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Nestle India Limited Versus Mood Hospitality Private Limited

2010 (2) TMI 1254 - DELHI HIGH COURT

F.A.O. (OS) 255/2009 - Dated:- 10-2-2010 - Badar Durrez Ahmed and Veena Birbal, JJ. For the Appellant: Sudhir Chandra, Sr. Adv. Hemant Singh Mamta R. Jha an Manish K. Mishra, Advs For the Respondents: Rajiv Nayar, Sr. Adv., Ashish Wad, Suchinto Chatterji, Chirag Dave, Sameer Abhyankar, Surbhi Aggarwal and Sanjay Samdarshi, Advs. JUDGMENT Badar Durrez Ahmed, J. 1. This appeal is from the order dated 01.07.2009 passed by a learned Single Judge of this Court in IA No. 7040/2008, which was an applic .....

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similar mark thereto or colourable imitation thereof, whether by using the expression by itself or as part of any other mark/name in respect of goods covered by the registration obtained by the respondent. The appellant has also been restrained from, in any manner, using the mark "Yo!" per se or in conjunction with any other logo/mark/letters or any other mark deceptively similar thereto, so as to pass-off or enable or assist others to pass-off their business and products as those of t .....

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onfectionery, ice, honey, treacle, yeast, baking powder, salt, mustard, pepper, vinegar, sauces, spices, ice. 13.08.2005 YO!China (Label) 1194647 32 Beer, ale and port, mineral and aerated waters and other nonalcoholic drinks, syrups and preparations for making beverages 25.05.2005 YO!China 1194648 29 Meat, fish, poultry extracts, preserved dried and cooked fruits and vegetables, jellies, egg, milk and dairy products, edible oils and fats, preserve, pickles. 24.08.2005 3. According to the respon .....

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espondent now claims to have a chain of about 40 such restaurants operating under the mark "Yo! China", spread over 15 cities across India. Apart from these restaurants, it is alleged by the respondent that there are a number of kiosks and take-away points where the respondent's products are sold under the said trademark. According to the respondent, besides being independently registered, the trademark "Yo!' also forms an essential feature of the trade mark, trade dress a .....

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ey are able to have quality Chinese food (particularly chowmein i.e., ready to eat noodles) at reasonable prices. Recently this product offering has been renamed as "Yo! Box". 4. The Respondent claims to have coined and adopted the expression "Yo! China" in the year 2002 in order to distinguish its business, trade identity and products/services from those of others. It is contended by the respondent that today "Yo! China" has become a brand name associated with qual .....

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" (Yo with an exclamation mark) is coined and arbitrarily applied (not being descriptive in nature) by the respondent to its goods and services making it inherently distinctive. 5. The respondent is aggrieved by the fact that the appellant is manufacturing and marketing, inter alia, noodles (chowmein) under the name and style of "Maggi Cuppa Mania" in two flavours "Masala Yo!" and "Chilly Chow Yo!". It is alleged that around April 2008, the appellant launched a .....

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ket segment comprised mainly of young people, which is a time, price and taste sensitive market and which is the prime market of the respondent for its products-"Yo! On the Go" or "Yo! Box". 6. The respondent filed the said suit alleging that the use of the mark "Yo!" by appellant in the same manner as the registered trade mark "Yo!" of the respondent was a clear case of infringement. Moreover, it was alleged that the products of the appellant resemble tho .....

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ss off its products as those of the respondent. 7. The appellant, on the other hand, alleges that it is engaged in the business of manufacturing and selling packaged noodles, under the well known and registered trade mark MAGGI, having an annual turnover of ₹ 493 crores and 91% of the market share in respect of packaged noodles. It is alleged that the trade mark MAGGI is extensively used in India since 1974 for culinary products. The appellant introduced packaged instant noodles in a cup u .....

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alling attention/expressing excitement." 8. The appellant claimed that "Yo!" was commonly used by numerous businesses. As examples of the usage of "Yo!", the appellant has placed on record printouts from various websites of businesses all over the world, which use the said expression "Yo" with or without an exclamation mark. They are-? "Yo! Youth Outlook" which has two further products/services "Yo! Radio" and "Yo! Blogs". The said .....

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here is a chain of restaurants in the U.K, Ireland, Middle East and Malaysia, which carries on business under the name and style-? "Yo! Sushi." Its takeaway service is called "Yo! To Go". It was suggested by the learned Counsel appearing for the appellant that "Yo! China" and "Yo! On the Go", which are allegedly used by the respondent have, in fact, been "more than inspired" by "Yo! Sushi" and "Yo! To Go". 9. Before the learne .....

