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Obsurge Biotech Ltd. v/s East West Pharma

    ORA/72 of 2006/TM/CH
    Decided On, 03 July 2007
    At, Intellectual Property Appellate Board
    By, THE HONOURABLE SHRI JUSTICE M.H.S. ANSARI
    By, CHAIRMAN & THE HONOURABLE MS. S. USHA
    By, TECHNICAL MEMBER
    For the Applicant: Shri Dhanaraj, Advocate. For the Respondent: Ms. Sujatha Venugopalan, Advocate.


Judgment Text
M.H.S. Ansari, Chairman:

1. Instant rectification application is filed for removal of the trade mark `SERADIC' registered under application No 1128494 under certificate No. 326709 dated 07.03.2005 in the name of Shri B.B. Mohan, Sole Proprietor of the firm East West Pharma (Registered proprietor - respondent herein) in Class 5 for medicinal and pharmaceutical preparations.

2. We have heard learned counsel Shri Dhanaraj for the applicant and Ms. Sujatha Venugopalan learned counsel for the respondent - registered proprietor at Chennai on 20.06.2007.

3. After having heard learned counsel for respective parties and with their assistance having perused the relevant pleadings and material on record, it appears that the applicant has based its application for removal on the ground, inter alia, that the predecessor in title (M/s Obsurge Pharma P. Ltd., for short OPPL) of the trade mark (which was subsequently assigned to the applicant) had adopted the trade name `SERADIC' in the year 1999 and had filed the application for registration in the month of August, 1999 in class 5 whereas the respondent - registered proprietor of the trade mark in question subsequently made application for registration of the said trade mark on 25.08.2002. In other words it is the claim of the applicant that the assignor, i.e., the predecessor in title of the applicant's trade mark `SERADIC' had earlier applied for registration of the trade mark in question and respondent, during the pendency of the said application obtained the registration of identical trade mark and thus the applicant claiming through its predecessor in title (by assignment) is the prior adopter and user of the trade mark in question and respondent being the subsequent adopter though having obtained registration earlier, the adoption is neither bona fide nor valid in law. Since the rival trade marks are identical and the goods covered by the said mark are also identical, i.e., medicinal and pharmaceutical preparations in class 5, if the respondent's trade mark is allowed to remain on the Register, it will cause confusion and enable the respondent's goods bearing the impugned mark to be mistaken for or passed off as goods of the applicant contends the Ld. Counsel for the applicant. We are satisfied that based on what is stated just herein before and the contentions hereinafter appearing applicant is an aggrieved person within the meaning of the said expression in Section 57 of the Act, 1999 having locus standi to maintain the application for rectification. In terms of Section 159(4) of the Trade Marks Act, 1999 the provisions of the said Act apply to the instant application and accordingly any reference to the Act in this order shall mean the Trade Marks Act, 1999. It was also contended that the mark of the respondent contravenes the provisions of Sections 9 and 11 of the Trade Marks Act, 1999 (for short the Act) and was therefore, not entitled to registration, as the applicant and not the respondent is the prior adopter and user of the trade mark in question, the registration thereof and its continuation on the Register is in contravention of the provisions of Section 18(1) of the Act warranting its removal from the Register.

4. Instant applicant for removal is resisted by the respondent on the grounds, inter alia that the respondent adopted the trade mark `SERADIC' in 2000 and filed an application on 26.08.2002 for registration of the mark. It was further contended, as averred in the counter statement, that respondent is having several trade marks with the prefix `SERA', the products covered by the trade mark in question (SERADIC) consists of Serratiopeptidase and Diclofenac sodium. The word SERADIC is derived from the said two ingredients and, therefore, it is contended that the adoption and use of the trade mark `SERADIC' by the respondent is honest, bona fide and by no stretch of imagination can it be said to be adopted to trade upon the reputation of the applicant. It is further contended that there is no bar to the registration under Sections 9, 11 or 18 of the Act as alleged. Also it is pleaded that the respondent "having adopted the trade mark honestly and used the same since 2002 without any break. There is no instance of confusion about the mark and, therefore, the respondent is entitled for protection under Section 12 of the Act."

