USV Limited vs Systopic Laboratories Limited and Another

Prabha Sridevan, J.—O.A. No. 95 of 2003 is an application for injunction restraining the respondent from dealing with medicinal and

pharmaceutical preparations under the trademark PIO, PIO-15 and PIO-30, which are identical with or deceptively similar to the applicant''s

trademark PIOZ-15 and PIOZ-30, pending the suit, Since the second respondent is outside the jurisdiction of this Court, applicant prayed for

leave to sue, which was granted on 22-01-2003. According to the applicant, the first respondent had its office within the jurisdiction of this Court

and had effected sale of the products bearing the offending trademark within the jurisdiction of this Court.

Notice was ordered in the injunction on 28-01-2003. The first respondent filed its counter. The first respondent filed application No. 1396 of

2003 for issuance of notice to the applicants as to why they should not be prosecuted for their acts of perjury and for making false statements.

Both the applications were taken up for hearing.

According to the learned Senior Counsel for the applicant, Mr. P. Chidambaram, the words PIO and PIOZ have hardly any difference. The

applicant had prior user, so the respondent must be injuncted from using the word PIO. The order dated 26-06-2002 in Application No. 230 of

2002 in C.S. No. 234 of 2002 was produced. The same applicant had obtained an injunction against another person who marketed the medicine

under the name PIOZED. The learned Senior Counsel would submit that the decision in the other case applies to the present one. After the

injunction was granted against use of the trademark PIOZED the parties entered into, a compromise. The defendant in that suit agreed to amend its

trademark from PIOZED to PIOMED. According to the learned Senior Counsel the respondent herein should also amend its mark so that it is

distinct from the applicant''s.

He submitted that Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd., squarely applies to this case. Himachal Pradesh Horticulture

Produce Marketing and Processing Corporation Ltd. Vs. Mohan Meakin Breweries Limited, was relied on to show that in a suit for passing off,

the cause of action will arise if the respondent is proved to have directly made sale of goods under the impugned trademark not to an individual

consumer but to a distributor; wholesaler or a retailer and such a sale is on a commercial scale. In the case on hand, the address given in the plaint

as the address of the first defendant belonged to the Consignee agent of the first defendant and therefore, sale on a commercial scale was clearly

taking place. Therefore, cause of action arose within the jurisdiction of this Court. Section 20, CPC was referred to. It was submitted that the

examples given in the said section would show that the place of operation of the agent was a place where cause of action arose. In answer to the

respondent''s charge of perjury, the learned Senior Counsel pointed out that the suit summons had been received at the address given in the plaint

and the invoice at page No. 17 of the respondent''s typed set showed that the address given therein was the address to which stock transfer was

made. Therefore, Section 191, IPC was not attracted since neither was the statement false nor can it be said that the applicant knew or believed it

to false. It was also submitted that this is not a proceeding under the Companies Act where the Company has to be served only at the registered

address.

The learned Senior counsel for the respondent, Mr. Aravind Datar, would submitted that PIO is descriptive of the chemical, which is the main

ingredient in the product and is publici juris and the applicant cannot claim any monopoly over the same. He also produced a copy of the Indian

Drugs Report, which shows that there are several medicines in the market beginning with the word PIO. Merely because in another case the

applicant had obtained injunction against another defendant it would not mean that injunction should automatically follow in this case. There, the

offending trademark was PIOZED and the learned Judge held that ED was silent. So PIOZ or PIOZED virtually sounded the same and that

reasoning will not apply here.

In the Cadila case, Supreme Court gave reasons why Courts should be careful where passing off is alleged in medicinal preparation. If a

medicinal preparation is contra-indicative to the ailment for which another medicine is prescribed and both sound similar, it may lead to

complications and sometimes it may even be fatal. It was submitted that in this case the words are not similar and both are prescribed for diabetes

and contain the same ingredients. He also submitted that the balance of convenience is not in favour of granting injunction. Section 20, CPC has no

applicability in the present case, since Section 120 of the CPC provides that Section 20 is inapplicable to suits filed under the Original Side of the

High Court. He referred to the Madras High Court O.S. Rules and to show that unless leave was granted the applicant cannot sue the first

defendant. He further submitted that the address for service on the applicant was not the registered address of the applicant and in fact, the

applicant does not carry on business at the address given in the plaint. The applicant had knowingly and deliberately given a false address as the

address of the first defendant. According to the learned Senior Counsel the consignee agent known as ""Pride Remedies"" carrying on business at

the address given in the plaint as the first respondent''s address, markets not only the respondent''s products but also the applicant''s products and

various other pharmaceutical products. By no stretch of imagination can that the address be said to be the address of the first respondent or the

address of the, first respondent''s branch office. He also referred to Order 16 Rule 14(a), CPC, which refers to the address where a Corporation

sues or is sued.

