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The Fairdeal Corporation Pvt. Ltd. v. Vijay Pharmaceuticals

Delhi High Court

Jan 30, 1985

Judgment

Subsequent
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Factual and Procedural Background

The plaintiff, a manufacturer of pharmaceutical formulations, filed a suit for perpetual injunction restraining the defendant from infringing its registered trade mark "ELECTRAL" and passing off its goods as those of the plaintiff. The plaintiff claimed that it marketed an oral electrolyte formulation under the registered trade mark ELECTRAL since 1972 and alleged that the defendant introduced a similar medicinal preparation under the mark "VIJAY ELECTROLYTE" in sachets deceptively similar in colour scheme and get up to that of the plaintiff. The cause of action arose in September 1984 when the plaintiff discovered the defendant's product in the Delhi market. The plaintiff filed an application (I.A. 6468/84) under Order 39 Rules 1 and 2 and Section 151 of the Code of Civil Procedure for interim injunction. The defendant filed a counter application (I.A. 77/85) under Order 39 Rule 4 seeking discharge or variation of the interim order granted on 16th November 1984. The defendant produced evidence showing that the plaintiff was aware of the defendant's use of the mark VIJAY ELECTROLYTE and similar sachets since at least February 1981, including prior legal notices sent by the plaintiff's advocate to the defendant. The defendant also presented sales figures and licence documents to support its case.

Legal Issues Presented

Whether the plaintiff was entitled to a temporary injunction restraining the defendant from using the mark VIJAY ELECTROLYTE and similar sachets that allegedly infringed the plaintiff's registered trade mark ELECTRAL.
Whether the plaintiff's delay and conduct, including alleged false averments and concealment of facts, affected its entitlement to such injunction.
The impact of the plaintiff's prior knowledge of the defendant's use of the mark and sachet design on the balance of convenience and irreparable injury considerations.

Arguments of the Parties

Plaintiff's Arguments

The plaintiff introduced the product ELECTRAL in 1972 and has extensively marketed it under the registered trade mark and distinctive sachet design.
The defendant's use of the mark VIJAY ELECTROLYTE in a similar sachet was likely to cause confusion among the public and amounted to infringement and passing off.
The plaintiff only became aware of the defendant’s offending activities in September 1984, thus justifying the interim injunction.
The plaintiff contended that there was a fresh cause of action despite prior knowledge, and delay was not material.
The plaintiff asserted the necessity of the injunction in the interest of the public at large because the product is freely available without prescription.

Defendant's Arguments

The defendant demonstrated that the plaintiff was aware of its use of the mark VIJAY ELECTROLYTE and similar sachets since at least February 1981, evidenced by legal notices and correspondence.
The plaintiff made false and misleading averments about the timing of its knowledge of the defendant’s activities.
The defendant argued that the plaintiff’s delay and conduct amounted to laches and unclean hands, which are crucial factors against granting interim relief.
The defendant showed that the sachet design used by the plaintiff was not exclusive and similar sachets were used by other pharmaceutical companies.
The defendant submitted sales records and licence documents to show legitimate use and continuous marketing since 1980.
The defendant contended that the product is not sold over the counter without prescription and thus confusion among doctors or chemists is unlikely.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court took a prima facie view considering the facts presented at the interlocutory stage. It found that the plaintiff was aware of the defendant's use of the allegedly infringing mark and sachet design since February 1981 but delayed taking legal action until 1984, which constituted suppression of material facts and false averments. The Court emphasized that granting an interim injunction is a serious step akin to condemning a party unheard, and such relief is not automatic upon showing a prima facie case. The plaintiff’s conduct led the defendant to believe it could continue marketing its product in the contested sachet design. The balance of convenience favored the defendant, who had been continuously selling the product since 1980. Further, the Court noted that the product requires a prescription and is not freely purchasable, reducing the likelihood of public confusion. The Court rejected the plaintiff’s explanation regarding the delay and found the plaintiff's conduct indicative of unclean hands, warranting adverse action. Given these factors, the Court concluded that the temporary injunction granted earlier should be vacated, and the defendant’s application allowed.

Holding and Implications

The Court dismissed the plaintiff’s application (I.A. 6468/84) and vacated the interim injunction order dated 16th November 1984, while allowing the defendant’s application (I.A. 77/85) with costs.

The immediate effect of this decision is that the defendant is permitted to continue marketing its product under the mark VIJAY ELECTROLYTE in the sachet design previously contested. The ruling underscores the importance of timely legal action and honest disclosure in seeking interim relief. No new legal precedent was established, but the decision highlights that delay, concealment of facts, and conduct amounting to unclean hands can defeat claims for interlocutory injunctions.

Show all summary ...

D.P. Wadhwa, J.

