Regarding the varying interpretation and understanding of the initial interest confusion test by a single judge bench and a division bench of the DHC in the recent Forest Essential v. Baby Forest case, we are pleased to present this post by SpicyIP intern Aditya Bhargava, critiquing the single judge’s interpretation of the doctrine. Aditya is a second-year law student at NLSIU Bangalore. He is interested in intellectual property, AI regulation and tech law. His previous post can be accessed here.

Initial Interest Confusion Clash: Forest Essentials Battles Baby Forest at the DHC

By Aditya Bhargava

A recent ruling dated May 30, by a Division Bench of the Delhi High Court (DHC), comprising Justices Vibhu Bakhru and Tara Vitasta Ganju, hinted at a prima facie error by a single judge, J. Anish Dayal, in a TM dispute between two Ayurvedic cosmetic companies, Forest Essentials and Baby Forest. The case, titled Mountain Valley Springs India Private Limited v. Baby Forest Ayurveda Private Limited & Ors., primarily focused on the interpretation and application of the doctrine of ‘initial interest confusion’. It was in an appeal that the Division Bench (DB) hinted that the Single Judge misinterpreted the doctrine by wrongly extending confusion to the completion of the transaction. As per the DB, confusion needs to exist only at the initial stage of consumer interest, not throughout the transaction, as opposed to J. Dayal’s interpretation.

[9] “Prima facie, we find merit in the appellant’s contention that the learned Single Judge has erred in its interpretation of the doctrine of ‘initial interest confusion’ to entail persistence of confusion till a stage that the transaction is consummated.”

While the DB did not go into the merits of the case in the 3-page order and adjourned the matter to a future date, it admitted the appeal on the grounds mentioned above. In this post, I will delve into the doctrine of Initial Interest Confusion (IIC), examining the Courts’ differing views and their implications. I argue that the prima facie observation by the DB, correctly points to the potential flaws in the single bench’s reasoning and interpretation of IIC.

Case Overview: What were The Parties even Fighting for?

Mountain Valley Springs, the plaintiff, has been marketing its products under the trademark (TM) “Forest Essentials” since 2000, claiming extensive reputation and goodwill, especially for their Ayurvedic products, including a baby care segment launched in 2006. Their premium products are sold through high-end stores and e-commerce platforms such as Amazon and Flipkart.

Baby Forest Ayurveda Private Limited, the defendant, has been using the TM “Baby Forest” since 2022, with its mark registered from 2020. Their products, exclusively for babies and toddlers, includes oils, creams, shampoos, and lotions. The defendant rebranded from “Landsmills Healthcare Pvt. Ltd.” in 2023.

The plaintiff argued that the similarity in the dominant feature “Forest” and the overlap in product categories is likely to confuse consumers, claiming the rebranding aimed to capitalize on their established reputation. The defendant contended their TM was distinct and legally registered without opposition, emphasizing their broader product range and significant presence in the baby care market.

The Court considered factors like consumer confusion, the sophistication of consumers, and TM distinctiveness. Ultimately, J. Dayal dismissed the plaintiff’s application for an injunction, allowing the defendant to continue using their TMs. Aggrieved by this, Mountain Valley appealed before the DB who has accepted the appeal, listing it for September 9.

Initial Interest Confusion: Modernizing a Traditional Doctrine

The doctrine of Initial Interest Confusion (IIC), rooted in 20th-century TM law, addresses situations where a consumer is momentarily confused by a similar mark, even if the confusion is dispelled before the purchase is completed. The doctrine was first articulated in Brookfield Communications, Inc. v. West Coast Entertainment Corp, (1999) where the United States’ Ninth Circuit Court acknowledged that initial confusion can be damaging even if it is resolved before the actual purchase. In Brookfield, the Ninth Circuit Court used the example of a misleading road sign where a competitor’s sign for “Blockbuster” incorrectly directs customers to Exit 7 for “West Coast Video,” which is actually at Exit 8. Customers looking for West Coast may exit at 7, fail to find it, and instead rent from Blockbuster located conveniently at Exit 7. This case is often cited in Indian jurisdiction, for instance by the Madras High Court in Consim Info Pvt. Ltd v. Google India Pvt. Ltd. and Ors (2010), to argue that the initial diversion of consumer attention is sufficient to constitute TM infringement.

Moving away from the Brookfield standards, the J. Dayal dismissed the plaintiff’s application for an interim injunction, asserting that any confusion must persist until the transaction is consummated (para 8.13). This interpretation deviates from the standard application of the doctrine which acknowledges assessment of confusion only at the initial stage when a consumer comes across the impugned mark and there is no need to establish sustained confusion throughout transaction for sale and purchase is completed. J. Dayal’s view, on the other hand reflects a non-traditional approach, requiring sustained confusion throughout the purchasing process.

Overestimating Consumer Sophistication

The core disagreement revolves around the interpretation and application of IIC. J. Dayal’s reasoning in paragraphs 8.20 to 8.31, emphasizing the evolution of consumer behaviour in the digital age, seems fundamentally flawed and overly simplistic.

