* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on: 08.02.2010
% Judgment Delivered on: 18.02.2010
+ I.A.No.9140/2009 ( u/O 39 Rule 1&2 CPC) in
CS(OS)No.1307/2009
NNE PHARMAPLAN INDIA LTD.
...........Plaintiff
Through: Mr.P.V.Kapur, Sr.Adv.
with Mr.Manoj Arora,
Ms.Girija Krishan
Varma, Advocates.
Versus
M/S CGMP PHARMAPLAN PVT. LTD. & ORS.
........Defendants
Through: Mr.G.D.Goel, Sr.Adv.
with Mr.Devashis
Bharuka & Mr.Praveen
Kumar, Advocates.
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
1. Whether the Reporters of local papers may be allowed to
see the judgment?
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest?
Yes
INDERMEET KAUR, J.
1. Present suit is a suit for permanent injunction restraining infringement of trade name, passing off, delivery up, rendition of accounts/damages.
CS(OS) No.1307/2009 Page 1 of 21
2. Plaintiff is a company incorporated on 30.12.1997 under the Indian Companies Act 1956. The main objects of the company include:-
i- Business of technical and industrial consultants and engineers especially planning, consulting, engineering, plant and equipment........... related to pharmaceuticals, bio-technolocy, medical device/products and the health care industries. ii. To carry on business or vocation or acting has adviser and consultants on all matters and problem connected or related to pharmaceuticals, bio- technology, medical device/product and the health care industries including carrying out of researches, experiments....... to improve and modernize the existing or the new process or units.
iii. To enter into any arrangement or contract................ relating to pharmaceutical, bio- technology, medical device/produce and health care industries.
iv. To provide technical knowhow, render advice on planning development, research design, plant operation, provide procurement, construction and technical services.......... for and or relating to pharmaceuticals, bio-technology, medical device/product and the health care industries.CS(OS) No.1307/2009 Page 2 of 21
3. Parent company of the plaintiff was Pharmaplan GmbH having its head quarters at Germany. Parent company was acquired by NNE and thus changed its name to NNE Pharmaplan. Consequent to the acquisition of the parent company, plaintiff company also changed its name to NNE Pharmaplan India Ltd. on 27.6.2008.
4. Plaintiff is a leading engineering and consulting company focused exclusively on pharma and bio-tech industries. The entity NNE Pharmaplan has 26 subsidiaries all over the world and employs about 1500 people. Total turnover of the group worldwide is Euro 157.52 million.
5. Plaintiff has over the years established its name in the market and acquired a sufficient goodwill. For the financial year ending on 31.3.2008, it has recorded gross revenue of Rs.1453.55 lacs and profit after tax was Rs.224.54 lacs.
6. Defendant no.2 was an employee of the plaintiff company having been employed on 5.6.1998 as its project manager. He was closely involved in the execution of the projects of the plaintiff company. As per appointment letter he would treat as strictly confidential all information and documents that may come to his knowledge during the period of his services with the company; information and material provided to him or which CS(OS) No.1307/2009 Page 3 of 21 would have come into his possession from third parties connected with the company were also to be treated as confidential. This was in terms of the Invasion and Proprietary Information Agreement dated 22.08.2003.
7. On 11.05.2009 services of defendant no. 2 were terminated. His claims were fully and finally settled on 22.06.2009. On 07.07.2009 four employees of the company working on various projects tendered their resignation. On enquiry it was revealed that all these persons had been solicited by defendant no. 2 to join the services of defendant no. 1.
8. Further inquiry revealed that defendants no. 2 and 3 who are brothers had incorporated a company on 06.07.2009 under the name of cGMP Pharmaplan Pvt. Ltd. i.e. defendant no.1
9. Objects of defendant no. 1 are similar to the projects of the plaintiff company. The main objects of defendant no. 1 inter alia read as under :-
(i) To provide consultancy services for setting up and upgradation of factories relating to pharmaceuticals, food FMCG, hospitals etc. to carry on business as planners .......contractors for various factories related to pharma and health care.
(ii) To carry on all or any of the business in India or elsewhere of manufactures, processors, packers, CS(OS) No.1307/2009 Page 4 of 21 importers, exporters, buyers, seller, distributors, agents, wholesale and retail dealers in all kinds of pharmasuticals, surgical, bulk drug, medicals, cosmetics, heavy and fine chemicals, toilet requisites sera, surgical appliances, equipments and machineries, medical and x-rays equipments, laboratory chemicals...... of whatsoever kind for abovesaid purposes.
