ITC Limited v. Nestle India Limited: The Famous Magic Masala Case

In a recent trademark suit filed by ITC Limited against Nestle India Limited, the Madras High Court finally settled off a seven year long issue by stating that nobody has exclusive right over the laudatory expression “Magic Masala”. The single-judge bench of the High Court dismissed the plea of a permanent injunction filed by ITC to prevent Nestle from using the expression “Magical Masala” for selling their noodles. While delivering the judgment, the court held that the word “Magic” and “Masala” are generic expressions which are common in the food industry and therefore not entitled to get statutory protection under Trade Marks Act, 1999.

BRIEF FACTS OF THE CASE

The ITC Limited (plaintiff) moved to the Madras High Court against Nestle India Limited (defendant) arguing the infringement of its mark “Magic Masala”. To its credit, the plaintiff claimed prior use of the expression “Magic Masala” as a sub-brand since 2010 when they introduced their primary brand/trademark “Sunfeast Yipee! noodles” while on the other hand, the defendant started using the expression “Magical Masala” only since 2013 for selling their noodles.

Plaintiff argued that the phrase “Magic Masala” was a prime feature of its composite trademark “Sunfeast Yippie! Noodles Magic Masala” and the general public associated the plaintiff’s product with the phrase “Magic Masala”. It claimed that the adoption of the phonetically similar phrase by the defendant was with a dishonest intention to confuse the minds of the public and therefore amounted to passing-off. It further argued that the phrase has attained distinctiveness and a secondary meaning came to be associated with the plaintiff’s product.

On the other hand, the defendant contended that the term “Magical Masala” was used by them as a mere flavour descriptor and not as a trademark. They claimed that the term “Magic” was used to praise the quality of the masala in the sachet. They further argued that the words “Magic” and “Masala” are common expressions and cannot be subject to any trademark rights by any trader to the exclusion of others.

MAIN ISSUES

1. Whether the phrase “Magic Masala” qualifies as a trademark and is capable of being monopolized to the exclusion of the defendant?
2. Whether there was a passing-off of the instant noodle by the defendant by adopting the expression “Magical Masala” for trading its “Maggi Xtra delicious Magical Masala” Noodles?

COURT’S FINDINGS

The court stated that the words “Magic” and “Masala” are common words used in the food industry and such adoption by the defendant cannot be said to be malafide. Court held that it was a legitimate adoption by the defendant as no person can appropriate generic or laudatory words and such words cannot be monopolized or protected by the Courts. The court also referred to Section 9 (1) (c) of the Trade Marks Act which prohibits the registration of generic marks.

Furthermore, the court held that the plaintiff had used the phrase “Magic Masala” in a laudatory way to complement the masala and it was never used as a sub-brand or trademark. Court held that Magic is not a distinctive term as it is very common to the food industry and cannot be said to distinguish the noodles sold by the plaintiff. Moreover, there is no case of passing-off as there is no ocular or visual similarity between the wrappers of the noodles sold by the two labels.

WHAT ARE LAUDATORY TERMS AND WHETHER THEY CAN BE USED AS A TRADEMARK?

Laudatory words or phrases are adjectives that express commendation or praise. These terms show that the goods are of high quality and services are of certain criteria.[i] These words fall under the category of descriptive or generic terms and therefore don’t qualify as a distinctive mark to be registered or protected under the Trade Marks Act.[ii]

For the laudatory trademarks to be protected; they should indicate secondary meaning. As stated by Supreme Court in the case of Godfrey Phillips India Ltd v. Girnar Food & Beverages Ltd., that “a descriptive trademark may be entitled to protection if it has assumed a secondary meaning which identifies it with a particular product or as being from a particular source”. However, a registered laudatory trademark that shows secondary meaning is considered weak and has narrow protection because various fair use defences can be used by the competitors to use a person’s registered trademark. [iii]

WHEN CAN A REMEDY OF PASSING OFF GRANTED?

A passing off or infringement happens when another manufacturer or trader copies the vital features of a trademark but sells the goods in his name. Infringement is a statutory remedy provided under Section 29(1) of the Trade Marks Act, 1999 while on the other hand passing off is a common law remedy. [iv]

To seek a remedy of passing off, the claimant has to go through the Classical Trinity Test. This test postulates that the following must be proven:

1. goodwill owned by the claimant
2. misrepresentation by the defendant; and
3. the likelihood of damage to that goodwill.

Moreover, in the case of Wockhardt Limited v. Torrent Pharmaceuticals Ltd, it was clarified by the two-judge bench of the Supreme court that “though passing off is, in essence, an action based on deceit, fraud is not a necessary element of a right of action, and that the defendant’s state of mind is wholly irrelevant to the existence of a cause of action for passing off if otherwise the defendant has imitated or adopted the Plaintiff’s mark.”

CONCLUSION

In conclusion, it can be stated that generally descriptive words or phrases cannot be registered as a trademark. They can be registered only if it attains secondary meaning which identifies them with a specific product. To get the trademark fully protected under the law, the words or phrases should be distinctive, dissimilar, and unique. The order of the court explicitly noted that “Magic Masala” and “Magical Masala” are phonetically generic word and cannot be registered to seek the benefit of statutory rights to the exclusion of others. The Judgment is welcomed as it has reminded traders that a weak mark cannot be registered as a trademark if it is not distinctive.

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ABOUT THE AUTHOR

Riddhi Khandelwal is  a third year law student at National Law University Odisha. 

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Kindly note that the views and opinions expressed are of the author and not of the Indian Journal of Law and Public Policy.