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The cookie crumbles in ITC vs Britannia biscuit packaging infringement

Sayan Ghosal / New Delhi 07 Sep 16 | 12:47 AM

The Delhi High Court on Tuesday provided ITC interim relief by passing an injunction order restricting Britannia Industries from selling its digestive biscuit NutriChoice Zero in blue-yellow packaging. 

The Bench of Justice S Muralidhar allowed Britannia four weeks to phase out existing stock and maintain accounts of all sales of NutriChoice Zero in its present form.

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“In a suit filed by ITC against Britannia for injunction restraining it from using a label deceptively similar to the trade dress and colour combination of ITC’s Sunfeast Farmlite Digestive All Good biscuit packages for its Britannia NutriChoice Digestive Zero biscuit packages, the Delhi High Court, after hearing arguments, has injuncted Britannia from using the offending labels," said an ITC spokesperson, after passage of the order.

The present passing off and copyright infringement suit filed by ITC, seeks withdrawal of Britannia’s product from the market and payment of damages for losses in sales. Britannia has taken the battle of the brands further, by lodging its own counter suit in the high court on September 1, which is supposed to come up for hearing sometime in October.

The Britannia packaging had been introduced in the market in June this year, months after the launch of ITC’s variant. ITC claims Britannia introduced the NutriChoice packaging, after it failed in seeking a remedy from the Advertising Standards Council of India against ITC’s Sunfeast Farmlite advertisements. Thereafter, it is alleged that Britannia copied the blue-yellow packaging and borrowed the ITC product’s references to no sugar or maida for its NutriChoice Zero variant.

In earlier hearings, the counsel for Britannia, senior advocate Sudhir Chandra, proposed an alteration of the shade of blue used in the NutriChoice Zero packaging, but the offer was not acceptable to ITC. ITC wanted the complete removal of the colour blue from the NutriChoice Zero wrapper or for Britannia to use its international packaging for the variant in question. 

Britannia had opposed the present suit by stating that the use of the colour yellow was indicative of the company’s brand and represented a common theme across their products. Britannia also claimed the colour blue was indicative of its zero-sugar products and was in use in several packages in its range.

According to Chandra, a successful passing off action also required a plaintiff’s product to have an established reputation, in addition to a deceptive similarity of the defendant’s variant with that of the plaintiff. Furthermore, this similarity should have led (or is likely to lead) to damages to the complainants business as a result. 

In his view, as Britannia was the industry leader in the biscuit market with over 66 per cent market share, compared to ITC’s 1.8 per cent, the latter’s product did not possess the required reputation for the court to offer any relief. He highlighted the ITC product had only been in the market for a short time and could not have gained a reputation in its fledgling tenure. 

Chandra also defended the Britannia product’s packaging, claiming the time-tested name of NutriChoice on the wrapper was sufficient to differentiate it from the ITC product. 

Senior advocate Rajiv Nayar, representing ITC, refuted the Britannia plea by stating the length of time a product is in the market, was not the sole indicator of a distinctive reputation. According to Nayar, ITC is one of the fastest-growing food businesses in the country and Sunfeast Farmlite’s revenue figures of Rs 5 crore in five months were a significant indicator of its repute.    

Negating the arguments put forth by Britannia, the court observed that prima-facie, the ITC product did have the requisite reputation for a passing off action, considering its sales figures. It also held the NutriChoice packaging could be viewed as deceptively similar to that of Sunfeast Farmlite’s at this stage and could to lead to damages incurred by ITC, if not restrained. 

According to the court, the quality of the two brands would eventually determine their popularity, but if the initial choice of a consumer is altered by possible deception, then it gives rise to an actionable tort and, as a market leader, Britannia’s packaging could eat into the share of the new entrant. 

On this reasoning, the court granted ITC a provisional remedy by passing an order of temporary injunction against the packaging used by NutriChoice Zero. The order has left it open for Britannia to choose its international packaging or to remove the colour blue from its wrapper, in order to make its product more distinctive for future sales after the four-week time period allowed.

“The packaging architecture for NutriChoice has been built on the brand’s own strategy and has not been influenced by any other brand. As far as the injunction passed by the Delhi High Court is concerned, we are exploring all our legal options in the matter," said a press statement issued by Britannia on Tuesday.

COPYRIGHT INFRINGEMENT SUIT

The decision of the court arises out of a passing off and copyright infringement suit filed by ITC against Britannia

 ITC has sought withdrawal of Britannia’s product from the market and payment of damages for losses in sales

 Britannia took the battle of the brands further by lodging its own counter suit in the high court on Sept 1

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