SUN PHARMA LABORATORIES LIMITED vs NARENDER KUMAR & ORS.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 22nd February, 2024
Pronounced on: 21st March, 2024
+ CS(COMM) 424/2021, I.A. 11524/2021 & I.A. 16787/2021
SUN PHARMA LABORATORIES LIMITED ….. Plaintiff
Through: Mr. Sachin Gupta, Mr. Ajay Kumar, Mr. Mana Mondal, Mr. Rohit Pradhan and Ms. Prashansa Singh, Advocates.
versus
NARENDER KUMAR & ORS. ….. Defendants
Through: Mr. Abhiraj Jayant, Mr. Advait Ghosh and Mr. Mrinal Chaudhry, Advocates.
CORAM:
HON’BLE MR. JUSTICE ANISH DAYAL
JUDGMENT
ANISH DAYAL, J.
I.A. 11524/2021 (application under Order XXXIX Rules 1 & 2 of the CPC) and I.A. 16787/2021 (application under Order XXXIX Rule 4 of the CPC)
1. This judgment disposes of I.A. 11524/2021 under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure, 1908 (CPC) filed by plaintiff seeking injunction against defendants and I.A. 16787/2021 under Order XXXIX Rule 4 of CPC filed by defendants seeking vacation of order dated 09th September, 2021 injuncting defendants.
Brief Facts
2. The suit had been filed by plaintiff seeking a decree of permanent injunction restraining defendants, and all those acting under them, from directly or indirectly, manufacturing, selling, advertising, and dealing in pharmaceutical preparations under defendants mark CAFTADAY (impugned mark) or any other trademark deceptively similar to plaintiffs trademark CAFTA (plaintiffs mark), which would amount to passing off of defendants goods as those of the plaintiff, and other attendant reliefs.
3. On 09th September, 2021, this Court issued summons in the suit and notice in the applications, and an ex-parte ad interim injunction was passed in favour of plaintiff and against defendants in the following terms:
15. Accordingly, till further orders, the defendants, their partners or proprietors, as the case may be, their assigns in business, licensees, franchisee, distributors, dealers, stockists, retailers/chemists are restrained from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in medicinal & pharmaceutical preparations under the impugned mark CAFTADAY or any other trade mark as may be deceptively similar to the plaintiffs trade mark CAFTA.
4. The dispute pertains to alleged passing off by defendants of plaintiffs product CAFTA, which is a medicinal eye drop containing the compound ALCAFTADINE. Defendants are using the impugned mark CAFTADAY for their eye drops containing the same compound. For reference, the pictorial representation of plaintiffs and defendants products is as under:
Plaintiffs Product CAFTA:
Defendants product CAFTADAY:
5. The application under Order XXXIX Rule 4 of CPC was listed before the Court on 13th January, 2022, when defendants sought time to file further documents in support. Subsequently, an affidavit in compliance was filed on 25th January, 2022. Written statement and replication has also been filed by the respective parties, and proceedings are underway in the suit.
Submissions on behalf of defendants
6. In support of their application under Order XXXIX Rule 4 of CPC, counsel for defendants, inter alia, submitted as under:
6.1 The generic compound which forms the basis of both plaintiffs and defendants products is ALCAFTADINE, where AL- and -INE are prefixes and suffixes which are generic and accepted in the trade. Reliance was placed on a document of World Health Organization (WHO) Guidance on the Use of International Nonproprietary Names (INNs) for Pharmaceutical Substances. It was contended that it is an admitted position that ALCAFTADINE, an ophthalmic preparation, was an INN listed by WHO (counsel for plaintiff agreed to this) and that the prefixes AL- and suffix -INE were part of common stems used in the selection of INNs. These common stems were listed in Annexure-3 of the WHO document. It was submitted that the prefix AL- meant aldehydes, while the suffix -INE denotes an alkaloid or organic bases.
6.2 It was, therefore, claimed that plaintiff had not coined the word CAFTA but had essentially taken it from the INN ALCAFTADINE and used it as their trademark. They could not, therefore, claim distinctiveness in the same.
