Use of numerals on alcohol bottles likely to constitute honest business practice
In Radico Khaitan Limited v Carlsberg India Private Limited (IA No 8122/2011 in CS (OS) 1216/2011, September 16 2011), the High Court of Delhi has taken a prima facie view that the use of numerals on alcohol bottle labels was likely to constitute an honest business practice.
Plaintiff Radico Khaitan Limited applied for an injunction against defendant Carlsberg India Private Limited, arguing that the defendant, by using the mark PALONE 8 for beer, infringed its trademark 8 PM, registered for whisky, and passed its goods off as those of the plaintiff.
The plaintiff relied on its prior use of, reputation in and registrations for, the trademark 8 PM. It challenged the defendant’s use of a mark comprising the numeral 8, arguing that it had been adopted in a dishonest manner. To buttress its case, the plaintiff highlighted, among other things, the fact that the defendant used the numeral 8 in a similar manner on the label and used a similar tagline.
The primary line of defence taken by the defendant was that the goods were different (beer falls within Class 32 of the Nice Classification, while whisky falls within Class 33) and that the plaintiff did not have rights over the numeral 8 per se for the following reasons:
- The trademark 8 PM is descriptive inasmuch as it refers the “preferred recreation time of the evening when everybody desires to unwind";
- The plaintiff did not have a separate trademark registration for the numeral 8;
- The defendant uses the numeral 8 to indicate the alcohol content in its product;
- The numeral 8 is common to the trade.
The court held that the defendant’s use of the numeral 8 constituted an honest business practice, which is a defence against trademark infringement. The court observed that the "decisive test" for determining whether use of a sign constitute an honest business practice is not based on the "prominence or non-prominence" of the sign, even though this criteria might be relevant; however, "much will be dependent upon the manner of use of the [sign] as warranted in the said industry, which will set out the limit for what can be honest and what can be dishonest”.
The court thus applied this test to determine whether there was a nexus between the numeral 8 and the liquor industry. Because the numeral 8 is commonly used in the trade, and because it can be used to indicate the alcohol content, the court went on to hold that the numeral mark 8 was not distinctive of the plaintiff’s product. The court also held that the plaintiff:
- did not own a separate trademark registration for the numeral 8; and
- could not have monopolistic rights over the numeral 8, unless the mark was proved to be distinctive of the plaintiff’s goods.
An important fact which emerged during the course of the proceedings - and might have influenced the court's decision - was that the trademark 8 PM for beer is registered in the name of a third party, rather that in the name of the plaintiff.
Taking into account the facts and circumstances of the case, the court held that, in the absence of a prima facie case in favour of the plaintiff, the defendant could not be restrained, at the interim stage, from using the numeral 8. However, in what seems to be an attempt to protect consumers against any confusion, the court directed the defendant to alter its label by:
- writing the number 8 and the word ‘Palone’ on the same line; and
- changing the gold colour of the number 8.
The court also ordered that the defendant maintain a statement of accounts for the product at issue.
This order illustrates how the courts will consider the defence of honest business practice; at the same time, it shows that companies should proceed with caution when using a sign that includes the trademark of another.
Abhilasha Nautiyal, Anand and Anand Advocates, New Dehli
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