Trade Marks — Prior user — Section 34, Trade Marks Act, 1999 — Scope
Registered proprietor not entitled to restrain honest prior user — Evidence established that defendants commenced use of mark “Mountain Dew” for packaged drinking water in India from year 2000 — Plaintiffs commenced use in India only in January 2003 — Prior user rights protected notwithstanding registration in favour of plaintiffs — Injunction rightly refused.
[Paras 16, 23–26]
Trade mark infringement — Registration — Not absolute
Registration under Trade and Merchandise Marks Act, 1958 / Trade Marks Act, 1999 confers statutory rights subject to limitations — Registration does not defeat superior rights of prior user — Trial Court justified in declining relief for infringement despite registration.
[Paras 16, 26–28]
Passing off — Prior user — Honest concurrent use
Defendants established continuous and bona fide use of mark “Mountain Dew” in relation to packaged drinking water — Plaintiffs failed to prove dishonest adoption by defendants — Passing-off action by registered proprietor not maintainable against prior user.
[Paras 16–17, 25–26]
Trans-border reputation — Proof — Insufficiency
Global reputation of mark not sufficient — Plaintiffs failed to establish spill-over reputation in India prior to defendants’ adoption in 2000 — Mere foreign advertisements and reputation abroad insufficient to dislodge established Indian prior use.
[Paras 16, 18–19, 23]
Trade mark — Allied and cognate goods — Distinction
Plaintiffs’ product “Mountain Dew” was carbonated soft drink — Defendants’ product was packaged drinking water — Plaintiffs marketed packaged water under different mark “Aquafina” — Likelihood of confusion not established.
[Paras 16, 23–24]
Copyright — Label and colour scheme — No infringement
Use of blue and white colour scheme and mountain device insufficient to constitute copyright infringement — Overall dissimilarity in labels — No copying of original artistic work proved.
[Paras 16, 26]
Damages — Trade mark infringement / passing off / defamation — Proof
Claims for damages require strict proof — Plaintiffs failed to establish loss or wrongful gain — Defendants’ claim for damages based on alleged defamatory newspaper publications also not proved — Damages rightly refused on both sides.
[Paras 17, 20]
Cross-objections — Inconsistent pleas — Effect
Defendants having succeeded on prior user defence could not simultaneously claim injunction against plaintiffs for passing off — Trial Court correct in refusing injunction in defendants’ suit — Cross-objections dismissed.
[Paras 17, 20]
ANALYSIS OF LAW AND FACTS
1. Nature of Proceedings
The appeals and cross-objections arose out of O.S. No.95 of 2004 (filed by PepsiCo for infringement, passing off and damages) and O.S. No.19 of 2004 (filed by Magfast Beverages for injunction and damages). Both suits were dismissed by the Trial Court by judgment dated 31-12-2019, leading to the present appeals.
[Paras 2–6]
2. Plaintiffs’ Case (PepsiCo)
PepsiCo asserted that:
“Mountain Dew” was adopted in 1940 and registered in India from 1985;
the mark enjoyed worldwide and trans-border reputation;
defendants’ packaged drinking water under identical mark caused infringement, passing off, dilution and unfair competition.
[Paras 7–7.11]
3. Defendants’ Case (Magfast Beverages)
Defendants pleaded that:
they commenced manufacture and sale of packaged drinking water under mark “Mountain Dew” in 2000;
PepsiCo introduced “Mountain Dew” in India only in January 2003;
plaintiffs never used “Mountain Dew” for packaged drinking water and sold such product under “Aquafina”;
defendants were honest and prior users entitled to protection under Section 34.
[Paras 11–11.5]
4. Findings on Prior User
The Division Bench upheld the Trial Court’s finding that:
defendants proved earlier commercial use of “Mountain Dew” in India;
plaintiffs’ Indian registration could not defeat prior user rights;
Section 34 squarely protected defendants.
[Paras 16, 23–26]
5. Registration and Infringement
The Court reiterated that:
registration is prima facie evidence of validity;
however, statutory rights are subject to limitations including prior use;
hence, plaintiffs were not entitled to injunction for infringement.
[Paras 26–28]
6. Passing Off and Confusion
The Court found that:
plaintiffs’ water product was sold under “Aquafina”, not “Mountain Dew”;
defendants’ packaged water had independent market presence;
likelihood of deception or confusion was not proved.
[Paras 16, 23–24]
7. Trans-border Reputation
While acknowledging global reputation, the Court held that:
plaintiffs failed to prove reputation in India prior to 2000;
spill-over reputation could not override proven Indian prior use.
[Paras 16, 18–19]
8. Damages and Defamation
Both sides claimed damages. The Court held that:
no cogent proof of loss or wrongful gain was adduced;
newspaper publications did not establish actionable defamation;
refusal of damages to both parties was justified.
[Paras 17, 20]
9. Final Outcome
CCCA Nos.20 & 21 of 2021 filed by PepsiCo were dismissed;
Cross Objections No.32 of 2021 filed by Magfast Beverages were dismissed;
Trial Court’s judgment dismissing both suits was affirmed.
[Paras 17, 20, 26]
Ratio Decidendi
Even a registered proprietor of a trade mark cannot restrain an honest prior user. Registration does not extinguish prior user rights under Section 34 of the Trade Marks Act, 1999, and trans-border reputation cannot prevail over established Indian prior use. Claims for infringement, passing off and damages must fail in absence of proof of deception, dishonest adoption or loss.
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