5. Respective parties in support of their respective cases have filed evidence, which may now be referred.

6. Applicant for rectification has filed evidence in the form of an affidavit affirmed by its Managing Director Shri J.S. Chauhan.

(i) It is stated therein that the predecessor in title of the trade mark of the applicant was one M/s Obsurge Pharma Pvt. Ltd, (for short OPPL) the drug licence No. 11237/D1/3/99 dated 25.06.1999 was obtained on its behalf by M/s Madras Pharmaceuticals, a copy of the drug licence has been made Annexure `A'. Thereafter the predecessor in title of the applicant filed an application for registration of the trade mark `SERADIC' in class 5 on 02.08.1999 claiming user as "proposed to be used".

(ii) Annexure B is the form of additional representation filed with Form TM-1 for registration of the trade mark `SERADIC' bearing the provisional number 871204. A perusal of Annexure B shows that it is dated 02.08.1999 and bears the date 13.8.1999, being the date when received in the Trade Marks Registry, Okhla and has an endorsement of being assigned provisional No. 871204.

(iii) Annexure C to the said affidavit is the correspondence with regard to the search and the report is at page 18 of the type set supplied by the applicant wherefrom it appears that as on 31.05.2000 the conflicting marks are shown as:

(a) SERIDAC in Class 5 advertised before acceptance and name of proprietor is shown as Cadila Chem Pvt. Ltd.

(b) SEREDISK- new application and name of proprietor is shown as Glaxo Group Limited.

(iv) Sales turnover of the applicant's predecessor in title (Assignor) for the years 1999-2000 to 2001-2002 are stated and in Annexure D what is annexed is said to be the invoices and stock transfer challans. These stock transfer challans are said to be of the predecessor in title of the trade mark, so also the sales turnover for the said years. No affidavit has been affirmed on behalf of the assignor and, therefore, in our view the evidence relied upon by the applicant cannot be said to have been proved, being hearsay.

(v) Annexure E is the Memorandum of Understanding dated 02.03.2002 between the applicant and aforesaid predecessor in title wherein it is recited that acquirer and the seller are in the business of marketing pharmaceutical products. Seller has agreed to transfer its rights in the trade marks mentioned in Schedule A to the said Memorandum of Understanding and also that acquirer in authorized to use the brands with effect from 01.04.2002. The agreed price is to be paid before signing the deed of assignment.

(vi) Annexure F collectively are copies of invoices allegedly showing the expenses incurred in sales promotion. The affidavit itself does not state that the sales promotion expenses for the years 1999-2000 to 2001-2002 incurred by the predecessor in title are in respect of the product covered by the trade mark in question. No single advertisement in any newspaper or media has been filed as evidence. Invoices pertain to purchase or pens, bags (gift articles). There is, however, no indication that they pertain to the product covered by the trade mark in question or promotion and sale thereof.

(vii) Annexure G is a copy of deed of assignment. Therein there is no reference to the memorandum of understanding said to have been executed earlier between the parties. However, it is a document registered in the office of the sub-registrar, Delhi having been presented for registration on 24.03.2003. The said deed is dated 03.03.2003 and shows that in consideration of the sum specified therein paid by the assignee to the assignor, all rights and interests of the assignor in the trade marks mentioned in Schedule A, wherein `SERADIC' is shown at Sl. No. 6, have been assigned alongwith goodwill of the business in the trade marks. There is also a covenant that the assignor will not thereafter use the said trade marks. At page 91 is the evaluation report of the trademarks. The assigned trade marks have been valued at Rs. 8.00 lakhs. There is a statement to the effect that the brands are weak due to lack of longevity, non-registration and short life span of about three years.

