Parle Agro

Vs

Cadbury (India) Over

Trademark Frooti

By:

Amritanshu (09FT-015)

Apoorv Joshi (09FT-027)

Deepika Jindal (09FT-045)

Girish Gullapudi (09FT-050)

Gurinder Singh Sohi (09FT-051)

1

INDEX

1. Introduction………………………………………………………………….. (3)

a. Parle Agro India Pvt. Limited……………………………………….. (4)

b. Frooti………………………………………………………………… (5)

c. Cadbury India Ltd………………………………………………….... (5)

d. Cadbury Fruity Gems………………………………………………... (6)

2. Trademark…………………………………………………………………… (7)

a. Main Requirement……………………………………………………. (7)

b. Why Trademark are used…………………………………………….. (7)

c. Function of trade mark………………………………………………... (7)

d. Types of trade mark…………………………………………………… (8)

3. Case Introduction……………………………………………………………. (8)

4. Case put forward by each side……………………………………………...... (9)

a. Parle’s side…………………………………………………………….. (9)

b. Cadbury’s side………………………………………………………… (9)

5. Trademark act…………………………………………………………………. (10)

a. Section 29……………………………………………………………... (10)

b. Section 30……………………………………………………………... (12)

6. Case Analysis…………………………………………………………………. (14)

7. Conclusion……………………………………………………………………. (15)

8. References……………………………………………………………………...(16)

2

1. Introduction

A Trademark, by law, has been defined as a mark capable of being represented

graphically and which is capable of distinguishing the goods or services of one

person from those of others.

Economic use of trademarks in resolving ownership disputes, aiding

advertisement and guarantying quality in the course of trade goes back thousands

of years, but it spread dramatically with the emergence of the merchant and craft

guilds and their monopolies in the 14th and 15th centuries. Increasingly property

value of trademarks was being recognized and by the end of the 19th century its

protection was codified in Europe and the United States.

However, India was a bit late in coming up with its own Trademarks Law. Prior

to 1940, there was no statutory law relating to trademarks in India. The law

applicable on the subject was based on common law as was applicable in

England. Problems relating to infringement, passing off, etc., were decided in the

light of Section 54 of the Specific Relief Act, 1877, and issues relating to

registration were resolved by obtaining a declaration as to ownership of the

Trademark under the Indian Registration Act, 1908. The Trademarks Act,

promulgated in 1940, a replica of the UK Trademarks Act, 1938, introduced a

machinery for the registration and statutory protection of trademarks in India.

This Act was in force till 1958. The Trademarks Act, 1940 was replaced by the

Trade and Merchandise Marks Act, 1958. This Act consolidated the provisions of

Trademarks Act, 1940, the Merchandise Marks Act, 1889 and some provisions

relating to Trademarks contained in Indian Penal Code, Criminal Procedure Code

and the Sea Customs Act.

However, even the Trade and Merchandise Marks Act, 1958 was not

comprehensive enough to govern all the disputes regarding conflicting

3

Trademarks. In the early 90’s, when India opened up to its borders to foreign

trade, companies were reluctant to invest in India, as they did not have confidence

in Indian laws regarding their Intellectual Property Protection. Thus, the Trade

and Merchandise Marks Act, 1958 has subsequently been replaced by the new

Trademarks Act, 1999, which has come into force from 15th September 2003.

The new Act, which has been sufficiently revised and revitalized to make it

substantially acquiescent with the provisions of TRIPS(trade related aspects of

intellectual property rights), was ratified by Parliament in 1999 with a view to

simplify the procedures for registration of Trademarks.

In this report, we would study certain sections of the Trademark Act, 1999

through a live case study. The case is about the Trade Mark Infringement Issue

between Parle Agro Ltd and Cadbury India Ltd over Frooti/Fruity. After

introduction of Fruity Gems by Cadbury, Parle filed a case in the court regarding

trade mark infringement of their registered trade mark Frooti. In this report, we

will briefly introduce both the companies and their concerned brands. We will

also present the standpoints of both the parties involved.

