ITC Limited v. Philip Morris Products S.A. And Ors.

Court: Hon’ble High Court of Delhi

Citation: CS (OS) 1894/2009

Date of Judgement:  January 07, 2010

Judges: S. Ravindra Bhat, J.

Facts: 

ITC Limited ("the plaintiff"), one of India's largest private sector companies engaged in a diverse set of businesses such as hotels, packaging, agro-business, Fast Moving Consumer Goods (FMCG), including cigarettes, foods, confectionery, stationery, etc. In 1975, the plaintiff adopted the mark "WELCOMEGROUP" concerning its hotel business. The registered "WELCOMEGROUP" trademark is a device mark depicting folded hands in a W format, representative of the traditional Indian gesture of Namaste and signifying its priority to hospitality and a welcoming environment. 

ITC submitted various documents, such as trademark and copyright registration certificates, concerning the Namaste "WELCOMEGROUP" logo (“W Namaste logo”) and hotel menu cards, booklets, tariff cards, promotional materials, and photographs concerning the hotel. ITC's presentation of such evidence aimed to establish the continuous and extensive use of the W Namaste logo, thus earning a reputation, achieving excellence, and becoming famous. 

Philip Morris ("the defendant"), involved in cigarettes, cosmetics, and other retail businesses, sold cigarettes under the registered trademark of “Marlboro”. The trademark “Marlboro” was first registered in 1956 and is best known for its traditional roof-shaped logo. In light of this, ITC challenged the defendant’s use of the mark “Marlboro”, which featured a stylized “M” on a roof-like design with flame outlines, introduced as part of a Diwali-themed promotion. ITC argued that this design infringed upon its registered trademark, particularly drawing similarities to its well-known “W Namaste” logo. ITC called for trademark infringement under Section 29(4) of the Trademark Act 1999, contesting that the defendant’s use of the “Marlboro” mark (“M logo”) diminished the goodwill of its “W Namaste” logo, thus diluting its reputation.  

Issues: 

1. Did the defendants infringe on ITC's W Namaste logo through dilution? 

Law: 

1. Section 29(4) of the Trademark Act, 1999

Analysis: 

Dilution is a specific form of trademark infringement recognized under Section 29(4) of the Trade Marks Act, 1999. Trademark infringement occurs when someone, without authorization, uses a mark that is identical or deceptively similar to a registered trademark in a manner that may deceive or cause confusion. Unlike traditional infringement, which typically involves similar or related goods, dilution applies even when the goods or services are unrelated. What makes it actionable is that the unauthorized use, without due cause, diminishes the distinctiveness or damages the reputation of the registered trademark, even in the absence of direct competition. Thus, the essence of dilution does not lie in causing confusion but in diminishing the reputation of the registered trademark.

The Hon'ble High Court of Delhi observed that to raise a contention of dilution under Section 29(4) of the Trademark Act, 1999, as raised by ITC, four essential criteria must be entirely satisfied, namely:

a) the mark in question ("infringing mark") should be similar or identical to the registered trade mark;

b) The registered trade mark of the plaintiff must have a reputation in India;

c) The use of the infringing mark is without due care;

d) Using the infringing mark amounts to taking unfair advantage of, or is detrimental to, the distinctive character or reputation of the registered trade mark.

Based on the above-mentioned cumulative criteria, ITC had to establish that the defendant's  “M” logo was identical or similar to its "W Namaste" logo. 

ITC's "W Namaste" logo is part of a larger logo, including the registered "WELCOMEGROUP" and/or name of the resort or hotel, and, as such, is not a stand-alone mark. Similarly, the defendant’s “M”  logo is set on a black background with the mark showcased in yellow flames. Thus, the court highlighted that in the case of logos and other marks, the application of the “identity” or “similarity” test has to result in a conclusion that the rival marks carry a very close resemblance, seen from an overall perspective, which ITC failed to prove due to distinct dissimilarities between the two marks when considered as a whole. 

Additionally, the court highlighted that ITC could not prove that the use of its “W Namaste” logo, which is associated with hospitality services and has acquired a luxury image, extends to mid and high-priced cigarettes, such as those sold by the defendants. The court further emphasized that ITC’s failure to deny that it sells cigarettes in a similar competitive price range is a crucial factor. This is important because the customers purchasing the defendants’ cigarettes fall within the same pricing segment, making the alleged association between the W Namaste logo and the defendants’ goods even less convincing.

Lastly, the court concluded that the documentary evidence presented by ITC did not establish prejudice or unfair advantage by the defendant in using its “M” logo, which ITC contested diluted its reputation and goodwill. Thus, there was no trademark infringement through dilution under Section 29(4) of the Trademark Act by the defendant. 

Conclusion:

The judgment makes it clear that dilution is not made out just because two marks look somewhat similar - there has to be a real and unfair impact on the distinctiveness or reputation of the original mark. In view of the same, the court held that the defendants' use of the “M” logo on their Marlboro festive packs did not amount to dilution of ITC's W Namaste logo; consequently, no finding of infringement was made out under Section 29(4) of the Trademarks Act, 1999.