6.3 Reliance was placed on Section 13 of the Trade Marks Act, 1999 (Trade Marks Act) which prohibits registration of names of chemical elements or INNs. According to the said provision, INNs declared by WHO and notified in the prescribed manner by the Registrar, or any word which was deceptively similar to such INN, could not be used for registration of a trademark. Plaintiffs mark was not registered and their trademark application for CAFTA was still under objections. Plaintiffs case, at best, was of passing off and not infringement. Defendants mark was also not registered and their trademark application has been opposed by plaintiff.
6.4 CAFTA was a significant and dominant part of ALCAFTADINE and had become publici juris and, therefore, being deceptively similar to the INN, ran the risk of not being registered.
6.5 Presence of the word CAFTA as a mark for a product containing ALCAFTADINE conveys, to the doctor and the chemist, that the particular medicinal formulation contains the specific salt. Restraining defendants or others from using the word CAFTA would lead to a monopoly over the salt ALCAFTADINE and would also lead to unfair competition in the market.
6.6 Since the products are medicinal in nature and are used for eyes, which are a sensitive part of the body, it is unlikely that a consumer would self-medicate or buy the product on the mere suggestion of a chemist. The said product would be available on prescription by a doctor, who is unlikely to get confused between the brands CAFTA and CAFTADAY.
6.7 Reliance was placed on the decision in Schering Corporation & Ors. v. Alkem Laboratories Ltd., 2009 SCC OnLine Del 3886, where a Division Bench of this Court reiterated, in para 62, that in the trade of drugs, it is a common practice to name a drug on the basis of the name of the active chemical compound or salt, or the disease it seeks to remedy, or the organ it intends to treat. The name of such ingredient or compound, being in the public domain and of a generic nature, cannot be claimed by anyone for exclusive use as their trademark.
6.8 Reliance was also placed on Orchid Chemicals and Pharmaceuticals Ltd. v. Wockhardt, 2013 SCC OnLine Mad 1324, where the Madras High Court reiterated that use of generic terms is common and unavoidable and such names have come to be identified with a class or category of goods and service by the public at large and can, therefore, be called generic.
6.9 Pharmaceutical customers tend to ignore common features of products since use of parts of a salt name is unavoidable and there are several medicines of different brands being sold in the market. Reliance was placed on various other trademarks which were using similar generic names such as CAFTADINE, OCUCAFT, CAFTROCARE T, ALCAFT, CAFTYCA, LASTACAFT, etc. A number of these formative marks have been registered in Class 5 domestically and internationally, and have been extracted from online search reports by defendants.
6.10 Refuting plaintiffs case for passing off, it was contended that plaintiff started selling its formulation in 2019 as per plaintiff, and had not generated enough goodwill in the market for CAFTA to have acquired secondary meaning and be associated exclusively with the plaintiff. This was further underscored since the name had been picked from a generic compound and there were several other CAFTA formative marks.
Submissions on behalf of plaintiff
7. Counsel for plaintiff placed the following submissions in their response:
7.1 Defendants did not raise an objection under Section 13 of the Trade Marks Act in their written statement and, in any event, plaintiffs mark was not registered, and therefore, Section 13 of the Trade Marks Act had no application in the present case.
7.2 Reliance was placed on the decision of the Bombay High Court dated 18th June, 2015 in Suit No. 235 of 2015 titled Ajanta Pharma Ltd. v. Sunways (India Pvt. Ltd.), where, in para 13, it was held that the registered trademark GATE and other variations were not deceptively similar to INN GATIFLOXACIN and that the suffix -FLOXACIN was prominent and emphatic and made the INN dissimilar.
7.3 Reliance was placed on the supplementary affidavit filed by defendants in compliance of this Courts order dated 13th January, 2022 stating that they had been able to locate only two eye drops containing the salt ALCAFTADINE viz. ALCAFT and ALCAREX manufactured by third parties. Plaintiffs counsel contended that they were not using a substantial part of the name of the salt ALCAFTADINE and that CAFTA was not an abbreviation of the generic name.