After this we will discuss sections in Trademarks Act 1999 pertaining to the case

and also will be presenting our analysis. Since, our group could not reach

consensus, we will be presenting both the stand-points.

1. a. Parle Agro India Pvt. Limited

Parle Products Pvt Ltd based in Mumbai, India has been India's largest

manufacturer of biscuits and confectionery, for almost 80 years. Makers of the

world's largest selling biscuit, Parle-G, and a host of other very popular brands,

the Parle name symbolizes quality, nutrition and great taste. With a reach

spanning even the remotest villages of India, the company has definitely come a

very long way since its inception. Many of the Parle products - biscuits or

confectioneries, are market leaders in their category and have won acclaim at the

Monde Selection, since 1971. With a 40% share of the total biscuit market and a

4

15% share of the total confectionary market in India, Parle has grown to become a

multi-million dollar company. While to consumers it's a beacon of faith and trust,

competitors look upon Parle as an example of marketing brilliance. And the

major products under its umbrella are:

Beverages:

Frooti (Mango drink)

Appy and Appy Fizz (Apple flavored drink)

LMN (Lemon flavored drink)

Bailley (Packaged drinking water)

Saint Juice (Fruit juices)

Grappo Fizz (Grape flavored drink)

Confectionery items include Buttercup, Buttercup Softease, Mintrox and Frewt

Eclairs.

1. b. Frooti

Frooti, or Mango Frooti, as it is popularly called, is the largest-selling mango

drink in India. It is the flagship product of and the most successful drink offered

by Parle Agro India Pvt. Ltd. Frooti was launched in 1985 in TetraPak packages.

The packaging played a major role behind its success, since it could be carried

easily and conveniently. Frooti also provided a refreshing mango taste that

translated into a huge demand for itself. The tagline “Mango Frooti, Fresh and

Juicy”, helped the brand strengthen and consolidate its position as the leader.

1. c. Cadbury India Ltd.

Cadbury is a leading global confectionery company with an outstanding portfolio

of chocolate, gum and candy brands .Cadbury has direct operations in over 60

countries, sells its products in almost every country around the world. In India,

Cadbury began its operations in 1948 by importing chocolates. After 60 years of

5

existence, it today has five company-owned manufacturing facilities. The

corporate office is in Mumbai. Currently Cadbury India operates in four

categories viz. Chocolate Confectionery, Milk Food Drinks, Candy and Gum

category.

In the Chocolate Confectionery business, Cadbury has maintained its undisputed

leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star,

Perk, Éclairs, Celebrations and Gems.

Milk food drinks are Bournvita the leading Malted Food Drink (MFD) in the

country. Similarly in the medicated candy category Halls is the undisputed leader.

Cadbury’s has entered the gum market with Bubaloo which has presence in 25

countries.

1. d. Cadbury Gems

The saying "Good things come in small packages" has been proven right many a

times and it couldn't have been truer for the pretty chocolate buttons called Gems.

Unrivalled in all these years, Cadbury Gems has captured every consumer's

fantasy for almost 4 decades. Little wonder that Cadbury Gems, the brand that

came into India in 1968 is still going strong.

Early 2006 gave consumers one more reason to celebrate with Cadbury Gems; the

launch of Cadbury Fruity Gems, a fruit flavored variant with a crispy shell outside

and white chocolate inside. Now consumers had not one, but two reasons to relish

the world of Cadbury Gems.

Now with the introduction of Cadbury Fruity Gems, Parle Agro filed a case in the

court regarding Trade Marks Act, 1999 detailed arguments of each sides are given

in further sections.

6

2. Trademark

A ‘Trademark’ means a mark capable of being represented graphically and which

is capable of distinguishing the goods or services of one person from those of

others.

A ‘Mark’ includes a device, brand, heading, label, ticket, name (including

abbreviations), signature, word, letter, numerals, shape of goods, packaging or

combination of colors and any combination thereof.

