Ranbaxy Laboratories Ltd vs Crystal Pharmaceuticals
2012 Latest Caselaw 7287 Del

       *          IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                          Judgment reserved on: 17.12.2012
                                           Judgment pronounced on: 19.12.2012

+      CS(OS) 104/2011

       RANBAXY LABORATORIES LTD                                        ..... Plaintiff
                               Through:    None.
                      versus
       CRYSTAL PHARMACEUTICALS                                      ..... Defendant
                               Through :   None.

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

V.K. JAIN, J.

1. The plaintiff is a large pharmaceutical company and owns several

trademarks, including the mark PENTAGESIC, which is registered in its name in

Class 5 in respect of analgesic preparations. The plaintiff-company claims the

following sale figures in respect of the medicine being sold by it under the name

PENTAGESIC:-

                               2004        -       1.16 million

                               2005        -       1.54 million

                               2006        -       1.69 million

                               2007        -       1.48 million

                               2008        -       1.25 million



                            2009         -     0.71 million

2. It is alleged in the plaint that the defendant is manufacturing and marketing

its drug under the registered trademark PENTAGESIC of the plaintiff. The drug

being sold by the plaintiff under the name PENTAGESIC is an anti-inflammatory

drug used for management of pain, fever, etc. The drug being sold by the defendant

under the said trademark is also an anti-inflammatory tablet being used for the

same purpose. It is alleged that the adoption of the mark PENTAGESIC by the

defendant is dishonest, actuated with an intention of encashing upon the goodwill

and reputation of the plaintiff and is bound to create confusion and deception

amongst the purchasing public as well as in the trade. The plaintiff has accordingly

sought an injunction restraining the defendant from manufacturing, marketing or

selling any medicine under the name PENTAGESIC or any other mark which is

identical or deceptively similar to its registered trademark. The plaintiff has also

sought delivering up of all the medicines, dies, blocks, cartons, labels, unfinished

products, besides damages amounting to Rs 20 lakh.

3. The defendant was proceeded ex parte on 17.03.2011 as no one appeared for

it despite service on 10.02.2010.

4. The plaintiff has filed affidavit of its attorney Shri Shaibal Sen Gupta by way

of evidence. In his affidavit, Mr Sen has supported, on oath. the case set out in the

plaint and has also proved the documents relied upon by the plaintiff.

5. Ex.PW-1/2 is the copy of the certificate of registration of the trademark

PENTAGESIC in favour of the plaintiff-company. The registration is effective

from 30.01.1974 and covers analgesic preparations comprised in class 5. Ex.PW-

1/3 is the photocopy of the packaging of the plaintiff-company in which it is selling

drug using the trademark PENTAGESIC-MR as also of the packaging in which the

defendant is selling drug under the name PENTAGESIC. Ex.PW-1/4 is the sale

figures of the plaintiff-company in respect of the product PENTAGESIC and it

shows that the sale of PENTAGESIC which was Rs 1.16 million in the year 2004

has grown to Rs 5.75 million in the year 2011.

6. As noted earlier, the plaintiff-company is registered owner of the trademark

PENTAGESIC in respect of analgesic preparations. Therefore, the defendant has

no legal right to sell analgesic preparations under the name PENTAGESIC or any

other name which is identical or deceptively similar to the said registered mark of

the plaintiff- company. A perusal of the photocopy of the packaging in which drug

is being sold by the defendant under the name PENTAGESIC would show that this

drug is an anti-inflammatory preparation, being a combination of paracetamol and

ibuprofen. Section 29(1) of Trademarks Act, to the extent it is relevant for our

purpose, would show that a registered mark is infringed when a person who is

neither its owner nor a registered user uses an identical or deceptively similar mark

in relation to the goods which are covered by the registered mark. Since the

defendant is using the registered trademark of the plaintiff in respect of those very

goods which are covered by the said mark, it is a clear cut case of infringement of

the registered trademark PENTAGESIC of the plaintiff.

