ITC v. Nestlé, Magic Masala & Secondary Meaning Challenges
A recent Madras High Court ruling stokes some interesting conversations around the application of common word trade marks to food products.
The Claim
June 10’s Madras High Court judgment in ITC v. Nestlé India arrives well overdue on a 2013 case. In it, ITC claims the right to restrain Nestlé from using the words MAGIC MASALA. The two companies are direct competitors in the instant noodles trade.
There is a lot of live evidence in play in the 112-page opinion. I focus here only on the details that influenced the Court’s decision.
The Court finds for Nestlé. The overall deceptive similarity claim is on thin ice to begin with, since the packaging and distinctiveness of the header brands (ITC’s ‘YIPPEE!’ and Nestlé’s ‘MAGGI’) are sufficient to foreclose the possibility of passing off. This is clear from a comparison of the packaging:
The Secondary Meaning Problem
This means, therefore, that ITC’s claim is concentrated on its deployment of the words MAGIC MASALA as a proto-descriptor for its brand of instant noodles. The contrast is with Nestlé’s similarly intentioned use of MAGICAL MASALA on its own brand of instant noodles. (Strictly speaking, the case compares MAGIC MASALA with MAGICAL MASALA. With this understanding, I use MAGIC MASALA to indicate the use of the phrase, for the sake of clarity.)
The principal fault with the claim lies in its inability to access the security of what Indian law recognizes as secondary meaning. Simply put, a descriptive trade mark can distinguish its proprietor and products or services under it if its proprietor can bring proof that the trade mark has, over a period of time, become distinctive through use, to the exclusion of others. This acquistion of distinctiveness i.e. the invocation of an association between the ordinary words that comprise the trade mark and its proprietor — a secondary meaning, in addition to the primary meaning of the words themselves — is key.
The difficulty with ITC’s claim here is the considerable doubt over both these elements.
In the Court’s terms, ITC needed to demonstrate, first, that they exercised “long [and] arduous uninterrupted use” over the MAGIC MASALA trade mark. This presents a challenge since ITC’s own claim to the trade mark goes only as far back as 2010, set against Nestlé’s first use which dates to 2013. Acquiring distinctiveness across this abbreviated a period is not unknown, but the odds are against it happening.
The Court’s survey of trade mark law also requires ITC to show that its adoption and use of MAGIC MASALA is unique, to the exclusion of others in the market. This claim is undercut by some impressive legwork by Nestlé, which identifies that the words ‘MAGIC MASALA’ are in use by several food brands. A dozen or so of these — including, most prominently, Lay’s Magic Masala for potato chips — would fit comfortably inside the deceptive similarity strictures sought to be imposed on Nestlé here.
There is a further complication. Nestlé is able to summon evidence of its use of the word ‘MAGIC’ in brand names far preceding ITC’s use of MAGIC MASALA. This feeds into an elaborate but slightly confusing sub-argument. I understand it as this: Nestlé claim use over MAGIC mainly in conjunction with their lead brand MAGGI, as a series for food product trade marks (‘MAGGI MAGIC’). Presumably, the suggestion is that the deceptive similarity comparison between ITC’s trade mark and Nestlé’s MAGGI MAGIC MASALA should see the latter as a rendition of the MAGGI MAGIC series (MAGGI MAGIC + MASALA) rather than a standalone use of MAGIC MASALA (MAGGI + MAGIC MASALA).
The Finding
Understandably, the Court takes the path of least resistance.
Relying on evidence, it finds, generally, that MAGIC is commonly used in the food industry. It finds, further and more specifically, that MAGIC MASALA was first adopted by neither party to this suit but by Lay’s for potato chips. These findings dissipate ITC’s uniqueness claim over MAGIC MASALA. The Court concludes, unexceptionably, that ITC’s use of MAGIC MASALA “was inspired [both] from the common words ‘Magic’ and ‘Masala’…[and] from other products in the [food] industry.”
This still leaves in hand ITC’s claim that it was the first to apply the MAGIC MASALA trade mark to instant noodles in India.
This claim is acknowledged as true by the Court —ITC’s 2010 adoption would undoubtedly qualify as prior use over Nestlé for this purpose. However, the Court’s discussion on this claim, disappointingly, goes nowhere. Instead, the Court stitches together two bits of evidence which faintly support Nestlé’s position.
First, it extricates Nestlé’s use of MAGIC MASALA from the disqualification of mala fide adoption. It does so by stating that the influences of Nestlé in adopting the phrase were likely similar to the factors that nudged ITC to adopt the same phrase. Second, the Court finds use of the word ‘MAGIC’ by Nestlé in relation to food products going back to 1986. It concludes that “no reason or explanation is forthcoming” from ITC to explain away this adoption. Neither is an affirmative finding of evidence; both are, instead, arguendo claims that ITC is unable to satisfactorily respond to. (Both claims are tied together by the assertion that nothing in the phrase MAGIC MASALA is inherently adapted to distinguish instant noodles — a point which, of itself, probably merits more discussion than the evidence on the issue.)
Finally, the Court does well to conclude that no unique claim over MAGIC MASALA is sustainable for either ITC or Nestlé. It does so in the following words:
“It would unfair to take a view that two common English and Indian words MAGIC and MASALA respectively or when together which are common to the trade former being laudatory had become distinctive of [ITC’s] ‘Sunfeast Yippee! noodles’ so much so that the expression MAGIC MASALA had transcended itself to the status of a sub-brand. Even in an ephemeral sense, the expression MAGIC MASALA cannot be said to have became distinctive as it is common to the trade.”
This is probably the Court’s clearest articulation of its two best findings: first, that the issue before it is of a pointed category of transcendent sub-brands which are generic in all but name; and second, that the resolution of such claims, absent any standout claims of distinctiveness, must lie in closing off a trade mark monopoly to either.
Significantly, the decision — quite literally at times — carries the weight of detailed evidence. That should offer it some leverage and credibility over prima facie interim injunction rulings involving food product trade marks, a category of cases to which recent history has been ambivalent, if not unkind.
In this light, the adjustments made by the Madras High Court to account for suggestive and descriptive elements of brand names, secondary meaning and for ‘transcedent sub-brand status’ are all of high quality. It is, in many ways, reminiscent of a similar set of adjustments made by the Godfrey Philips Supreme Court in 2004, at a time where secondary meaning was only just breaking into India’s trade mark law consciousness.
This is, to be clear, an impression of reminiscence, not of comparison. The hope is that future courts can lean on ITC v. Nestle to sprinkle some Magic Masala on secondary meaning discussions as and when they arise.
(H/t Rudrajyoti Nath Ray whose summary brought this case to my attention.)
