The Division Bench of the Delhi High Court in the case of Alkem Laboratories Ltd. vs M/S Laborate Pharmaceuticals India Ltd & Anr. consisting of Justices Jyoti Singh and Anoop Kumar Mendiratta reiterated that even a strong case of infringement in favour of one party can be off-set by an interim arrangement, which balances the equities between the parties and maintains public interest.
Facts
This appeal was filed under O43R1(r) and O43R2 2 CPC read with Section 13 of the Commercial Courts Act 2015 (“the Act”) assailing the passed by the learned Trial Court in CS(COMM) No. 394/2022. Appellant herein is the Defendant in the suit and Respondent No.1 is the Plaintiff. The parties were thereinafter referred to by their litigating status in the appeal.
Respondent No.1 (‘Respondent’) filed a suit against the Appellant, alleging infringement of trademark and copyright as well as passing off with respect to its registered trademark ‘LABDIC RELIEF’ and packaging thereof as well as unfair competition, dilution, etc. in respect of product being ‘pain relieving’ tablets.
Procedural History
An ex parte ad-interim injunction was granted by the Trial Court restraining the Appellant from manufacturing, selling or dealing in pharmaceutical preparations under the impugned mark ‘ALDIGESIC PAIN RELIEF’ or any other mark similar to the mark of the Respondent. It was also restrained from using its trade dress/product packaging and the blister packaging, alleged to be similar to Respondent’s packaging under ‘LABDIC RELIEF’. Appellant filed an application under O39 R4 CPC seeking setting aside of or vacating/varying the order. An application was also filed u/s 151 CPC for permission to sell its existing stock, amongst other reliefs. The learned Trial Court declined to vacate the interim injunction, clarifying, however, that Appellant was not restrained from dealing in products bearing the trademark ‘ALDIGESIC’ and rejecting the prayer for sale of the existing stock.
Contentions Made
Appellant: The ex-parte injunction was obtained by suppression of material facts, particularly that Appellant is the prior registrant of its trademark ‘ALDIGESIC’ (word) since 2010 as against Respondent’s registration for ‘LABDIC RELIEF’(word). The packaging of Appellant’s product, and that of Respondent’s product are palpably different and distinct with marked differences between the rival cartons and blister strip packaging. Respondent cannot claim monopoly over the colour of the packaging. The word ‘RELIEF’ is generic and descriptive to pain relief tablets and common to trade, so no proprietary rights can vest in the Respondent, to its exclusive use.
Respondent: The relief of selling the existing stock was sought by the Appellant in an application filed u/s 151 CPC and no appeal lies against an order passed under the same. Respondent adopted the trademark ‘LABDIC RELIEF’ for manufacturing and marketing pain killer tablets in the year 2001. Respondent is a registered proprietor of the wordmark and the first owner of the trade dress/packaging copyright u/s 17 of Copyright Act, 1957. Appellant’s impugned product is from the same family of pain relievers packaged and sold in deceptively similar trade dress/product packaging with identical features to confuse the customers. Such misrepresentation is bound to deceive the customers and cause damage and injury to Respondent’s business and goodwill. Unauthorised use of similar trademark/trade dress/product packaging leads to infringement, passing off, unfair competition and dilution etc.
Observations of the Court
The Bench noted that while the prayer for sale of existing stock was made u/s 151 CPC, however, the decision thereon was as a part of the order under O39 R4 CPC, treating the said relief as an ancillary and/or alternate interim relief. It was also observed that Section 13 of the Act clearly provides that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under O43 CPC. O43R1(r) provides that an appeal shall lie from an order under O39 39 Rules 1, 2 and Rule 4 CPC. So, the objection regarding maintainability could not be sustained.
It was further noted that balance of equities would be maintained between the parties if the Appellant is permitted to sell the existing stock, which was worth Rs.90 lakhs and they are persuaded to grant this permission on account of the fact that the subject product is a pain reliever and a ‘Schedule-H’ drug and there was no dispute on the quality of the Appellant’s product. Therefore, even the public interest would be sub-served if the product of the Appellant was allowed to be sold in the market. Reliance was placed on Lupin Limited v. Sun Pharma Laboratories Limited & Anr., Sun Pharma Laboratories Ltd. v. Ajanta Pharma Ltd., and Saga Lifesciences Limited v. Aristo Pharmaceuticals Pvt. Ltd. and Anr wherein the Court had permitted the Defendants therein to sell the existing stock while granting injunctions in favour of the Plaintiffs in matters relating to infringement and passing off in respect of pharmaceutical products, in order to balance the equities.
Judgment
The learned Trial Court was not justified in declining the relief of sale of the existing stock to the Appellant and the order required modification to this extent.. It was directed as follows:
- Appellant shall file an affidavit in this Court, within one week from today, detailing the existing stock of the product in question along with the total value of the stock as well as an undertaking that it shall only exhaust the existing stock till any further order by the Trial Court in its favour;
- The entire account of sales of the existing stock sold from various locations, with dates of sales, shall be filed on record of the learned Trial Court, by way of an affidavit of an authorised signatory of the Appellant Company.
Case: Alkem Laboratories Ltd. vs M/S Laborate Pharmaceuticals India Ltd & Anr.
Citation: FAO (COMM) 94/2022
Bench: Justice Jyoti Singh, Justice Anoop Kumar Mendiratta
Decided on: 17th June 2022
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