Cadila Healthcare Limited vs Dabur India Limited
2008 Latest Caselaw 977 Del

           THE HIGH COURT OF DELHI AT NEW DELHI

%                                  Judgment delivered on: 09.07.2008

+     IA 1496/2008 (U/O 39 Rules 1 & 2, CPC) in CS(OS) 224/2008


CADILA HEALTHCARE LIMITED                                   ... Plaintiff


                                   - versus -

DABUR INDIA LIMITED                                         ... Defendant

Advocates who appeared in this case:
For the Plaintiff     : Mr Anil Dewan, Senior Advocate with Ms Pratibha M.
                        Singh Mr Bijal Chhatrapati, Ms Shradha Sheth,
                        Mr Deepak Gogia and Ms Archana Sehdev
For the Defendant     : Dr A.M. Singhvi, Sr Advocate with Mr Hemant Singh,
                        Ms Mamta Jha and Ms Pallavi Singh


CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED

      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 Digest ? YES

BADAR DURREZ AHMED, J

1. By way of this application, the plaintiff seeks an interim

injunction restraining the defendant from using the expression "Sugar

Free" on any of the defendant‟s products. It is the contention of the

plaintiff that by using the expression "Sugar Free" on its products, the

defendant is passing off its goods as those of the plaintiff. The plaintiff

seeks to restrain such alleged passing off on the part of the defendant

by way of a permanent injunction in the suit.

2. The plaintiff claims to be the owner of the trademark

"SUGAR FREE" alongwith its variants "SUGAR FREE NATURA",

"SUGAR FREE GOLD" and "SUGAR FREE D‟LITE". According to

the plaintiff, the mark "SUGAR FREE" was originally coined and

adopted by its predecessor (Cadila Chemicals Limited) in respect of its

sugar substitute. The product which was originally marketed under the

mark "SUGAR FREE" contained aspartame - an artificial sweetener.

Subsequently, the plaintiff developed another sugar substitute using

sucralose and that product was marketed under the name "SUGAR

FREE NATURA". It is stated that the suffix „GOLD‟ was added to

"SUGAR FREE" to distinguish the new product, "SUGAR FREE

NATURA" which contained sucralose, from the older product which

contained aspartame. It is stated that the plaintiff also produces and

markets a soft drink powder concentrate and soft drinks in various

flavours under the brand name "SUGAR FREE D‟LITE". It has been

further contended on behalf of the plaintiff that the sales turn over of

the products selling under the said family of "SUGAR FREE" marks is

more than Rs 50 crores annually. It is also contended that the

plaintiff‟s sugar substitute marketed under the mark "SUGAR FREE"

has a market share in excess of 74% of the entire sugar substitute

market in India. It is, therefore, contended on behalf of the plaintiff

that the expression „Sugar Free‟ has become inextricably associated

with the plaintiff and its products and has acquired distinctiveness. It is

also contended that though the said marks are not registered,

applications in respect of the same are pending.

3. It was contended on behalf of the plaintiff that the defendant

is manufacturing and marketing "CHYAWANPRAKASH", a tonic,

under the mark "SUGAR FREE". Referring to the plaintiff‟s product

packaging and labeling, it has been contended that the expression

"Sugar Free" appearing thereon is in large and prominent letters. It is

the plaintiff‟s case that the use of the expression "Sugar Free" by the

defendant is not as a mere description of the characteristics of the

product, but as a brand name in order to bring about a connection

between the defendant‟s product and the plaintiff‟s goodwill. The

defendant‟s product packaging contains the following statements:-

"Sweetener - Sorbitol & Sodium Saccharine Preservatives - Sodium Methyl Paraben & Propyl Paraben Flavour - Nature Identical No Added Sugar. Safe For Diabetics."

4. It was contended that once the aforesaid statements had been

made on the packaging, there was no necessity on the part of the

defendant to prominently display the expression "Sugar Free" on the

said packaging. The only conclusion, according to the plaintiff, is that

the defendant has used the expression "Sugar Free" to create a link

between its product and the plaintiff‟s trademark and to ride on the

popularity of the plaintiff‟s said marks. It is on the basis of this that the

plaintiff seeks an interim injunction restraining the defendant from

using the expression "Sugar Free" in the prominent manner in which it

has done. The defendant, on the other hand, contended that the plaintiff

is not entitled to any injunction whatsoever.

