Delhi HC bars Zydus Wellness from using brand name Sugarlite

A division bench comprising of Justice Manmohan and Justice Saurabh Banerjee observed that not only the competing marks were identical, the respective products were also allied and cognate products as they are procured from the same source in the market and sold over the counter to almost the same class of purchasers. Hence, there was a likelihood of confusion in the minds of general public.

Delhi Marketing, a Delhi-based firm, marketing and selling its products under the brand name Sugarlite, reached out to the Delhi High Court in 2021. In 2020, Delhi Marketing had filed a suit against Zydus, which was marketing stevia-based sugar under the brand name ‘SugarLite’, before Patiala House District Court.

In its written statement, Zydus had contended to be dealing in health and wellness products under various trademarks and that it had honestly and bona fidely coined the word „SugarLite‟ which was an extension of its already registered trademark „SUGAR FREE‟ and also that it was visually and structurally different from that of the Delhi Marketing and further the competing marks were used for different class of goods as the trademark „SUGARLITE‟ of Delhi was for milk/ dairy products falling in Class 29 whereas the impugned mark „SugarLite‟ of Zydus Wellness was for sugar sweetener, a blend of sugar and stevia, falling in Class 30.

Relying on Vishnudas Kushandas v. Tah Vazir Sultan Tobacco Ltd & Anr6 and Nandhini Delux v. Karnataka Cooperative Milk Producers Federation Limited7, Zydus further stated that Delhi Marketing cannot have monopoly over the entire Class and that there was a delay in filing the suit.

Ruling in favour of Zydus, the learned Trial Court dismissed the interim application of Delhi Marketing. However, after an interim injunction was declined by the district judge, in 2021 Delhi approached the Delhi High Court Division Bench challenging the order of refusal of interim injunction.

Delhi submitted that the learned Trial Court has erred in observing that Zydus "coined" the impugned mark „SugarLite‟ in 2018 and also that the competing marks are not deceptively similar as the competing goods are not totally different and are being sold together and further that the visual appearance of the competing marks is different.

Meanwhile, the counsel for Zydus contended that Delhi was not the owner of the trademark „SUGARLITE‟ and that Zydus coined the word „SugarLite‟, which was an extension of its prior registered trademark „SUGAR FREE‟ and that the conflicting marks being different are anyways used for different class of goods and that there was delay in institution of the suit by appellant.

After hearing the contentions, the Court noted that;

"Delhi Marketing is the recorded registered proprietor of the valid and subsisting trademark „SUGARLITE‟ in Class 29 and Zydus, despite knowledge thereof, instead of challenging the same approached Delhi's predecessor (Kwality Limited4) in April 2018 for negotiations and thereafter upon failure of talks, filed an application for registration of the impugned mark „SugarLite‟ in Class 30 to which Delhi filed pre- publication objections."

The court also clarified that the products involved in Class 29 and Class 30 are somewhat similar, being allied and cognate products and as they are generally procured from the same source in the market and sold over the counter to almost the same class of purchasers, there is all likelihood of confusion in the minds of the general public in assuming that the two competing marks are emanating from a common source of origin.

Further, the court did not agree with the finding of the learned Trial Court that the impugned mark „SugarLite‟ was "coined" by Zydus. It observed;

"Zydus, despite having variants of its registered trademark „SUGAR FREE‟, adopted „SugarLite‟ in Class 30, that too after failure of talks with the predecessor of Delhi. Facts also reveal that there is no plausible reason given by Zydus for such adoption, either before the learned Trial Court or before this Court, much so, whence Zydus adopted an already existing, identically similar and deceptive mark which was visually, phonetically and structurally as that of Delhi despite knowledge thereof."

It added in its observation that;

"Zydus knowingly took a big calculated risk in adopting an identically similar mark „SugarLite‟ as that of the registered trademark „SUGARLITE‟ of Delhi despite complete knowledge of its existence since before. Having done so, Zydus is estopped from contending something which is far from reality."

Subsequently, the Court, being in agreement with the contentions raised by senior counsel for Delhi, held;

"The learned Trial Court has arbitrarily, capriciously and perversely, completely ignoring the documents on record, passed the impugned order against the settled principles of law. In view thereof, this Court is not in agreement with either the reasoning or the findings in the impugned order as they are not plausible."

"Accordingly, for the afore-going reasons, this Court has no hesitation in allowing the present appeal, along with application, if any, and setting aside the impugned order dated 8th January, 2023 of the learned Trial Court, leaving the parties to bear their own respective costs."

The court, among its several observations mentioned that the case also needed interference by the appellate court due to patent illegality in the order of the Ld. Trial Court.

To view the original order, click on the link below:

https://indiankanoon.org/doc/78461704/