(iii) To act as consultants and planners for designing, engineering and master planning. To provide related services ........to sectors like pharmasuticals, food FMCG hospital etc.
(iv) To carry on the business of bottling, packing, re-packing, processing of capsules, syringes, injections, ointment, medicines, medical and surgical equipments, devices and disposals ............to end provide consultancy for the same.
10. It is stated that the plaintiff had already been registered as NNE Pharmaplan India Ltd. Under Section 20(2) of the Indian Companies Act, no company shall be registered in a name which is identical with or resemble the name of the company in existence. The name of defendant no. 1 cGMP Pharmaplan Pvt. Ltd. is misleading to the customers of the plaintiff in view of the fact that the business of both companies is the same.
CS(OS) No.1307/2009 Page 5 of 21
11. It is not in dispute that an application ;under Section 22 of the Companies Act is pending adjudication with regard to the similarity in the names of the two companies; plaintiff has pleaded that defendant no. 1 be directed to change its name.
12. Erstwhile of the plaintiff company i.e. Pharmaplan GmbH had filed an application for the registration of trademark „PHARMAPLAN‟ under Trademark Act in the year 2006. The holding company of the plaintiffs i.e. NNE Pharmaplan in December, 2007 made an application for registration of same trademark „PHARMAPLAN‟ under Class 37 and Class 42 i.e. with regard to organization and business consultancy for the engineering, implementation, modernization and optimization of production and research development facilities as well as production process for pharmaceutical, biotechnological, medical devices and GMP oriented industries worldwide.
13. By way of the present application a prayer is sought that the defendant be restrained from using the business name of the company i.e. „PHARMAPLAN‟ which is attached to the business house of the plaintiff company.
14. Reliance has been placed upon Shree Sainath Industries Vs. Sainath Auto Industries 2004(28) PTC 377 (Guj). It is submitted that the facts of the instant case are paramateria to CS(OS) No.1307/2009 Page 6 of 21 the said case. In the said case the defendant who was earlier a partner with the plaintiff firm had started his own business under the same trade name as that of the plaintiff; the parties having same line of business the ensuing customer was led to believe that the products purchased from the defendant were actually the products of the plaintiff; he was restrained from doing so.
15. Reliance has also been placed upon Laxmikant V.Patel Vs. Chetanbhat Shah & Anr. 2002(24) PTC 1 (SC); it is submitted that common law business practice does not permit another to carry on his business in such a way as to persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith.
16. (India TV) Independent News Service Pvt. Ltd. Vs. India Broadcast Live Lic & Ors. 2007 (35) PTC 177(Delhi) has been relied upon by the plaintiff to substantiate his submission that the trade name „Pharmaplan‟ has come to be associated with the business of the plaintiff company and cannot be termed as descriptive as is the defence taken by the defendant.
17. The written statement and the reply to the pending application have made counter averments. It is stated that name of defendant no. 1 i.e. cGMP Pharmaplan Pvt. Ltd. is CS(OS) No.1307/2009 Page 7 of 21 distinct and clearly distinguishable from the name of the plaintiff company and this is evident from the fact that the first word used in the name of plaintiff and the defendant company are both entirely different. Plaintiff is associated with the compendious term NNE Pharmaplan and the acronym NNE is the most significant component of that term; there is no intent to mislead any prospective client. Term „Pharmaplan‟ originates from word „pharmaceutical‟ which is related to the pharmaceutical industry and the later word „plan‟ is also descriptive of the word „Pharmaplan‟. There are other two companies also which are using the name of Pharmaplan. These companies are two Indian Companies i.e. the Pharmaplan India Pvt. Ltd and Pharmaplan Technologies Pvt. Worldwide; two international companies are also using this name Pharmaplan. It is absurd on the part of the plaintiff to assert that it can claim monopoly over the term „Pharmaplan‟. Certificates issued by the clients of the defendant have revealed that there is no confusion or deception in the class of the customer of the plaintiff who is an educated and intelligent category of clients associated with the products /services sought to be rendered by the plaintiff. This customer is not the general public at large as CS(OS) No.1307/2009 Page 8 of 21 is also clear from the averments made in para no.19 of the plaint; it is the specialized class of customer.
18. Reliance has been placed upon Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd (2001) 5 SCC 73. It is submitted that while deciding the question of deceptive similarity the class of purchasers who are likely to buy the goods is one of the most relevant factors which has to weigh in the mind of the Court while granting or refusing an ad interim injunction. In the instant case this class of purchasers/ to whom services are to be rendered is an intelligent class.
