I. BACKGROUND
The Hon’ble Delhi High Court, in a recent judgment passed on August 26, 2022, in the case of Sun Pharmaceutical Laboratories Limited v. Hetero Healthcare Limited and Another 1, (“Case”) held that a manufacturer could not claim exclusivity over a trademark when the same was derived from the principal ingredient of the drug itself. The said order forms part of a series of decisions which collectively provide for judicial guidelines on the determination of exclusivity of word marks.
As per the Trade Marks Act, 1999 (hereinafter referred to as the “Act”), the element of distinctiveness is essential for the registration of a mark. Section 17 (2) (b) of the Act states that “when a trade mark contains any matter which is common to the trade or is otherwise of a non-distinctive character, the registration thereof shall not confer any exclusive right in the matter forming only a part of the whole of the trade mark so registered.” It follows that exclusivity cannot be claimed over descriptive or generic marks unless it can be proven that such marks acquired distinctiveness or secondary meaning in the public domain.
II. FACTUAL BACKGROUND OF THE CASE
The Hon’ble District and Sessions Court, New Delhi, vide an order dated 29th April, 2022, dismissed an application filed under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 by Sun Pharmaceutical Laboratories Limited (hereinafter referred to as the “Appellant”), inter alia, alleging infringement of its trademark ‘LETROZ’ and passing off and seeking a decree of permanent injunction against restraining Hetero Healthcare Limited (hereinafter referred to as the “Respondent”). Aggrieved from the aforesaid order, the Appellant preferred an appeal before the Hon’ble Delhi High Court praying for an interim injunction restraining the Respondent from using the trademark ‘LETERO’. It was the Appellant’s case that the Respondent was infringing and passing off the former’s trademark, viz. ‘LETROZ’. The Appellant further claimed that its trademark was in use since 2001 as the name of a generic drug for second line treatment of advanced breast cancer, containing an active ingredient ‘Letrozole’.
III. CONTENTIONS OF THE APPELLANT
a) It was alleged by the Appellant that the Respondent had, since 2017, been indulging in passing off its own goods as those of the Appellant by using a deceptively similar trademark and thus riding on the goodwill and reputation of the Appellant’s product.
b) The Appellant claimed that due to the superior quality and high efficacy of the product, its sales increased to ₹8.34 crores in the year 2016-17. It also claimed that it had incurred huge expenses towards the publicity of its product ‘LETROZ’. It acquired immense reputation and goodwill in the said trademark and the goods sold thereunder.
c) The Appellant further claimed that it had the exclusive right to use the trademark on account of registration and is entitled to an order restraining the Respondent from using its mark as it is deceptively similar to the Appellants registered trademark. The injunction was, thus, sought alleging not only infringement of the trademark but also passing off the goods by the Respondent as those of the Appellant.
IV. CONTENTION OF THE RESPONDENT
a) On the other hand, the Respondent submitted that it had merely used a derivative of ‘Letrozole’, over which the Appellant could not claim monopoly as it was the international non-proprietary name (“INN”) of a salt i.e., the ingredient used in the drug;
b) The Respondent contended that the word ‘LETROZ’ is derived from the word ‘LETROZOLE’ and the word ‘LETROZ’ is the first six letters of the said INN and that its registration does not entitle the Appellant to claim exclusive rights in respect of the word ‘LETROZOLE’ or any part thereof.
c) The Respondent also emphasised the fact that it was a common market practice to use trademarks derived from active pharmaceutical ingredients and that it had used a combination of the ingredient name and its own name, viz. Hetero to coin the word mark ‘LETERO’, thus making it a distinctive and coined mark.
d) The Respondent further stated that, the marks LETROZ and LETERO were in no way phonetically or otherwise similar, hence it cannot be alleged that the two would create confusion in the minds of consumers or doctors prescribing the drug.
e) The Respondent stated that Section 13 of the Act, specifically provides that no word or a word deceptively similar to such name which is declared by the World Health Organization and notified in the prescribed manner by the Registrar from time to time, as an international non-proprietary name, shall be registered as a trademark and that the mark adopted and registered by the Appellant is nothing but the first six letters of the said INN.
V. DECISION
The Commercial Court found no case for the grant of an interim injunction and held that there was no deceptive similarity between the two marks. It held that the Appellant, in the present case, cannot be allowed to monopolize the INN ‘LETROZOLE’. The mark, ‘LETROZ’, is not similar to the trademark ‘LETERO’ merely because both the parties have adopted the initial letters (Appellant adopted the first six and Respondent adopted the first three) of the INN ‘LETROZOLE’. It is apparent that both the parties are using their marks, which are derived from the INN ‘LETROZOLE’, which is descriptive of the active ingredient of the drug, that is, ‘LETROZOLE’.
While concurring with the view taken by the Commercial Court, the Hon’ble Delhi High Court held “this Court is unable to accept that the learned Commercial Court has exercised its discretion arbitrarily or has ignored the settled principles of law relating to grant of refusal of interlocutory injunction”.
VI. LEGAL ANALYSIS:
Application of S.13 of the Trade Marks Act, 1999
S.13 of the Act provides that no word which is the commonly used and accepted of any single chemical element or any single chemical compound or a word which is declared by the World Health Organization and notified with the registrar as an INN, shall be used as a registered trademark.
Application of S.29 of the Trade Marks Act, 1999
S.29 of the Act provides that a registered trademark is infringed when an unauthorized entity uses a trademark which is identical or deceptively similar to the registered trademark. The factor for determination in the case of “deceptively similar” marks is whether or not a common consumer may be confused or deceived by such unauthorized use of a trademark.
In the case of Schering Corporation & Ors. v. Alkem Laboratories Ltd., 2009 SCC OnLine Del 3886, the Hon’ble Delhi High Court refused to grant an injunction to the plaintiff who had filed a suit for infringement of its trademark which was used in relation to a pharmaceutical product used to treat brain cancer. It was held in this case that both products were Schedule H drugs, obtainable only through prescription by a registered medical practitioner, therefore it could not be said that any confusion would be caused in the minds of consumers. In this case, both parties had used a derivative word of the active ingredient used in the drug, and therefore, the plaintiff was not entitled to an exclusive right of use.
In the case of Panacea Biotec Limited v. Recon Limited, 1996 SCC OnLine, Del 508, it was held that: “when the name is derived or coined from the name of the principal ingredient being used in the manufacture of the drug, no distinctiveness or
exclusiveness can be claimed from the manufacturer.”
VII. CONCLUSION
The Hon’ble Delhi High Court held that the ratio laid down in Schering Corporation & Ors. v. Alkem Laboratories Ltd., 2009 SCC OnLine Del 3886 and Panacea Biotec Limited v. Recon Limited, 1996 SCC OnLine, Del 508, and would apply squarely to the present Case. The determinative factors in this Case were firstly that the Appellant had merely used the first six letters of the INN i.e., the active ingredient used in the manufacture of the drug. Secondly, there was no phonetic similarity between the two marks. Thirdly, there was a significant difference in the prices of the Appellant’s product and that of the Respondent. Lastly, the packaging and manner of depiction of both trademarks were distinctly different.
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