Smithkline & French Laboratories ... vs M/S. Alliaance Biotech & Others
2011 Latest Caselaw 5693 Del

$~38
         THE HIGH COURT OF DELHI AT NEW DELHI
%                       Judgment Pronounced on: 24.11.2011

+ CS(OS) 1775/2008

SMITHKLINE & FRENCH LABORATORIES
LTD. & ORS.                          ..... Plaintiffs
               Through:    Mr. Manav Kumar, Adv.
               versus
M/S. ALLIAANCE
BIOTECH & OTHERS           ..... Defendants
               Through:    None.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

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

2. To be referred to the Reporter or not?                      No.

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

V.K. JAIN, J. (ORAL)

1. Plaintiff No.1 - SmithKline & French Laboratories

Limited is a Company registered in United Kingdom whereas

plaintiff No.2 - GlaxoSmithKline Pharmaceuticals Ltd. is a

Company registered in India. These companies are group

companies, forming part of what is known as

GlaxoSmithKline Plc. GlaxoSmithKline is one of the leading

pharmaceutical companies having presence in a large

number of countries, including India. Plaintiff No.1 is the

registered owner of the trademark FEFOL and FEFOL-Z in

respect of the pharmaceutical preparations. The plaintiffs

have been selling products under the brand name FEFOL in

India since 1970 and they had sale of Rs.2530.1, 2407.4

and 2881.4 lakhs in the years 2005, 2006 & 2007

respectively, in India, from sale of products being sold under

the brand name FEFOL. The plaintiffs claim to have

incurred advertisement and promotional expenditure of

Rs.103.3, 53.5 and 70.1 lakhs respectively during these

years. Defendant No.1 is stated to be a partnership firm of

defendants No.2 to 4 and is engaged in the manufacturing

and marketing of pharmaceutical products. Defendant No.1

also has a website www.alliaancebiotech.com which

contains information about their business activities and the

products being manufactured and marketed by them. It is

alleged that the defendants are selling products similar to

that of the plaintiffs under the trademark FIFOL-Z. The

product of the plaintiffs as well as the product of the

defendants contains the same ingredients, i.e. carbonyl

Iron, Zinc and Folic acid and are sold in the form of

capsules as well as in the form of tonic also. The

defendants, according to the plaintiffs, are thus committing

infringement of registered trademark FEFOL and FEFOL-Z.

The plaintiffs have sought an injunction restraining the

defendants from manufacturing, selling, advertising or

promoting pharmaceuticals preparations under the

trademark FIFOL-Z or any other mark identical or

deceptively similar to that of the plaintiffs' trademark,

FEFOL and FEFOL-Z. They have also sought mandatory

injunction directing the Drugs Controller General of India to

cancel the defendants' permission to manufacture the said

drug under the aforesaid mark. The plaintiffs have also

sought delivery up of the infringing materials besides

damages amounting to Rs.20 lakhs.

2. The defendants were proceeded ex-parte vide order

dated 18th July, 2011 since no one appeared for them

despite service. The plaintiffs have filed affidavit of Mr.

Rahul Sethi by way of ex-parte evidence and in his affidavit

Mr. Rahul Sethi has supported on oath the case set out in

the plaint.

3. Ex.PX and PY are the legal proceeding certificates

issued by the Trade Mark Registry which show that the

trademark FEFOL and FEFOL-Z are registered in the name

of plaintiff No.1, in respect of pharmaceutical preparations

and the registrations are still valid. The registration date in

respect of FEFOL is 10th December, 1969 whereas that in

respect of FEFOL-Z is 26th May, 1993.

4. The case of the plaintiff is based primarily on

infringement of its registered trademarks. If the impugned

trademark is identical or deceptively similar to a registered

trademark and is used in respect of the same goods or

services in respect of which the trademark of the plaintiff is

registered, that would constitute infringement of the

registered trademark. The impugned trademark, in order

to constitute infringement of a registered trademark need

not be an absolute replica and it is sufficient if it is visually

phonetically or otherwise so close to the registered

trademark that it is found to be an imitation of the

registered trademark. In fact, the infinger while infringing a

registered trademark is not likely to use a mark which is an

absolute replica, but is likely to make some changes here

and there so that in the event is mark is challenged, he may

claim that the mark being used by him is not identical or

deceptively similar to the registered trademark of the

plaintiff. It is also settled proposition of law that the

question as to whether the two competing marks are so

similar as to be likely to deceive or cause confusion has to

be approached from the point of view of a man of average

intelligence and imperfect collection and not from the point

of view of an educated person who is well placed in life. The

Courts also need to ensure that there is no confusion in the

mind of the customer as regards the source of the product

he is buying and he needs to be assured that he buys the

same product which he intends to buy and identifies by its

name.