(viii) Annexure H is the application addressed to the Deputy Registrar of Trade Marks by the advocates on behalf of the applicant for carrying out the amendments in the pending applications for which Form TM-16 has been filed along with assignment deed. At page 94 is an application for search in respect of `SERADIC' and the report is dated 14.11.2002 which shows that as on that date the predecessor in title's application is pending and another applicant shown for the same trade mark is one Kamal Kohli. It was sought to be contended on behalf of the applicant that there is no mention of the respondent's trade mark even on that date. Non-mentioning of any party's mark by the Examiner of Trade Marks in is search report dated 14.11.2002 cannot be held against that party as the fault, if any, by non-mentioning would be that of the Examiner of Trade Marks and not of that party.

(ix) Annexure J collectively are legal notices exchanged between the applicant and the respondent in 2004. The respondent was asked by the attorneys for the applicant herein to cease and desist from manufacturing and selling any medicinal products under the trade mark `SERADIC'

(x) In reply respondent's advocate asked to be provided with certain documents and it appears from Annexure L dated 12.08.2004 being the letter addressed to the respondent's advocate, that following information was furnished.

(a) A photocopy of the Additional Representation form with the provisional number 871204 and also showing the date of filling of the application for registration.

(b) Photocopies of two invoices dated 14.9.99 showing the manufacture of goods bearing the above trademark under a proper and valid Drug manufacturing licenses number, in the year 1999, since when the mark is in regular use.

(c) A photocopy of the Drug manufacturing License.

(d) A specimen of the product bearing the trademark `SERADIC' as available in the market.

(xi) Annexure N is letter dated 08.11.2004 sent on behalf of the respondent by its trade mark attorney that in view of the facts stated therein his clients need not comply with the cease and desist notice on behalf of the applicant. It was contended that the applicant never claimed proprietorship in the marks through the predecessor in title of the mark in the said notices and, therefore, the claim now made on that basis is an after thought. Likewise on behalf of the applicant it was contended that the respondent in its reply has not given particulars of its pending application for registration of the trade mark in question nor given any particulars with regard to adoption and user and also did not take steps or any action to question the cease and desist notice.

(xii) Annexure O is a show cause notice from the Drug Controller, Kerala State addressed to one M/s Ravenbhel Healthcare Pvt. Ltd. stating that there are two products under the mark `SERADIC' available in the market and one of the products is believed to be not genuine. Addressee was asked to show cause within the time specified therein. According to the learned counsel for the respondent the said notice having been addressed to a third party is not relevant for the purpose of instant proceedings, whereas, according to the learned counsel for the applicant, the notice is addressed to a party (Ravenbhel) with whom the applicant has a manufacturing agreement to manufacture the drug, inter alia, under the trade mark `SERADIC'. It was also contended that the product under rival marks is causing confusion and the Drug Controller has viewed that one of the products is not genuine.

(xiii) Annexure S is an agreement dated 20.06.1999 by and between Madras Pharmaceuticals (for short MPH) and Obsurge Pharma Pvt. Ltd (for short OPPL) whereby MPH has undertaken to manufacture for OPPL pharmaceutical products under the trade marks including `SERADIC'. Another agreement of manufacture is dated 07.03.2002 between the applicant and M/s Unicure (India) Pvt. Ltd. Yet another agreement for manufacture is dated 04.03.2005 between the aforesaid Ravenbehl and the applicant. Also filed are copies of drug licences dated 14.05.2001 (MPH), 24.4.2001 (Unicure), 31.12.2001 (M/s. Moral Labs and Ravenbehl)

(xiv) Annexure T are said to be invoices bearing the name of the applicant for the period from 24.02.2003 onwards and challans dated 12.4.2002 onwards. The contention of the respondent is that the said evidence of the applicant only shows that applicant is subsequent user, if at all, from 2003 and not before.

(xv) Annexure U is a copy of the magazine Drug Today. Therein SERADIC has been shown opposite to the name of Obsurge Pharma. The earliest issue filed is dated October- December, 1999 and upto October-December, 2003. In the October - December 2002 issue and onwards the name shown opposite to `SERADIC' is of the applicant. From the same it is contended that the trade mark was known to the trade as far back as in 1999 and the applicant is prior user and adopter. Therefore, its adoption by the respondent in 2000 cannot be said to be valid.

