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Cadila Healthcare Limited v/s Uniza Healthcare Llp & Another

    I As No. 11873 of 2020, 8953 of 2020 & CS(Comm) No. 415 of 2020

    Decided On, 22 February 2021

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE JAYANT NATH

    For the Appearing Parties: Dayan Krishnan, Vivek Sarin, Harshita Chauhan, P.K. Jain, Advocates.



Judgment Text

1. This application is filed by the defendants under Order 7 Rules 10 and 11 CPC praying that the plaint be rejected for want of cause of action as the same neither accrued nor arose in favour of the plaintiff and against the defendants within the territorial jurisdiction of this court. IA No.11873/2020

2. It is pleaded in the application that the plaintiff has its office at Ahmedabad, Gujarat. The defendants have their corporate office at Mehsana, Gujarat. None of the parties has their registered office within the territorial jurisdiction of this court and no part of cause of action arose within the jurisdiction of this court.

3. The defendant carries on its business at Ahmadabad and has not made any sales of medicines under the alleged trademark 'ZACLEAR' within the jurisdiction of this court. It is further stated that the plaintiff carries its business at Ahmadabad. Defendant No.2 has served the plaintiff during his employment at Ahmedabad. Hence, the present application.

4. I have heard learned senior counsel appearing for the plaintiff and learned counsel for the defendants.

5. Learned senior counsel for the plaintiff has relied upon the judgments of a Co-ordinate Bench of this court in the case of Bristol Myers Squibb Company & Anr. vs. V.C. Bhutada & Ors.,2013 SCC OnLine Delhi 4129and of a Division Bench of this court in the case of Shilpa Medicare Limited vs. Bristol-Myers Squibb Company & Ors., 2015 SSC OnLine Delhi 11164 to plead that a perusal of the plaint would show that clear averments are made that the plaintiff apprehends that the defendants would be selling products in Delhi. Hence the suit is in the nature of a quia timet action.

6. Learned counsel for the defendants, on the other hand, relies upon a judgment of a Co-ordinate Bench of this court in the case of M/s Allied Blenders & Distillers Pvt. Ltd. v. R.K. Distilleries Pvt. Ltd., IA. No.18636/2013 in CS(OS) 2266/2013, decided on 27.07.2016.

7. A perusal of the plaint filed by the plaintiff shows that the averments regarding territorial jurisdiction of this court are made in paras 39 to 45 of the plaint. The same are read as follows:

"39. It is submitted that this Hon'ble Court has the jurisdiction to entertain and try the present suit on account of the fact that the Plaintiff is carrying on business in Delhi through its branch office. It is also submitted that Delhi has been one of the largest markets for sale and distribution of the Plaintiff's products. It is, thus, the reasonable apprehension of the Plaintiff that the Defendants would undoubtedly be interested in exploring this market for sale of their goods under the Impugned Mark shortly. The threat of Defendants attempting to ride off the goodwill and reputation of the Plaintiff looms large as the Defendant No. 2 had been employed with the Plaintiff for nearly 12 years in the Sales and Marketing Department and is well aware of the focus markets and brand strategies of the Plaintiff. His plans, therefore, to launch ZACLEAR, a brand deceptively similar to ZYCLEAR, within 4 months of quitting the Plaintiff's employment, reeks of dubious designs and manifestly mala-fide and calculated to deceive the public and members of trade.

40. This Hon'ble Court also has jurisdiction to entertain the present suit under Section 20 CPC, 1908 because the Defendants have been advertising and inviting the enquiries and trade interest through its website for the sale of commercial quantities and the website www.unizagroup.com which is accessible from any part of the world including Delhi for placing orders and/or enquiries which is within the territorial jurisdiction of this Hon'ble Court. Printouts from the website are being filed in the present proceedings. 41. The Defendants are engaged in the marketing and sale of several pharmaceutical products within the jurisdiction of this Hon'ble Court and it is apprehended that the Defendants are likely to launch, market and sell offending products under deceptively similar trademarks within the territorial jurisdiction of this Hon'ble Court.

