Thakur, J.— This appeal arises out of an order passed by a learned Single Judge of this court whereby an order of injunction issued against the defendant has been made absolute and the defendant's application under Order 39 Rule 4 dismissed. The controversy arises in the following circumstances:
2. The plaintiff respondent company was established by Dr. K. Anji Reddy in the year 1984 to deliver innovative pharmaceutical health care solutions. With the passage of time, the company is alleged to have emerged as India's second largest pharmaceutical company with the distinction of being the only Pharma company from the Asia Pacific region to be listed in the New York Stock Exchange. It is also alleged to have set up Dr. Reddy's Research Foundation to supplement the plaintiffs research and development capabilities in association with world renowned organizations in that field. It claims to have a turn over running into millions of dollars with world class expertise in development and manufacture of organic intermediaries. It has wholly owned subsidiaries in USA, European Union, United Kingdom, France, Singapore etc. It claims to have carved a niche for itself in branded finished dosages market and is treated as a world leader in pharmaceutical formulations. It has adopted a logo comprising a symbol representing a man with an outstretched arm and the word mark “Dr. Reddy” which was created for and on behalf of the plaintiff by M/s Oglivy and Mather for a valuable consideration.
3. The plaintiffs further case is that its trademark “Dr. Reddy” is recognized throughout the world and appears on packaging of all products as part of the logo with the result that adoption of “Dr. Reddy” or “Reddy” by any third party as a trade name or as a trading style for any products particularly in the field of pharmaceuticals is bound to make any consumer particularly consumers of average intelligence and imperfect recollection to believe that the products originate from the plaintiff. The defendant appellant before us is, according to the plaintiff, a company that was initially carrying on the business of purchase and supply of active pharmaceutical ingredients which it was purchasing from the plaintiff for supply to various manufacturers since 1997. The defendant was at no stage creating or marketing its own finished dosages brand. Its activities were only in the nature of distributor/agent supplying the active pharmaceutical ingredients manufactured by the plaintiff or formulations without changing the packaging or the label. The result was that the defendant's business activities were in no way detrimental to the plaintiff, nor did the plaintiff raise any objection to the use of Reddy Pharmaceutical Ltd. as the name of the defendant company.
4. In September, 2003, the plaintiff claims to have received information that the defendant appellant had gone beyond its initial area of operation of being a mere supplier of active pharmaceutical ingredients. It had entered the field of marking pharmaceutical preparations in finished dosages forms under different brand names taking advantage of the goodwill that had accrued to the plaintiff's trademark “Dr. Reddy”. The plaintiff's case is that the packing of the product marketed by the defendant clearly showed that the defendant intended to ride upon the success and reputation of the plaintiff in the field of pharmaceutical preparations by dishonestly adopting the packing in such a way as to make any consumer believe that the products originate from the plaintiff. The plaintiff has accused the defendant appellant of dishonesty and made specific averments to that effect which according to the plaintiff establishes the malafide arid dishonest intentions of the defendant. Efforts to amicably resolve the issue having failed, the plaintiff filed OS No. 2194/2003 alleging that the continued use of the name Reddy Pharmaceutical Ltd. by the defendant appellant as also the use of a deceptively similar logo was an infringement of the plaintiff's copyright and trademark and was bound to create confusion among consumers especially because the area of business of both the companies was the same. The plaintiff therefore prayed for a permanent injunction restraining the defendant from using the trading style Reddy Pharmaceutical Ltd. in relation to pharmaceutical preparations and from copying the layout and get up of the plaintiff's products as described in Para 15(iv) of the plaint and from reproducing a logo that is substantially similar to the plaintiff's logo or do any act amounting to passing off pharmaceutical and medicinal goods of the defendant as those originating from the plaintiff.
5. The suit was accompanied by an application for ad interim injunction restraining the defendants from using the trademark or name ‘Reddy’ on its pharmaceutical preparations or copying the layout and get up of the plaintiff's products and from using the plaintiff's logo or any similar logo which is capable of passing off the defendants products as those of the plaintiff.
