Nestlé suffers blow in MAGIC MASALA case

India

In ITC Limited v Nestlé India Limited (OA No 244 of 2013 in CS No 231 of 2013), a single judge of the High Court of Madras has held that MAGIC MASALA is not descriptive in relation to "instant noodles" and granted an interlocutory injunction in favour of ITC Limited in a passing-off action filed by the latter.

ITC’s Magic Masala noodles

Nestlé’s Magical Masala noodles

In support of its case, ITC relied on the following arguments, among others:

  1. Its mark MAGIC MASALA has been used as a variant of its brand SUNFEAST YIPEE! since 2010 in respect of instant noodles and has acquired a secondary meaning.

  2. The term 'Magic Masala' forms a predominant feature of the composite trademark SUNFEAST YIPEE! MAGIC MASALA, which is pending registration.

  3. The mark MAGICAL MASALA, adopted by Nestlé India Limited in respect of identical goods, is identical and/or deceptively similar to ITC’s MAGIC MASALA mark.

  4. Nestlé’s adoption and use of MAGICAL MASALA was in bad faith, and Nestlé sought to free-ride on ITC’s goodwill and reputation in MAGIC MASALA.

In its defence, Nestlé stated as follows:

  1. 'Magical Masala' is descriptive of its goods and describes the flavour of the instant noodles. The noodles and masala are sold in a 'combo packet' and the noodles have no taste; it is only the masala (ie, the spice), which is packed in a sachet, that gives flavour to the noodles.

  2. 'Magical Masala' is a laudatory and descriptive epithet, and the law prohibits interference in the good-faith description of the character or quality of the goods.

  3. The packages of the parties' products bear their respective house marks (ie, SUNFEAST YIPEE and MAGGI) and are thus different.

  4. Nestlé has used the word 'magic' prior to ITC and, in any event, other parties are using 'Magic Masala' in respect of other food products.

After hearing the parties, the court rejected Nestlé’s defences and granted an injunction on the ground that MAGIC MASALA indirectly suggests a magical change and, therefore, it cannot be considered to be descriptive. The court found that MAGIC MASALA is in fact distinctive as it has acquired secondary meaning.

The present case was restricted to a passing-off action, as ITC’s composite label is not registered. In an infringement action, if the essential features of the registered mark are copied, all added features in the defendant’s label can be disregarded. However, in a passing-off action, additional features in the label may dispel the allegation of passing off, as these are not to be disregarded. The order passed by the court is interesting as the term 'Magic Masala' on ITC’s packaging does not appear prominently compared to other features, including the word 'Yippee'. Apart from the words 'Magical Masala', all the other features on Nestlé’s label appear to be distinctive and different. Further, the word 'magical' could be considered as a laudatory epithet and the word 'masala' is a well-known word in Indian cuisine.

The decision is another setback for Nestlé in light of the ban that has been imposed on its MAGGI-branded noodles in several Indian states based on the allegation that it contains higher-than-permissible levels of lead and traces of monosodium glutamate.    

Adheesh Nargolkar, Shailendra Bhandare and Vidhi Kotak, Khaitan & Co, Mumbai

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