Lotte Confectionery Co. Ltd. v. Orion Corporation

Sanjeev Kumar Chaswal, Member (Technical):— The applicant filed the Rectification application for removal of Trademark “CUSTARD” registered under No. 1444980 in class 30 registered under the name of the respondent company

1. The Applicant Company was established in the year 1967 in Korea, it is South Korean subsidiary company and first company of the Lotte family of Companies founded by Mr. Shin Kyukhjo and is the Lotte Group's flagship company leader in Foods and Beverages category. The Applicant parent company i.e. Lotte Group has its presence in Food & Beverages Distribution, Tourism and Leisure business; Heavy Chemicals, Construction and Machinery Information, Communication and Electronics, Trading and Service; apart from Welfare Research and Support Services.

2. The Applicant's main line products are Chewing Gun (Lotte Xylitol, Lotte Juicy & Fresh, Lotte Spearmint, Lotte Fresh Mint, Flavdno, White & E, Spout Cafe Coffee) Candy, Biscuits, Chocolates, Snacks, Ice cream and health care products. Today the Applicant is the No. 3 chewing gum manufacturer in the world. The Applicant's Indian subsidiary Lotte India Corporation Limited was established in the year 2004 and has been carrying on extensive business in India ever since. Today, the Applicant has acquired an impeccable re mutation and importance in the field of confectionary not only abroad but also in India.

SUBMISSIONS BY APPLICANT

3. The respondent has obtained the registration of the trademark ‘CUSTARD’ vide registration no. 1444980 in class 30 since the year 10 of April 2006, the said registration of the respondent is subsisting and continuing till date. The respondent has obtained registration of the non-distinctive and of the generic term for the goods falling in class 30.

4. The impugned mark consists of word “CUSTARD” that is devoid of distinctive character in the trade, since the same is wholly descriptive. The word ‘CUSTARD’ is descriptive and the generic name for the goods in class 30 and such use is common to the trade. Apart from it is a dictionary word of ordinary and descriptive usage, so it is not capable of distinguishing the goods of the Respondent from any other person. The mark applied for is incapable of acquiring a distinctive character by any amount of use, whatsoever. The mark ‘CUSTARD’ wrongfully reregistered in the name of the Respondent is devoid of any distinctive character and not capable of distinguishing its goods or services from any other person during trade. The Registration of the impugned mark a liable to be dismissed being in violation of Section 9(1)(a) of the Trade Marks Act, 1999.

5. The mark ‘CUSTARD’ is commonly used in the trade and indicates the quality and characteristic of the goods on which the said mark is applied, and word custard is indicative of the nature, quality and character of the goods namely “Chocolates, Biscuts, Cookies, Crackers, Wafers, Confectionery, Corn Chips, Bread Pastries, Cakes, Pies, Puddings, Sherbets, Ice Creams, Candy, Caramels, Chewing Gum (Not for Medical Purpose)” applied by the Respondent. As such the trade mark ‘CUSTARD’ registered by the Respondent is liable to be dismissed being in violation of Section 9(1)(b) of the Act.

6. To elaborate further the mark ‘CUSTARD’ of the respondent the dictionary meaning of the term ‘CUSTARD’ is “A dish consisting of milk, eggs, flavouring and sometimes sugar, boiled or baked until set”. Hence, Custard is a culinary preparation made by blending eggs with milk or cream. Custard is mainly used as a dessert or as a base for a dessert or as a dessert sauce. Further, pastry cream or creme patisserie, which is used as a filling for classic desserts like cream puffs and eclairs, is made by adding some sort of starch, such as flour, to the custard. Custard is usually sweet, but it can also be savoury. Quiche is an example of a savoury custard.