5. The photographs of the packaging of the defendant‟s

products are as under:-

Front View Back View

6. The counsel on both sides referred to the following table

with regard to distinctiveness of marks as appearing in Section 11.1 of

Volume 2 of the Fourth Edition of McCarthy on Trademarks and

Unfair Competition:-

Fig. 11:1A. DISTINCTIVENESS OF MARKS

INHERENTLY DISTINCTIVE NON- NO INHERENTLY DISTINCTIVENESS DISTINCTIVE No Secondary Meaning Secondary No Trademark Required Meaning Required Significance Arbitrary and Suggestive Descriptive, Generic Fanciful Geographic, Personal Name

Referring to the aforesaid table, it was contended on the part of the

plaintiff that the expression "Sugar Free" was a suggestive expression

and, therefore, was inherently distinctive. Alternatively, it was argued

on behalf of the plaintiff that in the least, "Sugar Free" was a

descriptive expression and, though it was non-inherently distinctive,

could acquire distinctiveness through the establishment of a secondary

meaning. In this context, it was suggested that long user by the

plaintiff (since 1998) had given a secondary meaning to the expression

"Sugar Free" and that meaning was that it referred to the plaintiff‟s

sugar substitute / sweetener. It was then contended that since the

expression "Sugar Free" had attained distinctiveness in respect of the

plaintiff‟s products, no other person could use the same as a mark in

respect of his product and, if any person did use the expression "Sugar

Free" as a trademark in relation to his products, he would be liable

under a passing off action on the part of the plaintiff. It was contended

that the defendant by using the expression "Sugar Free" in the

prominent manner, indicated above, has used it as a trademark and has

thereby attempted to pass off its goods as those of the plaintiff‟s.

7. On the other hand, referring to the same table set out in

McCarthy (supra), it was contended on behalf of the defendant that the

expression "Sugar Free" is a generic expression and, therefore, no

claim of distinctiveness can be made in respect thereof. Consequently,

as pointed out in McCarthy (supra), the expression "Sugar Free" would

have no trademark significance. It was further contended that even

construing the expression "Sugar Free" as being descriptive, there is a

heavy burden on the plaintiff to demonstrate that it has acquired a

secondary meaning. It was contended that, in point of fact, no such

secondary meaning had been acquired by the expression "Sugar Free"

as was sought to be made out on the part of the plaintiff. It was further

contended on behalf of the defendant that, in any event, the expression

"Sugar Free" was neither intended nor was it used as a trademark by

the defendant. It was only used as a description of an attribute or

characteristic of its product. The attribute/characteristic being that the

product did not contain any sugar. It was also contended on behalf of

the defendant that, in any event, there could be no passing off inasmuch

as the nature of the plaintiff‟s product (sweeteners / sugar substitutes)

was not even remotely connected with the nature of the defendant‟s

products "CHYAWANPRAKASH".

8. The counsel for the parties had advanced elaborate

arguments and referred to a large number of decisions of the courts in

India, in the UK as well as in the United States of America. They had

also referred to a number of leading authoritative texts. Fortunately for

me, it would not be necessary to refer to them because most of these

decisions and texts have been recently considered by my learned

brother [G.S. Sistani, J] in the case of this very plaintiff, i.e., Cadila

Healthcare Ltd v. Gujarat Co-operative Milk Marketing Federation

Limited and Others: 2008 (36) PTC 168 (Del.). For the sake of

convenience, I shall refer to that case as „Sugarfree-I‟. The present

plaintiff in that case was seeking an injunction against the defendant

from using the expression "Sugar Free" in relation to the defendant‟s

products - frozen desserts and choc minis. The grievance of the

plaintiff, in that case, was that the defendant had used the expression

"Sugar Free" on the packaging of its products, namely, Pro Biotic

Frozen Dessert. It was submitted that the packaging contained the

expression "Amul - Sugar Free - Pro Biotic Frozen Dessert" and that

gave an impression that the expression "Sugar Free" had been used on

the packaging not in its descriptive sense but as part of the defendant‟s

trademark "Amul". It was also contended that the unusually large font

size adopted in respect of the expression „Sugar Free‟ on the packaging

was likely to mislead potential consumers into believing that the

defendant‟s products (Pro Biotic Frozen Dessert) was in some way

connected with or related to the plaintiff‟s „Sugar Free‟ range of

products or that it emanated from the same source as that of the

plaintiff‟s products. It was the plaintiff‟s case that the defendant, by

deliberately using the expression "Sugar Free" on the packaging of its

products, had tried to pass of its products as those of the plaintiff. The

similarity of the contentions on the part of the plaintiff in that case and

those being advanced in the present case is apparent.

