This case basically portrays ‘cheating’ or ‘misleading’ of a brand name or other things like products from a top reputed company by a newly formed start up. This case shows that how the new start-ups cannot use the knowledge of their own and instead they mislead someone else’s name and reputation in the market. Many such new firms have come up in recent times where the problems of cheating have been depicted. This commonly is known as the principle of ‘Dilution’.
Starbucks Corporation which is headquartered in Seattle, Washington is a coffee company and a coffeehouse chain founded in 1971. As of 2018, it operates 28,218 outlets all over the world. The company entered the Indian market in collaboration with Tata Group In 2012, and currently has 125 outlets. On the other hand, SardarBuksh is a Delhi, India, based company, having 5 outlets in Delhi. The latter serves similar types of beverages and food when compared to the former. An uncanny similarity can be noticed in their logo as Starbuck’s logo has concentric circles with the outer circles having the name written in a similar manner; both the logos have a wavy font with a character in the middle, which is highly deceptive although they are in different colour schemes. Also looking at the online platforms where both the products are sold such as Swiggy, Food Panda, Zomato, UberEats etc. the two branding is similar along with similar products. Starbucks might face a wrongful loss which will accrue, for such a tricky branding from domestic companies, as many people globally might take this as a business tactic to promote their products initially and when sued change it to something else. The present case was filed by Starbucks Corporation against Sardar Baksh Co and others in the Delhi High Court in July, 2018.
The primary issues that were involved in the case were that as to whether the trademark of SardarBuksh is deceptively similar to that of Starbucks and is this leading to dilution of the senior mark, i.e. of Starbucks.
The analogy behind deceptively decided case is under the Trademarks Act, 1999 under Section 2(1)(h), which deals with deceptive similarity read with Section 11, dealing with relative grounds of refusal states that, when two marks are placed beside each other causes confusion or deceive the spectators it would be deceptively similar and hence cannot be registered.
The key principle involved in the present case is that of the Doctrine of Dilution. Dilution of trademark occurs when someone uses trademark in usually non-competing goods, whereby it decreases the trademark’s association with the goods and services. It is the lessening of the capacity of a famous mark to identify and distinguish goods and services regardless of the presence or absence of competition between owner of the famous mark and other and the likelihood of creating confusion. The court shall be considering the degree of similarity of the marks , the distinctiveness of the mark , whether the infringer has the intention to associate the mark with mark of the well known mark and shall also consider the association between the two marks . The infringement can eat away the revenue that the firm would obtain, due to the poor perception of the product by the consumers due to the association of the weaker brand with the stronger one[1].
Further, one can also refer to the principle of ‘Deceptive Similarity’ which refers to an act or a statement which misleads, hides the truth, or promotes a belief, concept, or idea that is not true. It is often done for personal gain or advantage by the person or company who engages in such act[2].
Here, in the above case we can clearly say that this principle is violated as it is clear by the name and pronunciation and front design of the two companies which appear to be similar and both logo is likely to be appeared the same.
Some of the cases which were referred by the Delhi High Court were the cases of Polaroid Corporation vs. Polarad Electronics Corporation 287 F.2d 492 (1961) and National Sewing Thread Co. Ltd. vs. James Chadwick and Bros AIR 1953 SC 357 where it was held that the controversy of deceptively similar can only be decided by stepping in the shoes of purchaser, who is considered to be a man with ordinary intelligence. If the identification of two brands causes confusion to the purchaser then it would be right to say they are deceptively similar[3].
Again, in the case of Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Limited (2001) 5 SCC 73 the Apex Court held that it is immaterial whether the plaintiff and defendant trade in the same field or in a similar product. It is kept in mind that the nature of the marks that is word, label etc, the degree by which it is similar, the nature of the goods etc.
In the case of Apex Laboratories Ltd. vs. Zuventus Health Care Ltd. 2006 (33) PTC 492 (Mad.) it was held by the Madras High Court that the mark ‘Zinconia’ is phonetically as well as visually dissimilar than ‘Zincovit’ & hence there arises no confusion at all.
In 2013 a Pakistani businessman started a cafe under the “Sattarbucks Cafe” with logo which was completely different from that of Starbucks and the bearded gentleman replaced the mermaid which can be seen in the Starbucks logo.
Furthermore, in the case of M/s Nandhini Delux vs. M/s Karnataka Co-operative Milk Producers Federation Ltd. CIVIL APPEAL NO. 2943-2944 OF 2018 where due to difference in the variety of products traded and difference in visuals of both companies the Court opined trademarks ‘NANDINI and NANDHINI’ to be non-infringing.
Finally the Delhi High Court decided in favour of Starbucks and it was held by the court that Sardar Buksh have to change their name to ‘Sardar Ji Buksh’. Perpetual injunction was granted by the court. Starbucks have really been affected to this because their goodwill & image suffered a severe blow due to the dilution which took place because of the carrying on of the defendant’s business which was similar to that of the plaintiff. The new company was also asked to change the logo of the company as it was much similar in look. Starbucks was also given some compensation for the losses incurred due to the operating of Sardar Buksh. Further, the defendants were ordered not to use, register or even seek to register any mark containing the term ‘Sardar’ along with ‘Buksh’ or ‘Bakhsh’ or ‘Baksh’ or ‘Star’ or ‘Buck’ or ‘Bucks’ other than ‘Sardar-Ji-Bakhsh’ or ‘Sardar-Ji-Bakhsh Coffee & Co’[4].
Thus, to conclude it can be said that with the growing complexity and competition it has become a daunting & a humungous task to carry on business without a trademark to check unscrupulous use of trade names and it has often been found that the local entrepreneurs have a flexible notion of trademarks and they do not regard use of known marks as a crime, however the established holders of such marks do not regard such practices worth promoting. Hence it has often been found that such use has ultimately made them suffer huge losses whenever such matters have gone before the court.
It can be seen in the present case that the similarities are extremely evident and the mala fide intention is clearly visible, which is to use the brand name and goodwill of the stronger brand to promote one’s own business. The court rightly ordered to alter the name so that the phonetic and visual similarities are removed.
Hence the need of the hour is to raise awareness of the importance of Intellectual Property Rights even among local entrepreneurs which will go a long way in avoiding litigations on such issues and will promote fair and honest business practices in future.
[1] Dr. Mathew Thomas; Understanding Intellectual Property; 1st Edition 2016; Eastern Book Company, Lucknow; Pg-134-135.
[2] Section 2(1) (h) of the Trademarks Act, 1999.
[3] https://blog.ipleaders.in/concept-deceptively-similar-indian-trademark-law-starbucks-v-sardarbuksh/
Last Accessed on 16th January, 2018 1:56 AM IST.
[4] https://ssrana.in/Admin/UploadDocument/Article/Delhi-High-Court-Orders-Sardarbuksh-to-Stop-Infringing-Starbucks-trademarks-and-copyrights.htm Last Accessed on 16th January, 2018 2:40 AM IST
Prepared By- ATISH CHAKRABORTY (TEAM LEADER), DEBDEEP DAS, OISHIKA BANERJI, MANAV SONY, SOUPTIK BHATTACHARYYA (Students Amity Law School Kolkata).
