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Saturday, October 31, 2020

ITC loses its magic in Masala Noodles battle

In a much awaited decision, the High Court of Madras has finally cleared the air in the dispute regarding use of the words Magic/ Magical and Masala (a mixture of different spices used in Indian cooking) for food products. In 2013, the conflict had arisen between the two well established FMCG companies ITC and Nestle India, where the adoption of the expression “Magical Masala” by Nestle for marketing its instant noodles was alleged to be phonetically similar to “Magic Masala” used by ITC for its “Sunfeast Yippee! noodles”. 

Resultantly, the present suit for passing off was filed by ITC against Nestle. The primary question before the court was whether ITC can claim exclusivity over common words Magic and Masala alone or in combination.

ITC’s case is as follows:

  • The expression “Magic Masala” was adopted in 2010 as a sub-brand that forms the predominant feature of ITC’s composite trademark “Sunfeast Yippie! noodles Magic Masala”.
  • “Magic Masala” had attained distinctiveness and secondary meaning, which came to be associated with ITC alone in the instant noodle segment.
  • Nestle copied the expression “Magic Masala” by slightly tweaking it by adding a syllable “al” to the word “Magic”.
  • The adoption of a deceptively similar expression “Magical Masala” by Nestle (in 2013) amounts to passing off its instant noodles as that of ITC.
  • ITC was the first to adopt the expression “Magic Masala” for noodles.
  • “Magic Masala” was not used as a “flavour descriptor” (as contended by Nestle) as there is no ‘Masala’ in the Indian culinary, which is called “Magic”.
  • Nestle itself owned trademarks which were descriptive words and had used them as sub-brands for their noodles and sauce and had successfully thwarted its competitors from using them. Thus it cannot adopt a different stand.
  • Having noted that Nestle itself has used brands comprising the word Magic such as “Maggi Real Magic”, “Maggi Magic Cubes”, “Maggi Masala-Ae-Magic”, etc., it was estopped from contending that the word “Magic” was incapable of being protected even if it was laudatory.

Nestle contended that:

  • The expression “Magic Masala” was used by ITC as a “flavour/ product descriptor” describing the quality of the masala sold along with the bland noodles in the package. Similarly, it has used the expression “Magical Masala” as a “flavour descriptor” for its instant noodles.
  • The words “Magic” and “Masala”, or “Magic Masala” are common to the trade and have laudatory significance. Thus the same cannot attain distinctiveness so as to exclude others from using them.
  • ITC cannot restrain it from using the expression “Magical” in view of Section 35 of the Trade Marks Act, 1999, which provides the exception to use any bona fide description of the character or quality of goods or services.
  • It is the prior adopter of the words “Magic” and “Masala” for its range of taste enhancers and food products, namely, “Maggi Dal Magic” (Dal Taste Maker), “Maggi Masala Magic Cubes” and “Masala-Ae-Magic” (flavour solutions), etc.
  • “Magic” and “Masala” are also commonly used by several other traders in the food industry.
  • In newspaper advertisements and TV commercials, ITC has referred to its trademark as “Sunfeast Yippee!” and not as “Magic Masala”.
  • “Magic Masala” is not the registered trademark of the ITC and thus no statutory right can be claimed over the same.
  • Both the products are well distinguishable by their respective brands “Sunfeast Yippee!” and “Maggi” and the get-up, trade dress, and colour combination of the competing packaging are totally different.
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The Court framed the following two main issues (among others) for consideration:

  1. Whether the expression “Magic Masala” qualifies as a trademark and is capable of being monopolised to the exclusion of Nestle and others?
  2. Whether there was a passing-off of the instant noodle by Nestle?

After considering both parties’ pleadings and arguments, the Court dismissed the suit while making the following main observations:

  • Although there is a phonetic similarity between the words “Magic” and “Magical”, they are incapable of being monopolised as they are not only laudatory but also common to the trade.
  • The fact that no trademark application was filed by ITC to register the expression “Magic Masala” per se as a word mark shows that it was not intended to be used as a trademark or a sub-brand by them.
  • The expressions “Magic Masala” and “Magical Masala” are used to distinguish different flavours offered by both parties under their respective brands “Sunfeast Yippee!” and “Maggi”.
  • In its annual reports, ITC projected its brand as “Sunfeast Yippee!” for noodles. Thus the expression “Magic Masala” was not conceived as a brand or sub-brand as was argued.
  • As there is no visual similarity between the two wrappers in terms of their overall colour scheme, layout, style and get-up, there is no scope for passing-off. Moreover, the competing brands viz. “Sunfeast Yippee!” of ITC and “Maggi” of Nestle printed on the wrappers are completely different from each other.

Our comments

As brands jostle to attract consumers and increase market share, the sub-brands role as a product differentiator is increasingly becoming important. The placement of a sub-brand and its font size on a product packaging, in our view, are primarily branding and marketing issues. The case highlights that the court’s interpretation of branding from legal standpoint may be completely different from the intended purpose. One thing is clear while conceiving and adopting a brand, the businesses should avoid laudatory words.

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