 The Court’s reliance on the increased sophistication of consumers and their internet access to mitigate the likelihood of confusion ignores the reality of consumer behaviour. Consumer psychology explains that the motivation for a consumer to take corrective actions depends significantly on the perceived benefit of such actions. Essentially, consumers are motivated to make positive efforts—such as verifying brand authenticity or switching websites—only if they perceive a substantial benefit from doing so. This is often influenced by the resemblance or distinctiveness of the alternatives presented to them.

Hypothetically, if a consumer initially lands on a product page of Baby Forest Ayurveda while intending to purchase from Forest Essentials, the likelihood of them correcting this mistake depends on their perception of benefit. Given the similar product categories and potential brand confusion, the consumer might not see a significant incentive to switch to the intended brand, especially if the alternative appears equally appealing and meets their needs. Even if the consumer later realizes the difference, the initial interest has already impacted their perception and consideration set. This is akin to the US decision in Autozone, Inc. v. Tandy Corp., (2001) where the Court considered the potential for initial confusion sufficient for infringement. This scenario is exacerbated by the use of persuasive techniques such as click baits and dark patterns by websites to retain consumer attention and encourage immediate purchases. These manipulative strategies can capitalize on initial confusion, making it more likely for consumers to complete unintended transactions rather than an effort to correct their initial mistake or buy the product they ‘actually’ wanted.

Even with abundant information, the potential for initial confusion remains high, particularly when dealing with visually and conceptually similar TMs. J. Dayal’s stance, however, dangerously raises the threshold for proving TM infringement, making it easier to exploit legal ambiguities by excessively burdening the plaintiff to establish confusion throughout the transaction, which wasn’t the premise of IIC to begin with.

Underestimating the Persistent Relevance of Initial Confusion in Modern Trademark  Law

The Single Judge’s reasoning that initial confusion is transient and does not warrant protection seems misguided. Initial confusion can potentially impact brand goodwill and consumer trust, even if the confusion is temporary. The notion that consumers will always cross-check brands before purchasing a product is an idealistic view that does not account for impulse buying behaviour and the influence of first impressions in a market governed by reduced attention spans and misleading advertising. The traditional “customer of average intelligence and imperfect recollection” test has been effective precisely because it accounts for these nuances in consumer behaviour. Cases such as the National Sewing Thread Company (Indian SC, 1953) and Polaroid Corp. v. Polarad Electronics Corp (U.S. District Court for the Eastern District of New York (1961)) have established the requirement of a holistic approach in assessing TM infringement, considering factors like the strength of the mark and the proximity of the goods, which remain pertinent regardless of digital developments.

The Court’s focus on the sophistication of consumers purchasing high-price point products fails to recognize the broader spectrum of consumer demographics. While some consumers may indeed exercise greater diligence, this does not negate the need for greater TM protection across all market segments. The assumption that higher price points correlate with increased consumer care overlooks the diversity of purchasing behaviour and the varying degrees of attention paid to different types of products. The digital revolution should enhance consumer protection by providing more tools to prevent confusion, not serve as an excuse to weaken it.

Thus, it can be seen that the above interpretation by the Court is an attempt to modernize the “customer of average intelligence and imperfect recollection” test by incorporating digital advancements and consumer sophistication. Though it is well-intentioned, in my opinion such an interpretation by the Court is flawed. It fails to adequately protect against the subtler forms of TM infringement that can cause significant harm to both consumers and businesses. The assumption that modern consumers will always act rationally and verify information before purchase is unrealistic and overlooks the complex nature of consumer behaviour. J. Dayal’s modernist or non-conventional approach, if left unchecked, could significantly alter the IIC and the way it has been interpreted across the TM regimes. By placing the onus on consumers to avoid confusion, the court inadvertently enables infringers to act more freely. They can exploit the initial confusion, knowing that a significant number of consumers may not take the extra step to verify and may proceed with their purchase based on first impressions. In this context, even initial confusion can be enough for some competitors to exploit the goodwill created by others. Although the confusion may dissipate by the end of the transaction, the competitor has already benefited from misleading the customer.

It is in this context the Division Bench, in its order dated May 30, 2024, criticized this narrow and strict interpretation (paras 5, 9). The Bench emphasized that IIC should be considered at the threshold stage, where the consumer’s initial encounter with the brand can confuse, even if it is resolved before the purchase. This interpretation is crucial in today’s digital age, where consumers often make quick, preliminary judgments based on search engine results, online advertisements, or initial impressions from social media.

Applying this doctrine to the current case, the DB’s prima facie understanding is more aligned with modern realities. For instance, when a consumer types “Baby Forest” into a search engine and sees results for “Forest Essentials,” the initial diversion can create a lasting impression. Even if the consumer realizes the difference before making a purchase, the initial confusion had already impacted their decision-making process, leading them to associate “Baby Forest” with “Forest Essentials”.

However, as a counter point, it would be interesting to see a competition angle on this, as it is essentially stretching the purpose of the trademark from identifying the goods and reputation of a company, to actually making a purchase from (only) that company.