Pfizer Enterprises & Anr. vs Dr.H.R.Manchanda & Anr.
2008 Latest Caselaw 1037 Del

                     IN THE HIGH COURT OF DELHI AT NEW DELHI

                             CS(OS) 641/2007 & IA 3995/2007

                                                          RESERVED ON: July 7, 2008
                                                          DECIDED ON : July 16, 2008

Pfizer Enterprises & Anr.                 ...         Plaintiffs
                                     THROUGH: Mr. Ankush Mahajan, Advocate

                             VERSUS

Dr.H.R.Manchanda & Anr.                   ...           Defendants
                                     THROUGH: Mr. Ajay Sahni, Ms.Vrinda Bajaj, Advocates.


Coram: Mr. Justice S. Ravindra Bhat
       1.

Whether reporters of local papers may be allowed to see the judgment? Yes

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in the Digest? Yes

% 16.07.2008

Mr. Justice S. Ravindra Bhat:

1. This order proposes to dispose of the objection to maintainability of this suit, on the

ground of the court lacking territorial jurisdiction, raised by the defendant. The present suit

has been filed to restrain the defendants from infringing the trademark of the plaintiffs' and

passing off their goods as the plaintiffs' goods. The plaintiffs have also sought rendition of

accounts and delivery up of goods.

CS(OS) 641/2007 1 of 12

2. The first plaintiff is a company organized under the laws of Luxembourg. The second

plaintiff with its registered office in Mumbai, is its subsidiary in India. It is averred that the

plaintiffs form part of the fastest growing research oriented pharmaceutical companies and

have been one of the leading healthcare companies in the world. It is also averred that the

plaintiffs set up their India operation in the year 1950 in Bombay.

3. Apart from a wide range of products marketed in India by the plaintiffs, they also

market in India 'Dalacin', a product, which is the essential component of 'Dalacin C' and

'Dalacin T'. Dalacin is a highly sought after antibiotic used to treat infections in different

parts of the body caused by bacteria, the active ingredient of which is Clindamycin. It is

averred that they market chemical compositions Clindamycin hydrochloride and

Clindamycin phosphate under the mark Dalacin C. They aslo state that the mark 'Dalacin C'

was first adopted by the Upjohn Company in 1968 in India; (whose name was later changed

to Pharmacia & Upjohn Company in 1996). The mark was later assigned to Pharmacia

Enterprises SA in 2002, which was subsequently renamed Pfizer Enterprises SARL, the first

plaintiff. It is averred that the aforesaid trademark is a fanciful and coined word having no

denotative meaning and is therefore, a distinctive mark. Further, it is stated that the first

plaintiff is the proprietor of the aforesaid trademark by virtue of its priority in adoption,

continuous and extensive use, and widespread advertisement. Both 'Dalacin C' and 'Dalacin

CS(OS) 641/2007 2 of 12 T' have been registered in India; No. 247943 and No. 389213 respectively. The second

plaintiff is the authorized user of these trademarks in India. They aver that due to the

extensive use and the reputation of the plaintiffs, the aforesaid trademark has come to be

exclusively identified with the plaintiffs.

4. It is further averred that the second defendant, a company carrying on its business

activities from Mumbai, also manufactures an antibacterial product having Clindamycin as its

active ingredient. The plaintiffs state that in March 2007 they were shocked to discover from

their sources as well the defendant's website that the second defendant offers

pharmaceutical compositions Clindamycin hydrochloride and Clindamycin phosphate under

the mark 'Dalcinex', in both capsule and injection form as the plaintiffs do. The plaintiffs

allege that such use of the mark Dalcinex by the defendant amounts to infringement and

because the defendants want to dishonestly want to appropriate the goodwill of the

plaintiffs, also amounts to passing off. It is averred that the defendant's mark is phonetically

and visually similar to that of the plaintiffs', in relation to an identical product and therefore,

would cause confusion in the minds of the public. It is further stated that the plaintiffs' mark

being an arbitrary and unique collocation of words, is distinctive, and therefore, cannot be

adopted by the defendants in such dishonest fashion.

5. The plaintiffs also submit that this Court has the jurisdiction to entertain the present

CS(OS) 641/2007 3 of 12 suit, by virtue of Section 134(1) of the Trade Marks Act, 1999 (hereafter 'the Act'), as the

plaintiffs' product 'Dalacin C' is available for sale and distribution in Delhi and also because

the defendants' product is also available for sale in Delhi. Therefore, it avers that part of the

cause of action has also arisen within Delhi.

