The Case of Choclairs

case-of-choclairspng

Cadbury and Lotte are famous brands for chocolates with Cadbury probably a little more famous in India since it has been around for quite a while. This fact may have been one of the many reasons why Cadbury could obtain an interim injunction against Lotte in January this year.

Briefly, Cadbury sought to restrain Lotte from using a mark same or similar to their trademark “Choclairs”. The case primarily deals with who was first in the Indian market. Cadbury had been using its trademark “Choclairs” in countries other than India. It is understood from the case that Cadbury performed a general internet and trademark search for the mark “Choclairs” for seeking registration in India. During its trademark search it found that Parry’s Confectionery (which was later bought by Lotte) had a registration for the mark Choclairs but the mark had been removed from the register for want of renewal.  Equipped with this info, Cadbury filed an application for Choclairs in May 2012.  While prosecuting its application and doing a routine trademark watch, Cadbury found that Lotte had filed an application for Choclairs in April 2013, without claiming usage.

Arguments

Seeking to restrain Lotte, Cadbury argued that the mark Choclairs was initially coined and adopted by its predecessor in 1953 and had since been used in different countries with variations in packaging.

Lotte argued that its predecessor, Parry’s Confectionery had coined and adopted the mark Choclairs in 1976 as evident from the lapsed registration and that it had a registration for the mark Parry’s Choclairs (Application no. 418978, registered in 1984). Lotte also pointed out that Cadbury was a recent entrant in the market and was selling its goods using a mark identical to Lotte’s. It further argued that the evidence supporting Cadbury’s use of Choclairs was very recent and certainly not before 1984.

Court’s observations and decision

  • Similarity in essential features: Neither Cadbury nor Lotte proposed to use the word “Choclairs” independently as their trademark. However, their marks Cadbury Choclairs and Parry’s Choclairs respectively were very similar looking and Choclairs was certainly a predominant feature of the marks. 
  • Entry in the Indian market: While Cadbury re-branded Cadbury Eclairs as Cabury Choclairs in June 2013, Cadbury Eclairs had been in the market for a long time. However, Lotte started marketing Lotte Choclair in April 2013 and there was no evidence to show that Parry’s Choclairs or Lotte Choclair was in the Indian market before April 2013.Spill-over/trans-border reputation: Differentiating between reputation and goodwill, the Court observed that while goodwill is local, reputation (from which goodwill is derived) need not necessarily be local. Cadbury provided evidence of reputation in India through combination of the presence on the internet, the possibility of availability of Cadbury’s Choclairs in duty free shops in international airports. The Court affirmed that if the webpages displaying Cadbury Choclairs were accessible in India, it was sufficient to show that chocolate buyers in India and Indians travelling abroad were aware of Cadbury’s products.
  • Evidence of use: Cadbury had argued that it could not find any past or present use of Parry’s Choclairs during its general internet search. To counter this argument, Lotte provided Parry’s annual reports which included Parry’s Choclairs as one of its trademarks. However, there were no sales figures supporting its use. The Court rejected the annual reports as evidence of “use”.
  • Acquiescence: Lotte argued that Cadbury had been aware of Lotte’s presence in the Indian market since 2009 but did not object to its presence and therefore acquiesced to Lotte’s use of the mark, Choclair. The Court rejected this argument too on the ground that Cadbury had sufficient spill-over reputation by April 2013 when Lotte entered the market.

Based on the observations above, the Court found that Cadbury had proven all three cardinal requirements for obtaining an interim injunction and made the interim injunction against Lotte absolute.

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