JUDGMENT
Anand Byrareddy, J.
1. This is a defendant’s appeal. The appellant is aggrieved by an order of temporary injunction restraining it and their agents from manufacturing and marketing the medicinal product under the name of “ATVAS” which is held to be identical to the respondent-plaintiffs mark “AVAS”, pending disposal of the suit.
2. The brief facts of the case are as follows.
The appellant is a Company incorporated under the Companies Act, 1956 and is engaged in the manufacture and marketing of medicinal and pharmaceutical products.
The appellant had developed a formulation used for treatment of cardiac problems. The same was named “ATVAS”. According to the appellant this is a short form of the generic drug “ATORVASTATIN”. The name ATVAS has been coined by the appellant and has been used from inception. In this regard the appellant claims to have called upon its agent, M/s. IND-Swift Limited, through whom the appellant was getting the product “ATVAS” manufactured to obtain necessary licences as per a letter dated 1-6-2000. Similarly the appellant has also applied to the Registrar of Trademarks by an application dated 3-10-2001 for registration of the trademark “ATVAS”. The appellant seeks to rely on several documents to establish the claim of having spent considerable sums of money on promotion to have achieved sales exceeding Rs. 96 lakh from the time of its introduction in the market.
The appellant has adopted distinctive trademarks and carton design which sets the product of the appellant apart from any other product and the name itself has been selected only after a thorough search conducted at the Trademark Registry and after conducting a market survey.
On the other hand the respondent claims it is a Company registered under the Companies Act, 1956 and is engaged in the manufacture of pharmaceutical and medicinal preparations. The respondent has formulated a medicinal product and has adopted the trademark “AVAS” for the same. The name is derived from the generic name of the drug “ATORVASTATIN” – used for cardiac ailments. The respondent claims usage of the mark “AVAS” from March 2000 onwards, when, it is claimed, an application was made to the Registrar of Trademarks for registration of the name. The respondent claims that it was permitted by the Drug Controller to make use of the product name as on 24-5-2000, initially as A-VAS and by a further letter of the Drug Controller, at the instance of the respondent, from 26-6-2000 as AVAS and the respondent is said to have commenced manufacture and marketing from the month of July 2000.
3. As opposed to this the respondent urges that though the appellant claims to have obtained a drug licence for the manufacture of its product as on 17-8-2000 – it had actually commenced manufacture only as on 25-6-2001 and this apparently was in order to encash on the reputation that the respondent developed for its product in the interregnum and the respondent learnt about the appellant’s product when it was advertised in a medical journal in December 2001, and was thereby constrained to initiate proceedings.
4. The Trial Court in considering the application for temporary injunction of the respondent has allowed the same having regard to the following circumstances.
(a) That the respondent has commenced manufacture and marketing of its product AVAS from July 2000 after having obtained permission from the Drug Controller. Whereas the appellant commenced manufacture and sale of its product “ATVAS” only from June 2001;
(b) That the respondent is the prior user of the trademark AVAS, which is a vascular drug used for cardiac ailments, whereas the appellant had not produced acceptable documentary evidence to demonstrate that the name “ATVAS” was coined from the generic name Atorvastatin;
(c) That the respective trademarks AVAS and ATVAS are phonetically and visually, deceptively similar and would therefore create confusion not only in the mind of the public but also the medical fraternity.
5. Heard Sri Nandish for Holla and Holla for the appellant and Sri K.N. Sreenivasan for the respondent,
6. It is contended on behalf of the appellant as follows.-1
The Trial Court failed to take into account the fact that there are innumerable drugs in the market, which are formulations of the bulk drug Atorvastatin, that bear names that are derivations of the generic name (Example.ATOR, ATORIN, ATORVA, ATROSTAT, ATSTAT, AVASTIN, STORVAS, STATOR …etc.). The Trial Court has therefore proceeded in obvious disregard of an established practice of coining names derived from the generic name of the bulk drug.
The Trial Court has overlooked the principles laid down in law that no proprietary right to use can be claimed in a descriptive mark. The finding of the Trial Court that the respective trademarks are phonetically and visually similar is patently incorrect.
The Trial Court has completely overlooked the admitted fact that the appellant had obtained licence to manufacture the product ATVAS in August 2000 itself. Belaying the claim of the respondent that the user of the name is to encash on the reputation and goodwill developed by the respondent. In August 2000 there was no such reputation or goodwill.