7. The term ‘CUSTARD’ is used in all confectionary goods, and due to this reason, it is descriptive of the goods registered by the applicant. The confectioners' custard made with a combination of milk or cream, egg yolks, fine sugar, flour or some other starch and usually a flavouring such as vanilla, chocolate or lemon. Even cooled custard is the active ingredient of making ice-cream with the help of egg yolks milk and/or cream. The Yema Custard Candy is made with the help of the egg yolk, condensed milk, chopped nuts, jack fruit and custard. The registration of the impugned mark in relation to the impugned goods is contrary to the provisions of Section 18 of the Act since the Respondent was not and cannot be the bona fide proprietor of the impugned mark in relation to the impugned goods and hence to the provisions of Section 18(1) of the Act.

8. The trade mark ‘CUSTARD’ of the Respondent is a generic term and the said generic expression is bonafidely required by the members of trade and purchasing public in the ordinary course of trade. The adoption and proposed use of the trade mark custard in relation to Chocolates, Biscuits, Cookies, Crackers, Wafers, Confectionery, Corn Chips, Bread Pastries, Cakes, Pies, Puddings, Sherbets, Ice Creams, Candy, Caramels, Chewing Gum by the Respondent is likely to cause confusion and/or deception among consumers and the public at large. This mark being a generic expression cannot be adopted to distinguish goods with which a proprietor of a mark is connected in the course of trade from goods in the case of which no such connection subsists. Thus, the mark is hit by the provisions of Section 9(1)(c), (2)(a) of the Act and is thus disentitled to registration.

9. The Applicant had filed an application for the registration of the identical trade mark “CUSTARD” under No. 757775 on 30-07-1997 in the Trade Marks Registry Office, Kolkata which was refused by the Registrar on the ground that the same is not distinctive in respect of the goods and hence no appeal was filed subsequently against the order of the Registrar.

10. It is also submitted that even a public search of the Register of Trade Marks in class 30 reveals the presence of various third-party marks, who have acquired registration for “CUSTARD” only as part of its mark. Further, the Registrar of Trade Marks has granted registrations to the marks by appending condition of disclaimers against the exclusive right over use of the term “CUSTARD” in the said trademarks. Even though the Respondent has obtained registration of the trade mark “ORION CUSTARD” under No. 2705684 in class 30 registered and is valid up to 25/03/2024. This shows that the Applicant has a genuine concern and objection to registration of the term “CUSTARD” per se by the Respondent.

11. It is submitted that the Applicant is the aggrieved person within the meaning of Section 47 and 57 of the Act, as the Applicant is under the threat of an infringement action by the registered proprietor of such a trade mark, if the Respondent finds the Applicant bonafidely using the “CUSTARD” to describe his particular goods in a non-trade mark sense, as the trade mark of the Respondent “CUSTARD” on the Register of Trade Marks with respect to the impugned goods would limit the legal rights of the Applicant; and the trade mark of the Respondent on the Register of Trademarks would deprive the Applicant and other traders in the same field from using the common word ‘CUSTARD’ in non trade mark sense.

12. Both parties had a dispute in Korea, where the marks in question were ‘LOTTE CUSTARD’ and ‘ORION CUSTARD’, it was held that custard is a dessert made of eggs, sugar and milk and is baked, boiled or frozen. Therefore, the mark ‘CUSTARD’ is non-distinctive and common descriptive name. Accordingly, the marks were compattmentalised into ‘LOTTE AND ORION’, and exclusive rights to “CUSTARD” were disclaimed.

13. The applicant counsel has referred the citations to buttress his pleadings and arguments in the matter (i) HBI Branded Apparel Limited Inc. v. The Assistant Registrar of Trade Marks and Hrsi Ms. K Hema ([2009] IPAB 121):— Decided on August 21, 2009.

The Appellant filed application for registrations of the mark BRA-LET under No. 1401104 in class 25 in respects of Brassieres on 23 November 2005 on propose to be used basis. Objection under Section 9 was raised. Registrar of Trade Marks refused registration holding that the mark designates the kind and quality of goods and is not capable of distinguishing the appellant's goods from those of others. The appellant appealed against this order, it was held that any word which may be used to describe the character or quality of goods/services can be used only for such purpose and not to distinguish the goods/services of one person from those of another. The words which are descriptive of goods are not considered prima facie capable of distinguishing. The mark BRA-LET is too descriptive. It has not acquired distinctiveness or is capable of acquiring distinctiveness as the mark is only proposed to be used. Accordingly, the appeal is liable to be dismissed.