42. Moreover, the Plaintiff submits that a part of cause of action has arisen in New Delhi as the Defendants have customers, consumers, buyers and host of other persons for various aspects of their business activities in New Delhi and are also involved in large number of activities in New Delhi. All these establish beyond doubt that the Defendants have targeted New Delhi and purposefully availed the jurisdiction of this Hon'ble Court.

43. It is further submitted that New Delhi is the largest hub for the treatment for dermatological problems and has hospitals, clinics and experts and New Delhi is the hub for research in the field of dermatology. It is reasonable to apprehend that anybody who manufactures 'Amorolfine cream 0.25% w/w' will necessarily sell it in New Delhi and target customers, consumers, hospitals, pharmacies, etc. in New Delhi. It is therefore, apprehended that when the Defendants commercially launches their infringing product the same would be available within the territorial jurisdiction of this Hon'ble Court. It is submitted that the threat that the Defendants will sell and/or offer for sale the offending products within the jurisdiction of this Hon'ble Court is credible and eminent, giving rise to a substantial and integral part of the cause of action within the jurisdiction of this Hon'ble Court.

44. The subject matter of the suit is a "commercial dispute" as defined in Section 2(1)(c) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court Act, 2015.

45. The Plaintiff is selling its product under trade name 'ZYCLEAR' in New Delhi and apprehends that the Defendants are also targeting Delhi as its focus market and are likely to launch the product in New Delhi in the near future. In such circumstances, the Defendants are going to commit the violation of the Plaintiff's statutory rights in New Delhi and pass off their products/ formulations as those of the Plaintiff within the territorial jurisdiction of this Hon'ble Court. In such circumstances, the Plaintiff's goodwill and reputation will suffer irreparably in case the relief claim is not granted. The damages if calculated shall not be less than INR 2 crores therefore, for the purpose of peculiarly jurisdiction the present suit is valued at INR 2,00,00,600/-."

8. Hence, as per the plaint, Delhi is one of the largest markets for sale and distribution of the plaintiff's products and there is a reasonable apprehension that the defendants would be interested in exploring this market for sale of impugned mark. It is also stated that the defendants are engaged in the marketing and sale of several pharmaceutical products within the territorial jurisdiction of this court and the plaintiff apprehends that the defendants are likely to launch of the offending products under the deceptively similar trademark within the territorial jurisdiction of this court. Other similar averments have also been made. Further it is pleaded by the plaintiff that a part of cause of action had arisen in Delhi as the defendants have customers, consumers, buyers etc. in Delhi whom they have approached for the proposed product.

9. Keeping in view the above averments, reference may be had to the judgment of the Co-ordinate Bench of this court relied upon by the learned senior counsel for the plaintiff in Bristol Myers Squibb Company & Anr. vs. V.C. Bhutada & Ors.(supra), where the Co-ordinate Bench on the issue of territorial jurisdiction of this court held as follows:

"20. From the averments in the plaint it is seen that the Plaintiffs are seeking to invoke the jurisdiction of this Court on the basis of the threat or apprehension that the actions of the Defendant within the territorial jurisdiction of this Court are likely to cause prejudice to the Plaintiff. In other words, this suit is in the nature of quia timet action. The Plaintiffs urge that such action can be entertained by the Court, even if the threat has not culminated into a reality. So, one of the issues that arises for determination is whether, in the facts and circumstances of the present case, based on the averments made in the plaint, it can be said that the Court has territorial jurisdiction to entertain the suit. Particular to the present case, the question that arises is whether the mere apprehension of the Plaintiff or its perception of a threat of infringement by the Defendants of its patent occurring within the local limits of this Court is sufficient to attract the jurisdiction of this Court.

26. In Pfizer Products Inc v. Rajesh Chopra, 2006 32 PTC 301, the Court observed as under:

"The other aspect of the matter is that a threat of selling the offending goods in Delhi would in itself confer jurisdiction in the courts in Delhi to entertain a suit claiming an injunction in respect thereof. Whether the threat perception is justified or not is another matter which has to be considered and decided upon in the application filed by the plaintiff under Order 39 Rules 1 and 2 or on merits when the suit is taken up for disposal. Insofar as Order 7 Rule 10 is concerned, assuming that whatever is stated in the plaint is correct, one would have to also assume that the threat or the intention of the defendants to sell and offer for sale the offending goods in Delhi is also correct. Therefore, if the threat exists then this court would certainly have jurisdiction to entertain the present suit.""

