Sun Pharmaceutical Industries Limited v. Cipla Limited

3. The undisputed facts are that the defendant has adopted the trade mark 'Graniset' in February 1998. Admittedly, at that time, no one was using this mark nor had anyone applied for registration. On 26.2.1998 the defendant applied for registration of the trade mark 'Graniset' in class 5. No one including the plaintiff objected. After advertisement in the Trade Mark Journal, registration was granted on 4.2.2005. The plaintiff applied for registration of the identical trade mark 'Graniset' in class 5 on 31.12.1999. The plaintiff appeared to have commenced sale of the pharmaceutical product under the mark 'Graniset' on 1.12.2000. The defendant started their user in July 2005. The sale figures submitted by the plaintiff show that the sales have gone up from Rs.37.20 lakhs to Rs.121.30 lakhs in 2006.

4. Apparently, on 9.8.2001 the defendant applied for registration of the trade mark 'Granicip' whereupon the plaintiff issued a notice on 30.11.2005 informing the defendant of their opposition to the use of 'Granicip' and 'Graniset'. This dispute resulted in the defendant filing a suit, being Suit no.355 of 2005, in the District Court at Delhi on 22.12.2005, seeking an injunction on the ground of infringement and passing off of their trade mark 'Graniset'. They applied for interim relief and the application is pending in the Court at Delhi. In that suit, the plaintiff has made a counter claim and has claimed an injunction for restraining the defendant (plaintiff herein) from directly or indirectly dealing in any pharmaceutical preparation under the mark 'Granicip' or any other identical or deceptively similar to the plaintiff's mark 'Graniset'. The plaintiff has also filed an application under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure for a temporary injunction restraining the defendant from dealing in pharmaceutical preparations under the trade mark 'Graniset' on the ground of passing off. The plaintiff's application for injunction in the District Court at Delhi is admittedly not different from the present application for injunction under consideration. Interestingly, there is no mention of this application for injunction in the plaint filed by the plaintiff. At the hearing, it was accepted on behalf of the plaintiff that the suit is fixed for hearing on 6.2.2007 in Delhi.

5. Dr. Tulzapurkar, the learned Counsel for the plaintiff, submitted that even though the registration of the defendant is on 26.2.1998, the fact that they have started use of the trade mark on 1.12.2000 i.e. almost two years thereafter entitles them to maintain an action for passing off and an injunction restraining the defendant from using the trade mark 'Graniset'. This submission is based on the proposition that the mere registration of the trade mark does not create any association with the product and is, therefore, of no consequence in the market. The registration of a trade mark does not confer on its owner the right to prevent passing off which comes from user of the trade mark alone. The plaintiff's user of the trade mark, though later than the defendant's registration, being prior to the user by the defendant Page 0450 since July 2006 entitles them to an injunction restraining the defendant from passing off their goods under the trade mark 'Graniset'. The learned Counsel for the defendant submitted that the plaintiff's adoption of the trade mark is later than the defendant's registration i.e. application for registration and is not a honest adoption. The plaintiff was duty bound in law to take a search and notice the existence of the defendant's mark and is, therefore, not entitled to assert any rights in respect of the trade mark. It is further contended that the defendant having acted in accordance with law in getting the trade mark registered and then commenced its use, the plaintiff ought not to be allowed to make any grievance in respect of passing off merely because they commenced use prior to its use by the defendant. It is further submitted that the plaintiff having suppressed the fact of their having applied for identical injunction in the District Court at Delhi, they are not entitled to any relief from this Court in these proceedings.

6. Dr. Tulzapurkar, the learned Counsel for the plaintiff, submitted that the plaintiff's adoption of the mark may be considered honest since the mark "Graniset" is adopted by the plaintiff in view of the Active Pharmaceutical Ingredient, Granisetron. He relied on the decision of this Court in Bombay Drug Private Limited v. Janssen Pharmaceutica N.V. and Anr. Appeal No. 296 of 1980 decided on 24.9.1985. While it is true that it can be considered natural in the field of medicine to use the name of the drug in the trade mark, that would not by itself certify a honest adoption. The other circumstances such as the existence of the same mark in the register or in a pending application or the market would be equally relevant.

