K.S GUPTA, J.:— By the order dated July 18, 1996 the learned single Judge allowed I.A 9918/95 and dismissed I.AS 12447/95 and 12451/95. FAO(OS) No. 292/96 is directed against the order in I.AS 9918/95 and 12447/95 while FAO(OS) No. 293/96 against the order in I.A 12451/95. Since both the appeals arise out of a common order, we propose to dispose them of by this common order.
2. Suit for permanent injunction and rendition of accounts etc. was filed by M/s. Jagsonpal Pharmaceuticals Ltd., plaintiff/respondent, inter alia, alleging that it is an established company engaged in the business of manufacturing and marketing of medicinal and pharmaceutical preparations. Plaintiff adopted the trade mark SEFLOX on April 1, 1990 in respect of one of its pharmaceutical preparations and has been continuously using it upto this time. Plaintiff widely advertised the said trade mark through different medias. It has now become distinctive and associated with the plaintiff on account of long, extensive and exclusive user thereof. In order to acquire statutory rights of the said trade mark plaintiff filed an application in the office of Trade Marks Registry at New Delhi for its registration under No. 589743 in class 5 of the fourth schedule of the Trade and Merchandise Marks Act, 1958 (for short the ‘Act’) on February 1, 1993. It is further alleged that the defendant is also engaged in the business of manufacturing and marketing pharmaceutical formulations and adopted the aforesaid trade mark in relation to its goods in the first week of August 1995 as is evident from the defendant's notice dated nil issued to the plaintiff through counsel Shri S. Subramaniam Reddy. Defendant has been passing off its goods under the said trade mark as that of the plaintiff and has not given up the use of the trade mark despite the plaintiff's communication dated August 10, 1995. Adoption of the trade mark SEFLOX by the defendant is dishonest and the plaintiff has been suffering loss both in business and reputation.
3. Along with the suit aforementioned I.A 9918/95 under Order XXXIX Rules 1 and 2 read with S. 151, CPC was filed by the plaintiff and by the order dated October 19, 1995 M/s. Senor Laboratories, defendant/appellant was restrained from manufacturing, selling, offering for sale, advertising, displaying, directly or indirectly dealing in pharmaceutical formulation under the said trade mark SEFLOX or any other trade mark identical with or deceptively similar with that trade mark until further orders.
4. Defendant contested the suit by filing written statement. It also filed counter-claim for permanent injunction, rendition of accounts and damages against the plaintiff. It is alleged that the defendant coined and adopted the trade mark SEFLOX in 1991. On December 13, 1991 defendant applied for registration of the said trade mark in its name by filing application which was numbered as 563781and is pending before the Registrar of Trade Marks. On January 23, 1992 defendant was issued a drug manufacturing licence bearing No. 980.AP for various pharmaceutical preparations including SEFLOX. It is further alleged that the defendant has been selling the pharmaceutical preparations under the aforesaid trade mark since August 1992. In the month of March 1993 when the defendant came to know that the plaintiff is also manufacturing and selling its product under the above trade mark it contacted the plaintiff and the plaintiff assured that it will give up the use of said mark after exhausting the stock of the manufactured tablets. In August 1995 when the defendant learnt that the plaintiff has not given up the use of the said trade mark it got a legal notice served on it in the first week of August 1995. Immediately thereafter the plaintiff filed the present suit and obtained an ex parte interim injunction on false allegations. It is stated that the alleged sales shown by the plaintiff in annexure C to the plaint are totally false. It is denied that the plaintiff widely advertised the aforesaid trade mark or had been using it since April 1990, as alleged. Plaintiff deliberately adopted identical trade mark to encash upon the goodwill and reputation of the defendant. Plaintiff being the subsequent user of the said trade mark is not entitled to use it.
