THEO’s Restricts Use of Mark To Delhi-NCR In Settlement Agreement With THEOBROMA

Introduction

Recently in the case of Theos Food Pvt. Ltd. & Ors V. Theobroma Foods Pvt. Ltd., the parties agreed to settle their trademark dispute before the Delhi High Court. The suit related to two competing entities with similar/identical marks “THEOBROMA” and “THEOS”/”THEO’S” used in respect of bakery-related products, patisseries, confectionery, etc.

Background

The Plaintiff had sought to restrain the Defendant from infringing their trademarks “THEOS”, “THEO’S” and “THEO’S PATISSERIE & CHOCOLATARIE”, claiming trademark infringement as well as passing off and unfair competition. They alleged that the Defendant was using the term “THEO” as a prefix to the names of various food items being sold under the Theobroma brand.

The Court observed that the Defendant’s brand was a leading name in manufacturing and selling gourmet foods, including bakery and confectionary products. The Defendant also claimed to be the prior adopter and user of the marks and stated that at present it has a total of 81 retail outlets across Mumbai, Noida, Pune, Bengaluru and many other Indian cities. The Defendant also furnished trademark registrations as proof for its marks “THEOBROMA” and its variants, “THEO” and “THEOS”.

On the other hand, the Plaintiff claimed that it is a popular bakery chain in the Delhi-NCR region and it has a wide menu ranging from chocolates, cheesecakes, deserts and hot/cold beverages. The Plaintiff claimed that they operate a chain of bakeries/restaurants/cafés/lounges under the mark “THEOS”/”THEO’S” in the Delhi-NCR region. They have a wide variety of products on their menu such as chocolates, cookies, a wide selection of desserts and cheesecakes, hot/cold beverages among other milk and non milk-based products. Further, they also submitted that the mark ‘THEOS’/‘THEO’S’ was coined and adopted by them in the year 2008. Since then, they claimed to have used the mark continuously and uninterruptedly in respect of bakery related products in Class 30 and restaurant services in Class 43.

Settlement

Upon submissions by both parties, it was observed that considering the extent and scope of business of both parties, an amicable resolution in the matter ought to be explored. Finally, the parties agreed to their settlement terms before the Court, stating that the Plaintiff acknowledges the Defendant as the owner of the mark “THEOBROMA”. On the other hand, the Defendant agreed to acknowledge the Plaintiff’s mark “THEOS”/ “THEO’S” so long as its business activities were restricted to the Delhi-NCR region. The Defendant also agreed to restrict the use of the mark “THEOS”/ “THEO’S” only for a listed five food items, “Theos Dutch Truffle Cake”, “Theos Chocolate Mousse Cup”, “Theos Mava Cake”, “Theos Dense Loaf” and “Theos Quiche”. Further, the parties agreed that the Defendant’s restrictions on these items should only apply to physical outlets and not on their online food menu. The Plaintiff also agreed not to make any sales online outside the Delhi-NCR region.

Finally, it was also stipulated that “Neither party shall oppose each other’s marks or object to the same, in any manner, so long as the same are in compliance with the terms of this settlement."

Conclusion

This case shows an interesting means of settlement whereby both parties agreed to resolve an otherwise complicated trademark dispute amicably. Such agreements show the Court’s inclination towards dispute resolution and efficient adjudication of justice. This, along with the agreement of both parties, becomes essential in such matters. Essentially, in such matters, considering the extent of the commercial activities of both parties involved, settlement agreements are an efficient and effective way forward.

For any questions, please write to the author, Ms. Vrinda Sehgal, Associate, at vrinda@iprattorneys.com.