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Structured Summary of the Opinion (C.S.(OS) No. 352/2004) — Dr. Mukundakam Sharma, J.

Factual and Procedural Background

The plaintiff is a manufacturer and merchant of Ayurvedic medicinal and pharmaceutical preparations and is the registered proprietor of various trade marks in Class 5. The plaintiff manufactures and markets a product under the trade mark "M2 Tone" (in syrup and tablets), a mark originally registered in India since 1965 and subsequently assigned to the plaintiff by Deed of Assignment dated 1 May 2002; the assignment has been applied for registration with the Registrar of Trade Marks but the application is pending.

In or about November 2003 the plaintiff discovered that the defendant was manufacturing and marketing a medicinal preparation under the mark "MV-Tone", which the plaintiff alleges is deceptively similar to "M2 Tone". The plaintiff filed an application under Order XXXIX Rules 1 and 2 CPC seeking a temporary injunction restraining infringement and passing off. The defendant appeared, filed written submissions and a reply. This order disposes of the plaintiff's interlocutory application for temporary injunction; the suit was renotified for trial on 9 August 2004.

Legal Issues Presented

  1. Whether the plaintiff is entitled to interim relief (temporary injunction) restraining the defendant from using the mark "MV-Tone" (or any deceptively similar mark) pending trial for infringement or passing off.
  2. Whether the plaintiff, whose deed of assignment transferring the trade mark "M2 Tone" is pending registration with the Registrar of Trade Marks, has sufficient title, locus standi and prima facie right to maintain the interlocutory relief.
  3. Whether the two competing marks ("M2 Tone" and "MV-Tone") are deceptively or confusingly similar having regard to phonetic, visual and other relevant factors (including the nature of goods and class/mode of purchasers).
  4. Whether differences in claimed market positioning (prescription gynecological product vs. over-the-counter tonic) negate the likelihood of confusion and thus bar interim injunctive relief.

Arguments of the Parties

Plaintiff's Arguments

  • The plaintiff is the registered proprietor of "M2 Tone" since 1965 and has continuously used the mark; sales figures and use have been placed on record.
  • "M2 Tone" is an invented/ coined word used for a medicinal preparation for normalizing menstrual flow; the mark has been assigned to the plaintiff by Deed of Assignment dated 1 May 2002.
  • The defendant's mark "MV-Tone" is phonetically, structurally and visually confusingly similar to "M2 Tone" (the defendant has merely substituted the numeral "2" with the alphabet/roman numeral "V").
  • The plaintiff has opposed the defendant's registration application before the Registrar of Trade Marks and that opposition is pending.

Defendant's Arguments

  • The plaintiff does not have a valid or proper assignment because the Deed of Assignment has not been registered by the Registrar of Trade Marks; thus the plaintiff lacks proper title or standing.
  • The products target different clientele and are different in nature: the defendant's "MV-Tone" is an over-the-counter tonic while the plaintiff's "M2 Tone" is a prescription product used for gynaecological problems; therefore the marks are not liable to cause confusion.
  • Reliance was placed by defendant's counsel on the provisions of Section 45 of the Trade Marks Act, 1999 (as to the effect of unregistered assignments) — this was noted for fuller consideration at trial.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Modi Threads Limited v. Som Soot Gola Factory, AIR 1992 Delhi 4 Even where an application to transfer a registered trade mark into the plaintiff's name is pending before the Registrar, the plaintiff is not debarred from seeking protection by way of suit for injunction; pending registration does not preclude protecting the trade mark against unscrupulous use by others. The court relied on this authority to hold prima facie that the plaintiff's pending application to register the assignment does not, at the interlocutory stage, prevent the plaintiff from seeking and obtaining interim protection against alleged infringers.
State Trading Corporation of India Ltd. v. Government of People's Republic of Bangladesh, 63 (1996) DLT 971 (DB) The court can entertain and grant interim relief even while disputed jurisdictional facts (or competence) are under challenge, because waiting for determination of jurisdiction could render the plaintiff's suit infructuous or cause irreparable harm. The court invoked this principle to justify deciding the plaintiff's injunction application at this stage, while leaving jurisdictional and locus standi questions to be determined at trial.
Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73 Sets out the multi-factor test for deceptive similarity in passing off actions (nature of marks; degree of resemblance; nature of goods; similarity in character/performance; class of purchasers and degree of care; mode of purchase; surrounding circumstances) and emphasises heightened scrutiny for medicinal products because confusion can have serious consequences, including confusion even for prescription drugs. The court applied the Cadila factors to conclude prima facie that "M2 Tone" and "MV-Tone" are phonetically and visually similar and that confusion is likely given the nature of the goods and purchasers; Cadila was decisive in finding a strong case for interim relief.

