Citation Codes

Equivalent Citations

citation codes

Judges

B Goel

Acts

Order 39 Rules 1 and 2 CPC and I.A.64/95 under Order 39 Rule 4 CPC
applications (1) IA No.10735/94 under Order 39 Rules 1 & 2 CPC
Order 39 Rule 4 CPC
Order 39 Rules 1

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Smart Summary

Structured Summary of the Order by J.B. Goel, J.

Factual and Procedural Background

BIOCHEM Pharmaceutical Industries (plaintiff), a partnership firm, filed a suit for injunction for passing off and ancillary reliefs concerning the trade mark "BIOMOX" used in relation to medicinal preparations containing amoxycillin.

The plaintiff alleged it adopted the mark through assignment from M/s. Maxheal Pharmaceutical (Maxheal) by a deed of assignment dated 15.1.1993, which recited that Maxheal had been using the mark since 1988 and that a pending trademark application No. 543991 existed. The plaintiff asserted sales and goodwill for 1992–93 and 1993–94 and contended the defendant, M/s. Pharmasynth Formulations, had later adopted the identical mark fraudulently. The plaintiff filed I.A.10735/94 under Order 39 Rules 1 & 2 CPC for interim relief; an ex parte order dated 14.12.1994 restrained the defendant from using BIOMOX and that interim order remained in operation.

The defendant filed a written statement with counterclaim and two interlocutory applications: I.A.64/95 under Order 39 Rule 4 CPC to vacate the ex parte injunction, and another application for an interim injunction against the plaintiff. The defendant pleaded earlier adoption and use—claiming adoption in 1985, a Drugs Controller licence dated 20.9.1985, and sales beginning on 22.8.1988—and provided sales figures from 1988–89 to 1994–95 (upto November 1994).

The court heard rival applications and claims concerning competing rights to the identical trade mark BIOMOX. Three interlocutory applications (I.A.10735/94 by plaintiff; I.A.63/95 and I.A.64/95 by defendant) were disposed of by the present order.

Legal Issues Presented

Who is the prior adopter and user of the trade mark "BIOMOX" for medicinal products?
Whether the ex parte interim injunction granted on 14.12.1994 in favour of the plaintiff should be vacated?
Whether the defendant is entitled to an ad interim injunction restraining the plaintiff from using the trade mark BIOMOX during the pendency of the suit?
Whether, in view of alleged suppression/withholding of material documents by the plaintiff, the plaintiff's suit merits summary dismissal (as argued with reliance on S.P. Chengavaraya)?

Arguments of the Parties

Plaintiff's Arguments

The plaintiff (assignee) relied on the deed of assignment dated 15.1.1993 from Maxheal, which recited that Maxheal had used BIOMOX since June 1988; therefore the plaintiff claimed rights back to that date and priority over the defendant (whose first sale shown was 22.8.1988).
The plaintiff sought interim relief and originally obtained an ex parte injunction on 14.12.1994 restraining the defendant from using BIOMOX.
The plaintiff alleged the defendant set up a false case and withheld material documents with intent to mislead the court; reliance was placed on S.P. Chengavaraya to contend the suit could be summarily dismissed for such conduct.
The plaintiff's counsel relied on the authority Century Traders v. Roshan Lal Dugger & Co. & Ors.

Defendant's Arguments

The defendant asserted earlier adoption of the trade mark (adoption in 1985) and production of a Drugs Controller licence of 20.9.1985 permitting manufacture under the names BIOMOX, BIOMOX 500 and BIOMOX syrup, and showed sales starting 22.8.1988 by sale vouchers.
The defendant challenged the plaintiff's evidence of prior use by Maxheal, arguing that the deed of assignment alone was not proof of Maxheal's user since 1988 and that the assignment could not substitute for contemporaneous proof of use by the assignor.
The defendant produced correspondence from the Joint Commissioner, Nasik (Food & Drug Administration), stating Maxheal had earlier used the trade mark MOXIL and obtained permission to change MOXIL to BIOMIX with effect from 3.6.1989 (and later permitted to change BIOMIX to HEALMOX on 5.2.1993), which the defendant relied on to show Maxheal had not used BIOMOX prior to 3.6.1989.
The defendant filed an affidavit of its director, Shri A.K. Gupta, supporting its claim of earlier adoption and use; it sought vacation of the plaintiff's ex parte injunction and counter-claim injunction relief against plaintiff's use.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Century Traders Vs. Roshan Lal Dugger & Co. & Ors.	The plaintiff's counsel relied on this authority (the text does not specify the precise principle invoked).	The court noted that the plaintiff's counsel relied on this authority; the order does not record any detailed application of the precedent's ratio to the facts.
S.P. Chengavaraya (D) Vs. Jaganath (D), 1994 RLR (SC) 102	Relied upon by the plaintiff to contend that suppression/withholding of material documents can justify summary dismissal of the suit.	The court recorded that the plaintiff placed reliance on this authority but the order does not indicate that the court applied it to summarily dismiss the suit; instead, the court examined the documentary record and reached a decision on priority of user.

