Delhi High Court

Vee Excel Drugs & Pharmaceuticals ... vs Hab Pharmaceuticals & Research ... on 16 March, 2009

Author: Manmohan Singh

*          HIGH COURT OF DELHI : NEW DELHI

+    IA No.10720/2008 & 11669/2008 in CS (OS) No.1851/2008

                       Judgment reserved on:    9th February, 2009

%                      Judgment decided on :       16th March, 2009

VEE EXCEL DRUGS & PHARMACEUTICALS LTD.......Plaintiff
               Through : Mr. Anshuj Dhingra, Adv. with
                         Mr. Anubhav Mehrotra, Adv.

                       Versus

HAB PHARMACEUTICALS & RESEARCH LIM. .....Defendant
             Through : Mr. Rajiv Nayyar, Sr. Adv. with
                       Ms. Pratibha M. Singh, Mr. Alankar &
                       Mr. Deepak Gogia, Advs.

Coram:

HON'BLE MR. JUSTICE MANMOHAN SINGH

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                                   Yes

2. To be referred to Reporter or not?                                Yes

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

MANMOHAN SINGH, J.

1. The plaintiff has filed a suit for permanent injunction

restraining infringement of copyright, trade mark, rendition of accounts,

damages and delivery up etc.

2. By this order, I shall dispose of the two applications being IA

No.10720/2008 under Order XXXIX Rule 1 and 2 CPC filed by the

plaintiff and IA No.11669/2008 under Order XXXIX Rule 4 CPC read

with Section 151 CPC filed by the defendant for vacation of ex parte ad

interim order dated 5th September, 2008.

3. The brief facts, as per the plaint, are that the plaintiff is

engaged in the business of research, production, marketing, and export

of various pharmaceutical and medicinal products and preparations to

various countries outside India and has been engaged in the present

business for last several years.

4. The plaintiff has alleged that on 8 th February, 2002 the

plaintiff filed an application for registration of the trade name „Vega

Asia‟ which is duly registered trade mark under No.1079405 in class 5

in respect of pharmaceutical and medicinal preparations included in

class 5. It is also alleged that the plaintiff holds valid and subsisting

drug licence issued by the Drug Licensing and Controlling Authority of

the State of Uttar Pradesh for manufacture and sale of its products „Vega

Asia‟ vide protection granted on 30 th July, 2002. The plaintiff has

contended that the mark „Vega Asia‟ is a fanciful and coined word being

combination of the words „Vega‟ and „Asia‟ that was especially created

by the plaintiff having no descriptive meaning. The mark „Vega Asia‟

including its VEGA prefix separately, is inherently distinctive both to

the trademark and the consuming public of erectile dysfunction products

of the plaintiff company. The plaintiff has also designed, and created

various artistic works for the packaging(s) of the said medicinal product

„hereinafter Blister Packaging‟ and has also got the same registered

under the Copyright Act, 1957. The said protected artistic works in the

packaging as copyright is again the proprietary right of the plaintiff

under the Copyright Act, 1957 and the Common Law.

5. The plaintiff for the aforesaid registered trademark „Vega

Asia‟ has also created and adopted another packaging which is being

specifically and regularly used by the plaintiff for the instant product.

The plaintiff in order to protect the same from being misused had also

filed two separate applications for the registration of the said artistic

work in the copyright before the Copyright Office on 11/05/2004 under

the titles „Vega‟ and „Vega 100‟. The aforesaid copyright of the

plaintiff for its products have been registered by the copyright office on

02.05.2005 vide registration nos. A - 72140/2005 and A - 72146/2005,

hereinafter referred as „Rocket Packaging‟ and „Blue Packaging‟

respectively.

