rajdeep kumar 1 year ago

rajdeep

On April 16, 2025, the Delhi High Court delivered a significant judgment in Diageo Scotland Limited v. Prachi Verma & Anr. (C.A. (COMM.IPD-TM) 7/2025), allowing an appeal under Section 91 of the Trade Marks Act, 1999, and setting aside the registration of the trademark “CAPTAIN BLUE” (Application No. 4398295) in Class 33. The court overturned the Assistant Registrar of Trade Marks’ order dated October 1, 2024, which had dismissed Diageo’s opposition, finding that “CAPTAIN BLUE” was deceptively similar to Diageo’s “CAPTAIN” and “CAPTAIN MORGAN” marks and likely to cause confusion. This blog analyzes the case details, the court’s reasoning, and its implications for trademark law in India.

Case Background

Diageo Scotland Limited, a subsidiary of Diageo PLC, is a global leader in spirits, owning the renowned “CAPTAIN MORGAN” rum brand, launched in 1982 and acquired in 2001. The “CAPTAIN” formative is central to Diageo’s branding, with sub-brands like “CAPTAIN MORGAN GOLD,” “CAPTAIN MORGAN WHITE RUM,” and “CAPTAIN MORGAN DARK RUM.” Diageo holds registrations for “CAPTAIN” (No. 1485228) and “CAPTAIN MORGAN” (No. 708544) in Class 33 (alcoholic beverages) in India, where it has used these marks since 2006, generating USD 6.48 million in sales in 2023 alone.

Respondent No. 1, Prachi Verma, applied for the trademark “CAPTAIN BLUE” (Application No. 4398295) in Class 33 on a “proposed to be used” basis. Published in the Trade Marks Journal on January 27, 2020, the application faced opposition from Diageo (Opposition No. 1043295), which argued deceptive similarity, lack of bona fide adoption, and likelihood of confusion. The Assistant Registrar (Respondent No. 2) dismissed the opposition on October 1, 2024, finding “CAPTAIN BLUE” distinctive when compared holistically and citing unrelated third-party “CAPTAIN” registrations. Diageo appealed, seeking to set aside the order and remove “CAPTAIN BLUE” from the Trade Marks Register.

Key Arguments

Appellant’s Submissions (Diageo Scotland Limited)

Represented by Mr. Peeyoosh Kalra, Diageo argued:

1. Deceptive Similarity: “CAPTAIN BLUE” was deceptively similar to Diageo’s “CAPTAIN” and “CAPTAIN MORGAN” marks, incorporating the dominant “CAPTAIN” component. The suffix “BLUE” did not distinguish it, given Diageo’s family of marks like “CAPTAIN MORGAN GOLD” and “CAPTAIN MORGAN WHITE.”
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3. Prior Rights: Diageo’s prior registrations (Nos. 1485228 and 708544) and continuous use since 2006 established statutory and common law rights, entitling it to exclusivity under Sections 11 and 28 of the Trade Marks Act.
4. Lack of Bona Fide Adoption: Verma’s application was on a “proposed to be used” basis, with no evidence of actual use, commercial intent, or bona fide adoption under Rule 46 of the Trade Marks Rules, 2017. The Registrar ignored this.
5. Likelihood of Confusion: “CAPTAIN BLUE” could be perceived as a variant of Diageo’s marks, causing confusion among consumers and diluting Diageo’s brand, especially in Class 33 for identical goods (alcoholic beverages).
6. Third-Party Marks Irrelevant: The Registrar’s reliance on third-party “CAPTAIN” marks was flawed, as Diageo’s tabulation showed over 80 such applications were withdrawn, refused, abandoned, or opposed by Diageo. A settlement with IFB Agro Industries was confidential and not indicative of dilution.
7. Precedent Support: Cases like Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (2001) and Corn Products Refining Co. v. Shangrila Food Products Ltd. (1960) supported Diageo’s claim that minor variations in similar marks for identical goods create confusion.

Respondent No. 1’s Position (Prachi Verma)

Verma, proceeded ex parte after failing to file a reply or appear despite service, offered no defense regarding the adoption or justification of “CAPTAIN BLUE.”

Respondent No. 2’s Submissions (Registrar of Trade Marks)

Represented by Ms. Nidhi Raman, the Registrar defended the impugned order, arguing:

1. Distinctiveness: “CAPTAIN BLUE” was distinct from Diageo’s marks when compared holistically, lacking “semantic similarity,” per Vinita Gupta v. Amit Arora (2022) and Corn Products Refining Co.
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3. Third-Party Registrations: Other “CAPTAIN” marks existed, suggesting the term was not exclusive to Diageo.
4. Prior Rejection: Diageo’s failure to challenge a similar opposition rejection against another third-party “CAPTAIN” mark precluded this appeal.