2. a. Main Requirement of trademark

It must be distinctive.

It must not be deceptive.

2. b. Why Trademark is used

The essential function of a trademark is to exclusively identify the commercial

source or origin of products or services. It is generally used in the brand picture of

a product.

2. c. Function of trademark

Under modern business condition a trade mark performs four functions:

It identifies the goods / or services and its origin.

It guarantees its unchanged quality

It advertises the goods/services

It creates an image for the goods/ services.

7

2. d. Types of trade marks

Registered Trademark: The trademark registered under the trademark act is

called registered trade mark. In case of infringement of registered trademark, suit

for permanent injunction can be filed. If proved, the damages can be claimed.

Unregistered Trademark: The trademark being used without being registered

under the trademark act is called unregistered trade mark. In case of passing off

unregistered trademark, suit for permanent injunction can be filed however,

damages cannot be claimed.

3. Case - Introduction

Case details: Case APP/419/2007 in Bombay high Court

In early 2006, Parle Agro Ltd filed a suit against Cadbury India Ltd in Bombay

High Court, over the use of the word ‘Fruity’ in Cadbury Fruity Gems, as it

contended that it would dilute the brand value of its main product Frooti, a mango

drink. Parle Agro had also sought an ad-interim relief to prevent Cadbury from

marketing “Fruity Gems” until the case is decided. Within months, Cadbury

moved the Delhi High Court against Parle Agro and sought a declaration that the

word “Fruity” was commonly used in the English language and the Mumbai-

based Parle cannot claim exclusivity to a completely descriptive term. According

to Cadbury Spokesperson, the Bombay High Court has refused to grant an interim

injunction to Parle.

In June 2008, Cadbury and Parle Agro tried to settle the matter outside the court,

but Parle refused the settlement terms offered by Cadbury. After Cadbury lost its

appeal on declaration in the Delhi HC, it moved the Supreme Court to transfer the

Infringement case from Bombay High Court to Delhi High Court, so as to avoid

conflicting Judgments from the two courts. However this plea was rejected by the

Supreme Court.

8

4. Plea from both sides

4. a. Parle’s Side:

The company argues that Cadbury is not entitled to use the mark “Fruity” on its

pack as it would constitute infringement of its trademark “Frooti”, under section

29 of the Trade Marks Act, 1999. Parle Agro alleged that as Frooti is the flagship

brand of the company and has a sizeable good will in the country, Cadbury is

infringing on its trademark.  Parle Argo’s legal advisors say they are keen to

preserve, protect and enforce its intellectual property rights in the mark “Frooti”,

which it had been using since 1985.

4. b. Cadbury’s Side:

Cadbury, on the other hand, defends itself, saying that “Fruity” is used in accord

with honest practices in industrial or commercial matters. By virtue of the Section

30 of the Act, The use of mark “fruity” on the product does not affect the

registered trade mark of Parle Agro. Besides, it is seen that the respective

products of the two companies fall in different classes of the Fourth Schedule of

the Trademark Rules. Cadbury also says that the word fruity is only descriptive in

form and not being used as a trademark. According to Cadbury spokesperson,

Fruity is descriptive to show the difference between the normal chocolate

Cadbury gems and the variant, which has a fruit ingredient in it. Cadbury moved

the Delhi High Court against Parle Agro and sought a declaration that the word

“Fruity” was commonly used in the English language and the Mumbai-based

Parle cannot claim exclusivity to a completely descriptive term.

9

5. Trade Marks Act, 1999

This acts deals with the various queries, concerns and, issues faced while working

with trademarks. This act was constituted in 1999. For the mentioned case, we

will be elaborating on the following sections.

Section 29 and

Section 30 of the Trade Marks Act 1999

5. a. Section 29 of the Trade Marks Act

(1) A registered trade mark is infringed by a person who, not being a registered

proprietor or a person using by way of permitted use, uses in the course of trade, a

mark which is identical with, or deceptively similar to, the trade mark in relation

to goods or services in respect of which the trade mark is registered and in such

manner as to render the use of the mark likely to be taken as being used as a trade

mark.

