Telangana High Court Suggests Shift From 'Average Buyer' To 'Perceptive Consumer' Test In Trademark Cases

The Telangana High Court has observed that in the age of social media, the traditional test of assessing trademark confusion through the lens of a “person of average intelligence and imperfect recollection” should shift, to that of a “perceptive consumer with informed associations.”

The observation came in a trademark dispute between saree retailer Sai Silks (Kalamandir) Limited, the registered proprietor of marks including “Kancheepuram Vara Mahalakshmi Silks” and “Vara Mahalakshmi”, and a rival saree retailer using the mark “Kanchipuram Varahi Lakshmi Silks”.

A Division Bench of Justice Moushumi Bhattacharya and Justice Renuka Yara observed, “It is difficult to accept that in the age of print, digital and social media, a buyer would be insulated from purchasing options. In our considered opinion, the traditional test of a person of average intelligence and imperfect recollection should shift to a perceptive consumer with informed associations – who is mindful of the source, brand, quality, comfort and aspirational - index of the proposed purchase. The earlier test no longer serves the present society; consumers are now constantly exposed to productpromotions by means of print and social media feeds on a daily basis"

Sai Silks alleged that the rival retailer had adopted a deceptively similar name and sought an injunction, besides the appointment of a Local Commissioner to visit the rival's premises and seize allegedly infringing materials, packaging and raw materials.

The rival retailer pointed out that its second proprietor had entered into business MoUs with Sai Silks to manage the day-to-day affairs of its Chennai outlet, under revenue-sharing arrangements, before commencing an independent business under the disputed name in 2024. It argued that the trademark suit was filed to evade the revenue-sharing obligations under those arrangements.

The Trial Court dismissed Sai Silks' two interlocutory applications, finding that the competing marks contained striking dissimilarities that outweighed their phonetic similarity. It also found that the rival retailer had not copied the core and peculiar features of Sai Silks' mark. Sai Silks then appealed to the High Court.

The Bench's reasoning turned in part on the nature of saree-shopping.

The Court noted that purchasing sarees is a “planned and leisure activity” in which consumers are expected to devote thought to their purchasing decision. It said saree-shopping involves “a combination of visual and tactile sensations” and that ordering a saree simply on the trust of the sound of a shop is “rare, if not impossible”.

The Court therefore held that the phonetic similarity between the two marks would not be the sole determining factor in the present case.

It further observed that in the age of print, digital and social media, consumers are constantly exposed to purchasing options and product promotions. Against this backdrop, it said the traditional test of a person with average intelligence and imperfect recollection was unsuitable for assessing confusion in the present case.

The Court said the traditional test should shift towards the perspective of a “perceptive consumer with informed associations” who is mindful of the source, brand, quality, comfort and aspirational index of the proposed purchase.

Comparing the competing marks, the Bench found that their substantial visual differences outweighed their similarities and were sufficient to remove any possibility of confusion among customers.

The Court also held that Sai Silks could not claim exclusive rights over the individual words forming part of its composite mark. It noted that “Kancheepuram” is a city in Tamil Nadu famous for its distinctive silk sarees, while “Silks” is common to the trade.

It further held that “Vara Mahalakshmi” refers to Goddess Lakshmi and that Sai Silks could not claim proprietary rights over those words or prevent others from using “Vara”, “Mahalakshmi” or variations including “Varahi Lakshmi”.

The Bench further relied on Section 17(2)(b) of the Trade Marks Act, 1999, which restricts a proprietor of a composite mark from claiming exclusive rights over portions that are common to the trade or are non-distinctive.

In the present case, the Court held that “Kancheepuram”, “Vara Mahalakshmi” and “Silks” were non-distinctive and that Sai Silks could not claim that these words had become exclusively associated with its sarees.

The Court accordingly found no error in the Trial Court's approach, dismissed the appeal and upheld the refusal to grant interim relief. The connected applications were also dismissed, with no order as to costs.