19. Reliance has also been placed upon S.M.Dychem Ltd. Vs. Cadbury ( India) Ltd. (2000) 5 SCC 573 where these principles have been reiterated. Unless and until the pre-conditions requisite for the grant of a temporary injunctions are made out by the plaintiff, no such order should be passed.
20. Admittedly, trade mark of neither party has been registered. On 17.12.2007, NNE Pharmaplan had applied for the registration of trademark „Pharmaplan‟ in class 35, 36, 37, 41 and 42. Earlier its holding company i.e. Pharmaplan GmbH had applied for the registration of the same trademark. The defendant company i.e. cGMP Pharmaplan Pvt.Ltd. had applied for registration of the trademark in class 42 on 6.7.2009 before CS(OS) No.1307/2009 Page 9 of 21 the Trademark Registry. Applications of both parties are pending.
21. This court is not dealing with an application for infringement of the trademark. This is a case of passing-off. In view of Section 27 (2) of the Trade and Merchandise Marks Act, 1958, in the case of unregistered trade marks, a passing-off action is maintainable. The passing-off action depends upon the principle that nobody has a right to represent his goods as the goods of somebody. In other words, a man is not to sell his goods or services under the pretence that they are those of another person.
22. What is contended and has to be answered by this court is as to whether the names of the two companies i.e. of the plaintiff company "NNE Pharmaplan India Ltd." is deceptively similar to the name of the defendant company i.e. "cGMP Pharmaplan Pvt. Ltd." in use of the common mark „Pharmaplan‟; whether the goods of the plaintiff can be passed-off as the goods of the defendant.
23. In Cadila Health Care Limited (supra), the guidelines to be considered by a court in deciding a question of deceptive similarity include inter alia the following factors: CS(OS) No.1307/2009 Page 10 of 21
(a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks i.e. both words and label works.
(b) The degree of resembleness between the marks, phonetically similar and hence similar in idea.
(c) The nature of the goods in respect of which they are used as trade marks.
(d) The similarity in the nature, character and performance of the goods of the rival traders.
(e) The class of purchasers who are likely to buy the goods bearing the marks they require, their education and intelligence and the degree of care they are likely to exercise in purchasing and/or using the goods.
(f) The mode of purchasing the goods or placing orders for the goods.
(g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.
24. The object clause of both the companies i.e. the plaintiff and the defendant evidence that the business of the two companies is by and large similar; i.e. they act as consultants, engineers and technologists for pharmaceutical foods and other related products of the pharmaceutical industry. Both the parties have also sought registration under the same class; whereas the defendant has sought the registration of his trade mark under class 42 alone, the plaintiff has sought registration under other classes as well.
25. The word „pharmaplan‟ is disjunctive. It comprises of two words „pharma‟ and „plan‟. Both have a dictionary meaning. CS(OS) No.1307/2009 Page 11 of 21 The word „pharma‟ necessarily connotes its distinct relation to pharmaceutical; whether it‟s the pharmaceutical products or other matters related to the pharmaceutical industry. „Pharma‟ is noun comprising collectively of pharmaceutical companies. Word „pharma‟ is a part and parcel of the word „pharmaceutical‟, it is also a part and parcel of words „pharmacist‟ and „pharmacy‟, all these words necessarily denote their relation with medicine; whether it be in its preparation, use or its sale or whether it relates to the person who dispenses such medicine. The word „pharma‟ is a description of the pharmaceutical industry and all other matters related to it.
26. The word „plan‟ necessarily connotes a preparation, a pre- devised strategy, a scheme of action, a design and an organized/detailed method according to which something is to be done. This word by its dictionary meaning is also essentially descriptive in nature.
27. The word „pharmaplan‟ as used thus gives the impression that it is a scheme or a proposed method of dealing with the pharmaceutical products and other matters related to the pharmaceutical industry.
28. In so far as descriptive names are concerned, the position at law is that as in the case of geographical names, a descriptive CS(OS) No.1307/2009 Page 12 of 21 mark may be granted protection where the same has assumed a secondary meaning which identifies it either with particular goods or services or as being from a particular source.
29. In Godfrey Phillips India Ltd. v. Girnar Food and Beverages (P) Ltd., 2005 (30) PTC 1 the trademark involved was of a „SUPER CUP‟ in respect of tea. It had been held that protection can be given to individually descriptive words if they have acquired a distinctiveness and significance to be associated with the business of the company.
