ITC (Yipee) Vs Nestle (Maggi) – Madras High Court

ITC Ltd. and Nestle S.A. are two household names that have become indispensable in our lives. There is a minimum of one product in every household that belongs to these conglomerates. The demography of the consumers for these brands is vast and covers every age and economic group. These companies have influenced our lives such that they have become an inevitable part of our monthly grocery list.

‘Maggi’ and ‘Sunfeast Yipee’ noodles are the two most famous brands of Nestle and ITC, respectively. The fame and reputation associated with these two brands is in itself a story worth discussing but would defeat the purpose of this post. These brands gained the limelight when the Madras High Court, on June 10, 2020, rendered the most laudatory judgment.

The Plaintiff here is ITC Ltd. and protecting one of their brands, that being, ‘Sunfeast Yippee! noodles Magic Masala’. They had introduced their products under ‘Sunfeast Yippee! noodles Magic Masala’ and Sunfeast Yippee! noodles Classic Masala’ in 2010.

The Defendant here is Nestle S.A. defending their ‘Maggi xtra -delicious Magical Masala’ which was introduced by them in 2013.

The major contention here by ITC was that the use of the expression, ‘Magical Masala’ by the Nestle, on its products, amounted to an act of passing off and therefore, filed a suit for the same.

Analysing the matter in-depth, the Court framed eleven (11) issues. But most significantly, the Court determined whether monopoly lies in the words ‘Magic’ and ‘Masala’; and therefore, whether the use of the said terms amounts to passing off under trademarks law.

The Hon’ble High Court of Madras made it clear that ‘The word “Magic” is laudatory. It is incapable of being appropriated by the plaintiff (ITC). As such, no person can claim any monopoly over the said words “Magic” or “Magical” or their derivative as they are common to the trade. Therefore, it is incapable of being monopolised by any trader.’

Further, the Court also observed that ITC did not intend to use “Magic Masala” as a trademark or a sub-brand. It commented that ‘The fact that no trademark application was filed by the plaintiff (ITC) to register the aforesaid expression “Magic Masala” as word mark also shows that the said expression was not intended to be used as a trademark or a sub-brand by the plaintiff.’

Lastly, analysing the trademarks of the parties, while applying the well-established principle of ‘trademarks to be seen as a whole’, the Court reasoned, on comparison of the wrappers of both the parties, it was evident there was no scope of passing-off by the Defendant, as claimed by the Plaintiff. It observed that the ‘Overall colour scheme, layout, style and overall get-up of the two wrappers i.e. of the plaintiff’s “Sunfeast Yippee! noodles” bearing the expression “Magic Masala” for its instant noodle and the defendant’s “Maggi Xtra-delicious Magical Masala” were different. Therefore, these two are separate trademarks within the meaning of Section 2(zb) of the Trade Marks Act, 1999 and hence, qualify for protection as a whole.

In light of the above, the Court concluded that there is no case made out for misrepresentation and thus, there is no evidence to show passing-off as claimed by the Plaintiff. Hence, the Court ruled in favour of the Defendant (Nestle) and dismissed the suit of the Plaintiff (ITC) without costs.

The reasoning and logic applied by the Court is a precedent to be relied upon in the coming days. The Court has taken the time to dissect the trademark law and apply it coherently to the current business market and dynamic trading community. While deciding, the Court has in detail, analysed the meaning of a ‘mark’ and a ‘trademark’, as defined under the Trademarks Act. By doing so, the Court has very cleverly and clearly observed that while Sunfeast Yippee! noodles Magic Masala’ and ‘Maggi xtra -delicious Magical Masala’, including their wrappers, qualified as ‘trademarks’ under the law, the phrase ‘Magic Masala’ or ‘Magical Masala’, as standalone, did not qualify as trademarks. Rather, they are common words used in the food industry and therefore, this phrase is nothing more than a ‘descriptive trademark’, which has no protection under the Indian trademarks law.

Furthermore, the Court analysed in detail about the meaning of the words. It dissected the origin, history and source of the word and subsequently, looked into the dictionary meaning of the two words. In the words of the Court, ‘The expression “Masala” signifies a mixture of ground spices used in Indian cooking. It is a household name in Indian culinary and is used for describing a mixture of different spice. It is a generic name to collectively call a mix of different spice. The said word is used across length and breadth of the country irrespective of the zone, culture and geographical location.’ This establishes the meaning and the use of the word, thereby proving no distinctiveness existed in the word ‘Masala’. For the words, ‘Magic’ and ‘Magical’, the Court referred to the 10th edition of the Chambers Dictionary, which defines the word “Magic” as “marvellous” and “exciting”. It had also looked into the meaning as per the New Shorter Oxford English Dictionary which defined it as “superlatively good”, “excellent”, “fantastic”. Therefore, the Court cogently concluded that the two words, ‘Magic’ which is laudatory and ‘Masala’ which is colloquial, cannot attain distinctiveness so as to exclude others from using them, hence, further substantiating that the phrases, ‘Magic Masala’ or ‘Magical Masala’ do not qualify as trademarks as per the law.

Lastly, while analysing whether an act of passing-off was committed, the Court once again looked in the past and referred to the common law practices and precedents. Relying on the case of Century Traders v. Roshan Lal Duggar & Co., [AIR (1978) 250(DEL)], the Court held that the major three ingredients of passing- off, Goodwill, misrepresentation and damages, were not demonstrated or proved by the Plaintiff. The Court further observed that the Defendant was, in fact, the first to use ‘Magic’ for its food items, though not for its noodles, which was actually used first by the Plaintiff. However, the Court held that ‘the words “Magic” and its derivative “Magical” are common to the trade. Therefore, neither the plaintiff nor the defendant can claim any monopoly over the expression Magic” or “Masala” for they are common words in the Indian culinary and food industry’ and hence, held that the adoption by the Defendant was legitimate and no there was no passing-off warranted by the Defendant.

No more descriptive trademarks?

This judgement does make one mull over instances where we do come across purported trademarks that are downright descriptive and yet surprisingly obtained registration. While reasons of popularity and use may be attributed, the question is if such marks can still be considered registrable and defendable trademarks? Though the Court has expressed dedication and meticulousness, in deciding the case, it is now in the hands of the Trade Marks Registry to follow the same in letter and spirit. On the other hand, it also brings to our mind the question of taglines/slogans and the limitations associated with them. While the term “Magic Masala” in the present case is not exactly akin to a slogan, the circumstances of the case bring them to our mind. It is easier said than done to analyse, assess and award registration to taglines/slogans and it does require scrutiny of the highest order, delving deep into every element of the taglines/slogan owing to which they are not highly encouraged as registrable trademarks. All said and done, at least as far as the present case is concerned, going back to basics, we ardently hope, would only strengthen the trademarks practice in India.