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Schering Corporation & Another v/s United Biotech (P) Limited & Another

    NOTICE OF MOTION NO.3459 OF 2004 IN SUIT NO.3419 OF 2004
    Decided On, 02 May 2005
    At, High Court of Judicature at Bombay
    By, THE HONOURABLE MR. JUSTICE D.G. KARNIK
    Dr.Virag Tulzapurkar with Mr.Ravi Kadam i.b Crawford Bayley & Co for Plaintiff. Mr. I.M. Chagla with Mr.H.W. Kane for Defendants.


Judgment Text
P.C.


This motion is taken out by the plaintiffs in their suit for injunction restraining the defendants from infringing their trade mark "Netromycin" in any manner and from passing off their medicinal preparation under a deceptively similar brand name viz. "Netmicin" or any other name deceptively similar name or mark By this motion the plaintiffs claim an interim injunction restraining the defendants during the pendency of the suit from selling their products under the brand name "Netmicin".


2.The plaintiffs and the defendants are engaged in the manufacture, sale and distribution of pharmaceutical and medicinal preparations. Since prior to 1990, the plaintiffs are manufacturing, selling and distributing a medicinal product "Netilimicin Sulphate" in injectable form under the brand name "Netromycin". The plaintiff no.1 has also registered as a trade mark the word mark "Netromycin" in class 5 of IVth Schedule to the Trade Marks Rules, The plaintiffs' product is sold under the trade mark "Netromycin" in ampules and is used as an injectible antibiotic. The plaintiffs have sales of several crores of rupees every year and have acquired reputation and goodwill for the said medicinal product and the brand name. The defendants started manufacturing, selling and distributing the identical medicinal product "Netilmicin Suphate" in injectible form under the brand name "Netmicin". On being aware of the defendants' infringement of their trade mark and passing off of their goods (medicinal product) the plaintiffs after issuing a notice dated August 2, 2004 through their Solicitors have filed this suit and moved this court for the relief of an injunction.


3.Learned counsel for the plaintiffs submits that the name "Netmicin" used by the defendants for their product is deceptively similar to the trade mark of the plaintiffs. The similarity is both phonetic as well as visual. There is a probability of confusion of the consumers. Learned counsel for the plaintiffs refers and relies upon the decision of the Supreme Court in Cadilla Health Care Ltd. vs Cadilla Pharmaceuticals Ltd. reported in 2001 (5) SCC 73 wherein the Apex Court drew a distinction between the cases of passing off ordinary goods and passing off medicinal preparations. In para 33 of the judgment, the Supreme Court further observed :


"While dealing with cases relating to passing off, one of the important tests which has to be applied in each case is whether the misrepresentation made by the defendant is of such a nature as is likely to cause an ordinary consumer to confuse one product for another due to similarity of marks and other surrounding factors. What is likely to cause confusion would vary from case to case. However, the appellants are right in contending that where medicinal products are involved, the test to be applied for adjudging the violation of trade mark law may not be on a par with cases involving on medicinal products. A stricter approach should be adopted while applying the test to judge the possibility of confusion of one medicinal product for another by the consumer." (Underlining supplied)


4.Learned counsel for the defendants submits that there is no phonetic or visual similarity between the plaintiffs' mark and name of the defendant's product. The word "Netmicin" is not similar with the word "Netromycin". He further submits that the two medicinal products are prescription medicines sold in ampules only in an injectible form. They are used only by expert doctors mostly in hospitals and there is no possibility of any confusion in the said two names. He further submits that in any event both the medicinal products consist of a single pharmaceutical ingredients namely "Netilmicin sulphate" and therefore even if by accident one medicinal product is used for another, there is no possibility of having any harmful effect. Learned counsel also relies upon the decision of the Supreme Court in Cadilla Health Care Ltd. vs. Cadilla Pharmaceuticals Ltd. (supra) and invites my attention to the observations made in para 25 of the judgment:


"The drugs have a marked difference in the compositions with completely different side effects, the test should be applied strictly as the possibility of harm resulting from any kind of confusion by the consumer can have unpleasant if not disastrous results. The courts need to be particularly vigilant where the defendant's drug of which passing-off is alleged, is meant for curing the same ailment as the plaintiff's medicine but, the compositions are different. The confusion is more likely in such cases and the incorrect intake of medicine may even result in loss of life or other serious health problems." (Underlining supplied).


