This article is written by Ashutosh Singh. The article deals with the analysis of the M/s Biofarma v. Sanjay Medical Stores, (1997) case in the light of trademark infringement and passing off.

Introduction

Trademark is an intangible asset that has a great impact on the market. Once a trademark becomes well known, it creates revenue for the trader/manufacturer. The trademark can also be assigned and licensed to the prospective user for some consideration. Thus, the quality of the product and the trademark name is of great value to the trader and needs to be protected.

The present case is about the infringement of trademark and passing off damages. The plaintiffs are Biofarma and another and the defendants in the case are Sanjay Medical Store and others. The judgement was delivered by a single bench comprising of M.K. Sharma, J. The judgement of the case was passed on 31st March 1997. The plaintiffs in the case had filed a suit for trademark infringement and passing off against the defendants. The dispute was over the alleged deceptive similarity in the trademarks of the two parties. The disputed products of both parties were pharmaceutical Schedule ‘H’ drugs.

Passing off and infringement of well-known trademarks is a common offence and of great importance in view of the several inconsistencies in the implementation of the existing laws. Trademark is the only intellectual property right that can be retained permanently as long as one renews it regularly. 

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The problem of passing off and infringement arises when another entity imitates the trademark of the true owner in order to make a profit from the goodwill and reputation of the said trademark. Passing off hasn’t been defined in the Trademark Act, 1999 however, its mention has been made in a few places in the Act.

Facts of the case

  • The plaintiffs, in this case, filed a suit praying for a permanent injunction to restrain the defendants, their dealers, agents, stockists and servants from using the trademark ‘trivedon’ that was of the defendant.
  • Plaintiff no. 1 and plaintiff no. 2 entered into an agreement whereby plaintiff no. 1 has allowed plaintiff no. 2 to use their trademark.
  • The plaintiffs said that ‘flavedon’ is a registered trademark of plaintiff no. 1 in India and the product was introduced in India for the first time in the year 1987 and it is the largest prescribed drug in the French market. 
  • The defendants are selling pharmaceutical products under the trademark ‘trivedon’ which are used for the treatment of heart ailments and coronary diseases. These are similar to the drugs used by the plaintiffs under the trademark ‘flavedon’. Thereby defendant no. 2 is allegedly infringing the trademark of the plaintiffs. The plaintiffs claim that the two marks are also phonetically similar.
  • The plaintiffs claim that the trademark ‘trivedon’ of the defendant is deceptively similar to that of the plaintiffs ‘flavedon’ and therefore accused the defendants of passing off damages.
  • The plaintiffs also filed an application for a temporary injunction under Order 39(Rules 1 and 2) of the Code of Civil Procedure, 1908 to stop the defendants from using the trademark ‘trivedon’ to manufacture, sell or offer for sale any pharmaceutical products.
  • Accordingly, the present suit had been filed by the plaintiffs claiming for the aforementioned reliefs. 
  • Defendant no. 2 contested the suit and the application which were under Order 39 (Rules 1 and 2) of the Code of Civil Procedure and submitted their reply opposing the relief sought by the plaintiffs for grant of a temporary injunction. ​

Issues

  • Whether the plaintiff is entitled to be granted an injunction as prayed for in the application on the alleged ground that there has been an infringement of their trademark?
  • Whether there have been actual instances of deception and confusion amongst the public caused by the product of the defendant? 

Laws involved in the case

  • Section 29 of the Trademarks Act, 1999 comes into play when a registered trademark is said to be infringed by a mark that is deceptively similar or identical to the registered mark in relation to goods and services. 
  • Section 134(1)(c) in the Trademarks Act, 1999 institutes the law of passing off and gives the jurisdiction under which the suit can be instituted.
  • Section 135 in the Trademarks Act, 1999 provides injunctive relief and explains the various ways an injunction can be given.
  • Section 2(h) of the Trademarks Act, 1999 defines the term ‘deceptively similar’.
  • Order 39, Rules 1 and 2 of Code of Civil Procedure, 1908 has provision for the Courts in India to control and regulate the granting of a temporary injunction. Rule 1 of the order is relevant to the cases where a temporary injunction may be granted and Rule 2 is relevant where an injunction is granted to restrain repetition or continuance of breach.