Court's Reasoning and Analysis

The court's analysis proceeded by evaluating documentary evidence as to dates of adoption and actual user of the trade mark BIOMOX by the rival claimants:

The court observed that the plaintiff's asserted right derived from an assignment dated 15.1.1993 from Maxheal. The deed recited Maxheal's user since 1988 and referenced a pending trademark application No. 543991. However, the plaintiff did not place on record the trademark application, any contemporary documents from Maxheal proving use since 1988, or affidavit evidence from the assignor. The court held the recital in the deed, without corroborative documents, amounted to the plaintiff's ipse dixit and could not be accepted as prima facie proof of prior use by the assignor.
The court examined the plaintiff's own documentary record: the earliest sale voucher produced was dated 5.4.1992 and a product carton bore a manufacture date of November, 1992 (batch No. T-92130). On the basis of these documents, the court treated the plaintiff's first shown sale as 15.4.1992 (invoice No. G-0022) and, accordingly, prima facie presumed plaintiff's user from that date.
The defendant produced documentary material including (a) a Drugs Controller licence showing permission relating to BIOMOX (and related products) dated 20.9.1985; (b) sale vouchers evidencing sales beginning 22.8.1988; and (c) a letter from the Office of the Joint Commissioner, Nasik, indicating Maxheal had earlier used the trade mark MOXIL and had permission to change MOXIL to BIOMIX effective 3.6.1989 (and later to HEALMOX on 5.2.1993). The defendant also filed an affidavit of its director (Shri A.K. Gupta) supporting these facts.
The court found no reason prima facie to disbelieve the defendant's affidavit or its documentary material. On the basis of the evidence before it, the court concluded that Maxheal (plaintiff's alleged predecessor-in-interest) had not been using the trade mark BIOMOX prior to 3.6.1989, whereas the defendant had shown adoption in September 1985 and actual sales from 22.8.1988.
Applying the established principle (as stated in the order) that the person who adopts a trade mark with intention to use it and actually uses it in the course of trade has a preferential right and is entitled to remedies in passing off against a later adopter, the court concluded that the defendant was the prior adopter and user of BIOMOX for medicinal products. The court also observed that permitting two traders to sell the same or similar medicinal products under the identical trade mark would create confusion and be against the public interest.

The court expressly noted that nothing stated in the order should be taken as an expression of opinion on the merits of the case at trial.

Holding and Implications

Holding:

The court held that the defendant is the prior adopter and user of the trade mark BIOMOX, allowed the defendant's I.A.64/95 under Order 39 Rule 4 CPC, dismissed the plaintiff's I.A.10735/94 under Order 39 Rules 1 & 2 CPC, and vacated the interim ex parte order dated 14.12.1994.

Immediate consequences and orders made by the court:

The interim injunction previously granted in favour of the plaintiff on 14.12.1994 was vacated.
Costs were awarded against the plaintiff in the sum of Rs. 10,000/-.
Because the defendant was found to be the prior adopter and user and had filed a counterclaim, the defendant was granted an ad interim injunction restraining the plaintiff from using the trade mark BIOMOX in respect of medicinal products during the pendency of the suit.
The interlocutory applications I.As. 10735/94, 63/95 and 64/95 were recorded as disposed of.

Broader implications:

The order’s effect, as recorded, is limited to the interlocutory reliefs and the parties to this suit; the court explicitly refrained from expressing an opinion on the ultimate merits at trial, and the order does not purport to lay down any new binding precedent beyond the adjudication of the interlocutory disputes between these parties.

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Biochem Pharmaceutical Ind. v. M/S. Pharma Synth Formulations Ltd.

ORDER J.B.Goel, J.

1. By this order three applications (1) IA No.10735/94 under Order 39 Rules 1 & 2 CPC filed by the plaintiff, and two I.A.63/95 under Order 39 Rules 1 and 2 CPC and I.A.64/95 under Order 39 Rule 4 CPC filed by defendant are being disposed of.