9. In the Sugarfree-I case, Sistani J, considered in detail the

various factors and arguments pointed out on behalf of the plaintiff as

well as the defendant therein. The following conclusions in the

Sugarfree-I case are relevant for the purposes of the present case:-

1) "Prima facie, it is difficult for me to accept the plaintiff‟s claim of the expression "Sugar Free" being a coined word. "Sugar Free" cannot, in the least, be a coined word and neither does "Sugar Free" appear to me an unusual combination or juxtaposition of words. ..." [See: para 24 of Sugarfree-I]

2) "... Thus, the expression "sugar free", when used in relation to a sweetener/sugar substitute, may not be "descriptive in meaning" but it is certainly "descriptive in understanding". [See: para 26 of Sugarfree-I]

3) "... There is all possibility or likelihood, and in fact it is usually the case, that words which in the course of time acquire secondary meanings as trade marks are also used and understood in linguistics in their primary sense. For instance, words like "Catterpiller", "Panther", etc. are famously known for their dual meanings, that is, both in their primary sense as generic words of animals as well as in their secondary sense as well known trade marks. ..." [See: para 34 of Sugarfree-I]

4) "... Thus, while ascertaining the distinctiveness of a trademark in relation to a product, it is paramount to first identify the range or circumference of the consuming class of such product, and measure the distinctiveness of the trademark only within such range or circumference." [See: para 37 of Sugarfree-I]

5) "...a good reason to assume that the trade mark "Sugar Free" has acquired a considerable degree of distinctiveness amongst traders and consumers. However, it is to be borne in mind that the acquisition of a secondary meaning by a trade mark or the distinctiveness associated with it are not ipso facto conclusive of an action for passing off. ..." [See: para 42 of Sugarfree-I]

6) "... There may be a possibility, though less likely, that such consumer may be misled into believing that the plaintiff's product being in the nature of an 'add on' has been used as an ingredient in the preparation of the defendant's Pro Biotic Frozen Dessert and, thus, may be gravitated to purchase the defendant's product." [See: para 48 of Sugarfree-I]

7) "...though the petitioner has prima facie been successful in establishing the distinctiveness of its trade mark "Sugar Free" in relation to its products, it has not been able to satisfy this Court why an embargo should be placed on the defendant from absolutely using the expression 'Sugar Free', especially when the defendant has prima facie satisfied this Court of its bona fide intention to use the said expression not as a trade mark but only in its descriptive or laudatory sense. ..." [See: para 55 of Sugarfree-I]

10. In view of the aforesaid conclusions which were, of course,

of a prima facie nature, Sistani, J in Sugarfree-I, while directing that

the defendant was free to use the expression "Sugar Free" as a part of a

sentence or as a catchy legend so as to describe the characteristic

feature of its product, restrained the defendant from using the

expression "Sugar Free" in the present font size which was

conspicuously bigger than its trade mark „Amul‟.

11. Since the plaintiff‟s claim in respect of the expression "Sugar

Free" has been examined threadbare in Sugarfree-I, it is neither

necessary nor appropriate for me to have a relook. There is no need to

reinvent the wheel, as it were. From Sugarfree-I, it is apparent that the

prima facie view is that the expression "Sugar Free" is not a coined

word. It is also clear that in making the observations with regard to

"Sugar Free" having acquired a considerable degree of distinctiveness,

Sistani J, was only referring to a specific class of consumers and that

too in respect of the plaintiff‟s products, i.e., sugar substitutes /

artificial sweeteners. The distinctiveness that is spoken of in

Sugarfree-I, therefore, has to be limited to the plaintiff‟s products. It

must also be noted that, while the considerable degree of

distinctiveness of "Sugar Free" in relation to the plaintiff‟s products

was prima facie recognised, the court also took the view that no

embargo could be placed on the defendant from absolutely using the

expression "Sugar Free", particularly in a descriptive sense.

12. It has been contended on the part of the defendant that the

expression "Sugar Free" is in public domain and cannot be

appropriated exclusively by the plaintiff. Examples of numerous

products, including biscuits, ice-creams, chocolates, candies, mints, pan

cakes and waffles, all of which use the expression "Sugar Free"

prominently, have been presented on behalf of the defendant. Even

judicial notice can be taken of the fact that the expression "Sugar Free"

is commonly used to denote that a particular food article does not

contain sugar and / or has been sweetened by using sugar substitutes /

artificial sweeteners. In that sense, the expression "Sugar Free" is

generic. However, in Sugarfree-I, it has been observed that "Sugar

Free" in relation to sweeteners has attained a certain degree of

distinctiveness referring to the plaintiff‟s products. That, of course, is a

prima facie conclusion and is subject to the final decision in the suit.

However, assuming that conclusion to be valid for the purposes of the

present case also, it must be reiterated that the "considerable degree of

distinctiveness" relates only to artificial sweeteners / sugar substitutes

and is limited to such products. Sugar Free, prima facie, has not

attained any distinctiveness as alleged by the plaintiff, outside the field

of sugar substitutes / artificial sweeteners. Therefore, the plaintiff

would not be entitled, prima facie, to appropriate the expression "Sugar

Free" in respect of any field of activity beyond its range of artificial

sweeteners / sugar substitutes. This is de hors the question as to

whether the plaintiff can at all claim "Sugar Free" as a trademark,

which question would have to be conclusively determined in the suit.

