A seven-year-old legal battle between Fast Moving Consumer Goods (FMCG) manufacturers Nestle India Limited and ITC Limited over the use of the expression ‘Magical Masala’ in the former’s Maggi brand of instant noodles has finally come to an end with the Madras High Court dismissing a suit filed by ITC Limited which owns Sunfeast Yipee brand of noodles.
Justice C. Saravanan held that a suggestive expression such as ‘Magic Masala’ used in Sunfeast Yipee noodles since 2010 could have become a distinctive mark entitled for protection and monopoly, only if it had been used uninterrupted for a long number of years. Whereas in the present case, Nestle had pre-empted such a move by using ‘Magical Masala’ in Maggi in 2013 itself.
The judge pointed out that the instant noodle industry in the country was valued at over ₹2,000 crore even during 2013 when the civil suit was filed. Nestle was the leader in the business holding about 75% of market share since it had entered the business as early as in the 1970s. It’s annual turnover from Maggi rose from ₹0.02 crore in 1972 to ₹2,377 crore in 2012.
On the other hand, ITC Limited, originally engaged in tobacco business, had diversified its operations into hospitality, paper and agri-based industries before foraying into FMCG in 2010. It began selling Sunfeast Yippee brand of noodles in two varieties Classic Masala and Magic Masala and the latter turned out to be a runaway hit in the market.
The turnover of Sunfeast Yipee Noodles Magic Masala rose from ₹23.09 crore in 2010 to ₹251.49 crore by 2013, thus capturing 12.5% of the market. “Though the defendant (Nestle) is the undisputed leader in the instant noodles segment… it must have felt threatened by the plaintiff’s rapid inroad into the food industry… and therefore decided to use ‘Magical Masala.’
“However, such adoption of the expression cannot be said to be mala fide. It was a legitimate adoption by the defendant as no person can appropriate common and laudatory words… Laudatory epithet cannot be given monopoly or protection,” the judge said and pointed out that the words Magic and Masala were used widely by many in the FMCG industry.
Though Sunfeast was the first to use the expression ‘Magic Masala’ for instant noodles, Pepsico had been using the same expression for its Lay’s brand of chips even before 2010, the judge pointed out. He also said that the Annual Reports of ITC Limited clearly show that it had not conceived the expression, under contention, either as a brand or sub-brand.
Further, after comparing the wrappers of Sunfeast Yippee Noodles Magic Masala and Maggi Xtra delicious Magical Masala, the judge found them to be completely distinctive without any scope for confusion between them. Hence, the charge levelled against Nestle of misrepresentation and misleading the consumers stands disproved, he ruled.