6. The defendants allege that none of the plaintiffs are the registered proprietors of the

trademarks 'Dalacin C' and 'Dalacin T' within the meaning of section 2(i)(v) of the Act and

hence no suit for infringement is maintainable. They also allege the assignment deeds

produced by the plaintiffs are not valid and cannot be relied upon. They aver about having

applied for registration of the mark Dalcinex which is pending since the year 2004, and also

having commenced manufacturing in 2004. Therefore, they aver the present suit if hit by

delay and latches.

7. Mr. Ajay Sahni, learned counsel for the defendants contended that the suit is not

maintainable in this Court, since both the plaintiffs and the defendants carry on business

outside the jurisdiction of this Court. He submits that this position is admitted by the

plaintiffs in para 10 of the plaint. He submits that no documentary evidence has been filed

on record to even prima facie establish that the product of the defendants, on the date of

filing the suit was available within the jurisdiction of this Court. He also drew the attention

of this Court to the fact that the plaintiffs have not averred or produced any document as to

CS(OS) 641/2007 4 of 12 how the defendants' product including the packaging has been procured in Delhi. He

submitted that the suit ought to be filed either in the place where the defendants resides and

carries on business or the place at which the cause of action arises. Placing reliance on Dabur

India v. KR Industries 2008 (37) PTC 332 (SC), which affirmed this Court's finding, on

jurisdiction it was argued that unless the cause of action arises within territorial limits of this

Court, that is, and unless the defendants' allegedly infringing products are sold in Delhi, this

Court cannot exercise jurisdiction. He also argued that when both parties are from the same

place, the suit should be filed there and the tendency of the plaintiffs to file the case

elsewhere should strongly deprecated. In this regard he relied on Asst. Collector Central Excise,

Chandan Nagar v. Dunlop India Ltd., (1985) 1 SCC 260. Further, placing reliance on Kensoft

Infotech v. Krishnswami, 2007 (35) PTC 627, he submitted that since the proceedings are filed in

a forum non conveniens in relation to the defendants, the Court may in its discretion return

the plaint. He urged that Court must reject the plaint, since the plaint does not disclose a

cause of action.

8. Learned Counsel also sought to address the Court on the validity of the assignment

deed; how the deed was insufficiently stamped and was also invalid under section 45 of the

Act. He submitted that curiously, copies of the certificates of renewal of trademark from the

year 1982 do not have the name of the proprietor on them. Further, he submitted that the

plaintiff failed to establish the ingredients for an action of passing off. Finally, he argued that

where the mark has been coined using the alphabets of the generic salt, or ingredient no

exclusive right could be asserted.

CS(OS) 641/2007 5 of 12

9. Mr. Ankush Mahajan, contended, on the other hand that there are clear averments in

the suit about the cause of action having arisen within jurisdiction of the Court, and the

territorial jurisdiction of the Court. Counsel contended that after commencement of the

Trademark Act, 1999, there has been a shift in the law and that by virtue of Section 134, the

plaintiff has the choice of suing the defendant, even if some business is carried on by it (the

plaintiff).

10. It was contended that to determine whether a court has jurisdiction, all that can be

seen is whether there is sufficient averment in the plaint. In this case, the plaintiff had relied

on averments to allege sufficient nexus for the court to exercise jurisdiction over the cause.

Counsel submitted that the description of the threat of infringement, perceived by the

plaintiff was sufficient nexus for exercising jurisdiction. He relied on the judgment of this

Court reported as Pfizer Products Inc Vs. Rajesh Chopra 147 (2007) DLT 300 as well as the

previous decision in Pfizer Products Inc. Vs. Rajesh Chopra 2006 (32) PTC 301. Counsel also

relied upon the decisions reported as Exphar SA -vs- Eupharma Laboratories Ltd. 2004 (28)

PTC 251 (SC) and Intas Pharmaceuticals -vs- Allergan Inc 2006 (32) PTC 272 (Del).

