Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.
Supreme Court of India · 26 March 2001 · 3 judges
In a passing off dispute over the drug marks Falcigo and Falcitab, the Court left the refusal of interim injunction undisturbed but held that a stricter test of deceptive similarity applies to medicinal products, and listed the relevant factors.
Facts
Both companies took over the business of the former Cadila Group on its restructuring and each could use the name CADILA. The appellant sold an anti-malarial drug, containing Artesunate, under the mark Falcigo from October 1996 and had applied for its registration. The respondent sold a drug containing Mefloquine Hydrochloride, also for Falciparum malaria, under the mark Falcitab. The appellant sued in the District Court, Vadodara, for an injunction against passing off. The respondent said the prefix 'Falci' was taken from the disease name and that both were Schedule L drugs sold only to hospitals and clinics. The trial court refused an interim injunction, finding the drugs different in appearance, formulation and price, and the High Court dismissed the appeal. The Supreme Court did not interfere, directed speedy trial, and gave its reasons and the governing principles in this judgment.
Questions before the Court
- What test of deceptive similarity applies in a passing off action based on an unregistered trade mark?
- Does a different and stricter standard apply where the competing marks are used for medicinal products?
- Did S.M. Dyechem Ltd. v. Cadbury (India) Ltd. correctly state the law on the weight to be given to differences in essential features?
What the Court held
- In a passing off action, what has to be seen is the similarity between the competing marks and whether it is likely to deceive or cause confusion, judged from the view of a purchaser of average intelligence and imperfect recollection. Phonetic similarity cannot be jettisoned because the words are written differently.
- While agreeing that comparative strength of the parties' cases must be examined in trade mark matters, the Court held that the decision on merits in S.M. Dyechem Ltd. v. Cadbury (India) Ltd. does not lay down correct law, as it conflicts with Amritdhara and Durga Dutt Sharma.
- For medicinal products a stricter approach applies and a lesser degree of proof of confusing similarity suffices, since confusion may endanger health or life. That drugs are sold only on prescription or to hospitals is not by itself enough to prevent confusion.
- Deceptive similarity in a passing off action on an unregistered mark is decided on factors including the nature of the marks, degree of resemblance, nature and character of the goods, class of purchasers, mode of purchase and other surrounding circumstances, with weight depending on the facts.
- As evidence on merits may be needed, the Court did not interfere with the orders refusing interim injunction and directed the trial court to decide the suit expeditiously in the light of these observations.
Why it matters
The judgment states the factors for deciding deceptive similarity in passing off actions on unregistered marks and adopts a stricter standard for medicinal products. It declares that the decision on merits in S.M. Dyechem Ltd. v. Cadbury (India) Ltd. does not lay down correct law, reaffirming the earlier line of cases that stress overall and phonetic similarity judged from the view of the Indian purchaser of average intelligence and imperfect recollection. It also suggests that drug authorities check for confusing brand names before approval.
In the Court's words
Copied from the official judgment; each passage links to its page.
“Public interest would support lesser degree of proof showing confusing similarity in the case of trade mark in respect of medicinal product as against other non-medicinal products. Drugs are poisons, not sweets. Confusion between medicinal products may, therefore, be life threatening, not merely inconvenient.”
“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 at 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.”
“We are unable to agree with the aforesaid observations in Dyechems case (supra). As far as this Court is concerned, the decisions in the last four decades have clearly laid down that what has to be seen in the case of a passing off action is the similarity between the competing marks and to determine whether there is likelihood of deception or causing confusion.”
“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 plaintiffs goods seems to over look the ground realities in India.”
Provisions interpreted
- Sections 27 and 28, Trade and Merchandise Marks Act, 1958
- Section 17-B, Drugs and Cosmetics Act, 1940
Case and bench
- Parties
- Cadila Healthcare Limited v. Cadila Pharmaceuticals Limited
- Case
- Civil Appeal No. 2372 of 2001 (Special Leave Petition (Civil) No. 15994 of 1998)
- Decided
- 26 March 2001
- Bench
- B.N. Kripal, Doraswamy Raju, British Kumar
- Opinions
- Judgment of the Court delivered by Kirpal, J. No separate opinion appears in the file.
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