CASE COMMENT: PEPSI CO. INC. v.

HINDUSTAN COCA COLA

8.1: INTELLECTUAL PROPERTY RIGHTS

Submitted by
Mukul Nashine
UG16-29

Submitted to
Dr. Ragini P. Khubalkar
Assistant Professor of Law

Academic year 2019-20

MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

1. BACKGROUND OF THE CASE................................................................................... 3

2. FACTS ............................................................................................................................ 4

3. CONTETIONS RAISED BY PLAINTIFFS................................................................... 5

4. CONTENTIONS BY DEFENDANTS............................................................................ 6

5. ISSUES ........................................................................................................................... 7

6. JUDGMENT RENDERED............................................................................................. 8

7. CONCLUSION..............................................................................................................13

8. BIBLIOGRAPHY..........................................................................................................14

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 1. BACKGROUND OF THE CASE

The Cola-Pesi war has been running over a decade dealing with economic as well as legal
problems. Although the feud really heated up with the Pepsi Challenge in 1975 which prompted
Coca-Cola's horrific New Coke debacle the brands have been fighting each other for more than a
century. And not just about product development. Things occasionally get personal, which
sometimes resonates in their marketing. Releasing a large amount of commercials pointing and
poking each other. Both the Giants Soda Companies started spending a lot in marketing and
advertising not only across the world but including in India. The huge numbers of commercial and
the erupted cola-pepsi rivalry became the talk of the town as the kids to celebrities all of them
involved in partying with their own sides. Once such occurrence happened in India in around late
nineties. During this time Pepsi has already commercialized one of its unique advertisement
displaying the unique taste of Pepsi. This advertisement became popular and was during the time
also called as the Roller Coaster Advertisement. During the same time Cola released an
advertisement similar to the Pepsi but the only difference being that this advertisement as per Pepsi
Mocked its brand and was a way showed as a parody. This actually became a popular guilt at the
time leading to Pepsi filing the case against Coca-Cola for the reasons of Competitive
Advertisement.

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 2. FACTS

The present case has been filed before Delhi High Court with regards to application for grant of
interim injunction towards plaintiff regarding the conduct of infringement on the side of defendants
thereby seeking restriction order for the same. The plaintiff being Pepsi who has filed the case
based on the basis of comparative advertisement featured by Coca-Cola which is extremely similar
to that of the one released by the defendants thereby may in future lead to huge losses to plaintiffs.
By the virtue of both Copyright Act as well as Indian Trademark Act, the plaintiffs had already
been registered under the same. The act of deceptively similar advertisement by defendants as well
as slogan being PAPPI which is again similar to that of Pepsi, in addition, the phrase YEH DIL
Mange MORE coined by the plaintiffs has accumulatively lead to the infringement under the above
two acts thereby leading to infringement on the part of defendants. The Global Device is also
claimed to be an original work of plaintiffs, registered under copyright act.

It is in these circumstances that the plaintiffs in these actions pray that the defendants be injuncted
from infringing the registered trademark and copyright of the plaintiffs and be further restrained
from telecasting the commercials. On the contrary, the application is rejected by defendants on the
basis of allegations being controverted.

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 3. CONTETIONS RAISED BY PLAINTIFFS

(i) The plaintiffs contend that the use of the word Pepsi or any other deceptively similar word
constitutes infringement of the plaintiffs registered trademark. The use of the Globe Device
or any other device which is a colourable imitation or a substantial reproduction of the said
device constitute violation of trademark right and copyright in favour of the plaintiffs. The
use of phrase YEH DIL MANGE MORE or a substantial portion of the same also constitute
infringement of plaintiffs copyright.
(ii) That the registered trademarks or deceptively similar marks of the plaintiffs have been used
by the defendants in violation of the exclusive right conferred upon the plaintiffs under
Section 28 and 29 of the Act and the same would constitute infringement.
(iii)Plaintiffs contend that the television commercials of the defendants disparage and denigrate
the plaintiff’s products.
(iv)The plaintiffs contended that a viewer can be confused into believing that the commercial
of the defendants is for the product of the plaintiffs and not the defendants, and that by
reason of conduct of the defendants, the viewer who expects to see the advertisement of
the plaintiffs ends up by watching the advertisement of the defendants.