7. To take up the question of suppression first, it seems clear that the plaintiff has made averments about the existence of the suit filed by the defendant in Delhi and to the application for injunction filed by them in that suit. They have also referred to their own written statement and counter claim in that suit. Very strangely, they have omitted to mention the fact that they have filed an application for injunction to restrain the present defendant from using the mark 'Graniset'. They are admittedly seeking this very relief claimed by them in the Court at Delhi before this Court. I see no justification why the plaintiff ought to have omitted to mention the fact that they have filed an identical application in the Court at Delhi and that is pending decision. Even before any order is passed by the Court in Delhi, this matter is moved by the plaintiff in Mumbai. While it may be true that there is no legal bar to the plaintiff's filing the present suit before this Court and the suit would not even be prohibited under Order II Rule 2, I am of view that the failure to mention an application identical to the present one already filed in the Delhi Court is significant and amounts to a material suppression. Dr.Tulzapurkar, the learned Counsel for the plaintiff, relied on a decision of a Division Bench of this Court in Smithkline Beecham Consumer Healthcare Gmbh v. Hindustan Lever Limited 2002 (25) PTC 417 for the proposition that there is no breach of Order II Rule 2 or abuse of the process of the Court if there is a recurrent cause of action, as in the present case. There is no doubt about this proposition as laid down by a Division Bench of this Court. However, that does not relieve the plaintiff from disclosing material facts to this Court. It is also not possible to accept the contention of the plaintiff that the fact they have filed a large Page 0451 compilation of documents before this Court which includes the injunction application and have made a statement that they crave leave to refer to and rely upon the said compilation in the plaint, they must be taken to have disclosed the injunction application and not suppressed. It is clear that in the circumstances of this case, the plaintiff has made detailed pleadings about the Delhi litigation and even about the application for injunction filed by the defendant i.e. the plaintiff in the Delhi Court. It is unusual that they have omitted any reference to their own injunction application in the same suit which they filed in the Delhi Court for an identical relief. It is also not proper that the plaintiff should move another application, identical in nature in another Court, when the earlier application is pending. I am prima facie of view that the plaintiff is, therefore, not entitled to any ad-interim relief on that count.

8. However, it would be necessary to consider the other important aspect of the matter, viz., whether the plaintiff is entitled to an injunction on the ground that they started using the trade mark 'Graniset' before the defendant did even though the defendant got the trade mark registered much earlier. Dr.Tulzapurkar, the learned Counsel for the plaintiff, relief on several decisions in support of this proposition.

9. So, the material facts that emerge for the purpose of deciding this application for injunction are as follows:

The defendant's adoption and registration of the trade mark "Graniset" took effect from 26.2.1998. Then the plaintiff applied for registration on 31.12.1999. The plaintiff then commenced sale. Then the defendant commenced manufacture and sale i.e. use of the mark "Graniset" on the medicinal preparation in July 2006. The question is whether the plaintiff has a prima facie right for an injunction in such a case.

10. Dr. Tulzapurkar, the learned Counsel for the plaintiff submitted that the plaintiff is entitled to an injunction against passing off only on the ground that their user on 1.12.2000 is prior to the defendant's user in July 2006. According to the plaintiff, in such a case of passing off, the defendant's registration with effect from 26.2.1998, though prior to the plaintiff's user, is liable to be ignored, since the only right which registration confers is to prevent another person from infringing the trade mark, particularly since the registration was not accompanied by use. The learned Counsel for the plaintiff relied on Section 27 of the Trade Marks Act and several decisions in support of his case. It may be noted, however, that in none of the cases relied on by the plaintiff, an injunction was granted on the basis of a prior user against the defendant whose registration was prior to such user.

11. In Century Traders v. Roshan Lal Duggar & Co. , the plaintiff started using the mark on voiles from the year 1973. The defendant started using an identical mark sometime in the year 1976. The mark in question was "RAJARANI". The defendant argued that though the plaintiff's user is prior, they are not entitled to an injunction since two other Page 0452 parties, one in Andhra Pradesh and another in Amritsar had got the trade mark "RAJARANI" registered earlier to the plaintiff's user (vide para 20). In view of the fact that the plaintiff was admittedly a prior user of the mark vis-a-vis the defendant, the Court considered it appropriate to grant an injunction. It is in these circumstances that the Court made the observations relied upon by the plaintiff in para 14 which reads as follows:

14. Thus, the law is pretty well settled that in order to succeed at this stage the appellant had to establish user of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action for passing off and the mere presence of the mark in the register maintained by the trade mark registry did not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trade marks. In our opinion, these clear rules of law were not kept in view by the learned single Judge and led him to commit an error." As observed earlier, that was not a case where the defendant had obtained registration for the trade mark in question earlier in point of time to the plaintiff's user. The earlier registrations in that case, which were found to be irrelevant, were those of third parties.