Court's Reasoning and Analysis

The court proceeded in the following analytical steps, relying only on the material and authorities set out in the opinion:

  1. Title and Assignment: The court accepted the factual record that "M2 Tone" was originally registered in the name of Charak Pharmaceuticals (a sister concern) and that the mark was assigned to the plaintiff by a Deed of Assignment dated 1 May 2002; the plaintiff's application to register this assignment with the Registrar was pending. The court held, prima facie, that the plaintiff has become proprietor of the mark from the date of assignment and that the pendency of registration does not, at the interlocutory stage, strip the plaintiff of a right to seek protection. The court identified that the full effect of Section 45 of the Trade Marks Act, 1999 (relied upon by defendant) required consideration at trial, but would not preclude interim relief now. This reasoning was supported by Modi Threads (supra).
  2. Power to Grant Interim Relief despite Jurisdictional Challenge: The court noted the defendant's challenge to locus/competence but, following the Division Bench decision in State Trading Corporation (supra), concluded the court could and should decide the injunction application at this stage to avoid irreparable harm or rendering the suit infructuous. The question of jurisdiction/locus standi was left to be tried in the main suit.
  3. Similarity Analysis: The court compared the two marks as a whole and observed that, except for the substitution of the numeral "2" with the letter/roman numeral "V", the marks are identical in the alphabetic components ("M" and "Tone"). The court rejected the defendant's contention that the marks are dissimilar because of different target clientele (OTC tonic v. prescription gynaecological product), holding that this contention conflicts with the guidance in Cadila.
  4. Application of Cadila Factors: The court set out and applied the Cadila factors (nature of marks; degree of resemblance; nature of goods; similarity in character/performance; class of purchasers and degree of care; mode of purchase; other surrounding circumstances). On these factors the court found, prima facie, a degree of resemblance between the marks, similarity in the goods and similarity in the class and mode of purchasers. The decision emphasized that medicinal products warrant exacting scrutiny because even prescription drugs can be confused in practice (telephone/hard-to-read prescriptions).
  5. Conclusion on Interlocutory Relief: On the basis of the foregoing analysis and authorities, the court concluded that the plaintiff had made out a strong prima facie case of deceptive and confusing similarity and that any delay in granting relief would prejudice the plaintiff. Consequently, the court deemed it appropriate to grant a temporary injunction.
  6. Relief and Procedural Orders: The court granted a temporary injunction restraining the defendants (and persons acting on their behalf) from manufacturing, marketing, distributing or offering for sale any product under "MV Tone" or any deceptively similar mark to "M2 Tone" until disposal of the suit; the plaintiff's interlocutory application under Order XXXIX Rules 1 & 2 CPC was disposed of; the suit was renotified for trial on 9 August 2004.

Holding and Implications

Core Ruling: The court granted a temporary injunction in favour of the plaintiff restraining the defendants, their servants, agents, distributors, stockists or anyone acting on their behalf from manufacturing, marketing, distributing or offering for sale any product under the trade mark "MV Tone" or any other deceptively and confusingly similar trade mark to the plaintiff's "M2 Tone" until the disposal of the suit.

Disposition of Application: The plaintiff's application under Order XXXIX Rules 1 and 2 CPC stands disposed of in accordance with the order.

Direct consequences for the parties: the defendants are restrained from using "MV Tone" (or deceptively similar marks) pending trial; the suit was renotified for trial on 9 August 2004. The court left open the broader questions (for example, the precise legal effect of the unregistered assignment under Section 45 of the Trade Marks Act, 1999 and any jurisdictional or locus standi challenges) for determination at trial.

The opinion does not purport to lay down any novel general principle beyond applying established authorities; it decided the interlocutory question on the facts and authorities cited and reserved contested statutory and jurisdictional issues for the trial.

    Charak Pharma Private Limited v. Prashi Pharma Private Limited

    Dr. Mukundakam Sharma, J.— This order shall dispose of the application filed by the plaintiff under order xxxix rules 1 and 2, cpc praying for a temporary injunction restraining infringement of trade mark of the plaintiff and also restraining passing of the goods of the defendant as that of the plaintiff.

