Starbucks v. Sardarbuksh coffee & co.

Introduction

Starbucks Corporation vs. Sardarbuksh Coffee and Corporation is a landmark trademark case. In this case, the plaintiff argues that their intellectual work logo and idea are copied and come under the trademark. A trademark is a specified thing, like phrases or logo designs, of a specific company to provide goods and services that are identified by the customers. For example, the logo of a different brand on a mobile phone, like a half-eating apple, is the logo of the brand Apple.

Facts about case

Starbucks Corporation is the plaintiff, and Sardarbuksh Coffee Corporation is the defender of the case. Starbucks is a brand known for its coffee globally and has multiple branches in different countries. Sardarbuksh is also a coffee place situated in Delhi and has multiple outlets. It was established in 2015, and the name and logo of this company were similar to those of Starbucks, from the color of the logo to the shape of the logo, which was round. When both logos were compared, they looked similar, even though the goods and services provided by both were similar. The name of the corporation also sounded identical.

In 2017, Starbucks sent a letter of demand to Sardarbuksh, which said trademark infringement of Starbucks because of this defender changing the color of the logo and taking necessary action to change the logo but not changing the name of the company. In 2018, Starbucks filed a case in the Delhi High Court against Sardarbuksh, saying that it sounded similar to Starbucks.

The issue of the case

The issue of the case was whether the Sardarbuksh was similar to Starbucks. Whether it was a trademark infringement of Starbucks.

Laws Related to the Issue

Section 2(1)(h) of the Trademark Act of 1999 describes “deceptively similar” as if a mark is so similar to another mark and creates confusion that they deem it distinct and deceptively similar.

Section 11 of the Trademark Act of 1999 tells about the grounds on which registration can be refused.

11(1) Registration can be refused if the trademark covers similar goods and services provided earlier under an identical trademark.

11(2) a trademark that is similar to the earlier one and to be registered for goods and services that are not the same as the earlier trademark and registered in any other person’s name.

11(3) Registration will not be given if a trademark is prevented and can claim copyright.

11(4) Nothing in this section can prevent the registration of a trademark if the owner of an earlier trademark gives consent for registration. In such a case, registration will be under special circumstances under Section 12.

11(5) A trademark shall not be refused registration on the basis of subsections (2) and (3), unless any objection is raised by the proprietor of the earlier trademark on those grounds.

11(6) It shall be determined by the registrar that a trademark is well known and take into account any fact that he considers relevant for determining whether it is a well-known trademark.

11(8) If a trademark is determined to be well known by at least one relevant section of the public in India by a court or registered, then the trademark shall be considered well known for registration.

11(9) condition is not required by the registrar for demanding a well-known trademark if it is well known, has been registered, or an application for registration is filed in India.

11(10) It ensures the protection of a well-known trademark from an identical or similar trademark; it also considers bad faith involved in any side effects relating to the trademark.

History of trademark laws

Before 1940, there was no provision for trademarks, in India. The first trademark act was established in 1940 in India for the registration and protection of trade and trademarks, but this act was repealed by the Trade and Merchandise Act in 1958. In 1999, the New Trademark Act of 1999 was established, and it came into effect in 2003. Since then, laws regarding trademarks have undergone significant revisions. Some of the provisions of unregistered trademarks are codified, while others still depend on civil law and court rulings. This Act is complicated because of the long sections of cross-reference made to save the public or other traders from harassment by the owner of registered trademarks.

Many important parts of the act have been cleared by judicial interpretation, but some portions still have to be subjected to judicial inspection. Apart from making the provision simpler and more effective, several additional rules were added to the Act of 1999 for the benefit of both trademark owners and consumers of goods.

Need for trademarks

The need for a trademark is important as it helps to differentiate between the brands and also gives the owner of the trademark the right to stop someone from profiting from their brand. A trademark sets the line between the goods and services of one company and another so that consumers can easily identify or pinpoint a company.

Similar cases

Coca-Cola v. Bisleri International Pvt. Ltd.

