[The Viewpoint] Theos v. Theobroma: A cake well-baked by the Delhi High Court

THEOS and THEOBROMA are both renowned premium bakery outlets serving consumers much more than just delicious pastries, for a pretty long time now. Since the respective outlets deal with identical goods and services and have the common starting syllables ‘THEO’ in their brand names, they entered into a cake war, which was finally put to rest by the Delhi High Court.

Before reaching the conclusion as to how the cake was well-baked, it is imperative to know the background of the dispute.

Before the Bombay High Court

In 2015, Theobroma filed a suit 1, against Karan Narula (Director at Theos Food) before the Bombay High Court, seeking injunction from using the marks ‘THEOBROMA’, ‘Theobroma’, ‘theobroma’, ‘theo’, ‘Theo’, ‘Theo’s, ‘Theos’ and various other variants and derivatives thereof.

In this suit, Theobroma claimed to be the prior user of the marks ‘THEOBROMA’ and ‘THEOS’ in respect of identical goods and services, from the opening of its first retail outlet in Mumbai in 2004 under the trading style of ‘THEOBROMA Food of the Gods’.

THEOBROMA relied upon its following trade mark registrations/ applications:

It is relevant to note here that the last application mentioned in the table for the word mark ‘THEOS’ (#2325888) has been opposed by Narula.

Apparently, there is no injunction order or any other interim relief granted by the Bombay High Court in favour of THEOBROMA, and the said suit is still pending adjudication.

Before the Delhi High Court

In 2021, Theos Foods filed a suit, seeking a decree of permanent injunction from trademark infringement, passing off action, unfair competition, dilution, blurring, damages, rendition of accounts and delivery up against Theobroma before the Delhi High Court.

Theos operates a chain of bakeries/restaurants/cafés/lounges under the mark ‘THEOS’/‘THEO’S’ in the Delhi-NCR region and has a wide variety of products on its menu such as chocolates, cookies, desserts, cheesecakes, hot/cold beverages etc.

It was claimed by Theos that the mark ‘THEOS’/‘THEO’S’ was coined and adopted by them in the year 2008 and to substantiate the same, the following trademark registrations/applications were replied upon by Theos:

Thus, Theos claimed to have used the mark continuously and uninterruptedly in respect of bakery-related products in Class 30 and restaurant services in Class 43, and its marks are stated to have garnered valuable goodwill and reputation to its brand.

The case of Theos is that Theobroma was never using the mark ‘THEOS’ but has now started expanding and using the same in respect of pastries, chocolates, beverages, etc. They sought injunction against Theobroma from infringing the marks ‘THEOS’, THEO’S’ and ‘THEO’S PATISSERIE & CHOCOLATARIE’.

The Delhi High Court vide its order dated September 13, 2021, refused an ex-parte ad-interim injunction in favour of Theos, while observing that Theobroma’s trademark is registered and they are entitled, at the very least, to an opportunity to respond to the injunction application before the Court passes an order.

The matter came up for hearing before Justice Prathiba M Singh on July 8, 2022, when the Court granted an opportunity to the parties to explore the possibility of amicable settlement, before adjudicating on the merits of the case.

The Court noted that the main grievance of Theobroma before the Bombay High Court was Theos’ use of the mark ‘THEOBROMA’, which Theos is no longer using and the only dispute between the parties is now with respect to the mark ‘THEOS’.

Finally, the parties were able to arrive at an amicable settlement on the following terms:

(i) Theos recognises and acknowledges Theobroma as the owner and proprietor of the mark ‘THEOBROMA’. Theos has also agreed not to use the mark or name ‘THEOBROMA’ in any manner whatsoever, either in respect of any products of its manufacture, or sale, or any other services;

(ii) Theobroma no longer objects to the use of the mark ‘THEOS’/‘THEO’S’ by Theos in respect of its goods and services, as also, as part of its trading style/name ‘Theos Food Pvt. Ltd.’ and ‘Theos Patisserie & Chocolaterie’, so long as Theos restricts its business activities to the Delhi-NCR region;

(iii) Theobroma shall restrict its use of the mark ‘THEOS’/‘THEO’S’ only for the following five food items offered by it, along with variants being egg/without egg and sized i.e., pastry slice, per kg. size thereof:

(1) Theos Dutch Truffle Cake;

(2) Theos Chocolate Mousse Cup

(3) Theos Mava Cake;

(4) Theos Dense Loaf

(5) Theos Quiche

(iv) The said usage of the mark, as set out in (iii) above, shall only be in the menu cards used at the physical outlets of Theobroma, and shall not extend to online menu cards of Theobroma.

(v) Theos shall also not make any online sales outside Delhi/NCR region under the mark/name ‘THEOS’/‘THEO’S’. If it intends to extend its commercial activities outside the Delhi/NCR region, either in physical or in online mode, the same shall be done under a mark/name which is neither identical nor deceptively similar to ‘THEOBROMA’. Theos, however, is free to use a prefix or a suffix along with ‘THEOS’/‘THEO’S’ for such expansion, so long as the totality of the mark/name which is used for such expansion is not identically or deceptively similar or does not create confusion with ‘THEOBROMA’.

(vi) Theobroma shall continue to retain all its trademark registrations for ‘THEOBROMA’ and its registered variants and derivatives, including ‘THEOS’ and ‘THEO’, and shall also be entitled to protect and take all enforcement-related steps and opposition-related actions to safeguard its rights in these names and marks;

(vii) Theos shall be free to register its own mark ‘THEOS’/‘THEO’S’ as a word mark or in any logo form thereof, and use the same only in respect of goods and services offered in the Delhi-NCR region. The applications or registrations of the said marks by Theos shall be geographically restricted to the Delhi-NCR region.

(viii) 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

(ix) If Theos receives any requests for online supply or deliveries outside the Delhi-NCR region, the same shall be serviced under a different mark and name, as set out in (v) above. The said mark/name shall not be identical or deceptively similar to ‘THEOBROMA’. Theobroma is free to expand its outlets under the mark/name ‘THEOBROMA’ across the country. However, Theos shall be restrained to the Delhi-NCR region, insofar as its goods and services provided under the mark/name ‘THEOS’/‘THEO’S’ is concerned.

(x) There are various disputes pending between the parties before the Registrar of Trademarks, apart from the aforementioned two suits, as also, other cancellation petitions, etc. All the disputes between the parties would stand resolved, in the above terms.

The parties have agreed to abide by the terms of settlement dictated by the Court and sought time to file a joint compromise application by elaborately settling out the aforesaid terms. The suit is yet to be decreed finally in terms of the compromise application.

Sometimes, with such long and concurrent use, it becomes difficult for the courts to strike a balance between the rights of the parties without making either party suffer. This is more so the case where the adoption of the subsequent mark seems to be bonafide or sufficiently distinguishable. Therefore, it is in the best interests of the parties to settle their disputes amicably to end their long pending disputes before they become luxurious litigation. Sometimes, even getting a piece of the cake is worth it!

Priya Adlakha is Associate Partner and Tanvi Bhatnagar is Senior Associate at SS Rana & Co

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