7.4 Reliance was placed on the decision of the Honble Supreme Court in Cadila Healthcare v. Cadila Pharmaceuticals, 2001 SCC OnLine SC 578, where it was held that the threshold of deceptive similarity is lower in cases involving pharmaceutical drugs. Confusion between two products could be severely harmful and fatal, particularly considering that the doctors handwriting can be illegible and will cause confusion.
7.5 Reliance was placed on Corn Products Refining v. Shangrila Food Products Ltd., AIR 1960 SC 142, where it was held that the question of similarity had to be approached from the point of view of a man of average intelligence and imperfect recollection.
7.6 Plaintiff was the prior user of the trademark CAFTA since 2019, while defendants earliest trademark application is on 2021 on a proposed to be used basis. Reliance was placed on the decision in Radico Khaitan Ltd. v. m/S Devons Modern Breweries Ltd., 2019 SCC OnLine Del 7483, where the Court held that defendants had failed to discharge its duty of due diligence and had not conducted a search in the Trade Marks Registry.
7.7 Defendants are estopped from claiming lack of distinctiveness in the word CAFTA considering that defendants had themselves applied for registration of the mark CAFTADAY.
7.8 Plaintiff has garnered immense goodwill in the said product and has annual sales of over Rs.97.67 lakhs in 2019-2020 and Rs.176.33 lakhs in 2020-21 and, therefore, had made a strong case for passing off.
7.9 Reliance was placed on the decision in Mankind Pharma v. Nova Kind Biosciences Private Limited, 2023 SCC OnLine Del 4806 (a decision by a Coordinate Bench of this Court) where it was observed in para 32 that in the peculiar circumstances of India, where the poor are unable to afford services of a physician, they are provided drugs by the dispensing chemist and are likely to get confused into believing that drugs manufactured by the defendants are those of the plaintiff owing to a common suffix.
7.10 Reliance was placed on the decision in Nutrica Pusti Healthcare Pvt. Ltd. and Ors. v. Morepen Laboratories, 2021 SCC OnLine Del 2631, stating that the differences in packaging etc. between two compared products would be useful for general goods like soaps and detergents but not for medicines. Plaintiffs mark CAFTA had been completely subsumed by defendants in the impugned mark and was being used as a prefix.
7.11 The three tests of passing off i.e. prior and continuous user, goodwill and reputation and deceptively confusing trademark are satisfied in the case and the defendants have been unable to make a case for vacation of injunction, which is subsisting since 2021.
7.12 The decision in Schering Corporation (supra) was distinguished. While there was evidence in Schering that TEMO was an abbreviation for TAMOZOLOMIDE, there was no evidence that CAFTA was an abbreviation of ALCAFTADINE. Moreover, injunction was refused in Schering Corporation (supra) because of the price difference of about 600%, between the competing products; while in this case, plaintiffs and defendants products are priced similarly.
7.13 The reliance on Orchid Chemicals (supra) was distinguished on the ground that it was a case where injunction was refused since appellant was claiming a right in the prefix, was not able to show that it was the subsequent proprietor of the mark and was also not able to justify the delay of two years in approaching the Court. In this case, plaintiff was not claiming any right in the prefix of ALCAFTADINE and no other medicines have been brought to the attention of the Court which starts with the prefix CAFTA.
Analysis
8. Heard counsel for parties and perused the material on record.
9. Admittedly, plaintiffs case is one of passing off and not of infringement of a registered mark. Plaintiffs mark is unregistered, and the application for registration has been objected by the Trade Marks Registry on the ground that it is similar to a prior registered mark CEFTA. Defendants mark is also unregistered, and is currently opposed by plaintiff before the Trade Marks Registry.
