Starbucks Coffee Vs Sardarbuksh Coffee and Co. Ors

Case Name: Starbucks Coffee v. Sardarbuksh Coffee and Co. Ors

Citation: CS (COMM) 1007/2018

Petitioner: Starbucks Coffee

Respondent: Sardarbuksh Coffee and Co. Others

Court: Delhi High Court

Date of Judgment: 01 August 2018

Bench: Justice Man Mohan

Facts of the Case

Starbucks is a well-known chain of coffee shops operating worldwide, recognised for the quality of its coffee. It entered India in 2012 and launched its first café in a historic colonial building at Horniman Circle, Mumbai, through a 50:50 joint venture with the Tata Group (Tata Consumer Products Ltd.).

In 2015, another coffee chain began opening outlets across Delhi under the name Sardarbuksh Coffee. In 2017, Starbucks Corporation issued a letter of demand to Sardarbuksh on account of similarities between the two companies in colour theme, logo design, the round shape of the symbol, and the similar cadence of their brand names. Following this notice, Sardarbuksh changed its colour theme to black and yellow.

However, Starbucks subsequently approached the Delhi High Court, contending that Sardarbuksh continued to infringe its trademark rights by operating under the word mark “Sardarbuksh,” which bore a deceptive resemblance to the Starbucks brand name.

Issues Raised

1. Whether Sardarbuksh was infringing the registered trademark of Starbucks.
2. Whether the defendant had unfairly benefited from the reputation, goodwill, and global recognition of Starbucks, thereby resulting in unfair competition.
3. Whether the defendant’s mark fell within the category of deceptively similar marks under Section 11 of the Trade Marks Act, 1999, making it liable for rejection or restraint.

Arguments of the Parties

The Plaintiff, Starbucks, argued that it holds a registered trademark in India and has, through long and continuous use, acquired substantial goodwill and reputation both domestically and globally. Starbucks contended that the mark used by the defendant was deceptively similar to its own, on the following grounds:

• The names of both brands sound similar and carry almost the same phonetic flow when spoken aloud.
• The defendant’s logo is circular in shape and previously followed a similar colour pattern.
• Both parties operate in the same business segment, primarily offering coffee and related products to the same class of consumers.

Starbucks argued that these similarities were sufficient to cause confusion among ordinary consumers, who might mistakenly believe the defendant’s brand to be connected with or endorsed by Starbucks. It further contended that such use amounted to infringement and unfair competition under the Trade Marks Act, 1999, particularly under Section 11.¹

The Defendant, Sardarbuksh, argued that its brand name carried a different cultural meaning and had been derived from local references, with no intention to copy Starbucks. The defendant denied that its mark was deceptively similar and pointed out that, upon receiving the 2017 legal notice, it had voluntarily changed its logo to a black and yellow colour scheme — demonstrating honest intent to avoid dispute. Sardarbuksh further argued that operating in the same industry does not, by itself, constitute trademark infringement.

Judgment

After considering the submissions of both parties, the Hon’ble Delhi High Court decided the case in favour of Starbucks. The Court held that the name “Sardarbuksh” and its logo were deceptively similar to Starbucks’ registered trademark and that there was a strong possibility of consumer confusion arising from this similarity.

The Court directed Sardarbuksh to change its brand name to “Sardarji-Bakhsh Coffee & Co.” for all outlets yet to open. Two existing stores were permitted to continue operating under the old name temporarily, subject to conditions laid down by the Court. On 27 September 2018, Sardarbuksh complied with the Court’s directions and renamed all its outlets accordingly. The Court also granted Sardarbuksh the right to take legal action against third parties using the word “Bakhsh,” so as to prevent further confusion or infringement.

Legal Reasoning

The central legal question before the Court was whether the mark used by Sardarbuksh was deceptively similar to Starbucks’ registered trademark and whether such use amounted to trademark infringement and unfair competition under the Trade Marks Act, 1999.

