Stricter Test for Pharma “Marks”

29 October 2012

Keeping public safety as the overriding concern when deciding disputes pertaining to pharmaceutical marks, the Division Bench of the Madras High Court reiterated the significance of the public interest element in the case of medicinal preparations. As per the Supreme Court of India, confusion in case of a non-medicinal product may only cause economic loss to the consumer. But confusion between two medicinal products may have disastrous effects on health, and in some cases, on life.

Several months ago, in December 2009, but still of significance, in an infringement suit between Sun Pharmaceutical Industries Limited v. Cadila Healthcare Ltd, the Madras High Court dealt with the issue of the deceptive similarity of the VENZ mark with the registered VENIZ XR mark.

In 2000, Sun Pharmaceutical Industries Limited (SPIL), a well-known pharmaceutical company, was licensed by the Drug Controller to commercially manufacture pharmaceutical preparations under the trademark VENIZ XR; subsequently, in August 2010, SPIL became registered proprietors of the mark. Save the limitations imposed pertaining to use of ‘XR,’ which means extended release in normal pharmaceutical parlance, the mark received registration.

In 2009, SPIL came across a medicinal preparation sold as VENZ-OD, manufactured by Cadila Healthcare. Upon further enquiry, it was found that this tablet also contained an active metabolite of Venlafaxine (the same component as in VENIZ XR) and was used in the treatment of major depressive disorders similar to those treated by SPIL’s drug. A cease and desist notice was issued to Cadila Healthcare to refrain from manufacturing the drug. When Cadila refused, SPIL initiated action against the company, seeking an interim injunction against the manufacture and sale of VENZ, alleging visual, structural and phonetic similarity to VENIZ XR. The Single Judge of the Madras High Court concluded that, as the mark is registered, the only issue to be ascertained was whether the alleged marks cause confusion or deception. Upon being satisfied that confusion and deception do exist, the Single Judge granted the interim relief of injunction.

Cadila prayed for vacation of the injunction on the grounds that they coined and adopted the Mark “VEN OD” for its product Venlafaxine in 2001, by taking VEN from the name of the drug and OD to signify once a day. Later, in 2009 when Cadila decided to launch a new product with the active ingredient Desvenlafaxine, which is an isomer of Venlafaxine with better efficacy and fewer side effects, the company decided to modify their VEN mark, and took the letter Z from Cadila Heathcare’s housemark ZYDUS, using the resulting mark VENZ for the product Desvenlafaxine. The Single Judge concluded that there was no deception; accordingly, the orderfor injunction was vacated.

In an appeal filed by SPIL before a Division Bench, comprising of two judges, the appellant argued that the comparison must be between VENIZ-XR and VENZ-OD, and that the marks when compared in totality are phonetically similar. SPIL agreed that there are many drugs available in the market using the letters VEN to indicate the relevant molecule, but the adoption by Cadila of VENZ-OD from VEN-OD, after a gap of eight years, was dishonest. SPIL also pointed out that Cadila was marketing a drug meant for extended release (XR) as a once a day (OD) drug, which SPIL argued ought not to be allowed. Pubic interest was also highlighted since the degree of care and caution while determining consumer deception with medicinal and pharmaceutical products should be strict, since misuse of such products could a fatal impact.

The contention of Cadila Healthcare on appeal was that the molecule Venlafaxine was publici juris, or of public right, and is not for the exclusive use of SPIL. Cadila also argued that VENZOD is a coined word and that the letter Z is used with respect to many of the company’s pharmaceutical products.

The Division Bench concluded that the Single Judge had gone wrong in applying the test of infringement. It held that the correct test is the “possibility” of confusion and not “actual confusion.” The court relied on Medley Laboratories (P) Ltd v. Alkem Laboratories Ltd, 2002 (25) P.T.C 592, wherein a ninestep test was laid down by a Single Judge to determine whether SUPAXIN infringed the SPOXIN trademark with respect to drugs itself, which was overruled on appeal. It was held that once the mark is registered, the only thing that needs to be settled is whether the alleged mark is deceptively similar, and that factors like packaging and differences in prices are all immaterial. The Court also stressed the need to apply a stricter approach while considering medicinal products. Upholding the above, it was held that marks VENZ OD and VENIZ-XR are phonetically similar, and that there is likelihood of confusion and that, accordingly, SPIL had been properly granted an injunction.

The need to be mindful about public safety can considered the primary reason for the Court overruling the order of the Single Judge. The availability of thousands of drugs and brand names on the market can result in a mix-up at any level of the distribution chain: the prescribing physician, the pharmacist filling the prescription, the hospital staff administrating the medication or the patient consuming it. Bad handwriting and miscommunication can defeat even the most precautionary dispensing procedures. Safety has become a major element in the naming of new proprietary drugs because consumer confusion over drug brand names can have such deadly consequences.

LEX ORBIS Intellectual Property Practice

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