IMPORTANT POINT
In this judgment Supreme Court has given reasons for not interfering with the orders passed by the Courts below in refusing to grant interim injunction and has also set out the principles which are to be kept in mind while dealing with an action for infringement or passing of specially in the cases relating to medicinal products.

Headnote:(i) Trade and Merchandise Marks Act-Action alleging passing off trade mark of Medicinal Product-Suit for injunction-Pending suit-Prayer of interim injunction-Appellant and Respondent entitled to use the name CADILA Corporate name-Appellant making "FALCIGO" and Respondent FALCITAB" medicines-Both for cure of same disease-Tempering injunction sought pending disposal of suits-Refused by Trial Court, upheld by High Court-Appeal to Supreme Court-Whether decisions of Courts below need any interference? (No).
       Held : When the special leave came up for hearing, detailed arguments were heard and, for the reasons to be given, this Court did not interfere with the orders passed by the courts below but gave directions regarding expeditious disposal of the suit. In this judgment, we give the reason for not interfering and also set out the principles which are to be kept in mind while dealing with an action for infringement or passing off specially in the cases relating to medicinal products. The reason for not interfering with the order appealed against was that there may be possibility of evidence being required on merits of the case and directions were given for speedy trial of the suit. Expression of opinion on merits by this Court at this stage was not thought advisable. (Para 9)
       (ii) Trade and Merchandise Marks Act-Suit for injunction against passing off Trade Mark of Medicinal Products-Principles which are to be kept in mind while deciding a case of passing off on the basis of unregistered trade mark (Cross Ref. Section 27(2) of Trade Marks Act).
       Sub-section (2) of Section 27 provides that the Act shall not be deemed to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof. In other words in the case of un-registered trade marks, a passing off action is maintainable. The passing off action depends upon the principle that nobody has a right to represent his goods as the goods of some body. In other words a man is not to sell his goods or services under the pretence that they are those of another person. As per Lord Diplock in Erwen Warnink BV v. J Townend & Sons, 1979(2) AER 927, the modern tort of passing off has five elements i.e. (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. (Para 10)
       Held : Broadly stated in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity the following factors to be considered :
        (a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works.
        (b) The degree of resembleness between the marks, phonetically similar and hence similar in idea.
        (c) The nature of the goods in respect of which they are used as trade marks.
        (d) The similarity in the nature, character and performance of the goods of the rival traders.
        (e) The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods.
        (f) The mode of purchasing the goods or placing orders for the goods and
        (g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.
       Weightage to be given to each of the aforesaid factors depends upon facts of each case and the same weightage cannot be given to each factor in every case. The trial Court will now decide the suit keeping in view the observations made in this judgment. No order as to costs. Appeal disposed of. (Paras 34, 35, 36)
       (iii) Trade and Merchandise Marks Act-Drugs and Cosmetics Act, 1940-Section 17-B-Application for permission to manufacture a drug under a brand name-Proper course to be followed by authorities under the Drugs and Cosmetics Act before granting such permission.
       Held : Keeping in view the provisions of Section 17-B of the Drugs and Cosmetics Act, 1940 which inter alia indicates an imitation or resemblance of another drug in a manner likely to deceive being regarded as a spurious drug it is but proper that before granting permission to manufacture a drug under a brand name the authority under that Act is satisfied that there will be no confusion or deception in the market. The authorities should consider requiring such an applicant to submit an official search report from the Trade Mark office pertaining to the trade mark in question which will enable the drug authority to arrive at a correct conclusion. (Para 33)
       (iv) Supreme Court s precedents on an action alleging passing off-Recent decision in S.M. Dyechem Ltd. v. Cadbury India Ltd., 2000(5) SCC 573-Whether correct on facts? (No).
       Held : While we agree that in trade mark matters, it is necessary to go into the question of comparable strength, the decision on merits in Dyechem s case, 2000(5) SCC 573 does not, in our opinion, lay down correct law and we hold accordingly. (Para 19)

JUDGMENT

Kirpal, J.-Leave granted.

2. Appellant and respondent are pharmaceutical companies manufacturing various pharmaceutical products. The two companies had taken over the assets and business of the erstwhile Cadila Group after its restructuring under Sections 391 and 394 of the Companies Act. One of the conditions in the scheme of restructuring of the Cadila Group was that both the appellant and the respondent got the right to use the name "CADILA" as a corporate name.

3. The present proceedings arise from the suit for injunction which had been filed by the appellant against the respondent in the District Court at Vadodara. The suit related to a medicine being sold under the brand name " Falcitab" by the respondent which, according to the appellant, was a brand name similar to the drug being sold by it under its brand name "Falcigo".

4. The case of the appellant was that its drug "Falcigo" contains Artesunate for the treatment of cerebral malaria commonly known as Falcipharum . After the introduction of this drug, the appellant on 20th August, 1996 applied to the Trade Marks Registry, Ahmedabad for registration in Part-A, Class-5 of the Trade and Merchandise Marks Act. On 7th October, 1996 the Drugs Controller General (India) granted permission to the appellant to market the said drug under the trade mark of "Falcigo". It is, thereafter, that since October, 1996 the appellant claimed to have started the manufacture and sale of drug "Falcigo" all over India.

5. The respondent company is stated to have got permission on 10th April, 1997 from the Drugs Controller General (India) to manufacture a drug containing "Mefloquine Hydrochloride". The respondent was also given permission to import the said drug from abroad. According to the appellant, it came to know in April, 1998 that the said drug, which was also used for the treatment of Falcipharum Malaria , was being sold by the respondent under the trade mark of "Falcitab". The appellant then filed a suit in the District Court at Vadodara seeking injunction against the respondent from using the trade mark "Falcitab" as it was claimed that the same would be passed off as appellant s drug "Falcigo" for the treatment of the same disease in view of confusing similarity and deception in the names and more so because the drugs were medicines of last resort.

6. The respondent company stated in the defence that the word "Falci", which is the prefix of the mark, is taken from the name of the disease `Falcipharum Malaria and it is a common practice in pharmaceutical trade to use part of the word of the disease as a trade mark to indicate to the doctors and chemists that a particular product/drug is meant for a particular disease. It was also the case of the respondent that admittedly the two products in question were Schedule "L" drugs which can be sold only to the hospitals and clinics with the result that there could not even be a remote chance of confusion and deception. It may here be noticed that Schedule "H" drugs are those which can be sold by the chemist only on the prescription of the Doctor but Schedule "L" drugs are not sold across the counter but are sold only to the hospitals and clinics.

7. The Extra Assistant Judge, Vadodara by his order dated 30th May, 1998 dismissed the interim injunction application. He came to the conclusion that the two drugs "Falcigo" and "Falcitab" differed in appearance, formulation and price and could be sold only to hospitals and institutions and there was, thus, no case had been made out for grant of injunction and there was no chance of deception or/of confusion specially as the drug was not meant to be sold to any individual.

8. The appeal filed by the appellant before the High Court met with no success. After discussing various cases which were cited before it and after verifying the cartoons and packings of the respective products, the High Court came to the conclusion that it could not be said that there was a likelihood of confusion being cau

Click Here to Read the rest of this document

2001 Supreme(SC) 568

Cases Referred (6)