Arguments submitted by the plaintiffs 

The counsel for plaintiffs submitted that: 

  • The drugs under the trademark “flavedon 20” of the plaintiffs are the cellular anti-ischemic drug used to treat ischemic heart disease.  The plaintiffs further argued that their mark “flavedon 20” is totally originally created by them.
  • It is exclusively associated with the plaintiffs who have been using the said mark in India through plaintiff no. 2  after an agreement with them since 1987. 
  • In response to the defendant’s argument, ‘Trimetazidine’ is a Schedule ‘H’ drug used for the treatment of ischemic heart diseases and it is not available across the countertop unless prescribed by a physician/ cardiologist.  
  • The plaintiffs referred to the decision of Bombay High Court in Astra IDL Limited v. Ttk Phartila Limited Supra (1991) and a decision given by the Delhi HC in the case of Ciba Geigy Ltd. v. Cross lands Research Laboratories Ltd (1994).
  • It was held in the above-mentioned cases that in the present circumstances and predominantly in the Indian context, the doctor’s prescription is very important but the ground reality cannot be ignored, since in India many times schedule drugs that are to be sold under doctor’s prescription or by a licensed store are even sold without the competent doctor’s prescription. This then reduces the weightage given to this aspect while considering the question of deceptive similarity.
  • According to the Counsel for the plaintiff, the price difference is a reason for deception because the drug of defendant no. 2 is priced lower than that of the plaintiffs and therefore there is a fair chance of the customers being deceived by the manufacturers, retailers, and chemists when they give the customers a drug which is priced lower than that of the plaintiffs.
  • The plaintiff alleged that the mark which is accepted and used by the defendants ‘trivedon’ is deceptively similar to that of the mark ‘flavedon’ which is registered by the plaintiff. The plaintiffs then relied upon various cases mentioned herewith: –

 Arguments submitted by the defendants 

The defendants submitted that the trademarks of the plaintiff (flavedon) and that of the defendant (trivedon) are very different. In their defence, they said the following:

  • Their opening syllables are completely different.
  • The suffix ‘vedon’ is commonly used by many other pharmaceutical manufacturers.
  • ‘Trimetazidine’ is a Schedule ‘H’ drug that is used for the treatment of ischemic heart diseases and is not available on countertop unless prescribed by a physician/ cardiologist.
  • There is also a significant difference in the prices of the drugs manufactured and sold by the two parties.
  • Even the packaging of the products sold under the two conflicting trademarks is different.
  • Defendant no. 2, submits that they honestly envisaged and took up the trademark ‘trivedon’ and applied for the approval of the Food and Drug Administration (FDA) to manufacture and market the said drug on 30.8.1994. They said that they arrived at the name of the trademark by clubbing three letters from the active ingredient ‘trime tazidine’ which is contained as a single ingredient product of the defendants. They got approval from the FDA to manufacture the pharmaceutical preparation containing 20 mg of ‘Trimetazidine’ under the trademark ‘trivedon’ in the month of October 1994.

The defendants after the approval commenced manufacture of anti-angina medicinal preparation under their own developed manufacturing process from February 1995 that is marketed under the trademark ‘trivedon 20’.  The number ’20’ in the trademark signifies the 20 mg, that is, the potency of the generated drug. 

Observations of the Court

  • The Court observed that the product of the plaintiffs and defendants are both used for similar types of diseases i.e., ischemic heart disease. 
  • ‘Trimetazidine’ is the base of the said product from which the defendant has clubbed the first three syllables to create ‘tri’ which is part of their trademark ‘trivedon’.
  • ‘Don’ implies a new era in medicine and is generally used in the pharmaceutical trades as part of the brand name. The letters ‘ve’ have been added to the letter’s ‘tri’ with the suffix ‘don’.
  • The plaintiff on the other hand coined their trademark ‘flavedon’ and there is no pharmaceutical product with the suffix ‘vedon’ which is registered before the plaintiffs did. Therefore, the plaintiffs claimed that the words ‘flavedon’ / ‘vedon’ have come to be associated with them.
  • The Court observed that in the case, Mis. Johan A. Wolfing v. Chemical Industrial & Pharmaceutical Laboratories Ltd. (1983), in deciding two disputing marks which are allegedly descriptively similar, the Court relied upon the decisions of the SC in Corn Products Refining Co. v. Shangrila Food Products Ltd. Supra, (1959) and K. R. Chinna Krishna Chettiar v. Sri Ambal & Company and Another (1969) that it is not permissible to divide and split up the words of the two disputing marks.
  • In this present case, the rival trademarks have different opening syllables which are distinct from one another. Thus, the principle laid down in the case of Ciba Geigy Limited v. Sun Pharmaceutical Industries (1992) appears to be applicable. The Gujarat High Court in the aforesaid case said that since the drugs were Schedule ‘H’ drugs, available on prescription of a registered medical practitioner only, there was no question of deception or confusion likely to occur.

