Case Study: The Coca-Cola Company v. Bisleri International Pvt. Ltd. & Ors.

By Harish Khan 16 Minutes Read

“An assignment deed, once executed, grants the assignee exclusive rights to the intellectual property, including trademarks. Any unauthorized use or export of the trademark by the assignor constitutes infringement, and such disputes fall under Indian jurisdiction if the goods are manufactured in India.”

Citation: (2009) 164 DLT 59

Date of Judgment: 20^th October, 2009

Court: High Court of Delhi  

Bench: Manmohan Singh (J)

Facts

• On September 18, 1993, Bisleri International sold various intellectual property rights, including trademarks, formulation rights, and goodwill for brands such as Thums Up, Limca, Gold Spot, Citra, and Maaza, to Coca-Cola Company. This transfer was part of a larger transaction between the parties, and the case in question specifically concerns the Maaza brand.
• After the sale of rights, Bisleri International retained the use of the Maaza trademark for countries outside India, where it was already registered.
• On November 12, 1993, Bisleri International assigned the trademark and license agreement related to Maaza with their affiliate, Bisleri Sales, which was responsible for making the beverage base for Maaza.
• In March 2008, Bisleri International discovered that Coca-Cola Company had applied for registration of the Maaza trademark in Turkey. This led Bisleri International to issue a legal notice to Coca-Cola Company in September 2008, accusing them of breaching their agreement by seeking trademark registration outside India. The notice also renounced the existing licensing agreement and aimed to prevent Coca-Cola from using the Maaza trademark.
• Coca-Cola claimed that Bisleri International had disclosed Maaza’s formulation information to third parties, specifically Varma International and M/s Indian Canning Industries. This disclosure was allegedly in violation of the agreement between the parties. As a result, Coca-Cola sought the impleadment of both Ramesh Chauhan and Vishal Varma as necessary parties to the case.
• Coca-Cola filed a suit for a temporary injunction under Order 39, Rule 1 and 2 of the Civil Procedure Code (CPC) to prevent Bisleri International from using the Maaza trademark and to stop the alleged unauthorized disclosure of the formulation. Order 39 Rule 4 of CPC, allows a party to make an application against an ex-parte order.
• Bisleri prayed for vacating the court’s order made on 15th October 2008 citing lack of jurisdiction of the Delhi High Court. The Bisleri contended that since their registered office was in Mumbai, it was the Bombay High Court which had the appropriate jurisdiction in the matter. 
• The court granted the injunction and appointed a local commissioner to investigate the alleged illegal disclosure of information.
• Bisleri International argued that the assignment deed from 1993 only allowed Coca-Cola to use the Maaza trademark within India. Bisleri International also expressed an intention to start using the Maaza trademark in India, contrary to Coca-Cola’s claims. They repudiated the licensing agreement, asserting their rights to the Maaza trademark outside India and potentially within India as well.
• The core issue revolves around the scope and interpretation of the trademark and licensing agreements between Coca-Cola and Bisleri International, particularly regarding the use of the Maaza trademark in Turkey and the alleged breach of contract by both parties.
• The court’s initial intervention involved granting the temporary injunction in favor of Coca-Cola, thus restricting Bisleri International’s use of the Maaza trademark and investigating the claims of unauthorized disclosure.

Decision of the Delhi High Court

The Court ruled in favour of The Coca-Cola Company on all counts, confirming that Bisleri International Pvt. Ltd. had no legal grounds to challenge the assignment deed or to continue using the MAAZA trademark.

The Court upheld the Delhi High Court’s jurisdiction and dismissed Bisleri International’s appeal to vacate the interim injunction.

The permanent injunction against Bisleri International Pvt. Ltd. was upheld, along with the injunction against Varma International, to protect The Coca-Cola Company’s rights and prevent any further trademark infringement.

The Court’s judgment reinforced the sanctity of the assignment deed, confirmed The Coca-Cola Company’s exclusive rights to the MAAZA trademark, and emphasized the legal consequences of unauthorized trademark use, both within India and in international markets.

Key legal issues discussed

1. Was the assignment deed executed between Bisleri International Pvt. Ltd. and The Coca-Cola Company on September 18, 1993, considered legally valid and binding by the Court?

Yes

The Court upheld the validity of the assignment deed executed between Bisleri International Pvt. Ltd. and The Coca-Cola Company on September 18, 1993. The Court, in accordance with Sections 41(h) and (l) of the Specific Relief Act, 1963, confirmed that the deed of assignment was a legally binding agreement that effectively transferred all intellectual property rights (IPRs), including the trademark “MAAZA,” to The Coca-Cola Company. The Court noted that the terms of the contract were clear and absolute, and neither party could repudiate or dismiss the agreement unless there was a proven breach of the contractual terms.

2. Whether the Delhi High Court had jurisdiction over this matter?

Yes

The Delhi High Court had jurisdiction over the matter. The Court determined that the case involved trademark infringement where goods were manufactured in India and subsequently exported to another country. The Court emphasized that since the trademark infringement occurred with products manufactured in India, the sale, even if made abroad, was considered a domestic sale within India. The jurisdiction of the Delhi High Court in this matter is determined based on several key factors consistent with the provisions of the Trade Marks Act, 1999, and the Code of Civil Procedure (CPC).

According to Section 134 of the Trade Marks Act, 1999, a suit related to trademarks can be instituted in a District Court within the jurisdiction where the plaintiff resides or carries on business. Additionally, Section 20 of the CPC permits a suit to be filed in a court where a part of the cause of action arises. Therefore, if any part of the cause of action related to the trademark dispute occurred in Delhi, the Delhi High Court may exercise jurisdiction.