2. Briefly the facts are that the BIOCHEM Pharmaceutical Industries, the plaintiff, a partnership firm has filed this suit for injunction in passing off action besides other ancillary reliefs. The case of the plaintiff is that it is engaged in the business of manufacturing and marketing various pharmaceutical preparations in which they have got very good goodwill and reputation, it had adopted the trade mark BIOMOX in relation to a medicinal preparation containing amoxycillin in the year, 1992 and during search for registration of their trade mark came to know that an application No.543991 for registration of this very trade mark in Class 5 of M/s. Maxheal Pharmaceutical (India) (for short Maxheal) of Bombay had already been filed. After negotiation, the said Maxheal assigned and transferred the said trade mark alongwith their goodwill in the business to the plaintiff by means of a deed of assignment dated 15.1.1993 along with the benefit of the said pending application. The said Maxheal had been, using this trade mark since 1988 and as such the plaintiff being the assignee has acquired right in the said trade mark since 1988. It is also alleged that their product enjoys very good reputation and sale figures for two years, 1992-93 and 1993-94 amount to Rs.84,98,285.95 and Rs.1,31,27,678.77. Then it is alleged that the plaintiff in the year 1993 came to know that M/s.Pharmasynth Formulations, the defendant who had also been engaged in similar business had recently adopted identical trade mark BIOMOX in relation to amoxycillin capsules which the latter had adopted fraudulently and to mislead the public and misappropriate the plaintiff's goodwill. The defendant has not stopped the use of this trade mark in spite of two notices dated 26.11.1992 and 29.4.1993 sent to which no reply even was received. It is thus alleged that this user of identical trade mark by the defendant is illegal and fraudulent and the same is liable to be stopped. Alongwith the suit an application I.A.10735/94 under Order 39 Rules 1 & 2 for interim relief was filed. Whereon by ex parte order dated 14.12.94, defendant has been restrained from using the said trade mark BIOMOX. This interim order is still in operation.

3. Defendant has filed written statement cum counter claim and also two applications (1) I.A.64/95 under Order 39 Rule 4 CPC for vacation of the ex parte injunction and another for grant of interim injunction against the plaintiff. The case of the defendant is that they had adopted this trade mark in the 1985 when a licence dated 20.9.1985 was also obtained by them from the Drugs Controller, Delhi and thereafter after doing extensive research and development they started selling the product in August, 1988 and since then they are marketing this product and it has got very good reputation. It is denied that plaintiff or their alleged predecessor-in-interest has been using this trade mark since 1988 for which no proof also has been produced and that the deed of assignment in itself is no proof of the user since 1988. The plaintiff being the prior adopter and user is entitled to its exclusive use in preference to the use by the plaintiff. Sale figures from the years 1988-89 to 1994-95 (upto November, 1994) have also been given, showing increase of sales from Rs.33,303.60 in the year 1988-89 to Rs.9,18,183/- in the year 1994-95 (upto November, 1994). Defendant as prior user has also made counter claim seeking injunction against the plaintiff for restraining use of this trade mark BIOMOX. Plaintiff in replication to the written statement cum counter claim has denied the claim made by the defendant. Thus both the parties have made claim for competing the use of the same trade mark BIOMOX.

4. Learned counsel for the plaintiff has contended that the plaintiff's predecessor in interest Maxheal had adopted the trade mark in June, 1988 and since by means of deed of assignment dated 15.1.1993 the trade mark with goodwill of Maxheal has been assigned to the plaintiff, the plaintiff has acquired the right and interest of their assignor hence plaintiff's user is to be deemed since June, 1988, as against the user by defendant since 22.8.1988, the documents filed by the defendant show that the first sale took place on 22.8.1988. Plaintiff thus being prior in its user is entitled to its use to the exclusion of the defendant. He has relied on Century Traders Vs. Roshan Lal Dugger & Co. & Ors. .

He has also contended that the defendant has not only set up a false case but has also withheld material document, and thereby is trying to mislead and practice fraud on the court. The suit itself is liable to be summarily dismissed for this reason for which reliance is placed on S.P. Chengavaraya (D) Vs. Jaganath (D) 1994 RLR (SC) 102.

5. Whereas learned counsel for the defendant has contended that plaintiff earlier was a partnership firm which had adopted the trade mark in question in the year 1985, but sales started in 1988; the use of the defendant is thus of prior date. He has also contended that plaintiff has not produced any proof of user by the alleged assignor and mere mention of use since 1988 in the deed of assignment is no proof of its use and in the absence of any reliable material on record, it cannot be said that plaintiff or its predecessor in interest are prior user; the alleged assignment is bogus. Defendant on the other hand has filed document showing their prior user.

6. The trade mark used by both plaintiff and defendant is identical. It is not disputed that the person who adopts a trade mark with the intention to use it on vendible goods and actually uses the same during the course of his business has preferential right and is entitled to seek legal remedy of passing off action against the one who adopts identical trade mark later on.

