Syntex Pharm AG vs Cipla Limited and Syntex USA LLC

A.S. Oka, J.—I have heard the learned Senior Counsel appearing for the plaintiffs in support of the prayer for ad-interim relief. I have also heard learned Counsel appearing for the defendants.

According to the case of the plaintiff, Syntex (USA) Inc. was the REGISTERED proprietor of the trade mark "Cellcept". The said registered proprietor conceived and adopted the trade mark "CELLCEPT" and applied for registration thereof on 13th October 1993. The said Syntex (USA) Inc. merged into second defendant pursuant to a scheme of merger. Pursuant to the said merger, all the assets of Syntex (USA) Inc. including intellectual property rights were transferred to and vested into the second defendant. On 31st December 2002 the second defendant assigned the said trade mark "CELLCEPT" to the plaintiff by a Deed of Assignment. On 22nd August 2003 an application was filed by the plaintiff for bringing the name of the plaintiff on record as the proprietor of the said trade mark. On 14th January 2004 the said trade mark was registered in respect of medicinal and pharmaceutical preparations included in class-5 of the 4th Schedule of Trade Marks Rules, 2000. According to the case of the plaintiff, the mark "CELLCEPT" has been openly, continuously, extensively and exclusively used in respect of the said product. According to the plaintiff, in September 2008 it was learnt that the first defendant has introduced in the market a medicinal preparation under the trade mark "Valcept". The case of the plaintiff is that the first defendant''s trade mark is phonetically, visually and structurally similar to the plaintiff''s registered trade mark. It is contended that the channels of trade of both the products are the same. It is contended that the first defendant''s trade mark is not yet registered. The case of the plaintiff is that in the light of triple identify of the trade marks, confusion or deception is bound to arise in the course of trade. The present suit has been filed seeking to prevent the acts of infringement and acts of passing off committed by the first defendant.

The learned Senior Counsel appearing for the plaintiff invited my attention to the material averments made in the plaint and documents annexed to the plaint. He pointed out that the product sold under the mark "Cellcept" is an immunosuppressive drug administered to patients after an organ transplant to prevent the patients from rejecting their new organ. He pointed out that the plaintiff''s licensee has also been manufacturing a product under its own registered trade mark "Valcyte" which contains an identical ingredient as the first defendant''s product "Valcept". He pointed out that the use of first defendant''s product with the trade mark "Valcept" by a patient for whom "Cellcept" has been prescribed will lead to disastrous consequences. He placed reliance on the decision of the Apex Court in the case of Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd., . He submitted that as the first defendant''s trade mark is phonetically, visually and structurally similar to the plaintiff''s trade mark, to prevent the disastrous consequences, an injunction must follow.

The first defendant has filed a reply pointing out that the Drugs Controller General (India) while granting the permission to the first defendant has imposed a condition that on the label of the product a warning shall be printed viz. "To be sold by retail on prescription of Specialists only". It is pointed out that on 24th December 2007 the defendant has made an application for registration of the trade mark "Valcept" in Class-5 in respect of medicinal and pharmaceutical praparations. It is pointed out that the permission to manufacture the product was granted by the Food and Drugs Administration Department on 11th January 2008 and from June 2008, the first defendant commenced marketing and selling of the said preparation. It is stated that in November 2007 the first defendant conceived the trade mark "Valcept" in respect of the medicinal preparation containing "Valganciclovir HCI" as its active ingredient. It is contended that as per the prevalent practice of the pharmaceutical industry, the name of active ingredient or the formulation has been used while conceptualising and conceiving the trade mark. It is contended that from June 2008 to September 2008, the sale of the said preparation under the trade mark "Valcept" is to the tune of Rs. 5.00 lakhs. It is submitted that the first defendants'' product is not available across the counter. It is submitted that both the products of the plaintiff as well as the first defendant are of very special nature and are not available in a chemist''s shop. It is submitted that both the products are to be dispensed only against a prescription given by the specialist. The first defendant has also pointed out the vast difference between the price of the product of the plaintiff and the defendants. It is pointed out that the price of the plaintiff''s preparation is Rs. 515/- for 10 tablets whereas the price of the fist defendant''s preparation is Rs. 980/- for 4 tablets (which works out to Rs. 245/- per tablet). It is pointed out that the first defendant has been manufacturing and marketing other products bearing suffix "cept". It is submitted that the mark of the first defendant is not at all phonetically, visually and structurally similar to the mark of the plaintiff. The learned Counsel appearing for the first defendant placed reliance on the decision of Division Bench of this Court in the case of Johann A. Wulfing Vs. Chemical Industrial and Pharmaceutical Laboratories Limited and Another, . He pointed out that this Court held that the word "CIPLAMINA" is not deceptively similar to the word "COMPLAMINA". He relied upon paragraphs 7 and 8 of the decision of the Division Bench. He submitted that in the present case the marks are neither similar nor deceptively similar and no case is made out for grant of any ad-interim relief. He submitted that the first defendant has started using the mark from March 2008 and marketing of the product has been started from June 2008.

