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Schering Corporation v. Fulford India Ltd.
Structured Summary of the Opinion
Factual and Procedural Background
The appellants are two related pharmaceutical companies: Appellant No. 1 is a United States corporation and Appellant No. 2 is an Indian company (with appellant No.1 as its largest single shareholder). Appellant No.1 obtained registration of the trade mark "GARAMYCIN" in Class 5 in September 1965; the registration was renewed and is valid. Appellant No.2 introduced products under the mark "GARAMYCIN" in India (a gentamycin injectable from 1971 and eye/ear drops in 1982). The registered mark was assigned between the parties at various times (assignments dated February 26, 1974; reassigned April 9, 1979; again assigned April 10, 1989).
The appellants alleged that the respondents, with a dishonest object of trading on the appellants' goodwill, started manufacturing, marketing and selling identical products under the mark "GAMAMYCIN", which the appellants claimed was identical with or deceptively similar to "GARAMYCIN". The appellants lodged a criminal complaint, which led to a general search warrant, and instituted Suit No. 3079 of 1989 on September 12, 1989 seeking a perpetual injunction restraining the respondents from using "GAMAMYCIN" or any deceptively similar mark.
The appellants sought interim relief by Notice of Motion No. 2909 of 1989. The learned Single Judge, by an order dated December 18, 1989, declined to grant interim relief, relying heavily on observations in A.I.R. 1984 Bombay 218 (Hiralal Prabhudas v. Ganesh Trading Company) and concluding there was no likelihood of deception, noting also that the products were scheduled drugs obtainable only on prescription. The appellants appealed that order. On admission of the appeal, a Division Bench by order dated February 8, 1990 recorded a finding prima facie that the respondents' mark was deceptively similar and granted interim relief. This appeal challenges the Single Judge's December 18, 1989 order; the court below (the panel delivering this opinion) ultimately allowed the appeal, set aside the Single Judge's order and made the Motion absolute in terms of prayers (a) and (b), with respondents ordered to pay costs.
Legal Issues Presented
- Whether the respondents' use of the mark "GAMAMYCIN" is deceptively similar to the appellants' registered mark "GARAMYCIN" and therefore constitutes an infringement or actionable passing off.
- Whether the respondents' claimed use of the mark was bona fide (i.e., a genuine prior user) such that relief should be denied.
- Whether interim relief (injunctive relief) should be granted in the circumstances of the case, particularly in light of the respondents' contention that the products are scheduled drugs available only on medical prescription and therefore unlikely to cause public confusion.
Arguments of the Parties
Appellants' Arguments (as presented)
- The Single Judge's order declining interim relief was unsustainable.
- The Division Bench had already, on admission, granted interim relief by recording a prima facie finding that the respondents' mark is deceptively similar.
- There was no reliable material to show that the respondents had used the offending mark since 1980; the respondents' explanation for the coinage of "GAMA" was frivolous and their user was not bona fide.
- The sales figures shown by respondents were negligible and, coupled with the manner of invoicing and limited publicity claimed, indicated the respondents were trading on the appellants' reputation rather than building an independent market.
Respondents' Arguments (as presented)
- The respondents claimed the mark "GAMAMYCIN" was coined in 1980, a licence for manufacture had been secured, and actual manufacture began in 1986.
- The respondents contended "Gama" means "power" and that the mark was invented independently and was distinct, so it did not infringe the appellants' mark.
- The respondents produced invoices and sales figures to support their user and argued that, even assuming deceptive similarity, interim relief was unnecessary because the goods are scheduled drugs dispensed on medical prescription and therefore unlikely to engender public confusion.