(xvi) Annexure V is said to be the sales promotion expenses incurred by the applicant for the period 2002-2006. A perusal thereof would show that the said invoices are for purchase of certain items. There is nothing to show that they are connected with the product covered by the mark in question (SERADIC). Annexure V collectively, therefore, in our view, is of no assistance to the applicant. There is not a single newspaper or any media advertisement filed amongst the said Annexure V documents.

7. Turning now to the evidence filed on behalf of the respondents Annexure A to the affidavit affirmed by Shri B.B. Mohan Kumar on behalf of the respondents are certificate/licences issued by the statutory authorities for drug licence and renewal thereof in favour of the respondent. `SERADIC' is one of the products for which the respondent was granted licence No. 1007 dated 20.03.2000. Renewed upto 31.12.2006. Annexue B is certificate of registration under the GST (Tamil Nadu) and CST both dated May, 2000. Annexure C are said to be invoices-showing sale of the product `SERADIC'- They do not appear to be signed nor is it stated in the affidavit as to who signed the same. Neither the executant nor the dealer to whom the invoices are addressed has affirmed any affidavit. The said documents cannot be said to be proved.

8. Annexure D has been described in para 19 of the affidavit as "copies of literatures as ANNEXURE `D' to prove the promotion and advertisement of our product SERADIC." It is not shown as to whether there was publication of the said literatures in any magazines or media or any other promotion media. Also it is not clear as to when (date or year) the said literatures were used for promotion or advertisement. They are of no assistance to establish as to who among the parties herein is the prior user of the mark in question.

9. The above is the entire evidence relied upon by the respective parties in support of their respective case put forth.

10. In our opinion this Tribunal cannot rely upon what is not evidence such as hearsay. Also we would not be justified in basing our Judgment or order upon evidence which is not proved either by way of an affidavit of the person who is a party to the documents (exhibit) or at least stating in the affidavit the basis of his knowledge with respect to the exhibit/annexure concerned.

11. There can hardly be any dispute that the rival marks `SERADIC' are identical, phonetically, visually and structurally. Therefore, there can be also no doubt that the registration of the two marks would cause confusion and deception in trade. The bar of Section 11 (1) (a) of the Act would be attracted as there is identity of trade mark as well as identity of goods covered by such mark.

12. The only question, therefore, that needs to be decided is as to who is the prior user. Also, the contention raised on behalf of the respondent as regards protection under Section 12 of the Act needs consideration.

13. As already noticed each of the parties hereto claim to be the prior user and adopter of the trade mark in question. It emerges as a fact that the respondent applied for and obtained registration of the trade mark in question showing user as from 01.07.2002. On the other hand Annexure B relied upon by the applicant shows that its assignor in title had applied for registration of the trade mark `SERADIC' by an application dated 02.08.1999 and the same was received in the office of the Trade Marks Registry on 13.08.1999 and was assigned provisional No. 871204. It is also the applicant's case that the proprietorship in respect of the mark is claimed on the basis of the deed of assignment which is dated 03.03.2003. One thing that comes out clearly from the material on record is that the predecessor in title of the trade mark in question was OPPL and had applied for its registration and was assigned provisional number on 13.08.1999. From Annexure-U being the magazine Drug today meant for drug stores and stockiest it would appear that the trade mark `SERADIC' has been appearing in the name of OPPL from October-December 1999 upto January-March 2002 and from October - December 2002 onwards in the name of the applicant. Likewise on the side of the respondent Exhibits A and B only establish that the respondent obtained the drug licence to manufacture from 09.03.2000 and soon thereafter obtained registrations under the tax enactments and, therefore, had intention of manufacture and sale of the products produced by it. Annexures C and D to the affidavit affirmed on behalf of the Respondent, in our view do not constitute evidence which can be relied upon for the purpose of these proceedings.