Diageo’s Rejoinder

Diageo countered that Vinita Gupta and Corn Products supported its case, as they emphasized confusion from conceptual similarities. The Registrar’s reliance on third-party marks was impermissible, as these were not part of the pleadings, and Diageo’s tabulation showed most were non-existent or opposed. The IFB settlement was confidential and irrelevant.

Court’s Analysis and Decision

Justice Saurabh Banerjee allowed the appeal, set aside the impugned order, and directed the Registrar to remove “CAPTAIN BLUE” (Application No. 4398295) from the Trade Marks Register. Key findings included:

1. Prior Use and Registration: Diageo’s prior adoption and registration of “CAPTAIN” (No. 1485228) and “CAPTAIN MORGAN” (No. 708544), coupled with continuous use since 2006 and significant goodwill (USD 6.48 million in 2023), established its exclusive rights in Class 33.
2. Deceptive Similarity: “CAPTAIN BLUE” wholly incorporated the dominant “CAPTAIN” element, a source-identifying feature of Diageo’s family of marks. The suffix “BLUE” was insufficient to distinguish it, especially given Diageo’s variants like “CAPTAIN MORGAN GOLD” and “CAPTAIN MORGAN WHITE.” The court found a likelihood of confusion, as “CAPTAIN BLUE” could be perceived as a Diageo variant, per Cadila Healthcare and Corn Products.
3. Lack of Bona Fide Adoption: Verma’s “proposed to be used” application lacked evidence of actual use, commercial intent, or bona fide adoption under Rule 46. Her silence and failure to file a counter-statement or evidence reinforced bad faith adoption, which the Registrar ignored.
4. Third-Party Marks Irrelevant: The Registrar’s reliance on third-party “CAPTAIN” marks was erroneous, as Diageo’s tabulation showed most were withdrawn, refused, abandoned, or opposed. The IFB settlement was confidential and not indicative of market dilution. No evidence showed “CAPTAIN” was commonly used for alcoholic beverages in India, barring Diageo’s exclusive use.
5. Statutory Protection: Under Section 11, “CAPTAIN BLUE” should have been refused due to its similarity to Diageo’s registered marks and likelihood of confusion. Section 28 granted Diageo exclusivity, which the Registrar failed to uphold.
6. Registrar’s Errors: The Registrar ignored Diageo’s evidence, misapplied Vinita Gupta and Corn Products, and improperly relied on third-party marks not in the pleadings. The prior unappealed opposition rejection was irrelevant, as it did not bind this case.

The court concluded that Diageo, as a prior user, registered proprietor, and “person aggrieved,” was entitled to appeal under Section 91. The registration of “CAPTAIN BLUE” was unsustainable, warranting its removal.

Implications of the Judgment

This ruling has significant implications for trademark law and brand protection in India:

1. Protection of Dominant Mark Elements: The decision reinforces that incorporating a dominant, source-identifying element of a well-known mark (e.g., “CAPTAIN”) creates a likelihood of confusion, even with suffixes, especially for identical goods in the same class.
2. Burden on “Proposed to Be Used” Applicants: Applicants filing on a “proposed to be used” basis must demonstrate bona fide intent and commercial justification, failing which oppositions by prior users are likely to succeed. Silence or lack of evidence, as in Verma’s case, strengthens bad faith claims.
3. Limited Relevance of Third-Party Marks: The court clarified that third-party registrations are irrelevant unless they demonstrate widespread market use or dilution, particularly if opposed, withdrawn, or settled confidentially. This protects established brands from copycat applications.
4. Registrar’s Evidentiary Duty: The Registrar must consider all evidence, including tabulations of mark statuses, and avoid relying on unpleaded third-party marks. Failure to do so risks reversal on appeal.
5. Strengthened Appellate Jurisdiction: The ruling underscores the High Court’s role under Section 91 in correcting Registrar errors, especially when statutory protections under Sections 11 and 28 are overlooked.
6. Impact on Alcoholic Beverage Industry: For the spirits industry, where brand identity is critical, the decision bolsters protection for iconic marks like “CAPTAIN MORGAN,” deterring imitative filings that exploit brand equity.

Conclusion

The Delhi High Court’s decision in Diageo Scotland Limited v. Prachi Verma & Anr. is a landmark victory for trademark owners, particularly those with established brand families. By setting aside the registration of “CAPTAIN BLUE,” the court reaffirmed the principles of deceptive similarity, prior use, and statutory exclusivity under the Trade Marks Act. The ruling highlights the Registrar’s obligation to rigorously assess oppositions and the limited weight of third-party marks absent market evidence.

For brand owners, the judgment emphasizes the importance of vigilant opposition to similar marks and robust evidence of goodwill. For applicants, it underscores the risks of adopting marks resembling established brands without demonstrable bona fide intent. As trademark disputes grow in India’s competitive markets, this decision strengthens the legal framework protecting brand distinctiveness and consumer trust.