13. At this juncture, it would be pertinent to point out that the

case of the plaintiff is one founded on the common law tort of passing

off and not one based on infringement of a registered trademark. The

difference and distinction between the two uses have to be borne in

mind. Had there been a registration in favour of the plaintiff, then,

clearly, in view of the provisions of the Trade Marks Act, 1999, the

plaintiff would have had exclusive right to use the same, subject to the

plea of prior user by the defendant. The distinction between a suit for

passing off and one for infringement of a registered trademark has been

brought out by the Supreme Court in Kaviraj Pandit Durga Dutt

Sharma v. Navaratna Pharmaceuticals Laboratories: 1965 SC 980 in

the following manner:-

"... While an action for passing off is a Common Law remedy being in substance an action for deceit, that is, a passing off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of the exclusive right to the use of the trade mark in relation to those goods" (Vide s. 21 of the Act). The use by the defendant of the trade mark of

the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable imitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. But there the correspondence between the two ceases. In an action for infringement, the plaintiff must, no doubt, make out that use of the defendant's mark is likely to deceive, but were the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated. Expressed in another way, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get- up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different from that of the registered proprietor of the make would be immaterial; whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff."

The last part of the above extract is important for the purposes of the

present case which states that in a passing off action, the defendant may

escape liability if he can show that the added matter is sufficient to

distinguish his goods from those of the plaintiff.

14. From the description of the defendant‟s product packaging

and the photographs indicated above, it is more than clear that there is

enough added matter therein to distinguish the defendant‟s product

from that of the plaintiff. The first of them being the prominent manner

in which the defendant‟s trademark "Dabur" has been displayed. The

trademark "Dabur" and the name of the product

"CHYAWANPRAKASH" on a visual examination are apparently

much more prominent than the manner in which the expression "Sugar

Free" has been displayed on the product packaging. Where the

composition of the product is given, the following statement, as

indicated above, is also given:-

"Sweetener - Sorbitol & Sodium Saccharine Preservatives - Sodium Methyl Paraben & Propyl Paraben Flavour - Nature Identical No Added Sugar. Safe For Diabetics."

It is obvious that the sweetener that has been employed by the

defendant is not of the plaintiff inasmuch as the plaintiff does not make

any sweetener using Sorbitol and / or Sodium Saccharine. The

plaintiff‟s sweeteners are composed of either Aspartame or Sucralose.

Even otherwise, it is apparent that the expression "Sugar Free" has

been used in a descriptive sense indicating the characteristic or attribute

of the product as not containing any added sugar. The artificial

sweetener that has been used has also been indicated.

15. Considering the manner in which the expression "Sugar

Free" has been used by the defendant in the packaging in respect of its

products, there does not appear to be any possibility whatsoever of a

consumer being misled into believing that the plaintiff‟s product has

been used as an ingredient in the preparation of the defendant‟s

product-"CHYAWANPRAKASH". Consequently, there is no

possibility of consumers being misled into purchasing the defendant‟s

product thinking that it is in some way connected with the plaintiff.

The expression "Sugar Free" has been used entirely as a catchy legend

and in a descriptive sense and not as a brand name or a trademark.

16. Before concluding, it would be relevant to indicate that the

modern tort of passing off, as per Lord Diplock in Erven Warnink BV

v. J. Townend & Sons: (1979) 2 All ER 927 and as approved in Cadila

Health Care Ltd. v. Cadila Pharmaceuticals Limited: 2001 (5) SCC

73 and reiterated in Heinz Italia and Another v. Dabur India Limited:

2007 (6) SCC 1, has five elements, i.e., (1) a misrepresentation, (2)

made by a trader in the course of trade, (3) to prospective customers of

his or ultimate consumers of goods or services supplied by him, (4)

which is calculated to injure the business or goodwill of another trade

(in the sense that this is a reasonably foreseeable consequence), and (5)

which causes actual damage to a business or goodwill of the trader by

whom the action is brought or (in a quia timet action) will probably do

so.

17. Viewed in the light of these five elements, the plaintiff has

not been able to establish a prima facie case of misrepresentation made

by the defendant in the course of trade to his prospective or ultimate

customers which can be said to be calculated to injure the business or

goodwill of the plaintiff. Much less, any prima facie case, to show

actual damage to the plaintiff‟s business or goodwill or the probability

of such damage. If any one of the elements are missing, then a passing

off action would not be maintainable. Prima facie, none of the

elements have been established by the plaintiff.

18. The result of the foregoing discussion is that the plaintiff is

not entitled to an interim injunction under Order 39 Rules 1 and 2,

CPC.

19. This application is dismissed with costs which are quantified

at Rs 10,000/-.

BADAR DURREZ AHMED (JUDGE) July 09, 2008 dutt