5. In addition to the filing of reply to the plaintiff's I.A 9918/95 the defendant filed aforesaid I.A 12447/95 under Order XXXIX, Rule 4 read with S. 151, CPC and I.A 12451/95 under Order XXXIX, Rules 1 and 2 read with S. 151, CPC. I.A 12447/95 is for vacating the ex parte order dated October 19, 1995. In I.A 12451/95 defendant sought to restrain the plaintiff from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in pharmaceutical preparations under the trade mark SEFLOX or any other mark as may be deceptively similar to the said mark, logo or device that may lead to confusion/deception amounting to the passing off the plaintiff's goods for those of the defendant.
6. Needless to say that the plaintiff filed replies to both the said I.As 12447/95 and 12451/95 and the written statement to the counter-claim preferred by the defendant.
7. Through the impugned order plaintiff's application was allowed and those of defendant's were dismissed. Appeals are by the defendant.
8. We have heard the learned counsel for the parties and have also been taken through the record.
9. In both the appeals controversy centres around the fact as to which of the two parties is entitled to use the trade mark SEFLOX. Indisputably both the defendant/appellant and plaintiff/respondent do not have a registration with respect to mark SEFLOX and the case is based on passing off action at common law. By catena of decisions it is now settled that a prior user of trade mark has rights even over a later registered user. (See Bimal Govindji Shah Trading as Acme Industries v. Pannalal Chandulal, 1997 (2) Century Traders… v. Roshan Lal Duggar & Co… and Co., AIR 1978 Delhi 250, Consolidated Foods Corporation v. Bandon and Co. Pvt. Ltd., AIR 1965 Bombay 35, M/S.L.D Malhotra Industries…Petitioner v. M/S. Ropi Industries…, ILR (1976) 1 Delhi 278 and Delco Engineering Works v. General Motors Corp., ILR (1974) 1 Punj and Har 502.
10. Needless to repeat that according to the plaintiff it has been continuously using said trade mark SEFLOX since Ist April 1990 while as per the defendant it has been selling pharmaceutical preparations under the said trade mark from August 1992. Reference to the documents filed by the parties has become relevant for deciding the said rival contentions. By way of annexure ‘C’ to the plaint, plaintiff has filed sales figure in respect of the medicine sold under the trade mark SEFLOX for the periods April 1993 to March 1994 and April 1994 to March 1995. It has further filed copies of the application No. 589973 dated February 1, 1993, application dated August 10, 1995, letter dated April 4, 1990 and the invoices for the years 1993, 94 and 95. Application dated February 1, 1993 was filed with the Registrar of Trade Marks seeking registration of the trade mark SEFLOX and against the column of user therein words proposed to be used are written. Application dated August 10, 1995 was filed seeking amendment in the column of user to read as ‘from 1-4-1990’ instead of ‘proposed to be used’ in the said application. In the letter dated April 4, 1990 Rs. 1500/- have been shown as charges for registration of the trade mark SEFLOX claimed by Acme Company from the plaintiff.
11. As against this, defendant has filed the photostat copy of the renewed drug licence issued by the Drug Controller, Hyderabad dated September 1, 1994, statements showing annual sales figures of SEFLOX tablets for the years 1992 to 1995 in addition to first batch sheet pertaining to medicine SEFLOX dated August 18, 1992 and sales invoices for the periods 1992 to 1995 in original. As is manifest from the said drug licence, originally drug manufacturing licence was issued to the defendant on January 23, 1992 for the products mentioned in the list enclosed therewith. In the enclosed list name of SEFLOX tablets USP 250 mg and 500 mg appear at serial Nos. 11 and 12. Sales of Rs. 1,61,406/40 from August 1992 to February 1993, Rs. 3,13,528/40 for the years 1993-94 and Rs. 8,38,146/67 for year 1994-95 have been reflected in the statements in respect of SEFLOX 250 mg and 500 mg by the defendant Original sales invoices filed by the defendant start from September 16, 1992 onwards.
