Pfizer Enterprises & Anr. v. Dr.H.R.Manchanda & Anr.

3. Whether the judgment should be reported in the Digest? Yes % 16.07.2008 Mr. Justice S. Ravindra Bhat:

1. This order proposes to dispose of the objection to maintainability of this suit, on the ground of the court lacking territorial jurisdiction, raised by the defendant. The present suit has been filed to restrain the defendants from infringing the trademark of the plaintiffs' and passing off their goods as the plaintiffs' goods. The plaintiffs have also sought rendition of accounts and delivery up of goods.

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2. The first plaintiff is a company organized under the laws of Luxembourg. The second plaintiff with its registered office in Mumbai, is its subsidiary in India. It is averred that the plaintiffs form part of the fastest growing research oriented pharmaceutical companies and have been one of the leading healthcare companies in the world. It is also averred that the plaintiffs set up their India operation in the year 1950 in Bombay.

3. Apart from a wide range of products marketed in India by the plaintiffs, they also market in India 'Dalacin', a product, which is the essential component of 'Dalacin C' and 'Dalacin T'. Dalacin is a highly sought after antibiotic used to treat infections in different parts of the body caused by bacteria, the active ingredient of which is Clindamycin. It is averred that they market chemical compositions Clindamycin hydrochloride and Clindamycin phosphate under the mark Dalacin C. They aslo state that the mark 'Dalacin C' was first adopted by the Upjohn Company in 1968 in India; (whose name was later changed to Pharmacia & Upjohn Company in 1996). The mark was later assigned to Pharmacia Enterprises SA in 2002, which was subsequently renamed Pfizer Enterprises SARL, the first plaintiff. It is averred that the aforesaid trademark is a fanciful and coined word having no denotative meaning and is therefore, a distinctive mark. Further, it is stated that the first plaintiff is the proprietor of the aforesaid trademark by virtue of its priority in adoption, continuous and extensive use, and widespread advertisement. Both 'Dalacin C' and 'Dalacin CS(OS) 641/2007 2 of 12 T' have been registered in India; No. 247943 and No. 389213 respectively. The second plaintiff is the authorized user of these trademarks in India. They aver that due to the extensive use and the reputation of the plaintiffs, the aforesaid trademark has come to be exclusively identified with the plaintiffs.

4. It is further averred that the second defendant, a company carrying on its business activities from Mumbai, also manufactures an antibacterial product having Clindamycin as its active ingredient. The plaintiffs state that in March 2007 they were shocked to discover from their sources as well the defendant's website that the second defendant offers pharmaceutical compositions Clindamycin hydrochloride and Clindamycin phosphate under the mark 'Dalcinex', in both capsule and injection form as the plaintiffs do. The plaintiffs allege that such use of the mark Dalcinex by the defendant amounts to infringement and because the defendants want to dishonestly want to appropriate the goodwill of the plaintiffs, also amounts to passing off. It is averred that the defendant's mark is phonetically and visually similar to that of the plaintiffs', in relation to an identical product and therefore, would cause confusion in the minds of the public. It is further stated that the plaintiffs' mark being an arbitrary and unique collocation of words, is distinctive, and therefore, cannot be adopted by the defendants in such dishonest fashion.

5. The plaintiffs also submit that this Court has the jurisdiction to entertain the present CS(OS) 641/2007 3 of 12 suit, by virtue of Section 134(1) of the Trade Marks Act, 1999 (hereafter 'the Act'), as the plaintiffs' product 'Dalacin C' is available for sale and distribution in Delhi and also because the defendants' product is also available for sale in Delhi. Therefore, it avers that part of the cause of action has also arisen within Delhi.

6. The defendants allege that none of the plaintiffs are the registered proprietors of the trademarks 'Dalacin C' and 'Dalacin T' within the meaning of section 2(i)(v) of the Act and hence no suit for infringement is maintainable. They also allege the assignment deeds produced by the plaintiffs are not valid and cannot be relied upon. They aver about having applied for registration of the mark Dalcinex which is pending since the year 2004, and also having commenced manufacturing in 2004. Therefore, they aver the present suit if hit by delay and latches.

