This article is written by Mayank Kumar during his internship with LeDroit India.
Court: Delhi High Court
Year: 2023
Citation: 2023 SCC OnLine Del 2664
Bench: Hon’ble Justice C. Hari Shankar
Date of Judgment: 15th May 2023
Facts of the Case
One of the main makers of Glucon-D, a glucose-based energy drink with a unique green-and-yellow packaging, and longtime market presence is Zydus Wellness. Zydus alleged that Dabur decided to adopt Glucon-Ds color schemes and family images as a trade dress through Glucovita Bolt. This imitative act resulted in confusion in the minds of consumers constituting unfair competition and passing off, Zydus said. Dabur, on its part, contended that the packaging similarities were generic to the industry and that its product had distinctive branding elements. Zydus sought a permanent injunction against Dabur’s use of the allegedly infringing trade dress and damages for harm to its reputation.
The dispute stemmed from two television commercials (TVCs) by Dabur India Ltd. that Zydus Wellness alleged maligned its product, Glucon-D, especially the Glucon-D Tangy Orange variant. Zydus argued that the advertisements made a case for Dabur’s competing product, which boasted of having 25% more glucose than Glucon-D. This contention has been considered in an earlier judgment and Zydus had sought a re-examination based on subsequent changes to the its product formulation, which reduced the glucose level difference to 22.9%. The plaintiff had also moved to seek an injunction restraining Dabur from running the proposed TVCs alleging that such TVCs are misleading and disparaging to the plaintiff brand.
Issues of the Case
The central issues before the court were:
- Whether Dabur’s Glucovita Bolt packaging infringed upon the trade dress of Zydus’s Glucon-D?
- Whether Dabur’s product created a likelihood of confusion among consumers, constituting passing off?
- To what extent Glucon-D’s trade dress was entitled to legal protection based on its distinctiveness and goodwill?
- Whether Dabur’s TVCs disparaged Zydus’s Glucon-D product?
5. Whether Zydus was entitled to interim relief in the form of an injunction restraining Dabur from airing the TVCs?
Arguments by the Plaintiff (Zydus)
Glucon-D is exclusive due to distinctiveness developed during decades in more than 75 % of market of the said category. They claimed that the colour pack of green and yellow and the image of a happy family had become an identifier of their product. The plaintiff argued that the trade dress used by Dabur for its product Glucovita Bolt, was intended to encash on the goodwill associated with Glucon-D. This not only deceived the public but also damaged the reputation and market standing of Zydus.
Dabur argued that Zydus did not provide concrete evidence of actual confusion among consumers. It further maintained that Glucovita Bolt had distinguishing features, including its own branding elements such as the bolt logo and unique textual style, which were enough to avoid confusion. Zydus contended that Dabur, in fact, intended to copy Glucon-D’s trade dress to unfairly leverage its reputation and market strength. This was a passing off, an infringement of Zydus’s rights to its proprietary property.
Zydus specifically stated that it led in the glucose-based energy drinks market, holding over 75% market share, so it could not, even in the slightest of margins, be considered under-invested. Instead, Dabur made fraudulent claims while trying to pilfer away Zydus’s customer base, further denting the latter’s pockets along with reputation
Arguments by the Defendant (Dabur India ltd.)
Dabur stated that its Glucovita Bolt packaging was sufficiently distinguishable on account of such distinct elements as branding, for example, the bolt logo and design. It claimed that the resemblance in packaging practice was functional and general in the sub-industry of glucose powder and not specific to Zydus. Dabur also contended that there was no tangible proof of confusion among consumers, and its product sought a different consumer segment.
The defendant further averred that Glucovita Bolt was specifically targeted to a younger, more dynamic demographic segment than the general customer base of Glucon-D. This aspect of difference in marketing emphasis was said to diminish the possibility of confusion between the two products.
Dabur pleaded that its product was made in good faith and that similarities in packaging elements, if any, were incidental because of market trends and functional necessities.
