Giving a partial relief to the country’s largest consumer product company Hindustan Unilever HUL, the Calcutta High Court directed Kwality Ltd to not use the original writing style of Kwality Walls for any of its dairy products, but continue to use its currently operational registered trademark KDIL’S Kwality.
However, the court also said Kwality Ltd should not get into ice cream, ice lollies and frozen desert categories with KDIL’S Kwality brand while HUL is restrained to enter the dairy category with Kwality brand.
Hearing a petition of HUL claiming sole rights over Kwality Walls Justice Soumen Sen said that “Considering the fact that the defendant (Kwality) has been using the word ‘Kwality’ in conjunction with other words and was incorporated much before the dispute arose with no objection from the plaintiffs (HUL) or any of them, an order of injunction at this stage would cause irreparable prejudice to the defendant compared to that of the plaintiff if not granted at this stage, the following interim order is passed,”.
“The court has simply reiterated well established fundamental principles of trademark law, and the order therefore is logical. The only peculiarity is the plaintiff suffering an injunction in its own suit by having being restrained from entering into the defendant’s product lines using its Kwality mark. Perhaps a reading of the Order will shed more light on the rationale behind such a direction,” said Priyanka Khimani, partner, Anand & Anand & Khimani.
Food entrepreneurs Iqbal Ghai and PL Lamba founded the ice cream company under the ‘Kwality’ brand in pre-Independence Delhi in 1940. By early 1980s, the ice cream business was divided into four regions and the brand’s trademark was split amongst the proprietors in these territories. Between 1994-95, these different proprietors sold all rights along with goodwill of the trademark ‘Kwality’ to HUL.
Earlier this month, HUL filed a suit in the Calcutta High Court against Kwality Ltd alleging wrongful appropriation of the trademark. HUL also claimed that use of the brand name (Kwality Walls) for dairy products, including flavoured milk which can be considered as an extension of ice creams, has resulted in confusion in the market.
The core dairy business that was set up to supply milk as backward integration for the ice cream company was acquired by the Dhingra family in 2002. While the firm has mostly focussed on institutional sales, it also caters to retail clients under Dairy Best brand and had annual sales exceeding ₹6,000 crore in FY16-17. However, the publicly traded firm has been entering newer segments including flavoured milk under Kwality brand over the past few years, a move that attracted a similar legal dispute in 2015.
In 2015, Graviss Holdings, promoted by the Ghais, that owns InterContinental Hotel at Marine Drive in Mumbai, apart from restaurant chain Zaffran and other popular joints, took their former business partner PL Lamba to court alleging illegal reassignment of intellectual property rights in the artistic work ‘Kwality’ to the Delhi based dairy enterprise — Kwality Ltd. Ghai had then argued that the ‘Kwality’ brand had been sold to HUL and Lamba had no rights to assign the intellectual property in the brand to any other third party. The Court ordered Lamba and Kwality Ltd to refrain from using the brand. HUL intervened in the suit claiming rights over the brand basis assignment of rights by the Ghais, Lambas and others in 1994. The suit was subsequently withdrawn by Graviss.