Danone to return 'Tiger' to Britannia

Danone to return 'Tiger' to Britannia

Author | Source: The Economic Times | Monday, Dec 04,2006 9:56 AM

Danone to return 'Tiger' to Britannia

Groupe Danone, which had registered the Tiger brand as its own in 74 countries, has now agreed to return it to Britannia. This follows a settlement between the two players on the intellectual property rights (IPR) issue.

While this indicates that the tension has eased in the relationship between Danone and the Wadias, differences persist over the terms and conditions regarding the return. Britannia wants Danone to return the Tiger trademark through a deed of assignment before discussing larger IPR issues, but Danone is seeking a firm commitment from Britannia to let it use the Tiger trademark in perpetuity in some markets.

There are also differences of opinion on whether Danone was entitled to register the Tiger brand as its own in the first place. Moreover, Danone - which co-owns Britannia with the Nusli Wadia Group - has debunked Britannia's claim that it was kept in the dark about the French company's move to file for trademark registration globally, and has highlighted its own status "as a worldwide leader in agri-foods with strong intellectual property management competencies".

In a communication to ET, Danone said, "In the frame of IPR exchange between Danone and Britannia, Danone has filed a worldwide registration application for Tiger in 74 countries (India excluded). As of now, Danone uses the Tiger intellectual property only in two countries, which is less than 2% of the total number of markets where it has been registered. Danone has in principle agreed to return IPR to Britannia once the terms and conditions of the return have been agreed".

Britannia, with a 38% value share of the growing domestic biscuit market, is critical to both Danone and the Wadia Group. Tiger, which was developed by Britannia as a glucose biscuit brand in the late 1990s, is the biggest brand in Britannia's portfolio, and accounts for nearly 25-30% of its Rs 1,800-crore annual sales.

Danone reiterated that "an exchange of technical co-operation and intellectual property, approved by, both, the Danone and Britannia managements, took place between the companies. These exchanges have been made with the full knowledge and support of the Britannia management and are documented".

In sharp contrast, Britannia claimed that Danone kept it in the dark about its registration of the Tiger trademark in so many countries. Company sources say Britannia stumbled upon this development when it was preparing to export Tiger biscuits to a country where Danone had already registered the trademark.

Britannia sources also countered an earlier Danone statement to ET that a 1998 board resolution between the two companies provided guidelines on technical collaboration and IPR issues which are yet to be formalised. Sources close to the Wadia camp said that the board resolution clearly said that Britannia will pay royalty to Danone for the use of any of its brand or recipes. For instance, in the case of Little Heart, a Danone brand.

It did not say anything about Danone paying royalty to Britannia because at that time the Britannia management felt that it could not make products relevant for Danone's use in overseas markets. So, if the company is now asking Danone to return the Tiger trademark, which was taken without its knowledge, it's perfectly entitled to do so, say Britannia sources.

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