Cadila Health Care Ltd. vs Shree Baidyanath Ayurved Bhawan ...
2008 Latest Caselaw 1643 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI


+        FAO (OS) No . 386/2008


%                       Date of decision : 12th September, 2008


      CADILA HEALTH CARE LTD.                        .....Appellant

                       Through:    Mr. Rajiv Nayyar, Sr. Adv. with Ms.
                                   Pratibha M. Singh, Mr. Bijal
                                   Chatrapati, Mr. Sudeep Chatterjee
                                   , advs.


                                Versus


      SHREE BAIDYANATH AYURVED BHAWAN PVT. LTD.
                                           ...Respondent

                       Through:    Mr. Hemant Singh, Mamta Rani
                                   Jha with Mr. Manish Kr. Mishra,
                                   Advocate.

CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE MOOL CHAND GARG


1.    Whether the Reporters of local papers may be allowed to
      see the judgment?                                            No

2.    To be referred to Reporter or not?                           No

3.    Whether the judgment should be reported in the Digest?       No


SANJAY KISHAN KAUL, J(Oral).


CM 13139/2008(exemption)

Exemptions allowed subject to all just exceptions.

FAO(OS)386/2008

1. The appellant filed a suit for permanent injunction restraining

passing off of the trade mark "SUGAR FREE", for damages, for rendition

of account, delivery etc. The plaintiff claims to be a leading

pharmaceutical company of India and claims that in the year 1988 they

developed and launched in the market a product without natural sugar,

containing an artificial sweetner, as a low calorie table top sweetner

under the trade mark "SUGAR FREE". The trade mark of the plaintiff is

not registered but it is the case of the plaintiff that the expression

"SUGAR FREE" came to occupy a secondary meaning in respect of the

product of the plaintiff.

2. The defendant is manufacturing and marketing ayurvedic

medicines, proprietory medicines and food products. It is the claim of

the appellant that the defendant has dishonestly adopted the mark

"SUGAR FREE" which completely erodes the distinctiveness which is

associated with the mark "SUGAR FREE".

3. The plaintiff along with the plaint filed an application for interim

relief under Order 39 Rule 1 and 2 read with Section 151 of the Code of

Civil Procedure, 1908. It is this application which has been dismissed

by the learned Single Judge in terms of the impugned order dated

09.07.2008. It may be noticed that the claim of exclusive right of the

plaintiff to "SUGAR FREE" forms subject matter of adjudication at the

interlocutory stage in another application filed under Order 39 Rule 1

and 2 of the said Code being IA NO. 3847/2007 in C.S.(OS) No.

605/2007 Cadila Healthcare Ltd. V. Gujarat Co-opeartive Milk Marketing

Federation Limited and Others. 2008 (36) PTC 168 (Del.) It is this

judgment which has been taken note of in the impugned order and

after discussing the ratio of the said judgment the learned single judge

in the impugned order has decided to follow the same course of action

though there is some difference in the final directions passed by the

two learned Judges.

4. In Cadila Healthcare Ltd. V. Gujarat Co-opeartive Milk Marketing

Federation Limited and Others (Supra) the conclusion arrived at have

been reproduced in para 8 of the impugned judgment. The prima facie

finding is that the plaintiff‟s claim of the expression "SUGAR FREE"

being a coined word could not be accepted but the said expression

when used in relation to a sweetner/sugar free substitute may not be

descriptive in meaning but is certainly descriptive in understanding.

The word Sugar Free has been held to have acquired a suitable degree

of distinctiveness amongst traders and consumers but simultaneously

it has been observed that the acquisition of a secondary meaning by a

trade mark or distinctiveness associated with it are not ipso facto

conclusive for an action of passing off. It was held that there could be

no complete embargo placed on the defendant in the suit from using

the expression "SUGAR FREE" but taking into consideration the fact

that the goods in question being ice cream with the trade mark Amul

were being sold with Sugar Free written in a very large font as

compared to the trade mark Amul, the following operative directions

were passed:

"59. The ex parte order dated 3.4.2007 is accordingly varied to incorporate the following directions:

(i) The defendant is restrained from using the expression „Sugar Free‟ in the present font size which is conspicuously bigger than its trade mark „Amul‟.

(ii) The defendant is free to use the expression „Sugar Free‟, as part of a sentence or as a catchy legend, so as to describe the characteristic feature of its product."