The Court primarily relied on Section 11 of the Trade Marks Act, 1999, which sets out the relative grounds for refusal of registration. This provision prohibits the use or registration of a mark that is identical or deceptively similar to an earlier trademark if it is likely to cause confusion in the minds of the public. The underlying purpose of this section is to protect both consumers and prior trademark holders.¹

In this case, Starbucks had registered its trademark in India in 2001 — well before Sardarbuksh commenced business in 2015. Starbucks therefore held prior statutory rights along with established market goodwill. The Court observed that once prior use and registration are demonstrated, the burden shifts to the defendant to show that its mark will not cause confusion — a burden that Sardarbuksh failed to discharge.

To determine deceptive similarity, the Court applied the test laid down in National Sewing Thread Co. Ltd. v. James Chadwick & Bros Ltd. (1953).² Under this test, trademarks are not to be compared side by side in a technical or analytical manner; rather, they must be assessed from the perspective of an average consumer of ordinary intelligence with imperfect memory.

Applying this test, the Court found that “Starbucks” and “Sardarbuksh” sounded markedly similar when spoken in ordinary conversation. This phonetic similarity is particularly significant because consumers typically do not analyse brand names analytically during quick purchases. The Court also identified visual similarity: both logos were circular in shape and had previously used a similar green colour scheme. Even though the central figures in the logos differed, the overall commercial impression was sufficiently close to risk consumer confusion.

A further consideration was that both brands operated in the same business — selling coffee and related products — and targeted the same consumer base. The Court held that where goods and services are identical, even a relatively modest degree of similarity between marks can be enough to confuse consumers, who may assume that the brands are connected, affiliated, or operating under a franchise arrangement.

The Court also found that Starbucks’ status as a globally well-known brand with strong goodwill meant that permitting Sardarbuksh to continue using a similar name and branding would confer an unfair commercial advantage on the defendant and dilute the distinctiveness of the Starbucks mark. This, the Court held, amounted to passing off — the defendant was, in effect, trading on the reputation of Starbucks without having built an independent identity of its own.

The Court rejected the defendant’s argument that the change of logo colour was sufficient to avoid infringement. It made clear that minor cosmetic changes do not cure infringement when the dominant features of a mark continue to cause confusion. The persistent use of the name “Sardarbuksh” itself remained a serious concern, given the strong impact of phonetic similarity on consumer perception.

The Court acknowledged that every enterprise has the right to carry on trade. However, this freedom cannot override the statutory rights of a prior trademark owner. Trademark law seeks to balance commercial freedom with the protection of goodwill against misuse. By directing Sardarbuksh to adopt the name “Sardarji-Bakhsh Coffee & Co.,” the Court preserved the defendant’s ability to continue in business while eliminating the risk of consumer confusion.

Conclusion

The Delhi High Court’s decision in Starbucks Coffee v. Sardarbuksh Coffee and Co. Ors is a significant affirmation of the principles governing trademark protection in India. The case demonstrates that deceptive similarity is assessed holistically — through the lens of an ordinary consumer — and that phonetic resemblance alone can be sufficient grounds for restraint, even where visual or conceptual differences exist.

The Court correctly applied Section 11 of the Trade Marks Act, 1999, holding that the similarity in name, logo, and nature of business was sufficient to create confusion in the mind of an average consumer. By benefiting from the goodwill Starbucks had established, Sardarbuksh gained an unfair commercial advantage — an outcome that trademark law is specifically designed to prevent.

The judgment reinforces the importance of conducting thorough trademark searches before adopting a brand name, particularly in competitive consumer markets. It also serves as a caution against “sound-alike” branding strategies that, even when adopted without deliberate intent to deceive, may cross the legal threshold of deceptive similarity. The restriction imposed by the Court was both legally justified and equitably balanced — protecting trademark rights, preventing consumer confusion, and preserving fair competition in the market.

Reference(S):

¹ Trade Marks Act 1999, s 11.

² National Sewing Thread Co. Ltd. v. James Chadwick & Bros Ltd., AIR 1953 SC 357.