―Yo!‖. Interestingly, there is a chain of restaurants in the U.K, Ireland, Middle East and Malaysia, which carries on business under the name and style — ―Yo! Sushi.‖ Its takeaway service is called ―Yo! To Go‖. It was suggested by the learned counsel appearing for the appellant that ―Yo! China‖ and ―Yo! On the Go‖, which are allegedly FAO (OS) 255/09 Page No. 7 of 36 used by the respondent have, in fact, been ―more than inspired‖ by ―Yo! Sushi‖ and ―Yo! To Go‖. 9. Before the learned Single Judge, the appellant sought to defend its use of the expression ―Yo!‖ in respect of its ‗Maggi Cuppa Mania‘ products, primarily on the ground that there can be no infringement of the respondent‘s registered trademarks because the appellant was not using ―Yo!‖ as a trademark at all, which is a condition precedent for constituting infringement under Section 29 of the Trademarks Act, 1999 (hereinafter referred to as the ―said Act‖). It was also contended by the appellant that ―Yo!‖ was used merely as a flavour descriptor and, therefore, did not constitute infringement in view of the provisions of Section 30(2)(a) of the said Act. With regard to the allegation of passing off, the appellant had contended that there was no likelihood of any confusion between the trademarks of the appellant and the respondent. The trademark of the appellant was MAGGI and its packaging employed the distinctive red and yellow combination, which it has been doing since 1974. The expressions ―Masala Yo!‖ and ―Chilly Chow Yo!‖ were only used as flavor descriptors and not as trademarks. On the other hand, the trademark of the respondent was ―Yo! China‖ and there was no question of there being any likelihood of confusion between the two trademarks, namely, ―Yo! China‖ and ―MAGGI‖. It was also contended by the appellant that, in any event, ―Yo‖, with or without the exclamation mark, is a common or popular expression which is used worldwide and which originated as American slang and has been used commonly not only by youngsters in their day-to-day FAO (OS) 255/09 Page No. 8 of 36 conversation but has also been used by businesses particularly to attract the attention of the younger customers. Consequently, it was submitted that ―Yo!‖ cannot be monopolized by the respondent. It was also suggested that ―Yo!‖ could not have been registered in view of the provisions of Section 9(1)(a) of the said Act inasmuch as it was a mark which was incapable of distinguishing the goods or services of one person from those of another person. In other words, the mark ―Yo!‖ was devoid of any distinctive character. It was pointed out that the appellant had filed rectification proceedings seeking cancellation of the respondent‘s registration before the Intellectual Property Appellate Board on 19.07.2008 and the same are pending. It was also contended that ―Yo‖ and ―Yo!‖ were commonly used in the trade for the purposes of brand imaging so as to target the youth. The general use of the expression ―Yo!‖, both in day-to-day conversation and in the trade, clearly established that there was no question of the said expression having lost his primary meaning and having acquired a secondary meaning and, therefore, the respondent could not have any exclusive claim for its use. 10. It was also contended that ―Yo!‖ had been registered in favour of the respondent in respect of ‗restaurants‘ falling under Class 42, which was essentially a service and did not relate to any goods. On the other hand, the appellant‘s products were goods falling under Class 30 and were not services falling under Class 42. It was also submitted that Section 17 of the said Act clearly stipulated that when a trademark consists of several matters, its registration would confer on the proprietor exclusive right to the use of the FAO (OS) 255/09 Page No. 9 of 36 trademark taken as a whole. Thus, it was submitted that while the respondent had registrations under Class 30 in respect of the mark ―Yo! China‖, the said registrations were in respect of the whole mark ―Yo! China‖ and not just the mark -- ―Yo!‖. The registered mark — ―Yo! China‖ would, therefore, have to be taken as a whole and ―Yo!‖ cannot be considered to be a registered trademark insofar as products falling under Class 30, which include the subject noodles, are concerned. For all these reasons, it was urged before the learned Single Judge that the application for ad interim injunction be rejected. 11. However, the learned Single Judge returned several prima facie findings which went against the appellant. It appears that the learned Single Judge was quite concerned about the fact that there was no explanation forthcoming from the appellant as to why it had used the exclamation mark (!) along with the word ―Yo‖. The learned Single Judge also found, prima facie, that ―Yo!