12. It is pertinent to state that the plaintiff has neither filed the drug licence for manufacture of medicine under the said trade mark SEFLOX nor the sales figure or the invoices in respect thereto for the period prior to 1993. Further, in application No. 589743 filed on February 1, 1993 seeking registration of the aforesaid mark by the plaintiff significantly words ‘proposed to be used’ as noted against the column of user were sought to be substituted by the plaintiff as ‘from 1-4-1990’ by filing the application dated August 10, 1995 only after receipt of the defendant's legal notice through counsel in 1995. Documentary evidence referred to above placed on record by the plaintiff prima facie go to show that it started using the trade mark SEFLOX sometime in 1993 instead of since 1-4-1990 as pleaded in the plaint. On the other hand, use of trade mark SEFLOX by the defendant since August 1992 is prima facie established by the documentary evidence mentioned above filed by the defendant. In the impugned order the learned single Judge has held that the defendant cannot rely upon the prior user of the said trade mark to non-suit the plaintiff and the plaintiff is entitled to the injunction sought for because of its having invented the word SEFLOX. In our opinion, approach of the learned single Judge on the matter is contrary to the well established principle of law that no injunction can be issued against a prior user of the trade mark in a passing off action. Common Law of passing off does not recognise a proprietary right of any kind whatsoever in an invented word. Thus, the part of the impugned order in so far as it relates to the allowing of I.A 9918/95 and dismissing I.A 12447/95 deserves to be set aside.
13. This brings us to the validity of another part of the impugned order dismissing I.A 12451/95 filed under Order XXXIX, Rules 1 and 2 and S. 151, CPC by the defendant. In an action for passing off, in order to succeed in getting an interim, injunction, the party praying for injunction has to establish (i) distinctive features, (ii) substantial user, and (iii) wide reputation of the impugned trade mark. This principle is well established and has been reiterated in the decision in Khemraj Shrikrishnadass v. Garg and Co., AIR 1975 Delhi 130 and the other decisions. The figures as reflected in the statements particularly of the years 1993-94 and 1994-95, in respect of the medicinal preparation marketed by the defendant under the said trade mark SEFLOX, the sales run into lakhs of rupees, which fact shows that considerably large number of SEFLOX tablets had been sold in the market. Obviously, this turn over not only indicates substantial user but also wide reputation of the medicinal preparation manufactured and sold by the defendant under the aforesaid trade mark. With regard to distinctiveness of the title, it would be clear from the literature placed by the defendant on record that the defendant's said trade mark contains setting of words and colour scheme in a particular style. It thus followed that the defendant who is in prior use, has prima facie made out case for grant of the ad interim injunction sought for. Non-grant of the interim injunction is likely to cause irreparable injury to the defendant. Balance of convenience also lies in defendant's favour. There cannot be any dispute as regards the law laid down in the decisions in S. Pillay v. G.S.T Shaik Thumby Sahib, AIR 1940 Rangoon 113, American Home Products Corporation v. Mac Laboratories Pvt. Ltd., AIR 1986 SC 137, J.B Williams Company v. H. Bronnley and Co. Ltd., 1909 RPC 765, First Computers v. A. Guruprasad, 1996 (16) PTC 27 and Bank of Maharashtra v. Race Shipping and Transport Co. Pvt. Ltd., AIR 1995 SC 1368, relied on behalf of the plaintiff but the same are of no help to the plaintiff as the same are not at all relevant for the purposes of deciding the point, which has arisen for consideration, which has been stated by us in the earlier part of the order.
14. For the foregoing discussion, both the appeals are allowed. The impugned order is set aside. I.A 9918/95 is dismissed while I.A 12447/95 and I.A 12451/95 are allowed. Pending suit the plaintiff/respondent, its directors, servants, agents and dealers are restrained from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in medicinal preparation under the trade mark SEFLOX or any other mark as may be deceptively similar to the said mark which may lead to confusion or deception amounting to the passing off of the plaintiff's medicinal preparation as that of the defendant/appellant. No order as to costs.
Appeals allowed.