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tended by the appellant that "Yo!" was used merely as a flavour descriptor and, therefore, did not constitute infringement in view of the provisions of Section 30(2)(a) of the said Act. With regard to the allegation of passing off, the appellant had contended that there was no likelihood of any confusion between the trademarks of the appellant and the respondent. The trademark of the appellant was MAGGI and its packaging employed the distinctive red and yellow combination, which it has .....

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common or popular expression which is used worldwide and which originated as American slang and has been used commonly not only by youngsters in their day-to-day conversation but has also been used by businesses particularly to attract the attention of the younger customers. Consequently, it was submitted that "Yo!" cannot be monopolized by the respondent. It was also suggested that "Yo!" could not have been registered in view of the provisions of Section 9(1)(a) of the said .....

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ere commonly used in the trade for the purposes of brand imaging so as to target the youth. The general use of the expression "Yo!", both in day-to-day conversation and in the trade, clearly established that there was no question of the said expression having lost his primary meaning and having acquired a secondary meaning and, therefore, the respondent could not have any exclusive claim for its use. 10. It was also contended that "Yo!" had been registered in favour of the re .....

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, it was submitted that while the respondent had registrations under Class 30 in respect of the mark "Yo! China", the said registrations were in respect of the whole mark "Yo! China" and not just the mark-? "Yo!". The registered mark-? "Yo! China" would, therefore, have to be taken as a whole and "Yo!" cannot be considered to be a registered trademark insofar as products falling under Class 30, which include the subject noodles, are concerned. Fo .....

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acie, that "Yo!" and "Yo! China" were not descriptive of the respondent's products but were arbitrary marks and that they had acquired distinctiveness through usage since 2002. He observed that, prima facie it appeared that these marks had acquired a secondary meaning insofar as chowmein (noodles) were concerned. A prima facie view was also taken by the learned Single Judge that the respondent's registrations were not liable to be cancelled. Further, that "Yo!&qu .....

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pears" to fall within Section 29(4)(b) of the said Act. The learned Single Judge then relied on the case of Indian Shaving Products v. Gift Pack and Anr. 1998 (18) PTC 698 where the two marks in question were "Duracell Ultra" and "BPL Ultra". Reliance was also placed on the decision in the case of Yahoo, Inc v. Akash Arora 1999 (19) PTC 201 where the dispute was between the names of two websites, namely, "Yahooindia.com" and "Yahoo.com". The learned S .....

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ere connected with those of the respondents. Referring to the decision in Midas Hygiene Industries Pvt. Ltd. and Anr. v. Sudhir Bhatia and Ors. 2004 PTC (28) 121 (SC), the learned Single Judge, observing that clearly an injunction must follow when the adoption of the mark was dishonest, allowed the application of ad interim injunction of the respondent. 12. The impugned order is assailed before us by the appellant on all the grounds urged before the learned Single Judge but, principally, on the .....

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ade mark under Section 2(1)(zb). Reliance was placed on Mothercare U.K. Ltd. v. Penguin Books Ltd. 1988 R.P.C. 113. It was submitted that the whole law of Trade Marks-whether 'statutory law' relating to infringement or 'common law' relating to passing off-is concerned with deception and confusion with regard to trade origin and the use of marks indicating the same. The trade origin of the appellant's packaged noodles is MAGGI which is boldly written on the packaging. It was c .....

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ed for. Hence, a registered trade mark for services is infringed only when used for those services. Otherwise, there was no need for the legislature to add classes 35 to 42 (Services) to the fourth schedule of the Trade Mark Rules. Reliance was placed on Asian Paints Ltd. v. Home Solutions Retail (I) Ltd. 2007 (35) PTC 697 (Bom) (para 5). It was submitted that the mark "Yo!" per se is not registered for noodles which falls in class 30 and that the learned Single Judge ignored this dist .....

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or the appellant that the learned Single Judge erred in holding that the provisions of Section 29(4) and (5) applied inasmuch as this was not even a case pleaded in the plaint. The suit is based on the pleadings that the goods of the appellant and the respondent are the same/similar. A reference was made to paragraph No. 24 of the plaint: 24. It is well settled principle of law that if the essential features of a registered Trade Mark are adopted by the Defendant, then the fact that other writin .....

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to infringement and the plaintiff has a statutory remedy to protect his mark. Further, the fact that the goods/services in question are almost identical, both catering to the same consumer base and both dealing with noodles (chowmein), enhances the chances of confusion. 15. It was further submitted that even otherwise, Section 29(4) did not apply as there was no trade mark usage of "Yo!" and that any other interpretation would render Section 29(1) redundant, which, in turn, would be ag .....