7. The question thus is who is the prior adopter and user of trade mark BIOMOX. Plaintiff as alleged itself came into existence as a partnership firm in the year 1992 though no document to this effect has been produced. It claims rights and title in the trade mark on the basis of assignment in their favour by Maxheal. The copy of the deed of assignment dated 15.1.1993, placed on record by the plaintiff, shows the assignment of the trade mark to the plaintiff with a recital therein that Maxheal, the assignor has been using the trade mark BIOMOX since 1988 and that their application for registration under Trade Mark Act was registered vide No. 543991 which is still pending. Neither the copy of the said application nor any documentary proof nor even affidavit of the assigner that they were actually using the trade mark has been produced by the plaintiff. The first sale voucher filed by the plaintiff is dated 5.4.1992 and a carton of the medicine placed on record shows the date of manufacture of this product in November, 1992 vide batch No. T-92130. If the predecessor in interest of plaintiff was actually using this trade mark similar documents showing such use must be available but the same have not been produced. In the absence of relevant documents, plea of the plaintiff that their assignor had adopted and used the trade mark since the year 1988 is mere ipsi dixit and cannot be accepted as prima facie proof of its actual use by the plaintiff's predecessor in interest. The use of the trade mark by the plaintiff in view of the documents placed on record could be presumed to be from 15.4.1992 when first sale appears to have been made by means of invoice No. G-0022 dated 15.4.1992. The defendant has filed an application No. I.A. 6966/95 alleging that on their being approached, the office of the Joint Commissioner, Nasik, Food and Drug Administration, Maharashtra State vide their letter No. Maxheal/667/95/4 dated 13.6.1995 had informed their counsel that Maxheal was earlier using the trade mark MOXIL and subsequently they were permitted to change this trade mark to BIOMIX with effect from 3.6.1989. This application is supported by the affidavit of Shri A.K. Gupta, Director of the defendant and the copy of the letter, received from the aforesaid office has also been produced. There is no challenge to the correctness of this statement. This document would show that Maxheal were earlier using the trade mark MOXIL and on their application made on 3.6.1989 they were given permission on 6.7.1989 to change the trade MOXIL to BIOMOX. It is also stated in the aforesaid letter that Maxheal was again permitted to change the trade mark BIOMIX to HEALMOX on 5.2.1993. This document shows that plaintiff's predecessor-in-interest was not using the trade mark BIOMOX prior to 3.6.1989. Whereas the documents produced by the defendant shows that it had adopted this trade mark on 26.9.1985 when drug licence inter alia (for manufacture of additional medicinal products by the names of BIOMOX, BIOMOX 500 and BIOMOX syrup) was allowed by the Drugs Controller Delhi and its sale had started with the sale on 22.8.1988 as appears from sale vouchers produced on record.

8. The defendant has also filed an affidavit of Shri A.K. Gupta, Director of the Defendant in support of this case. Prima facie there is no reason to disbelieve the same. This material supports the case of the defendant that the defendant had adopted the trade mark in September, 1985 and their actual sales started on 22.8.1988. In that view of the matter the defendant is the prior adopter and user of the trade mark BIOMOX in respect of medicinal products. The defendant thus being the prior adopter and user of the trade mark BIOMOX has got the preferential right to use this trade mark than the plaintiff. The goods being medicinal products, two traders cannot be allowed to sell the same/similar products under same/identical trade mark which is bound to create confusion in the market and is not in the interest of the public who may happen to purchase it for use.

9. In the result defendant's application I.A. 64/95 under Order 39, Rule 4 CPC is allowed and plaintiff's I.A. 10735/94 under Order 39 Rules 1 & 2 is dismissed with costs. Interim order granted on 14.12.1994 which is still continuing is also hereby vacated. Costs assessed at Rs. 10000/-.

10. Since defendant is the prior adopter and user of this trade mark than the plaintiff and defendant has also made a counter claim, they are entitled to an ad interim injunction against the plaintiff's use of the trade mark BIOMOX. Plaintiff is accordingly hereby restrained by means of ad interim injunction from using the trade mark BIOMOX in respect of medicinal products during the pendency of this suit.

Nothing stated herein shall be taken as expression of opinion on merit of the case in the trial of the suit.

11. I.As. 10/35/94, 63/95 and 64/95 stand disposed of.

Biochem Pharmaceutical Ind. v. M/S. Pharma Synth Formulations Ltd.

Structured Summary of the Order by J.B. Goel, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Plaintiff's Arguments

Defendant's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Biochem Pharmaceutical Ind. v. M/S. Pharma Synth Formulations Ltd.

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