In other case of Lal Babu Priyadarshi v. Amritpal Singh . ((2015) 16 SCC 795 : AIR 2016 SC 461):— Decided on October 27, 2015 Appeal filed against IPAB order allowing the appeal filed by Amritpal, while setting aside the order passes by Assistant Registrar of Trade Marks. The mark ‘RAMAYAN’ with device of crown in class 3 for incense sticks was applied by Lal Babu. The Respondent claimed that the mark is similar to their mark ‘BADSHAH RAMAYAN’ held: the word ‘RAMAYAN’ represents the tide of a book written by Maharishi Valmiki and is considered to be a religious book in India. Thus, exclusivity over the word for any commodity is not permissible. If any other word had been added as a prefix or suffix, then the same could have been registerable. Consequently, the appeal is dismissed.

In other case of Indus League Clothing Limited v. The Assistant Registrar of Track Marks ([2009] IPAB 136) Application for registration of ‘CONTRA FORMATS’ for clothing was refused. Contra means against. ‘Formals’ meaning an evening or formal dress. The mark as a whole indicates to clothing in casual (not formal) wear. The quantum of use prior to the date of application is not sufficient to make the mark distinctive. It was held that ‘CONTRA FORMALS’ is a descriptive word and thus the appeal was dismissed.

In other case Lincoln Global, Inc. v. The Deputy Registrar of Trade Marks, the Application filed for the mark METASHIELD in respect of arch welding electrodes in class 9. The Appellant argued that the mark was registered in many countries. It was held that it cannot be ascertained under what facts and circumstances the registration was granted to the mark in other countries and that cannot be made applicable in this case in India. The mark is descriptive and was refused registration in the interest of the public at large and to maintain the purity of the Register of Trade Marks as the mark was not capable of distingnishing the Appellant's goods from those of others.

In other case of Hindustban Development Corporation Ltd. v. The Deputy Registrar of Trademarks (AIR 1955 Cal. 519) the Hindustan Development Corporation Ltd. Made an application to register the mark “RASOI” in respect of hydrogenated coconut oil. The mark was used by them for less than two years before the filing of the application; it was held the Application was refused on the grounds that the word “RASOI” in its ordinary significance meant ‘cooking, cookery and kitchen, dressed or cooked food’. As applied to hydrogenated oil, the word had a direct reference to the character and quality of the goods. The evidence of the user adduced by the applicants was not sufficient to establish that the made had become distinctive. Even otherwise, the word was such that no amount of evidence could show that it had lost its primary meaning and become adapted to distinguish. Even if distinctiveness had been established or was not required, registration of such a common word of the language which others may also legitimately require ought not to be allowed. The appeal was accordingly dismissed.

In other case of Power Control Appliances v. Sumeet Machines Pvt. Ltd., (1994) 2 SCC 448. It is a settled principle of law relating to trade marks that there can be only one mark, one source and one proprietor. It cannot have two origins. In other case of National Bell Co. v. Metal Goods Mfg. Col (P) Ltd., (1970) 3 SCC 665) it was held the distinctiveness of a mark is relation to the goods may be lost in a variety of ways, e.g. by the goods not being capable of being distinguished as the goods of the proprietor.

14. The respondent has made submitted their submissions rebutting the claim of the applicant that the mark ‘CUSTARD’ of Respondent No. 1 is an inherently distinctive mark which bears no direct and immediate reference to the goods for which it is used/registered i.e. “cakes”. It is submitted that a trade mark can only be considered descriptive if in exclusively consists of marks or indications which describe the goods covered under the trade mark. Such connection must thus be exclusive and direct. In support of the said contention, the respondent has placed a reliance i on the following extract from Law of Trade Marks & Passing Off by P. Narayanan, Sixth Edition.