Table of Precedents Cited
| Precedent / Authority | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| A.I.R. 1984 Bombay 218 (Hiralal Prabhudas v. Ganesh Trading Company) | Used by the Single Judge as a comparative authority to assess phonetic, visual and structural similarity between marks. | The learned Single Judge drew heavily upon observations in this decision to conclude that the marks were phonetically, visually and structurally dissimilar; the present court disagreed with the Single Judge's reliance and set that conclusion aside. |
| A.I.R. 1965 Supreme Court 142 (Sales Tax Officer, Jodhpur v. Shiv Ratan C. Mohatta) | Principle that mere existence of similar registered marks on the register is insufficient to deny relief; actual user must be established before denying relief based on market prevalence of an element. | The court invoked this principle to reject the respondents' suggestion that the common "MYCIN" element in multiple marks should preclude relief; the court found no evidence of user of other marks and relied on this authority to support granting relief. |
| Kerly's Law of Trade Marks and Trade Names (treatise) | Observation that where two marks share a common element that is common in the market, purchasers will pay more attention to other features of the marks. | The respondents cited this observation to argue that the common use of "MYCIN" neutralizes similarity. The court found the submission unsubstantial and, applying the principle from Sales Tax Officer (Supreme Court), noted that user of other marks was not established. |
Court's Reasoning and Analysis
The court proceeded through the following analytical steps (as appears in the opinion):
-
Assessment of bona fides of respondents' user:
- The court inquired how "GAMA" was coined; counsel for respondents said it meant "power" but could not show any dictionary support (medical or English) for that meaning. The court thus doubted the explanation and concluded, prima facie, that the respondents' user was not bona fide.
- The court examined invoicing and sales evidence produced by the respondents: only the entries for the allegedly offending mark were type-written while others were hand-written, inviting suspicion that the type-written entries could have been inserted subsequently. Accordingly, the court declined to place reliance on the invoices as establishing bona fide continuous user.
- The court noted inconsistency between the claimed modest turnover figures in early years and the comparatively large publicity expenditure claimed in 1989 (claimed advertising/sampling expenditure of Rs. 2,25,000 on turnover of Rs. 3,05,000). The respondents could not satisfactorily explain the break-up of turnover attributable to the offending mark, undermining the credibility of their claimed user evidence.
-
Likelihood of deception / proximate confusion:
- The court rejected the respondents' contention that because the products are scheduled drugs and available only on prescription there is no likelihood of confusion. The court noted that while that fact is relevant, it is not conclusive; established authorities show availability on prescription does not automatically bar relief.
- The court found that the marks "GAMAMYCIN" and "GARAMYCIN" were deceptively similar prima facie and that confusion could realistically arise—for example, a chemist reading a doctor's prescription might misunderstand the prescribed drug.
- The court also emphasized that respondents' goods included ear and eye drops, which are commonly available over the counter, increasing the risk of confusion despite scheduling of some products.
-
Treatment of the Single Judge's reliance on prior authority:
- The Single Judge had relied heavily on Hiralal Prabhudas v. Ganesh Trading Company to find dissimilarity. The present bench analyzed the totality of evidence and concluded the Single Judge was in error to deny interim relief on that basis.
- The court applied the Supreme Court principle from Sales Tax Officer v. Shiv Ratan C. Mohatta to reject the contention that the common element "MYCIN" (allegedly occurring in many marks) should defeat the appellants' claim—because the respondents had not established user of other marks in the market.
-
Outcome of analysis on interlocutory relief:
- Given the prima facie finding of deceptive similarity and the absence of reliable evidence demonstrating bona fide prior user by respondents, and because scheduling/precription-access did not conclusively negate the risk of confusion, the court concluded the Single Judge erred in declining interim relief.
Holding and Implications
Core Holding:
Appeal allowed; the order of the learned Single Judge dated December 18, 1989 (on Notice of Motion No. 2909 of 1989) is set aside and the Motion is made absolute in terms of prayers (a) and (b).
Direct Consequences for the Parties
- The Single Judge's refusal to grant interim relief is reversed.
- The appellants' Notice of Motion is made absolute in terms of prayers (a) and (b) (the opinion does not reproduce the specific wording of those prayers; the court's order is recorded exactly as "made absolute in terms of prayers (a) and (b)").
- The respondents are ordered to pay costs throughout.
Broader Implications
The opinion explains and applies settled principles: (a) that prima facie deceptive similarity and weak or unreliable evidence of bona fide user justify interlocutory relief, and (b) that the fact that goods are scheduled drugs obtainable on prescription is relevant but not automatically decisive against granting relief. The court relied on existing authorities to apply these principles; the opinion does not announce a new legal principle beyond application of established law.
This summary is strictly confined to the facts, arguments, authorities and holdings expressly contained in the provided opinion.