11. Learned counsel contended that sale of the defendant's goods is something that

cannot be denied. Being engaged in Pharmaceutical business, it would be inconceivable that

the second defendant carries no business within jurisdiction of this Court. It was also

CS(OS) 641/2007 6 of 12 submitted that since the defendants have entered appearance, and are contesting

proceedings, it would not be appropriate at this stage to return the plaint, on the ground of

lack of jurisdiction. Learned counsel relied upon the documents filed and submitted that the

defendants are marketing their products and advertising through the Internet. He relied on a

copy of the print out of the website www.cipla.com and submitted that entire product range

of the defendants is listed on such website. It was submitted that the website can be accessed

from Delhi and thus, this Court possesses jurisdiction. Reliance was placed upon judgments

of this Court including Casio India Ltd. v. Ashita Telesystems Pvt. Ltd. (2003) 27 PTC 265 (Del)

as well as the India TV Independent News Pvt Ltd. v. India Broadcast Live LLC 2007(35) PTC 177

(Del).

12. The Court had listed the matter for consideration of the interlocutory application for

ad interim relief; the defendant at that stage raised a preliminary objection to maintainability.

The court therefore, heard arguments on the maintainability of the suit on grounds of

territorial jurisdiction and reserved orders.

13. It is well settled that the court has to see only the contents of the plaint to decide

whether the suit discloses a triable cause of action, and whether this court has jurisdiction.

The Supreme Court in Liverpool & London SP & I Asson. Ltd. v. MV Sea Success, (2004) 9 SCC

512, held that for the purposes of Order 7 Rule 11 the Court should not only look at the

averments in the plaint but also examine into documents filed along with, in view of Order 7

CS(OS) 641/2007 7 of 12 Rule 14. In Sopan Sukhdeo v. Assistant Charity Commr., (2004) 3 SCC 137, the Supreme Court

emphasized that a meaningful, and not formal reading of the plaint has to be adopted so as

to nip in the bud any clever drafting of the plaint. Therefore, in order to decide the issue of

jurisdiction and to assess whether the plaint discloses a cause of action, only the contents of

the plaint along with the documents filed are relevant.

14. The following fora are provided by Section 20 of the Code of Civil Procedure, 1908,

(hereafter the 'CPC') Section 62(2) of the Copyright Act, 1957 and section 134 of the Trade

Marks Act, 1999, for the adjudication of trademark disputes. First, the place at which the

defendant actually and voluntarily resides or carries on business. Second, the place at which

the cause of action, wholly or in part arises. Lastly, by an amendment to the Copyright Act

and the Trade Marks Act, the suit can be instituted at the place where the plaintiff resides

and carries on business. The Explanation to section 20 of the CPC makes it clear that the

place at which a corporate entity carries on business is either the place at which it has its sole

or principle office or where it has a subordinate office.

15. In Indian Performing Rights Society v. Sanjay Dalia, 143 (2007) DLT 617, this Court,

relying on Loknath Prasad Gupta v. Bijay Kumar Gupta, 57(1995) DLT 502, held that the

expression 'carries on business' in section 62 of the Copyright Act has the same meaning as

in Section 20 of the CPC. It was further held that the mere existence of a branch office in

Delhi would not mean that the plaintiff carries on business in Delhi. The plaintiff would be

deemed to carry on business at a branch office only if a cause of action had arisen in Delhi.

A well established principle of law is that to amount "to carrying on business" in a certain

CS(OS) 641/2007 8 of 12 place, the essential part of the business must take place in that place. (Dhodha House v. SK

Maingi, (2006) 9 SCC 41; Nedungadi Bank v. Central Bank of India, AIR 1961 Ker 50; Bharat

Insurance Co. v. Vasudev, AIR 1956 Nag 203).

16. In Dodha House, the Supreme Court observed that it was possible that the goods

manufactured by the plaintiff were available in the markets in Delhi or they are sold in Delhi,

but that by itself would not mean that the plaintiff carries on any business in Delhi. In

SectorTwenty-one Owners' Welfare Association v. Air Force Naval Housing Board, 65 (1997) DLT 81

(DB) it was held that a trivial or insignificant part of the cause of action arising at a particular

place would not be enough to confer jurisdiction on the court to entertain the lis. Citing a

number of precedents the court held that the emphasis had shifted from the residence or

location of the person or authority sought to be proceeded against, to the situs of the accrual

of the cause of action. In H.P. Horticulture Produce Marketing and Processing Corpn. v. M.M

Breweries, AIR 1981 P&H 117, in relation to action for passing off the Court observed as

follows:

"In a case of present nature, the cause of action partly or wholly can arise in a given jurisdiction only if it is the defendant who is proved to have directly made sale of the goods under the impugned trademark (within a given court) not to an individual customer but to a distributor or a wholesaler or retailer and that such a sale should be at a commercial scale."