‖ and ―Yo! China‖ were not descriptive of the respondent‘s products but were arbitrary marks and that they had acquired distinctiveness through usage since 2002. He observed that, prima facie it appeared that these marks had acquired a secondary meaning insofar as chowmein (noodles) were concerned. A prima facie view was also taken by the learned Single Judge that the respondent‘s registrations were not liable to be cancelled. Further, that ―Yo!‖ was not generic in nature and that the goods and services of the respondent and goods of the appellant were overlapping and similar, both being noodles (chowmein). Rejecting the argument of the appellant that there was no infringement because the appellant did not use FAO (OS) 255/09 Page No. 10 of 36 the expression ―Yo!‖ as a trademark or as a part of its trademark, the learned Single Judge held that ―Yo!‖ was used in a similar manner and that the use of the mark ―Yo!‖ by the appellant ―appears‖ to fall within Section 29(4)(b) of the said Act. The learned Single Judge then relied on the case of Indian Shaving Products v. Gift Pack and Another: 1998 PTC (18) 698 where the two marks in question were ―Duracell Ultra‖ and ―BPL Ultra‖. Reliance was also placed on the decision in the case of Yahoo, Inc v. Akash Arora: 1999 PTC (19) 201 where the dispute was between the names of two websites, namely, ―Yahooindia.com‖ and ―Yahoo.com‖. The learned Single Judge also found, prima facie, that there was no merit in the appellant‘s submissions that the use of ―Yo!‖ by it was not likely to lead to any confusion as it was used in conjunction with the words ―Masala‖ and ―Chilly Chow‖ and the trademark ―Maggi‖. The learned Single Judge observed that ―Yo!‖ was distinctive of the goods and services of the respondents and as such there was likelihood of confusion that the appellant‘s products were connected with those of the respondents. Referring to the decision in Midas Hygiene Industries Pvt. Ltd and Another v. Sudhir Bhatia and Others: 2004 PTC (28) 121 (SC), the learned Single Judge, observing that clearly an injunction must follow when the adoption of the mark was dishonest, allowed the application of ad interim injunction of the respondent. 12. The impugned order is assailed before us by the appellant on all the grounds urged before the learned Single Judge but, principally, on the ground that the learned Single Judge failed to appreciate that an action for FAO (OS) 255/09 Page No. 11 of 36 infringement under section 29(1) of the said Act could only be brought where the defendant uses a mark ―as a trade mark‖. According to the learned counsel for the appellant, it is a condition precedent under Section 29(1) that, in order to constitute infringement, the mark complained of must be "used as a trade mark" i.e., in a manner "indicative of trade origin" as per the definition of trade mark under Section 2(i)(zb). Reliance was placed on Mothercare U.K. Ltd. v. Penguin Books Ltd: 1988 R.P.C. 113. It was submitted that the whole law of Trade Marks -- whether 'statutory law‘ relating to infringement or 'common law' relating to passing off -- is concerned with deception and confusion with regard to trade origin and the use of marks indicating the same. The trade origin of the appellant's packaged noodles is MAGGI which is boldly written on the packaging. It was contended that the impugned judgment has created a monopoly in the commonly used exclamation "Yo!" in favour of the Respondent which is contrary to law. 13. Another ground urged before us concerned the scope of the right conferred upon registration of a trademark. It was submitted that the right conferred under Section 28 is infringed under Section 29 only if the impugned trade mark is used for ―same or similar‖ goods or services that the Plaintiff's trade mark is registered for. Hence, a registered trade mark for services is infringed only when used for those services. Otherwise, there was no need for the legislature to add classes 35 to 42 (SERVICES) to the Fourth Schedule of the Trade Mark Rules. Reliance was placed on Asian Paints FAO (OS) 255/09 Page No. 12 of 36 Ltd. Vs. Home Solutions Retail (I) Ltd: 2007 (35) PTC 697(Bom) (para 5). It was submitted that the mark "Yo!" per se is not registered for noodles which falls in class 30 and that the learned Single Judge ignored this distinction. "Yo!" is registered only for restaurant services in class 42. As far as registration of the trade mark "Yo! China" in class 30 is concerned, the same does not give an exclusive right of use to a part thereof, namely "Yo!", on account of the prohibition laid down by Section 17 of the Act. Hence, there is no infringement. Reliance was placed on Three-N-Products P. Ltd v. Emami Limited: 2008 (4) CHN 608. 