Lever, Nirma end 16-yr-old row

Reach out-of-court settlement on trademark violation.

After a bitter battle for 16 years, India's largest fast-moving consumer goods (FMCG) company, Hindustan Unilever (HUL), and its arch rival Nirma have reached an out-of-court settlement over the latter using a trademark similar to HUL's power brand, Surf.

In a settlement ratified by the court last week, Nirma had undertaken not to use a packaging device "" known as a starburst "" similar to HUL's Surf, sources close to the development said.

The case goes back to 1991 when HUL, then Hindustan Lever Ltd, filed a case against Nirma for infringement and "passing off" of the registered trademark and copyright of Surf on its own detergent brand.

An industry analyst explained that the close resemblance to Surf's packaging caused many consumers, especially rural and illiterate customers, to confuse the two brands.

As Nirma products are priced lower than HUL's fast-selling detergent Surf, sources said the similarity in trademarks caused Nirma to eat into Surf's sales.

The Bombay High Court had granted an injunction restraining Nirma from using the Super Nirma label with the "star device/flash of star" in 1991. Subsequently, this order was stayed because both parties filed appeals.

In 2006, both parties withdrew their appeals mainly on the basis of Nirma informing the court that it was not using the impugned label/carton.

Since then, Nirma has used a sea wave logo on its Super Nirma detergent powder packets and a girl with a blue circle in the background on its packets.

When the case came up for hearing this month, the court allowed HUL to withdraw the suit with leave to file a fresh one if Nirma uses the impugned label in future for its goods.

While most trademark violation cases are filed by established companies against the unorganised sector, this was the first time two of the country's top FMCG majors fought over a packaging design.

This is not the first time best-selling FMCG brands have fought over trademark violations or packaging designs that look similar to theirs. Colgate has sued newcomers Anchor and Ajanta toothpaste over the latter's use of red and white colours in their packaging.

An e-mail questionnaire to the Nirma spokesperson did not elicit a response.

Nirma first challenged HUL's leadership in the detergent segment in the late 1970s. Surf, one of HUL's flagship brands, was launched in 1959 and is now sold in three variants.

While Surf has moved on to higher price points, Nirma has maintained lower prices. However, the resulting price war for greater market share between the two companies has continued. HUL today claims a market share of 36.4 per cent in the fabric wash segment.

Both companies are facing tough competition from local and regional brands, which have gained significant market share in the last few years.