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ation commonly used by the trade and is a generic expression. Consequently, it cannot be considered as a distinctive or a well known trade mark, which is a condition precedent for the applicability of Section 29(4). It was submitted that the Respondent has allegedly used "Yo! China" as a trade mark but, no material has been produced by the respondent to show that "Yo!", by itself, has been used as a trade mark by the respondent or that it has acquired the status of a "we .....

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eceptive similarity for the purposes of an infringement action and a passing off action is the same where the trade marks are not identical. Reliance was placed on Ruston & Hornby Ltd. v. Z. Engineering Co. AIR 1970 SC 1649 (para). The learned Counsel contended that the Learned Single Judge disregarded this test of deceptive similarity. He drew our attention to the appellant's trade mark and packagings and those employed by the respondent to submit that there is no similarity, what to sp .....

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turnover of ₹ 21 crores. Thus, the question of piggybacking or trading upon the goodwill of the respondent by the appellant defies all logic. Reliance was placed on Durga Dutt Sharma v. N.P. Laboratories AIR 1965 SC 980 (para 28). 19. Lastly, it was contended on behalf of the appellant that the reliance placed by the learned Single Judge on Indian Shaving Products Ltd. (supra) and Yahoo Inc. (supra) was wholly misplaced inasmuch as both these were cases of "trade mark usage", wh .....

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of infringement may fall. Each sub-section provides for a different situation and each is independent of the other. It was submitted that, by virtue of Section 29(4), protection is provided to a registered trade mark even if the impugned mark is used for goods and services which are not similar to the goods and services in respect of which the trade mark is registered. It was further submitted that Section 29(4) does not require that the impugned mark has to be used as a trademark. In this cont .....

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be used as a trademark. It was submitted that the appellant is using the mark "Yo!" in the course of its trade by affixing it to the packaging of its products and advertising on all media. Furthermore, the mark "Yo!" is an essential feature of the respondent's mark "Yo! China", meaning thereby that the usage of "Yo!" by the appellant is identical to the registered trademark of the respondent. It was contended that since the respondent's trademark .....

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oposition that if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get-up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences or indicate a trade origin different from that of the registered proprietor of the mark, would be immaterial. 22. Thirdly, it was submitted on behalf of the respondent that the appellant, by using the mark "Yo!" in the cours .....

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o as to enable the appellant to seek protection under Section 30(2)(a) of the said Act. It was submitted that the appellant has been using "Masala" as a flavour descriptor on its regular packaging of "Maggi 2 minutes noodles" for many years. As such, there is no justification for the appellant to use "Yo!". According to the learned Counsel for the respondent, from the above, it is abundantly clear that the appellant was aware of the success of respondent's " .....

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plea of the appellant with regard to it having a 91% market share is of no consequence. Further, whether "Yo!" is used in small or big letters is immaterial as the use itself constitutes infringement. 25. Sixthly, with regard to the appellant's contention that "Yo!" is a generic expression, it was submitted by the learned Counsel for the respondent that even generic, common and descriptive words can be protected if they acquire a secondary meaning. In this context, it wa .....

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d & Beverages (P) Ltd (2004) 5 SCC 257 (para 4). 26. Lastly, it was submitted that in addition to infringing the trademark of the respondent, the appellant is also liable for passing off its products as that of the respondent inasmuch as the trademark "Yo!" had become distinctive of the services and goods offered by the respondent and use of such mark by the appellant on its products was likely to lead to confusion and deception in the minds of consumers that the product of the app .....

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the present case fall under Section 29(4) or (5) of the said Act as held by the learned Single Judge? 3. Whether the expressions "Masala Yo!" and "Chilly Chow Yo!" can be said to be flavour descriptors and hence eligible for protection under Section 30(2)(a) of the said Act against an infringement action? Point 1: 29. The appellant has used the expression "Yo" in conjunction with "Masala" and "Chilly Chow" which describe the two flavours of the a .....

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thereof; Clearly, "Yo" (with or without the exclamation mark), being a word, would fall within this definition of "mark". Section 2(1)(zb) defines "trade mark" in the following manner: (zb) "trade mark" means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and- (i) in relation to Chapte .....

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se of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark; 30. We are not presently concerned with Chapter XII which deals with offences, penalties and procedure. Consequently, our focus is on Section 2(1)(zb)(ii), whereunder, for a 'mark' to qualify as a & .....

