Britannia Industries Ltd. v. ITC Ltd.

Britannia Industries Ltd. v. ITC Ltd.

FAO(OS) (Comm) No. 77 of 2016

Division Bench (Delhi High Court)

Brief Facts:

The Respondent, ITC Ltd. filed a civil suit against the Appellant, Britannia Industries Ltd. for passing off and infringement of Copyright of the trade dress of Respondent’s product ‘Sunfeast Farmlite All Good’ which is a No Added Sugar and No Maida digestive biscuit.

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As per the Respondent, Appellant’s product ‘Nutrichoice Digestive Zero’ which was also a No Added Sugar and No Maida product had a packaging which was deceptively similar to Respondent’s product packaging of ‘Sunfeast Farmlite All Good’. Allegedly, both the products were being sold in the colour combination of Yellow and Blue.

The said suit was listed before the Learned Single Judge of the Hon’ble High Court of Delhi. After hearing arguments on the application for interim relief, the Learned  Single Judge granted a temporary injunction in favour of the Respondent in the following terms:

“An interim injunction is, accordingly, issued restraining Britannia from using the impugned packaging get-up/wrapper for its Nutri Choice Digestive Zero biscuits in the present form during the pendency of this suit. It will however be open to Britannia to adopt the packaging it uses for the product internationally or while retaining the yellow colour, substitute the blue colour in the impugned packaging with any other distinctive colour other than variants of blue. In sum, it can adopt any packaging which is distinctively different from the packaging that is currently used by ITC for its Sunfeast Farmlite Digestive All Good biscuits.”

Aggrieved by the said decision, the Appellant filed the present appeal.

Some Observations of the Learned Single Judge:

  • When a new product with a distinctive packaging is introduced, it is not necessary for the Plaintiff to show that it has established a formidable reputation in that product for a number of years.
  • The factum of sales of 5 crores was a significant factor in examining the question of reputation of the product, as also the factum of Rs 14 crores spent on advertising.
  • Britannia had been late in introducing its “Digestive Zero” variant till after six months after ITC introduced its product and this was a factor which weighed in favour of ITC.
  • Sales of Rs 5 crores of the said biscuits in a short span of five months was indicative of the growing reputation of ITC‟s product which deserved protection.
  • Even if it were to be accepted that yellow as a colour was integral to Britannia’s packaging scheme for Digestive biscuits, Britannia’s purpose could well be served by adopting a colour other than blue, to combine with the yellow colour of its packaging.

Appellant’s Contentions (observed in the order in question)

  • Britannia Digestive biscuits are being sold under three different variants. One variant is the “Nutri Choice Hi Fibre Digestive” biscuit. The other variant is the “Nutri Choice Digestive 5 Grain” biscuit and the third variant is the one in issue, that is, the “Nutri Choice Digestive Zero” biscuit.
  • First invoice of ITC is of May 2016.
  • Colour blue was being used worldwide in relation to sugarless or zero sugar products.
  • Britannia was using similar packaging for its Digestive Hi Fibre and Digestive 5 Grain biscuits, which all had the features of stacked biscuits, ears of wheat and other grains. The Digestive Hi Fibre packaging, which was also a pillow packing, had a yellow-red combination. The Digestive 5 Grains packing employed the yellow – green combination. In this context, it was suggested on behalf of Britannia that the packing for “Nutri Choice Digestive Zero” biscuits employed the yellow – blue combination to distinguish its other products.
  • All three variants of Appellant’s Digestive biscuits had the same genre of package design and the similar colour concepts. Yellow was the primary colour with a combination of red for Digestive Hi Fibre and a combination with green for the Digestive 5 Grain biscuits and now with a combination of blue for its Digestive Zero biscuits.
  • 5 crores sales of ITC’s product is not substantiated by any Chartered Accountant’s Certificate.
  • 14 crores spent on advertising is not only in respect of the get-up, but more so for the trade marks and other features of the product.

Division Bench’s observations:

  • Britannia has been restrained from using the colour blue. It has been permitted to retain the colour – yellow. In other words, the entire controversy in the present appeal centers around the use of blue and / or its variants in the packaging. It is, therefore, clear that in case the appellant / Britannia uses the same packaging, but substitutes the blue with any other colour, which is not a variant of blue, then there would be no case for passing off. (Paragraph 8)
  • It is evident that a passing off action has to be examined from the standpoint of three factors: (1) goodwill and reputation; (2) misrepresentation / possibility of deception; and (3) likelihood of damage. (Paragraph 10)
  • In a passing off case, it is the goodwill which is sought to be misappropriated. It is this misappropriation which provides a cause of action at common law.
  • ITC, in order to succeed at this stage, must establish, at least prima facie, that the combination of yellow and blue that is used in its packaging for its “Sunfeast Farmlite Digestive – All Good” biscuit has become distinctive specifically of its goods. (Paragraph 15)
  • The issue here, in this case of passing off, is not that a new biscuit or a new product has acquired popularity in a short span of time, but whether the get-up and, in particular, the colour combination of yellow and blue has become exclusively identifiable with the plaintiff‟s product ? (Paragraph 16)
  • We are of the view that the focus ought to be on the question whether the get-up (the yellow-blue combination of the package) was exclusively and distinctively associated with ITC.
  • In the present case, we find that ITC in its advertisements mainly relies on its trade marks and business name. That being the case, ITC would, in any event, have greater difficulty in establishing its claim based on general getup and in the present case, on the combination of yellow and blue. (Paragraph 18)
  • We do not think that in the short span of time and, particularly when Britannia has alleged that the first invoice of ITC is of May 2016, the yellow-blue combination in the packaging of ITC‟s biscuits had become so identified with ITC so as to enable ITC to prevent its use by competitors. (Paragraph 19)
  • There are a good number of products which use the colour blue for sugarless, zero sugar or sugar free products. (Paragraph 21)
  • Britannia has been using yellow as the primary colour in combination with red and green for its earlier products and, therefore, its natural evolution into a combination of yellow and blue for the Digestive Zero product was quite understandable.
  • The appropriation of and exclusivity claimed vis-à-vis a get-up and particularly a colour combination stands on a different footing from a trade mark or a trade name because colours and colour combinations are not inherently distinctive. It should, therefore, not be easy for a person to claim exclusivity over a colour combination particularly when the same has been in use only for a short while. It is only when it is established, may be even prima facie, that the colour combination has become distinctive of a person’s product that an order may be made in his favour. We feel that the present is not such a case. When the first element of passing off, in our view, is not established, we need not examine the other elements of misrepresentation and likelihood of damage. (Paragraph 23)

The Division Bench observed that ITC was not entitled to an interim injunction and therefore the impugned order of the Learned Single Judge was set aside.

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