6. The further contention of the plaintiff is that the trade mark

„Vega Asia‟ has become popular and has been accepted by the

international community. The defendant company along with its

officers, agents and buyers in order to enjoy much laboured efforts of

the plaintiff has started misusing the intellectual property of the plaintiff

in the aforesaid registered copyright and trade mark by production and

export of the same either by identical with or deceptively similar

packaging or with the combination of both of them and exploiting the

same. It is also alleged that the defendant has copied the artistic

work/copyright contained in the „Blister Packaging‟ of the plaintiff, both

„Rocket Packaging‟ and „Blue Packaging‟ bearing the titles „Vega‟ and

„Vega 100‟ and has been exporting the same to various countries out of

India and more particularly to the countries of the Middle East. The

plaintiff has also given the comparison chart and details of the

packaging in Paras 18 to 20 of the plaint.

DEFENDANT'S CASE

7. The defendant has opposed the interim application filed by

the plaintiff on various grounds which are mentioned in the written

statement, reply to the injunction application as well as in the

application filed by defendant under Order 39 Rule 4 read with section

151 CPC being I.A.No.11669/08. On merit, the defendant‟s case is as

follows:-

a) The defendant is the exclusive licensee to use the mark

„Vega‟ in respect of medicinal and pharmaceutical

compositions by virtue of Deed of Cross Licensing dated

07.11.2007 with Aurochem Pharmaceuticals (I) Private

Limited. The said Aurochem Pharmaceuticals (I)

Private Limited is owner of the Trade Mark „Vega‟, since

1996;

b) The mark „Vega‟ is being used by defendant since

August, 2001 which is prior in use of plaintiff (the

plaintiff is using the said mark since 2002). Hence the

defendant is the prior adopter and prior user of the mark

„Vega‟;

c) The defendant is the registered owner of Copyright in

the „Vega‟ and „Vegah‟ cartons and blister packs, since

2001;

d) The defendant is the registered proprietor of the mark

„Vegah‟ by virtue of Registration No.1098288, since

2002.

e) The plaintiff has wrongly contended that it acquired

knowledge about the defendant‟s use of mark „Vega‟

and similar cartons on or about August, 2008 since the

plaintiff had issued a Cease and Desist Notice on 7 th

February, 2005 calling upon the defendant to cease and

desist from using the mark „Vega‟. The defendant had

replied to the said letter on 1.3.2005, through their

Attorneys. The plaintiff thereafter did not do anything

against the defendants for a period of about 42 months

and suddenly in the month of September, 2008,

concealing the aforesaid facts, filed a suit against

defendant and obtained ex-parte injunction.

f) The plaintiff has suppressed material facts of the case

while obtaining ex parte ad-interim relief and

g) The Suit filed by plaintiff and interim application suffers

heavily from delay, acquiescence and latches.

8. The main contention of the defendant is that the plaintiff has

suppressed various material facts in order to obtain ex parte ad interim

injunction order from this court. The details of the said facts are given

as under:-

(i) That the plaintiff has suppressed the fact that the defendant

had filed an application bearing No.

ORA/59/2005/TM/Mum/3033 under Sections 47, 57 and

125 of the Trade Mark Act, 1999 for rectification of the

plaintiff‟s trade mark „Vega Asia‟ before the Intellectual

property Appellate Board, Chennai. The Deputy Registrar

of the Trade Marks vide his letter dated 31 st August, 2005

had informed the plaintiff about the said application being

filed before the Intellectual Property Appellate Board at

Chennai by the defendant.

(ii) The plaintiff on 18th October, 2004 lodged a complaint

against the defendants under the Drug and Cosmetic Act at

the office of Commissioner, Drugs and Food

Administration, Maharashtra State at Bandra, Mumbai on

the basis of same very trademark. After hearing the parties,

the Deputy Commissioner vide his order dated 10 th March,

2005 informed the Commissioner of Food and Drug

Administration that the defendants are the prior user of the

mark „Vega‟.

