Modern Snacks Pvt. Ltd. vs. Modern Foods Enterprises Pvt. Ltd.

Case Citation: MANU/DE/4236/2023, Delhi High Court, decided on July 4, 2023.

Introduction:

The case involves a dispute between two companies, namely M/s Modern Food Enterprises Pvt. Ltd. (referred to as the ‘plaintiff’) and M/s Modern Snacks Pvt. Ltd. (referred to as the ‘defendant’). The plaintiff filed a suit (CS(COMM) 460/2020) seeking a permanent injunction against the defendant for alleged trademark infringement and passing off, while the defendant filed a suit (CS(COMM) 299/2020) seeking a permanent injunction to restrain the plaintiff from issuing groundless threats regarding the use of the trade mark ‘MODERN’. Both parties claim rights over the trade mark ‘MODERN’ in relation to various food products.

Procedural History:

The plaintiff and the defendant are involved in two cross-suits. The defendant filed CS(COMM) 299/2020 under Section 142 of the Trade Marks Act, 1999, seeking an injunction to prevent the plaintiff from issuing groundless threats regarding the use of the trade mark ‘MODERN’. On the other hand, the plaintiff filed CS(COMM) 460/2020 seeking a permanent injunction against the defendant for alleged trade mark infringement and passing off relating to the use of the trade mark ‘MODERN’ and its copyright.

The lower courts considered these cross-suits together, and the case was disposed of by the Delhi High Court through a common judgment.

Issues Presented:

The main legal issues addressed in the case are:

• Whether the defendant is entitled to a permanent injunction restraining the plaintiff from issuing groundless threats in relation to the use of the trade mark ‘MODERN’?
• Whether the plaintiff is entitled to a permanent injunction against the defendant for alleged trade mark infringement, passing off, and copyright violation in relation to the use of the trade mark ‘MODERN’?

Rules of Law:

• Trade Marks Act, 1999: The Trade Marks Act, 1999, governs the registration, use, and protection of trademarks in India.
• Principles of Trademark Infringement: Under Section 29(2) of the Act, if a trade mark is identical or deceptively similar to an existing registered trade mark and is used in relation to goods or services that are similar to those for which the trade mark is registered, it constitutes infringement.
• Principles of Passing Off: Passing off occurs when a party misrepresents its goods or services as those of another, causing damage to the reputation of the latter’s goods or services.
• Section 33 of the Act: Section 33 provides protection to honest concurrent users of identical or similar trade marks, allowing them to continue using their trade marks despite their registration being subsequently challenged.
• Clean Hands Doctrine: This doctrine states that a party seeking equitable relief, such as injunction, must come to the court with clean hands, without misrepresentation or suppression of material facts.

Arguments of the Plaintiff:

The plaintiff argued that it had prior rights over the trade mark ‘MODERN’ and had been using it for various bakery products since 1965. It claimed that the defendant’s use of the same trade mark for namkeens, snacks, and allied goods was likely to cause confusion among consumers and the trade. The plaintiff contended that the defendant’s adoption of the trade mark was dishonest, and the defendant’s trade mark and packaging were deceptively similar to the plaintiff’s. The plaintiff also argued that its extensive advertising and substantial sales figures supported its claim of reputation and goodwill associated with the trade mark ‘MODERN’.

Argument of the Defendant:

The defendant asserted that its adoption of the trade mark ‘MODERN’ for namkeens, snacks, and related goods was honest and concurrent, and it had obtained registrations and copyrights for its marks and labels. The defendant contended that the goods it produced were not similar to those of the plaintiff and, thus, no likelihood of confusion existed. The defendant also claimed that the plaintiff had known of the defendant’s mark since 2003 and had even stated in earlier documents that the defendant’s mark was not similar. The defendant further alleged that the plaintiff had suppressed evidence regarding its own application for registration and had misrepresented its usage since 1965.

Analysis and Reasoning:

The court first examines the plaintiff’s claim of being the proprietor of the mark “MODERN.” The plaintiff relies on its extensive use of the mark since 1968 and its registration of various trademarks containing the word “MODERN.” The defendant contests this claim, arguing that there is no evidence to prove the plaintiff’s usage before April 2016. The court finds the plaintiff’s submission of newspaper articles as prima facie evidence of prior use and rejects the defendant’s argument.

The court then addresses the similarity of goods between the plaintiff’s and the defendant’s products. The defendant asserts that their products (namkeen, snacks, savouries) are different from the plaintiff’s products (bread and bakery items), thereby reducing the likelihood of confusion. However, the court disagrees, stating that both parties’ products are general consumable food items available in the same stores and could easily be confused as extensions of each other. This finding is based on Section 29(2) of the Act, which considers the use of an identical mark for similar goods as infringement.

Holding and Decision:

The court ultimately holds that the plaintiff has established a prima facie case of infringement and is entitled to an interim injunction. However, the court balances this with the defendant’s claim of honest concurrent use and the implications of delay on the part of the plaintiff in taking legal action. The court restrains the defendant from using the mark “MODERN” for goods other than those they were selling at the time of filing the suit and the products they have registered the mark for. The defendant is also restricted from expanding its line of products using the mark “MODERN” during the lawsuit’s pendency.

Implications and Significance:

This decision has several implications for future cases involving trademark infringement. It reaffirms the principle that even similar, but not identical, goods can be deemed infringing if confusion is likely among consumers. It also emphasizes that the delay in taking legal action by the plaintiff can impact the court’s decision on granting an injunction, even if the plaintiff establishes a prima facie case.

Critique and Commentary:

The court’s analysis is thorough and takes into account relevant legal precedents. However, one point of critique could be the application of the defendant’s prior registrations as a strong factor in weighing the balance of convenience. While the defendant’s registrations were noted, the court could have delved further into the plaintiff’s arguments against the validity of those registrations, given that the plaintiff challenged them in 2019.

Conclusion:

In conclusion, the court’s decision in Modern Snacks Pvt. Ltd. vs. Modern Foods Enterprises Pvt. Ltd. establishes that the plaintiff has established a prima facie case of trademark infringement based on the similarity of goods and marks. However, due to the defendant’s claim of honest concurrent use and the plaintiff’s delay in taking legal action, the court grants an interim injunction with specific restrictions on the defendant’s use of the mark. This decision underscores the importance of balancing trademark protection with considerations of concurrent use and delay.