(2) A registered trade mark is infringed by a person who, not being a registered

proprietor or a person using by way of permitted use, uses in the course of trade, a

mark which because of- (a) its identity with the registered trade mark and the

similarity of the goods or services covered by such registered trade mark; or (b)

its similarity to the registered trade mark and the identity or similarity of the

goods or services covered by such registered trade mark; or (c) its identity with

the registered trade mark and the identity of the goods or services covered by such

registered trade mark, is likely to cause confusion on the part of the public, or

which is likely to have an association with the registered trade mark.

(3) In any case falling under clause (c) of sub-section (2), the court shall presume

that it is likely to cause confusion on the part of the public.

10

(4) A registered trade mark is infringed by a person who, not being a registered

proprietor or a person using by way of permitted use, uses in the course of trade, a

mark which- (a) is identical with or similar to the registered trade mark; and (b) is

used in relation to goods or services which are not similar to those for which the

trade mark is registered; and (c) the registered trade mark has a reputation in India

and the use of the mark without due cause takes unfair advantage of or is

detrimental to, the distinctive character or repute of the registered trade mark.

(5) A registered trade mark is infringed by a person if he uses such registered

trade mark, as his trade name or part of his trade name, or name of his business

concern or part of the name, of his business concern dealing in goods or services

in respect f which the trade mark is registered.

(6) For the purposes of this section, a person uses a registered mark, if, in

particular, he- (a) affixes it to goods or the packaging thereof; (b) offers or

exposes goods for sale, puts them on the market, or stocks them for those

purposes under the registered trade mark, or offers or supplies services under the

registered trade mark; (c) imports or exports goods under the mark; or (d) uses the

registered trade mark on business papers or in advertising.

(7) A registered trade mark is infringed by a person who applies such registered

trade mark to a material intended to be used for labeling or packaging goods, as a

business paper, or for advertising goods or services, provided such person, when

he applied the mark, knew or had reason to believe that the application of the

mark was not duly authorized by the proprietor or a licensee.

(8) A registered trade mark is infringed by any advertising of that trade mark if

such advertising- (a) takes unfair advantage of and is contrary to honest practices

in industrial or commercial matters; or (b) is detrimental to its distinctive

character; or (c) is against the reputation of the trade mark.

11

(9) Where the distinctive elements of a registered trade mark consist of or include

words, the trade mark may be infringed by the spoken use of those words as well

as by their visual representation and reference in this section to the use of a mark

shall be construed accordingly.

5. b. Section 30 of the Trade Marks Act

Limits on effect of section 29 of the trade mark act

(1) Nothing in section 29 shall be construed as preventing the use of a registered

trade mark by any person for the purposes of identifying goods or services as

those of the proprietor provided the use- (a) is in accordance with honest practices

in industrial or commercial matters, and (b) is not such as to take unfair advantage

of or be detrimental to the distinctive character or repute of the trade mark.

(2) A registered trade mark is not infringed where- (a) the use in relation to goods

or services indicates the kind, quality, quantity, intended purpose, value,

geographical origin, the time of production of goods or of rendering of services or

other characteristics of goods or services; (b) a trade mark is registered subject to

any conditions or limitations, the use of the trade mark in any manner in relation

to goods to be sold or otherwise traded in, in any place, or in relation to goods to

be exported to any market or in relation to services for use or available or

acceptance in any place or country outside India or in any other circumstances, to

which, having regard to those conditions or limitations, the registration does not

extend; (c) the use by a person of a trade mark- (i) in relation to goods connected

in the course of trade with the proprietor or a registered user of the trade mark if,

as to those goods or a bulk or which they form part, the registered proprietor or

the registered user conforming to the permitted use has applied the trade mark and

has not subsequently removed or obliterated it, or has at any time expressly or

impliedly consented to the use of the trade mark; or (ii) in relation to services to