1. This is an appeal preferred by original plaintiffs to challenge the order dated December 18, 1989 passed by learned Single Judge on Notice of Motion No. 2909 of 1989. By the impugned order, the learned Judge declined to grant interim relief. The facts which gave rise to the filing of the suit are as follows:
2. Appellant No. 1 are a Corporation organised under the laws of United States of America and are carrying on business as manufacturers of and dealers in medicinal and pharmaceutical preparations. The appellant No. 2 are a limited Company incorporated under the Indian Companies Act and appellant No. 1 is the largest single holder of appellants No. 2. Appellant No. 2 carry on business as manufacturers of and dealers in pharmaceutical and medicinal preparations. In September, 1965, appellant No. 1 applied for and obbtained registration of the trade mark ‘GARAMYCIN’ in Class 5 in respect of pharmaceutical and medicinal preparations. The registration of the mark has been renewed from time to time and is valid and subsisting. In March 1971, the appellant No. 2 introduced into the market a pharmaceutical product under the trade mark ‘GARAMYCIN’ and the product has since then been continuously and widely sold and marketed in India. The product is a single ingredient injectable consisting of ‘GENTAMYCIN’. The appellant also introduced in February, 1982, eye and ear drops bearing the trade mark ‘GARAMYCIN’ and which is sold in bottle and carton. By a deed of assignment dated February 26, 1974, all the right, title and interest in the registered trade mark has been assigned by appellant No. 1 to appellant No. 2. The mark was reassigned on April 9, 1979 by appellant No. 2 to appellant No. 1 and again assigned in favour of appellant No. 2 on April 10, 1989.
3. The appellants claim that with the dishonest object of trading upon the reputation and goodwill of the appellants in the product sold under the trade ‘GARAMYCIN the respondents started manufacturing, marketing and selling identical products under the trade mark ‘GAMAMYCIN’ which is identical with or deceptively similar to the appellants’ trade mark. The appellants claim that because of the distinctive trade mark, colour scheme, lettering, layout and get-up of the appellants mark the products have come to be identified by the trade and members of the public exclusively with the appellants and that the use of identical or deceptively similar trade mark by the respondents inevitably will deceive and confuse the public. The appellants lodged a criminal complaint against the respondents and a general search warrant for the search of the premises and factory of the respondents was issued. The appellants instituted Suit No. 3079 of 1989 on September 12, 1989 for perpetual injunction restraining the respondents from manufacturing, selling, offering for sale, advertising or otherwise dealing in any pharmaceutical or medicinal product under the trade mark ‘GAMAMYCIN’ or any other name deceptively similar so as to infringe the appellants registered trade mark ‘GARAMYCIN’.
4. The appellants took out Notice of Motion for grant of interim relief pending the disposal of the suit. In answer to the claim for interim relief, the respondents claimed that the trade mark ‘GAMAMYCIN’ was coined in the year 1980 and a licence for manufacture of the drug was also secured. The respondents claim that the actual manufacture commenced in the year 1986. The respondents claimed that the word ‘GAMAMYCIN’ was invented and ‘Gama’ means ‘power’. The respondents further pleaded that the mark is distinct and does not infringe upon the appellants' trade mark. The learned trial Judge by the impugned order heavily drew upon the observations made in A.I.R 1984 Bombay 218 (Hiralal Prabhudas v. Ganesh Trading Company) and then concluded by holding that the products manufactured by the respondents are phonetically, visually and structurally dissimilar and there is no likelihood of any deception or confusion and particularly so as the products were scheduled drugs and can be had only on a doctor's prescription. The order of the learned single Judge is under challenge.
5. Shri Tulzapurkar learned counsel appearing on behalf of the appellants, submitted that the impugned order is entirely unsustainable. The learned counsel urged that at the time of admission of the appeal, Division Bench of the Court by order dated February 8, 1990 granted interim relief sought by the appellants after recording a fiuding that prima facie, the mark of the respondents is deceptively similar to the appellants' trade mark. Shri Tulzapurkar urged that the learned trial Judge overlooked that there is no material to establish that the offending mark was used by that respondents from year 1980 onwards. Shri Tulzapurkar also pointed out that the explanation given by the respondents as to how the word was invented is entirely frivilous and the user of the mark is not bona fide. The learned counsel urged that a look at the figures given by the respondents about the quantum of the sale established that the products alleged to have been sold are of an extremely negligible amount and it is obvious that the respondents were desirous of trading upon the reputation of the appellants. Shri Warerkar learned counsel appearing on behalf of the respondents, on the other hand, urged that the order of the learned single Judge is not required to be disturbed on the facts and circumstances of the case. We are unable to accede to the submission urged by Shri Warekar.