    2. The plaintiff herein is a manufacturer and merchant of Ayurvedic medicinal and pharmaceutical preparations. The plaintiff is the registered proprietor of various trade marks in India in respect of goods falling in Class 5. The registration of the aforesaid trade marks is also being renewed from time-to-time. During its course of business, the plaintiff is also manufacturing and marketing a product under the distinctive trade mark “M2 Tone” in a syrup base as well as in the form of tablets. The aforesaid trade mark “M2 Tone” of the plaintiff is registered in India since 1965 in respect of goods falling in Class 5. The said registration is renewed, valid and subsisting in the Register of Trade Marks. According to the plaintiff, the said trade mark is an invented word coined by Charak Pharmaceuticals in and about the year 1965 and has been in use since then as a registered trade mark. It is further stated that the medicinal preparation “M2 Tone” is used for normalising the menstrual flow by modulation and hence the plaintiff has named the product M2 which in fact is a condensed version for two M's signifying menstrual modulation which is used in combination with word Tone. The aforesaid trade mark was in the first instance registered in the name of Charak Pharmaceuticals, a partnership firm and sister concern of the plaintiff and subsequently assigned to the plaintiff by virtue of and pursuant to Deed of Assignment dated 1st May, 2002. A copy of the assignment deed is placed on record and a statement is made that the said assignment deed is pending registration with the Registrar of Trade Marks. The plaintiff has been using the aforesaid trade mark continuously, extensively and uninterruptedly and the year-wise sale figures has also been given by the plaintiff. It is alleged that some time in November, 2003 the plaintiff came to know that the defendant is also manufacturing and marketing a medicinal preparation under a deceptively similar and infringing trade mark “MV-Tone”. It is contended that the impugned trade mark is phonetically, structurally and visually confusingly and deceptively similar to the plaintiff's trade mark “M2 Tone”. It was pointed out that while adopting the aforesaid mark, all that the defendant has done is to substitute the second numeral “2” of the plaintiff's trade mark with the alphabet “V”. It is also alleged that the defendants after adopting the said trade mark of the plaintiff dishonestly have also applied for registration of the said trade mark in Class 5 with the Registrar of Trade Marks and that in order to protect its intellectual rights vested in the trade mark “M2 Tone” and to stop the defendant from getting registration of confusingly and deceptively similar trade mark “MV-Tone”, contested the proceedings also before the Registrar of Trade Marks by filing an opposition which is pending.

    3. Summons and notices were issued to the defendant in the present case upon which the defendant appeared in this Court and has filed reply as also the written statement. I have perused the said pleadings of the parties and have also perused the documents placed on record to which specific attention was drawn by Counsel appearing for the parties during the course of their submissions. The two competing marks when considered and pitted against each other and looked at as a whole, it would be crystal clear that except for numeral 2 in the trade mark of the plaintiff, namely, “M2 Tone”, the rest of the alphabets are the same whereas the numeral 2 is replaced in the case of the trade mark of the defendant by alphabet “V” or Roman numeral “V”.

    4. Counsel appearing for the defendant, however, submitted during the course of his submissions that the plaintiff does not have a valid and proper assignment, as the deed of assignment is not yet registered by the Registrar of Trade Marks in favour of the plaintiff. The aforesaid plea of the defendant was examined and scrutinised by me very minutely. The records disclose that the said trade mark was at the first instance registered in the name of Charak Pharmaceuticals, a partnership firm which is a sister concern of the plaintiff. The trade mark “M2 Tone” was subsequently assigned by Charak Pharmaceuticals to the plaintiffs by virtue of and pursuant to the Deed of Assignment dated 1st May, 2002. The plaintiff has also applied for registration of the aforesaid assignment to the Registrar, Trade Mark, Mumbai and the said application is still pending for consideration and no final order thereon has been passed till date.

    5. The plaintiff on being assigned the aforesaid trade mark by virtue of Deed of Assignment has become the owner and the proprietor of the said trade mark “M2 Tone” with effect from 1st May, 2002 and, therefore, merely because its application is pending with the Registrar of Trade Marks and no order is passed by the Registrar of Trade Marks, the same would not deprive the plaintiff from exercising and establishing its intellectual property rights. This is, however, at this stage, a prima facie opinion and the real effect and implication of the provisions of Section 45 of the Trade Marks Act, 1999 shall have to be effectively considered as strong reliance on the said provision has been placed by Counsel appearing for the defendant. But the aforesaid issue shall have to be taken up during the trial and, at this stage, when the injunction application is being considered and argued, such a plea taken would not and could not be construed as a bar for considering as to whether or not a case for grant of temporary injunction is made out. In this connection, reference may be made to the decision of this Court in Modi Threads Limited v. Som Soot Gola Factory, AIR 1992 Delhi 4, wherein this Court has held that even though the application of the plaintiff for transferring the registered trade mark in its name in the office of the Registrar was still pending for consideration by the Registrar of the Trade Marks, it would not debar him to protect the violation of its trade mark at the hands of unscrupulous persons by filing an action in Court of law for injunction and, therefore, the defendants could not be allowed to make use of said trade mark in order to get themselves illegally enriched earning upon the reputation built up qua that trade mark by the predecessor-in-interest of the plaintiff.