Various decisions were relied on in which Courts have laid down the guidelines for granting injunction in the case of medicinal preparations. He

also referred to cases where injunction was denied because there was a suppression of facts.

Sections 15 to 25, CPC deals with the place of suing. The applicant relied on Section 20 to show that the suit can be instituted within the legal

limits of whose jurisdiction any of the defendants where there are more than one actually and voluntarily resides or carries on business. Section 120

of the CPC states that Sections 16, 17 and 20 will not apply to the High Court in the exercise of its original jurisdiction. So we then look to the

Letters Patent for guidance. Clause 12 of the Letters Patent provides that :

this Court in exercise of its ordinary original civil jurisdiction shall be empowered to receive, try and determine suits of every description if in the

case of suit for land or other immovable property such land or property shall be situated or in all other cases if the cause of action shall have arisen

either wholly or in case, the leave of the Court shall have been first obtained in part within the local limits of the ordinary original jurisdiction of the

Court or if the defendant at the time of the commencement of the suit shall dwell or carry on business or personally work for gain within such

limits...."".

Order 3 of the Original Side Rules provides for leave to sue. Order 5 deals with issue and service of summons. Order 6 Rule 14(a) of the CPC

deals with the address for service of notice and deals with the consequences if the Court finds that the registered address of a party is discovered

to incomplete, false or fictitious, in the case where the party furnishing his address as the defendant. Order 29 of the CPC deals with suits by or

against Corporation. Rule 2 of the said order is relevant.

Service on corporation.--Subject to any statutory provision regulating service of process, where the suit is against a corporation, the summons

may be served-

(a) on the secretary, or on any Director, or other principal officer of the corporation, or other principal officer of the corporation, or

(b) by leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office then at the place where

the corporation carries on business.

In this case, the applicant has given the address of the 1st respondent as Sys-topic Laboratories Limited, N. First Stree, Railway Colony,

Mehta Nagar, Chennai-29 represented by its Director. The long cause title states that the first defendant is a Company incorporated under the

Companies Act, 1956 having its office at the same address. It is admittedly the address of one ""Pride Remedies"". The applicant definitely knew

that this was not the registered address of the first respondent. The sale of the respondent''s product was taking place at Chennai on a commercial

scale. Therefore, the applicant would have had no difficulty in obtaining leave to sue the respondents 1 and 2. But for reasons best known to the

applicant, the'' applicant obtained leave to sue the second defendant alone stating that the first defendant was having its address within the

jurisdiction of this Court. The learned Senior counsel for the applicant would submit that in the first respondent''s web-site there is a map of India

showing the Systopic presence and it includes Chennai and therefore, the cause of action arose at Chennai. I do not think much weight can be

given to this submission because even if the first respondent''s presence is all over India what we are concerned with is whether sale of this product

was carried on at Chennai and whether the address for service of summons to the first respondent is the address that is given. As already seen the

fact that the applicant has shown that the respondent''s products are being sold at Chennai even without the aid of the website, the explanation for

not giving the address of the first respondent is far from satisfactory. The registered address of the first respondent is evident to any person, who

would care to look at the carton in which the respondent''s product is sold. It passes comprehension as to why the applicant would choose to

ignore this and give as the address for service on the Corporation an address where the consignee agent is carrying on business. The applicant may

have given the correct registered address, and also stated that the Chennai address is that of the consignee agent. In the counter, the applicant

casually says that only now the applicant came to know that the address given in the plaint was that of the Commission Agent. The applicant does

not explain why the correct address, which is known to the applicant was not given.

In Shalimar Rope Works Ltd. Vs. Abdul Hussain H.M. Hasanbhai Rassiwala and Others, which was a suit against the Company, the Supreme

Court dealt with the mode of service of summons and the Supreme Court held that,

The words ""leaving the summons at the registered office"" under Clause (b) do not mean that the summons can be left anywhere uncared for in the

registered office of the company. These words have to be read in the background of the provision contained in Order 5, Rule 17 of the Code. In

other words, if the serving peon or bailiff is not able to serve the summons on the Secretary or any Director or any other Principal Officer of the

Corporation because either he refuses to sign the summons or is not to be found by the serving person even after due diligence then he can leave

the summons at the registered office of the company and make a report to that effect.

Similarly it appears to me that the address for service on a Corporation cannot be just any place where the products of the defendant are sold but

the registered address of the Company or it may be served in the manner laid down in Order 29.

