Syed Ghaziuddin had set up a packaged drinking water plant (Magfast Beverages) in the late 90s and named his products "Mountain Dew” to indicate something pure, emanating from natural sources. The business soon gained popularity and received various quality and standard certifications.
In 2003, PepsiCo approached the Delhi High Court, accusing Magfast of infringement. Magfast filed a suit[1] against PepsiCo, for passing off, before the Hyderabad City Civil Court.
Magfast’s main grounds for contention were that PepsiCo had not used its mark in India before 2003 and that PepsiCo sold its bottled water as not as ‘Mountain Dew’ but rather, as ‘AQUAFINA’.
PepsiCo claimed that it had been selling flavoured soda under “Mountain Dew” since 1940 and had become popular throughout the world, and had registered the trademarks in 100 countries, including India dating back to 1985.
The Hyderabad Civil Court had poured over various documents highlighting the plaintiff’s use of the mark since 2000 and therefore, referring to the Supreme Court’s decision in Syed Monideen v. Sulochana Bai[2] which recognised the common law principle of priority in adoption prevailing over registration, ruled in favour of Magfast.
We anticipate that PepsiCo will challenge this decision in the High Court. However, in the meanwhile, there are a few questions of law that are left to be answered.
It becomes imperative to note that the Court did not, in its ruling, make any reference any Section 34 of the Trade Marks Act 1999, which embodies the rule about Prior use and provides that the registered user of a trade mark cannot prevent any other user from the using an identical or similar mark, where the said other user has been continuously using the mark prior to either the use of the first-mentioned trade mark or the date of registration of the first-mentioned trade mark, whichever is earlier. Magfast’s claim of prior use should therefore have been backed by its continuous use of the mark before the registration of PepsiCo’s trademark in 1985, however, as per Magfast’s own submissions to the Court regarding the use of their mark, it is proven that their use of the mark could be traced only as far back as 2000, by which time, Mountain Dew was a popular drink worldwide. This hints at the possibility that Magfast’s adoption of a mark, which had an international repute, was not entirely bona fide.
This brings us to another issue that was not broached by the Hyderabad High Court – transborder reputation.
The doctrine puts forth that when a mark’s reputation has transcended geographical barriers to spill over into Indian market and becomes recognised by the consumers despite lack of actual use of the mark in that territory, such mark becomes entitled to protection from those who seek illicitly benefit from such reputation[3].
Since these issues are yet to be delved into, we can only wait and see how the Courts play out this conflict of prior use and cross-border reputation.
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