Schering Corporation & Others v. Kilitch Co. (Pharma) Pvt. Ltd.

S.K Desai, J.:— This Appeal is preferred against the decision given by the single Judge in Notice of Motion No. 3070 of 1989. By the impugned order only limited injunction was granted by the single Judge and that pertained to the cartons in which the medicinal tubes were packed. The injunction sought for by the plaintiffs (Appellants before us) regarding the name of the medicine was not granted. It is the refusal to grant that injunction which has resulted in the Appeal. A few facts may be stated.

2. There are three plaintiffs before us as Appellants. In 1973 a private limited company by name of C.E Fulford (India) Pvt. Ltd. applied for and obtained registration of a trade mark consisting of the word per se ‘Quardriderm’. This was under No. 291832B in class 5 in respect of dermatological preparations for human and veterinary use. The registration of the mark has been renewed from time to time and is subsisting. Since 1973 plaintiff No. 2 used the said mark on dermatological preparations for human use. In 1979 the said private limited company assigned the said mark to plaintiff No. 1 under a deed of assignment dated 9th April, 1979. In 1987, it was subsequently assigned in favour of plaintiff No. 3. Upto 1987 it was plaintiff No. 1 who was using the said mark under license from the private limited company and thereafter from 1987, plaintiff No. 3 was using the said mark under license from plaintiff No. 2. The said product is a dermatological cream consisting of Gentamycin Sulphate, Betanothasone Valerate. Tolnaftate and Iodocyolorhydroxy-quin line. The said ointment was sold in cartons and tubes having distinctive layout, design, colour scheme and get up. We are however not concerned with the latter but only the plaintiffs' trade mark ‘Quadriderm’ written in a stylised manner which occurs both on the tubes and on the cartons.

3. It is calimed by the plaintiffs that in or about October 1988 the defendants had put in the market an identical multi-ingredient dermatological preparation or product and were selling the same in a tube and carton deceptively similar to the plaintiffs carton and tube under the word ‘Coriderm’. It was alleged that the tube and the carton were copied from the tube and the carton of the plaintiffs and this proclaimed a deliberate dishonest object on the part of the defendants of trading upon the reputation and goodwill of the plaintiffs. Correspondence thereafter ensued and since the defendants persisted in the contention a Suit was ultimately filed and a Motion taken out for interim relief. It may be mentioned, since this would have relevance on the question of delay, that earlier to the filing of the Suit criminal proceedings had been adopted on a complaint by the plaintiffs and as a result of the said complaint goods of the defendants had been seized by the police.

4. In the exhibits annexed to the plaint as well as in the Affidavit, the plaintiffs have given details of the sales of this product as also of the amount spent by them to promote such sales. The defendants, on the other hand, have also given figures of sales of their product ‘Coriderm’. It will be sufficient for our purpose to state that whereas the figures of the plaintiff run into crores and millions respectively, the sales of the defendants run only into a few lakhs at the most. Further substantial sales are claimed only for the period after the correspondence started and the plaintiffs objected.

5. Counsel appearing for the Appellants drew our attention to the discussion in the order which suggests that although the single Judge was satisfied that there was substantial similarity, he refrained from granting injunction in respect of the trade mark because of delay in moving the Court and in his view by result of such delay the plaintiffs were not entitled to have the status quo altered. It has been urged before us that there was no delay and that any such alleged delay has not caused any substantial prejudice to the defendants. It was urged that only such prejudice and not delay simpliciter would disentitle the plaintiffs from obtaining an injunction.

6. Before going into the question of delay which has weighed with the single Judge, the first question to be considered is whether there is visual and phonetic similarity between the two marks. It has been contended on behalf of the Respondents that there is no similarity at all and if there is no similarity, the question of granting interim relief or whether the plaintiffs are disentitled to such relief by reason of delay would not arise.

