Starbucks Corporation v. SardarBuksh Coffee & Ors

Case Details

Case Title: Starbucks Corporation v. Sardarbuksh Coffee & Co. & Ors.

Citation: CS(COMM) 1007/2018

Date of judgment:  1 August 2018

Plaintiff: Starbucks Coffee

Defendant: Sardarbuksh Coffee and Co. & Ors

Bench: Hon’ble Justice Manmohan

Court:  Delhi High Court (Commercial Court)

Introduction

The case of Starbucks Corporation v. Sardarbuksh Coffee & Co. & Ors. is important in Indian trademark law for its contribution to the concept of deceptive similarity.

Both Starbucks and Sardarbuksh are coffee brands, but the dispute arose when Sardarbuksh’s name tends to create confusion among the public and that lead to the infringement of Starbucks, as both names are phonetically similar, and their logos are also similar.

Starbucks is a well-known international coffee brand that is known for the calibre of its coffee and also holds the trademark for the name ‘STARBUCKS’ and related logo. Both the Defendant and the Plaintiff offer similar products and services. The Plaintiff filed a complaint against SardarBuksh in the Hon’ble High Court of Delhi as a result of the entire chain of events beforehand.

Facts of the Case

Both Starbucks and SardarBuksh are the coffee brands in this case. Starbucks is a well-known coffee brand around the globe and has registered the word mark “STARBUCKS” and its corresponding logo in India since 2001.

In 2015, the defendant opened a coffee shop by the name Sardarbuksh Coffee & Co. The defendant also opted for a circular logo containing the image of a turbaned man, with wavy lines around the figure. The overall visual representation of the logo was similar to the Starbucks logo.

In 2017, Starbucks sent a legal notice to Sardarbuksh asking them to modify their brand name and logo.

Sardarbuksh responded by changing the colour of its logo to black and yellow, while continuing to use the name Sardarbuksh.

In 2018, it was also specified and agreed that if a third party used the term “Bakhsh,” the defendant would have the right to sue; as a result, the defendant renamed Sardarbuksh Coffee & Co. to Sardarji-Bakhsh Coffee & Co.

Issue Before the Court 

The issue before the court was:

1. Whether the mark “Sardarbuksh Coffee & Co.” was deceptively similar to Starbucks’ registered trademark “STARBUCKS.”
2. Whether Sardarbuksh’s use of the mark amounted to trademark infringement under the Trademarks Act, 1999.
3. Whether the use of the mark was likely to cause confusion or deception among consumers.
4. Whether Sardarbuksh was attempting to benefit from Starbucks’ goodwill and reputation through its branding.

•  Arguments by Starbuck (Plaintiff)

1. Starbucks was the plaintiff and contended that the word Sardarbuksh is phonetically similar and is creating confusion in the minds of people.
2. They also stated that both names have similar pronunciation, structure, and overall commercial impression.
3. They further stated that the logos of both brands were circular with a central human figure, creating visual similarity, and the defendant copied the overall appearance of the Starbucks logo.
4. Starbucks argued that it had acquired the goodwill through years of use and trademark registration, and Sardarbuksh was infringing the trademark by attracting customers through imitation.
5. Starbucks relied on Section 29 of the Trademarks Act, 1999, which states the Infringement of registered trademarks.

• Arguments by Sardarbuksh (Defendant)

1. Sardarbuksh was the respondent and argued that Sardarbuksh was inspired by Punjabi culture and had a distinct identity.
2. They also claimed that after receiving the legal notice from Starbucks, they changed their colour scheme from green to black and yellow.
3. The defendant contended that they had no intention of misleading the customer and copying the Starbucks name and logo.
4. Sardarbuksh claimed that they had developed their own customer base and business identity in India.

Judgment

The High Court of Delhi granted interim relief in favour of Starbucks and directed the defendant to use the name “Sardarji-Bakhsh” for its upcoming outlets until the final hearing.

On 27 September 2018, the parties settled, and Sardarbuksh agreed to rename its outlets to Sardarji-Bakhsh Coffee & Co., and the matter was resolved by consent.

The Court passed a decree in accordance with the settlement terms.

Significance of Judgement

The case Starbucks Corporation v. Sardarbuksh Coffee & Co. & Ors. Is one of the important cases in Indian trademark law for its contribution to the interpretation of the concept of deceptive similarity. It clarifies that trademark infringement is not limited to identical marks; phonetic, visual, and conceptual similarity may also amount to infringement.

The court also emphasised protecting the consumer from misleading and protecting the brand identity, which had established goodwill and reputation over the years of continuous use.

The Court relied on the following principles of trademark law:

• Section 2(1)(h) – Deceptive Similarity

A trademark is deceptively similar if it resembles another mark closely enough to deceive or confuse consumers.

• Section 29 – Trademark Infringement

Using a similar mark for identical or similar goods or services without authorisation amounts to infringement if it causes consumer confusion.

Conclusion

Starbucks Corporation v. Sardarbuksh Coffee & Co. highlighted the importance of deceptive similarity and protection of trademark goodwill under Indian trademark law. Starbucks, being the prior registered proprietor of the STARBUCKS mark, took an objection to Sardarbuksh’s use of a similar-sounding name and a name deceptively similar in appearance in the same business sector.

The Delhi High Court granted interim relief to Starbucks, and the parties subsequently settled the dispute, with Sardarbuksh changing its name to Sardarji-Bakhsh Coffee & Co.

The case therefore serves as a pertinent precedent of how phonetic similarity, visual similarity, nature of goods/services, goodwill and likelihood of consumer confusion are relevant considerations in trademark disputes. It also reinforces the principle that businesses cannot simply adopt a similar-sounding or similar-looking mark where it may create confusion or an association with an already established brand.

References

1. Starbucks Corporation v. Sardarbuksh Coffee & Co. & Ors., CS(COMM) 1007/2018, 
2. The Trade Marks Act, 1999 – S 2(1)(h), 11 and 29.
3. National Sewing Thread Co. Ltd. v. James Chadwick & Bros., AIR 1953 SC 357 
4. https://www.rkdewan.com/articles/true-brew-starbucks-corporation-v-sardarbuksh-coffee-co/