6. The defendant appears to have filed a written statement in which it was alleged that the plaintiff cannot claim any monopolist or proprietary right in the common trade name ‘Reddy’. The defendant claimed a bonafide statutory right to use the same as it is the surname of its Managing Director. It was also alleged that the plaintiff did not have a registered trade name in “Dr. Reddy” and that the plaintiff's proprietary right was limited to the mark “Dr. Reddy” and not “Reddy” being used by the defendant. It was also alleged that the drugs referred to by the plaintiff were Schedule drugs which were dispensed by trained and qualified pharmacists and chemists on medical prescriptions issued by qualified physicians. There was therefore no question of any confusion in the sale or use of such drugs. The similarity between the packaging or preparations of the two companies was also disputed and the suit filed by the plaintiff dubbed as malafide and a counter blast to pressurize the defendant to pay a sum of Rs. 1.65 crores which the plaintiff had demanded upon termination of an agreement between the parties regarding the supply of bulk drugs. The defendant also moved an application for vacation of the ad interim injunction earlier granted by the Court.
7. By the order impugned in this appeal, the learned Single Judge has, on the basis of the material placed before him, recorded the following findings of fact on a prima facie basis:
(i) The appellant has been functioning under the trade name Reddy Pharmaceutical Ltd. since 1996 but it was never manufacturing drugs or pharmaceutical preparations. It was only a trader in bulk drugs and was acting as an agent of the plaintiff even for the sale of such drugs.
(ii) The defendant appellant had been appointed as an agent of the plaintiff on 1st April, 2003 in terms of an agreement entered into between them. There was therefore no problem between the two till August, 2003 when the defendant suddenly launched 33 pharmaceutical preparations under various brand names and started using the name “Reddy” on the same.
(iii) There was no material to show that at any stage prior to August, 2003, the defendant had engaged itself in manufacture or sale of pharmaceutical preparations under the brand name “Reddy”. The Articles of Association no doubt stated manufacture and trading of all kinds of pharmaceutical preparations and drugs as one of its objects but there was no material to show that any such activity was carried on at any time before August, 2003.
(iv) The defendant had no manufacturing facilities of pharmaceutical preparations even in August, 2003. It started marketing pharmaceutical manufactured by others by quoting the trademark “Reddy” thereon.
(v) The malafide intentions of the defendant appellant were proved by the fact that it not only started using a similar trademark/name but it also started using a Hyderabad address inspite of the fact that its registered office was at Delhi and bills issued by it clearly mentioned that the customers are required to make payments at Delhi and settle the disputes subject to jurisdiction of Delhi courts.
(vi) The defendant was endeavouring to pass off its products under the trademark “Reddy” with a view to confuse and mislead the customers by making them believe that the products were manufactured by the plaintiff company. That was so because even after the date of the impugned order, the defendant did not appear to have any manufacturing unit for manufacturing pharmaceutical preparations and was only putting the name “Reddy” on the pharmaceutical preparations manufactured by others.
8. On the above findings and relying upon several decisions rendered by the Supreme Court as also by other in the country, the learned Single Judge arrived at the following conclusion:
“There is identity of goods, identity of trade mark and identity of consumers. The defendant is not at all an honest and concurrent user of the trade mark “Reddy” and it is apparent on record that it has started using the trade mark “Reddy” on its pharmaceutical preparations in bad faith knowing fully well that the plaintiff company has enormous trade reputation and goodwill in the trade mark “Dr. Reddy” which is completely associated with plaintiff and has acquired a secondary meaning in business circles.”
9. The Court also recorded a finding that the plaintiff had acquired substantial trade reputation and goodwill in the trademark “Dr. Reddy” and that the defendant by adopting the trademark “Reddy” on its pharmaceutical preparations was trying to encash upon the trade reputation and goodwill of the plaintiff. The present appeal, as already noticed earlier, calls in question the correctness of the said order.