The claim of the respondent that it had approached the Registrar of Trademarks for registration of the trademark AVAS in March 2000 is a patent falsehood. Material on record indicates that an application was made only as on 16-10-2000. Secondly the respondent was permitted to manufacture a drug by the name of A-VAS as on 25-5-2000. It was only as on 16-6-2000 the respondent was permitted to manufacture the drug “AVAS”. This misrepresentation of facts is completely glossed over.
The Trial Court’s reasoning that the respondent’s trade name is derived from the generic name Atorvastatin but it is not convinced that the appellant’s trade name is similarly derived is patently arbitrary and capricious, as there is nothing unique about in the respondent’s trade name.
The Trial Court has failed to notice that the appellant’s trademark, even it could be held to be deceptively similar to that of the respondent, the same was a prescription drug and would not possibly mislead the Medical Practitioner. A case in point are the several affidavits of doctors produced before the Trial Court, in none of which was it claimed that the individual doctor would be confused. The affidavits stating that the general public may be misled, is besides the point and a subjective opinion.
7. The Counsel for the appellant has relied on the following authorities.
Uniply Industries Limited v. Unicorn Plywood Private Limited and Ors. In a passing-off action involving cross suits by the parties each claiming proprietorship of trademarks in respect of their plywood products. The Supreme Court held that as-there was common field of activity between the two parties the only question to be determined was as to who was the prior user. And that in such cases the Courts ought not to decide the matter on a prima facie test but-should more appropriately decide that suit expeditiously Or the Registrar under the Trade and Merchandise Act, 1958 may decide the matter which would then govern the rights of the parties.
J.R. Kapoor v. Micronix India 1994 Supp. (3) SCC 215: Trade names “Microtel” and “Micronix” were used by the respective parties in respect of electrical and electronic apparatus. The Supreme Court, while vacating the injunction order, held that Micro-chip technology being the base of many of the products, the word “micro” has relevance in describing the products. And the word being descriptive of micro technology used for production of the goods, no one can claim monopoly over the use of the word “Micro”. And these being no phonetic or visual resemblance between the words “tel and nix”, users of such products are not likely to be misguided – or confused.
E.R. Squibb and Sons Inc. v. Curewel India Limited The question whether the adoption of the trademark “Curechol” by the defendant for its product containing the basic drug “Chloramphenicol” amounts to infringement of the trademark “Reclor” of the plaintiff was decided following the judgment of the Supreme Court in F. Hoffimann-La Roche and Company Limited v. Geoffrey Manners and Company Private Limited , where the view taken was that the question of deceptive similarity must be decided on the basis of class of goods to which the two trademarks applied.
Panacea Biotec Limited v. Recon Limited 1996 PTC 16 (Del.) Plaintiff using the name “Nimulic” for its medicinal preparation Defendant likely to introduce medicine under the name “Remulide” injunction was sought by the plaintiff. The Court held that the trademark having been derived from the name of basic drug “Nimesulide” was held to be descriptive in nature being indicative of the composition of the medicine. The Court held that no person can claim exclusive use of descriptive and generic terms.
8. The Counsel for the appellant has relied on several judgments to urge and/bolster the principles laid down in the above cases:
(1) Indo Pharma Pharmaceutical Works Limited v. Citabel Fine Pharmaceuticals Limited 1998 PTC 18;
(2) Aviat Chemicals Private Limited and Anr. v. Intas Pharmaceuticals Limited 200.1 PTC 601 (Del.);
(3) SBL Limited v. Himalaya Drug Co. 1997(17) PTC 540 (DB);
(4) Khandelwal Laboratories Limited v. FDC Limited 2001 PTC 864 (Del.);
(5) Reckitt and Coleman of India Limited v. Medicross Pharmaceuticals Private Limited 1994 IPLR 31.
9. Per contra, Sri KN. Sreenivasan appearing for the respondent would contend as follows.
That the order of the Trial Court is a well-considered order and does not warrant interference. The circumstances of the case clearly disentitle the appellant to any relief. The fact that the respondent has adopted for use the trademark “AVAS” in early 2000 and has established a universal reputation and goodwill and the admitted fact of the appellant manufacturing and marketing products under the name of “ATVAS” only in the latter half of the year 2001 and given that the name is deceptively identical and similar to the mark of the respondent, is a primary circumstance on facts on which the Trial Court has rightly found a prima facie case for the respondent. And, in the light of the principles of law laid down by the Supreme Court relating to passing-off actions, the Trial Court’s order does not warrant any interference.
10. The Counsel for the respondent has relied on the following judgments.
Cadila Health Care Limited v. Cadila Pharmaceuticals Limited : The appellant and respondent in this case, which are pharmaceutical companies, had taken over the business of the erstwhile Cadila group after its restructuring under the Companies Act. Under the scheme of restructuring, both the appellant and the respondent got the right to use the name “Cadila” as a corporate name.