7. Mr. Ajay Sahni, learned counsel for the defendants contended that the suit is not maintainable in this Court, since both the plaintiffs and the defendants carry on business outside the jurisdiction of this Court. He submits that this position is admitted by the plaintiffs in para 10 of the plaint. He submits that no documentary evidence has been filed on record to even prima facie establish that the product of the defendants, on the date of filing the suit was available within the jurisdiction of this Court. He also drew the attention of this Court to the fact that the plaintiffs have not averred or produced any document as to CS(OS) 641/2007 4 of 12 how the defendants' product including the packaging has been procured in Delhi. He submitted that the suit ought to be filed either in the place where the defendants resides and carries on business or the place at which the cause of action arises. Placing reliance on Dabur India v. KR Industries 2008 (37) PTC 332 (SC), which affirmed this Court's finding, on jurisdiction it was argued that unless the cause of action arises within territorial limits of this Court, that is, and unless the defendants' allegedly infringing products are sold in Delhi, this Court cannot exercise jurisdiction. He also argued that when both parties are from the same place, the suit should be filed there and the tendency of the plaintiffs to file the case elsewhere should strongly deprecated. In this regard he relied on Asst. Collector Central Excise, Chandan Nagar v. Dunlop India Ltd., (1985) 1 SCC 260. Further, placing reliance on Kensoft Infotech v. Krishnswami, 2007 (35) PTC 627, he submitted that since the proceedings are filed in a forum non conveniens in relation to the defendants, the Court may in its discretion return the plaint. He urged that Court must reject the plaint, since the plaint does not disclose a cause of action.

8. Learned Counsel also sought to address the Court on the validity of the assignment deed; how the deed was insufficiently stamped and was also invalid under section 45 of the Act. He submitted that curiously, copies of the certificates of renewal of trademark from the year 1982 do not have the name of the proprietor on them. Further, he submitted that the plaintiff failed to establish the ingredients for an action of passing off. Finally, he argued that where the mark has been coined using the alphabets of the generic salt, or ingredient no exclusive right could be asserted.

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9. Mr. Ankush Mahajan, contended, on the other hand that there are clear averments in the suit about the cause of action having arisen within jurisdiction of the Court, and the territorial jurisdiction of the Court. Counsel contended that after commencement of the Trademark Act, 1999, there has been a shift in the law and that by virtue of Section 134, the plaintiff has the choice of suing the defendant, even if some business is carried on by it (the plaintiff).

10. It was contended that to determine whether a court has jurisdiction, all that can be seen is whether there is sufficient averment in the plaint. In this case, the plaintiff had relied on averments to allege sufficient nexus for the court to exercise jurisdiction over the cause. Counsel submitted that the description of the threat of infringement, perceived by the plaintiff was sufficient nexus for exercising jurisdiction. He relied on the judgment of this Court reported as Pfizer Products Inc Vs. Rajesh Chopra 147 (2007) DLT 300 as well as the previous decision in Pfizer Products Inc. Vs. Rajesh Chopra 2006 (32) PTC 301. Counsel also relied upon the decisions reported as Exphar SA -vs- Eupharma Laboratories Ltd. 2004 (28) PTC 251 (SC) and Intas Pharmaceuticals -vs- Allergan Inc 2006 (32) PTC 272 (Del).

11. Learned counsel contended that sale of the defendant's goods is something that cannot be denied. Being engaged in Pharmaceutical business, it would be inconceivable that the second defendant carries no business within jurisdiction of this Court. It was also CS(OS) 641/2007 6 of 12 submitted that since the defendants have entered appearance, and are contesting proceedings, it would not be appropriate at this stage to return the plaint, on the ground of lack of jurisdiction. Learned counsel relied upon the documents filed and submitted that the defendants are marketing their products and advertising through the Internet. He relied on a copy of the print out of the website www.cipla.com and submitted that entire product range of the defendants is listed on such website. It was submitted that the website can be accessed from Delhi and thus, this Court possesses jurisdiction. Reliance was placed upon judgments of this Court including Casio India Ltd. v. Ashita Telesystems Pvt. Ltd. (2003) 27 PTC 265 (Del) as well as the India TV Independent News Pvt Ltd. v. India Broadcast Live LLC 2007(35) PTC 177 (Del).