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 4. CONTENTIONS BY DEFENDANTS

(i) “ That the plaintiffs have failed to make out any prima facie case for grant of interim
protection. To constitute infringement the plaintiffs had to show that the defendants use of
the mark Pepsi or the Globe Device or any other mark identical with or deceptively similar
thereto was in the course of trade and that such use was in relation in such a manner as to
suggest that the goods were manufactured by the defendants. ”
(ii) “ That the defendants television commercial did not disclose any recognizable device and
in any event it was similar to the circular device of the defendants, which are registered
trademarks of the defendants company. Even if the defendants were to use the trade mark
Pepsi or the Globe Device it would not amount to infringement of the plaintiffs trade mark
in light of the provisions of 1958 Act. ”
(iii) “ Defendants denied the use of the word Pepsi in their commercial and urged that the word
PAPPI is neither visually nor phonetically similar to the word Pepsi. There was thus no
question of infringement of the plaintiffs trade mark.”
(iv) “ That mere advertising slogans are not literary work within the meaning of the Copyright
Act and therefore, enjoy no protection. ”
(v) “ It was contended that defendants are at liberty to puff and promote their goods. ”It is also
submitted that the suit has been filed mala fide as the plaintiffs have complained to this
Court of advertising campaigns on part of the defendants but they themselves have
indulged in campaigns of comparative advertising which are offensive and disparaging.

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 5. ISSUES

1. “Whether the plaintiffs make out a prima facie case for grant of an interim
injunction.”
2. Whether the defendants infringe the :
(i) TRADEMARK PROTECTION in respect to the use of word PAPPI (being
deceptively similar to Pepsi).
(ii) COPYRIGHT PROTECTION in respect to the phrase ‘YEH DIL MANGE
MORE’, and Global Device, as well as the Roller Coaster advertisement.
3. “Whether the conduct of the defendants injures the rights and goodwill and the
business of the plaintiffs. ”
4. “Whether the use by the defendants of the plaintiffs mark in comparative
advertising constitutes infringement. ”

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 6. JUDGMENT RENDERED

In the present case upon all the contentions raised by both the parties the court came up with the
four main issues covering all the contention raised by the parties, while answering each one of
them on the basis of the various precedents set by both the Domestic as well as International courts.

The Court after looking at the ‘TRADEMARK’ Infringement issue in particular the following
problem being whether the use of competitor’s trademark qualifies as an infringement under the
Indian Trademark Act of 1958. For this the court dealt with the relevant sections concerning the
above dispute; mainly Section 2(1)(V), 2(2)(b), 28 & 29 of Indian Trademark Act, 1958 with
former analyzing in context with the that given under the 1940 act as well as 1938 Act of British.

After analyzing the ccontext and intention of Indian legislatures incorporating these sections under
1958 Act in addition to certain case laws (cited by the Court), it came to a certain conclusion as
to given below in points.

“Coming to the present case the following are the relevant points to mention here:

(a) That the defendants have not used the trade mark PAPPI and device on their products in the
course of their trade nor in relation to any goods in respect of which the trade mark is registered.

(b) That the defendants have not sold their merchandise goods under the trade mark of the
plaintiffs.

(c) That the defendants have not advertised their products under the plaintiffs' trade mark.

(d) It is not disputed that comparative advertisements are permissible in la w.”

After coming to the consideration as to the following above points the court was of the view that
the defendants in any way did not infringe any right with respect to Trademark Infringement under
Indian Trademark act, 1958. It further went on to observe the following:

The expression “in relation to any goods in respect of which the trade mark is registered” in
Section 29(1) makes it clear that there is no infringement of a mark unless the infringer uses the
“

mark in relation to same goods covered by the registration. It is fundamental principle of trade
mark law that the function of a trade mark is to indicate the origin of the goods to which it is
applied.” The expression “in the course of trade” has a definite connotation. In order to constitute

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infringement, the use complained of must be a use in the course of trade. “ The defendants must be
dealing or selling of in some other way trading in the goods bearing the offending mark.
Possession of such goods for the purpose of comparison will not amount to in fringement. The right
conferred by registration is a right to use the mark in the course of trade and obviously this right
is infringed only when the infringer also uses the mark in the course of trade. ” The use “in the
course of trade” means in the course of business. “ It did not mean use as a trade mark. The purpose
for which the mark was applied will not prevent it constituting an infringement provided it was
used in the course of trade and was capable of indicating a connection in the course of trade
between the goods and the proprietor of the registered trade mark. ”1