7. On behalf of the Respondents we were referred to various passages from Narayanan's Book on Trade Marks and Passing Off. In our opinion, it is unnecessary to refer to the various passages culled out from decided cases. Both at the stage of interim relief and finally, the matter rests on impressions. In the first place, although the ointment would be sold by chemists it does not require a Doctor's prescription. It was urged that since the ointment and the tubes containing the same would be sold by chemists there cannot be any question of confusion. The question however is whether there is any similarity as a result of which there could be confusion. We are clearly of opinion, as has been the single Judge to a considerable extent, that the plaintiffs cannot be non-suited by a finding that there is no similarity whatsoever or such substantial dis-similarity as would not entitle them to injunction. In our opinion, there is substantial phonetical similarity. Again when both are written in English as well as in vernacular languages there is considerable similarity, more if the name of the products were to be written and not printed or typed. It is essential to note in this connection that many a time products are suggested or ordered on the telephone and bearing in mind the almost total identity of the ingredients used and the user, there is likely to be considerable confusion between the two products by result of such similarity.

8. In our opinion, that the product would be available only from chemist's shop is not of much relevance. The persons who come to purchase the product are not necessarily highly educated or technically qualified. Indeed, many may not be able to read English. Again the salesmen who are employed in chemist's shops are not necessarily conversant with the English language. This is even true in a large city like Bombay and it would be all the more true in smaller towns where the product will be sold from smaller chemist shops where perhaps the family members or the relatives of the chemists would be attending to the customers throughout the day. The position would have been different had this been a medicinal preparation requiring a doctor's prescription.

9. Thus the plea of the Respondents (Original defendants) that there is no similarity whatsoever will have to be rejected and it would have to be held that there is considerable similarity, both visual and phonetic between the trade mark of the Appellants and the mark invented, so the defendants say, of the Respondents.

10. In this connection, our attention was drawn to the improvements made on behalf of the Respondents from time to time regarding the manner in which they claimed to have invented the mark ‘Coriderm’. On 23rd January, 1989, Trade Mark and Patent Attorneys M/s. M.P Mirchandani & Co. addressed a letter to the Petitioners' Advocates in which they have explained the invention of the mark Coriderm' as under:

“Our clients further assert that the prefix “CORI” in Gujarati means ‘itching’ and suffix DERM is derived from Dermatology which is a common suffix in the medicinal and Pharmaceutical trade and no exclusive rights could be claimed by any one. Our clients further assert that the prefix “CORI” and QUADRI (QUADRIDERM) are distinct and dissimilar visually, phonetically and structurally.”

11. It was realised subsequently when the matters came to Court that the prefix ‘Cori’ in Gujarati does not mean itching. Realising that there will have to be some further explanation other than the untenable one given by M/s. M.P Mirchandani & Co., the Respondents in paragraph 6 of the Affidavit in Reply changed front as under—

“The said Trade Mark “CORIDERM” cosists of two words namely “CORI” as prefix and the word “DERM” as suffix. The said word ‘CORI’ is a Gujarati word inter alia having meanings “clean” or “Dry” or “Itching” while the word DERM” is an English word meaning “Skin”.

12. Undoubtedly the word “Cori” in Gujarati means ‘dry’ or ‘blank’ but it has no relevance to itching. We have no hesitation in rejecting the explanation and indeed the fact that false explanations are sought to be tendered must have relevance on the question of intention of the defendants and whether interim relief is required to be granted.

13. We finally come to the question of delay. As stated earlier, the plaintiffs have claimed that they came to know about the defendants's product sometime in October, 1988. On 25th October, 1988, the plaintiffs Advocates have addressed a letter to the defendants at their Marol factory whereunder the defendants were called upon to confirm their acceptance of the various steps sought by the plaintiffs' Advocates. This was replied to on 17th November, 1988 in which letter it was denied that there was any similarity between the plaintiffs' mark and the defendants' mark ‘Coriderm’. It was contended that the defendants were the original adopters of the trade mark ‘Coriderm’ and therefore, it was not necessary to carry out the requisitions contained in the plaintiffs' Advocates letter. It was urged before us that when such clear statement was made on behalf of the defendants in November, 1988, the plaintiffs should have immediately taken legal proceedings and not waited till September, 1989 when they filed the present Suit. Indeed the Motion was taken out a couple of months after the Suit was filed.

14. To continue with the survey of the correspondence, on 13th December, 1988, the plaintiffs' Advocate wrote a further letter to the defendants Patent Attorneys M/s. M.P Mirchandani & Co. and on 23rd January, 1989 the said Advocates gave the explanation (in our opinion false) about the manner in which the mark ‘Coriderm’ was invented. A formal notice thereafter followed in April, 1989. After this we are told that in June/July, 1989, criminal proceedings came to be adopted followed by the Suit in September, 1989.