The proceedings arose from a suit for injunction relating to a medicinal product sold under the brand name “Falcitab” by the respondent, which according to the appellant, was a brand name similar to a product sold by it under the brand name “Falsigo”. The respondent contended that the word “Falci” was taken from the name of the disease “Falcipharum Malaria”. This is a common practice in the pharmaceutical trade, to use part of the word of the disease as a trademark to indicate that a particular product is meant for a particular purpose. It was also contended that the product was a schedule “L” drug which is sold only to hospitals and clinics, unlike schedule “H” drugs which are sold across the counter on a doctor’s prescription, hence it was the case that there was no dishonest intention nor the possibility of creating confusion.
The Trial Court refused injunction. The High Court confirmed the order of rejection. The Supreme Court also did not interfere. However, the Supreme Court gave reasons for not interfering and set out the principles which are to be applied in dealing with an action for infringement or passing off, especially in regard to medicinal products. The Supreme Court overruled the judgment in the case of S.M. Dyechem Limited v. Cadbury (India) Limited , where the view was that stress is laid down on common features rather than on differences in essential features, which would be equally applicable in deciding a case of passing off. The Court held that this view is contrary to a binding precedent in the case of Amritdhara Pharmacy v. Satya Deo Gupta ” and held that the principle of phonetic similarity cannot be jettisoned when the manner in which the competing words are written is different.
The Court also held that the fact that drugs are sold under prescription is not sufficient to prevent confusion which is otherwise likely to occur.
In this regard the Court has held:
Keeping in view the provision of Section 17-B of the Drugs and Cosmetics Act, 1940 which inter alia indicates as 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 trademark office pertaining to the trademark in question which will enable the drug authority to arrive at a correct conclusion.
The Court has then concluded:
Broadly stated in an action for passing off on the basis of unregistered trademark 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 word and label marks;
(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 trademarks;
(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.
11. The Counsel has relied on a large number of cases for the proposition that a prior user determines the balance of convenience if favour of such first user:
Sushil Vasudev v. Kwality Frozen Foods Private Limited ; Glaxo Operations UK Limited, Middlesex (England) and Ors. v. Samrat Pharmaceuticals, Kanpur and Basha v. Shaik Hyder .
Further, the following cases wherein it is held the theory of the’ product being a prescription drug and hence the chance of confusion not being possible as not being acceptable.
(1) Anglo-French Drug Co. (Eastern) Limited (Bombay) v. Mis, Belco Pharma (Haryana) AIR 1984 P and H 430;
(2) Mis. Charak Pharmaceuticals v. Mis. Deepharma Limited AIR 1999 Del. 15;
(3) Ranbaxy Laboratories Limited v. Dua Pharmaceuticals Private Limited ;
(4) Medley Lab v. Alkem 2002(25) PTC 592 (Bom.) (DB).
12. In the light of the rival contentions and upon consideration of the material on record, the findings of the Trial Court, in my opinion, are arbitrary and capricious:
(a) The finding of the Trial Court that the trade name “AVAS” is coined from the generic name ‘Atorvastatin’ is established by “acceptable documentary evidence” and that trademark “ATVAS” is not established by the production of any “plausible documentary evidence” is clearly a capricious finding;
(b) The case of the respondent that it had established a long prior user is again accepted by the Trial Court in the face, of the admitted fact that it is only after 25-5-2000 that the respondent has chosen to call its product “AVAS” for upto that date the name was “A-VAS”. And further the respondent was permitted to manufacture the product under the name AVAS only from 16-6-2000. And the appellant was permitted to manufacture its product ATVAS on 17-8-2000. The dishonest intention to use a name similar to that of the respondent, to encash on its reputation, is not tenable. The Court has adopted an arbitrary stance. The issue can only be determined after a trial;
(c) The finding of the Court below that the name and mark coined by the appellant is phonetically and visually similar to that of the respondent, is not entirely correct. The similarities and dissimilarities in packaging, colour scheme and other particulars are not apparently similar. The same is a matter for trial;
(d) The material on record to indicate that the appellant has itself invested substantial sums of money in promotion and sales of its product and has a substantial volume of sales in the product, cannot be readily attributed to any reputation that the respondent may have developed over the relevant period of time.
13. For these reasons, which are not however exhaustive, the interest of justice requires that the order of the Trial Court be set aside.
14. Accordingly, the appeal is allowed. The Trial Court is directed to expedite the trial. Parties to bear their own cost.