Economic Business Legislation

PARLE PRODUCTS PRIVATE LTD VS PARLE AGRO PRIVATE LTD

FACTS OF THE CASE • • • • • • •

Case No.: NMS/4431/2007 Registration no: S/3203/2007 Date of filing the Case in High Court: 28 Nov. 2007 Date of Final Hearing in High Court: 18 Dec. 2008 Presiding Judge: Hon’ble Smt. Justice R. S. Dalvi Status quo: Appeal in Supreme Court by Plaintiff Next Hearing 31 August 2009

HISTORY OF PARLE • MR. M. D. CHAUHAN ALONG WITH HIS 5 SONS STARTED THE COMPANY IN 1929 UNDER THE NAME OF PARLE PRODUCTS MANUFACTURING COMPANY. • THE COMPANY DERIVED ITS NAME PARLE AFTER IT WAS SET UP IN VILE PARLE (SUBURB OF MUMBAI). • IN 1929, THE COMPANY STARTED PRODUCING SWEETS AND CANDIES. • IN 1939, THE COMPANY EXPANDED TO MANUFACTUE AND SALE OF BISCUITS. AT THE SAME TIME THEY SET UP PARLE BOTTLING COMPANY. • IN 1950, PARLE PRODUCTS PVT LTD WAS INCORPORATED AND ALL THE BROTHERS BECAME ITS FIRST DIRECTORS. • IN 1952, PARLE BOOTLING COMPANY WAS CONVERTED INTO A LTD COMPANY OWNED BY ALL THE BROTHERS.

THE SPLITT & THE CASE

THE CASE FACTS • The case of Parle Products v. Parle Agro 2009 (39) PTC 405 revisits the dicta behind the use and sharing of the same "house marks“ i.e. “Parle” as they belonged to the same family of Mr Mohanlal Dayal Chauhan . • Each has however been naturally using separate names /marks / brands for each of their products. • There is no prior memorandum or agreement signed between the parties for using the mark Parle. • The dispute arose in 2007 with launch of Mintrox and Buttercup by Parle Agro as they were marketed with the words Parle or Parle Confi.

• The Plaintiff said that the use of the mark Parle by Defendant on its confectionery products might lead to misrepresentation in the minds of consumers that the products belong to Parle Private Ltd. whereas its not so. • Plaintiff also claimed “If any adverse publicity is generated from poor quality of the defendant's good, it is bound to spoil the impeccable reputation of Parle Products," they complained. • The Defendant contended that Parle was registered by the family before division of the companies and as such it can be used by members of the family to denote the family lineage for any business confectionery and biscuits or beverages

HOUSEMARK AND PRODUCT IDENTIFICATION MARK

HOUSEMARK OF THE COMPANY PRODUCT IDENTIFICATION MARK

SO WHAT WERE THE PROBLEMS • The public would confuse the sign and mark in question. (Direct confusion). • The public would make a connection between the proprietor of the sign and the mark and confuse them. (Indirect confusion) • The public would consider the sign to be similar to the mark although the two are not confusing. (Association)

COURT’S RULING The Court noted that the initial business being in the nature of a Partnership Firm, expanded and diversified to form a Limited Company which later was split to form another Company, leading to the division of the management and shares held amongst the brothers being sold so as to "exit" from one of the Companies. Their trademarks using the word "Parle" have been registered under Classes 29, 30 and 32 of the Trade Marks Act, 1999.

• The High Court considering the facts of the case, distinguished between house mark and product identification mark. The Court held that Parle is a mark that belongs to both Plaintiff and Defendant as after the division of the companies belonging to the brothers, the companies continued to use the mark Parle without any objection from the other. • • The mark Parle is the company identification mark that is used by both parties. Thus Parle is a house mark that is used by both the companies.

ACADEMIC PART OF THE CASE • HOUSE MARK • House mark refers to a trademark which is used to identify the operations of an organization. This may also be the company name. • PRODUCT IDENTIFICATION MARK • A product identification mark is a mark that distinguishes the product of one company from the other, even if both the companies have a common house mark.

INDIAN CONTRACT ACT, 1872 MISREPRESENTATION, SECTION 18 • Misrepresentation is an incorrect or false statement but the falsity or inaccuracy is not due to any desire to deceive or defraud the other party. Such a statement is made innocently. The party making it believes it to be true.

INDIAN TRADEMARK ACT, 1999 • The objective of the Trade Marks Act, 1999 is to register trade marks applied for in the country and to provide for better protection of trade mark for goods and services and also to prevent fraudulent use of the mark. The trademarks using the word have been registered under Classes 29, 30 and 32 of the Trade Marks Act, 1999.

WHAT IS THE FUNCTION OF A TRADEMARK • Under modern business condition a trade mark performs four functions: • It identifies the goods / or services and its origin. • It guarantees its unchanged quality • It advertises the goods/services • It creates an image for the goods/ services.