On September 18, 1999, Bisleri International Pvt. Ltd. sold property rights, formulation rights, and trademarks to brands such as Thumbs Up, Maaza, Citra, Limca, and Gold Spot. In 2008, the plaintiff filed an application for registration in Turkey for the trademark Maaza. When the defendant got the information, he sent a legal notice to the plaintiff, stopping him from further production of the trademark and also terminating its use of the trademark. This case was filed in the Delhi High Court, and it restricted the sale of maaza by Bisleri in India and the past order of injunction against Bisleri, preventing them from using trademarks in India and exporting merchandise. The appeal filed by Bisleri was also invalidated by the court.

It was also held that Bisleri still had all the right to sell its goods in other countries, but it was stopped from being forced to sell in India because it had the trademarks of Maaza all over other countries and Coco-Cola only held trademarks in India.

A trademark is one of the major aspects of business, and it contains a brand name and use that cannot be copied by anyone.

Parley Products Ltd. v. J.P. & Corporation

Both parties were producers of the biscuits and confectionery and had their registered trademarks. The appellant connects the sale of their business with wrappers, which are their trademark. The wrapper contained the name “parle glucose” in the 1961 appellant's knowledge about the respondent's biscuit wrapper, which was deceptively similar to their trademark. According to the responses, many differences are present in both wrappers. Both wrappers contain pictures of a girl having a bundle of grass in her hand and carrying a reaping hook, which is supported by one hand, and food in the other hand.

In this case, the District Court said there are many differences rather than similarities between both wrappers. The High Court said, there were some different and similar features between the wrappers. Both the wrappers were partly yellow and white, and both contained distinguishing designs of girls and some birds in similarity. The lady in the appliance wrapper has a pot in her hand and two calves in the back, whereas the Lady in the respondent wrapper has a grass bundle on her head and a cow in the back.

The Supreme Court held that it is an act of infringement and the rights of the plaintiff are violated if the marks of the plaintiff and defender match or are close if both are put side by side. The court stated that the shape and color of the wrappers are the same for biscuits; the identical design of both can be easily mistaken; even the constitutive feature of the wrappers of both packets is similar, so the verdict given by the court was in favor of the plaintiff, and it made it clear that a trademark cannot be deceptively similar.

How does this matter in the present case?

In Starbucks Corporation vs. Sardarbuksh Coffee and Corporation, the trademarked word is deceptively similar, and the logo design and name of the companies also sound similar. The case stated above is a landmark in the concept of deceptive similarity. This case gives distinctness related to the infringement of a trademark due to deceptive similarity and also acts for future reference.

Judgment

The court set a different test to prove the deceptive similarity from this onwards after referring to the judgment of the past. The test was like likelihood, confusion, goodwill, and so on the court, taking reference from National Serving Thread Co Ltd. v. James Chadwick and Bros, where it held that deceptive similarity can only be determined by taking into consideration consumer presumptions that if ordinary men are confused within two brands while differentiating, then they will be considered as this deceptively similar. In this case, the court gave the decision in favor of Starbucks and ordered Sardarbuksh to change the name from the business to Sardarbuksh Coffee and Corporation. On September 27, 2018, all the outlet's names changed to Sardarji Bakhsh Coffee and Corporation. It was also held that the defender can file a suit of infringement if any third party uses the term Bakhsh in the future.

Conclusion

In this case, essential guidelines were laid down when a trademark is deceptively similar to another. It encourages the registration of trademarks, if a trademark is registered, no third party can copy or make a deceptively similar trademark, which violates the rights of the trademark owner.

References:

1. Starbucks v. Sardarbuksh coffee & co. CS(COMM) 1007/2018
2. Coca cola v. Bisleri International Pvt. Ltd. 2009 SSC online Del 3275
3. Parley Product Ltd. V J. P & co Mysore 1972 AIR SC 1359
4. The Trademark Act, 1999 (47 of 1999) amended by The Finance Act, 2017

Disclaimer: The author affirms that this article is an entirely original work, never before submitted for publication at any journal, blog, or other publication avenue. Any unintentional resemblance to previously published material is purely coincidental. This article is intended solely for academic and scholarly discussion. The author takes personal responsibility for any potential infringement of intellectual property rights belonging to any individuals, organizations, governments, or institutions.

About the Author: Priyanshi Lekhwar is a first-year BA.LL.B student at Vivekananda Institute of Professional Studies, Pitampura, New Delhi.