5.Learned counsel for the defendants submits that possibility of serious health problems arising out of use of medicinal products of different compositions used for the treatment of the same ailment led the Supreme Court to adopt a stricter approach while considering the possibility of confusion in an action for passing off of medicinal products. In the present case, chemical composition of the plaintiffs' medicinal product as well as defendants' medicinal product is identical and therefore even if one medicinal product is used for the other,even by accident, there would be no side effects at all, much less serious health problems. The observations made by the Supreme Court in para 25 of the judgment, submits learned counsel, make it clear that stricter approach required to be applied in respect of medicinal products is only in respect of medicinal products of different compositions. When a single and identical medicine constitutes the sole ingredient of two medicinal products, there is no possibility of any adverse health problems even if one medicinal product is used for the other. There is therefore no need of adopting stricter approach and the law as is applicable in an action for passing off of any ordinary product would only be applicable in respect of such medicinal products also.


6.Learned counsel for the defendants relies upon the decision of the Division bench of this Court in Bal Pharmaceuticals Ltd. vs Wockhardt Ltd. (Appeal No.498 of 2002 decided on 12th June, 2002 Coram: A.P.Shah and Smt Nishita Mhatre, JJ.) After referring to the decision of the Supreme Court in Cadila's case the Division Bench observed at para 10 of its judgment:


"In the present case apart from the fact that there is no likelihood of confusion in the two marks there is no difference in the composition of the two drugs and both products are made of a single ingredient viz. Axithromycin and therefore the question of causing the health problem or side effects really does not arise." (Emphasis supplied)


7.Per contra, learned counsel for the plaintiffs relies upon the decision of another Division Bench of this Court rendered in Sun Pharmaceuticals Industries Limited vs Wyeth Holdings Corporation (Appeal No.1005 of 2003 decided on 14th January, 2004 Coram: R.M.Lodha and A.V.Mohta, JJ) wherein the earlier decision of the Division Bench in the case of Bal Pharmaceuticals Ltd. has been distinguished. In para 40 of the judgment the Division Bench observed :


"We are of the opinion that (where) there is common field of activity, common field and procedure for selling such pharmaceutical medicines, and above all "materia medica" is common or composition of such product is common, there is more possibility of deception and confusion and infringer's action, definitely cause damage to the goodwill and the reputation of their trade mark of parties like respondents herein." (Underlining supplied)


8.Learned counsel for the plaintiffs submits that in the decision of Sun Pharmaceuticals Industries Limited the Division Bench of this Court has categorically held the fact that composition of the two medicinal products is common, gives rise to more possibility of deception and confusion and therefore injunction should be granted. Learned counsel submits that these observations of the Division Bench in Sun Pharmaceuticals Limited is the ratio of the judgment while observations made in para 10 of the decision in Bal Pharma's case are in the nature of obiter dicta. In the case of Bal Pharma the Division Bench had come to the conclusion that the two marks were not similar and there was no likelyhood of confusion in the two marks. Having come to that conclusion the injunction was refused. Therefore, the further observations that two products were made of a single ingredient and therefore question of causing health problems and side effect would not arise, were really unnecessary and are obiter in nature, for the injunction was refused on the ground that two marks were not similar. I find considerable force in the submission of the learned counsel for the plaintiffs.


9.I also find that in Indica Specialities Pvt. Ltd. vs Naxpar Laps Pvt. Ltd. and another reported in 2002 (1) L.J. 1004 after referring to the judgment of the Supreme Court in Cadilla's case, another Division Bench of this Court has held that the test to be applied in respect of medicinal products is totally different than the test to be applied in relation to other products.