I have carefully considered the submissions. It will be necessary to refer to the case of Apex Court in the case of Cadila Health Care Ltd. (supra). The Apex Court has quoted with approval the view taken by the House of Lords in the case of Aristoc Ltd. v. Rysta Ltd. The relevant part of paragraph 16 reads thus:

...It is also important that the marks must be compared as wholes. It is not right to take a portion of the word and say that because the portion of the word differs from the corresponding portion of the word in the other case there is no sufficient similarity to cause confusion. The true test is whether the totality of the proposed trade mark is such that it is likely to cause deception or confusion or mistake in the minds of persons accustomed to the existing trade mark.

The Apex Court also relied upon its earlier decision in the case of Amritdhara Pharmacy Vs. Satyadeo Gupta, in which it was observed that the products will be purchased by both villagers and townsfolk, literate as well as illiterate and the question has to be approached from the point of view of a man of average intelligence and imperfect recollection. In paragraph 22 of the judgement, the Apex Court also considered the case of Schedule-L drugs which are not sold across the counter but are sold only to the hospitals and clinics. The Apex Court observed that nevertheless it is not uncommon that because of lack of competence or otherwise, mistakes can arise specially where the trade marks are deceptively similar. In paragraph 25 the Apex Court observed thus:

The drugs have a marked difference in the compositions with completely different side effects, the test should be applied strictly as the possibility of harm resulting from any kind of confusion by the consumer can have unpleasant if not disastrous results. 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 medicine but the compositions are different. The confusion is more likely in such cases and the incorrect intake of medicine may even result in loss of life or other serious health problems....

Thereafter the Apex Court proceeded to hold that the principles laid down in English Cases regarding dissimilarity of the marks may not apply in Indian conditions. In paragraph 33 the Apex Court observed thus :-

...Can English principles apply in their entirety in India with no regard to Indian conditions? We think not. In a country like India where there is no single common language, a large percentage of population is illiterate and a small fraction of people know English, then to apply the principles of English law regarding dissimilarity of the marks or the customer knowing about the distinguishing characteristics of the plaintiff''s goods seems to overlook the ground realities in India. While examining such cases in India, what has to be kept in mind is the purchaser of such goods in India who may have absolutely no knowledge of English language or of the language in which the trade mark is written and to whom different words with slight difference in spellings may sound phonetically the same. While dealing with cases relating to passing off, one of the important tests which has to be applied in each case is whether the misrepresentation made by the defendant is of such a nature as is likely to cause an ordinary consumer to confuse one product for another due to similarity of marks and other surrounding factors. What is likely to cause confusion would vary from case to case. However, the appellants are right in contending that where medicinal products are involved, the test to be applied for adjudging the violation of trade mark law may not be on par with cases involving non-medicinal products. A stricter approach should be adopted while applying the test to judge the possibility of confusion of one medicinal product for another by the consumer. While confusion in the case of non-medicinal products may only cause economic loss to the plaintiff, confusion between the two medicinal products may have disastrous effects on health and in some cases life itself. Stringent measures should be adopted specially where medicines are the medicines of last resort as any confusion in such medicines may be fatal or could have disastrous effects. The confusion as to the identity of the product itself could have dire effects on the public health.

In the light of what is held by the Apex Court, the controversy in the present case will have to be decided. The trade mark of the plaintiff "Cellcept" and the mark of the first defendant "Valcept" have phonetic similarity. As held by the Apex Court in the case of Cadila Health Care Ltd. (supra), the trade marks must be compared as a whole and it is not open to take a portion of the word and say that because that portion of the word differs from the corresponding portion of the word in the other case, there is no sufficient similarity to cause confusion. Therefore, it is not possible to take out the word "Cell" from the mark of the plaintiff and to compare the same with the word "Val" in the mark of the defendant and to say that there is dis-similarity. Therefore, the decision in the case of Johann (supra) has no application. Both the marks will have to read as a whole. Comparing both the trade marks as a whole and considering what is held by the Apex Court in the case of Cadila Health Care Ltd. (supra) and especially in paragraphs 32 and 33 thereof, in this case there appears to be a confusing similarity between the two trade marks. Considering the conditions under which the products are sold in India, there is a distinct possibility of a confusion in case of these two marks. Therefore, stricter standards will have to be applied in view of what is held in the case of Cadilla (supra). The product of the plaintiff is a immunosuppressive drug and the product of the defendant is an anti viral product using for the treatment and prevention of "Cytomegalovirus". Therefore, use of the drug "Valcept" by patient who is prescribed the drug "Cellcept" will have disastrous consequences. The trade mark of the plaintiff has been registered in the year 2004 and the one of the first defendant is not registered.

In my view, a strong prima facie case has been made out by the plaintiff. Even according to the case of the first defendant, the marketing of its product has commenced from June 2008 and the present suit has been lodged on 14th October 2008. Considering the disastrous consequences which may follow in case of confusion, the issues of balance of convenience and irreparable loss will have to be held in favour of the plaintiff.

The Notice of Motion is made returnable after twelve weeks. There will be an ad-interim relief in terms of prayer Clauses (a) and (b).

The learned Counsel appearing for the 1st defendant prays for stay of operation of this order on the ground that the notice of motion is pending since October 2008. The said prayer is opposed by the learned Counsel for the plaintiff. It is pointed out that the consequences of allowing the 1st defendant to sell their products by using the offending trade mark are disastrous and therefore stay should not be granted. Considering the fact that the Notice of Motion is pending from October 2008 for hearing of prayer for ad-interim relief, the operation of this order will remain stayed till 17th January 2009.