5. The learned Single Judge in the impugned order has taken into

account the fact that the case of the plaintiff is one founded on the

common law or tort of passing off and not one based on infringement

of a registered trade mark and the distinction between two has to be

kept in mind. The packaging of the defendant‟s product was found to

have sufficient added matter therein to distinguish the defendant‟s

product from that of the plaintiff. The trade mark in question

„Baidyanath‟ was prominently displayed and the expression "SUGAR

FREE" and the word "GRANULES" were used in the same blue font and

size while the expression „Chyawanprash‟ is in red. It was concluded

that the expression "SUGAR FREE" has been used to describe the kind

of Chyawanprash Granules. It was thus held that there is no possibility

of any deception.

6. Learned counsel for the appellant seeks to contend that the

distinctiveness acquired by the expression "SUGAR FREE" in respect of

the product of the petitioner, specially keeping in mind the

observations made by the learned single judge in Cadila Healthcare

Ltd. V. Gujarat Co-opeartive Milk Marketing Federation Limited and

Others (supra) entitles the appellant to the exclusive use of the

expression. It was further pleaded that the learned Single Judge in the

impugned order while following the said judgment has failed to notice

the interim directions issued in para 59 referred to above and has

given a clean chit to the respondent to sell its goods with the

expression "SUGAR FREE"

7. We may at the initial stage itself keep in mind the scope and

ambit of the scrutiny of an appeal against an interlocutory order

especially in the context of infringement of any intellectual property

right in view of the judgment of the Apex Court in Wander Ltd. and Anr.

Vs. Antox India Pvt. Ltd. 1990 Suppl. (1) SCC 727. The Apex Court

impressed upon the appellate court not to interfere with the orders of

the learned Single Judge on the ground that the appellate Court would,

on assessment of the material, have come to a different conclusion

than the one reached by the Court below as long as the conclusion

reached by the Court was reasonably possible on the material on

record. It was thus held that there was a misdirection in understanding

the scope and nature of appeal before it and discussed the limitation

on the powers of the appellate court to substitute its own opinion in

appeal preferred against the discretionary order. We consider it useful

to reproduce the observations made in para 9 of the said judgment:

"9. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the Appellate Court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of

discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the Trial Court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v. Pothan Joseph said :

... These principles are well established, but as has been observed by Viscount Simon in Charles Osention & Co. v. Johnston the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case.

The appellate judgment does not seem to refer to this principle."

8. The aforesaid observations leave no doubt on the scope and

ambit of scrutiny by this Court. It is not the function of this Court to sit

and substitute the opinion of the learned Single Judge and endeavour

to find out as to what decision it would have taken in the given facts

and circumstances. It is only a power exercised arbitrarily or

capriciously or perversely or in ignorance of the settled principles of

law regulating grant or refusal of interlocutory injunctions would

interference be called for.

9. If the present appeal is scrutinized within the aforesaid

parameters we find no reason to interfere with the impugned order.

The stage of leading evidence by the parties to establish their case has

yet not arrived. It is always open to the appellant to prove its case of

passing off by leading appropriate evidence. What has to be seen at

this stage is whether the packaging of the two products is in such a

manner that assuming that the expression "SUGAR FREE" has a

distinctiveness associated with the product of the appellant, there is

any chance of misleading the purchasing public. The learned Single

Judge has compared the two cartoons and we have also had the

benefit of seeing the packaging of the two products. We are in

agreement with the view taken by the learned Single Judge that the

use of the expression "SUGAR FREE" is not carried out in such a

manner as for a purchasing public to perceive it as the product of the

appellant. The expression "SUGAR FREE" is written in the same font as

the expression "Chyawanprash" thereafter in a similar font the

expression "Special Granules" has been used. The trade mark of the

respondent Baidyanath is prominently displayed. It is thus, clear that

the expression "SUGAR FREE" in the sentence is to define the fact that

the Chyawanprash is free from sugar.

10. It is in view of the aforesaid that we are of the view that the

directions as contained in the order in Cadila Healthcare Ltd. V. Gujarat

Co-opeartive Milk Marketing Federation Limited and Others.(Supra) are

not required to be passed in the present case. Those directions were

required in the facts of that case dependent on the font of the "SUGAR

FREE", the font of the trade mark and the manner in which both have

been interposed on the cartoon of the respondent.

11. We find no reason to interfere in the appeal.

12. Dismissed.

13. Needless to say that any observation made herein would not in

any manner prejudice the appellant at the stage of final hearing of the

suit.

CM 13138/2008(stay)

In view of the above, dismissed as infructuous.

SANJAY KISHAN KAUL,J

MOOL CHAND GARG,J SEPTEMBER 12, 2008/anb