10. Similarly, reference may also be had to the judgment of the Division Bench of this court relied upon by the learned senior counsel for the plaintiff in Shilpa Medicare Limited vs. Bristol-Myers Squibb Company & Ors.(supra), where the Division Bench held as follows:

14. The suit filed by the respondents is by way of a quia timet action, which visualizes apprehended injury. No doubt, there are important constraints placed upon a plaintiff who brings such an action, the most prominent one being that the burden of proving such apprehension is heavy. Yet, the fact remains that the suit is based to a large extent on the threat. Now how does a court evaluate a threat to adjudge if it is justified, in the context of a dispute about its territorial jurisdiction? This is to be seen from the requirements of what has to be pleaded in a plaint, and what can legitimately be seen when a dispute (with regard to the territorial jurisdiction) arises. The court necessarily has to confine its gaze to the plaint and the documents filed with it. It has been held in Saleem Bhai v. State of Maharashtra, 2003 1 SCC 557 that a plaint must be read as a whole to find out if it discloses cause of action. What is a cause of action, is a question of fact, which has to be decided on the basis of averments made in the plaint in its entirety, taking them as correct. It is also settled that the court cannot exercise the power to return, or reject the plaint where the averments made in plaint do disclose cause of action. (Ref. Mayar (H.K.) Ltd. v. Owners and Parties Vessel M.V. Fortune Express, 2006 3 SCC 100). As to what constitutes a 'cause of action', has been described as "every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court." (Ref. A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies Salem, 1989 2 SCC 163 and Bloom Dekor Ltd. v. Subhash Himatlal Desai, 1994 6 SCC 322).

15. In Teva Pharmaceutical Industries v. Natco Pharma Ltd., 2014 59 PTC 124 the appellant had a process patent; it filed a quia timet suit before this Court complaining of infringement as the Defendant was preparing to export the product manufactured by the process covered in the patent. The Defendant filed an application under Order VII Rule 10 of CPC seeking return of the plaint. The learned single judge allowed the application, stating that there was no averment in the plaint of the violation of the plaintiff's process patent in Delhi. It was also held that since the suit was for process patent, the pleadings as regards the product being sold in Delhi or the possibility of the product being launched in Delhi or elsewhere cannot justify the territorial jurisdiction of this Court. Reversing the decision and restoring the suit, the Division Bench held that:

"We are of the opinion that once the appellants/plaintiffs have pleaded apprehension of sale/marketing in Delhi, the Courts in Delhi would have jurisdiction to entertain the suit and such jurisdiction cannot be ousted by the defendant by making a statement not to do any such act in Delhi, though the defendant would be entitled to prove that there is no basis for such apprehension. If such a course of action were to be permitted, it would enable a defendant to avoid action in a particular Court by making such a statement and indulge in forum shopping. We also find that the same was not permitted by this Court in Rana Steels v. Ran India Steels Pvt. Ltd., 2008 37 PTC 24(Del); there, though the counsel for the defendant stated that the defendant had no intention to sell its products in Delhi, it was held that the plaint could not be ordered to be returned on the basis of the said statement." [Para 20]

11. In my opinion, the facts in the relevant paras of the plaint noted above clearly state the reasons as to why the goods, which are likely to be manufactured by the defendants using the impugned trademark, namely, 'ZACLEAR' are likely to be sold in Delhi. Detailed reasons are given to elaborate this apprehension. At this stage, the court has to decide this application assuming the averments made in the plaint to be correct.

12. I may also have a look at the judgment relied upon by the learned counsel for the defendants. A perusal of the said judgment in the case of M/s Allied Blenders & Distillers Pvt. Ltd. v. R.K. Distilleries Pvt. Ltd.(supra) shows that the facts of that case were different. The court concluded on the facts that as per the averments in the plaint, the cause of action, if any, has occurred in Andhra Pradesh and not in Delhi. The court further noted that the said case was not a case where the products had not been launched or were likely to be launched. That was a case in which the product with the impugned mark/label was in the market but not in Delhi but in Andhra Pradesh. Clearly, the said judgment relied upon by the defendants does not help the case of the defendants.