30. In Living Media India Ltd. v. Jitender V.Jain and Anr. 2002 (25) PTC 61 (Del) on the use of words „AAJ TAK‟ it was held that the words though individually descriptive and being dictionary words may not be monopolized by any person but their combination does provide protection as a trademark if it has been in long, prior and continuous user in relation to particular goods manufactured or sold by a particular person and by virtue of such user, the mark gets identified with such person; this would be irrespective of facts whether this combination is descriptive in nature and even has a dictionary meaning. In this case it was held that in such a case any person can use any of the two words as their trade mark or mark but has to be prohibited from using the words as a combination. CS(OS) No.1307/2009 Page 13 of 21
31. Plaintiff has thus to establish a long, prior and a continuous user in relation to this particular goods or services which are being used by him in order that such goods and services are identified with him i.e. a continuously long and prior user in relation to the mark „Pharmaplan‟ It may however be noticed that the plaintiff has not produced any such material on record to establish that his mark has acquired any secondary meaning which is a pre-condition for granting protection to descriptive names. No sale promotion/advertisement or any like document has been placed on record by the plaintiff to show that the mark „pharmaplan‟ leads its consumer to believe that such goods/services offered are those of the plaintiff company alone and not of any other person. Except for the audited statement of account for the year March, 2008 the plaintiff has not filed any other document.
32. In M/s Online India Capital Co.Pvt. Ltd. and Anr. v. M/s Dimension Corporate, (2000) V AD (Del) 860 the plaintiff company was running the website „www.mutualfundsindia.com‟ while the defendant had created a similar website „www.mutualfundindia.com‟. The contention was that „mutual fund‟ is a generic term and no monopoly can be claimed in relation thereto by any person. It was observed that the CS(OS) No.1307/2009 Page 14 of 21 expression „mutual funds‟ forming part of the plaintiff‟s domain name is the description of the services being offered by the plaintiff. The material placed on record failed to show that the said expression had acquired a secondary meaning which is a precondition for grant of protection to a descriptive name. It was thus held that no prima facie case was made out for the grant of an interim injunction prayed for by the plaintiff.
33. In Manish Vij and Ors. v. Indra Chugh and Ors., AIR 2002 Del 243 : 2002 (24) PTC 561 (Del), it was observed:
"..... that a trademark is a descriptive if it imparts information directly which may concern some characteristic or ingredient of the product. The term "kabari bazaar" is descriptive and requires no imagination to connect the same with second hand goods. It was further observed that it is true that descriptive words can be used at times as trademarks where they acquire distinctiveness and signify that particular goods are manufactured or services rendered by a particular person, it may be said that the mark has acquired a secondary meaning. This can be demonstrated by proving advertisements, promotions and sales. It was found that there was no such material to show that the website of the plaintiff had acquired such a secondary meaning."
34. In the instant case, there is no such material on record to establish that the mark „pharmaplan‟ which is essentially a descriptive word has acquired a secondary status connecting it with the goods/services offered by the plaintiff. CS(OS) No.1307/2009 Page 15 of 21
35. The plaintiff company is „NNE Pharmaplan India Ltd.‟. The defendant company is „cGMP Pharmaplan Pvt. Ltd.‟; business of two companies is by and large the same but the logo and the formation of the words of the plaintiff company have distinct attributes. The logo of the plaintiff company reads as: „nne pharmaplan‟ The alphabets „nne‟ are in small letters. The emphasis is essentially on the prefixed words i.e. on „nne‟; alphabet „n‟ is distinct and there is no curve on the top of the alphabet „n‟; „Pharmaplan‟ follows later. On the other hand, the logo of the defendant company reads as:
„cGMP Pharmaplan Consulting, Engineering and Validation‟ The emphasis here is on the words „cGMP‟; the alphabets are in italic form. The colouring of the plaintiff‟s logo which is distinctly in black colour is again a marked variation with the mark of the defendant which is in lighter shade and there is no filling in the alphabets; visual impresion mark of both names is markedly and absolutely different. There is no scope of confusion or deception to the proposed customer.
36. Section 2 (1) (d) of the Trade and Merchandise Marks Act, 1958 defines the words „deceptively similar‟; it refers to CS(OS) No.1307/2009 Page 16 of 21 situation where one is „deceiving‟ others or „confusing‟ others the distinction between the words „deceive‟ and „confuse‟ has to be kept in mind. In a given case if the essential features have been copied, the intention to deceive or to cause confusion is not relevant in an infringement action. Even if, without an intention to deceive, a false representation is made, it can be sufficient. Similarly, confusion may be created unintentionally but the purchaser of goods may get confused for the reason that the purchaser does not have knowledge of the facts which can enable him to get confused.