“What is capable of distinguishing is a matter of interpretation. Marks which have only an indirect reference to or are suggestive of the character or quality of the goods may be considered as being capable of distinguishing if not row, in the near future by actual user. Ultimately, what degree of capability to distinguish is required is a question of fact and degree depending upon the pacts of each case.”

15. The respondent has place further reliance on the following judicial principles in support of the contentions which vividly enunciate the principles which determine descriptiveness of a trade mark:

In the case of A.K. Khaleel v. Registrar of Trade Marks, AIR 1962 Kant. 122, while examining descriptiveness of the mark ‘SPEED MASTER’ with respect to time pieces and watches, it was observed by the Hon'ble High Court of Karnataka held that the word ‘SPEED MASTER’ did not have direct reference to the character or quality of the goods (watches) and was therefore a registerable trade mark. It was further held that the Court was concerned only with the ordinary meaning of the words and special or specific use of the word must be disregarded; that a mere suggestive significance in connection with the goods would not render it inappropriate for use as a trade mark; that the test was the imagination involved in the suggestion, that is whether the suggestion was so close and direct that it was apparently descriptive or so remote an subtle that it was fanciful and not needed by other merchants; that one had to look at the word not in its strict grammatical significance, but as it world represent itself to the public at large who were to look at it and to form an opinion as to what is connoted. (Keystone Knitting Mills TM (1928) 45 RPC 421 at 426); that such a question was a practical question to be decided by the common understanding of the term amongst those who use it and not by what might be recondite meaning to be found in dictionaries (Rasoi Cased AIR 1955 Cal. 519 to 521); that prima facie, the Register was created for he purpose of enabling Trade Marks to be upon it; and that it would be very unfortunate if bonafide and honest application for Trade Marks were to be refused on grounds which were fanciful and which, in a business sense, were unsubstantial.

In the other case of People Interactive (India) Private Limited v. Vivek Pahwa, 2016 (6) ABR 275, while defining a suggestive mark, it was held by the Hon'ble Bombay High Court that “These marks only hint at a feature or a specialty. The consumer must, in his mind, make the necessary link between the word and the goods. This class of expression requires no proof of acquisition of a secondary meaning to proceed to registration.”

16. The respondent has submitted that in light of the of the aforesaid contentions and judicial principles it is submitted that the word ‘CUSTARD’ does not bear any direct or exclusive reference to the goods with respect it is used/registered and is therefore prima facie distinctive of the goods of Respondent No. 1.

17. It is further submitted that the Respondent No. 1 has been continuously and extensively using its mark ‘CUSTARD’ with respect to its goods of interest since as early as the year 2003. The said mark is presently in use in several countries of the world. The Respondent No. 1 has already submitted substantial documentary evidence showing continuous use of its said trade mark, since as early as 2003 along with its Counter Statement filed in the year 2014. It is therefore submitted that the mark has acquired distinctiveness through significant and continuous use and is now exclusively associated with the goods of Respondent No. 1, as such the mark ‘CUSTARD’ of the Respondent No. 1 is not only an inherently distinctive mark but has also acquired distinctiveness through open, continuous and extensive use since as early as 2003.

18. The registrations of the trademark ‘CUSTARD’ vide application No. 1444980 of the Respondent No. 1 is therefore a valid registration and must not be expunged from in the Trade Marks Register. It is submitted that cancellation of the aforesaid registration will cause irreparable loss and injury to the business of the Respondent No. 1. The Respondent No. 1 reiterates and reaffirms the contents of its prayer in the Counter Statement.

19. After going through the documents submitted by the respective counsels, in our considerable opinion the applicant has a bonafide case the mark ‘CUSTARD’ is commonly used in the trade and indicates the quality and characteristic of the goods on which the said mark is applied and word custard is indicative of the nature, quality and character of the goods namely “Chocolates, Biscuits, Cookies, Crackers, Wafers, Confectioner), Corn Chips, Bread Pastries, Cakes, Pies, Puddings, Sherbets, Ice Creams, Candy, Caramels, Chewing Gum (not for Medical Purpose)” applied by the Respondent. As such the trade mark ‘CUSTARD’ registered by the Respondent is liable to be dismissed being in violation of Section 9(1)(b) 9(1)(c), (2)(a) of the Act.