10.I am of the view that the word "Netmicin" is phonetically similar to the plaintiff's word mark "Netromycin". There is a real possibility, nay probability, of a confusion of a consumer. Accepting the fact that both the medicinal products are prescription medicines and are usually used in hospitals, one cannot lose sight of the fact that even in hospitals senior doctors often prescribe a drug on telephone and an injection is administered by junior resident doctors and even nursing staff on oral instructions given by senior doctors on telephone. In case of a life saving drug, of a last resort the instructions are often required to be carried out forthwith. In such circumstances, possibility of confusion cannot be overlooked. Irrespective of the possible serious health problems arising out of confusion and administration of a different medicinal product than the one prescribed, that would be a clear case of infringement and passing off. In the present case, on account of phonetic similarity between the two names, there is clear possibility of confusion. The possibility of the defendant's product being wrongly used in place of the plaintiff's product clearly exists.


11.Learned counsel for the defendants next submits that as the defendant's trade mark "Netmicin" has also been registered as a trade mark under Registration No.1144328 under the Trade Marks Act, 1999 the defendant are entitled to use the said trade mark and the plaintiffs the owners of a similar registered trade mark are not entitled to maintain an action for infringement of the trade mark or passing off against the defendants. Learned counsel for the defendants submits that prior to the institution of the suit the defendant's mark "Netmicin" has been registered as a trade mark under Registration No.1144328 under the Trade Marks Act, 1999. Under section 28(3) of the Trade Marks Act, 1999 where two or more persons are the proprietors of a trade marks which are identical with or nearly resemble each other, the exclusive right to use any of those trade marks shall not be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration for the trade marks. Learned counsel for the defendants submits that while the plaintiff may be entitled to use its trade mark "Netromycin" exclusively the defendants would be entitled to use its trade mark" Netmicin" exclusively and use of their respective trade marks by the plaintiff and the defendants would not amount to infringement of each other's trade mark.


12.It is pertinent to note that the suit of the plaintiff is not only based on infringement of a trade mark but is also an action against passing off. In my view, right of a person to use a trade mark adopted by him exist independently of the registration of a mark as a trade mark under the Trade Marks Act, 1999 (for short the Act). A person who is a prior user of a mark is entitled to use that mark and prevent others from using an identical or deceptively similar mark and thereby passing off their goods as that of the plaintiff. This right exists as a common law right and in equity. It would be useful to quote here section 28(1) and 27(2) of the Act which reads thus:


"28(1): Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act."


"27(2) : Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof."


According to section 28(1) of the Act, registration of a trade mark gives to the registered proprietor of the exclusive right to use the same in relation to the goods in respect of which it has been registered. But, the opening words of section 28(1) namely "subject to other provisions of this Act" make it clear that the right conferred on the trader is not an indiffusible right and the same is expressedly made subject to other provisions of this Act.


Sub-section (2) of section 27 reserves a right of a trader to an action against any of the persons for passing off his g

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oods or services as to the goods as that of the plaintiff. Thus, the common law right which exists in prior user of a mark to prevent any other person from using identical or deceptively similar mark in relation to this goods is preserved and is unaffected by a subsequent registration of the latter's mark under the Act. Notwithstanding the subsequent registration by a subsequent user of his mark the prior user, even of an unregistered mark would be entitled to bring an action for passing off on the ground that the former has adopted which is identical or deceptively similar his mark. I am fortified in this view by the decision of the Division Bench of the Delhi High Court reported in H.R. Dongre vs Whirpool Corpn. reported in 1996 ETC 16. In that case though a trade mark "whirlpool" was registered by the defendants under the Trade and Merchandise Marks, Act, 1958 an injunction was granted at the instance of the plaintiff who was a prior user of the mark "Whirlpool". In my view, therefore contention that no action for passing off is maintainable at the instance of the plaintiff for the defendant's use of the mark "Netmicin" on account of its registration under the Trade Marks Act, 1999 has to be rejected. 13.For these reasons, there shall be ad interim injunction in terms of prayer clauses (g) and (h). Motion is made returnable early. 14.At the request of the learned counsel for the defendants and in view of the impending summer vacation, operation of this order is stayed till 8th June, 2005.
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