    6. Reference may also be made to the decision of the Division Bench of this Court in State Trading Corporation of India Limited v. Government of People's Republic of Bangladesh, 63 (1996) Delhi Law Times 971 (DB) wherein it was held that by the time disputed jurisdictional facts come to be tried and determined the Court is not powerless to entertain a prayer for the grant of interim relief for by the time the issue relating to jurisdiction may come to be tried and decided, the plaintiff may have suffered irreparably; nay his suit may have been rendered infructuous. Thus, the jurisdiction to grant an interim relief is there, though the jurisdictional competence of the Court to try a suit may itself be under challenge. In my considered opinion, therefore, the plea for grant of temporary injunction, at this stage, could be decided and disposed of leaving the parties to fight out the question of jurisdiction and locus standi during the trial of the present suit.

    7. Now coming to the question of similarity between the two competing marks, let me examine the plea of the defendant that both the marks are dissimilar particularly in view of the fact that both the marks target at different clientele and patients. According to the defendant, the product under the trade mark “MV-Tone” is only a tonic which could be sold over the counter whereas the product of the plaintiff under the trade mark “M2 Tone” is a product for Gynaecological problem and could be sold only upon a prescription given by the Doctor. The aforesaid contention is misplaced in the context of Indian market. In this connection, reference may be made to the decision of the Supreme Court in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.., (2001) 5 SCC 73. In the aforesaid decision of the Supreme Court, the question that was raised and decided was whether the mark “Falcigo” and “Falcitab” were deceptively similar. The Supreme Court held that in a passing off action in deciding the question of deceptive similarity, the following factors have to be taken into consideration:

    “(a) The nature of the marks i.e whether the marks are word marks or label marks or composite marks i.e both words and label works;

    (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 trade marks;

    (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, their education and intelligence and the 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;

    (g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.”

    8. It was further held in the said decision that in respect of medicinal products exacting judicial scrutiny is required if there is a possibility of confusion over marks on medicinal products because the potential harm may be far more dire than that in confusion over ordinary consumer products. It was held that even though certain drugs cannot be sold across the counter, nevertheless it was not uncommon that because of lack of competence or otherwise, mistakes can arise specially where the trade marks are deceptively similar. The Supreme Court went on to hold that confusion and mistakes could arise even for prescription drugs where similar goods are marketed under marks which look alike and sound alike. It was also held that physicians are not immune from confusion or mistake and it was common knowledge that many prescriptions are telephoned to the pharmacists and others are handwritten and frequently handwriting is not unmistakably legible which enhance the chances of confusion or mistakes by the pharmacists in filling the prescription if the marks appear too much alike.

    9. The statement that was made by Counsel appearing for the defendant, therefore, is clearly contrary to what has been laid down by the Supreme Court in the aforesaid decision. Therefore, if on analysis it is found that the two competing marks are similar either phonetically or visually, in that event temporary injunction should be granted immediately. As stated hereinabove, except for “V” replacing 2, the rest of the alphabets are the same and, therefore, both the competing marks are phonetically as also visually similar.

    10. When the facts of the present case are tested by the touchstone of the factors laid down in the decision of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.. (supra), it would also be, prima facie, established that there is a degree of resembleness between the two competing marks. The nature of the goods in respect of which they are used as trade mark is also similar and the class of purchasers who are likely to buy the goods bearing the marks they require is also similar. The mode of purchasing the goods is also similar and, therefore, when weightage is given in the light of the aforesaid decision of the Supreme Court, I am of the considered opinion that both the competing marks are deceptively and confusingly similar to each other and, therefore, I am of the considered opinion that the plaintiff has been able to make out a strong case for the grant of temporary injunction in his favour and that any delay in granting the same would prejudicially affect the case of the plaintiff.

    11. Accordingly, temporary injunction is granted in favour of the plaintiff and against the defendants, their servants, agents, distributors, stockists or anyone acting on their behalf from in any manner manufacturing, marketing, distributing or offering for sale any product under the trade mark “MV Tone” or any other deceptively and confusingly similar trade mark of the plaintiff, namely, “M2 Tone” till the disposal of the suit.

    12. In terms of the aforesaid order, the application of the plaintiff under order xxxix rules 1 and 2, cpc stands disposed of.

    C.S(OS) No. 352/2004

    13. The suit be renotified on 9th August, 2004 for trial.

    Application disposed of.
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    Charak Pharma Private Limited v. Prashi Pharma Private Limited
    (May 25, 2004)