In Shalimar Rope Works Ltd. Vs. Abdul Hussain H.M. Hasanbhai Rassiwala and Others, that case, the summons was served on an employee

who was an Office Assistant sitting in the registered office of the Company. Even though it was served at the registered address it was held to be

not an valid service of summons. This is referred only to show the importance of proper service of summons. The fact that ""Pride Remedies"" had

received the notice calling itself as the Commission Agent will not help the applicant. The verification of pleadings by the Manager (Legal) that this

information given is true to his knowledge, information and belief is difficult to accept.

If the stand of the applicant is to be accepted, then the big soap and detergent giants whose products are sold all over the country may be sued

at the address of any little grocery shop in any small village in this vast country. Merely because the proceedings do not arise under the Companies

Act, the applicant cannot be excused for not giving the registered office of the Corporation which is sought to be sued and which was within the

applicant''s knowledge. It must have taken some investigative skill to locate the address of the Commission Agent and to give the same as the

address for service on the defendant. The applicant wants an equitable relief and should show that he has come with a bona fide case. We do not

know with what intent, the applicant has given deliberately the address of the Commission Agent of the respondent when he cannot plead

ignorance of the registered address of the defendant. This reason alone is enough to deny the relief in favour of the applicant. The learned Senior

Counsel would submit that the provisions regarding the registered address of the Corporation would apply only to proceedings under the

Companies Act and not to any other proceedings. This submission has to be rejected.

In Jute and Gunny Brokers Ltd. and Another Vs. The Union of India (UOI) and Others, the question of validity of service of summons came

to be considered and the Supreme Court examined whether service on the managing agents was service on ""other principal officer"". It Was

contended before the Supreme Court that the definition of an officer given in the Companies Act is an artificial definition and only for the purpose

of the Companies Act and not for the Code of Civil Procedure. The Supreme Court observed that,

That Appellate Court did not accept this contention and was of the opinion that the definition of an officer given in the Companies Act can also be

utilised for the purpose of the Code of Civil Procedure, and we think that that view is correct.

The Supreme Court there observed that Order XXXIX, Rule 2, CPC is subject to any statutory provision regulating service of process. The only

other statutory provision was held to be that in Section 148 of the Companies Act which is similar to Section 51 of the Companies Act, 1956. So

summons can be served either in accordance with the provisions of the Companies Act or the provisions of Order 29 Rule 2 of the Code of Civil

Procedure. The applicant cannot pull out an address acted to the best of his knowledge and belief.

The applicant also has not obtained leave to sue the first defendant who obviously carries on business outside the jurisdiction of this Court.

Unless leave to sue the first defendant is obtained no interim order can be granted against the first defendant.

Now (sic) come to the merits of the case. The cartons of the applicant and the respondent''s products are not identical. The copy of the Indian

Drug Report would show that most of the drugs which use the chemical pioglitazone hydrochloride use the word PIO and the list of those drugs

have also been enclosed in the typed set filed by the respondent. It has been held that it is not a defence in a passing off action to state that other

medicine manufacturing companies are using similar sounding words and no action has been taken against them.

In fact in Indian Shaving Products Ltd. and Anr. v. Gift Pack and Anr., 2000 CLC 183 : 1998 (18) PTC 698 (Del) the Delhi High Court held

that the allegation that some other manufacturers are also using the said trademark, is not available to the defendants as the Court is concerned with

the parties concerned before it only. However, the reference to the other companies using the similar name is referred to only for the purpose of

showing that the word PIO is indicative of the basic ingredient and it cannot be said to belong to the applicant alone. In fact the applicant had

himself stated in the counter filed in the other suit which is filed in the paper book, that the grievance is against the use of the word PIOZ as a whole

and not PIO as such. I am not saying that the applicant is estopped from seeking injunction because of that statement. It is only to demonstrate that

the applicant is aware, it cannot claim ownership over the word PIO. PIO sounds different from PIOZ, It cannot be said that the two are identical

and in any case the applicant cannot object to the use of the word PIO.

The decision in Cadila case was relied on by both the parties. In that case the plaintiff was selling a tablet under the trade name ""Falcigo"". The

defendant was marketing the drug by name ""Falcitab"". ""Talcigo"" was for treatment of cerebral malaria and ""Flacitab"" was for falcipharum malaria,

but the basic ingredient was different. The defence taken was that the word, ""Falci"" which is the prefix of the mark was taken from the name of the

disease and that it is common practice in pharmaceutical trade to use part of the word of the disease to the product to indicate of the Doctors that

the particular product is meant for the particular disease. As far as the medicinal products are concerned the name may be based on the three

factors, (a) Generic term or ailment as in the case of FALCI case; or (b) it can refer to organ or part of body as in LIV. - 52; or (c) it may refer to

ingredients of medicine as in PIO for Pioglitazone Hydrochloride.