(iii) Prior to present suit, the defendant has filed a suit against

one M/s. Saviour Biotech Pvt Ltd having its office at

2047/48, Second Floor, Gali No.6, Chuna Mandi,

Paharganj, Delhi complaining about the acts of

infringement of trade mark „Vega‟ and carton in the High

Court of Mumbai. The said suit was numbered as Suit No.

2426/08. The notice of motion was heard by the High

Court of Mumbai on 7th August, 2008 where an ad-interim

order was passed in terms of prayers (a), (b) and (c) of the

notice of motion. By virtue of the said order, a Court

Receiver of Mumbai High Court was appointed to take

possession of the goods who visited the premises of M/s.

Saviour Biotech and took possession of 2560 strips bearing

the mark „Vega‟. The report of the Receiver is also filed on

30th August, 2008, in the said suit. The Director of Saviour

Biotech Pvt Ltd informed the present defendant that all the

goods seized at the premises of M/s. Saviour Biotech Pvt

Ltd were being manufactured under the license from the

plaintiff herein i.e. M/s. Vee Excel Drugs and

Pharmaceuticals Pvt. Ltd. and in view of the said

information, the defendant also lodged the chamber

summons to join the present plaintiff as one of the parties to

the suit at Mumbai High Court and the summons in this

regard are pending. The plaintiff has not disclosed about

this suit filed by the defendant.

9. I have compared the trade marks as well as copyright and

packaging filed by the respective parties in the present suit. It appears

to me that the trademark as well as the packaging of the parties are

almost identical with and deceptively similar with each other. From

the perusal of documents placed by the parties, both the parties are

registered owners of the trade marks as well as copyrights for their

respective packaging. However, the registration of Trade Mark and

Copyrights have been obtained by the parties on different dates. The

plaintiff has challenged the alleged assignment of the copyright in

favour of the defendant. Infact, both the parties are claiming earlier

user of the trade mark and copyright.

10. I feel that the crucial and essential question at this stage is to

decide the interim application and to see whether the plaintiff has made

full disclosure of the material facts while filing the present suit before

this court. On the basis of admission made by the parties during the

hearing of interim application, the following facts emerged :-

a) Learned counsel for the plaintiff has not denied about the factum

of pendency of the application for rectification of the plaintiff‟s

trade mark „Vega Asia‟ filed by the defendant before the

Intellectual Property Appellate Board, Chennai.

b) It has also been admitted by the plaintiff that in October, 2004,

the plaintiff filed a complaint against the defendants under the

Drug and Cosmetics Act at the office of the Commissioner, Drug

and Food Administration, Mumbai and the said complaint was

heard and decided in favour of the defendants.

c) The factum of filing of suit by the defendant against M/s. Saviour

Biotech Pvt. Ltd is also not denied by the plaintiff. However, the

plaintiff justified his stand by stating that he was not a party and

M/s. Saviour Biotech Pvt. Ltd was doing its business on its own

for the purpose of exporting the goods on his behalf.

d) It has also been admitted that prior to the filing of the suit, there

is correspondence of legal notice and its reply exchanged

between the parties from the period of February, 2005 onwards

and the said correspondence was not disclosed in the plaint.

11. In the present case, in Para 35 of the plaint, it is stated that

the plaintiff gained knowledge about the defendants‟ activities in the

month of August, 2008. There are admittedly various

proceedings/actions pending prior to August, 2008 i.e.

(i) rectification of the plaintiff‟s trade mark pending from the

year 2005 before the Appellate Board,

(ii) the details of disposal of the complaint filed by the plaintiff

against the defendant on 10th March, 2005 before the Food

and Drug Administration, Maharashtra,

(iii) the legal notice issued by the plaintiff to the defendant

regarding the misuse of the trade mark on 7 th February,

2005 and

(iv) the filing of the suit by the defendant before the High Court

of Mumbai against one M/s. Saviour Biotech Pvt. Ltd who

later turned out to be the licensee of the plaintiff.