20. Further, in our considered opinion even the Registrar of Trade Marks has granted registrations to the marks by appending condition of disclaimers against the exclusive right over use of the term ‘CUSTARD’ for the registered trademarks. Even though the Respondent has obtained registration of the trade mark ‘ORION CUSTARD’ under No. 2705684 in class 30 registered and are valid up to 25/03/2024. This shows that the Applicant has a genuine concern and objection to registration of the term ‘CUSTARD’ per se by the Respondent.

21. We are tending to agree with the citation referred by the applicant in the case of Hindusthan Development Corporation Ltd. v. the Deputy Registrar of Trademarks (AIR 1955 Cal. 519) the Hindustan Development Corporation Ltd. Made an application to register the mark “RASOI” in respect of hydrogenated coconut oil. The mark was used by them for less than two years before the filing of the application; it was held the Application was refused on the grounds that the word “RASOI” in its ordinary significance meant ‘cooking, cookery and kitchen, dressed or cooked food’. As applied to hydrogenated oil, the word had a direct reference to the character and quality of the goods. The evidence of the user adduced by the applicants was not sufficient to establish that the mark had become distinctive. Even otherwise, the word was such that no amount of evidence could show that it had lost its primary meaning and become adapted to distinguish. Even if distinctiveness had been established or was not required, registration of such a common word of the language which others may also legitimately require ought not to be allowed. The appeal was accordingly dismissed.

22. In the instant case the respondent has obtained the registration of the trademark ‘CUSTARD’ vide application No. 1444980 in class 30 for the goods Chocolates, Biscuits, Cookies, Crackers, Wafers, Confectionery, Corn Chips, Bread Pastries, Cakes, Pies, Puddings, Sherbets, Ice Creams, Candy, Caramels, Chewing Gum and the word ‘CUSTARD’ is descriptive and the generic name for the goods in class 30 and such use is common to the trade. Apart from it is a dictionary word of ordinary and descriptive usage, so it is not capable of distinguishing the goods of the Respondent from any other person. The mark is incapable of acquiring a distinctive character by any amount of use, whatsoever and the mark ‘CUSTARD’ wrongfully reregistered in the name of the Respondent is devoid of any distinctive character and not capable of distinguishing its goods or services from any other person in the course of trade.

23. Further the mark ‘CUSTARD’ is commonly used in the trade and indicates the quality and characteristic of the goods on which the said mark is applied, and wood custard is indicative of the nature, quality and character of the goods qua “Chocolates, Biscuts, Cookies, Crackers, Wafers, Confectionery, Corn Chips, Bread Pastries, Cakes, Pies, Puddings, Sherbets, Ice Creams, Candy, Caramels. As such the trade mark ‘CUSTARD’ registered by the Respondent is liable to be dismissed being in violation of Sections 9(1)(b), 9(1)(c), (2)(a) of the Act. As such the registration of the impugned trademark ‘CUSTARD’ vide application No. 1444980 in class 30 remains on the register without sufficient cause thus the existence of the impugned entry in the Register of Trademarks affects the purity of the Register of Trademarks.

24. Keeping in view of the extensive submissions made herein above by the respective counsels, we are of the considered opinion that the mark is incapable of acquiring a distinctive character by any amount of use, whatsoever and the mark ‘CUSTARD’ wrongfully reregistered in the name of the Respondent is devoid of any distinctive character and not capable of distinguishing its goods or service from any other person in the course of trade thus the impugned registration of trademark application No. 1444980 in class 30 in contrary to the provisions: of Sections 9(1)(b), 9(1)(c), (2)(a) and section 18 of the Act. The registration of the impugned trademark application No. 1164072 for ‘CUSTARD’ in class 30 remains on the register without, sufficient cause thus the exists No. 1444980 hence of the impugned entry in the Register of Trademarks affects the purity of the Register of Trademarks.

Order as no cost.