The Bombay High Court recently comprising of a bench of Justices Nitin Jamdar and C.V. Bhadang refused to restrain Serum Institute of India (SII) from using the mark 'COVISHIELD' for its vaccine against the COVID-19 virus on the ground that SII was the prior user of the mark, had acquired enough goodwill and that discontinuing the name would create confusion and disruption in the vaccination programme (Cutis Biotech v. Serum Institute of India).
Facts of the Case
Last year in 2020, Cutis Biotech (Cutis) had filed an application for registration of the Trade Mark in class 5 in relation to wider specification of goods viz. ‘veterinary, ayurvedic, allopathic, medicinal and pharmaceutical preparations and vitamins and dietary food supplements for humans and animals’ (Cutis’ Goods), on a ‘proposed to be used’ basis.
After about a month, Serum applied for registration of the Trade Mark in class 5 limited to Serum’s Goods, on a ‘proposed to be used’ basis.
In December, Cutis filed a suit for passing off before the District Court, Nanded (Nanded Suit) for restraining Serum from using the Trade Mark. Serum appeared in the Nanded Suit and filed an application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) for rejection of plaint on the ground that the suit was barred by law as it ought to have been filed as a ‘commercial suit’ under the Commercial Courts Act, 2015 (Commercial Courts Act). Pursuant thereto, Cutis has filed an application for withdrawal of Nanded Suit and the same is pending.
On 4 January 2021, Cutis filed a similar suit under the Commercial Courts Act, for passing off before the(Pune District Court. The Pune District Court observed that Cutis failed to establish the primary ingredients of a passing off action i.e. a prima facie case, the balance of convenience and damages / likelihood of damages. Accordingly, Pune District Court vide judgment dated 30 January 2021 (Pune Court Order) dismissed the application for interim relief filed by Cutis. Being aggrieved by the Pune Court Order, Cutis filed the Appeal before the High Court.
Contention of the Parties
The contention of the appellant was that there is a large chance of confusion between their products and SII. It further stated that the suppliers of Cutis had allegedly stopped supplying goods to them which was causing damage to them and impairing their growth.
The appellant further stated that from 30 May 2020 to 31 December 2020 its turnover was Rs. 16,00,152 and it spent Rs. 1,22,500 for the advertising of its products. SII opposed the plea contending that it had coined the mark 'Covishield' in March 2020 itself.
In response, Serum inter alia contended that
- Cutis is not the prior adopter of the Trade Mark as Serum coined the Trade Mark in March 2020 and has been using the same continuously and extensively since then. This claim was supported by documentary evidence including approvals taken from Governmental authorities, expenses incurred on producing vaccines bearing the Trade Mark, and supply thereof to Indian Government as well as foreign countries on a large scale; and
- the revenue figures produced by Cutis towards the use of the Trade Mark were insignificant to impart any goodwill onto Cutis, as the Trade Mark had been used in respect of hand sanitisers and disinfectants, which remain in high demand due to the Covid-19 pandemic.
Courts Observation & Judgment
The High noted that to establish passing off by the respondent, the applicant must first establish goodwill and reputation attached to his goods and services. To establish goodwill, Cutis Biotech has claimed that from 30 May 2020 to 31 December 2020, its turnover was of Rs.16 lakh and it spent Rs.1.2 lakh towards advertisements.
Serum Institute contended that Cutis Biotech sold hand sanitizers and disinfectants, which products had high demand during the pandemic, the turnover of Rs.16 lakh for seven months is not significant. Cutis Biotech failed before the district court to establish goodwill.
Second issue before the court is likelihood of deception :whether the products of Cutis Biotech and Serum Institute are in the common field ? The District Court has held that the consumers of Cutis Biotech and Serum Institute are different, and the trade channels are also different. The vaccine ‘Covishield’ produced by Serum Institute is not available across the counter. The vaccine will be administered through Government agencies. The sale of disinfectant or hand sanitiser, though it may relate to the same field, that is, health care products, cannot be said to cause confusion in the mind of average consumers. The administration of vaccine through an injection is well known.
Since there is no prima facie case in favour of Cutis Biotech, its prayer to direct the Serum Institute to maintain accounts cannot be granted. A direction to maintain accounts is not a routine order and cannot be issued when there is no prima facie case made out by Cutis Biotech. Court also mentioned that, There is one more facet to be considered to determine the balance of convenience. That ‘Covishield’ is a vaccine to counter Coronavirus is now widely known. A temporary injunction directing Serum Institute to discontinue the use of mark ‘Covishield’ for its vaccine will cause confusion and disruption in the Vaccine administration programme of the State. In this case, thus, the grant of an injunction would have large scale ramifications traversing beyond the parties to the suit.
Read Judgment @Latestlaws.com
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