High Court on Distinctiveness-Letters in the middle of an INN can't be linked to active ingredient

Introduction

The Hon’ble High Court of Delhi in the case of FDC LIMITED VERSUS NILRISE PHARMACEUTICALS PVT. LTD. AND ANR.[1] held that the overall similarity from the point of view of a man with average intelligence and imperfect recollection must be seen in an infringement suit. Further, granting an order of interim injunction, the High Court rejected the Defendant’s argument that the term ‘POD’ in the Plaintiff’s mark “ZIPOD” is generic and is derived from the common molecular name i.e., “Cefpodoxime”. In its opinion, the Court noted that “POD” appears in the middle of the molecule name; it is neither the opening nor the closing part and is the irrelevant part of the said molecular name.”

Background

The present case was filed by the proprietor of FDC Limited (hereinafter referred to as the ‘Plaintiff’). The Plaintiff sought for an injunction order to restrain the proprietors and people related to Nilrise Pharmaceuticals Pvt. Ltd. and Anr. (hereinafter referred to as the ‘Defendants’) from manufacturing, marketing, or selling any pharmaceutical/ medicinal product under the mark “ZOYPOD” .

The Plaintiff alleged that its mark “ZIPOD” was conceived in the year 2004 and has been in use since 2007 for antibiotic and anti-bacterial preparations. It further asserted that the net sales and profits for its brand “ZIPOD” and its variants have increased multiple folds. The Plaintiff filed the present suit being aggrieved by the adoption of a phonetically and conceptually similar mark “ZOYPOD” (hereinafter referred to as the ‘conflicting mark’) by the Defendants. Alleging that the Defendants are using the phonetically similar conflicting mark for various formulations, Plaintiff asserted that it gained knowledge of such use by the Defendants in January 2022 only. Thereafter, the Plaintiff sent a Cease and Desist Letter to the Defendants and filed a Rectification Petition.

The Defendants argued that the term ‘POD’ is generic and is derived from the common molecular name i.e., “Cefpodoxime”. It argued that “Cefpodoxime” falls in the list of International Nonproprietary Names (INN) used to treat bacterial infections. Therefore, no one can claim an exclusive right over the same or over any other mark having ‘POD’ either as a prefix or suffix. The Defendants further asserted that a number of business entities have been using the term ‘POD’ as prefix or suffix. Out of which a few can also be seen on the Trade Marks Register, hence no exclusive rights can be claimed by the Plaintiff. The Defendants not only argued the phonetic and structural dissimilarity from the Plaintiff’s mark but also relied on the examination report wherein the Registry did not cite the Plaintiff’s mark. The Defendants further submitted that they have been using the conflicting mark since 2014. They further argued that the conflicting mark is used for a Schedule-H drug which is available only on prescription and has a dissimilar packaging. Lastly, the Defendants claimed that they have been using the prefix of the conflicting mark, i.e., ‘ZOY’ for their several other products.

The Plaintiff countered the arguments of the Defendants by claiming that the marks are not only phonetically similar but have also been applied and used for common goods. Further, the word “POD” comes in the middle of the molecular name and is thus not a generic term/common to trade for pharmaceutical products. Countering the Defendants’ argument of ‘POD’ comprising marks on the Register, the Plaintiff submitted that all the marks starting with the letter ‘Z’ are cancelled/abandoned/refused. Plaintiff further asserted that the Defendants’ being a Registered Proprietor is estopped from contending that such mark is generic. In addition, the Plaintiff evinced that the invoice of the year 2015 submitted by the Defendants is fabricated as it had a mention of GSTIN, which came into existence in the year 2017. The Plaintiff also pointed out that the CIMS Drug Book 2019-2020 and the Indian Drug Review (IDR) Compendium 2021, which lists out the available drugs in the market had no mention of the Defendants drug sold under the conflicting mark. Contending that it is the prior adopter and user, the Plaintiff asserted that an injunction order can be passed against a Registered Proprietor.

Analysis and Findings

The High Court after consideration of the arguments of both parties noted that:

●The difference in conflicting marks must be seen from the point of view of an “unwary purchaser of average intelligence and imperfect recollection”. Thereby opining that the conflicting marks are phonetically similar, and the dissimilarity of the packaging is irrelevant since the Plaintiff is a registered proprietor and prior adopter of its mark “ZIPOD”.

● The conflicting mark “ZOYPOD” cannot be said to be derived from the molecular name “Cefpodoxime”. Opining that “POD” appears in the middle of the molecule name; it is neither the opening nor the closing part and is the irrelevant part of the said molecular name.”

●The Defendants are a Registered Proprietor of the device of the conflicting mark in which the word is the only and pre-dominant part. Therefore the Defendants cannot contend that the mark is generic in nature.

●Even though the drug comes under Schedule H, mistakes can occur while reading the prescription. Thus, this defense would only limit the test of infringement.

● An injunction can be granted against a registered mark and held that the rights of a prior user are superior to those of a registered proprietor.

● The invoice of the year 2015 submitted by the Defendants appears to be fabricated, thereby creating a doubt on the authenticity of other invoices as well. Further commenting on the evidence of use, the Court stated “the mere presence of such marks in the Register of Trade Marks, is not evidence of their use.”

●“Each mark of the defendant has to be tested on its own standing”, thus the Defendant’s argument that they have been using the “ZOY” prefix marks for various products was found irrelevant.

The Learned High Court observed that since the marks in the present case are for medicines, a stricter approach should be taken in order to avoid any public injury. Therefore, keeping in view the facts of the case, the Learned High Court opined that the balance of convenience lies in the favour of the Plaintiff. Consequently, passing an order of ad-interim injunction against the Defendants, restraining them from “manufacturing, marketing or selling pharmaceutical and medicinal preparations under the mark “ZOYPOD” or any deceptively similar variant of the plaintiff's registered trademark “ZIPOD”, either as a standalone mark or as a prefix mark or in any manner whatsoever amounting to an infringement of the plaintiff's registered trademark “ZIPOD” or passing off their pharmaceutical preparations as those of the plaintiff, during the pendency of the present suit.”.

Comment

The decision highlights the importance of marks to be compared as a whole and from the perspective of an average customer having a vague recollection as well as lays down the legal framework for assessing pharmaceutical trade marks.

[1] CS(COMM) 427/2022