May 13, 2022

Infringement of Trademark: What, when and how?

Guest post by Pallavi Mohan

Recently, the Delhi High Court awarded damages of Rs. 2 lakhs and costs of Rs. 9 lakhs in favour of the global coffee shop chain, Starbucks Corporation, for infringement of its trademark “Frappuccino”. A cafe by the name of “Teaquilla – A Fashion Cafe” had allegedly been using the word “Frappuccino” to sell its products with no permission, authorisation or license from Starbucks.

How can Starbucks have a trademark over a common word like ‘Frappuccino’, created by joining the words Frappe and Cappuccino?

Starbucks claims that “Frappuccino” is a “well-known trademark” [Section 2(1)(zg) of the Trademarks Act, 1999] associated with its brand on account of extensive usage of the term, trademark registrations in India and other jurisdictions, substantial investments in promotions, presence on social media networking sites, etc. Starbucks argued that it had been vigilant in protecting its intellectual property rights on the trademark.

What was the Court’s decision in this case?

The Court held that this case satisfied the Triple Identity Test for Infringement, since Starbucks’ trademark “Frappuccino” had earned formidable goodwill and reputation in the market. The “Teaquilla cafe” was using similar marks for selling similar goods (i.e. beverages using the word “Frappuccino”), where the trade channels and consumers were common. It held that “Teaquilla cafe” had not explained why it was doing so. A case of passing-off (misrepresenting one’s goods or services as that of another) is made out.

The Court asked “Teaquilla cafe” to stop using the trademark to sell its products,  pay damages of Rs. 2 lakhs for wrongful use and Rs. 9 lakhs for the costs of litigation to Starbucks.

What is the Triple Identity Test for establishing Trademark Infringement?

In trademark infringement cases, courts follow a Triple Identity Test to establish trademark infringement. The judge has to answer three questions:

  • Is the mark in question identical or deceptively similar to the registered trademark?
  • Is the field of activity of the owner of the mark in question and the registered trademark owner the same?
  • Is the owner of the mark in question using it in such a way that it seems the registered mark is being used?

If the answer to all three tests is yes, courts protect the registered trademark. In the present case, “Teaquilla” was using the marks – “BUTTER SCOTCH FRAPPUCCINO’” and “HAZEL NUT FRAPPUCCINO” which are deceptively similar to Starbucks’ marks – “SMOKED BUTTERSCOTCH FRAPPUCCINO” and “HAZELNUT FRAPPUCCINO BLENDED COFFEE”. Both Starbucks and “Teaquilla” are in the same field of activity, which is selling coffee beverages and “Teaquilla” is using the word “Frappuccino” to give the impression that Starbucks’ “Frappuccino” is actually being sold in its cafe. So, the court concluded that all three tests are met and trademark infringement is established.