Judgement

Upon the merits of the case, the single bench said that it was not appropriate to grant a temporary injunction to the plaintiffs and their application for the same stood rejected subject to the condition that defendant no.2 furnishes an undertaking to pay the plaintiff any damages within 3 weeks if the suit on merits is decided in favour of the plaintiffs. Defendant no.2 was also ordered to maintain an account of the sale and submit it to the Court every quarter till the disposal of the suit. The application of the plaintiffs was thus dismissed by the Court.

Obiter dicta

The term “deceptively similar” is defined in Section 2(d) of the Trade and Merchandise Marks Act, 1958. A mark would be thought to be deceptively similar to another mark if it has a close resemblance to the other mark such that it is likely to deceive or cause confusion in the mind of its consumers/users.

For concluding on the matter of deceptive similarity, the Courts have laid down some factors which are: 

  • Consideration of the nature of the marks, whether they are word marks, level marks, or composite marks.
  • Whether the marks are similar in idea and are phonetically similar.
  • The similarity in the nature of the goods is represented by the marks.
  • The similarity in the character, nature, and performance of the goods of the competitor traders.
  • The class of purchasers and the degree of care, on education, and intelligence they will exercise in purchasing the goods bearing the marks.
  • The mode of purchase/placing order of these goods.
  • Any other relevant circumstances
  • It is also settled that weightage should be given to each of the factors mentioned aforesaid and it depends upon facts of each case and hence the same weightage cannot be given to each factor in every case.

Ratio decidendi

The two marks, ‘trivedon’ of the defendant and ‘flavedon’ of the plaintiff are found to be prima facie dissimilar to each other. In the words of Lord Diplock who had told in American Cynamid v. Ethicon Ltd.(1975) that it’s not really the Court’s part at that stage of litigation when more information and supporting documents are required, to try to resolve conflicts of evidence on affidavit about facts on which the claims of the concerned party may ultimately depend. The Court should refrain from deciding difficult questions of law that call for detailed arguments and mature considerations as these matters should be dealt with at the trial. 

Therefore, the introduction of the practice of requiring an undertaking as to damages on the grant of an interlocutory injunction because it helped the Court in achieving its objective, of refraining from expressing any opinion upon the merits of the case until the hearing. Since the marks of the plaintiffs and defendants, in this case, are not the exact mark on the registration, but allegedly similar to each other, hence the test of passing off is applicable to this case to see if they are deceptively similar and are likely to cause confusion and deception in the minds of their users.

In Ruston and Hornsby Ltd. v. Zamindara Engineering Company (1969), the Apex Court has laid down the test for passing off and infringement and held that the test for both is the same. 

Critical analysis

There is no doubt that the trademark of the plaintiff was registered before that of the defendants and they both have been used for the treatment of ischemic heart disease but there ends the similarity as rightly pointed out by the Court that the starting syllables are different, the thought behind coining of the marks is different, their price and packaging is also different and at first look, it doesn’t look like an infringement of the trademark. However, the question then arises to ascertain the case of passing off, for which it is not necessary to prove intention. A deceptive mark can be a mark that is likely to cause confusion in the minds of the buyers of the said drugs. The Court in this case rightly did not grant an injunction to the plaintiff and ordered the defendant to maintain an account of sale and submit the same every quarter to the Court as the Court should refrain from deciding difficult questions of law which call for detailed arguments and mature considerations as these matters should be dealt with at the trial. 

Conclusion

The case was settled on 9th October 1998 by a two-bench consisting of R Lahoti, J. and C Mahajan, J. by Delhi High Court in which the bench felt that there was no evidence that the defendants at any time attempted passing off their products as that of the plaintiffs. And for this reason, the 2 judge bench upheld the order given on 31st March 1997 by a single bench and said that it had not made an error either on facts or in law in refusing the grant of ad-interim injunction to the plaintiff-appellant and the suit was dismissed.

References

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