12. The Court had listed the matter for consideration of the interlocutory application for ad interim relief; the defendant at that stage raised a preliminary objection to maintainability. The court therefore, heard arguments on the maintainability of the suit on grounds of territorial jurisdiction and reserved orders.

13. It is well settled that the court has to see only the contents of the plaint to decide whether the suit discloses a triable cause of action, and whether this court has jurisdiction. The Supreme Court in Liverpool & London SP & I Asson. Ltd. v. MV Sea Success, (2004) 9 SCC 512, held that for the purposes of Order 7 Rule 11 the Court should not only look at the averments in the plaint but also examine into documents filed along with, in view of Order 7 CS(OS) 641/2007 7 of 12 Rule 14. In Sopan Sukhdeo v. Assistant Charity Commr., (2004) 3 SCC 137, the Supreme Court emphasized that a meaningful, and not formal reading of the plaint has to be adopted so as to nip in the bud any clever drafting of the plaint. Therefore, in order to decide the issue of jurisdiction and to assess whether the plaint discloses a cause of action, only the contents of the plaint along with the documents filed are relevant.

14. The following fora are provided by Section 20 of the Code of Civil Procedure, 1908, (hereafter the 'CPC') Section 62(2) of the Copyright Act, 1957 and section 134 of the Trade Marks Act, 1999, for the adjudication of trademark disputes. First, the place at which the defendant actually and voluntarily resides or carries on business. Second, the place at which the cause of action, wholly or in part arises. Lastly, by an amendment to the Copyright Act and the Trade Marks Act, the suit can be instituted at the place where the plaintiff resides and carries on business. The Explanation to section 20 of the cpc makes it clear that the place at which a corporate entity carries on business is either the place at which it has its sole or principle office or where it has a subordinate office.

15. In Indian Performing Rights Society v. Sanjay Dalia, 143 (2007) DLT 617, this Court, relying on Loknath Prasad Gupta v. Bijay Kumar Gupta, 57(1995) DLT 502, held that the expression 'carries on business' in section 62 of the Copyright Act has the same meaning as in section 20 of the cpc. It was further held that the mere existence of a branch office in Delhi would not mean that the plaintiff carries on business in Delhi. The plaintiff would be deemed to carry on business at a branch office only if a cause of action had arisen in Delhi. A well established principle of law is that to amount "to carrying on business" in a certain CS(OS) 641/2007 8 of 12 place, the essential part of the business must take place in that place. (Dhodha House v. S.K Maingi., (2006) 9 SCC 41; Nedungadi Bank v. Central Bank of India, AIR 1961 Ker 50; Bharat Insurance Co. v. Vasudev, AIR 1956 Nag 203).

16. In Dodha House, the Supreme Court observed that it was possible that the goods manufactured by the plaintiff were available in the markets in Delhi or they are sold in Delhi, but that by itself would not mean that the plaintiff carries on any business in Delhi. In SectorTwenty-one Owners' Welfare Association v. Air Force Naval Housing Board, 65 (1997) DLT 81 (DB) it was held that a trivial or insignificant part of the cause of action arising at a particular place would not be enough to confer jurisdiction on the court to entertain the lis. Citing a number of precedents the court held that the emphasis had shifted from the residence or location of the person or authority sought to be proceeded against, to the situs of the accrual of the cause of action. In H.P. Horticulture Produce Marketing and Processing Corpn. v. M.M Breweries, AIR 1981 P&H 117, in relation to action for passing off the Court observed as follows:

"In a case of present nature, the cause of action partly or wholly can arise in a given jurisdiction only

if it is the defendant who is proved to have directly made sale of the goods under the impugned

trademark (within a given court) not to an individual customer but to a distributor or a wholesaler

or retailer and that such a sale should be at a commercial scale."

