Cadila Healthcare Limited Vs Cadila Pharmaceuticals Limited, 26th March 2001

Cadila Healthcare Limited Vs Cadila Pharmaceuticals Limited, 26th March 2001

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FACTS

  • The appellant and the respondent are pharmaceutical companies who have launched medicinal products named Falcitab and Falcigo respectively and registered it in the year 1996 and 1997 respectively. 
  • In the year 1998, the appellants realised that the respondent had a product similar to it in name and purpose and filed for an injunction restraining them from further trade before the district court of Vadodara. 
  • This was dismissed by the court in favour of the respondents for the reasons that the two products were different in appearance, formulation, and price and that they were scheduled L products i.e they were sold directly to the hospitals/clinic and not directly to the individuals. 
  • Hence, there wasn’t any scope for confusion. After this, the appellants approached the high court. 
  • The high court dismissed the appeal on the grounds that there was little chance of passing off and there was no likelihood of confusion.
  • When the appellants approached the Supreme Court, it refused to delve into the matter of the validity and legality of the order passed by the lower courts since it was under the obligation for the speedy disposal of the case. 
  • This case involves a question of passing off which is different from the infringement of the trademark.

ISSUE

Whether there is passing off of goods by the respondent?

RULES

In the case of passing off, one trader deceitfully tries to sell his goods as somebody else’s goods. Remedy for this scenario is through common law and one can escape liability by establishing that some matter is added to his product which is sufficient to distinguish it for the claimant’s product. When a proprietor registers his trademark, he has the exclusive right over it. When somebody infringes this right, a statutory remedy can be availed by it. 

This exclusive right is infringed when somebody uses his trademark which is the sin quo non-requisite for this cause of action to arise. And for this, a statutory remedy can be availed by the proprietor. One cannot escape his liability by marked differences in the products nor can he escape when the two products are of different origin. The people who are likely to be deceived due to the confusion are the customers. The confusion as to the resemblance may be due to visual, phonetic resemblance or even the basic idea of the products. The identification of the essential features of the mark is, in essence, a question of fact and depends on the judgment of the Court based on the evidence led before it as regards the usage of the trade.[1] Both registered and unregistered trademarks can avail the protection of passing off as per sec 28 and sec 27(2) respectively.

A registrar or an opponent has the right to object to the application made by a trader for the registration of the trademark under sec 8 if it is scandalous or if there is a scope of deception or confusion. The grounds for objection are not dependent upon the identity or close resemblance of the trademarks in question. The grounds vary upon different circumstances. And after the registration is objected upon the above-mentioned grounds, the burden of proof to prove that the grounds upon which the objection is made is invalid lies upon the applicant.[2]

ANALYSIS

Trademark is essentially for the advertisement of its nature and quality. When it becomes popular, other people are tempted to pass off their products as that of the original owner of the mark. Hence, passing off action is deceptive. 

Passing off is said to be a species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation which other has established for himself in a particular trade or business.[3]There are five ingredients of passing off. First ingredient being misrepresentation, second being that the misrepresentation must be by a trader in the course of trade, third being to prospective customers/ final consumers, fourth being that [4]trader must be aware of the consequence i.e injuring the goodwill or business of another trader and the last being actual damage to the goodwill of the business of the trader that he misrepresents.

The question as to whether there is a confusion or not is a matter of the first impression. Assessment of whether two trademarks are similar or not must be done in its entirety and not by breaking down the words. Breaking down and comparing of words has been considered as a dangerous method.[5]Similarity of a part of the syllable of the two trademarks is not sufficient for it to be a ground for the rejection of registration.[6]The criteria for deciding whether there is deception by one trademark or confusion is not laid down by the act. 

The deception or confusion can be caused by two trademarks when they coexist in the same market and are legitimately used.[7]In Re Pianotist Co’s Application, things that need to be considered while deciding if there is confusion or not has been discussed. The first being the look and the sound. The second and the third being the goods for which the trademark is considered to be used and all surrounding circumstances respectively. The last two being the nature and the kind of the customer and the consequence of the two trademarks in question if they coexist. A customer irrespective of him being literate or illiterate looks at the overall structure and phonetic similarity rather than the etymological or ideological meaning.