14. Then it was urged before us by the learned counsel for the appellant that the learned Single Judge erred in holding that the provisions of section 29(4) and (5) applied inasmuch as this was not even a case pleaded in the plaint. The suit is based on the pleadings that the goods of the appellant and the respondent are the same/similar. A reference was made to paragraph No.24 of the plaint:- ―24. It is well settled principle of law that if the essential features of a registered Trade Mark are adopted by the Defendant, then the fact that other writings or marks on the goods or packaging in which the Defendant sells his goods are different are immaterial and the plaintiff has a statutory right to seek protection of his exclusive right to use his Trade Mark. A Trade Mark has only one source and no one other that the registered proprietor has the right to use the same. ―Yo!‖ is the most essential feature of the plaintiff‘s Trade Mark. The use by the defendant of a mark which is identical to the plaintiff‘s trade mark amounts to infringement and the plaintiff has a statutory remedy to protect his mark. Further, the fact that the goods/services in question are almost identical, both catering to the same consumer base and both dealing with noodles (chowmein), enhances the chances of confusion‖. FAO (OS) 255/09 Page No. 13 of 36 15. It was further submitted that even otherwise, Section 29(4) did not apply as there was no trade mark usage of "Yo!" and that any other interpretation would render Section 29(1) redundant, which, in turn, would be against the permitted rules of interpretation. Reliance was placed on Illachi Devi Vs. Jain Society: (2003) 8 SCC 413. It was contended that what would not amount to infringement for "identical goods", cannot amount to infringement for "different goods" and that the test of infringement applicable to "different goods" cannot be wider than the test of infringement for "identical/similar goods". 16. It was also reiterated that "Yo!" is a popular exclamation commonly used by the trade and is a generic expression. Consequently, it cannot be considered as a distinctive or a well known trade mark, which is a condition precedent for the applicability of Section 29(4). It was submitted that the Respondent has allegedly used "Yo! CHINA" as a trade mark but, no material has been produced by the respondent to show that "Yo!", by itself, has been used as a trade mark by the respondent or that it has acquired the status of a "well known" trade mark. 17. The learned counsel for the appellant also submitted that, in any event, infringement is not made out since use of "Yo!" by the appellant in conjunction with ―masala‖ and ―chilly chow‖ cannot lead to any confusion or deception inasmuch as the appellant's product is well distinguished by the FAO (OS) 255/09 Page No. 14 of 36 trade mark MAGGI and its packaging is entirely different and distinct from that employed by the respondent. It was contended that the test of deceptive similarity for the purposes of an infringement action and a passing off action is the same where the trade marks are not identical. Reliance was placed on Ruston & Hornby Ltd. v. Z. Engineering Co.: AIR 1970 SC 1649 (para). The learned counsel contended that the Learned Single Judge disregarded this test of deceptive similarity. He drew our attention to the appellant's trade mark and packagings and those employed by the respondent to submit that there is no similarity, what to speak of deceptive similarity, between them. [Appellant‘s product] FAO (OS) 255/09 Page No. 15 of 36 [Respondent‘s product] 18. Continuing on this theme, the learned counsel submitted that, as there is no similarity whatsoever between the competing trademarks and the packaging, the question of passing off also would not arise. The appellant's packaged noodles are well distinguished by the well known trade mark MAGGI and its distinctive packaging. Furthermore, the appellant has a 91% market share and Rs. 493 crores annual turnover as compared to respondent's total turnover of Rs. 21 crores. Thus, the question of piggy- backing or trading upon the goodwill of the respondent by the appellant defies all logic. Reliance was placed on Durga Dutt Sharma v. N.P. Laboratories: AIR 1965 SC 980 (para 28). 19. Lastly, it was contended on behalf of the appellant that the reliance placed by the learned Single Judge on Indian Shaving Products Ltd (supra) FAO (OS) 255/09 Page No. 16 of 36 and Yahoo Inc. (supra) was wholly misplaced inasmuch as both these were cases of "trade mark usage", which is not the case here. It was therefore submitted that the impugned order be set aside. 20. On the other hand, the learned counsel for the respondent fully supported the impugned order and contended that no interference was called for. First of all, it was submitted that the plea of the appellant with regard to ―Yo!‖ not being used by it as a trade mark was not tenable. According to the learned counsel, section 29 of the said Act has various independent sub- sections under which cases of infringement may fall. Each sub-section provides for a different situation and each is independent of the other. It was submitted that, by virtue of