14. A trader acquires the right of property in a distinctive mark merely by using it upon or in connection with his goods. Such a trader is entitled to protection no sooner the product with the trade mark is launched upon the market. Registration under the Trade Marks Act does not confer any new right to the mark claimed or any greater rights than what already existed at common law and at equity without registration. It is well established that registration itself does not create the trade mark, which exists independent of such registration. It is priority in adoption and using the trade mark that is regarded as superior to priority in registration. To establish the priority in adoption and use of a trade mark it would suffice if the goods with the mark upon it has actually become a vendible article in the market with the intent on the part of the proprietor to continue its production and sale. It is not necessary that such goods should have acquired reputation for quality under that mark. The actual test is the actual use of the mark. Publication in the Trade Journal Annexure "U" would satisfy the test of prior adoption and user. It is seen from Annexure "U" that in October - December, 1999 there was the vendible product is the market under the trade mark `SERADIC' manufactured/marketed by OPPL. This being anterior to the date set out in the Journal No. Mega 6 dated 25.11.2003 (see page 113) wherein respondent's application for registration was advertised before acceptance showing user claimed since 01.07.2002.

15. There is no bar to the assignment of an unregistered trade mark alongwith good will. Assignee would in such circumstances step into the shoes of the assignor and can tack on the period of user of the mark by the assignor. Judged in the light thereof applicant is prior adopter and user of the trade mark in point of time than the respondent. Applicant's claim to have acquired the right in the trade mark in question from the predecessor in title of the said trade mark by way of assignment stands established by virtue of the deed of assignment dated 3.3.2003 and thus its claim as proprietor.

16. Learned counsel M/s. Sujatha Venugopalan contended that the applicant has not filed any drug licence granted in its favour and if a proper search was made in November 2002 the applicant would have found that the respondent is using the said trade mark.

17. There are three search reports placed on record by the applicant and, therefore, there is no substance in the contention of the Ld. Counsel for Respondent. The same is rejected.. One such report is dated 31.05.2000 (page 18) and the application of respondent dated 26.08.2002 could not have been and is obviously not mentioned therein. The next search report is dated 14.11.2002 (page 95). Therein applicant's assignor's name is mentioned as proprietor with respect to trade mark `SERADIC'. The status is shown as new application. The application dated 26.08.02 of the respondent was required to be but has not been shown in the said search report. Just as in the applicant's case where in the report dated 31.05.2000 there is no mention of the application of OPPL which is said to have been filed in 1999 and additional representation form said to have been received in the Registry on 13.08.1999. The third search report is dated 03.03.2006 (page 115). Therein respondent's trade mark `SERADIC' is shown as registered, applicant's assignor's application 871204 is shown as advertised before acceptance.

18. Much has also been made about the respondent not making a search before adoption of the mark. It was sought to be contended on behalf of the applicant that the adoption by the respondent was not bona fide or honest as a mere search in the office of the Registry would have established that the application (of OPPL) for registration of the trade mark in question was pending registration. The contention of the learned counsel for the applicant is not without merit. The circumstances in which the Respondent adopted their mark is a matter which required examination in the context of the plea raised by Ld. Counsel for Respondent based on Section 12 of the Act.

19. It is true that the applicant has not filed any drug licence issued in its favour. However, it has filed the drug licences issued in favour of Madras Pharmaceuticals wherein the product under the trade mark `SERADIC' has been included vide orders of Drug Controller dated 25.06.1999 as also in the drug licences issued in favour of Unicare and Ravenbehl (see page 15, 130 to 133). There are manufacturing agreements executed between the applicant (page 125 Ravenbehl) (Page 123 Unicure) (Page 117 Madras Pharmaceuticals and OPPL dated 20.06.1999) in the light thereof it can be said that the applicant has established its proprietory rights in respect of the trade mark in question.

