Trademark infringement cases often highlight the balance courts seek to strike between protecting intellectual property rights and allowing fair competition in the market. The present case between Pernod Ricard India Private Limited (hereinafter “Pernod Ricard”) and A B Sugars Limited & Anr. (hereinafter “Defendants”) concerns the use of the marks “ROYAL STAG” and “INDIAN STAG” in the Indian Made Foreign Liquor (IMFL) market. The decision rendered by the Delhi High Court on October 31, 2023, reflects the complexities involved in establishing trademark infringement and passing off, especially when similar marks are used in a competitive industry.

• Factual Background:
  • Pernod Ricard, the plaintiff, has been using the mark “ROYAL STAG” for its IMFL products since 1995 and holds registrations for “ROYAL STAG,” “ROYAL STAG BARREL SELECT,” and the associated stag device in Class 33 for alcoholic beverages.
  • Pernod Ricard’s products have gained significant market recognition, supported by extensive marketing and sales efforts.
  • The defendants manufacture and export IMFL under the mark “INDIAN STAG,” accompanied by their own stag device.
  • Pernod Ricard alleged that the defendants’ use of “INDIAN STAG” constituted trademark infringement and passing off, leading to confusion among consumers.
• Procedural Background:
  • The suit was filed by Pernod Ricard under CS(COMM) 371/2019, accompanied by an application for an ex parte ad interim injunction under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908.
  • The injunction was granted on July 25, 2019.
  • The defendants filed an application under Order XXXIX Rule 4 for the vacation of the injunction.
  • The present judgment disposed of both applications.
• Issues Involved:
  • Whether the defendants’ use of the mark “INDIAN STAG” infringes the plaintiff’s registered trademark “ROYAL STAG.”
  • Whether the defendants’ use of “INDIAN STAG” constitutes passing off of their goods as those of the plaintiff.
  • Whether the defendants could establish honesty in adoption of the mark “INDIAN STAG.”
  • The extent of protection available to the plaintiff given the disclaimer on the “ROYAL” part of its mark.
• Submissions of the Parties:
  • Plaintiff’s Submissions:
    • The plaintiff contended that “STAG” was the dominant part of its mark, as “ROYAL” had been disclaimed during registration.
    • It argued that the use of “INDIAN STAG” by the defendants was deceptively similar to “ROYAL STAG,” leading to confusion in the market.
    • Reliance was placed on the doctrine of initial interest confusion, where even momentary confusion at the point of sale could constitute infringement.
  • Defendants’ Submissions:
    • The defendants asserted that “STAG” was common to the trade, particularly in the liquor industry, citing various international whisky brands using the term.
    • They highlighted that “INDIAN STAG” was solely exported and not sold in the Indian market, thereby negating any likelihood of confusion domestically.
    • The defendants also argued that the distinct visual appearance of the labels and packaging prevented any confusion or deception.
• Judgments Cited and Their Context:
  • Novartis v. Adarsh Pharma (1999) 19 PTC 294 – Establishing the principle that the mark must be viewed as a whole.
  • Khoday Distilleries Ltd v. Scotch Whisky Association (2008) 10 SCC 723 – Highlighting the distinction between IMFL and Scotch whisky.
  • United Breweries Ltd v. Khodays Breweries Ltd (2013 SCC OnLine Kar 2303) – Addressing the global nature of the liquor trade and the necessity of considering international markets in infringement cases.
• Reasoning and Analysis of the Judge:
  • Lack of Substantial Use Evidence: The court noted that while international whisky brands use a stag device, the defendants failed to provide evidence of substantial use of “STAG” in the Indian IMFL market.
  • Territorial Nature of Trademarks: The court emphasized that trademark rights are territorial and foreign usage of “STAG” does not establish its commonality in India.
  • Distinction Between IMFL and Scotch Whisky: The argument that "STAG" is associated with whisky due to Scottish traditions was rejected as the cultural significance differs in India.
  • Plaintiff’s Established Reputation: The court acknowledged that “ROYAL STAG” had acquired distinctiveness through extensive use and marketing since 1995.
  • Anti-Dissection Principle: Applying the anti-dissection rule, the court held that “ROYAL STAG” had acquired distinctiveness, and the presence of “STAG” in other brands did not dilute the plaintiff’s rights.
  • The court distinguished between infringement and passing off, emphasizing that passing off requires proof of misrepresentation and resultant damage.
  • However, due to the similarity in marks and potential confusion in foreign markets, the interim injunction was continued.
• Final Decision:
  • The court confirmed the interim injunction granted on July 25, 2019.
  • The defendants were restrained from using the mark “INDIAN STAG” pending the disposal of the suit.
  • The plaintiff’s application (IA 9922/2019) was allowed.
  • The defendants’ application (IA 11201/2019) seeking vacation of the injunction was dismissed.

Conclusion:
This judgment underscores the stringent standards required for proving passing off and the importance of holistic comparison in trademark infringement cases. It also reflects the court’s careful consideration of international trade implications and the nuanced approach needed to balance competing interests in the intellectual property domain.

Case Detail:Pernod Ricard India Private Limited Vs A B Sugars Limited & Anr., 
Date of Order:31 October 2023, 
Case No:CS(COMM) 371/2019, 
Court:High Court of Delhi at New Delhi Judge:Justice C. Hari Shankar.H. J. 

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539