12. It must be noted that the Division Bench of the Delhi High Court while deciding the Century Traders' case relied on an earlier decision in L.D. Malhotra Industries v. Ropi Industries which was also a case where the Ropis has started user on April 1, 1963, the Malhotra's user was later to the user by the Ropis; however, their registration was earlier to the user by the Ropis. In these circumstances, the Court observed that:

Use plays an all important part. A trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. Registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed at common law and at equity without registration. It does, however, facilitate a remedy which may be enforced and obtained throughout the State and it established the record of facts affecting the right to the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the statute. Common law rights are left wholly unaffected.

In that case, the Court granted an injunction on the basis of the prior user of the Ropis against the subsequent, even though the Malhotra's registration was earlier to such user. It appears that one of the factors that weighed with the Court in favour of Ropis was the fact that the adoption by Malhotras was not found to be honest.

Page 0453

13. While deciding the case in Century Traders, the Delhi High Court also considered the decision of this Court in Consolidated Foods Corporation v. Brandon and Co. Private Ltd. . The facts of that case, however, disclose that the plaintiff i.e. Consolidated Foods Corporation had started using the mark in question i.e. Monarch in this country for the first time in or about 1935 and the defendant had made an application for registration of the mark sometime in January 1957. It was in this context that the Court made the following observations:

A trader acquires a right of property, in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. Registration under the statute 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 does, however, facilitate a remedy which may be enforced and obtained throughout the State and it established the record of facts affecting the right to the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the Statute. Common law rights are left wholly unaffected. Priority in adoption and use of a trade mark is superior to priority in registration. For the purpose of claiming such proprietorship of a mark, it is not necessary that the mark should have been used for considerable length of time. As a matter of fact, a single actual use with intent to continue such use eo instanti confers a right to such mark as a trade mark. It is sufficient if the article with the mark upon it has actually become a vendible article in the market with intent on the part of the proprietor to continue its production and sales. It is not necessary that the goods should have acquired a reputation for quality under that mark. Actual use of the mark under such circumstances as showing an intention to adopt and use it as a trade mark is the test rather than the extent or duration of the use. A mere casual, intermittent or experimental use may be insufficient to show an intention to adopt the mark as a trade mark for specific article or goods....

It appears that the closest similarity to the facts of this case is in the case of L.D. Malhotra Industries v. Ropi Industries considered in the Century Traders' case. But an injunction was granted against the Malhotras whose adoption was found dishonest. In all other cases, the registrations were either irrelevant being that of third parties or subsequent to the user by the plaintiff.

14. I must, at this juncture, point out that commentaries from several text-books were relied upon by the learned Counsel for the plaintiff. I have not dealt with all of them in the view that I propose to take. It must be stated that it is possible to conceive that a plaintiff is entitled to an injunction on the basis of prior user, notwithstanding the earlier registration of the same mark Page 0454 by the defendant. However, in such a case, it must be established beyond any doubt by the plaintiff that the adoption of the mark was completely innocent and honest. A party would be entitled to an injunction only when it can establish that it began using the mark innocently and unknowingly and unaware of the mark used by the defendant as observed in GEC v. The GE Co. Ltd. (1972) 2 All E.R. 507. In the context of the origin of the doctrine of concurrent user, Lord Diplock says thus:

... To meet this kind of situation the doctrine of honest concurrent user was evolved for protection in cases where the use of it 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. If, however, his own wrongful conduct had played a part in making the use of the mark deceptive, the court of Chancery would not grant him an injunction against infringement. This was but a particular application of the general equitable doctrine but he who seeks equity must come with clean hands.

15. In Inter Lotto (UK) Ltd. v. Camelot Group PLC (2004) R.P.C.9, the Court of appeal observed that the law of passing off is preserved, notwithstanding any apparent conflict or overlap with the provisions of the Act. The facts of the case were different from those here. The plaintiff's user since August 2001 was earlier than the defendant's application for registration on October 17, 2001. The observations in the case referred to above suggest that user confers rights for enforcing passing off and that registration is of no consequence in an action for passing off. In this context, Dr. Tulzapurkar, the learned Counsel for the plaintiff, relied on Section 27 of the Trade Marks Act, 1999 which reads as follows:

27. No action for infringement of unregistered trade mark.--(1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark. (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.

The learned Counsel submitted that the action of passing off at common law is preserved by virtue of Sub-section (2) and the scheme is the same as that considered by the English Court in Inter Lotto (UK) Ltd. v. Camelot Group PLC (2004) R.P.C. 9. Be that as it may, the all important question is whether the plaintiff is entitled to an injunction and that depends on the validity of the adoption of the plaintiff's mark.

