Intellectual Property Rights“SUBWAY” AND “SUBERB” NOT PHONETICALLY AND DECEPTIVELY SIMILAR; DELHI HIGH COURT

INTRODUCTION

The Delhi High Court, in case of Subway IP LLC v. Infinity Food & Ors., [2023/DHC/000269], decided on 12^th January 2023, dismissed Subway’s plea for injunction against Infinity Food for trademark infringement, ruling that the red and white “SUBERB” mark used by Infinity Food could not be deemed to be confusingly similar to Subway’s device mark, “SUBWAY.”

FACTS

“Subway” (hereinafter referred to as ‘Plaintiff’) is a company incorporated in the United States that runs a well-known international chain of restaurants by the name “SUBWAY.” The Plaintiff has registrations in India for the names “SUBWAY CLUB” and “VEGGIE DELITE,” which are used by the Plaintiff, for its club sandwich and vegetable sandwich, respectively.

Infinity Food & Ors.(hereinafter referred to as the  ‘Defendants’) is a partnership firm. Defendants were the Plaintiff’s licensees, to whom the Plaintiff had granted the right to franchise for the Plaintiff’s outlets. From2019, the Defendants had been serving and distributing the Plaintiff’s products through the outlets operated by the Defendants.

The Plaintiff has accused the Defendant of violating its Intellectual Property Rights (hereinafter referred to as “IPR”) through the following actions:

1. the usage of the “SUBWAY” brand name and logo, with a matching yellow and green color scheme, to identify the two restaurants managed by the Defendants;
2. use of the trademarks “VEGGIE DELICIOUS” and “SUB ON A CLUB,” which were deceptively similar to the Plaintiff’s registered “VEGGIE DELITE” and “SUBWAY CLUB” marks;
3. usage of identical, or similar, signage, outlet décor, menu cards, paper napkins, and staff uniforms; use of photographs and wall art, in their outlets, which were similar to the Plaintiff’s registered trademarks; and use of identical, or similar, menu cards and paper napkins.

The Delhi High Court (hereinafter referred to as “High Court”) granted time to the Defendants, so that the Defendants may determine and make any changes that would satisfy the Plaintiff that they were no longer violating the Plaintiff’s IPR.

The Defendants made the changes in the color combination of the logo and changed the names of the food which were subject to the dispute.  The Plaintiff was not satisfied with the changes and filed petition for interim injunction.

ISSUE BEFORE THE DELHI HIGH COURT

Whether even after the modifications that the Defendants had undertaken, it could still be said that the Defendants are infringing the registered trademark of the Plaintiff ?

CONTENTIONS OF THE PARTIES

The Plaintiff  submitted that the Defendants’ violations were apparent before they consented to make the changes which have been mentioned above. The Plaintiff also asserted that the underlying goal of the Defendants is to assert copyright over the Plaintiff’s goodwill.

The Plaintiff relied on Ruston and Hornsby Ltd v. The Zamindra Engineering Co. (1969) 2 SCC 727, Parle Products (P) Ltd v. J.P.& Co. [(1972) 1 SCC 618] and stated that even as word marks, the names SUBWAY and SUBERB are confusing to one another. As a result, the marks would continue to be deceptively  similar even if the color scheme of the said marks were modified.

The Plaintiff also claimed that because the Defendants were franchisee holders of the Plaintiff, this was a case of willful deception, entitling the Plaintiff to injunctive remedy ipso facto. On the contrary, the Defendants submitted that because of the changes they have made, the Plaintiff’s allegations of infringement and passing off, are no longer valid. The Defendants also brought it to the notice of the High Court that they changed the color of their logo, interior of their stores and took down the pictures and artwork that the Plaintiff had objected to be hanging on the walls.

The Defendants contended that menu cards and staff outfits had also been altered to differ from those of the Plaintiff. The Defendants further stated that the  “S” in the logo of the Defendant no longer resembles the  “S” in the logo of the Plaintiff, due to the change in color scheme. The Defendants relied on the judgments of the Supreme Court in J.R. Kapoor v. Micronix India, [1994 Supp (3) SCC 215] and Bigtree Entertainment Pvt Ltd v. Brain Seed Sportainment Pvt Ltd., [2018 (73) PTC 115 (Del)].

DECISION AND FINDINGS

The High Court was of the opinion that “SUBERB” was not phonetically similar to “SUBWAY,” despite the fact that both words had two syllables. The High Court thus held that Defendants’ mark “SUBERB” could not be considered to violate any of the Plaintiff’s word marks or device marks.

The first word “SUB” was widely used, and it was commonly known that, when used in connection with sandwiches, “SUB” stood for “Submarine,” a well-known variation of long-bodied sandwiches that were typically 6 or 9 inches in length.

As a result, when used in relation to these restaurants, “SUB” was publici juris, and hence the Plaintiff cannot be granted exclusivity over the “SUB” portion of its registered “SUBWAY” mark. Moreover, once the “SUB” part of the “SUBWAY” mark was out of the way, there was prima facie no similarity  between “WAY” and “ERB”.

The High Court further observed that, as per Section 29 of the Trade Marks Act, 1999 (hereinafter referred to as “the Act”), infringement of trademarks can only be of registered trademarks. Subsequently, the Plaintiff had  existing registrations which qualified for protection for the word mark and the device mark “SUBWAY.”

Since the Plaintiff lacked any other registered trademarks, this High Court was required to protect it against infringement. The High Court additionally noted that Section 17(2) of the Act do not permit the dissection of a trademark,  hence, exclusivity in respect of a portion of the mark, or the assertion of infringement in respect of any matter that was customary in the industry or otherwise lacking in distinctiveness , cannot be claimed.

The High Court determined that Defendants’ red and white “SUBERB” mark, following its alterations, could not be considered to be deceptively similar to the Plaintiff’s device mark. As the terms “CLUB” and “VEG” were publici juris, the alterations made to the two marks, namely “VEG LOADED REGULAR” and “TORTA CLUB,” would likewise put an end to any infringement claims. .

In light of the alterations made by Defendants, the High Court held that as there was no evidence to support the request of injunction and passing off , the application for an interim injunction of the Plaintiff cannot be admitted.

AMLEGALS REMARKS

It is a well-established legal principle that if a mark is publici juris or generic in character, it shall not be protected under the Act. Sections 9 and 11 of the Act specifically provides for the grounds for denying trademark registration. One of these grounds is where the marks consist solely of marks or indications that have become usual in the present language or in legitimate and established trade practices, unless the mark has acquired a distinctive character as a result of its usage or is a well-known trademark.

It is not rare for Courts to authorize the registration of generic words as trademarks because they have acquired a secondary or distinguishing meaning or character.

But, on the other hand, there have been various instances where trademarks that are well-known, unique and distinctive have grown synonymous with the product and run the risk of them being designated as publici juris. The genericization process leads to trademarks becoming common for the public to refer to comparable types of products in general, regardless of whether they are created by the trademark owner or not; one such example is the term ‘Xerox’.

Similarly, in the present case as well, “Subway” is well-known brand but again the word “Subway” or “sub” is  also synonymously used by the public for a “sub sandwich”. Thus, such the High Court has rightly not admitted the interim application of the Plaintiff and upheld the purpose of the Act.

– Team AMLEGALS assisted by Ms. Bhavika Lohiya (Intern)

For any queries or feedback, please feel free to get in touch with falak.sawlani@amlegals.com or mridusha.guha@amlegals.com.