Khandelwal Laboratories Ltd. vs Fdc Limited
2001 Latest Caselaw 1222 Del

ORDER

A.K. Sikri, J.

1. The plaintiff is a company incorporated under the Indian Companies Act which is carrying on business, inter alia, of manufacturer and seller of pharmaceuticals and medicinal preparations. It claims to be a well known pharmaceutical company enjoying very high reputation for its products because of excellent quality and efficacy. Total turnover of plaintiff company for the year 2000-2001 was more than 35 crores. One of its drugs is under the Trade MarkCEFI. This medicine is used for the treatment of typhoid, lower Respiratory Tract Infection, urinary Tract Infection and OtIT is Media and contains cefixime. The plaintiff has filed present suit for permanent injunction restraining, passing off, delivery of infringing goods, rendition of accounts etc. against the defendant with the allegations that in relation to same medicinal and pharmaceutical preparations defendant has adopted the Trade Mark ZIFI which is phonetically similar to that of plaintiff's Trade Mark CEFI and, therefore, is bound to cause confusion in the minds of consumers as they may treat the defendant's goods as that of the plaintiff. Thus, according to the plaintiff, defendant's Trade Mark ZIFI being similar to Trade Mark CEFI, sale of medicines under the Trade Mark ZIFI by the defendant amounts to an act of passing of their goods as that of the plaintiff.

2. Facts are more or less admitted. It is the case of the plaintiff that in July, 2000 it conceived and invented the Trade Mark CEFI for its medicinal preparations. Application for registration of this Trade Mark was submitted to Trade Mark Registry on 17-8-2000. On 24-11-2000 the Food and Drug Administration granted permission to the plaintiff to manufacture the drug cefixime tablets USP 200 mg and cefixime Dispersible Tablets 100 mg and cefixime for Oral Suspension USP. On 23-4-2001 the plaintiff launched its preparations under the Trade Mark CEFI and CEFI DT as well as CEFI Dry Syrup. The plaintiff further claims that it spent huge amount in popularizing its said product through advertisements etc. and that because of well established and reputed pharmaceutical concern, the Trade Mark CEFI has also attained high reputation and goodwill for its products. During April, 2001-July, 2001 the plaintiff sold their products worth Rs. 1,99,61,290/-. It is further alleged that on 23-7-2001 plaintiff came across the defendant's product bearing the trade mark ZIFI-100 DT and ZIFI-200 which also contains cefixime and the two products being phonetically and deceptively similar to the trade mark CEFI, present suit is filed.

3. By order dated 1-8-2001 in IA. 6867/2001, the ex-parte ad-interim injunction order was granted restraining the defendants from using the trade mark ZIFI and/or any other trade mark deceptively similar to the plaintiff's trade mark CEFI in respect of medicinal and pharmaceutical preparations. The defendant, after it was served with the summons in the suit and notice in the aforesaid injunction application filed IA. 7146/2001 under Order XXXIX Rule 4 CPC for vacation of the said ex-part ad interim injunction granted on 1-8-2001 by alleging that plaintiff had obtained the injunction by making mis-representation. The opposition of the defendant to the grant of injunction is founded on the following submissions:

1. The defendant has a family of trade marks starting with the letter 'Z' including ZOCON, ZOSPAR, ZO, ZOXAN AND ZEFRICH. The adoption of the trademark ZIFI is bonafide and not driven by an attempt to copy or take undue advantage of the plaintiff.

2. The plaintiff's user is just about two months (i.e. 23rd April, 2001) prior to the date of institution of the suit. This is about the shortest user possible in an action for passing off.

3. The plaintiff's mark CEFI is derived from the Chemical compound or salt Cefixime and there are umpteen authorities on the proposition that where marks are derived from such pharmaceutical salts, these are weak trademarks. Here the plaintiff has taken the first four letters of the name of the salt and this is therefore a weak trademark [F. Hoffman La Roche Vs. Geoffrey Manners, 1982 PTC 335; Panacea Biotec Vs. Recon 1996 PTC 561].

4. Even prior to the plaintiff's adoption of the trade mark CEFI, there have been several other pharmaceutical companies using marks derived from the Chemical salt Cefixime, namely:-

- CEFO of Medley

- CEFIX of Cipla

- CEFO adopted by Alembic for the salt Cefuroxime

- CEFU adopted by Prem Pharma for the salt Cefuroxime

- CEFF adopted by Lupin for the salt Cephalexin

Others whose name appearing in the trade mark search reports given by the plaintiff's own attorney to the defendant two months prior to the date of launch of the plaintiff's project, include:-

- CEFEX of Parke Davis

- CEFIXE of Nicholos Piramal

- CEFOX of Siscon

- CIFEX of Orion

5. The bonafides of the defendants are clear from the fact that it obtained a clear search report as regards conflicts with CEFI from its Attorney. Further the packaging of both products are completely different.

