Theos v Theobroma Trademark Dispute

Introduction

Both ‘THEOS and THEOBROMA’ are premium bakeries serving confectionary and baked goods since a very long time. They entered into a trademark war over the common starting syllable ‘THE’ as both the outlets deal with identical goods and services. ‘THEOS’ acknowledged ‘THEOBROMA’ as the owner of the trademark and agreed to not use the mark ‘THEOBROMA’ in any manner. The court also ordered that ‘THEOBROMA’ is free to expand its outlets under the given name while ‘THEOS’ was restricted to Delhi-NCR region so far as its goods and services provided under the mark ‘THOES’ are concerned.

[Image Sources : Shutterstock]

Facts of the case

Theos Food Pvt. Ltd. and Theos Patisserie & Chocolatarie were the plaintiffs in the present case originating out of Delhi and Noida. The defendant is Theobroma Foods Pvt. Ltd. established in Mumbai. Both the defendant and plaintiff are involved in the production of things related to bakeries such as patisseries, confectionery, and other similar products, and were using the similar mark. The dispute arose due to the usage of the mark ‘Theos’ by the defendant for the several food products sold by it in its respective outlet. A plant was instituted in the Bombay High Court where the defendant claimed that the impugned mark was adopted by the defendant prior to the plaintiff. A retail outlet was established by the defendant namely, ‘THEOBROMA Food of the Gods’ at Colaba Causeway in Mumbai, which was the first retail outlet or cafe which was next to Cusrow Baug. Over time, it gained a good reputation and earned popularity. Moreover, the name earned by the brand helped it in establishing 81 retail outlets overall at different locations such as New Delhi, Pune, Noida, Bangalore, and Mumbai, and registered several trademarks for the brand of ‘THEOBROMA’ and for its different variants. On the other hand, Plaintiffs has a chain of cafes, outlets, restaurants, and bakeries with the trademark of ‘THEOS’/ ‘THEOS’ in the region of Delhi for a wide range of bakery products and chocolate products on the menu which includes chocolates, cookies, different types of deserts and cakes, multiple types of beverages that are made out of dairy and non-dairy products. However, the mark of ‘THEOS’/ ‘THEOS’ was introduced in 2008 and has been using the mark for conducting business continuously and has not faced any interruptions whatsoever. There were two proceedings brought before the courts.

Issues

Whether the marks ‘THEOS’, ‘THEO’S’ and ‘THEO’S PATISSERIE & CHOCOLATARIE’ can be restricted and the defendant can be prohibited from using it for the violation of the rights, infringement of the trademark, passing off, harming the reputation, and other similar violations that can result in loss to the plaintiff?

Rules

• Section 29 of the Trademark Act, 1999
• Passing off

Analysis

The case arising from the trademark dispute between the plaintiff and defendant resulted in a settlement between them and they decided to settle on certain terms to end the dispute. Both parties allowed the court to decide the case in a manner where the business and commercial activities of the parties are not affected and an amicable resolution can be reached to resolve the conflict in the present matter. The parties came up with a list of conditions that can act as an agreement between the parties for deciding on the question of trademark infringement and settled on the following terms:

1. It was mutually agreed between the plaintiff and defendant that the defendant is the rightful owner and lawful proprietor of the mark ‘Theobroma’. Further, the plaintiff agreed not to use the said mark or name for any goods produced by it, for the sale of the said goods, or for any services, under any circumstances.
2. The defendant will not object to the usage of the mark ‘THEOS’/ ‘THEOS’ by the plaintiff for any future purposes even though, it had objected to the usage of the said mark. The mark ‘THEOS’/ ‘THEO’S’ can be used for the goods and services provided by the plaintiff and also for the trading style or trade name used provided that the business activities will be restricted to the Delhi-NCR region.
3. The defendant was restricted from using the mark and name ‘THEOS’/ ‘THEOS’ in its physical menu cards, social media, and on online platforms. However, the exceptional usage for the ‘THEOS’/ ‘THEOS’ was only allowed for the five food items in its menu which included the bifurcation of the products based on, with and without egg, size of the product. The following products were exempted:

     “1. Theos Dutch Truffle Cake

2. Theos Chocolate Mousse Cup
3. Theos Mava Cake
4. Theos Dense Loaf
5. Theos Quiche”

1. The allowed usage was also limited to the physical menu of the defendant and was not allowed to the online menu published by the defendant.
2. The plaintiff is not allowed to sell the products outside the region of Delhi-NCR for the marks ‘THEOS’/ ‘THEO’S’. In the event, it wants to expand its scope for commercial activities beyond the said region being it physical or online mode, it should trade under the mark which is not deceptively similar or identical to the mark used by the defendant. This does not restrict the plaintiff to use ‘THEOS’/ ‘THEOS’ for the extension of business as long as it does not the mark in its entirety does not link to the mark used by the defendant or is not identical or deceptively similar that may cause confusion in the mind of a reasonable man.
3. The defendant will be entitled to all the trademarks registered for ‘THEOBROMA’ and the variants registered that includes ‘THEOS’ and ‘THEO’ which allows him to protect and initiate proceedings in the event there is any violation of the rights granted under the trademark to protect the rights granted under the law.
4. Plaintiff is not restricted from registering its mark ‘THEOS’ and ‘THEO’ for the word, logo. But the same shall be limited to trade in the goods and services offered in the restricted region geographically.
5. In future events, the parties will not object to or oppose the mark of either party as far as the mark is used in terms agreed between the parties under this settlement.
6. If there is any request received by the plaintiff for the online delivery or supply to a location outside the restricted region, then the delivery or supply should be serviced under a different name or mark and it should not be deceptively similar or identical to the defendant’s mark.
7. There are no restrictions placed on the defendant to expand its business across the nation but the same does not apply to the plaintiff if the mark under which the business is expanded remains ‘THEOS’/ ‘THEO’S’.

Legal Opinion

In the cases where the overlapping of the trademark is concerned, the application of Section 29 of the Trademarks Act, 1999 takes place and the infringement suit can be initiated for damages. Provided the trademark is registered and is registered prior to the other mark against which the infringement suit can be initiated. The trademark infringement can take place if the following conditions are satisfied:

1. The mark is deceptively similar or identical.
2. The mark can cause confusion in the mind of the general public.
3. Confusion can link the original trademark and the identical business which may cause damage to the reputation or in monetary terms.

In the event the trademark is not registered then the passing-off claim can be initiated. If the parties deviate from the terms agreed by them under the settlement, then, the proceedings for breach of contract can be instituted. However, the court missed the fact that the ‘THEOS’/ ‘THEOS’ has gained popularity on its own and there was no reason to restrict the brand since the same cannot cause confusion in the mind of a prudent man. The same was laid down in the case of Laxmikant V. Patel v. Chetanbhai Shah^[1] where the court held:

“The three elements of passing off action are the reputation of goods, possibility of deception and likelihood of damages to the plaintiff”

It is important to establish if there is a possibility of deception. Merely trading in the same type of business does not make it necessary that deception can be caused. Further, the brand established by Theos was identifiable on its own and there was no deception caused.

Author: Akanksha Mohan, Lloyd Law College, BA.LL. B 4^TH Year, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.

References:

Theos Food Pvt Ltd & Ors vs Theobroma Foods Pvt Ltd on 9 March, 2022 (indiankanoon.org)

Theos & Theobroma Settle Trademark Infringement Suit Before Delhi High Court (livelaw.in)

^[1] [2002] SC, 24 PTC 1 (SC).