7. Though the plaintiff has been selling drug under the name PENTAGESIC-

MR that would make no difference since PENTAGESIC is the registered mark of

the plaintiff and same is the mark being used by the defendant. If injunction is not

granted against use of the mark PENTAGESIC by the defendant, it is likely to

cause confusion not only to the members of the public, but in the trade as well. If a

doctor prescribes PENTAGESIC/ PENTAGESIC-MR to his patient and that

prescription is handed over to the chemist for purchase of the prescribed medicine,

it is quite likely that instead of selling the product of the plaintiff, the chemist may

sell the product of the defendant though the doctor wanted the patient to take the

product of the plaintiff and not the product of the defendant. Similarly, if a patient

goes to a chemist, without prescription and ask for PENTAGESIC tablet, the

chemist may sell the product of the defendant to him though the customer might be

seeking to purchase the product of the plaintiff.

8. Another material subject in this regard is that there is some difference in the

composition of the drug being sold by the defendant and the drug being sold by the

plaintiff, though both the drugs are anti-inflammatory drugs. The drug of the

plaintiff is a combination of Diclofenac Sodium, Paracetamol and Chlorzoxazone,

whereas the drug of the defendant is Paracetamol and Ibuprofen. A doctor may

like to give the combination being sold by the plaintiff-company and, therefore,

prescribe PENTAGESIC. However, on account of the use of the mark

PENTAGESIC on the product of the defendant, the chemist may sell the drug

having a different combination, i.e., Paracetamol and Ibuprofen, which may prove

to be harmful to the patient. It is, therefore, in the interest of the members of the

public that the defendant does not use the trademark PENTAGESIC in respect of

the anti-inflammatory/analgesic drug being sold by it. The plaintiff is, therefore,

entitled to an injunction against use of the mark PENTAGESIC by the defendant in

respect of analgesic preparations.

9. The plaintiff has also claimed damages amounting to Rs 20,50,000/-. No

evidence has, however, been led by the plaintiff to prove the actual damages

suffered by it on account of use of the trademark PENTAGESIC by the defendant.

However, it can hardly be disputed that the defendant must have made profits by

use of the registered trademark PENTAGESIC of the plaintiff-company. The

adoption of the trademark PENTAGESIC by the defendant appears to be dishonest

and mala fide, the sole objective being to encash upon the goodwill and reputation

which the trademark PENTAGESIC of the plaintiff-company enjoys amongst the

doctors as well as in the members of the public. As noted earlier, a person seeking

to purchase the product of the plaintiff and ending up purchasing the product of the

defendant may suffer harm on account of use of the drug which has not been

prescribed to him and which he does not intend to purchase. Moreover, if the

quality of the drug being sold by the defendant under the name PENTAGESIC is

not up to the mark, this may also adversely affect brand value which the mark

PENTAGESIC of the plaintiff enjoys in the market since the customer who

purchases the product of the defendant, under a false impression that he is

purchasing the product of the plaintiff, may assume that the quality of the product

of the plaintiff has declined. If it so happens, it is likely to adversely affect the

financial interest of the plaintiff-company besides eroding the reputation which its

brand PENTAGESIC enjoys in the market.

10. This is a harsh reality that in our country, despite statutory requirement of

obtaining prescription from a registered medical practitioner, the chemists and

druggists continue to sell drugs such as analgesic and anti-inflammatory medicines,

without insisting upon such a prescription. In fact, the analgesic and anti-

inflammatory tablets are available over the counter, without production of a

medical prescription and this happens not only in small towns and villages, but also

in metropolitan cities. Therefore, there is a strong likelihood that a customer,

possessing an average intelligence and imperfect recollection, may buy the product

of the defendant on the assumption that he was buying the product of the plaintiff

which is a reputed and well-known anti-inflammatory medicine.

