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Manjari Raman
(This is the second and concluding part of the report on the tussle between Candico and Perfetti over trademark use. The first part appeared in yesterday's edition)
It was a balmy Thursday evening on August 6, 1998, when the managing director of Perfetti India, Natalino Duo, met the chairman and managing director of Candico (I) Ltd. The summit conclave took place on neutral grounds at Gulmohar Park, a tony residential area in South Delhi, over drinks. Says Perfetti India director, sales and marketing, AK Dhingra: ``It was a friendly meeting and both parties agreed `let's not argue'.''
Counters Sanjiv Kumar, ``There was a meeting called by the directors of Perfetti, but no settlement took place. If you sat down over a drink would you leave behind the rights to your house? How can you take a decision when there is a pendency of the case in the court?''
To put a quick end to the legal cases, Perfetti claims, around the end of July 1998, it extended an olive branch to Candico: Sanjiv Kumar was invited over for cocktails by Natalino Duo and for the first time, the two sat face to face in an informal environment.
Now, Perfetti's insistence that both parties agreed to withdraw all the legal actions initiated against each other, during the August 6 meeting--and Candico's stout denial that any such unconditional move was agreed upon--will have a critical bearing on the future of the Perfetti-Candico fracas.
For, Perfetti has claimed in court, that on August 7, Natalino Duo dispatched a letter, by courier, to Sanjiv Kumar, reiterating ``the settlement''. Also, Perfetti claims that expecting a withdrawal of cases, it failed to appear at the Nagpur district court on subsequent hearings.
Here is an extract from a photocopy of the letter that Perfetti claims was sent to Sanjiv Kumar, dated August 7, 1998:
``Dear Sanjiv,
I am glad that our meeting could lead us in reinforcing a friendly relationship.
We decided that each of us will withdraw the litigation pending before the tribunals and particularly from your side the MRTP case and the case pending with the district court of Nagpur.
From our side we will not take further action in the legal notice that our lawyer Dadachandji has sent to you.
You agreed to modify the product description ``The Big Bubble Gum'' in your product so that no confusion is generated among the consumers.
From our side I will do whatever possible to ensure that within our organisation (sic) there is an attitude of respect towards competitors and towards Candico particularly.''
Perfetti claims that it received no immediate reply to this letter. On August 14, 1998, when the civil case came up for a hearing at Nagpur, Perfetti claims it did not appear at the district court for the hearing, assuming a withdrawal of the case.
The case was adjourned to August 29. Perfetti claims the first intimation it got that the August 6 meeting might not have gone off as well as expected was when it received a letter dated August 21, 1998, from Sanjiv Kumar. Purportedly, the letter was couriered by Candico through Falcon Couriers on August 24, and received at Perfetti, on August 26. Extracts:
``Dear Natalino,
It was a pleasure meeting you and I would like to acknowledge your letter dated August 7, 1998.
I shall have no objection to the withdrawal of the legal cases pending in the tribunal and the district court of Nagpur at various stages as per your suggestion.
Your request to modify the product description ``The Big Bubble Gum'' is not possible since a huge amount has been spent on the promotion throughout the India through TV and local medias.
You are also aware that we are prior users of the descriptive word ``The Big Bubble Gum'' and the details of the same are as per legal reply enclosed to this letter.
However, I shall advise my counsel to stop further proceedings in the courts on your withdrawal of the legal notice sent by your counsel and concede to the above.''
On August 27, Duo left for a scheduled visit to Italy. Perfetti also missed the August 29 hearing at the Nagpur district court.
On September 5, 1998, the court passed an interim order ruling that Perfetti, its men, servants, agents, stockists and distributors be ``restrained from using the words Big Babol''. The court also rapped Perfetti for not replying to the application or filing any written statement.
WERE PROMISES TRULY MADE--OR BROKEN?
September 7, 12 noon: Dhingra was entering his office when he came across a courier from Candico bearing a court order. Dhingra claims he assumed it was a decree of consent, and promptly signed for the document. ``However, only when I turned to the last page did I realise it was an injunction against us,'' says Dhingra.
All hell broke loose. As Duo was still in Italy, Dhingra began trying to contact Sanjiv Kumar and was finally given an appointment for the next day. On September 8, 6 pm, Dhingra met Sanjiv Kumar at Candico's corporate office in Delhi.
According to Dhingra, Kumar made his stand perfectly clear: the Big Bubble Gum brand belonged to Candico. Says Dhingra, ``He said to me, `both brands cannot exist in the market'. I said, `You know Big Babol can't be withdrawn.' So he said, ``Then what is your proposal? Get back to me.''
The Italian MNC decided in favour of fighting a legal battle. On September 8, all dispatches of Big Babol were stopped from Perfetti's Haryana-based manufacturing unit. On September 9, a message was sent to all depots to stop Big Babol sales.
And on September 8, 1998, Perfetti filed a petition appealing for a lifting of the injunction order and also apologised to the court saying the company meant no disrespect to the court.
Pertinently, Perfetti's application said that the managing director of Perfetti and the CMD of Candico ``entered into a dialogue for resolving the disputes involved in the present suit and proceedings''. And that the two ``came to an understanding/out-of-court settlement that were recorded in letters dated August 7, 1998 and August 21, 1998, agreeing to withdraw the suit and proceedings filed by or on behalf of the respective parties.''
