This article is written by R Sai Gayatri, from the Post Graduate College of Law, Osmania University. This article deals with the passing off of an unregistered trademark and the landmark case of Cadila Healthcare Ltd. v. Cadila Pharmaceuticals, 2001. 

Introduction 

Imagine a situation where you are unwell and you are in search of your medicine, you want paracetamol with the name ‘Fevergo’ for your treatment, however, you get a tablet by the name ‘Fevertab’. Believing ‘Fevertab’ to be the same as ‘Fevergo’ you buy it and the tablet doesn’t suit you. Later, you realise that it was not the tablet you were looking for, you were misled by the name. By this example, it is clear that such similarity between the names of medicines might lead to life-threatening situations as the composition may differ extensively. In the law of intellectual property, there is a catena of cases that are premised upon unregistered trademarks and the action of passing off. The case Cadila Healthcare Ltd. v. Cadila Pharmaceuticals, 2001 is a landmark case that deals with the passing off of an unregistered trademark.

Meaning of passing off 

Passing off refers to the situation where one person represents his goods or services to people as that of another person. When a false representation is made by the owner of a certain product or service in order to mislead his customers into thinking that such goods or services are that of another entity, then such action will be considered as passing off. 

An unregistered trademark is a trademark that is not registered under a patent or trademark office. Such unregistered trademarks are often subject to the action of passing off. Section 134(1)(c) of the Trademarks Act, 1999 deals with the law of passing off while Section 27 provides a common-law remedy for the action of passing off.

Passing off often leads to damage to the goodwill and reputation of the actual product or service owner. Thus, it becomes pertinent to examine whether a person intends to deceive people or if they want to create confusion between two entities.

In order to establish a case of passing off, the owner must prove that their products or services have goodwill and that false claims are being made by the user. The owner must also prove that they have incurred a loss due to such creation of false claims of the user.

Quick insights on the case

NAME OF THE CASECADILA HEALTHCARE LTD. V. CADILA PHARMACEUTICALS, 2001
CITATION OF THE CASE2001 (2) PTC 541 SC
NAME OF THE COURTHON’BLE SUPREME COURT OF INDIA
APPLICANT IN THE CASECADILA HEALTHCARE LTD.
RESPONDENT IN THE CASECADILA PHARMACEUTICALS
HON’BLE BENCHJUSTICE B.N.KRIPALJUSTICE DORASWAMY RAJUJUSTICE BRITISH KUMAR
DATE OF THE JUDGEMENT26TH MARCH, 2001

Facts of the case

In the present case, Cadila Healthcare Ltd. (the appellant) and Cadila Pharmaceuticals (the respondent) were two pharmaceutical companies that introduced medicine for the treatment of cerebral malaria commonly known as Falciparum. The appellant launched the medicine by the name and style ‘Falcitab’ and the respondent named their medicine ‘Falcigo’. The appellant got their trademark registered in 1996 after being granted permission by the Drugs Controller of India, whereas, the respondent registered their trademark in 1997.

Later in the year 1998, the appellant became aware of the fact that the respondent is manufacturing, distributing and selling a medicine similar to that of the appellant in name and use, thus, the appellant filed an injunction before the Vadodara District Court to restrict the respondent from doing any further trade. However, the Vadodra District Court gave the judgement in favour of the respondent stating that the two medicines were different from each other based on formulation, appearance and price. The Court also stated that, since both the medicines are ‘Schedule L’ category drugs and are sold to hospitals directly there will not be any likelihood of the public being confused. Aggrieved by this decision, the appellant appealed before the High Court. The appellants had no luck this time too, as the High Court dismissed their appeal on the basis that there was no possibility of any confusion between both the medicines and thus, there was only a slight chance of passing off. Finally, the appellant approached the Supreme Court.

Issues raised in the case

  • Whether or not the sale of the ‘Falcigo’ drug by the respondent amounts to passing off?
  • Whether the mark of Cadila Pharmaceutical i.e., ‘Falcitab’ is similar to the mark of Cadila Healthcare i.e., ‘Falcigo’?

Contentions of the parties

Appellant’s contentions

Cadila Healthcare Ltd., i.e., the appellant contended that a similar trademark to theirs is being used by Cadila Pharmaceuticals, i.e., the respondent for the treatment of falciparum malaria that has a high possibility of creating confusion and deception among the public. The appellants stated that the respondent is passing off a drug of the appellants by making use of a deceptively similar trademark name called ‘Falcitab’ for the treatment of a similar ailment.

The appellant further mentioned the contention of the respondent stating that the mark of the drug is only used for the ‘Schedule L’ category of drugs that are directly sold to hospitals and clinics and thus, the possibility of any confusion being created is groundless. Even if the drug is directly sold to hospitals or clinics, the possibility of confusion and error cannot be overseen even though it is prescribed by a trained medical practitioner, they are not infallible. 

Respondent’s contentions

Cadila Pharmaceutical contended that the prefix ‘Falci’ in their trademark name ‘Falcitab’ was taken from the disease ‘Falciparum’, and it is a common practice in the pharmaceutical industry to name a medicine after the disease it is supposed to cure.