13. It is manifest that this court would have territorial jurisdiction to entertain the present suit and Order 7 Rule 10 or Rule 11 CPC will have no application. The application is dismissed.

14. This application is filed by the plaintiff seeking an ad-interim injunction in favour of the plaintiff and against the defendants restraining defendants No.1 and 2, their franchises etc. from offering or selling product under the mark 'ZACLEAR' or any other deceptively similar variant thereby passing of their products as that of the plaintiff's trademark "ZYCLEAR".

IA. 8953/2020

15. It is the case of the plaintiff that for treatment of allergic conjunctivitis the plaintiff created the trademark "ZYCLEAR". The same is a coined word derived from a combination of the alphabets Z & Y from the plaintiff's trade names ZYDUS and the term CLEAR. It is pleaded that the plaintiff's trademark "ZYCLEAR" has been in used since 2017 for eye-drops. The plaintiff has also filed a trademark application on 28.06.2019 for registration of the trademark "ZYCFEAR" under class 05. It is stated that defendant No.2 by nature of his employment with the plaintiff from 27.08.2008 to 04.02.2020 had undergone necessary training wherein defendant No.2 acquired access to and came in possession of plaintiff's proprietary information. It is pleaded that it came to the notice of the plaintiff that defendant No.2 in collusion with other certain former senior employees of the plaintiff who were privy to plaintiff's proprietary information drew up a plan to set up manufacturing units as business operations under the name of defendant No.1 using the plaintiff's proprietary information. Defendant No.2, it is pleaded, in collusion with the others malafidely applied for trademark 'ZACLEAR' in class 5 which is visually, phonetically and structurally similar to the plaintiff's prior in use trademark "ZYCLEAR" applied for in the same class. Defendants have adopted a phonetically, visually and structurally identical trademark 'ZACLEAR' in respect of an anti-fungal cream and the same is a malafide attempt to pass off the impugned mark as that of the plaintiff.

16. Defendants have filed a written statement. Essentially the defence taken is that this court has no territorial jurisdiction to entertain the present suit. It is also pleaded that a large number of trademarks have the suffix 'clear' and adoption of the impugned trademark by the defendants is in order. It is not denied that the defendants have yet to launch the product with the tr

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ademark in question 'ZACLEAR'. 17. On a pointed quarry from the court, learned counsel for the defendants was not able to submit any details of sales being made of the said medicinal products using the trademark 'ZACLEAR'. Learned counsel for the defendants also stated that his basic submission relates to lack of territorial jurisdiction of this court to decide the present matter. He did not make any submission on the merits of the matter. 18. I may note that in the application filed for registration of the mark "ZYCLEAR" the plaintiff has noted the user of the mark since 22.01.2019. However, the plaintiff in the plaint claims that it has been using the mark since 2017. 19. Learned senior counsel for the plaintiff has shown me invoices for the year 2017 which have been filed along with the plaint in the list of documents. There are invoices on record dated 13.05.2017, 15.05.2017 and 16.02.2018. Prima facie it appears that the plaintiff has been using the mark "ZYCLEAR" since 2017. 20. It is also obvious that the proposed trademark 'ZACLEAR' of the defendants is deceptively similar to the plaintiff's mark "ZYCLEAR". The said mark "ZYCLEAR" has been used uninterruptedly by the plaintiff since 2017. The attempt of defendants prima facie appears to be to pass off its goods as that of the plaintiff by dishonestly using the trademark 'ZACLEAR' which is deceptively similar to the plaintiff's trademark "ZYCLEAR". 21. The plaintiff has made out a prima facie case. The balance of convenience is in favour of the plaintiff. The defendants, its agents etc. are restrained from manufacturing, offering for sale or dealing with the products under the mark 'ZACLEAR' or any other mark, which is deceptively similar to the products of the plaintiff under the trademark "ZYCLEAR" till pendency of the present suit. 22. The application is disposed of.
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