The court’s jurisdiction is also supported by the principle established in Tata Iron & Steel Co. Ltd. v. Mahavir Steels & Ors.,[1] which emphasizes that jurisdiction is determined based on the allegations in the plaint, provided they are not disproven by evidence. Similarly, LG Corporation & Anr. v. Intermarket Electroplasters (P) Ltd.[2] illustrates that jurisdiction is accepted based on the averments made by the plaintiff at the preliminary stage of the proceedings.

In addition, the decision in Pfizer Products Inc. v. Rajesh Chopra & Ors.[3] confirms that jurisdiction can be conferred if the threat or act of infringement occurs within the territorial limits of the court. Furthermore, the court considers evidence such as the distribution and marketing of infringing products within the jurisdiction, as seen in Souza Cruz v. N.K. Jain & Ors.[4] and Jaininder Jain & Ors. v. Arihant Jain & Ors.,[5] where jurisdiction was upheld based on the location of infringing activities or where goods were marketed.

In this case, if the defendant’s activities, including legal notices and advertisements, occur within Delhi, these factors collectively support the Delhi High Court’s jurisdiction over the matter. This established the Delhi High Court’s jurisdiction over the case.

3. Whether the plaintiff was entitled to a permanent injunction?

Yes

The plaintiff, The Coca-Cola Company, was entitled to a permanent injunction. The Court found that the assignment deed executed between Bisleri International Pvt. Ltd. and The Coca-Cola Company was valid and legally binding, effectively transferring all rights to the MAAZA trademark to The Coca-Cola Company. Bisleri International’s continued use of the trademark after the transfer constituted an infringement of The Coca-Cola Company’s rights. To prevent further unauthorized use of the trademark and to protect The Coca-Cola Company from irreparable harm, the Court granted a permanent injunction against Bisleri International, prohibiting the use of the MAAZA trademark both in India and for export purposes.

The Court in Para 51 referred to the case of Midas Hygiene Industries Pvt. Ltd. v. Sudhir Bhatia,[6] in which it was held that “the law on the subject is well settled. Normally, in cases of infringement of trademark an injunction must follow. The grant of injunction becomes necessary if it appears prima facie that the adoption of the mark was itself dishonest.”

The Court in Para 52 referring to the above judgment held that “…Since the plaintiff is the registered owner of the trademark MAAZA, hence, it has established a good prima facie case for grant of an injunction, the balance of convenience also lies in favour of the plaintiff and against the defendants. I am of the considered opinion that in case no injunction is issued, the plaintiff shall suffer irreparable loss and injury.”

4. Whether it was necessary to implead Mr. R.B. Varma, who was the father of Mr. Vishal Verma and also a former employee of Bisleri?

Yes

It was necessary to implead Mr. R.B. Varma. The Court found that Mr. R.B. Varma’s involvement was crucial to the case as he was connected to the unauthorized use of the MAAZA trademark through his son, Mr. Vishal Verma, who was associated with Varma International. Varma International had been found to export products bearing the MAAZA trademark, which constituted an infringement. Given Mr. R.B. Varma’s connection to both the trademark’s prior owner (Bisleri) and his son’s company (Varma International), his impleadment was deemed necessary for the Court to fully examine the extent of the infringement and the roles of all parties involved. The Court concluded that his joinder was essential for the proper adjudication of the case.

5. Had Infringement of Trademarks Occurred?

Yes

Trademark infringement had occurred. The Court determined that Bisleri International Pvt. Ltd. had infringed upon The Coca-Cola Company’s trademark rights by continuing to use the “MAAZA” trademark after having legally assigned all rights to the trademark to The Coca-Cola Company in 1993. The continued production and sale of products under the “MAAZA” brand by Bisleri or any of its affiliates constituted a violation of The Coca-Cola Company’s exclusive rights to the trademark.

6. Whether Export of the Products with the Trademark “MAAZA” was Considered Trademark Infringement in the Exporting Nation?

Yes

The export of products with the trademark “MAAZA” was considered trademark infringement in the exporting nation (India). The Court held that under Indian law, the act of manufacturing goods in India for the purpose of export constituted a sale within India. Since the goods bearing the “MAAZA” trademark were manufactured in India, the unauthorized use of the trademark during production and export was considered an infringement under Indian law, regardless of where the products were sold or used internationally.

The Delhi High Court affirmed that trademark rights were protected within the jurisdiction of the country where the goods were produced and where the trademark was registered. In this case, the infringement occurred in India, where the “MAAZA” trademark was registered under The Coca-Cola Company, and the export of these goods was thus a violation of those rights. Therefore, the exportation of “MAAZA” products without authorization from The Coca-Cola Company was ruled as an infringement, justifying the permanent injunction granted by the Court.

[1] 47(1992) DLT 412.

[2] 2006 (32) PTC 429.

[3] 2006(32) PTC 301(Delhi).

[4] PTC (Suppl) (2) 892 (Del).

[5] 2007 (34) PTC 128 (Del).

[6] 2004 (28) PTC 121 (SC).

Harish Khan

This is Harish Khan, Enrolled as an Advocate with the Bar Council of Delhi. Currently, working as Legal Manager at Blackbull Law House. Pursued B.B.A. LL.B (Hons) Specialised in Business Laws from Himachal Pradesh National Law University, Shimla [H.P]. completed LL.M Specialised in Business Laws from Amity University, Lucknow [U.P].