17. In Gold Seal Engineering Products v. Hindustan Manufacturers, AIR 1992 Bom. 144, it was

held that a suit for passing off could not be filed in Bombay if the defendants carry on

business in Calcutta and that supply of goods to Delhi was on a commercial basis. In Gupta

Brothers Conduit Pipe Manufacturing Co. v. Anil Gupta, (2001) 24 PTC 159, this Court held that

CS(OS) 641/2007 9 of 12 since neither plaintiff nor the defendants have offices in Delhi and are not carrying on

business in Delhi, the suit had to be returned due to lack of jurisdiction. The court held, in

Haryana Milk Foods v. Chambel Diary Products, (2002) 25 PTC 156 that for the purposes of

ascertaining territorial jurisdiction the entire plaint has to be taken into consideration. In that

case since the plaintiff could not prove that the defendant had a office in Delhi or carried on

business in Delhi, the Court held that it did not have territorial jurisdiction to adjudicate the

matter. In Dabur India Limited v. KR Industries, (2006) 33 PTC 348, a Division Bench of this

Court held that since the defendant was from Andhra Pradesh and since there was no

documentary evidence to show that it was selling its goods in Delhi, this Court did not have

territorial jurisdiction. This decision has been recently affirmed by the Supreme Court in

Dabur India v. KR Industries 2008 (37) PTC 332 (SC).

18. The plaint in the present case shows that both the second plaintiff and the second

defendant have their offices in Mumbai and undeniably carry on their business in Mumbai

too. The plaint does not disclose either of them having their offices in Delhi. The relevant

parts of the plaint are extracted below :

"16. The cause of action arose in favour of the plaintiff in the month of March 2007, when they came to learn of the availability of the Defendants' products in the market. The said Defendants are very much continuing with their infringing activity. The cause of action again arose when the plaintiff's visited the website of the Defendants located at http://www.cipla.com/ and found that the Defendants are advertising a pharmaceutical drug under the impugned mark DALCINEX having Clindamycin as its active ingredient. The cause of action is thus a continuing one and will continue to subsist until the said Defendants are restrained permanently by an order of permanent injunction passed by this Hon'ble Court.

17. This Hon'ble High Court has necessary jurisdiction to entertain and try the present Suit, by virtue of Section 134 (1) of the Trade Marks Act, 1999 as the Plaintiffs'

CS(OS) 641/2007 10 of 12 products, including DALACIN C, are available for sale & distribution within the jurisdiction of this Hon'ble Court. Further, the Defendants' products under the impugned mark are available for sale in Delhi and therefore, the cause of action has also arisen within the jurisdiction of this Hon'ble Court."

The plaintiff far from establishing that the defendants carry out the essential parts of their

business from Delhi has not been able to demonstrate that the defendants' goods are in fact

sold in Delhi. Even the sample, which is produced with the list of documents annexed to the

plaint and relied upon does not disclose whether the defendant's goods are sold; no invoice

of sale, from Delhi is placed on the record. The allegation, therefore, that plaintiff has

become aware of the infringing activities of the defendant, within territorial jurisdiction of

this court, or that any cause of action arose within jurisdiction, are not even prima facie

substantiated.

19. As regards the argument about jurisdiction arising on account of the web site of the

plaintiff is concerned, in India TV (supra), this Court had, in para 44, held that in order to

extend jurisdiction to defendants residing outside the territorial limits, on the basis of their

presence on the internet, the website of the defendants cannot be a mere passive one but has

to be interactive, in the sense that something purposeful should be directed towards the

forum state. The print outs of the second defendant's website submitted by the plaintiff, in

the list of documents, do not in any manner disclose the minimum threshold of interactivity

laid down in India TV (supra). The copies merely disclose the range of products sold by the

defendants and nothing more. There is no purposeful direction of the defendants web

activities to the concerned geographical locale, in this case Delhi, to prima facie establish this

Court's jurisdiction.

CS(OS) 641/2007 11 of 12

20. This court, therefore, is of the view that taken together, the suit averments, and the

documents do not disclose that the dispute in this case can be entertained and tried by this

court; it plainly lacks territorial jurisdiction. The plaint is, therefore, returned.

July 16, 2008                                                         S. RAVINDRA BHAT
                                                                          (JUDGE)




CS(OS) 641/2007                                                                         12 of 12