War of words: ITC, Nestle redraw the battle lines after HC ruling

The Madras High Court rejects a petition by ITC and lets Maggi use the word magical in its branding. Will the ruling lead to a fresh war of words?

Old rivals ITC and Nestle are stepping into a new phase in their fight for the lucrative instant noodles market in the country as the Madras High Court puts the clamps on a seven-year war of words between the two. 

ITC claimed that Nestle had wrongly appropriated the term magic masala from Sunfeast Yippee! Magic Masala for Maggi Magical Masala with an aim to confuse the consumer. 

Not so, said the court, giving both brands equal rights over what it calls common terms in the culinary trade. But, experts say, the end of a protracted legal battle may well open the doors to a new one, one that is played out in the arena of public opinion and advertising.

 

Such battles are common in the world of consumer goods marketing said several senior advertising and marketing professionals; toothpaste, biscuit, salt, masala, beverages and detergent brands have all invested large sums in law suits over trademarks, taglines and distinctive words. It keeps rivalries sharp and brands on their feet.

A spokesperson for Nestle India said, “We welcome the verdict of the Hon’ble Madras High Court dismissing the suit.”  It is to be seen whether ITC will pursue the matter in a higher court. 

 

Sandeep Goyal, brand strategist and founder of Mogae Media, says that FMCG skirmishes are not new. He points to some protracted battles in the past, such as the one between Colgate and Close-Up and between Horlicks and Complan. “They were all distractions and mind games. It was all about one-upmanship,” he said. This is unfortunate as brands need to take their trademarks, colours, descriptors seriously say experts. K Ramakrishnan, managing director-South Asia, Worldpanel Division, Kantar explains that these are important identifiers.

“This is because some brands are better recognised than recalled, many consumers do not ask for the brand by name and often do not know what is written on the package. Consumers typically ask for the colour of the pack, like 'blue soap' or 'orange chips',” he points out. 

 

Goyal agrees but he says he is surprised how lightly some brands take such differentiators. “Brand teams have to have the sense to register what they consider as ‘brand differentiators’ before market entry,” he says. This is especially true of rural markets where Ramakrishnan said, Maggi has a 29 per cent penetration and Sunfeast Yippee! has a 13 per cent. Together, the two dominate the instant noodles segment that has registered a 42 per cent penetration in rural India. No wonder then that the brands want to keep confusion over terms to the minimum. 

The more intense the competition, greater is the likelihood of such fights believes Ambi Parameswaran, founder of Brand-Building.com. “So the mother brand will become more important. Consumers will pick the brand that he is familiar with and words like Magic Masala may become just flavour descriptions. Like strawberry and vanilla in ice creams,” he says. 

Consumers are smart enough to know the difference believe experts, but for both ITC and Nestle, the Court ruling may well open the door for some public posturing and fresh advertising they say.