11. It was observed by Supreme Court in Cadila Health Care Ltd. vs. Cadila

Pharmaceuticals Ltd. 2001 PTC 541 (SC), the Courts need to be particularly

vigilant where the defendant's drug, of which passing off is alleged, is meant for

curing the same ailment as the plaintiff's medicines, but the compositions are

different. It was also observed that it is not uncommon that because of lack of

competence or otherwise, mistakes can arise, specially where the trademarks are

deceptively similar. It was also noted by the Court that while examining such cases

in India, what has to be kept in mind is that the purchaser of such goods may have

absolutely no knowledge of English language or of the language in which the

trademark is written and to whom different words with slight difference in

spellings made sound phonetically the same.

12. The question of granting punitive damages came to be considered by me in

Autodesk, Inc. & Another v. Mr. Prashant Deshmukh & Others: 183(2011) DLT

411 and the following view was taken:

"Regarding punitive damages in the case of Time Incorporated v. Lokesh Srivastava & Anr., 2005 (30) PTC 3 (Del), this Court observed that punitive damages are founded on the philosophy of corrective justice and as such, in appropriate cases these must be awarded to give a signal to the wrong doers that the law does not take a breach merely as a matter between rival parties but feels concerned about those also who are not party to the lis but suffer on account of the breach. In the case of Hero Honda Motors Ltd. v. Shree Assuramji Scooters, 2006 (32) PTC 117 (Del), this Court noticing that the

defendant had chosen to stay away from the proceedings of the Court felt that in such case 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 Microsoft Corporation v. Deepak Raval MIPR 2007 (1) 72, this Court observed that in our country the Courts are becoming sensitive to the growing menace of piracy and have started granting punitive damages even in cases where due to absence of defendant, the exact figures of sale made by them under the infringing copyright and/or trademark, exact damages are not available. The justification given by the Court for award of compulsory damages was to make up for the loss suffered by the plaintiff and deter a wrong doer and like-minded from indulging in such unlawful activities.

In Larsen and Toubro Limited v. Chagan Bhai Patel MIPR 2009 (1) 194, this Court observed that it would be encouraging the violators of intellectual property, if the defendants notwithstanding having not contested the suit are not burdened with punitive damages.

Also, the Court needs to take note of the fact that a lot of energy and resources are spent in litigating against those who infringe the trademark and copyright of others and try to encash upon the goodwill and reputation of other brands by passing of their goods and/or services as those of that well known brand. If punitive damages are not awarded in such cases, it would only encourage unscrupulous persons who actuated by dishonest intention, in the case of a trademark use the well-reputed trademark of another person, so as to encash on the goodwill and reputation which that mark enjoys in the market, with impunity or in the case of a software use the pirated software thereby depriving the copyright owner

of the revenue to which he is entitled by sale of licence to use that software and then avoid payment of damages by remaining absent from the Court, thereby depriving the plaintiff an opportunity to establish actual profit earned by him from use of the infringing mark/pirated software, which, if he is using the infringing mark/pirated software for business purposes, can be computed only on the basis of his account books. This would, therefore, amount to putting premium on dishonesty and give an unfair advantage to an unscrupulous infringer over those who have a bona fide defence to make and therefore come forward to contest the suit and place their case before the Court."

The view taken above applies with a stronger force in the case of sale of

medicines.

13. For the reasons stated hereinabove, a decree for permanent injunction is

hereby passed, restraining the defendant from packing, selling, distributing,

marketing or promoting any analgesic/anti-inflammatory drug under the trademark

PENTAGESIC or any other mark which is identical or deceptively similar to the

said mark. A decree for recovery of Rs 5 lakh as damages is also passed in favour

of the plaintiff and against the defendant. The plaintiff shall also be entitled to

proportionate costs of the suit. No other relief is granted to the plaintiff.

Decree sheet be drawn accordingly.

V.K.JAIN, J

DECEMBER 19, 2012 BG