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ed use; 4. It may be so used or proposed to be used with or without any indication of the identity of that person; 5. It includes a certification trade mark or collective mark. 31. Now, let us see how the mark "Yo" is used by the appellant in its Maggi Cuppa Mania products. The manner of use is indicated by the following photographs of the two variants of the Cuppa Mania products: From the manner in which "Yo" is used in the expressions "Masala Yo!" and "Chilly .....

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the word "Yo". First of all, the appellant did not use the word "Yo" independently. It was used in conjunction with "Masala" and "Chilly Chow". Secondly, since the expressions used by the appellant are "Masala Yo!" and "Chilly Chow Yo!", it cannot be said that the appellant used the mark "Yo!" (i.e., "Yo" with the exclamation mark "!") or that the exclamation mark "!" simply ended the whole expres .....

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exclamation mark "!" ends the expressions with a further emphasis. 33. Coming back to point No. 1, we find that there is clear prima facie indication that the mark "Yo" (with or without the exclamation mark "!") was not used by the appellant as a trade mark. The consequence of this is that infringement under Section 29(1) is not made out. Let us explain how. Section 29(1) stipulates that: a registered trade mark is infringed by a person who, not being a registered .....

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n question is used in such manner, the use of the mark by itself would not amount to infringement under Sub-section (1) of Section 29 of the said Act. We have already seen that the mark "Yo" (with or without the exclamation mark "!") has not be used as a trade mark nor is its use likely to be taken as being used as a trade mark. Consequently, this necessary ingredient of Section 29(1) is missing. This takes us to point No. 2. Point 2: 35. The prima facie finding of the learne .....

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o those for which the trade mark is registered; and (c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark. (emphasis supplied) 36. We may recall that the learned Single Judge held that the use of the mark "Yo!" by the appellant "appears" to fall within Section 29(4)(b) of the said Act. And, in so concluding, the learned S .....

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isfied. This is obvious from the word "and" used in each of the said three clauses. 37. We need to consider each clause. Clause (a) of Section 29(4) requires that the mark in question be identical with or similar to the registered trade mark. The mark used by the appellant is "Yo" (with or without the exclamation mark). The respondent's trade mark "Yo!" is registered for T-shirts etc., under class 25 and for restaurants under class 42. The respondent's trade .....

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ppellant that the trade mark as a whole is to be seen in view of the provisions of Section 17 of the said Act. Considered in this light, the mark "Yo" and the registered trade mark "Yo! China", taken as a whole, are neither identical nor similar. So, it is only when "Yo" is compared with the registered trade mark "Yo!" that the condition specified in Clause (a) of Section 29(4) is satisfied. 38. Clause (b) stipulates that the mark in question must be used .....

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ompared with "Yo!", in the facts of this case, the condition specified in Clause (b) is also satisfied. But, this is not sufficient to constitute infringement as the conditions prescribed in Clause (c) must also be fulfilled. 39. Clause (c) requires several conditions to be satisfied. They are: 1. The registered trade mark must have a reputation in India; and 2. The use of the mark in question must be without due cause; and 3. Such use must take unfair advantage of or be detrimental to .....

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for the purposes of Clause (c), concerned with the registered trade mark "Yo! China" because that mark "failed" the test of Clause (a). This distinction between the two separate marks "Yo! China" and "Yo!", in the context of their separate and independent reputations in India, escaped the attention of the learned Single Judge. So, while the mark "Yo" as used by the appellant may be regarded to be similar if not identical to the respondent's .....

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remembered that we have already concluded, prima facie, that the mark "Yo" has not been used by the appellant as a trade mark. In fact, the word "Yo" has been used as part of the expressions "Masala Yo!" and Chilly Chow "Yo!". The appellant has explained that the word "Yo" has been used in both expressions to invite the attention of the customers (and, particularly the younger customers who are prone to use the word "Yo" in their day-t .....

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n in the context of Clause (c) is - does the use of the mark "Yo" by the appellants take unfair advantage of or is detrimental to the "distinctive character" or repute of the registered trade mark? But such a question does not arise in the facts of the present case because the other necessary conditions of "reputation in India" and "without due cause", as pointed out above, have not been fulfilled. 43. From the foregoing discussion, it is obvious that Sect .....

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referred to in the above provision can only occur if the 'infringer' uses another's registered trade mark as his trade name or part of his trade name or name of his business concern or part of the name of his business concern, dealing in the goods or services in respect of which the trade mark is registered. The appellant has not used "Yo!" as its trade name (or part of its trade name). Nor has the appellant used the said marks as the name of its business concern (or part .....