which the proprietor of such mark or of a registered user conforming to the

12

permitted use has applied the mark, where the purpose and effect of the use of the

mark is to indicate, in accordance with the fact, that those se vices have been

performed by the proprietor or a registered user of the mark; (d) the use of a trade

mark by a person in relation to goods adapted to form part of, or to be accessory

to, other goods or services in relation to which the trade mark has been used

without infringement of the right given by registration under this Act r might for

the time being be so used, if the use of the trade mark is reasonably necessary in

order to indicate that the goods or services are so adapted, and neither the purpose

nor the effect of the use of the trade mark is to indicate, otherwise than in

accordance with the fact, a connection in the course of trade between any person

and the goods or services, as the case may be; (e) the use of a registered trade

mark, being one of two or more trade marks registered under this Act which are

identical or nearly resemble each other, in exercise of the right to the use of that

trade mark given by registration under this Act.

(3) Where the goods bearing a registered trade mark are lawfully acquired by a

person, the sale of the goods in the market or otherwise dealing in those goods by

that person or by a person claiming under or through him is not infringement of a

trade by reason only of- (a) the registered trade mark having been assigned by the

registered proprietor to some other person, after the acquisition of those goods; or

(b) the goods having been put on the market under the registered trade mark by

the proprietor or with his consent.

(4) Sub-section (3) shall not apply where there exist legitimate reasons for the

proprietor to oppose further dealings in the goods in particular, where the

condition of the goods, has been changed or impaired after they have been put on

the market.

13

6. Case Analysis

Parle Agro contended that the use of the word ‘Fruity’ in Cadbury Fruity Gems is

an infringement on its flagship trademark ‘Frooti’.

Our contention is that the use of the word Fruity by Cadbury does not constitute a

Trademark Infringement. This opinion is derived from the fact that it is clearly

mentioned under Section 30 of the Trade Mark Act, 1999, that there is no case of

Trademark Infringement if it is ‘detrimental to the distinctive character or repute

of the trade mark’. The distinctive characteristic of Frooti is that it is a mango

drink. However, Cadbury Fruity gems is a completely different category of

product, and thus the use of the word ‘Fruity’ does not, in any way, take away the

uniqueness of Parle Agro’s brand Frooti.

Another school of thought can be that the case is indeed a trademark

infringement. Let us say that Cadbury’s Fruity Gems is allowed to be marketed

without any constraints and it becomes very popular with people, then the brand

‘Frooti’ will feel the heat of Fruity Gems. When we say “Frooti”, people may not

think of just mango Frooti but also of Fruity Gems and this leads to the brand

dilution of Parle’s Mango Frooti. So whenever we allocate a trademark we are

talking about many years and not just current situation. Moreover the scope of

infringement of Trademark has been widened by the section 29 of the trademaark

act, wherein the use of an identical or similar mark on goods or services which are

not similar will constitute infringement, where the registered Trademark has a

reputation in India and the use without due cause will take unfair advantage of or

would be detrimental to the distinctive character or repute of the registered mark.

This supports the analysis presented above.

14

7. Conclusion

Disputes over trademark are on the rise in the country. Indian companies have

become more aware of the value of trademark and its legal aspects. Based on the

increase in number of opposition filed by companies at the Intellectual Property

Appellate Board, it is clear that India Inc has woken up to the IPR regime.

 

Looking at Parle vs. Cadbury case, let us wish both the parties come to an

agreement and it concludes soon.

15

8. References

http://bombayhighcourt.nic.in/partyquery_action.php

http://www.cadburyindia.com/cadtoday/company.asp

http://www.parleagro.com/Parle%20agro.html

http://economictimes.indiatimes.com/News/News-By-Industry/Cons-

Products/Food/Parle-Agro-rejects-Cadburys-peace-offer-over-Fruity/

articleshow/3515477.cms

http://www.business-standard.com/india/news/parle-drags-cadbury-to-

high-court-over-frooti/300239/

http://www.commonlii.org/in/legis/num_act/tma1999121/

16