10. The common law tort of passing off has been succinctly explained by the Honble Supreme Court in Laxmikant V. Patel v. Chetanbhai Shah and Another, (2002) 3 SCC 65, in the following terms:
10. A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury.
11. Salmond & Heuston in Law of Torts (20th Edn., at p. 395) call this form of injury as injurious falsehood and observe the same having been awkwardly termed as passing-off and state:
The legal and economic basis of this tort is to provide protection for the right of property which exists not in a particular name, mark or style but in an established business, commercial or professional reputation or goodwill. So to sell merchandise or carry on business under such a name, mark, description, or otherwise in such a manner as to mislead the public into believing that the merchandise or business is that of another person is a wrong actionable at the suit of that other person. This form of injury is commonly, though awkwardly, termed that of passing-off one’s goods or business as the goods or business of another and is the most important example of the wrong of injurious falsehood. The gist of the conception of passing-off is that the goods are in effect telling a falsehood about themselves, are saying something about themselves which is calculated to mislead. The law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices, the benefit of the reputation already achieved by rival traders.
(emphasis added)
11. In a case of passing off, plaintiff is essentially required to establish three things, i.e., volume of sales and extent of advertisement, misrepresentation by the defendant to the public, and finally, loss or the likelihood of it. This triple test has been summarized by the Honble Supreme Court in Satyam Infoway Ltd. vs. Sifynet Solutions (P) Ltd., (2004) 6 SCC 145. Relevant paragraphs from the same are extracted below:
13. The next question is, would the principles of trade mark law and in particular those relating to passing off apply? An action for passing off, as the phrase passing off itself suggests, is to restrain the defendant from passingoff its goods or services to the public as that of the plaintiff’s. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant’s goods or services are the plaintiff’s. The action is normally available to the owner of a distinctive trade mark and the person who, if the word or name is an invented one, invents and uses it. If two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed. The question is, as has been aptly put, who gets these first? It is not essential for the plaintiff to prove long user to establish reputation in a passing-off action. It would depend upon the volume of sales and extent of advertisement.
14. The second element that must be established by a plaintiff in a passing-off action is misrepresentation by the defendant to the public. The word misrepresentation does not mean that the plaintiff has to prove any mala fide intention on the part of the defendant. Of course, if the misrepresentation is intentional, it might lead to an inference that the reputation of the plaintiff is such that it is worth the defendant’s while to cash in on it. An innocent misrepresentation would be relevant only on the question of the ultimate relief which would be granted to the plaintiff [Cadbury Schweppes v. Pub Squash, 1981 RPC 429 : (1981) 1 All ER 213 : (1981) 1 WLR 193 (PC); Erven Warnink v. Townend, 1980 RPC 31 : (1979) 2 All ER 927 : 1979 AC 731 (HL)] . What has to be established is the likelihood of confusion in the minds of the public (the word public being understood to mean actual or potential customers or users) that the goods or services offered by the defendant are the goods or the services of the plaintiff. In assessing the likelihood of such confusion the courts must allow for the imperfect recollection of a person of ordinary memory [Aristoc v. Rysta, 1945 AC 68 : (1945) 1 All ER 34 (HL)] .
15. The third element of a passing-off action is loss or the likelihood of it.
(emphasis added)
12. In order to establish the first element of passing off, plaintiff has drawn this Courts attention to the CA Certificate appended with the plaint which reflects that it has made sales of Rs. 97.67 lakhs between January 2020 and March 2020, and sales of Rs. 176.33 lakhs in the Financial Year 2020-2021 for goods bearing the mark CAFTA. Sale invoices from September, 2020 to August, 2021 have also been appended.