1. I.A. 6468/84 is filed by the plaintiff and is under Order 39 Rules 1 and 2 and Section 151 of the Code of Civil Procedure (for short 'the Code'). The other I.A. 77/85 is filed by the defendant and is under Order 39 Rule 4 of the Code. The suit is one for perpetual injunction restraining the defendant from infringing the trade mark of the plaintiff and passing off its goods as that of the plaintiff. There are also other usual prayers in such like suits like rendition of account etc. The plaintiff claims to be the manufacturer of pharmaceutical formulations and market its produce under various trade marks. One of these marks is ELECTRAL. Trade mark ELECTRAL (word per se) is registered under No. 251636B in class 5 as of 12.9.1968 in respect of pediatric medicinal preparations in the name of the plaintiff. ELECTRAL label is registered under No. 356663 as of 19.12.1979 in class 5 in respect of medicinal and pharmaceutical preparation in the name of the plaintiff. There is a disclaimer which says that the "registration of this Trade Mark shall give no right to the exclusive use of the device of circle, letters and numericals". It is the case of the plaintiff that the pharmaceutical formulation on which the trade mark ELECTRAL is used in an oral formulation of physiologically important electrolytes in palatable carbohydrate base and that this preparation is mainly used for dehydration in case of loss of water from the body due to diarrhea, dysentry, shock, etc. Further claim of the plaintiff is that it introduced this product under aforesaid trade mark ELECTRAL in the market in November, 1972, and has sold goods worth crores of rupees and also incurred expenses on large scale advertisements on this product. Then the plaintiff claims that this product has been manufactured and marketed under the registered trade mark ELECTRAL label in a distinct sachet bearing distinct colour scheme and get up. This sachet bears colour scheme in the white, green and black colours and specimen of this sachet has been filed with plaint. Of course, there are further claims that the public at large associates the trade mark ELECTRAL and the sachet to the product of the plaintiff. In para 8 of the plaint it is stated that in the month of September, 1984, the plaintiff learnt that defendant had brought into Delhi market a similar medicinal preparation under the name/mark VIJAY ELECTROLYTE in sachet like that of the plaintiff and a specimen of this sachet was also filed alongwith the plaint (Annexure 'X'). The medicinal preparation of the defendant is same as that of the plaintiff. Grievance of the plaintiff is not to the medicine but it is that the defendant adopted a deceptively similar trade mark VIJAY ELECTROLYTE in respect of the same goods and is also marketing the same in a sachet deceptively similar to that of the plaintiff both in colour scheme and get up. Then in para 14 of the plaint it is alleged that the cause of action to file the present suit arose in the month of September, 1984, when the plaintiff learnt about the offending activities of the defendants on purchase of the product with the offending mark at Delhi on 25th September, 1984. Alongwith the suit an application being I.A. 6468/84 was filed. In this it was also stated that it was in the month of September, 1984, that the plaintiff learnt that defendant had brought into Delhi market a similar medicinal preparations under the name/mark VIJAY ELECTROLYTE in packets similar to that of the plaintiff. An and interim injunction was prayed against the defendant from using the mark VIJAY ELECTROLYTE as aforesaid.

2. On 16th November, 1984, I issued notice of this application to the defendant for 14th January, 1985 and in the meanwhile I ascertained the defendant from selling its product in sachet like Annexure 'X' or other such like sachets similar to that of the plaintiff. Defendant filed reply to this application to which rejoinder was also given by the plaintiff. The defendant also filed an application (I.A. 77/85) praying for discharge and/or variation of the order of 16th November, 1984.

3. An noticed above the plaintiff in the plaint as well as in the application submitted that it was only in September, 1984, that the plaintiff came to know about the offending activities of the defendant on purchase of the product with offending mark in Delhi on 25th September, 1984. Defendant has placed on record a copy of the notice dated 14th July 1982, sent by Mr. M.V. Rajadhyaksha, Advocate of the plaintiff to the defendant. In this Mr. Rajadhyaksha referred to an earlier notice of February 12, 1981, sent by him on behalf of the plaintiff to the defendant. The objection was taken by the plaintiff to the use of the name VIJAY ELECTROLYTE by the defendant and the defendant was called upon the discontinue forthwith marketing of its product in the sachets with colour and design scheme as that of the plaintiff. The defendant had replied to this notice by its letter dated 4th September, 1982. From this is quite obvious that the plaintiff was aware that the defendant was selling its products in the name of VIJAY ELECTROLYTE in the sachets with similar colour and design as that of the plaintiff as far back as in February, 1981. Mr. Krishan Kumar, learned counsel for the defendant, therefore, contended that the plaintiff is guilty not only of making false averments but also of concealing true facts. He submitted that on this very ground the application of the plaintiff be dismissed and the interim order vacated.