37. In this context the guidelines laid down in the case of Cadila Healthcare (supra) to be considered by the courts in an action for passing-off become relevant. The class of the purchasers who are likely to buy the goods is a very relevant factor and due weightage has to be given to this factor while deciding an application of this nature.
38. In the instant case, defendant has detailed the process by which a project of such a nature can be acquired. It is a long drawn out process starting from the sending of the company‟s profile to the finalization of the contract. Each prospective client has specific requirements for their projects in view of their individual business needs; based on these requirements a CS(OS) No.1307/2009 Page 17 of 21 plan is customized for the prospective client. Process is need- based and elaborated, spreading over months. Consumer i.e. customer of such products/services which are rendered by the plaintiff are customers from the intelligent and educated category. It is not the public at large who would be buying the goods/services offered by the plaintiff. Contracts are awarded for conceptualization, engineering and validation of pharmaceutical products, only after due deliberations and intense discussions; only then will the customer accept the services of the plaintiff. They are not shelf off goods which are being sold; but multi crore pharmaceutical projects which are to be awareded. The clients for such services are entrepreneurs who are in the process of setting up pharmaceutical plants/units i.e. big time pharmaceutical companies. Such individuals who come for consultancy would be experts in their filed with years of experience. Such a class of customer is not the ignorant public at large but is high end profile customer who can distinguish the goods of the plaintiff from the defendant. The kind of customer in such cases is the customer who knows the distinguishing characteristics of the plaintiff‟s goods, those characteristics which distinguish his goods from other goods in CS(OS) No.1307/2009 Page 18 of 21 the mark. He is unlikely to be confused with the use of the words „Pharmaplan‟.
39. In support of this proposition the defendant has also placed on record certificates from some of his its clients which include Kemwell Pvt. Ltd., Famy Care Ltd. and ZYG Pharma Private Limited. The aforestated companies had contracted with the defendant i.e. cGMP Pharmaplan Pvt. Ltd. for engineering and validation services for their pharmaceutical products as therein mentioned. These documents clearly state that the contract has been awarded to the defendant after representation and discussion; it further recites that while awarding the contract the aforestated customers were aware that cGMP Pharmaplan Pvt. Ltd. is a separate and newly formed distinct entity different from NNE Pharmaplan India Ltd. The customer of the defendant is thus fully aware that he is dealing with the services offered by the defendant who is a corporate entity distinct and different from the corporate entity of the plaintiff. For such a customer there is little chance of confusion or deception.
40. Defendant has also placed on record the existence of two Indian and two foreign companies employing the word „pharmaplan‟. These have been downloaded from the internet. CS(OS) No.1307/2009 Page 19 of 21 Counsel for the plaintiff states that he has instructions that he would be proposing relevant action against the said companies. It is relevant to state these documents had been filed on 5.10.2009; till date admittedly no action has been forthcoming by the plaintiff.
41. In dealing with an application of such a nature all three preconditions i.e. a prima facie case, an irreparable loss and balance of convenience has to be established by the plaintiff before he can obtain an order. None of the aforestated ingredients have been fulfilled by the plaintiff. There is no prima facie case made out in his favour. The names of the plaintiff and the defendant company are in no manner similar; emphasis is essentially on the prefixed words „NNE‟ of the plaintiff and „cGMP‟ of the defendant. They are not only worded differently, the manner and the nature of the composition of alphabets is also distinct; they are not likely to cause confusion or deception in the minds of the proposed customers to whom the defendant is offering its services. Such a customer being a high profile customer and not an ordinary lay person, no irreparable loss is also likely to be suffered by the plaintiff and this is also evident from his own action. In October, 2009, the plaintiff became aware that two other Indian companies were CS(OS) No.1307/2009 Page 20 of 21 using the name „pharmaplan‟; admittedly no action has been taken against them till date. Balance of convenience also does not lie in favour of the plaintiff; it in fact lies in favour of the defendant as the business of the defendant company would come to an entire stand still if this order is made in favour of the plaintiff.
42. There is no merit in the application; it is dismissed.
(INDERMEET KAUR) JUDGE February 18, 2010 nandan/rb CS(OS) No.1307/2009 Page 21 of 21