13. Insofar as the question of misrepresentation is concerned, plaintiffs mark CAFTA has been completely subsumed by the impugned mark CAFTADAY. In this regard, counsel for plaintiff, in the written submissions, draws attention to the decision of a Coordinate Bench of this Court in Intel Corporation vs. Dinakaran & Ors., 2006 SCC Online Del 459, which also finds favor with this Court. Plaintiffs grievance in the said decision was that defendants mark ARTINTEL subsumed plaintiffs mark INTEL. Therefore, it was argued, that the prefix in the form of ART was affixed to the word INTEL to take advantage of plaintiffs goodwill and reputation. Although the defendants were proceeded against ex-parte and the plaintiffs mark was registered, the observations made by this Court in Para 12 of the said decision are instructive:
12. The defendants have failed to appear and to point out any significance why word ARTINTEL was used for the business of the defendants. There is force jn the contention of the learned Counsel for the plaintiff that though word ARTINTEL is one word while pronouncing the same it gets broken up into two parts ART and INTEL. The mark INTEL of the plaintiff is well known and obviously the use of the word INTEL is with the object of showing some connection with the mark of the plaintiff INTEL and to take advantage of the goodwill and reputation of the plaintiff. Needless to say that the chances of such deception increase when the product range is same or similar. In view thereof, I am of the considered view that the plaintiff is entitled to a decree of permanent injunction and delivery up as prayed for in paras 48(i) to (iii) of the plaint.
(emphasis added)
14. Attention was also drawn to the decision of the Division Bench of the Bombay High Court in Indchemie Health Specialities Pvt. Ltd., Mumbai vs. Naxpar Labs Pt. Ltd.¸ 2001 SCC OnLine Bom 868. In this case, the two marks under consideration were the registered mark Cheri and defendants (respondent therein) mark Cherish for pharmaceutical products. The Court observed that the phonetic similarity between the two competing marks was all the more manifest because appellants entire mark is incorporated in the mark of the respondents. The relevant paragraph from the said decision is extracted below:
8. In the light of the aforesaid observations of the Supreme Court the question we must ask to ourselves is: what would be the effect on the mind of the person of average intelligence and imperfect recollection. Applying this test which is established principle quoted above, there can be no manner of doubt that the respondents’ mark Cherish is deceptively similar to the appellants’ mark Cheri. If we compare the words cheri and cherish they are structurally and visually similar as well as aurally similar and easily give rise to deception and confusion. It would be highly improbable to expect on ordinary person of average intelligence and imperfect recollection to notice the difference in the meaning of two words cheri and cherish. As there is great deal of similarity in the phonetics of these two words. This phonetic similarity taken in conjunction with the fact that there is also a similarity in the products, to our minds, undoubtedly confuse an ordinary purchaser of average intelligence an imperfect recollection and who may even be an illiterate. This is all the more manifest because entire mark of the appellants is incorporated in the mark of the respondents. We have therefore no hesitation in coming to the conclusion that the respondents’ mark Cherish is deceptively similar to the appellants’ mark Cheri and is likely to deceive or cause confusion. Merely because the words are different it makes no difference since possibility of confusion remains.
(emphasis added)
15. This Court finds merit in plaintiffs submissions. The deceptive similarity between CAFTA and CAFTADAY is writ large as the former has been entirely subsumed by the latter. CAFTADAY will, necessarily, be pronounced as two words CAFTA and DAY. Therefore, an average consumer of imperfect recollection is likely to be confused between the two marks.
16. Defendants counsel, per contra, contends that the mark CAFTA is derived from the salt ALCAFTADINE, which is an INN listed by WHO, and therefore, incapable even of registration. Reliance in this regard was placed on Section 13 of the Trade Marks Act. Defendants counsel submits that CAFTA, being a significant and dominant part of ALCAFTADINE, had become publici juris. Attention was also drawn to other trademarks containing the mark CAFTA, such as CAFTADINE, OCUCAFT, CAFTROCARE T, ALCAFT, CAFTYCA, LASTACAFT.
17. The expression publici juris was explained by the Division Bench of this Court in Schering Corporation (supra), where the competing marks TEMODAL/TEMODAR and TEMOGET/TEMOKEM for the drug TEMOZOLOMIDE were under consideration, in the following relevant paragraphs:
49. The expression publici juris is defined in Black’s Law Dictionary (Eighth Edition) as
of public right; of importance to or available to the public a city holds title to its streets as property publici juris>