20. The legal notices exchanged between the parties show that the attorneys for the applicant have furnished all such documentary proofs as was required of the applicant by the respondent's attorneys. Atleast there is no objection placed on record with regard to non-furnishing of any such information called for from applicant's attorneys. Despite such legal notice to cease and desist issued on behalf of the applicant, respondent did not choose to take action which it was entitled to under Section 142 of the Act. This section protects the person against groundless threats of infringement by giving him an opportunity to bring a suit against the person making such threats and obtain a declaration that the threats are unjustifiable. On the other hand, it was, sought to be contended that despite knowledge and exchange of legal notices no proceedings were initiated by the applicant, therefore, there is delay and latches on part of the applicant in making the instant application for rectification. Instant applicant having been made in 2006, the same suffers from delay and latches and deserves to be dismissed on that ground, it was contended on behalf of the respondent. We have to reject the said contention on the ground that a specifically pleaded, there was no evidence of use of the said Trade Mark by respondent in the market after the cease and desist notices to compel the applicant to take legal action. Except a general denial on the side of respondent there is no evidence let in to show that the said plea is incorrect. We have to accept the submission made on behalf of the applicant that it was the letter of the Drug Controller, Kerala State dated 12.01.2006 (Annexure O) which promoted the applicant to file the instant application for rectification. The objection based on delay and latches is accordingly rejected.

21. As already noticed the rival marks are identical and also the goods covered by the said trade marks being identical there is every likelihood of confusion or deception for the purposes of Section 11(i) (a). Applicant as already held, has established its claim as proprietor and prior adopter and user. It must therefore be held that, the respondent's mark has been wrongly entered upon the Register in contravention of Section 11 and Section and 18 of the Act.

22. Insofar as the objection under Section 9 is concerned the same is rejected as we do not find any basis to sustain the said objection. The expression "deceive the public or cause confusion" in Section 9(2) (a) is, in our opinion, with reference to inherent nature of the mark itself and not with reference to another trade mark identical or sim

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ilar to the mark in question dealt with under Section 11(1) of the Act. 23. With regard to the plea of the respondent based on Section 12 of the Act, it must be stated that this Section 12 provides for registration of same or similar trade mark by more than one proprietor in the case of honest concurrent use of for other special circumstances. The operative words in the section being honest concurrent use. Doctrine of honest concurrent user was evolved for protection in cases where the use of the mark had not originally been deceptive but a risk of deception had subsequently arisen as a result of events which did not involve any dishonesty or other wrongful conduct on the part of the proprietor of the mark. 24. As is natural, the respondent has tried to explain his conduct and had given explanation as to how he derived the word `SERADIC'. Even if we are to hold that the said explanation is plausible, no relief can be granted to the respondent based on Section 12 of the Act as a similar trade mark was in use prior to its adoption by the respondent besides there was the application pending registration before the Registry concerned. The respondent has taken the risk in adopting the mark without proper enquiries as to whether anyone else had adopted the mark and had applied for registration of the same. Without having taken this elementary precaution of search in the Registry its claim to honest adoption/user can not be sustained. 25. The products covered by the rival trade marks in question are medicinal and pharmaceutical products, therefore, this Tribunal has also to keep in view the observations of the Supreme Court in Cadila Health Care, 2001 PTC (21) 546 (SC) wherein it is observed that under Section 17(B) of the Drugs and Cosmetics Act the imitation or resemblance of another drug in a manner likely to deceive is regarded as a "spurious" drug. The notice of the Drugs Controller, Kerala is a pointer in that direction. In the circumstances the plea of the respondent based on Section 12 of the Act is rejected. 26. In the view that we have taken, as above, it is not necessary to deal in any detail with the Judgment relied upon by the Ld. Counsel for the applicant circulated through letter dated 21.06.2007, namely, (1) AIR 1963 SC 1882 : PTC (Suppl)(1) 246(SC) London Rubber Co. Ltd. v. Durex Products (2) AIR 1998 Bombay 312 : 1999 PTC (19) 118(Bom), Lupin Laboratories Ltd. v. M/s Jain Products. 27. For the reasons aforestated the application is allowed holding that the Register of Trade Marks requires to be rectified by directing the Registrar of Trade Marks to expunge and cancel the mark `SERADIC' under application No. 1128494 and Certificate No. 326709 dated 07.03.2005 from the Register of the Trade Marks Registry. No order as to costs. Let a copy of this order be forwarded to the Registrar of Trade Marks.
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