Perfetti also pleaded that it was ``under the genuine and bonafide impression that the plaintiff/respondent (Candico) has taken necessary steps for withdrawal of the suit and present proceedings and also the UTP/RTP proceedings filed by it that were agreed to be settled mutually...''
Not surprisingly, Candico is protesting against the lifting of the interim order. Contesting Perfetti's claim that the company stayed away from the court on the basis of the ``alleged assurance'' given by Sanjiv Kumar, Candico has also firmly objected to Perfetti's interpretation of the August 7 meeting.
Says the Candico application filed on September 15: ``There was no concluded contract or settlement between the parties to withdraw the present proceedings...The parties were exchanging the offers and counter offers which never culminated into a concluded settlement''.
There was another issue: did Perfetti withdraw its legal notice sent to Candico on April 16, 1998? Pertinently, Perfetti insists that Dadachandji was advised not to proceed on the April '98 legal notice, soon after the August 7 meeting. However, no formal notice of the withdrawal was sent to Candico. Perfetti claims that on September 1, 1998, a formal withdrawal notice was sent to Candico from Dadachandji.
However, Candico accuses Perfetti of ante-dating the letter and that ``Significantly, at 4.55 pm on September 7, 1998, two full days after the injunction order had been passed by the hon'ble court, the respondents received a letter purportedly dated September 1, 1998, from the petitioner's advocates...'' Candico also points out that even on September 7, it received only a faxed copy and the copy by post arrived only on September 10, 1998.
With claims and counter-claims flying furiously, one thing is clear: September marked a hardening of positions of the two companies against each other. Once the dust over the interim stay order against Big Babol settles, the real battle will then begin over the cardinal issue: who owns the Big Bubble Gum brand?
WHEN DOES SIZE MATTER?
On September 21, 1998, Perfetti presented original documents in the Nagpur district court to prove that Big Babol was registered in the name of Perfetti SpA under the Trade and Merchandise Marks Act, 1958, under number 383562 on November 27, 1981.
Candico's current contention on the other hand is ``prior use''. Candico launched Big Bubble Gum in the Indian market in March 1989, while Big Babol debuted in India in December 1994. Says Sanjiv Kumar, ``The question of prior user, registration, etc, relating to the brand is a matter now before the court to decide.''
Perfetti is believed to have filed ad campaigns from the world over to establish that Big Babol has been in the global market place for almost 20 years. However, Candico is contesting the relevance of the use of the trademark outside India.
In fact, Candico has already objected that Perfetti SpA and Perfetti India Ltd are ``different legal entities'' and that ``there is absolutely no arrangement between the Italian company and the present defendant.''
Candico also claims: ``the registration of the alleged mark alleged to be in favour of the Italian company alleged to be of 1981 and renewal thereof is bad and illegal and appears to have been obtained on the basis of suppression of facts and misleading the authorities under the act.''
Candico also claims that the registration obtained by the Italian company was obtained by fraud--and that it is also initiating proceedings to have the trademark removed from the register.
On the flip side, besides the prior registration date, Perfetti's argument will hinge on proving how Candico's brands are actually the bold-type names of `Freedom' and `Loco Poco' and that the small-type `Big Bubble Gum' is a descriptor. Perfetti might also try to establish that Big Bubble was phased out of the market and is not even an active brand.
Pointing to the packaging, Dhingra says, ``In their television commercial or on their label, Freedom and Loco Poco are very clearly the brandnames. Big, bubble, gum, are dictionary words which can't be used as brandnames.''
Says Sanjiv Kumar, ``We can use the name Big Bubble Gum in any shape or size. And even if I sell one kilo of Big Bubble, it's my intellectual property, volumes are no justification. If I start selling even one Coca-Cola Bubble Gum, will I be allowed to?''
That both companies now have a fight--and an increasingly sticky one, at that--on their hands, is certain now. Perfetti sources claim that soon after the September 5 injunction was passed, an unsigned letter landed on its dealers' doorstep, announcing `Big Babol Banned' and which crowed that: ``It is perhaps for the first time that an Indian company has successfully managed to safeguard its rights under the Trade and Merchandise Act, 1958.''
Early this month, Candico also began pumping sales of Freedom. All authorised Candico dealers in Madhya Pradesh--called Candico Freedom Fighters--have been offered a September-long retail scheme.
Under the scheme, the retailer gets one poly pack of Frutti Tutti free with one jar of Freedom. It's a deal in which the margin percentage for the retailer will increase from the present 20 per cent to 56 per cent. Perfetti, which is still smarting under the MRTPC case on its 43 per cent discount, will now have a counter bone to pick with Candico.
Then there is the issue of packaging: market sources aver that Candico has readied a new packaging design for Freedom, and which will be launched in the next few months.
After skirmishing for the past nine months, Candico and Perfetti now seem to be digging trenches for a long and bloody battle: already the matter shows portents of graduating from the Nagpur district court to the high court. With both companies getting ready to chew each other out with one-up strategies in the courtroom and out in the marketplace, it will be a long time before the rancour is spat out. And bubble gum becomes a fun thing for India Inc. once again.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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