Judgment of the Case
The Delhi High Court ruled in favour of Zydus Wellness, granting a permanent injunction restraining Dabur from using the impugned trade dress for Glucovita Bolt. The court found that Zydus had successfully established that Glucon-D’s packaging had acquired secondary meaning, making it eligible for protection. The court held that Dabur’s packaging created a likelihood of confusion and amounted to passing off. It directed Dabur to alter its packaging to avoid similarity with Glucon-D.
The disputed TVC merely highlights the advantages of the defendant’s goods; it makes no disparaging remarks about any orange glucose powder drink.
The comparison in the contested TVC cannot be considered disparaging, even though it might not be in the plaintiff’s advantage. Instead of disparaging the Plaintiff’s or any other manufacturer’s goods, the Defendant’s appears to be the focus of the aforementioned commercial and its overall effect.
It is true that the Defendant’s product contains 25% more glucose than the Plaintiff’s. The contested advertising is mostly accurate and does not contain any false information. As a result, the defendant in the contested TVC did not seriously falsify any facts.
The Plaintiff’s own claims that glucose gives rapid energy are supported by the advertisements and product packaging for its own goods that have been submitted to the court. It is improbable that the request for a temporary injunction will be approved. Consequently, the application submitted by the Plaintiff is rejected.
Overall, the court passed the summons in the case and put the matter for further hearing while giving the parties liberty to file their pleadings and evidence. On the application for interim relief, the court deferred the case of Zydus for a later hearing. The court ordered the parties to strictly follow the timeline of replies and rejoinders. Considering the apprehension of the plaintiff, the court did not restrain Dabur from telecasting the ads. The decision on interim relief was kept reserved.
Ratio Decidendi of the Case
The court emphasized three key principles:
- Trade Dress as an Identifiable Marker: Trade dress of a product encompasses its Colour combination, contour and shape of its packaging, and trade dress features, so long as it has become distinctive and has a secondary meaning in the consumer’s mind. In this case, it has been established that Glucon-D acquired distinctive marketing status as a result of being in the market for a while and its consumers’ memories.
2. Likelihood of Confusion: If two competing products trade dress are so similar that the average consumer is likely to confuse the source of the goods in the course of trade, it amounts to passing off. The court found that Dabur’s Glucovita Bolt packaging was similar enough to Glucon-D’s trade dress to deceive the customers on the source of the product.
3. Goodwill and Reputation: The court also recognized that Zydus created a significant goodwill and reputation pertaining to Glucon-D for many years. It is clear that the competitors have no right to exploit or take improper advantage of such goodwill by adopting almost similar trade dress.
Conclusion of the Case
This judgment underscores the importance of protecting trade dress and consumer association with a product. By ruling in Favor of Zydus, the court highlighted the need to prevent competitors from exploiting the goodwill of established brands. This case reinforces the principle that intentional imitation, resulting in consumer confusion, cannot be justified, thereby setting a precedent in intellectual property law.
The court held that Zydus’s Glucon-D progressed to a different stage which is developing its own identity in the marketplace through its distinctive features such as the type of packaging, color and the design which had acquired secondary meaning over time. It does appear that the use of the same or similar trade dress by Dabur for its Glucovita Bolt product would create an impression to consumers which in reality does not exist and this amounts to passing off. The court also appreciated the necessity to protect Zydus’s goodwill and prevent Dabur from reaping the benefit of unfair competition by closely copying features associated with Glucon-D. The court applied firm measures in terms of permanent injunction, explaining that all Zydus competitors should not be allowed to take advantage of already well-known reputation of other brands by imitating packaging or trade dress which makes the other side of the competition unfair as well as the protection of consumers.
REFERENCES:
SC IP (Dec 27,2022) https://www.sc-ip.in/post/zydus-wellness-products-ltd-v-dabur-india-ltd
Indian Kanoon https://indiankanoon.org/doc/190433832/
