By Vikrant Rana and Aashi Nema
Introduction
Can a brand use a competitor’s registered trademark (LOTUS) as part of a product name (Lotus Splash) by claiming it is simply describing the ingredients?
In a significant development for Indian trademark jurisprudence, the High Court of Delhi has overturned a previous refusal to grant an interim injunction in the case of Lotus Herbals v. 82°E. This judgment serves as a crucial exploration of the “Dominant Feature Test” and the fine line between descriptive usage and trademark infringement. By restraining the use of the mark “Lotus Splash” by the Respondents, the Court has reinforced the sanctity of prior usage and the protection of distinctive brand elements against the defense of descriptiveness.
Facts and Background
The dispute arose when Lotus Herbals, a market leader in the cosmetics sector with registrations dating back decades, filed a suit against the Respondents (82°E). The grievance centered on the Respondents’ use of the term “Lotus Splash” for a conditioning facial cleanser. While the Respondents operated under their primary house mark “82°E,” they introduced “Lotus Splash” as a product identifier. The Appellant contended that since “Lotus” is their registered trademark in Classes 3 and 5, any use of the word “Lotus” by a competitor, even as part of a multi-word product name, constituted infringement. The Learned Single Judge had initially declined the injunction vide order January 25, 2024, finding the term descriptive, which prompted this appeal.
Arguments Advanced by the Parties
- Arguments on behalf of the Appellants (Lotus Herbals)
The Appellants primarily argued that they are the prior and registered users of the “Lotus” mark, which has achieved secondary meaning through decades of continuous use. They contended that “Lotus Splash” was not being used descriptively but was projected as a sub-brand or sub-mark, evidenced by its prominent placement on the packaging. The Appellants also argued that the term “Lotus Splash” requires a “degree of imagination” to conclude that the product is a face wash, as a lotus cannot physically be “splashed.” Therefore, it is a suggestive or arbitrary mark rather than a descriptive one. Furthermore, they highlighted the concept of Initial Interest Confusion, asserting that the mere presence of the word “Lotus” would lead a consumer to believe there is an association between the two brands, even if the confusion is cleared at the point of purchase. - Arguments on behalf of the Respondents (82°E)
The Respondents maintained that “Lotus Splash” was purely a descriptor of the product’s characteristics, specifically its lotus extracts and hydrating nature. They relied heavily on Section 30(2)(a) of the Trade Marks Act, arguing that the law protects the bona fide use of words that indicate the kind or quality of the goods. They argued that the Rule of Anti-Dissection must apply, meaning the court should not isolate the word “Lotus” from the phrase “Lotus Splash.” Additionally, they pointed to their existing house mark “82°E” as the source identifier, claiming no consumer would be confused. They cited precedents like the Marico (Low Absorb) and Sugar Free cases to argue that common English words or ingredient names cannot be monopolized by a single entity.
Court’s Observation
The Court’s observations were centered on the visual reality of the product packaging. It noted that the phrase “conditioning cleanser with lotus and bioflavonoids” appeared in smaller font below “Lotus Splash,” which rendered the “descriptive” argument for the main mark redundant. If “Lotus Splash” were truly just a description, the secondary phrase would not be necessary. The Court found that “Lotus Splash” failed the test of pure descriptiveness. Furthermore, the Court observed that the respondents’ house mark was relegated to the base of the bottle, while “Lotus Splash” occupied the most prominent position at the top, indicating a clear intent to use it as a trademark to encash the Appellant’s goodwill.
Legal Intricacies Involved
The judgment delved deep into several sophisticated legal doctrines as follows :
Competitor’s Need Test : It applied the Degree of Imagination Test and the Competitors’ Need Test, concluding that “Lotus” is not a generic term for cosmetics that every competitor “needs” to use to describe their product. The Court also navigated the tension between the Anti-Dissection Rule and the Dominant Feature Test.
The “Visual Hierarchy” Test: The Court observed that “Lotus Splash” was printed in a larger, more prominent font than the house mark “82°E.” This suggested an intent to use the term as a sub-brand rather than a mere descriptor.
The “Day Before” Test: Citing the Procter & Gamble precedent, the Court noted that descriptiveness must be judged based on the “day before” first use. Since a “lotus cannot be splashed,” the term was deemed suggestive/arbitrary, not purely descriptive.
Initial Interest Confusion: Significantly, the Court addressed “Initial Interest Confusion,” holding that even if a consumer eventually realizes the products are from different brands, the confusion created at the preliminary stage of discovery is sufficient to meet the requirement of deceptive similarity under Section 29 of the Act.
Redundancy of the Defense: Since the packaging already included a descriptive phrase (“conditioning cleanser with lotus…”), the Court found the “Lotus Splash” title to be an unnecessary and infringing addition.
Court’s Final Order
The Division Bench allowed the application for a temporary injunction, setting aside the previous order. The Court restrained the respondents, along with their directors, agents, and distributors, from manufacturing or selling any beauty or hygiene products under the mark “Lotus Splash” or any other mark deceptively similar to the appellant’s “Lotus” trademark. This restraint applies to the use of “Lotus” independently or with any prefix or suffix until the final disposal of the suit. The Court clarified that these findings are prima facie for the purpose of the interim stage and shall not have a bearing on the final outcome of the trial.
Author’s Note
This judgment is a significant reaffirmation of three important principles in Indian trademark law :
- The defence of descriptiveness cannot be mechanically invoked. Courts will examine not only the literal meaning of words but also their commercial presentation and marketplace function. A term that appears descriptive in theory may nevertheless operate as a trademark in practice.
- The prominence on packaging is decisive. If a phrase is displayed as the most eye-catching element, courts are likely to treat it as a mark rather than a descriptor,
- The ruling strengthens protection for dominant features of well-known brands. Adoption of the essential part of a prior mark, even with additions or suffixes, is unlikely to survive interim scrutiny.
By focusing on the visual hierarchy of the packaging, the Court has provided a practical roadmap for identifying “trademark use” disguised as “description.” However, the ruling raises a significant question: where does a competitor’s right to inform the consumer about ingredients end?
By ruling that “Lotus Splash” is not descriptive because it is not literally possible to splash a flower, the Court has narrowed the scope of the descriptive defense. This “literalist” approach to the Degree of Imagination Test effectively grants a “zone of exclusivity” around registered marks that competitors must navigate with extreme caution. While this protects the commercial investment of established brands like Lotus Herbals, it places a heavy burden on new entrants to find creative ways to mention their ingredients without triggering infringement. The decision essentially mandates that if a brand wants to use an ingredient name that is also a competitor’s trademark, it must do so in a purely informative, non-prominent manner.
Anuj Dhar, Former Associate at S.S. Rana & Co. has assisted in the research of this article.