'Indian Stag' Liquor Deceptively Similar To ‘Royal Stag’ But No Case Of Passing Off Since Former Only Exported: Delhi High Court

Justice C. Hari Shankar said that the interim order passed by a co-ordinate bench on July 25, 2019 shall remain confirmed pending the disposal of the trademark infringement suit.

It was simultaneously ruled that no case of passing off was made out against the defendant manufacturers (AB Sugars Limited and Ian Macleod India Private Limited) which only export their products abroad without selling any bottle in India.

“While, therefore, a prima facie case of infringement, by the use of the INDIAN STAG marked by the defendants, of the plaintiff’s ROYAL STAG mark, for IMFL, is made out, warranting interim injunction as sought, no case of passing off can, in my opinion, be said to exist, prima facie,” the court said.

Passing off

On the issue of passing off, it was underlined that the standard of proof to sustain a charge of passing off is higher than that which is required to sustain a charge of infringement. The court opined that given the difference in the visual appearance of labels of both the products and the fact that the defendants’ product is entirely exported, any finding of passing off would require a satisfaction that in foreign markets, consumers might mistake the defendants’ goods for the plaintiffs.

“Though mens rea need not be shown to exist for a plea of passing off to succeed, nonetheless, passing off is, classically, a tort of deceit. The character and complexion of passing off is not far removed from its normal etymological connotation. A defendant can be found guilty of passing off if the facts indicate that the defendant is passing off its goods, or services, as those of the plaintiff,” it said.

Deceptive similarity

Justice Shankar further observed that the mark “Indian Stag” has to be held to be deceptively similar to the mark “Royal Stag” and that the use of the Stag device by the defendant would exacerbate confusion.

“A stag is an animal. Though liquor, consumed in excess, may evoke animalistic tendencies in the imbiber, the word STAG cannot, in any manner of speaking, be regarded as descriptive of alcoholic beverages. Once that is so, applying the reasoning contained in the afore-noted decisions, the marks INDIAN ROYAL STAG and INDIAN STAG, have necessarily to be regarded as deceptively similar. Both are used for IMFL,” the court said.

Upon analysis of judicial precedents on phonetic and visual similarity, it was added that the use of the word “STAG” by defendant manufacturers rendered their “INDIAN STAG” mark phonetically and structurally similar to the plaintiff’s mark “ROYAL STAG”.

Furthermore, the court said that if a consumer of average intelligence and imperfect recollection, who has a taste for the proverbial good life, imbibes ROYAL STAG whisky and sometime later comes across the defendants’ INDIAN STAG whisky, there is every likelihood of him believing that the two marks are associated.

“The market place is not, therefore, crowded. It is occupied by just two solitary brands. These brands being ROYAL STAG and INDIAN STAG, and reflecting the figure of a stag in each case, the possibility of likelihood of an association between the two marks, in the minds of a consumer of average intelligence and imperfect recollection, cannot be ruled out,” the court said.

Principle of acquiescence

Pertinently, the defendant manufacturers had invoked the principle of acquiescence and submitted that INDIAN STAG has been sold since several years through outlets (overseas and in the UAE) at which ROYAL STAG is sold, yet the plaintiff allowed the sale to continue without demur.

On this, the court observed that the conditions of Section 33 of the Trade Marks Act (which talks about effect of acquiescence) were not satisfied and thus, the plea of acquiescence had necessarily to fail.

“Once a particular exigency, and its sequelae, are specifically provided for by statute, that provision would prevail. It is only, therefore, where the conditions of Section 33 are strictly satisfied that acquiescence can be pleaded by the defendant as a defence to injunction, even where infringement is found to exist. The onus to establish existence of the conditions envisaged by Section 33 would, however, be on the defendant,” the court said.

Publici juris marks

Justice Shankar stated that a mark which is publici juris and which is legitimately available to the public for enjoyment and exploitation, cannot be monopolised by a private individual. Holding that the mark “STAG” was not ineligible for registration as a trademark, the court concluded that the same was not publici juris.

“The publici juris principle is actually conceptually circular in nature. Registration, and registration alone, confers the right to monopolise a trademark and to proceed against those who use it, or something deceptively similar to it, without authority. Every mark which is neither registered nor deceptively similar to a registered mark is, therefore, publici juris,” the court said.

It added: “The publici juris character is being attributed only to the latter “STAG” part of the plaintiff’s mark. In view of the fact that the defendants’ INDIAN STAG mark, as used for IMFL, is deceptively similar to the plaintiff’s ROYAL STAG mark, the issue of whether the latter STAG part of the plaintiff’s mark is, or is not, publici juris, ceases to be of relevance.”

Referring to the decisions in Baker Hughes Ltd. v. Hiroo Khushalani and Ramdev Food Products (P) Ltd v. Arvindbhai Rambhai Patel, the court also rejected the defendants’ contention that the imbibers of products dealt in by the plaintiff and themselves were discerning, and therefore, there was no likelihood of confusion.

Idea Infringement

Noting further that a stag has nothing to do with alcoholic beverages, the court agreed with the plaintiff’s averment that there was “idea infringement”.

Reading Sections 29(6)(c) and 56 of the Trade Marks Act in conjunction, the court did not merit significance to the contention that the defendants’ products were not sold within India. It opined that, “one has to examine the likelihood of confusion on the deeming premise that a consumer of average intelligence and imperfect recollection comes across, within India, the marks of the plaintiff and the defendants, even if, in actual fact, he does not”.

With respect to the Stag devices of the respective parties, the court said that the two were not visually alike/similar. However, in conjunction with the deceptively similar word marks (ROYAL STAG and INDIAN STAG), there was a likelihood of confusion being exacerbated.

Plea of Disclaimer

On the defendants’ contention that the plaintiff itself had disclaimed part of its mark i.e. “ROYAL”, the court opined that the disclaimed part of a mark cannot be the basis of a claim for infringement. However, while examining for infringement, the marks ought to be viewed as wholes.

It observed that the plaintiff was claiming deceptive similarity based on “STAG”, which was common to the competing marks and had not been disclaimed by the plaintiff. As such, the defendants’ contention w.r.t. plaintiff’s disclaimer made no difference.

Dominant feature

In the same breath, the court found itself in agreement with the plaintiff’s claim of “STAG” constituting a dominant part of its mark. It referred to the decision rendered by a Division Bench of the Delhi High Court in South India Beverages Pvt Ltd v. General Mills Marketing Inc, where it was held that in the case of a composite mark, it was permissible to accord more/less importance or dominance to a particular portion or element of the mark.

Notably, in South India Beverages, the court was concerned with an infringement challenge brought by General Mills Marketing in respect of its registered trademark ‘HAAGEN DAZS’. South India Beverages was manufacturing like products under the name ‘D’DAAZ’. Reiterating the importance of analysing marks as wholes, the court had held that the “anti-dissection rule” did not impose an absolute embargo upon the consideration of the constituent elements of a composite mark.