HUL v. EMAMI: Is The Battle For The Brand 'Fair'?
Arnab Chakraborty *
The recent controversy surrounding racial discrimination has resulted in several companies changing their business goals and interests across the world. People have started speaking up against various professional fraternities’ obsession with fair toned skin. This has eventually caused big names involved in the manufacturing of skincare merchandise to rebrand their products. Now, it is turning out to be a race among the major competitors to adopting attractive brand names for their products to avoid constant criticism and attract decent endorsements, simultaneously. The latest conflict between Hindustan Unilever Limited (hereinafter ‘HUL’) and Emami Private Limited (hereinafter ‘Emami’) has been viewed as the first of many such trademark infringement issues that could emerge due to the protests related to the #BlackLivesMatter movement.
Emami and HUL have been top brands in the sector of FMCG products and they have been equally dominant in the market of fairness creams in India. The conflict started when HUL, through a press release, announced the rebranding of their successful fairness product ‘Fair and Lovely’ in an attempt to reiterate its vision towards a more inclusive definition of beauty in India. However, they did not mention the rebranded name of the product as they awaited regulatory approvals. On 2nd July 2020, the company finally revealed that the women’s ‘Fair and Lovely’ has been rebranded as ‘Glow and Lovely’ while the men’s version of the same product has been rebranded as ‘Glow and Handsome’.
The press release was condemned by their FMCG competitor, Emami. It was alleged that this amounted to be a gross trademark infringement of their brand ‘Glow and Handsome’ as they were the prior adopter of the name. The top officials of the company stuck to their ground, pointing fingers at HUL for their extremely selfish move. Moreover, Emami also furnished notices with warnings to initiate legal proceedings against HUL. Things turned ugly when HUL approached the High Court of Judicature at Bombay to ward off “groundless threats” under Section 142 of the Trademarks Act.
ANALYSIS OF THE INTERIM ORDER
The Court granted interim relief to the plaintiff by ascertaining that the defendant should intimate the plaintiff seven days prior to initiating or filing a suit against HUL for trademark infringement.[i] However, there are two issues that assume supreme significance. The fact that HUL had applied for a registered trademark in 2018 for its product on a ‘proposed to be used’ basis but it was rejected on grounds of indistinctiveness is the primary issue in this matter. The trademark could not be registered by HUL two years back. However, they tried to take another crack at it this year through a review petition and it remains to be seen whether they come out on the winning side of the suit, if contested. The reason for the trademark being rejected in 2018 but prima facie being considered in 2020 certainly raises a few questions regarding the process of certification solely because HUL’s 2018 application had the same name as the one which received FDA approval on July 3rd, 2020.[ii]
Section 9(1)(a) of the Trademarks Act forbids registration of a trademark if it is devoid of any distinctive character and consequently, bears the potential of confusing the consumers. The 2018 application was rejected since the brand ‘Glow and Lovely’ was viewed as extremely commonplace and it was stated that the applied mark is a very routine and general tag line over which nobody can have a monopoly or exclusive right. The Registrar of trademarks rejected it without even providing scope for correction or amendment under Section 22(1) of the Trademarks Act. Thus, the decision reflects the status of the inconsistency and arbitrariness of the Registrar of Trademarks.
Secondly, the threats meted out by Emami through newspaper articles and interviews certainly seem baseless. It looks more like an attempt to disparage and slander the brand of HUL in order to tighten their grip on the market. Section 11(4) of the Act clarifies that an “earlier trademark” would be decided on the basis of the date of filing of the application and not the date of registration. In this case, HUL had initially applied for the trademark in 2018 and later filed a review petition dated 25th June 2020 whereas Emami filed their trademark application a day later on 26th June 2020. The timeline proves that HUL being the earlier filer should be considered to be the licensed trademark owner. It was also stated that HUL had followed routine legal protocol before filing their application for rebranding. This further elucidates the fact that the name was coined without any mala fide intention to defame or eat into the market share of their rival.