“ In view of the above it is clear that the language of Section 4(b) of the Trade Mark Act, 1938 (UK)
is not embodied in Section 29 of the present Act which is applicable in India i.e. Trade and
Merchandise Marks Act, 1958. Although Section 2(2)(a) and (b) has the similar language of
Section 69(2) of the U.K. Act. ” 2

“ I am afraid that if the interpretation which is sought to be given is accepted, it will travel beyond
the scope of the Section 29 and go contrary to the intention of the Legislature. In view of the
aforesaid reasons, the decisions cited by the plaintiffs are not applicable in the facts of the present
case.”3

The next issue that arises was concerning the COPYRIGHT Infringement with respect to the work
YEH DIL MANGE MORE (phrase and song) and the Globe Device.

Thw court while dealing with the above issue firstly considered section 2(c) & 2(O) of the
Copyright Act defining Literary work as well as Artistic work. After looking at both the
definintions court cited certain case laws concering the following dispute. The court also cited para
21.20 and 21.35 of Copinger & Skone James on Copyright 14th Edition, Volume One. As per the
above references it was submitted by the Court that, “the advertising slogans are prima-facie not
protectable under the Copyright Act. They may be protected under the law of passing off in case
the plaintiffs make out such a case. However, it is admitted position that defendants have not used
the phrase/slogan YEH DIL MANGE MORE in relation to their products. It is used in a mocking

1 Pepsi Co. Inc. v. Hindustan Coca Cola (2001) 94 DLT 30; Para 48 & 49.
2 Pepsi Co. Inc. v. Hindustan Coca Cola (2001) 94 DLT 30; Para 50.
3 Pepsi Co. Inc. v. Hindustan Coca Cola (2001) 94 DLT 30; Para 51.

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manner only in the course of comparative advertising. This itself would not prima facie amount to
infringement of copyright.”

The next question before the court was whether the following advertisement reproduced by the
defendants amount to infringement and even if that is not the case whether these types of
comparative advertisement be allowed kin today’s scenario.

From the viewing of advertisement it was evident that the defendants were making a comparison
with defendants advertisement of cola. In respect to this the defendant placed reliance on the SC
Court case being R.G. Anand v. Delux Films4 . The court after relooking at the above reference
observed that “the Court in the aforesaid decision held that one of the surest and the safest test to
determine whether or not there has been a violation of copyright is to see if the reader, spectator
or the viewer after having read or seen both the works is clearly of the opinion and gets an
unmistakable impression that the subsequent work appears to be a copy of the original. Applying
the principles mentioned it is clear that the plaintiffs cannot claim the injunction against the
defendants on these features for the purpose of comparative advertisement of their product s.”5

Further one more question arose before the court was whether the advertisement is disparage in
nature. “ It was evident as per the Reckitt & Colman India Ltd. v. M.S. Ramachandran6 that
comparative advertisements were admissible. However, the advertisement should not be in such a
manner as to disparage the goods of the competitor. Mere puffing of a goods without
disparagement is not actionable. The advertisements must be viewed in light of the aforesaid tests.”

Following were the elements laid down by the court which, in order to succeed in an action, the
plaintiffs have to establish the following key elements:

“(1) A false or misleading statement of fact about a product.

(2) That statement either deceived, or had the capacity to deceive, a substantial segment of
potential consumer, and

(3) The deception was material, in that it was likely to influence consumers' purchasing decisions.”