The explanation given by the plaintiff in this regard is not

satisfactory to the effect that the plaintiff did not have any knowledge

about the same and in the said suit the plaintiff is not a party. The

plaintiff himself has filed a copy of the license agreement between the

plaintiff and M/s. Saviour Biotech Pvt. Ltd. In the said agreement, the

plaintiff has allowed M/s. Saviour Biotech Pvt. Ltd to use the trade

mark „Vega Asia 50‟, „Vega Asia 100‟ and „Vega Super‟ and appointed

him as a licensee.

12. The plaintiff has failed to assign any valid reason as to why

the plaintiff has not disclosed the above mentioned facts in the plaint as

well as in the application for injunction. The overall circumstances

show that the plaintiff has not come before this court with clean hands,

therefore, I feel that the plaintiff is not entitled for the interim injunction

prayed in the application filed by the plaintiff under Order 39 Rules 1 &

2 read with Section 151 CPC.

13. In the case of S.P. Chengalvaraya Naidu vs. Jagannath,

(1994) 1 SCC 1 it has been observed that non disclosure of relevant

material documents with a view to obtain advantage amounts to fraud.

A judgment or decree obtained by playing fraud on the court is a

nullity and non est in the eyes of the law. Such a judgment/decree -

by the first court or by the highest court- has to be treated as a nullity

by every court, whether superior or inferior. It can be challenged in

any court even in collateral proceedings. Relevant portion of para 7 and

8 are reproduced below :

"para 7 . The principle of „finality of litigation‟ cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands........

Para 8 .....A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another‟s loss. A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as the opposite party."

14. In the case of Vijay Syal v. State of Punjab, (2003) 9 SCC

401 it was held in para 24 as under :

"in order to sustain and maintain the sanctity and solemnity of the proceedings in law courts it is necessary that parties should not make false or knowingly, inaccurate statements

or misrepresentation and/or should not conceal material facts with a design to gain some advantage or benefit at the hands of the court, when a court is considered as a place where truth and justice are the solemn pursuits. If any party attempts to pollute such a place by adopting recourse to make misrepresentation and is concealing material facts it does so at its risk and cost. Such party must be ready to take the consequences that follow on account of its own making. At times lenient or liberal or generous treatment by courts in dealing with such matters is either mistaken or lightly taken instead of learning a proper lesson. Hence there is a compelling need to take a serious view in such matters to ensure expected purity and grace in the administration of justice."

15. As far as the merit of the case is concerned, this court cannot

ignore the following facts and documents filed by the defendant in

support of its contention:-

A. The defendant vide deed of cross licensing dated 7 th

November, 2007 obtained the rights for use of the mark

„Vega‟ from one Aurochem Pharma India (P) Ltd. which is

the registered proprietor of the trade mark „Vega‟ from 23rd

December, 1998.

B. The defendant is also the registered proprietor of the trade

mark „Vegah‟ in its favour vide registration No. 1098288 in

class 5 as of 24th April, 2002.

C. The defendant is holding the registration of copyright

bearing No.A-71707 of 2005 granted on 30 th April, 2005

under the title „Vega 100‟ and another copyright

registration bearing No.A-73948/2005 granted on 3rd June,

2005 titled „Vega 50‟. The defendant is also holding the

copyright of blister pack under the registered Copyright

No.A-75783/2006 granted on 27th February, 2006.

A copy of the first shipment of the defendant is also placed

on record which is dated 8th October, 2001. The above said documents

clearly indicate that the defendant is not a new entity.

16. The documents filed by the parties, prima facie, show that

both the parties have almost simultaneously used the trademark as well

as the copyrights in question. The question of actual proprietorship of

the mark as well as of the copyright is yet to be gone into and the

conclusion in this regard will come after the trial of the suit as both the

parties are holding trademark registration as well as copyright

registration in their favour. Moreover, since the plaintiff has not come

before this court with clean hands as he has not disclosed the factum of

rectification of trademark filed by the defendant; the decision given by