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gement action? Section 30(2)(a) is as follows: (2) A registered trade mark is not infringed where- (a) the use in relation to goods or services indicates the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or other characteristics of goods or services; 47. The argument of the learned Counsel for the respondent is that "Yo" cannot be regarded as a flavour descriptor as sought to be alleged by the appellan .....

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It was argued on behalf of the respondent that "Yo" by itself does not describe any flavour and that it has been added 'mischievously'. But, it may be argued with equal vigour that the use of the word "Yo" is not mere surplusage or mischievous as it has been used to provide emphasis to the flavours "Masala" and "Chilly Chow" in a manner which appeals to the customers and, especially, to the younger customers. If the latter argument were to be accep .....

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nt of an interlocutory injunction, particularly, in trade mark cases. The grant of an interlocutory injunction is a matter of discretion of the court. However, as pointed out in Gujarat Bottling Co. Ltd. v. Coca Cola Co. (1995) 5 SCC 545 (at page 574), while exercising this discretion the court applies the following tests: (i) whether the plaintiff has a prima facie case; (ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the plaintiff would suffer an irrepa .....

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such expressions as 'a probability', 'a prima facie case', or 'a strong prima facie case' in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried. This meant that the stricter regime of establishing a &# .....

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Ltd. (1994) 2 SCC 448). However, as pointed out in S.M. Dyechem Ltd. v. Cadbury (India) Ltd. (2000) 5 SCC 573 (at page 590), the Supreme Court, through its decision in Gujarat Bottling (supra), "again adverted to the prima facie principle while granting temporary injunction". In Dyechem (supra), the Supreme Court clarified that the decision in American Cyanamid (supra) was looked at from a fresh perspective in Series 5 Software Ltd. v. Clarke (1996) 1 All ER 853 (ChD) inasmuch as it wa .....

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compensated in money. The Supreme Court, after noting the said development in the law, held: Therefore, in trademark matters, it is now necessary to go into the question of "comparable strength" of the cases of either party, apart from balance of convenience. 50. This was re-affirmed by the Supreme Court in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 73 (at page 87): One of the questions which this Court considered was that for grant of temporary injunction, sho .....

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ce of convenience. 51. So, the test of prima facie case as traditionally understood has been replaced, at least in trade mark matters, by the test of comparative strengths of the rival cases. This is also in keeping with the requirements of the said Act inasmuch as it not only describes what amounts to infringement (see: Section 29) but it also makes provision for what does not amount to infringement (see: Section 30). 52. Thus, apart from examining the case in the context of Section 29 of the s .....

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sala Yo!" and "Chilly Chow Yo!" and was, therefore, entitled to the protection under Section 30(2)(a), was 'strong' enough in the balance of comparative strengths to deny the respondent an interlocutory injunction. This vital consideration of the comparative strengths of the rival cases is missing in the impugned decision. 53. We are also of the view that the reliance placed by the learned Single Judge on Indian Shaving Products (supra), where the two marks in question wer .....

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"Yo! China" had acquired distinctiveness through usage since 2002. He also observed that, prima facie, it appeared that these marks had acquired a 'secondary' meaning insofar as chowmein (noodles) were concerned. We shall briefly dwell on these prima facie conclusions of the learned Single Judge. We have already indicated that though there is material to show continuous use of the mark "Yo! China" by the respondent in respect of its restaurant business, there was no .....

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conclude, prima facie of course, that "Yo!" had acquired distinctiveness through usage since 2002. A trade mark acquires distinctiveness when, in the eyes of the public, it distinguishes the goods or services connected with the proprietor of the mark from those connected with others. Does "Yo!" pass this test? On the basis of the material before us and upon a prima facie look, the answer is - No. Distinctiveness of a mark may arise in two ways: (1) it may be inherently distin .....

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mation or as an expression calling attention is lost and whenever the word "Yo" (with or without the exclamation mark) appears on a product or in relation to a service (even if used as a trade mark) the minds of the public are straightaway directed to the source of the product or service. At this interlocutory stage, there is nothing to suggest that the word "Yo" in "Masala Yo!" and "Chilly Chow Yo!" would create a connection in the minds of the customers .....

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urt ought to be slow in interfering with the discretionary jurisdiction of the trial court in the grant of interlocutory injunctions. However, it was also pointed out in Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel (2006) 8 SCC 726, [at page 774] that: ...the appellate courts will substitute their discretion if they find that discretion has been exercised arbitrarily, capriciously, perversely, or where the court has ignored the settled principles of law regulating the grant or refus .....

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