Sanctity of Registration Upheld

11 September 2012

In a landmark decision, the sanctity of registration was upheld by c. Justice SJ Vazifdar held that “in an action for infringement of trade marks, the relevant date or the date of registration shall be the date of application and not the date on which the trade mark is entered into the register.”

The decision in the matter of Merck KGaA v. Natco Pharma Ltd is in line with the precedent laid down by courts all around the world which stops the dishonest practice of adopting conflicting marks subsequent to the date of application by proprietor and prior to its date of entry in the register. The decision states that Section 34 of the Trade Marks Act, 1999 provides that the registered proprietor can interfere with the continuous use of an identical mark by any other person, only if such use is prior to the date of application made by the registered proprietor and not when such use is prior to the date of registration.

The plaintiff filed Suit No. 165 of 2010 for infringement and passing off against the Defendant. The Plaintiff is the registered proprietor of the word mark “Ostonate” in Class 5, i.e. in respect of medicinal and pharmaceutical preparations. The above application was made by the Plaintiff on July 24, 1997, and the same was registered on April 22, 2005. The registration was, therefore, with effect from the date of its application. The Plaintiff started using the mark from January 2009. The Defendant was using a similar mark, “Ostonat,” since 2003. The Defendant applied for registration of the impugned mark Ostonat on July 7, 2003, which was opposed by the Plaintiff. The Defendant also made a rectification application against registration of the Plaintiff’s Ostonate mark in September 2007. The Plaintiff’s product is a calcium supplement whereas the Defendant’s product is meant to treat osteoporosis.

Justice Vazifdar relied upon his order in Drums Food case bearing Suit No. 953 of 2011, where the Defendant’s mark was registered in 2001 and the Plaintiff started using a similar mark in 2007. The Plaintiff filed a case against Defendant for wrongful threats of infringement as the Defendant’s mark was not in use prior to Plaintiff’s. He held that in a passing off action for a registered trademark, the relevant date must be the date of application for registration and not the date on which the registration was actually obtained.

If the Plaintiff in the Ostonate case are denied adequate relief and the Plaintiff in the Drums Food case would have been granted relief, it would not only be contrary to, but destroy the objective of the Act, as it would positively discourage registration of trademarks. It would cause havoc and virtually erode the rights of the proprietors of trademarks. To hold that use of the mark after the date of application for registration will take precedence over a registered mark would render Section 18(1) otiose.

There is always a time-lag between an application and registration of a mark. If the entity or individual does not carry out a search before adopting a similar conflicting mark, his conduct is negligent, and if such entity or individual does a search regarding availability of similar marks and still adopts the same, his conduct if dishonest. This view was taken by Justice Vazifdar relying upon Paragraph 34 of the Electrolux case where a similar view was taken by Appeal Court in England.

The Defendant in the Ostonate case took a defense of delay, acquiescence and dissimilarity of goods. Again relying upon the Electrolux judgment, the Court held that “there is no hard and fast rule for delay per se as it would defeat an application for interlocutory injunction. To deny interim relief, the delay must be such as to have induced the defendant or at least to have lulled him into a false sense of security to continue to use the trade mark in the belief that he was the monarch of all he surveyed.” Such was not the case here and hence the defense of delay and acquiescence taken by Defendant did not hold against the Plaintiff.

Justice Vazifdar also relied upon the Cadilla case, 2001 PTC 541, where the Supreme Court held that “when the nature of the drugs are different, it is even more important for the Court to ensure that the public is not deceived as that could lead to adverse consequences by a person consuming the wrong drug.” Dissimilarity of goods in this case aggravates the adverse effects of deception and is against public interest.

Justice Vazifdar passed an order granting an interim injunction restraining the Defendants from infringing the Plaintiff’s registered Ostonate trademark. There was no question of passing off as the Defendant started using the impugned mark much prior to the Plaintiff. This order was appealed by the Defendant before a division bench of Chief Justice Mohit Shah and Justice Dalvi where the appeal was dismissed and the view taken by the single judge was upheld.

This decision sets an important precedent in maintaining the sanctity of registration and stops defendants from manipulating the defenses available under Section 34 or Section 27 of the Trade Marks Act, 1999.

Krishna & Saurastri

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Mumbai 400 001, India

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