6. The trademarks are different as the letter 'Z' is one of the highly distinctive letters in the English alphabet and has a powerful distinguishing capacity as held in Cadila Vs. Dabur 1997 PTC (17) 417 where the learned judge held:

"....the defendant has independently opted for 'Z' which is a highly distinct letter among all the syllables of the English language."

7. Quite apart from the above CEFI and ZIFI are pronounced differently and visually appear quite different particularly when pronounced in the Devnagri script and being scheduled drugs can only be purchased through a written prescription of a doctor or a registered medical practitioner and dispensed by a chemist or a registered pharmacist. Therefore, there are inherent checks and balances within the pharmaceutical industry which would ensure that the competing marks would not be confused.

On the other hand learned counsel for the plaintiff submitted that ex-parte injunction order dated 1-8-2001 warrants to be confirmed and the sole emphasis was on the phonetic similarity between the two trade marks. It was submitted that the argument that cefixime is a generic word was of no avail to the defendant inasmuch as defendant had not adopted the word CEFI from the aforesaid word cefixime. The examples of other companies using similar trade mark was also of no consequence as all those companies were using the word CEFI and combining the same with some other word for their products. On the other hand the trade mark used by the defendant, namely, ZIFI had no relationship with the generic word cefixime. Thus what needed to be examined was to whether there was phonetic similarity between the two trade marks, namely, CEFI and ZIFI and it was likely to cause deception. The comparison was not between two generic words. It was submitted that it was a clear case of similarity with same structure of word in respect of same medicine. In case of such phonetic similarity, it was argued that the Plaintiff was entitled to injunction and following judgments were cited in support of this:

1. . [TISCO : FISCO]

2. AIR 1986 Delhi 345 [DOUBLE : BUBBLE]

3. [CHARMIS : FORMIS]

4. 1987 PTC 47 [EXIDE : ROXIDE]

5. 1997 (28) Arb. LR 25 [CASTROL : BESTROL]

Relying upon the recent Supreme Court judgment in the case of Cadila Healthcare Ltd. Vs. Cadila Pharmaceuticals Ltd. IPLR 2001 APR. 87 it was submitted that there may be a bar on claiming trade mark rights in a generic word or a phonetic equivalent thereof but there is no bar in claiming trade mark right in a mark derived from the generic word. This emerges from the reading of CADILA Judgment" where the basic plea taken by the defendant was that the competing trade marks were "FALCIGO" and "FALICITAB" derived from "FALCIPHARUM", a disease of cerreberal malaria. There was nothing similar between the trade marks except prefix "FALCI" derived from the generic name "FALCIPHARUM". Despite the defense taken of the generic nature of the trade mark, the Supreme Court excluded the said plea to be taken into consideration in determining deceptive similarity between competing trade marks derived from generic names of the drugs or diseases. Hence, it is perfectly permissible in law. There is also no such bar under Trade and Merchandise Marks Act. It was also submitted that following case of Amritdhara Pharmacy Vs. Satya Deo Gupta the Supreme Court held that "the court is not to go into etymological meaning of the words used as trade mark. The reason being that such meanings are not known to the consumers". In the present case from claiming proprietary right in the trade mark "CEFI" on the ground that it is derived from the generic name of the drug "CEFIXIME". Such contention is against "CADILA judgment". The plaintiff is not claiming any trade mark right in the generic name "CEFIXIME". The mark "CEFI" is not a phonetic equivalent of the generic name "CEFIXIME". The layman or consumer would not know or is concerned with the salt used in the drug. "CEFI" is, therefore, a valid trade mark and is to be protected like any other trade mark. Reliance was also placed in the case of Win-Medicare Ltd. Vs. Somacare Laboratories 1997 PTC (17) 34 where "DICLOMOL" was held to be an inventive trade mark though derived from the salt diclophenyl sodium and paracetamol. It is a common practice in the drug industry to derive trade marks from the name of drug or disease. It was submitted that the law in respect of trade marks derived from generic drugs has been put to rest after the "CADILA Judgment". It was submitted that in this case the factor of "scheduled drug" has been considered as irrelevant by the Supreme Court which was also the law laiddown in the case of K.R. Chinna Krishna Chettiar Vs. Sri Ambal & Co., and another and in the case of Amritdhara Pharmacy Vs. Satya Deo Gupta . The other submission of learned counsel for the plaintiff was that the proprietary right in a trade mark is acquired by prior use irrespective of length of use (Century Traders Vs. Roshan Lal Duggar & Co. and others ) and that goodwill can be acquired within the short span of time (1998 PTC 698), which the plaintiff was able to prove in this case. The learned counsel concluded his submissions in the following manner:

a. Law does not prohibit coining a trade mark from generic name as long as the coined trade mark does not convey the same meaning as the generic name to a consumer.

