Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd.

Citation: 2001 (2) PTC 541 SC

Court: Supreme Court of India

Bench: Justice B.N. Kripal, Justice Doraswamy Raju, Justice British Kumar

Facts:

Cadila Healthcare Ltd (the Appellant) and Cadila Pharmaceuticals Ltd. (the Respondent) were entities engaged in manufacturing pharmaceutical products. Following the restructuring of the Cadila Group, both companies got the right to use ‘Cadila’ as their corporate name. The Appellant came out with a drug called ‘Falcigo’ to treat falciparum malaria. In 1996, it applied to register the drug under the Trade and Merchandise Marks Act. The Drug Controller General of India granted permission to the Appellant to market the drug under the name ‘Falcigo’. It soon came to the Appellant’s attention that the Respondent was selling and manufacturing a drug under the brand name ‘Falcitab’ to treat the same disease. The Appellant brought an action against the Respondent in the District Court at Vadodara, seeking an injunction to restrain the Respondent from using the trademark ‘Falcitab’. The Appellant alleged that using ‘Falcitab’ amounts to passing off the Appellant’s drug ‘Falcigo’ due to the similarity in their names and the disease it is used to treat. On the other hand, the Respondent claimed that the prefix ‘Falci’ originates from the name of the disease. It further stated that since the said products were meant to be sold only to hospitals and clinics and not individuals, there was no chance of confusion. The Judge dismissed the interim application and concluded that the two drugs differed in appearance, formulation, and price. There were no chances of confusion or deception as the drug was not meant to be sold to any individual. The Appellant filed an appeal in the High Court, which did not bear fruit. The High Court was of the view that there was no likelihood of confusion between the names. Aggrieved, the Appellant approached the Honourable Supreme Court.

Issues:

• Are ‘Falcigo’ and ‘Falcitab’ confusingly similar?

• Does the Respondent’s action constitute passing off?

Laws Involved:

Sections 27 & 28 of the Trade and Merchandise Marks Act, 1958

Analysis:

While assessing whether the trademarks can cause confusion, the Supreme Court observed that merely because the drugs are sold by prescription only, this is not alone to prevent confusion. Physicians and pharmacists are not immune from committing mistakes, and when it comes to medicines, even a possibility of a mistake can be fatal. Considering human nature and the immense pressure on medical professionals, there should be as many clear indicators as possible to distinguish two medicinal products from each other. Therefore, stricter measures are required to prevent confusion arising from the similarity of marks among medicines.

The Supreme Court delved into various domestic and foreign decisions to examine if the present action constitutes passing off. The question is whether the misrepresentation made by the defendant will likely cause an ordinary consumer to confuse one product for another due to the similarity of marks and other surrounding factors. Further, to decide on the question of deceptive similarity, the following must be considered:

1. The nature of the marks (whether the marks are word marks, label marks or composite marks)

2. The degree of resemblances and phonetical similarity between the marks.

3. The nature of the goods in respect of which the marks are used.

4. The similarity in the nature, character and performance of the goods of the rival traders.

5. The class of purchasers who are likely to buy the goods bearing the marks, their education and intelligence, and the degree of care they are likely to exercise in purchasing and/or using the goods.

6. The mode of purchasing the goods or placing orders for the goods and

7. Any other relevant surrounding circumstances.

The weightage given to each factor above may vary from case to case.

The Supreme Court did not interfere with the orders passed by the lower courts. Disposing of the appeal, the Supreme Court directed the trial court to decide as per the observations made by the Apex Court.

Conclusion:

Although the Supreme Court did not interfere with the orders given by the lower courts, its key observations threw light upon the factors necessary to examine instances of passing off and deceptive similarity. At the same time, it emphasized that these factors must not be given equal weightage in every situation.