A comparison of the products of the plaintiffs

Companies with the products of the defendants would show

that both the products contain carbonyl Iron, Zinc and Folic

acid. The defendants have been selling this product in

capsule form as well as in the form of syrup, though the

plaintiffs appear to be selling only in capsule form. The only

difference between the trademark of the plaintiffs and the

trademark of the defendants is that letter 'E' in the

trademark of the plaintiff has been replaced by the letter 'I'

in the trademark of the defendants. Except for this rather

insignificant change, there is practically no difference in the

two trademarks. It can therefore hardly be disputed that

the trademark FIFOL-Z of the defendants is structurally,

phonetically as well as visually similar and almost identical

to the registered trademark FEFOL-Z of the plaintiffs. In

fact, phonetically there is practically no difference in the two

trademarks since both of them are pronounced the same

way.

In our country, it can hardly be denied that

chemists and druggists do not hesitate in selling drugs

without insisting upon prescription from a medical

practitioner even if the medicine requires such a

prescription. Almost all the drugs in our country are

available over the counter, irrespective of the class in which

they fall. If a person goes to a chemist shop to purchase a

FEFOL-Z, the chemist on account of phonetic identity, may

sometimes presumes that the customer is asking for FIFOL-

Z and, therefore, sell the product of the defendants though

the customer wants to purchase the product of the

plaintiffs. If the quality of the product of the defendants is

not as good as that of the product of the plaintiffs that may

prejudicially affect the reputation and quality which the

brand of the plaintiffs enjoys besides deceiving the customer

who wants to buy the product of a reputed company, but

ends up buying a product which is not as good in quality as

the product he intends to buy. It is, therefore, necessary for

the protection not only of the plaintiffs, but also of the

customer, that such unfair and illegal business practices

are not allowed to flourish and are adequately dealt with.

The plaintiffs are, therefore, entitled to injunction sought by

them against the use of the trademark FIFOL-Z by the

defendants.

Coming to damages though the plaintiff has not

proved the actual damages suffered by it on account of sale

of the product of the defendant under the brand name

FIFOL-Z, it is definitely open to this Court to award punitive

damages in appropriate cases.

As observed by this Court in Time Incorporated v.

Lokesh Srivastava & Anr., 2005 (30) PTC 3 (Del), punitive

damages are founded on the philosophy of corrective justice

and are meant to send signal to the wrong doers that the

law does not take a breach by them as a matter between

rival parties but is also concerned about those also who are

not party to the lis but suffer on account of the breach of

law on the part of wrong doer. As held by this Court in

Hero Honda Motors Ltd. V. Shree Assuramji Scooters,

2006 (32) PTC 117 (Del), this Court noticing that in a case

where the defendant chooses to stay away from the

proceedings of the Court, punitive damages need to be

awarded, since otherwise the defendant, who appears in the

Court and submits its account books would be liable for

damages whereas a party which chooses to stay away from

the Court proceedings would escape the liability on account

of the failure of the availability of account books. In fact,

punitive damages are appropriate relief where on account of

absence of the defendant exact figure of the sale made and

profit earned by him by infringing the trademark of the

plaintiff and/or passing off his goods as those of the plaintiff

cannot be ascertained. The Courts also take into

consideration the fact that a lot of time and money is spent

by trademark owners in litigation against those who infringe

the trademark and try to encash upon the goodwill and

reputation of other brands by passing off their goods and

services as those of others. Award of punitive damages,

therefore, describes dishonesty and curbs tendency to gain

an unfair advantage by infringement of the legal rights of

others. Failure of the Court to award punitive damages is

likely to encourage unscrupulous persons actuated by

dishonest intention, to use the trademarks of others and

encash upon their goodwill and reputation which they have

built with years of hard work and labour.

5. For the reasons given in the preceding paragraphs,

the defendants are hereby restrained from manufacturing,

selling, marketing or advertising or promoting any

pharmaceutical preparations under the trademark FIFOL-Z,

FIFOL or any other mark which is identical or deceptively

similar to the registered trademark FEFOL/FEFOL-Z of the

plaintiffs. The plaintiffs are also awarded punitive damages,

amounting to Rs 2 lakh. If the amount of damages is not

paid within four weeks from today, the plaintiffs will also be

entitled to interest on the amount of damages at the rate of

6% per annum from the date of the decree till payment.

Decree sheet be drawn accordingly.

(V.K. JAIN) JUDGE NOVEMBER 24, 2011 'sn'/bg