THE FIGHT FOR MAGIC: An analysis of the case- ITC Limited v. Nestle India Limited, 2020

The Author of this blog is Mr. Ritik Kumar Rath of National Law Institute University, Bhopal 

Introduction

Instant noodles have its unique position in the Indian market. According to the World Instant Noodles Association, India is the fourth-largest instant noodles market[1].The instant noodles market in India has valued at INR 93.66 Bn in 2017, and there are two big players of this in the market first is Nestle with its Maggie and ITC with it’s yippee. But in 2013 ITC Company filed a case against Nestle for trademark infringement.

Facts

ITC contended that it had introduced ‘Sunfeast Yippee! Noodles’ with Magic Masala flavour in 2010 and Nestle India’s adoption of a deceptively similar expression ‘MAGICAL MASALA’ in 2013 to market their noodles this amounted to passing off.

Argument from petitioner

ITC claimed that Magic Masala had acquired a distinctive and unique place in the market and was immediately identified by the trade and the public as that of the plaintiff because of superior quality and affordability.

Defendant launched “Magical Masala” as a sub-brand. It is further submitted that the defendant copied the expression “Magic Masala” by slightly tweaking it by adding a syllable “al” to the word “Magic”. The use of similar words can be seen as the attempt of the defendant to acquire the market of the petitioner. And adopting “Magical Masala” deviously for their instant noodle was a malafide intention to ride on the goodwill of the plaintiff and to cut into the market share enjoyed by the plaintiff.

Also, Indian consumers generally do not check the details in a roadside grocery shop. The retailers themselves may confuse and substitute one product for another when orders are placed for “Magic Masala”. This is an intentional act to make confusion among innocent people and acquire the plaintiff market.

 

Argument from defendant

The defendant had denied having copied the expression “Magical Masala”. The defendant said they were prior adopter of the word “Magic” in the food industry like magic -e- masala and they never objected ITC to use the word magic as it very common to use the word magic in the food industry, therefore, the plaintiff cannot have an exclusive right of the same.

Further, defense of the defendants that the expression “Magic” was laudatory and therefore incapable of any protection under the provisions of the Trade Mark Act, 1999 and no common law rights of passing-off recognized under the aforesaid Act inures to the plaintiff. The expression “Magic” has been used to qualify the quality of the masala in the packet as "Magic Masala. It was used in a laudatory sense.

It is further submitted that the food industry market was flooded with various products where both the words “Magic” and “Masala” is very common.

 

Judgment by the court

The Madras High Court in one line said, ‘The word “Magic” is laudatory. It is incapable of being appropriated by the plaintiff (ITC). As such, no person can claim any monopoly over the said words “Magic” or “Magical” or their derivative as they are common to the trade. Therefore, it is incapable of being monopolized by any trader.’

Further, the Court also said that ITC had no intention to use “Magic Masala” as a trademark or a sub-brand because the fact no trademark application was filed by the plaintiff (ITC) to register the aforesaid expression “Magic Masala” as word mark also shows that the said expression was not intended to be used as a trademark or a sub-brand by the plaintiff.’

Overall color scheme, layout, style, and overall get-up of the two wrappers i.e. of the plaintiff’s “Sunfeast Yippee! Noodles” bearing the expression “Magic Masala” for its instant noodle and the defendant’s “Maggi Xtra-delicious Magical Masala” were different. Therefore, these two are separate trademarks within the meaning of Section 2(zb) of the Trade Marks Act, 1999[2], and hence, qualify for protection as a whole.

Therefore, the Court held that the two words, ‘Magic’ which is laudatory and ‘Masala’ which is colloquial, cannot attain distinctiveness to exclude others from using them, hence, further substantiating that the phrases, ‘Magic Masala’ or ‘Magical Masala’ do not qualify as trademarks as per the law.

The court also relied on the case of Century Traders v. Roshan Lal Duggar& Co[3].AIR 1978 where the Court held that the major three ingredients of passing- off, Goodwill, misrepresentation, and damages, were not demonstrated or proved by the Plaintiff. In this case, ITC is unable to prove the main ingredient of Passing -off.

However, the Court held that ‘the words “Magic” and its derivative “Magical” are common to the trade. Therefore, neither the plaintiff nor the defendant can claim any monopoly over the expression Magic” or “Masala” for they are common words in the Indian culinary and food industry’.

 

Future Problem

In my point of view, this is a good judgment but it may create problem in future as company X use the generic term in their product and the generic term in so attached to the product that if another company Z uses the generic term there is a chance they will earn a huge profit because of the goodwill earned by company X  product and the point that ITC argued that common people do not check the details in a roadside grocery shop is a valid point because people generally buy FMCG goods that are suggested by the retailer and there is chance retailer may be confused by the name and hand over the product of company Z in place of Company X product that was asked by the consumer.

---

[1]Instant Noodles Market in India 2020 Technology, Share, Demand, Opportunity, Projection Analysis Forecast Outlook,marketwatch.com ,(July 9, 2020, 10:04 AM)https://www.marketwatch.com/press-release/instant-noodles-market-in-india-2020-technology-share-demand-opportunity-projection-analysis-forecast-outlook-2020-06-02?mod=mw_quote_news

[2]Trade Marks Act, 1999 § 2(zb)

[3]Century Traders vs Roshan Lal Duggar Co , AIR 1978 Delhi 250