6. In the first instance, it is necessary to examine whether the user of the mark of the respondents is bonafide and, prima facie, we are satisfied that it is not so. We enquired from Shri Warerkar as to how the word ‘GAMA’ was coined and the answer was that the word ‘GAMA’ indicates power. The learned counsel could not point out from any dictionary, Medical or English, to indicate that the word ‘GAMA’ is understood as power. We are also not, prima facie, satisfied that the claim of the respondents that the product was sold under the trade mark ‘GAMAMYCIN’ from the year 1986 is genuine. Shri Warerkar invited our attention to the invoices but we are not prepared to place any reliance thereupon because the respondents are manufacturers of several medical products and in the invoices, only the products sold under the mark ‘GAMAMYCIN’ are type-written, while the others are hand-written. The complaint of the appellants that the typewritten words were inserted subsequently cannot be straightaway rejected. Turning to the quantum of sales, it is obvious that in the year 1986, the sales turn-over is shown to be Rs. 40,235/-. By year 1989, it has steadily grown to Rs. 3,05,000/-. The respondents admit that no amount on publicity expenses were shown in the first three years, i.e 1986, 1987, and 1988 and the expenditure in the year 1989 is Rs. 1,75,000/- on giving samples and Rs. 50,000/- on literature. It is impossible to place any reliance upon the sales figures. It is difficult to believe that the respondents would spend on publicity an amount of Rs. 2,25,000/- when the sales turnover was only Rs. 3,05,000/- Shri Warerkar tried to explain that the expenditure is not only on the advertisement of the mark GAMAMYCIN’ but in respect of the advertisement of other medicinal products manufactured by???he respondents. If the contention is correct, then it is obvious that the sales turnover is also not limited to the product??? sold under the offending trade mark. We enquired from the learned counsel as to what is the break-up and how much is the turnover in respect of the products sold under offending mark and the counsel was unable to give any satisfactory answer.
7. Shri Warerkar then submitted that even assuming that???he offending trade mark is deceptively similar to the registered trade mark of the appellants, still it is not necessary to pass interim relief in favour of the appellants. The learned counsel urged that the medicinal products manufactured by the respondents and sold un???er the offending mark are not likely to cause any deception or confusion because the goods are scheduled drugs and they are not available across the counter but can only be secured on medical prescription. Shri Warerkar urged that the factor is enough to deny the grant of interim relief to the appellant. We are afraid we connot accede to the submission. It is now well settled by catena of decisions of this Court that the fact thal the products are scheduled drugs and can be had only on doctor's prescription is not enough and cannot lead to the denial of reliefs to the plaintiffs. The fact that the scheduled drugs are available on doctor's prescription is a relevant circumstance but is not necessarily a conclusive one. It is necessary for the Court to bear in mind that even in respect of scheduled drugs, there is likelihood of deception and confusion. As the respondents' mark ‘GAMAMYCIN’ and the appellants’ registered mark ‘GARAMYCIN’ are deceptively similar, there is every likelihood that the chemist who reads the doctor's prescription may misunderstand the drug prescribed. It also cannot be overlooked that the products manufactured are not merely injections but are also ear drops and eye ointments. It is not a secret that ear drops and eye ointments are available across the counter. On the facts and circumstances of the case, the learned single Judge was clearly in error in not granting interim relief. We are in respectful agreement with the observations made by the Division Bench on February 8, 1990 while granting interim relief on admission of the appeal.
8. Shri Warerkar referred to some observations in Kerly's Law of Trade Marks and Trade Names to suggest that where two marks contain a common element which is also contained in a number of other marks in use in the same market, such a common occurrence in the market tends to cause purchasers to pay more attention to the other features of the respective marks. Reference is made to this observation to contend that there are several marks in the market with the use of expression ‘MYCIN’. We are unable to find any substance in the submission. The Supreme Court observed in the the decision reported in A.I.R 1965 Supreme Court 142 (Sales Tax Officer Jodhpur v. Shiv Ratan C. Mohatta) that the mere fact that similar registered marks are on register is not enough but the user must be established before relief is denied. There is no evidence whatsoever to indicate user in respect of other marks In our judgment, the order of learned single Judge is required to be set aside.
9. Accordingly, appeal is allowed and the order dated December, 18 1989 passed by the learned single Judge on Notice of Motion No. 2909 of 1989 is set aside and the Motion is made absolute in terms of prayers (a) and (b), The respondents shall pay the costs throughout.
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