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ITC Limited vs Britannia Industries Ltd

By Piyush Joshi, Sr. Principal Associate, Delhi Office

The Delhi High Court in a Copyright infringement and Passing Off case between Britannia Industries Ltd and ITC Ltd has provided an interim relief on 6th Sept, 2016 to ITC Ltd and asked Britannia to refrain from selling its digestive biscuits, NutriChoice Zero.
ITC had filed theSuit against Britannia, for permanent injunction seeking to restrain Britannia from violating its rights in the ITC's packaging/trade dress of 'Sunfeast Farmlite Digestive - All Good' biscuit by using a deceptively and confusingly similar trade dress for its Nutri Choice Digestive Zero biscuit. The relief claimed in the suit wasfor an injunction to restrain Britannia from (a) passing off ITC's rights in the trade dress/packaging/label, (b) diluting the mark, (c) infringing ITC's copyright in the said packaging and for delivery up, damages and rendition of accounts etc.
The main crux of ITC's submissions was that Britannia had copied the unique colour scheme and combination, and the method and placement of the various elements of ITC's trade dress. The products and the trade channels too were identical in respect of the said goods (biscuits), which also had the same retail price. Thus, these similarities were bound to lead to confusion and deception.
The court took in consideration the three elements that must be shown to exist for a Plaintiff to succeed in an action for passing off, namely,

  • The Plaintiff must establish a goodwill or reputation attached to the goods or services which it supplies, and that the said goodwill & reputation is in the mind of the purchasing public.
  • Secondly, the Plaintiff must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by the Defendant are in fact, the goods or services of the Plaintiff.
  • Thirdly, the Plaintiff must demonstrate that it suffers or, in a quiatimet action, that it is likely to suffer damage by reason of the erroneous belief engendered by the Defendant's misrepresentation that the source of the Defendant's goods or services is the same as the source of those offered by the Plaintiff.

Aspect of Reputation
On the aspect of reputation, there was merit in ITC's contention that it was not practicable and in fact not necessary, particularly when a new product with a distinctive packaging is introduced in the market for the Plaintiff to show that it had established a formidable reputation in that product for a number of years.
The court said that the averment of ITC that the sales of Sunfeast Farmlite Digestive All Good biscuits had been to the extent of Rs. 5 crores in a period of over five months since it was first introduced in February, 2016 is a significant factor in examining the reputation of the product. It was further averred by ITC that it had incurred over Rs. 14 crores as marketing expenditure. In reply to the said averment, Britannia had stated that contents thereof were wrong and ITC should be put to strict proof of the same. Therefore, there was no specific denial.
Aspect of deception and confusion
The Court observed that the very colour scheme of the wrapper with yellow colour on the left and blue on the right, the positioning of the letters 'No Sugar' above and 'No Maida' below were strikingly similar. The words Nutri Choice merged with the background. As a result what strikes the eye from a distance of say even 10 ft. is the colour combination of yellow on the left and blue on the right. The Court was satisfied that the impugned packaging for the Nutri Choice Digestive Zero Biscuits launched by Britannia was deceptively similar to the packaging of ITC's Sunfeast Farmlite Digestive All Good biscuits and such deception was likely to confuse the consumers of such biscuits, even the discerning health conscious ones, into thinking that Britannia's biscuits are that of ITC's.
Likelihood of damage
Britannia was given many suggestions by ITC to change its packaging.  ITC was the first as far as the 'No sugar' and 'no maida' variant is concerned. ITC's product was launched in February, 2016 which means Britannia was aware of and lived with the yellow and blue packaging of ITC's Farmlite Digestive All Good biscuits for about six months so it could have changed the yellow and blue colour packaging.Further, even if Britannia insisted on having both yellow and blue as part of its packaging, then ITC's suggestion that Britannia could use for its Indian market the same wrapper it used for the same product in the international market appeared reasonable; butBritannia's rejectedthese suggestions. Also Britannia's packaging states that it is not suitable for children because it has sucralose added. This can lead to possible dilution of the reputation and goodwill attached to ITC's product. So long as the deception persists, it would have an adverse impact on sales of this particular product of ITC. And a market leader like Britannia could certainly eat into the market share of a relatively smaller player like ITC in the biscuit trade by adopting a deceptive variant of the latter's get up and trade dress but the converse may not be true. The new entrant with a product that enjoys a growing popularity might require protection.
The three elements for an action of Passing Offhaving shown to the Court as being prima facie fulfilled, the Court was satisfied that ITC had a prima facie case in its favour and that the Balance of Convenience in granting an interim injunction was in its favour. Since it was just about two months that Britannia had introduced its variant with the impugned packaging, it was likely to suffer a far less damage if the injunction were to be granted when compared to the damage that ITC was likely to suffer if it were not granted the said injunction. Without such interim protection, ITC was likely to suffer irreparable hardship since the loss of market share cannot adequately be compensated later.

While granting the Injunction against Britannia from using the infringing trade-dress, the Court also granted in 4 weeks to phase out the existing stock of the infringing biscuits.