The Coca-Cola Company v. Bisleri International Pvt. Ltd [MANU/DE/2698/2009]
The parties to this case contended on infringement of trademark within and outside the jurisdiction where the brand trades.
It throws into the limelight on the jurisdictional boundary of trademark and what amounts to an infringement if one should go beyond such boundary. From the decision of the court, one can deduce that the proprietor of a trademark has both local and international intellectual property rights over his or her name.
The Delhi High Court argued that for an infringement to exist there must be a threat of such existence to the aggrieved party. The court will consider such existence and rule on it.
The Facts of the Case
The Plaintiff is the Coca-Cola Company which owns the largest brand of soft drinks in over 200 countries.
The company grants licenses to the franchise to operate, bottle and sell their brands. The Defendant, on the other hand, was a subsidiary in a group of industries and on 18 September 1993 through a Master Agreement sold to the Plaintiff its IPR on varying products such as Limca, Citra, Gold spot, Thums up, and MAAZA.
The IPR included the trademark, know-how, formulation rights, and goodwill.
- By 12 November 1993, the Plaintiff and the Defendant signed a Deed of Assignment assigning and transferring the trademark in MAAZA to the Coco-cola company for a consideration of One Million US Dollars.
- The Deed of Assignment assigned the Goodwill for a consideration of $50,000 USD.
- The Know-how was transferred for a consideration of $1,000,000 USD.
- A Confidentiality, Non-use and Non-compete Agreement was signed with the Plaintiff, Defendant, Mr. Ramesh Chauhan, his wife and both (the owners of the secret formulae base for MAAZA) for a consideration of $1,000,000 USD.
- The Agreement on License with Bisleri formerly called Golden Agro Products Pvt. Ltd was also signed.
- An Agreement on relinquishment and compensation of franchise rights was also signed.
- Finally, in October 1994, the License Agreement for the total and permanent transfer of all IPR to the Plaintiff forever was executed by all parties.
The Plaintiff thereafter filed to register the Trademark on MAAZA in March 2008 in Turkey. The Defendants became aware on 7 September 2008 and initiated a legal action to repudiate the Agreement.
The defendants relied on the notion that the Agreement signed was for use of MAAZA only in India and not for export purposes. The defendant also intended to start using the MAAZA trademark which they have licensed forever to the Plaintiff in India.
The Plaintiff subsequently filed a lawsuit.
The plaintiff and the Defendant raised the following issues:
- The Plaintiff sued for a permanent injunction to refrain the Defendant and other related parties from infringing on the trademark.
- The Plaintiff asked for damages for passing off by the defendants.
- The Plaintiff contended that the Defendant ignored the terms of the Deed of Assignment pertaining to total transfer and assignment of IPR, trademarks, know-how, and formulae to the plaintiff.
- The Plaintiff argued that they have the sole and exclusive usage rights to the trademark to the exclusion of others within and outside India.
- The Defendant, on the other hand, contended that the Plaintiff was only authorized to use the trademarks, IPR, know-how, and formulation in India and not outside India.
The Court held the arguments on those sides and decided as follows.
First, a Deed of Assignment is a legal and binding Agreement between parties to a contract. The terms of the contract can only be repudiated or canceled if the parties act contrary to what is stipulated.
Hence, the aggrieved party can sue for damages. In the instance, the defendant signed to convey, transfer and assign all IPR and its related rights pertaining to the MAAZA trademark to the plaintiff. These rights are absolute and as such the defendant has no claim or no right to cancel or repudiate the contract.
The day the defendant signed the Agreement was the day he transferred the entirety of his rights to the exclusion of every other to the Plaintiff.
Second, the Plaintiff in forever owning the trademark can decide on what to do with it however they want. They must not inform the defendant either will they obtain permission to make use of the trademark.
Third, the Plaintiff has the right to register the trademark conveyed on them within and outside India. In the eyes of the law, they are the assigned proprietor of the trademark, know-how, formulation, goodwill, etc. The defendant has no standing in law to register the trademark in another country or repudiate the Agreement.
Fourth, the defendant signed confidentiality and a Non-compete Agreement which meant that they cannot use, sell, offer, assign, or convey the formulae, trademark, etc. to another person.
They are bound by the Agreement to cease and desist from carrying out any action which may infringe on the trademark. As such, by offering it to another person, they were infringing on the trademark and also passing off.
The actions of the defendant pertaining to the trademark are covered by section 26 of the Trademark Act, 1999.
In the end, the Plaintiff, Coca-Cola won the case against Bisleri and the court awarded a temporary injunction against the defendant.
Trademark is one of the various aspects of Intellectual Property. It covers brands, names, business related concepts, etc. the law adduced that an infringer of this IP must be a person who creates a similar name or identical concept of another brand or name to deceive people into believing or thinking they are the same.
Passing Off is simply portraying a name or brand as what it is not.
From this case, it can be seen that the Trademark is a global phenomenon and protects the proprietor across boundaries.
Also, it does not matter that the name was assigned in one country and registered in another, once there is an assignment conferring and assigning the rights in its entirety, it can be registered anywhere.