The Trial Court in the Cadila case dismissed the injunction application on the ground that the two drugs differed in appearance, formulation and

price and could be sold only to hospitals and no chance of deception or/of confusion was likely. The appeal also was dismissed and therefore, the

manufacturer of ""Falcigo"" went before the Supreme Court. It is relevant to note that the Supreme Court did not interfere with the decision not to

grant injunction. However, the Supreme Court examined the principles on which these cases have been or are required to be decided. The

Supreme Court also observed that when the drugs have a marked difference in the composition and/or have completely different side effects, the

tests should be applied strictly as the possibility of confusion of one medicinal product for another could have disastrous results. The Supreme

Court also said that the Courts need to be particularly vigilant where the defendant''s product of which passing off is alleged is meant for curing the

name ailment but the compositions are different. In the present case, admittedly the medicinal products of the two parties are marketed in the same

two strengths viz. 15mg and 30mg. Both contain Pioglitazone Hydrochloride.

Several judgments were cited to show how Courts have dealt with applications under Order 39, Rules 1 and 2, CPC in passing off action. The

drugs were Dropvit and Protovit, Nimulid and Remulide, Rechlor and Curechlor, Dispirin and Medisprin, Sorbilene and Sorbitone, Mexate and

Zexate, Lipicard and Lipicor, Menscure and Mensurol, Liv-52 and Liv-T, Micronix and Microtel, Cera and Re cera vitreous. In the Lipicor case

the applicant pressed into use the judgment of the Supreme Court in Cadila case, and the learned Judge of the Delhi High Court deduced some

principles as the tests for deciding a passing off action in medicinal problems which may not be applicable in non-medicinal problems. When the

drugs have completely different side effects the tests should be applied strictly and the Courts need to be particularly vigilant. Even if both drugs are

sold under prescription, strict measures to prevent confusion arising from similarity of marks must be adopted. Public interest would support lesser

degree of proof for showing confusing similarity in the case of trademarks in respect of medicinal products as against non-medicinal products since

drugs are poisons and not sweets. In LIPICOR case, both the drugs were lipid lowering drugs used in Cardiac diabetics and the learned Judge

held that the word LIPI is publici juris and cannot be owned by anyone for use as trademark and the learned Judge also referred to the use of

theword LIPI in several products.

Injunction is not granted; because the word PIO is publici juris and the applicant has no monopoly over it; because many products using the

same ingredient for treatment of diabetes use the word PIO for their trademark; because the names of the two products are not identical; the

applicant has not obtained leave to sue the first applicant; and because with oblique motive the applicant did not give the correct address of the first

respondent which was within the applicant''s knowledge.

If the ailment for which PIO is prescribed is contra-indicated in the ailment for which PIOZ is prescribed-both are prescribed for diabetes; or if

the two products are marketed in different strengths-they are marketed in the two same strengths 15 and 30; or if they contain different

ingredients-both contain pioglitazone hydrochloride, then the decision may have been different. But here the lesser degree of proof, or the more

stringent test is not necessary. Public interest also does not suffer.

The injunction application O.A. No. 95 of 2003 is therefore, dismissed with costs. The application 457 of 2003 is closed.

Application No. 1396 of 2003:

In the counter to this application, the applicant (who is the respondent in the application) has stated that no prejury has been committed by them

and any discrepancy in the address is due to the bona fide mistake of fact and that the deponent, believed that the applicant/first defendant had an

office at the address given in the plaint and that however, later when the applicant/first defendant filed their counter, the deponent came to know

that the address that was that of the consignee agent of the applicant/first defendant. In the leave to sue application the applicant stated that the

cause of action arose at Chennai""..... where the first defendant is located...."". In the apply to the counter filed in O.A.No. 95 of 2003 they had

stated that the first respondent has a consignee agent at Chennai and carries on business at Chennai. This reply is sworn to on 08-03-2003, the

notice in Application No. 1396 of 2003 was served on the applicant 18-03-2003 and in the counter, in that application the deponent has slated

that he came to know that he was a consignee agent only from the endorsement in the receipt of the notice. It is rather unfortunate that ambivalent

statements are being made to suit the occasion.

While the burking of the registered address of the first respondent-Corporation and furnishing the address of a stray dealer throws enough

doubt on the bona fides of the applicant deny the equitable remedy of injunction it may not be sufficient to warrant initiating criminal proceedings.

So no orders are necessary in this application.