What constitutes a trademark violation: Subway vs Suberb in Delhi High Court (2024)

Subway owns trademarks in the brand name “Subway” as a whole, as well as for its sandwiches named “Veggie Delite” and “Subway Club”. Subway also claimed trademark infringement of its menu card, outlet decor, and recipes by Suberb.

What is a trademark?

A trademark is a symbol, design, word or phrase that is identified with a business. When a trademark is registered, its owner can claim “exclusive rights” on its use.

The Trademark Act,1999, governs the regime on trademark and its registration. The Act guarantees protection for a trademark that is registered with the Controller General of Patents, Designs, and Trademarks, also known as the trademark registry. A trademark is valid for 10 years, and can be renewed by the owner indefinitely every 10 years.

Violation of trademark

Using a registered trademark without authorisation of the entity that owns the trademark is a violation or infringement of the trademark.

Using a substantially similar mark for similar goods or services could also amount to infringement. In such cases, courts have to determine whether this can cause confusion for consumers between the two.

There are several ways in which a trademark can be infringed. However, the trademark owner has to show that the trademark has a distinct character.

DECEPTIVE SIMILARITY: The law states that a mark is considered deceptively similar to another mark if it nearly resembles that other mark, confusing the consumer in the process. Such deception can be caused phonetically, structurally or visually.

PASSING OFF: Say, a brand logo is misspelt in a way that’s not easy for the consumer to discern. In such cases, the infringing products need not be identical — but similarity in the nature, character, and performance of the goods of the rival traders has to be established. (Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited, 2001) Essentially, for a claim of ‘passing off’, some form of deception, misrepresentation, or harm to goodwill and reputation to the owner of a mark has to be established.

The Supreme Court has said that passing off is a “species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation which other has established for himself in a particular trade or business”.

In the Subway case, the HC did not look into the issue of passing off. Justice C Hari Shankar said that to establish passing off, Subway would have to demonstrate that a “person of average intelligence” would be confused between the goods and services of Subway and Suberb because of the manner in which the Suberb mark is used.

This, the court said, was not possible as Subway “commands a reputation in the market”, and that there was no person of average intelligence who wanted to purchase food from Subway but would walk into a Suberb outlet instead.

What Subway argued in court

Subway argued that the brand name and logo “Suberb” was deceptively similar to “Subway”, and that the combination of green and yellow in Suberb was identical to the Subway trademark.

In December 2022, Suberb offered to change the colour combination used in the signage, as well as the names of its sandwiches “Veggie Delicious” and “Sub on a Club” to “Veg Loaded Regular” and “Torta Club” respectively.

Suberb argued that Subway is a “well known brand”, and that a consumer would not walk into a Suberb outlet confusing it with Subway.

Decision of the court

In his 26-page verdict, Justice Shankar held that while the two terms do not sound the same, “Sub” (the first syllable/ part) is common to both marks and is used as an abbreviation for “submarine”, which represents a well-known variety of long-bodied sandwiches, generally 6 or 9 inches in length and are thus in common knowledge of the public.

Subway, the court held, cannot claim “exclusivity” or “monopoly” over “sub”, the first part of its trademark “Subway”, when used in the context of eateries which serve sandwiches and similar items. It also held that once the dispute over the “sub” part was resolved, there was “obviously no similarity” between the two others parts of the marks — “way” and “erb”.

The HC held that “sub” was common to both marks; however there was no likelihood of confusion to the public as the marks when considered as a whole did not sound the same. Since the two marks did not sound similar, and the defendants had agreed to change the lettering, font, and colour scheme, no case for deceptive similarity was made out.