15. In their Affidavit-in-reply the defendants have indicated the extent of their sales. The would be found in Exhibit 9 of the Affidavit-in-reply. Counsel for the Appellants has urged, with reference to Ex. 9, that only the sales upto December, 1988 should be taken into account and not any sales subsequent to the first letter in the aforesaid correspondence, the submission being that if after notice of the plaintiffs' rights the defendants continued to trade under this trade mark, they did so at their peril. In our opinion there is substance in the plea. The position could conceivably be different had there been such a long time interval between the notice and the civil action as could have led the defendants to assume that the plaintiffs were not pressing in their contention and had accepted the plea of the defendants about there being lack of similarity between the trade marks and as regards the genuineness of the defendants, invention. Correspondence briefly adverted to earlier gives an impression entirely to the contrary. Right from October, 1988 the plaintiffs' Advocates have been contending that the plaintiffs' trade mark is being violated and that action would be taken in respect of such violation indeed, in July, 1989 criminal action is taken followed by civil action in September, 1989. At no stag had the plaintiffs in any manner given the defendants to understand that they have accepted the defendants' explanation and are acquiescing in the defendants'user of the mark ‘Coriderm’.

16. In connection with the aspect of delay it would be useful to refer to a recent decision of the Delhi High Court in which a single Judge of that High Court had occasion to deal with similar arguments. The decision is in the case of Hindustan Pencils Pvt. Ltd. v. India Stationery Products Co., AIR 1990 Delhi 19.

17. The aforesaid decision was cited before the single Judge and it appears to have been passed over substantially on the ground that in the said decision the mark was identical and there was no question of the mark complained of being similar. However, in our opinion, the observations on the question of delay and the approach to the question would remain the same irrespective of whether the violation is by the defendants adopting the identical mark or by a substantially similar mark.

18. In the said decision the plaintiffs claimed that in 1985 they had come to know of the infringement of their mark by the defendants. On the other hand, according to the defendants, the plaintiffs were aware of the defendants' user of the mark since 1982, in which year advertisements of the plaintiffs and the defendants had appeared in a magazine viz. Paper & Stationery Samachar of March, 1982. Thus according to the defendants there was inordinate delay of more than six years before the suit was filed. Even if this was not accepted there would be three years' dealy on the plaintiffs' own footing that they came to know of the mark in 1985. In connection with this aspect of the matter, this is what the learned single Judge has observed in paragraph 39 of the report:

“39. It had been submitted that there was an inordinate delay on the part of the plaintiffs in filing the present suit. I have already held that inordinate delay would not defeat an action for the grant of a temporary injunction especially where the use by the defendant of he mark was fraudulent. In any case, in my opinion, the delay in the present case cannot be regarded as inordinate. Assuming for the sake of argument that, as contended by the defendants, the plaintiffs came to know about the user by the defendants of the infringing mark in March, 1982, it is not as if he plaintiff slept over their rights for a number of years: It is to be seen that the plaintiffs' principal place of business is in Bombay while the defendant is a small businessman carrying on its business in Sadar Bazar, Delhi. The plaintiffs, in 1985, did file an application for cancellation of the registration of copy-right of the defendant. This amounted to first step being taken by it. The plaintiffs waited and within 3 years thereafter filed the present suit. The defendant must have known that it was adopting a mark which belongs to some one else. Any infringer who uses or adopts some one else's mark must be aware of the consequences which may follow. The defendants ran the risk in using a mark which belonged to some one else. It continued its business uninterruptedly for a number of years before any action was taken by the plaintiffs against it. Any growth after notice is at the risk and peril of the defendant. The defendant certainly had notice of application of the plaintiff having been filed against it in the year 1985 for cancellation of registration of the copyright. The defendant should have been warned at that stage, that the plaintiff is not likely to accept the user of its mark by the defendant. If the defendant continued to do business by using the impugned mark, it did so at its own peril. The continued user cannot be set up as a defence under these circumstances.”