The respondent further contended that the said drug belongs to the ‘Schedule L’ category wherein such medicines are directly sold to hospitals or clinics, unlike the ‘Schedule H’ drugs which are sold in the retail medical shops. Due to this reason, the possibility of the public being confused or deceived between both drugs is unlikely. 

Judgement of the case

The Hon’ble Supreme Court stated that by the means of this judgement it does not intend to involve itself with the judgements passed by the lower courts, the said judgement is passed to establish the principles to be followed while dealing with an action of passing off with special regard to medical products.

The Apex Court further went into the detailed aspects of a catena of judgements including domestic and foreign jurisdictions after which it stated that no matter how intricate and precise those judgements are, the same cannot be applied to the instant case as there is no common language in India. The Indian market consists of a huge number of people who don’t know English or are illiterate, thus such consumers are supposed to be considered prior to making any decision as the confusion regarding the identity of the product might lead to grave effects on public health.   

The Hon’ble Court also observed that even if the drugs in dispute belong to ‘Schedule L’ which are directly sold to the hospitals or clinics, the possibility of creation of confusion between both the drugs cannot be dispensed with even though it is prescribed by a medical practitioner.   

Finally, the Hon’ble Supreme Court established certain principles to consider while dealing with a case of passing off and to decide the existence of deceptive similarity. The principles are as follows –

  • To check the nature of the marks which includes word marks, label marks and composite marks.
  • To check the degree of similarity between such marks which include ideological and phonetic similarity.
  • To check the similarity of nature, performance and character of the goods of both traders involved.
  • To identify the class of consumers who might buy the goods based on the marks they require, their intelligence, education and the degree of care they might employ in buying or consuming such goods.
  • To check the nature of the goods for which they are used as trademarks.
  • To identify the mode of purchase when buying such goods.
  • Any other such related circumstances which may be relevant in the matter of dissimilarity between such competitive marks.

Cases referred to in the judgement

Corn Products Refining Company v. Shangrila Food Products Limited, 1960

In this case, the Hon’ble Supreme Court had to deal with an appeal concerning a decision given by the Registrar regarding the registration of a trademark. The respondent i.e., M/s Shangrila Food Products had applied for the registration of the mark ‘Gluvita’ and the appellant i.e., M/s Corn Products, the owner of the registered trademark ‘Glucovita’, filed its objections to the registration of the respondent’s mark.

The question before the Court was whether there was a possibility of confusion being created between the two marks i.e, ‘Glucovita’ and ‘Gluvita’. The Court in this regard stated that the present case depends on the concept of first impression. It was further stated that in deciding a question of deceptive similarity and confusion between two marks, only the test of their close resemblance is not sufficient, the trade connection must also be considered. Here, the Court held that the two marks were so similar so as to cause confusion to the public and thus, allowed the appeal.

F. Hoffmann-La Roche and Co. Ltd. v. Geoffrey Manner and Co. (P) Ltd., 1969

In this case, the appellant i.e, F. Hoffmann-La Roche and Co. Ltd. was the owner of the trademark ‘PROTOVIT’ whereas the respondent i.e, Geoffrey Manner and Co. (P) Ltd. applied for the registration of the mark ‘DROPOVIT’. The appellant contended that the respondent’s mark is deceptively similar to their mark and that such mark is not an invented word but only descriptive in nature. Thus, the same question of whether the respondent’s mark amounts to deceptive similarity or not and whether the mark can be considered as an invention or not was brought before the Hon’ble Supreme Court.

It was stated by the respondent’s that their mark ‘DROPOVIT’ means ‘drop of vitamin’, and thus, it is an invented word. Subsequently, the Court held that since the mark ‘DROPOVIT’ is an invented word and does not fall under the ambit of a descriptive word, there is no possibility of deception or confusion being created among the consumers. The appeal was therefore dismissed by the Court. 

Critical analysis

The Hon’ble Supreme Court established various principles to be followed in the cases of passing off, mainly concerning medical products. The Hon’ble Court also confirmed that prior to manufacturing a drug, the applicant must prove to the Drug Controller General that their drug shall not cause any confusion or deception in the market by making use of a particular brand name.

The Apex Court did not involve itself in the decision given by the lower courts and it further gave directions to the lower courts to dispose of the suit expeditiously. However, the present case was reverted back to the lower court, it was to follow the principles established by the Apex Court while deciding the case.

Conclusion

In the present case, the Hon’ble Supreme Court gave its judgement after carefully interpreting various domestic and foreign judgements. More importantly, the Court observed that, even though both the drugs belonged to the ‘Schedule L’ category, there was a high probability of confusion being created between them leading to a case of passing off and deceptive similarity.

Generally, a case of passing off of non-medical products only leads to damage of goodwill or economic loss, however, in the case of medicinal products, the damage might lead to grave effects on the lives of people. The Apex Court ruled the present case as a case of deceptive similarity, and thus, the decision was given in favour of the applicant, i.e., Cadila Healthcare Ltd.

References


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