10. We have heard at considerable length learned counsel for the parties and perused the record. The factual aspects covered by the findings recorded by the learned Single Judge, no matter on a prima facie basis, were not questioned before us by learned counsel for the parties. It was not in dispute that the defendant appellant has been functioning under the trade name Reddy Pharmaceutical Ltd. since 1996 but was confining its activity only to trading in bulk drugs. It was also not disputed that the defendant was purchasing bulk drugs since 1997 not only from the plaintiff but from other manufacturers also and was supplying them to various pharmaceutical companies. The appointment of the defendant appellant as a Delcredere Agent by the plaintiff on 1st April, 2003 is also not disputed. So also there is no dispute that the plaintiff had without any manufacturing facilities launched a number of pharmaceutical preparations under various brand names in which it was using the name “Reddy”. That the defendant appellant had given a Hyderabad address on the packaging even when the registered office of the company was in Delhi and all disputes in relation to the supplies were to be subject to the jurisdiction of the Delhi Court is also common ground before us. Such being the position, the short question that falls for consideration before us is whether the defendant appellant was passing off its products under the trademark “Reddy” by confusing and misleading the customers and making them believe that the products being sold to them were manufactured by the plaintiff company. The fact that the plaintiff company has a reputation of being one of the leading pharmaceutical companies in the country with sizeable global presence is in this regard a significant feature to be kept in view, just as it is necessary to remember that the defendant did not have and even till date does not have any manufacturing facilities of its own for manufacturing pharmaceutical preparations. What the defendant appears to be doing is to have the pharmaceutical preparations manufactured from others and put the name “Reddy” on the same creating an impression as though the preparation is “Dr. Reddy's” and not just “Reddy's” product. To add to that confusion, the defendant appellant has without any real basis and for malafide reasons given a Hyderabad address knowing fully well that the plaintiff company is headquartered at Hyderabad. The whole purpose behind this device adopted by the defendant appellant as also the logo which is similar to that of the plaintiff was to encash the reputation and the goodwill of the plaintiff company in the market to the detriment and at the cost of the said company. The learned Single Judge has, in that view of the matter, correctly held that the similarity of the goods, identity of the trademarks and the consumers as also the dishonest concurrent use of the trademark “Reddy” all leave no manner of doubt that the adoption of the trademark “Reddy” is not honest or in good faith and that the whole purpose underlying the said deceptively similar adoption was to encash the enormous trade reputation and goodwill of the plaintiff in the trademark “Dr. Reddy” which is synonymus with that of the plaintiff.
11. In Laxmikant v. Patel V/s Chetanbhai Shah and another, (2002) 3 SCC 65 their Lordships of the Supreme Court have held that while considering a prayer for grant of ad interim injunction in a passing off action, the Court ought to remember that a person who sell his goods or delivers services under a trading name or style over a period of time acquires a reputation or goodwill which becomes the property of the user entitled to protection by the courts. Initiating sale of goods or services in the same name or by imitating that name may cause injury to the business of one who has property in that name. Honesty and fair play, observed the court, ought to be the basic policy in the world of business and when a person adopts or intends to adopt a name which already belongs to someone else, it results in confusion, has the propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury. The following passage from the decision is in this regard instructive:
“A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury.”
12. In cases involving passing off of drugs, the Supreme Court in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.., 2001 PTC 541 (SC) emphasised the need to be vigilant and to adopt a cautious approach. It was held that even in the case of Schedule ‘H’ and Schedule ‘L’ drugs which are not sold across the counter but are sold only to hospitals and clinics, it was not uncommon that because of lack of competence or otherwise mistakes may occur especially when trademarks under which drugs are sold are deceptively similar. Reference may also be made to the decision of the Supreme Court in Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra Ltd., 2002 (24) PTC 121 (SO and Kirloskar Diesel Recon Pvt. Ltd. and another v. Kirloskar Propreitary Ltd. and others, AIR 1996 Bombay 149, Balaji Electrical Limited, Bombay v. Metals & Allied Products, Bombay and another, AIR 1988 (Bombay) 167 to the effect that surname of the partners or the firm or a company would not be used to carry on trade in brand name nor was the sue of a family name permissible for passing off goods of another entity that enjoy the protection of law for its trade name.
13. Mr. Kaul, learned counsel appearing for the respondents argued and in our opinion rightly so that apart from the view taken by the learned Single Judge being legally sound even if there was a possibility of another view being taken, the same would not justify interference by the appellate court so long as the order in appeal was discretionary in nature and the court below had properly exercised the discretion vested in it. In support, he placed reliance upon Wander Ltd. & Another v. Antox India (P) Ltd. 1991 PTC 1 (SC). The following observations in the decision are instructive:
“An appeal against exercise of discretions said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it has considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the Trial Court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion.”
14. There is in our view considerable merit in the submission of Mr. Kaul. Although we have found the order passed by the learned Single Judge to be legally unexceptionable and based on sound principles of law and a correct appreciation of the factual matrix presented by the two rival versions of the parties, yet even if one were to hold that there was another opinion possible on the very same facts, that may not have been sufficient for this court to set aside the order under challenge which is discretionary in nature especially when the discretion had been properly exercised by the trial court as we find to be the position in the present case.
15. In the result, this appeal fails and is hereby dismissed but in the circumstances without any order as to costs.