17. In Gold Seal Engineering Products v. Hindustan Manufacturers, AIR 1992 Bom. 144, it was held that a suit for passing off could not be filed in Bombay if the defendants carry on business in Calcutta and that supply of goods to Delhi was on a commercial basis. In Gupta Brothers Conduit Pipe Manufacturing Co. v. Anil Gupta, (2001) 24 PTC 159, this Court held that CS(OS) 641/2007 9 of 12 since neither plaintiff nor the defendants have offices in Delhi and are not carrying on business in Delhi, the suit had to be returned due to lack of jurisdiction. The court held, in Haryana Milk Foods v. Chambel Diary Products, (2002) 25 PTC 156 that for the purposes of ascertaining territorial jurisdiction the entire plaint has to be taken into consideration. In that case since the plaintiff could not prove that the defendant had a office in Delhi or carried on business in Delhi, the Court held that it did not have territorial jurisdiction to adjudicate the matter. In Dabur India Limited v. KR Industries, (2006) 33 PTC 348, a Division Bench of this Court held that since the defendant was from Andhra Pradesh and since there was no documentary evidence to show that it was selling its goods in Delhi, this Court did not have territorial jurisdiction. This decision has been recently affirmed by the Supreme Court in Dabur India v. KR Industries 2008 (37) PTC 332 (SC).

18. The plaint in the present case shows that both the second plaintiff and the second defendant have their offices in Mumbai and undeniably carry on their business in Mumbai too. The plaint does not disclose either of them having their offices in Delhi. The relevant parts of the plaint are extracted below :

"16. The cause of action arose in favour of the plaintiff in the month of March 2007,

when they came to learn of the availability of the Defendants' products in the market. The

said Defendants are very much continuing with their infringing activity. The cause of action

again arose when the plaintiff's visited the website of the Defendants located at

http://www.cipla.com/ and found that the Defendants are advertising a pharmaceutical

drug under the impugned mark DALCINEX having Clindamycin as its active

ingredient. The cause of action is thus a continuing one and will continue to subsist until the

said Defendants are restrained permanently by an order of permanent injunction passed by

this Hon'ble Court.

17. This Hon'ble High Court has necessary jurisdiction to entertain and try the present Suit, by virtue of Section 134 (1) of the Trade Marks Act, 1999 as the Plaintiffs' CS(OS) 641/2007 10 of 12 products, including DALACIN C, are available for sale & distribution within the jurisdiction of this Hon'ble Court. Further, the Defendants' products under the impugned mark are available for sale in Delhi and therefore, the cause of action has also arisen within the jurisdiction of this Hon'ble Court."

The plaintiff far from establishing that the defendants carry out the essential parts of their business from Delhi has not been able to demonstrate that the defendants' goods are in fact sold in Delhi. Even the sample, which is produced with the list of documents annexed to the plaint and relied upon does not disclose whether the defendant's goods are sold; no invoice of sale, from Delhi is placed on the record. The allegation, therefore, that plaintiff has become aware of the infringing activities of the defendant, within territorial jurisdiction of this court, or that any cause of action arose within jurisdiction, are not even prima facie substantiated.

19. As regards the argument about jurisdiction arising on account of the web site of the plaintiff is concerned, in India TV (supra), this Court had, in para 44, held that in order to extend jurisdiction to defendants residing outside the territorial limits, on the basis of their presence on the internet, the website of the defendants cannot be a mere passive one but has to be interactive, in the sense that something purposeful should be directed towards the forum state. The print outs of the second defendant's website submitted by the plaintiff, in the list of documents, do not in any manner disclose the minimum threshold of interactivity laid down in India TV (supra). The copies merely disclose the range of products sold by the defendants and nothing more. There is no purposeful direction of the defendants web activities to the concerned geographical locale, in this case Delhi, to prima facie establish this Court's jurisdiction.

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20. This court, therefore, is of the view that taken together, the suit averments, and the documents do not disclose that the dispute in this case can be entertained and tried by this court; it plainly lacks territorial jurisdiction. The plaint is, therefore, returned.

July 16, 2008 S. RAVINDRA BHAT

(JUDGE)

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