Battle of Trade dress between Coconut oil manufacturers
The Plaintiff, Marico Limited (Marico) filed the suit to restrain the Defendant, K.L.F. Nirmal Industries Pvt. Ltd (Nirmal) from using the trade dress for their KLF Nirmal Coconut Oil. Marico alleged that Nirmal’s packaging is similar to the blue packaging and trade dress of the Parachute Coconut oil. This note discusses the contentions raised by the parties in the injunction application and the order passed by the Court.
At the admission stage the Court while granting an ex-parte injunction observed:
- Nirmal’s impugned labels/packaging and the impugned products are deceptively similar or rather identical with Marico’s Parachute packaging/labels, the flag device, the tree device, and the distinctive bottles/containers.
- The similarities between the rival marks/labels/packaging cannot be a matter of coincidence.
- Marico has made out a strong prima facie case and balance of convenience is also in their favour.
Nirmal seeks to set aside the injunction on the following factual and legal grounds:
- Marico has suppressed that Nirmal is a well-established business entity with presence for decades and has a history and tradition going back to 1948. They have substantial sales and having wide range of products with presence in India and the Gulf.
- Marico has suppressed the Non-Disclosure Agreement (NDA) signed by them in March 2021 and the Information Memorandum circulated which contained details of Nirmal’s products in blue bottle entitled ‘Kepler Project.’ The NDA and the Information Memorandum evidence sales of the impugned products since 2021 which Marico was aware of.
- The averment that Marico became aware of Nirmal’s impugned product in July 2023 is false. Documents such as purchase orders; delivery challans; invoices etc. issued in relation to sales to the Canteen Stores Department (CSD) show sales from 2017 in blue bottles. This is relevant as Marico is the largest supplier to CSD followed by Nirmal.
- Marico cannot claim monopoly over their blue colour as the coconut oil segment has several manufacturers, using the same blue colored bottles.
- There is delay and acquiescence.
Marico counters the contentions on the following:
- Nirmal proceeds on the presumption that Marico ought to have noticed their products on the shelves of the CSD canteen without providing any material which shows the actual packaging used by them in the CSD canteen since 2021.
- Nirmal’s contentions are unsubstantiated, lack material particulars, and are insufficient to set aside the injunction order. Considering the dishonesty and the deliberate copying of Marico’s well-known packaging/trade dress of its Parachute coconut oil products the injunction order ought to be confirmed in the interest of justice and public interest since the rival products are edible coconut oil products which are consumed by millions of people.
- The injunction order cannot be vacated based on conjectures or surmises. Nirmal has failed to produce any material to prove Marico had prior knowledge of the Information Memorandum or Nirmal’s impugned products prior to the date of knowledge alleged in the plaint.
- The signing of the NDA does not prove that the alleged Information Memorandum was received by Marico or that they had noticed Nirmal’s impugned products prior to July 2023. The mere reference to ‘Project Kepler’ does not establish any evidence of the receipt by Marico of the Information Memorandum or any other document containing images of the impugned product.
- The internal enquiries regarding the alleged Information Memorandum revealed that Nirmal’s proposal did not cross the preliminary evaluation process and therefore no material or information was shared with Marico at the relevant time or any time thereafter.
- There is no acquiescence or delay on the part of Marico in approaching the Court or
taking steps to protect its rights in its marks/labels/packaging. Nirmal cannot seek shelter behind other infringers and there is no evidence whatsoever to show the actual use or extent of sales of the alleged third-party products.
- For setting aside ex-parte order it is essential to establish that a party has knowingly made a false or misleading statement in relation to a material particular to obtain the order. Presuming it is established, even then the Court may not vacate the injunction if it considers that it is not necessary to do so in the interest of justice. In the instant case Nirmal has failed to discharge this burden and has sought vacation of the injunction on conjectures and surmises.
- There is no document on record to substantiate the contention that Marico had received the Information Memorandum or had prior knowledge of Nirmal’s impugned product prior to July 2023.
- Nirmal’s attempt to draw a link between NDA and the Information Memorandum by relying upon the project named “Project Kepler” mentioned in the alleged Information Memorandum will not succeed. The mere reference to ‘Project Kepler’, cannot constitute evidence that Marico had received the Information Memorandum and/or any other document containing the images of the impugned product.
- There is merit in the argument that even assuming the Information Memorandum was shared with a member of Marico, at best an incorrect/inadvertent statement made without knowledge of the alleged Information Memorandum or its contents does not constitute a ground for vacating the ad-interim order. The public interest also needs to be taken into account whilst considering whether, or not, the injunction granted against Nirmal ought to continue.
- The mere reference to the alleged purchase orders /invoices /delivery challan relating to sales to CSD is insufficient to establish Marico had prior knowledge of Nirmal’s impugned product. The documents only mention the words ‘blue bottle’ with no image or identification of the product being ordered/supplied under the same.
- In the instant case there is no delay or acquiescence, and Marico has acted with utmost dispatch and proceeded to act against Nirmal. Moreover, Nirmal cannot seek shelter under the guise of other parties using similar trade dress in the absence of any evidence to show the actual extent of use or sales of the alleged third-party products.
In view of the above the Court rejected the contentions raised by Nirmal and confirmed the injunction in favour of Marico until further orders.