The Court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description but also of the shop assistant ministering to that person’s wants. This is because only those who are not aware of both the words and even if they are aware of one but with imperfect collection are the ones who get confused and are likely to be deceived.[8]The the court rejected the view that along with the balance of convenience, comparable strength of cases of either party must be considered while deciding cases of this genre which was held in and that dissimilarity was an important aspect than the similarities. Both of these were introduced in S M Dyecham Ltd. v Cadbury (India) ltd case. Physicians and Pharmacists are not immune from making mistakes.[9] There should be as many clear indicators as possible to distinguish two medicinal products from each other.

A customer must be generally aware of the general distinguishing characteristics. When a customer is not aware of it, he is labelled as ignorant and such customer’s view must not be regarded.[10]A customer cannot be labelled as being deceived if he does not treat the products fairly if he buys the products [11]without any consideration.[12]Confusion in schedule L medicines is not uncommon. It can be caused by a lack of competence or otherwise. Confusion among medicines with different compositions and different side effects but targeted towards the same ailment causes more harm than confusion among other products because they can be fatal.[13]Hence, higher standards must be applied in situations like these.[14]

DECISION

The Supreme Court, in this case, laid the factors that need to be considered while deciding cases like these and ordered the trial court to decide the case based on these factors. The factors are:

·         Nature of the goods and marks(written or label or composite marks)

·         Degree of resemblance

·         People who are likely to buy the goods based on the mark

·         Mode of purchasing or placing orders for the goods

·         Any other surrounding circumstances

CONCLUSION

The English principles cannot apply to India because there is no single common language, the literacy rate is not high and all the people do not know English. In India, one must keep in mind as to who may have absolutely no knowledge of the English language or of the language in which the trademark is written and to whom different words with a slight difference in spellings may sound phonetically the same. The violation of trademark law is not at par with cases involving non-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. While confusion in the case of non-medicinal products may only cause economic loss to the plaintiff, confusion between the two medicinal products may have disastrous effects on health and in some cases life itself. For these reasons, it is proper to require a lesser quantum of proof of confusing similarity for drugs and medicinal preparations. 


[1]DurgaDutt Sharma v. NP laboratories, A.I.R 1965 S.C 980.

[2] National swing thread company ltd Chidambaram v. James Chadwick, A.I.R 1953 S.C 357.

[3]Wander Ltd. v. Antox India Pvt Ltd., 1990 Suppl. S.C.C 727.

[4]ErwenWarnink BV v. J Townend& Sons, 1979(2) AER 927.

[5] William Bailey Birmingham ltd. Application, (1935) R.P.C. 136.

[6]Corn Products Refining Company v. Shangrila Food Products Limited, 1960(1) S.C.R 968.

[7]Amritdhara Pharmacy v. SatyaDeo, A.I.R 1963 S.C 449.

[8]Aristoc Ltd. v. Rysta Ltd.

[9] Schering Corp Vs. Alza Corp reported in 207 USPQ 504 (TTAB 1980

[10] Payton & Co. v. Snelling, Lampard& Co. (1900) 17 R.P.C 48.

[11] American Cynamid Corporation v. Connaught Laboratories Inc., 231 U.S.P.Q 128.

[12]Schweppes Case (1905) 22 RPC 601 (HL).

[13] Glenwood Laboratories, Inc. v. American Home Products Corp, 173 USPQ 19(1972) 455 F. Reports 2d, 1384(1972).

[14]Clifton v. Plough 341, F.2d 934, 936, 52, CCPA 1045, 1047 (1965).


Kavitha Ravi- School of Law, Sastra University

Kavitha Ravi

Author

Kavitha hails from Sastra University, Thanjavur and she spends most of her time in dancing and playing chess. Her Interest area lies in Constitutional and International Law. For any clarifications, feedback, and advice, you can reach her at kavitharavi2429@gmail.com

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