b. It the trade mark is not itself a generic word or phonetic equivalent thereof, it is to be considered as a fancy trade mark which would be protected like any other trade mark.

c. While determining the deceptive similarity of competing trade marks, the letters derived from generic word and forming part of the trade mark are not to be excluded. The trade marks are to be compared as a whole.

d. The meaning conveyed by the trade marks, if not known to the consumer is an irrelevant factor. It is the phonetic similarity which is relevant consideration.

e. CEFI does not convey any meaning by itself unless explained. CEFI by itself is not generic word.

f. The trade mark CEFI and ZIFI are deceptively similar on account of phonetic similarity.

There is no quarrel about the propositions of law which are argued by either side. Of course, principles laid down by Supreme Court in Cadila case (supra) have to be kept in mind. However, one need not deal with the various arguments advanced by both the sides at this stage. Central issue, after all, is limited in its scope. Admittedly, the core issue to be examined is whether there is phonetic similarity between the two trade marks CEFI and ZIFI. After all the plaintiff's own case is founded on this argument. Therefore, it is this aspect which needs to be examined at this stage while considering the application for grant of ad-interim injunction. Before deciding this aspect, few salient facts are to be borne in mind. The plaintiff's trade mark CEFI is derived from Chemical bound cefixime as it is not in dispute that the drugs manufactured and sold by the plaintiff contained cefixime. It is also not in dispute that for same medicine many other pharmaceutical companies are using the trade marks derived from cefixime. Many of these companies launched their medicines in the market much prior to the launching of its product by the plaintiff. Therefore, the plaintiff cannot claim itself to be the first user of such a trade mark. On the contrary as per plaintiff's own showing its products under the trade mark CEFI was launched only in April, 2001. When there can be same medicinal products marketed by different companies with the use of CEF as part of the trade name, namely, cefo, cefix, cefu, ceff, ceffex, cefixe, cefox and cifex etc. which are more similar or nearer to the plaintiff's trade mark phonetically as well as alphabetically, and when all such trade marks can co-exist in the market without causing any deception or confusion it is beyond comprehension that the defendant's trade mark ZIFI which starts with alphabet-Z would cause any confusio of deception. Coupled with this, one has to keep in mind that the drug in question is a scheduled drug and can only be purchased through a written prescription of a doctor or a registered medical practitioner and dispensed by a chemist or a registered pharmacist. The argument of scheduled drug, by itself alone, may not be sufficient to dislodge the case of the plaintiff once the principle laid down in Cadila (supra) is kept in mind. However, when this aspect is considered along with other factors weighing favor of the defendant it assumes some significance at least. One cannot at this stage lose sight of the fact that defendant is not a fly-by-night type of company but also been able to sell the medicine in question to the tune of approximately Rs. 90 lakhs in 15 days i.e. 16-7-2001 to 31-7-2001. The defendant also claims that the price of its product is lowest in the industry and with a view to eliminate the defendant from the market the plaintiff has filed the present suit. It is also explained that defendant has a family of trade mark beginning with 'Z' which encompasses ZOXAN, ZOXAN-TZ, ZOXAN Eye and Ear Drops, ZOXAN Eye Ointment, ZOXAN-D Eye Drops, ZOSPAR, ZO ZO-T, ZOCON, ZOCON-T ZOCON Eye Drops, ZEFRICH. These claims are also not disputed by the plaintiff. Therefore, prima facie it appears that the use of trade mark ZIFI by the defendant for its medicine or products is not going to cause any confusion and/or deception in the mind of consumers. When there are many products in the market having similar name as that of plaintiff than that of the defendant, it would be improper to continue the interim injunction as the balance of convenience is also in favor of the defendant. The inconvenience and the loss which may be caused to the defendant is likely to be much more in case the injunction is continued than the so called inconvenience to the plaintiff if the following observations of Supreme Court in the case of Wander Ltd. & Anr. Vs. Antox India (P) Ltd. reported in 1990 (Supp) SCC 727:

"Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The objection of the interlocutory injunction, if is stated

"..is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favor at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the 'balance of convenience lies."

The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."

Accordingly, I.A. 6867/2001 filed by the plaintiff is dismissed and I.A. 7146/2001 filed by the defendant is allowed. Ex-parte ad interim injunction granted on 1st August, 2001 is hereby vacated.

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