4 AIR 1978 SC 1613.

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Now after looking at the test the court finally observed that: “In the commercials in question all
the above elements are missing. The intention of the defendants are not to deceive the plaintiffs
because no false representation is made. The defendants have compared the two drinks and
explained to the consumers that one drink is strong and the other drink is swe et and the children
like the sweet taste. In the end the choice is left with the consumers. It is an undisputed fact that
the plaintiffs have filed a suit for damages also. So far no evidence has been produced by either
side regarding the similarity and dissimilarity of the comparative advertisement given by the
defendants. There is no material on record to show that the advertisement given by the defendants
harmed the business of the plaintiffs or the goods of the plaintiffs are bad or in any way the
defendants have defamed the business of the plaintiffs. It is also a matter of fact that the defendants
are selling their products under their own brand name and they are not advertising objectionable
features in the literature form.”7

The last question before the court being whether at this stage the interlocutory injunction should
be granted or refused. While dealing with this last issue Court again cited some of the following
cases: American Cyanamid v. Ethicon Ltd. 8; Franz Xaver Huemer v. New Yash Engineers 9;
Surendra Lal Mahendra Jain v. Galazers 10 in order to come to the result. One of the excerpt from
the following states that- It is on Plaintiff to prove that the following case has a strong bent to be
accepted in order to prove that the patent being valid. If it fails to do the same upto the certain
standard the court has to seek the balance of conviniece in order for itself to come to certain
conclusion and after calculating the losses to the parties in general.

Now as per the above cases the court came to the conclusion that,“In light of the aforesaid
discussion, I am of the view that plaintiffs do not make out a prima facie case for grant of an
interim injunction. The balance of convenience is also against grant of any interlocutory
injunction. It is a unique case of its own kind and the issues that arise therefrom are be decided
on the basis of evidence of the parties. Having arrived at a prima facie opinion, it would be in the
interest of justice requiring the defendants to give an undertaking to pay damages, if at the final

7 Pepsi Co. Inc. v. Hindustan Coca Cola (2001) 94 DLT 30; Para 88 & 89.
8 (1975) (1) All E.R. 504.
9 AIR 1997 Delhi 79.
10 1981 PTC 112 (117).

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stage and after detailed evidence and arguments and mature consideration of the facts, the
plaintiffs succeed in the suit. ”11

“ Having regard to the facts and circumstances of the case and in light of the foregoing discussion,
I do not think it appropriate to grant temporary injunction in favour of the plaintiffs as sought for
in the present application.”12

On these observations the Court dismissed the present Application.

11 Pepsi Co. Inc. v. Hindustan Coca Cola (2001) 94 DLT 30; Para 96& 97.
12 Pepsi Co. Inc. v. Hindustan Coca Cola (2001) 94 DLT 30; Para 98.

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 7. CONCLUSION

“ The vast majority of the viewer of the commercial advertisement on electronic media are
influenced by the visual advertisements as these have a far reaching influence on the psyche of the
people, therefore, discrediting the product of a competitor through commercial would amount to
disparagement as has been held by the High Courts and the Supreme Court of India as well as the
Law laid down by Courts in U.K. & U.S.A. ”

“ As per the above case as we discussed earlier with the issue- whether use of trademark in
comparative advertising amounts to trademark infringement or not the court above decided it in
negative as infringement occurs when two essentials are fulfilled that is, if the defendant has used
the substantially similar mark and that too for passing off his own goods as that of the plaintiff’s.
In comparative advertising one or both may be absent sometimes. As it may be possible that only
a reference is made to the mark and not the substantially similar mark is used. And the mark is not
used to pass off the goods but to compare both the goods. ”

“ Whereas now the position of law in India in respect of disparaging advertisements of rival
products is well settled. Although a tradesman is entitled to make an untrue declaration that his
goods are the best, better than his competitors, and for that purpose can even compare the
advantages of his goods over the goods of the others; he cannot say that his competitors’ goods
are bad. Further, such use generally/specifically of a proprietor's product for a comparison with
the rival product of another proprietor violates the first proprietor's intellectual property rights. But
if a competitor makes the consumer aware of his mistaken impression, the Plaintiff cannot be heard
to complain of such action. ”

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 8. BIBLIOGRAPHY

 Websites Referred
 www.legalserviceindia.com
 www.sciencedirect.com
 www.businessinsider.com
 randequity.economictimes.indiatimes.com
 www.history.com
 www.scconline.com/
 www.wikipedia.org/

 Articles Referred
 Use of Trademark In Comparative Advertising: Situation In India: by Priya Bansal
 COKE VS. PEPSI: The Amazing Story Behind The Cola Wars: by Kim Bhasin
 How the 'Blood Feud' Between Coke and Pepsi Escalated During the 1980s Cola
Wars: by Becky Little

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