No similarity between goods and services, rules High Court

In Balakrishna Hatcheries v Nando's International Ltd (Suit 2996 of 2006, June 4 2007), the Mumbai High Court has clarified the meaning of Section 29 of the Trademarks Act 1999, which deals with infringement on account of use of a sign on similar goods or services to those covered by a registered mark.

Balakrishna Hatcheries Ltd owns a registration for a mark, the principle feature of which is the word 'NANDU'S', for goods in Class 29 of the Nice Classification, namely "processed or frozen meat products". Balakrishna initially carried on a poultry business, and over the course of time commenced manufacturing and marketing processed and frozen chicken and meat products. Thereafter, it gradually expanded its product line so as to include other food-related products sold in ready-to-eat form. Balakrishna never carried on a restaurant or food outlet business, although it claimed that at some time in the future it intended to extend its business to such activities.

Nando's International Ltd is an international chain running fast food outlets and restaurant businesses serving Afro-Portuguese cuisine under the mark NANDO'S. Its Indian operations commenced in the year 2005.

Balakrishna filed an infringement and passing off action seeking an interlocutory injunction against the use of the NANDO'S mark. It claimed that Nando's use of its mark for restaurant services infringed its rights in its NANDU'S mark for goods in Class 29.

For the infringement claim, Balakrishna relied on Section 29(2)(b) of the Trademarks Act, which provides that a registered trademark is infringed if, in the course of trade, another person, without authorization, uses a mark which because of "its similarity to the registered trademark and the identity or similarity of the goods or services covered by such registered trademark" is likely to cause confusion on the part of the public or which is likely to have an association with the registered trademark.

The Bombay High Court held that a comparison of goods (for which the mark is registered) and services (in relation to which infringing use is claimed), (ie, similarity between goods on the one hand and services on the other), was not within the ambit of Section 29(2)(b).

The court further held that even if such a comparison of goods and services was permissible, there was no similarity or association between the goods (processed or frozen meat products) for which Nandu's mark was registered and the services rendered (through restaurants and food outlets) by Nando's for the following reasons:

• The uses and nature of the respective goods and services were different. Balakrishna's processed or frozen meat products are uncooked and are bought for cooking at home. Nando's services are those of "hospitality, entertainment and social interaction, in addition to the specialized Afro-Portuguese cuisine at a restaurant" where cooked food is to be selected from a menu.
  
  
• The respective users of the goods and services were different. Balakrishna's products are bought by people to be consumed at home; Nando's services are enjoyed by those who wish to go outside their homes and to socialize and enjoy the ambience of a specialized restaurant (usually of a higher-middle or upper income bracket).
  
  
• The trade channels through which the goods/services reach the market were different. Balakrishna's products are sold at cold storages, wholesale distributors and supermarkets, and have to be cooked to be eaten. Nando's serves food at its restaurants, which is chosen by customers from a menu.
  
  
• Balakrishna's goods do not compete with Nando's restaurants and food outlets. Balakrishna's products are frozen and need to be heated and consumed at home, whereas Nando's provides restaurant services for those not wishing to eat at home. Its menus also stipulate that it uses fresh (not frozen) meat.
  

Balakrishna additionally invoked Section 29(4) which accords further protection to marks having a reputation in India. Under this section, a registered mark is infringed even if another uses, without authorization, the same or a similar mark on goods or services that are not similar to those for which the mark is registered, provided that the registered mark has a reputation in India, and the use of the impugned mark without due cause takes unfair advantage of or is detrimental to the distinctive character or repute of the registered trademark.

The court rejected Balakrishna's claim under Section 29(4) for the following reasons:

• Balakrishna had failed to establish sufficient reputation in its mark even for processed or frozen food products so as to be entitled to invoke this section.
  
  
• Balakrishna had no reputation at all in the restaurant business.
  
  
• Nando's had commenced its restaurant business under the mark NANDO'S in 2005 and there was pre-launch publicity prior to the commencement of business.
  
  
• Nando's had registered the mark NANDO'S for its restaurant business in more than 100 countries and it carried on business in more than 30.
  
  
• In addition to transborder reputation penetrating into India, Nando's had acquired further reputation through its Nando's restaurant business in India.
  
  
• Balakrishna had failed to establish in what way the use of the NANDO'S mark was taking unfair advantage of the distinctive character or repute of the NANDU'S mark
  

The passing off claim was also rejected on the basis that Balakrishna did not have sufficient reputation in the NANDU'S mark so as to cover restaurant services.

Mustafa Safiyuddin, DSK Legal, Mumbai