4. Mr. Anoop Singh, learned counsel for the plaintiff, had no answer to this as to why it was averred that the plaintiff came to know about the offending activities of the defendant only in September, 1984. He merely stated that the service of the notice by the plaintiff's advocate was not to the knowledge of Mr. C.D. Kamath, Director of the plaintiff, who signed the plaint and filed the application supported by his affidavit. He however, submitted that since the defendant had admitted the use of the offending sachet, which infringes the plaintiff's registered trade mark, there was always a fresh cause of action. But, then it was submitted by the defendant that it was not the plaintiff a lone which was exclusively using the sachet in which it was selling its product under the mark ELECTRAL. This sachet of the plaintiff is having green background. The plaintiff is also selling its product ELECTRAL FORTE AND ELECTRAL-M in similar sachet with colour background of violet and brown respectively. Mr. Krishan Kumar also brought on record sachet of various pharmaceutical which have been selling their products in some what similar sachets as that used by the plaintiff for marketing its products under the mark ELECTRAL. Some of these are CILTRAL of Climax chemicals, ELECTORAL of Prakash Pharmaceuticals, PLAXOLYTE of Priti Pharma, A OLYTE of Apolo Pharmaceutical Laboratories, ARSTOLITE Aarkees Pharmaceuticals, LEALITE of Leal Pharma. Then there are also those with somewhat different colour scheme but with almost same get up as PLAXOLYTE of Priti Pharma, ENDO ELECTROLYTE of Endolabs, B-TRAL of Bombay Pharma Products and FLOELECTRAL of Flora Pharma Private Ltd. To this the argument of the plaintiff was that now that it has been made aware of the infringements by the defendant the plaintiff would be taking action against all these parties. Then the defendant has brought on record copies of various bills right from October, 1980, to show the sale of its product VIJAY ELECTROLYTE. The defendant also placed on record its statement showing sale figures of this product. In the year 1980 the sales for 2½ month were for Rs. 6,400/- in 1981 for about Rs. 94,000/- in 1983 for about 30,000 in 1983 for about Rs. 6,500/- and in 1984 for about Rs. 3,30,000/-. Thus, Mr. Krishan Kumar submitted that not only the plaintiff is guilty of laches, but has come to the Court with unclean hands after suppressing material facts and making false averments and also that in case of temporary injunction, these are important factors which weight with any Court while granting temporary injunction. It is submitted that the defendant was bound to suffer an irreparable loss in case the temporary injunction was continued Mr. Anoop Singh, however submitted that delay is not quite material in the present case and that interim order, should be continued in the interest of public at large. He stated that the drug which was marketed by the plaintiff under the mark ELECTRAL and that marketed by the defendant under the mark VIJAY ELECTROLYTE was not a schedule drug and that anybody could buy the same. He submitted that use by the defendant of the sachet of the type of the plaintiff is bound to cause confusion in the minds of the public.

5. I do not think Mr. Anoop Singh is quite right. For one thing he himself did not press that the defendant should not use that mark VIJAY ELECTROLYTE. His only attack was on the user by the defendant of the sachet similar to that of the plaintiff. Rather I would say that Mr. Krishan Kumar is right when he says that such type of medicine, as marketed by both the parties, is not something that any person can go to a chemist and buy it either the person will get a prescription from the Doctor or he will go to the Chemist to buy medicine for the ailment. I do not think either the Doctor of the Chemist would be deceived. I may also notice that while the price of the product of defendant, as printed on the sachet, is Rs. 6/- that of the plaintiff is little less. It is nobody's case that defendant is marketing a sub-standard product. He has filed on record a copy of the licence issued to it by the Food and Drugs Controller Madhya Pradesh, for the manufacture of product in question. This certificate is dated 24th November, 1979.

6. At this stage of the case I have to take only a prima facie view of the matter each party will have ample opportunity to lead evidence to prove its case during the course of the trial.

7. In this view of the matter I am of the opinion that the temporary injunction granted by me should be vacated. It is not that once a Court finds that the plaintiff has a prima facie case, the temporary injunction should be granted. The plaintiff, in this case, was aware of the use of the alleged offending mark by the defendant as far back in February 1981. It kept quite all these years. Once it has come to the court, it cannot get temporary injunction just as a matter of course to the detriment of the defendant. By its conduct the plaintiff led the defendant to believe that the defendant could market its product in the sachet, which now plaintiff claims, offends its registered mark. Balance of convenience appears to be in favour of the defendant as it is continuously selling its product in sachet like Annexure 'X' since 1980. Then, there is the question of the conduct of the plaintiff in making averments in the plaint as well as in the application, which are obviously false.

8. Grant of an ad interim injunction is a serious matter. It is something like condemning the party unberad. I would, certainly, have not granted an ex-parte injunction had it been brought to my notice that the plaintiff was well aware of the alleged infringement by the defendant as far back as February, 1981. The explanation offered by Mr. Anoop Singh that Mr. G.D. Kamath, Director of plaintiff, was not aware of the notice sent by the advocate of the plaintiff to the defendant, cannot be readily accepted. From the record I find that the same advocate who sent the notice, has also identified Mr. G.D. Kamath, as would be seen from the affidavit filed in support of the application by the plaintiff. I, therefore, propose to proceed against the plaintiff for making false declaration. I would have also certainly proceed against the plaintiff even if I had confirmed the interim order.

9. Both the parties did refer to a few judgments but the view which I have taken on the facts of this case, I don't fell necessary to refer to any of those decisions. I, therefore dismiss the application of the plaintiff being I.A. 6468/84 and vacate the order dated 16th November, 1984. At the same time application of the defendant being A.A. 77/85 is allowed. Defendant would be entitled to costs. Counsel's fee Rs. 500/-