Since HUL succeeded in establishing a prima facie case, the Hon’ble Court granted an interim injunction restraining the defendant from issuing “groundless threats” and now the burden of proof shifts from the plaintiff to the defendant to prove that their trademark has been infringed.[iii] Further, the Court also ensured that the plaintiff be informed seven days before any legal proceeding is initiated by the defendant. This does place HUL in an advantageous position and it is only a matter of time before their resolute attitude bears fruit. The seven days cushion provided by the Court has to be read harmoniously with Section 34 of the Specific Relief Act which guarantees that a person is entitled to institute a suit to protect his right as to any property against any person denying or interested in denying his entitlement to such property. In such a situation, the plaintiff may not ask for further relief. Thus, the luxury of HUL being intimated seven days prior to a suit being filed goes against the interest of Emami in this case as Section 34 explicitly does not impose any added condition that has to be satisfied before a suit is instituted. However, the relief given by the Court in the form of the mandatory prior intimation definitely does not serve anybody’s interest but HUL’s.
LIMITATIONS OF SECTION 142 OF TRADEMARKS ACT
Section 60 of the Copyright Act and Section 106 of the Patents Act are viewed as parallel provisions to Section 142 of the Trademarks Act. There is a major difference in the scope of the Copyright Act and the Trademarks Act from the said provision of the Patents Act. Section 142 of the Trademarks Act and Section 60 of the Copyright Act explicitly states that the remedy provided under these provisions shall not be available if the registered proprietor of the trademark, with due diligence, prosecutes an action against the person threatened for infringement of the trademark. However, Section 106 of the Patents Act does not state that the remedies available under it shall cease to exist if a fresh suit is instituted after due diligence. This means that both the proceedings can run concurrently, which seems to be a better and more logical method as compared to the parallel provisions in the Copyright Act and the Trademark Act.
The character of Section 142 of the Trademarks Act enables it to be used with a mala fide intention to shove off the action brought against them for “groundless threats”. For instance, the person against whom an action under Section 142 is brought may file a proceeding for infringement thereby having the action under Section 142 dismissed but thereafter not pursue the action for infringement.[iv] The action brought under Section 142 would dissolve in such a situation, thereby putting the plaintiff in a vulnerable position. The said provision acts as a defense to baseless threats of trademark infringement but it has the potential of turning into an extremely conniving provision. This was commonly practiced in the UK in the 1940s, with regard to the protection of patents. It is believed that the Patents Act, 1970 took this factor into account and hence, left out the added provision which stated that the action under Section 106 loses its validity on the institution of a subsequent suit.[v]
This is not the first time that HUL and Emami have engaged in a legal battle. They have been involved in various legal battles in the past concerning trademark infringement and comparative advertising.[vi] As things stand, in all probability HUL should take the reins of the new version of men’s fairness cream which they have rebranded as ‘Glow and Handsome’. Undoubtedly, this verdict is lined up to become a landmark judgment in the field of trademarks and might go a long way in determining the future of fairness cream branding in India. Section 142 and its implementation also raise certain questions pertaining to prosecution for trademark infringement. It was used as a wielding sword, although under Patents Law, previously in the UK. In the present context, the scope of the said provision can turn out to be extremely damaging for the actual proprietor of the trademark in India. Thus, there emerges an urgent need to amend Section 142 of the Trademarks Act and thereby, aligning it with Section 106 of the Patents Act.
* Arnab Chakraborty is a 3rd year BBA. LLB (Hons.) student at National Law University Odisha
** Image Source: Bar & Bench
[i] Hindustan Unilever Limited v. Emami Limited,2020 SCC OnLineBom 764, ¶13.
[ii] Hindustan Unilever Limited v. Emami Limited, 2020 SCC OnLineBom 764, ¶8.
[iii] Kokanratna Holiday Resorts Limited v. Millenium and Copthorne International Limited, 2018 SCC OnLineBom 15474. [iv] Bristol-Myers Squibb Holdings Ireland Unlimited Company v. Natco Pharma, (2020) 266 DLT 724, ¶15. [v] ibid. [vi] Hindustan Unilever Limited v. Emami Limited, 2018 SCC OnLine Cal 8882.