16. There is substance in the argument of Mr. Ravi Kadam, Advocate General, that it is necessary to examine with care the circumstances in which the plaintiff adopted their mark. This is clearly necessary since it would otherwise be very easy for a trader to copy a mark pending registration, start using the mark and claim a priority on the basis of user and even further obtain an injunction restraining the defendant who had earlier applied for the registration of the mark, but who happens to start using it later after registration is obtained. It is, therefore, necessary to examine the circumstances in which the plaintiff adopted the mark "Graniset". The defendant had already applied for registration when the plaintiff applied for Page 0455 using the mark. The plaintiff stated the circumstances in which they have adopted the mark in para 5, which reads as follows:

5. The Plaintiff coined and adopted a distinctive trademark GRANISET for its pharmaceutical products more particularly injections and tablets containing the drug Granisetron as Active Pharmaceutical Ingredient (hereinafter referred to as "API"), manufactured by the Plaintiff. On 31st December 1999, the Plaintiff applied for registration of the mark GRANISET under the Trade Marks Act, 1958 in Class 5 of the Fourth Schedule to the Rules framed under the Trade Marks Act, 1958. There was no other similar mark in the market. The Plaintiff had checked different goods but no product had similar mark. The Plaintiff's adoption was honest.

17. There is no mention whether the plaintiff sought an inspection of the register.

18. It is, therefore, reasonable to assume that prima facie the plaintiff had knowledge of the mark "Graniset" when they themselves applied for registration on 31.12.1999 and commenced use on 1.12.2000. The plaintiff's pleadings about any search which they took and its results is conspicuous by its absence. It is quite possible that the plaintiff might have copied the mark and, therefore, would not have a proprietary interest in the mark. The plaintiff must be taken to have knowledge of the defendant's mark on the principle of res ipsa loquitur as applied by an English Court in the case of Brown Shoe Company Inc., 1959 RPC 29. The respondents there had evolved word "Naturlizet" as a trade mark in relation to ladies shoes. The trade mark "Naturalizer" belonging to the appellant was already in existence and on the register. The Court observed as follows:

Here it is true two words are involved "Naturalizer" and "Naturlizet". The Assistant Comptroller disposed of this part of the case by saying that on the question of discretion he found nothing in the evidence to establish that the respondents had copied the appellants mark. With all respect to him, that can hardly be a satisfactory way of dealing with the problem. No evidence by the appellants on such a point could be expected. It must to my mind be a question of res ipsa loquitur or nothing. I find it impossible to treat the case as one of coincidence and to take the view that in evolving the word "Naturlizer" as a Trade Mark in relation to ladies shoes the respondents had no regard to the appellants mark "Naturalizer". In view of the above, there is no merit in the contention that there is no evidence to prove that the plaintiff copied the mark "Graniset" in respect of which the application for registration was pending. Such direct evidence can hardly be expected. If the plaintiff has made a search, they have failed to disclose the result of the search which again is a factor which goes against them. At the hearing, the learned Counsel for the plaintiff was not in a position to make a categorical statement about the search when this contention was raised by the learned Counsel for the defendant. In view of the decision of this Court in Ayushakti Ayurved Pvt. Ltd. v. Hindustan Lever Limited 2004 (28) PTC 59 (Bom), I am of view that prima facie, the plaintiff does not Page 0456 have a proprietary right in the mark and, therefore, not entitled to an injunction on this count also. At this juncture, it should be noted that the matter was closed for orders on 18.1.2007. The plaintiff was not in a position to make any statement about the search, even though the suit was filed in December, 2006. Almost a week after the matter was closed for orders, on 24.1.2007, the learned Counsel for the plaintiff sought permission to place additional material on the record of the case for throwing light on the aspect of search. However, I declined permission to the plaintiff since the matter had already been closed after detailed arguments had been heard.

19. The argument advanced by the learned Counsel for the plaintiff on the similarity of the two marks and the fact that they are used for medical preparations may be considered. There is no doubt that there is a similarity and the Active Pharmaceutical Ingredient in the two medicinal product is different. The plaintiff's product contains Granisetron and the defendant's product contain Ondansetron. The plaintiff has, however, failed to support the averments about the consequences of a mistake in administering the two drugs by any opinion/affidavit of a medical practitioner as stated in para 26 of the plaint. The defendant has described the plaintiff's description of the consequence as exaggerated.

20. The other contention on behalf of the defendant in this regard is that the medicines in question are drugs which are highly specialised and which are administered under the treatment of specialists and, therefore, there is no likelihood of passing off. This contention of the defendant would not be acceptable in view of the judgement of the Supreme Court in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.. 2001 PTC 300 (SC). However, it is not possible to grant an injunction to the plaintiff in view of the finding that prima facie they do not have a proprietary interest in the mark.

21. In this view of the matter, the plaintiff's application for ad-interim relief is rejected.