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IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Dr. Reddys Laboratories Limited – Appellant
Versus
Rikon Pharmaceuticals Pvt. Ltd. – Respondent
CS(COMM) 495 of 2022 & I.A. 11373 of 2022
Decided On : 06-03-2023
Trademark - Settlement Agreement - The court decreed the suit in terms of the settlement agreement, which recognized the exclusive proprietary rights of the First Party in the trademark NISE and prohibited the Second Party from challenging these rights. The settlement also included undertakings regarding the use of specific marks, cancellation of registration, and consequences for violation of the terms.
Fact of the Case:
The dispute between the parties was settled through mediation, and a settlement agreement was placed on record. The court found that nothing survived for adjudication in the suit and decreed it in terms of the settlement agreement.
Finding of the Court:
The court found that as the dispute was settled and the terms of settlement were agreed upon by both parties, nothing remained for adjudication in the suit. The court decreed the suit in terms of the settlement agreement, which would be binding on the parties.
Issues: The main issue was whether the settlement agreement should be decreed by the court and whether anything remained for adjudication in the suit.
Ratio Decidendi: The court's decision was based on the settlement agreement reached between the parties, which resolved the dispute and left nothing for adjudication. The court decreed the suit in terms of the settlement agreement, emphasizing the binding nature of the agreement on the parties.
Final Decision: The court decreed the suit in terms of the settlement agreement, which would be binding on the parties. The plaintiff would be entitled to a refund of court fees, if any, deposited by it.
JUDGMENT (Oral)
I.A. 11373/2022 (under Order XXXIX Rules 1 and 2 of the CPC)
1. The dispute between the parties stand settled with the intervention of the Delhi High Court Mediation and Conciliation Centre. The settlement agreement dated 13th February 2023 has been placed on record. The terms of settlement read thus:
"1. That Second Party hereby recognizes and acknowledges the First Party's exclusive proprietary rights in the trademark NISE and not to challenge First Party s statutory and proprietary rights directly or indirectly at any time in future in India and globally.
2. The Second Party their directors, confirm and undertake that as per the directions passed by the Hon'ble High Court of Delhi vide order dated 22/07/2022 in CS (COMM) No. 495 of 2022, the Second Party has stopped manufacturing and using the mark `RIKONISE-P' or 'NISE-P', directly or indirectly in medicinal and pharmaceutical preparations of suspension syrups for domestic sale in India and or for export. The Second Party confirms that the last batch of `RIKONISE-P' products manufactured by them were as per details below:
| S.No. | Manufacturing date | Batch No. | Month of Expiry |
| 1. | December 2021 | RL-025 | 11/23 |
3. That in the integrum, Second Party in its bona fide has also brought to the knowledge of First Party the fact of manufacturing tablets, capsules, under the mark 'RIKONISE-P TABLETS' for domestic sale in India.
4. The Second party confirms that the order of permanent injunction was granted by the Hon'ble High Court of Delhi only with regard to manufacture and use of `RIKONISE-P' which is a suspension syrup. However, the Second Party in its own good faith has agreed to also stop the manufacture and use of tablets under the mark 'RIKONISE-P TABLETS'.
5. The Second Party confirms that after executing the present Settlement Agreement, the Second Party shall stop/refrain from manufacturing the said 'RIKONISE-P TABLETS' for domestic sale in India or export.
6. The First Party agrees and confirms that it will not interfere with sale of 'RIKONISE' and `RIKONISE-P' products that have already been manufactured and already sold. The Second Party undertakes and confirms that no fresh batch of products bearing the mark `RIKONISE-P' and 'RIKONISE-P TABLETS' will be made by them. The Second Party declares and confirms that any further production will make them liable for cost and damages.
7. The Second Party confirms they do not have in stock further products, packaging, printed material bearing the mark 'RIKONISE-P TABLETS' and `RIKONISE-P' in India. Any unused printed material shall be destroyed by the Second Party at its own cost.
8. The Second Party agrees not to use in future any mark containing the mark NISE or NICE.
9. The Second Party undertakes to apply to cancel its registration for the mark RIKONISE in class 5 within30 days of recording of these settlement terms.
10. The Second Party undertakes not to adopt any mark in future whether for sale in domestic market or for export any mark that is identical or deceptively similar to the First Party's mark NISE or carry out any such activities as may be likely to cause confusion or deception amounting to, passing off their goods under captioned Trademark as and for that of the First Party.
11. That both the parties confirm and understand that in case of any violation of the terms of the Settlement terms as set out above they shall be liable for legal proceedings.
12. That in view of the aforesaid undertaking given by the Second Party, the First Party agrees to forego its claim of rendition of account/damages/punitive damages against the Second Party including account/damages/punitive damages as stated in paragraph No. 30 (iv), (v) and (vi) of the plaint and the parties agree that in view of the above undertakings and acknowledgements, a decree may be passed in terms of the mediation settlement agreement."
2. Mr. Narula, learned Counsel for the plaintiff and Ms. Shalya Agarwal, learned Counsel for the defendant are present on behalf of th
The main legal point established in the judgment is the binding nature of a settlement agreement reached between parties, which can lead to the court decreeing the suit in terms of the settlement and....
Enforcement of Settlement Agreement
Settlement agreements can be used to resolve disputes without delving into the merits of the case, and the court may decree the suit in terms of the settlement agreement.
Settlement agreements can effectively resolve disputes and render legal proceedings unnecessary for adjudication.
The central legal point established in the judgment is the effectiveness of a settlement agreement in resolving a trademark infringement dispute and leading to a decree in favor of the aggrieved part....
The court's approval of the settlement agreement and the subsequent decree based on the terms of the agreement.
Settlement agreements can effectively resolve disputes in trademark infringement cases, allowing parties to acknowledge rights and agree on actions to prevent future violations.
The court validated the settlement agreement between the parties and ruled for the full refund of court fees, reinforcing the principle that amicable resolution entitles a party to such refunds.
Enforceability of settlement agreements and their impact on the resolution of disputes.
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