19. The principles enunciated by the single Judge of the Delhi High Court, in our opinion are a complete answer to the defendants' plea on the ground of delay. Once it is established that there is visual and phonetic similarity, and once it is established that the defendants' adoption of the trade mark is not honest or genuine, then the consideration of any plea as to delay must be on the basis of a consideration whether there has been such delay in the matter as has led the defendants to assume that the Plaitiffs have given up their cotention and/or whereby the defendants have altered their position so that it would be inequitable to grant interim relief to stop them from using the trade mark until the suit is decided? In the instant case we do not find any great delay on the part of the plaintiffs between the correspondence and the taking of steps. Correspondence starts in October, 1988 and criminal action is taken in June/July, 1989 followed by the Suit in September, 1989. This cannot be regarded as substantial delay. Again, it is not the defendants case that by reason of the delay the defendants assumed that the plaintiffs were acquiescing in the user of the mark “Coriderm”. Indeed if the correspondence is properly read there is no warrant for any such assumption. At all times the plaintiffs' Advocates were thratening to take action and indeed action was taken immediately, that is, within three to four months after the letter of April, 1989. If that be so, then there is no delay whatever which will non-suit the plaintiffs or disentitle them from interim reliefs. Again between February, 1989 and July, 1989 we have no such averment by the defendants in the Affidavit-in-reply which would suggest that the defendants have altered their position or expended considerable amount for promotion of the trade mark ‘Coriderm’, which they felt that they could spend by reason of any inaction on the part of the plaintiffs. Mere lapse of time does not amount to laches. Lapse of time must be so considerable as to enable the Tribunal or the Court before which the plea is raised to come to the conclusion that by such lapse of time the defendants have changed or altered their position and/or by reason of which certain equities have resulted which would be improper to alter. In the instant case the plaintiffs have not acted with any undue delay. By reason Of such lapse of time the defendants have not altered their position nor any equities are shown to have come into existence by reason of which the defendants are required to be protected. In such background, there would be no question of altering the status quo or of the status quo not being altered by reason of any delay.

20. With respect to the learned single Judge, we are unable to accept the discussion to be found in paragraphs 7 to 9 of he impugned order.

21. One final point required consideration. According to the defendants Affidavit-in-reply, there were a number of similar dermatology products in the market ending with the suffix ‘Derm’. Six such products are enumerated in paragraph 6 of the said Affidavit-in-reply. It was suggested, which suggestion appears to have appealed to the learned single Judge, that ‘Curoderm’ and ‘Qriderm’ were in the market and that these marks are also very similar to ‘Quadriderm’. The argument was that if the plaintiffs have not objected to these two marks the plaintiffs are disentitled from objecting to or at any rate securing interim relief against the defendants' mark ‘Coriderm’. We find no substance in the plea. Apart from producing tubes and cartons and some bills the defendants have not shown the extent of the sales of these products. Indeed, at the most it can be assumed that two similar products are in the market in January, 1990. That will not, in our opinion, non-suit the plaintiffs or disentitle them to interim relief against the defendant. Further, at least, one of the two products, viz., ‘Curoderm’ can be safely assumed to be an invented word, the prefix emanating from the word ‘cure’ and with the common suffix ‘Derm’ pertaining to skin. The position in case of defendants' invention of their mark is totally different

22. When a Court is called upon to consider granting of interim reliefs, it has to consider several factors. Is the mark visually or phonetically similar? Are the plaintiffs' sales sufficiently large and extensive to require promotion? Have the plaintiffs acquiesced in the defendants user in such manner as to disentitle them for injunction by result of any equities having evolved in favour of the defendants?. Are there any other factors disentitling the plaintiffs from securing interim relief? On all these counts we are of opinion that the plaintiffs have made a strong prima facie case which has not been rebutted by the defendants. Indeed, the defendants's adoption of the mark appears to have been done with a view to taking advantage of the reputation acquired by the plaintiffs' mark ‘Quadriderm’. Indeed, one of the factors which must weigh with he Court is the interest of the general public which factor has been repeatedly mentioned by the Supreme Court in several of its decisions. On all considerations, in our opinion, the plaintiffs were entitled to injunction and we are unable to subscribe to the view of the learned single judge that by reason of delay the plaintiffs werd not entitled to have the status quo altered. In the result the Appeal is allowed and in addition to the injunction granted by the single Judge, there will also be injunction in terms of prayers (a) and (b) of the original Notice of Motion No. 3070 of 1989. Costs of the Appeal, like the costs of the Notice of Motion, will be costs in the cause.

23. In view of the Order passed by us disposing of the Appeal the Notice of Motion No. 680 of 1990 taken out by the Appellants in the Appeal does not survive and the same is directed to stand dismissed with no order as to its costs.