The case of VST Industries Limited vs. ASD Tobacco Private Limited & Anr., decided on March 6, 2025, in the Delhi High Court, is a crucial trademark dispute concerning the rectification of the trademark register under Section 57 of the Trade Marks Act, 1999. The petitioner, VST Industries Limited, sought the removal of the mark "CHUMS," registered by respondent no. 1, ASD Tobacco Private Limited, on the grounds that it was deceptively similar to its well-established trademark "CHARMS."

• Factual Background:
  • VST Industries Limited, incorporated on November 10, 1930, is a well-established company engaged in the manufacturing and distribution of cigarettes. It is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
  • The company owns several well-known cigarette brands, including TOTAL, CHARMS, GOLD, MOMENTS, and EDITIONS. Since 1982, the "CHARMS" mark has been used by VST Industries for its cigarettes, achieving significant market recognition.
  • The distinctive packaging of "CHARMS" includes gold and red colors, a stylized ‘woosh’ separator, and a specific font style, elements that reinforce brand identity.
• In May 2019:
  • VST Industries discovered that ASD Tobacco Private Limited had registered the trademark "CHUMS" under Registration No. 3960579 in Class 34, with a claimed user date of August 20, 2018.
  • VST Industries argued that "CHUMS" was phonetically, visually, and structurally similar to "CHARMS," creating consumer confusion and diluting the established brand identity.
• Procedural Background:
  • The petition was filed under Section 57 of the Trade Marks Act, 1999, seeking rectification of the register by canceling the trademark "CHUMS." Despite several notices, respondent no. 1 did not appear before the court. The matter proceeded ex-parte against ASD Tobacco Private Limited.
  • Respondent no. 2, the Registrar of Trade Marks, appeared and raised no objection to the cancellation of the impugned trademark.
• Issues Involved in the Case:
  • Whether "CHUMS" is deceptively similar to "CHARMS," leading to confusion among consumers.
  • Whether the petitioner’s prior and continuous use of "CHARMS" grants it exclusive rights over the mark.
  • Whether the registration of "CHUMS" was obtained in bad faith with an intent to exploit the goodwill of "CHARMS."
  • Whether the similarity in packaging between the two brands further supports the likelihood of deception.
• Submissions of the Parties:
  • The petitioner, VST Industries Limited, argued that "CHARMS" had been in continuous and exclusive use since 1982, generating goodwill and consumer recognition.
  • The petitioner provided sales records and financial data indicating a substantial market presence, with a sales turnover of approximately ₹228 crores in 2018-19 and a cumulative turnover of ₹4,344.01 crores from 2002-03 to 2018-19.
  • It was further demonstrated that "CHUMS" was visually and phonetically similar to "CHARMS," with a similar color scheme and font style. Case law was cited to support that phonetic and visual similarities, along with identical product classification (Class 34), justify rectification of the register.
  • Respondent no. 1, ASD Tobacco Private Limited, did not appear despite multiple notices, leading to an ex-parte ruling. Respondent no. 2, the Registrar of Trade Marks, submitted that if the court found deceptive similarity, they would comply with directions to rectify the register.
• Judgment and Case Law Cited:
  • The court, in its detailed judgment, examined landmark cases on trademark similarity, including Opella Healthcare Group vs. Vaibhav Vohra & Anr. (2024 SCC OnLine Del 8214), where the Delhi High Court ruled in favor of the plaintiff when a similar packaging style and phonetic similarity were found. The "likelihood of confusion" was a decisive factor in granting an injunction.
  • In VST Industries Limited vs. ASD Tobacco Private Limited (Panchkula District Court, 2022), a permanent injunction was granted against ASD Tobacco for using "CHUMS," reinforcing that the mark was deceptively similar. The court emphasized consumer perception, stating that minor phonetic and visual differences do not negate the likelihood of confusion, particularly when both marks are used for identical goods.
• Reasoning and Analysis by the Judge:
  • The court recognized that VST Industries Limited had been using "CHARMS" for over 36 years before ASD Tobacco's registration of "CHUMS." The distinct brand identity, significant sales, and market penetration demonstrated substantial goodwill.
  • The comparison of the two marks revealed substantial similarity in appearance, pronunciation, and trade dress. The slight difference in spelling (CHARMS vs. CHUMS) was insufficient to prevent confusion.
  • The court noted that cigarette consumers do not always inspect packaging minutely and may rely on phonetic recall. Given the similar color schemes, font styles, and product category, the likelihood of deception was high.
  • The deliberate imitation of the distinctive elements of "CHARMS" indicated bad faith adoption of the mark "CHUMS." The non-appearance of ASD Tobacco in court further suggested a lack of legitimate defense.
• Final Decision:
  • The court ruled in favor of VST Industries Limited, ordering the cancellation of the trademark "CHUMS" (Reg. No. 3960579 in Class 34). The Registrar of Trade Marks was directed to rectify the register accordingly.
  • The judgment reaffirmed the principle that prior use, coupled with deceptive similarity, warrants cancellation of a registered trademark.
• Law Settled in This Case:
  • The court reaffirmed that prior user rights supersede subsequent registrations, especially when the prior mark has acquired substantial goodwill.
  • Phonetic and visual similarity is sufficient to establish a likelihood of confusion, even if minor differences exist.
  • Bad faith adoption and similar trade dress contribute to the determination of trademark infringement.
  • Non-appearance of a party does not absolve them of liability, and ex-parte orders can be passed when evidence supports the claims.

Case Title: VST Industries Limited vs. ASD Tobacco Private Limited & Anr.
Date of Order: March 6, 2025
Case Number: C.O. (COMM.IPD-TM) 128/2021
Neutral Citation: 2025:DHC:1562
Court: Delhi High Court
Judge: Hon’ble Ms. Justice Mini Pushkarna

Disclaimer:
The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

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