India: The Regional Director, Ministry Of Corporate Affairs Correct In Finding CGMP Pharmaplan Pvt.Ltd Nearly Resembling NNE Pharmaplan India Limited

Last Updated: 6 June 2011
Article by Sonam Lhamu Bhutia

In the case of CGMP Pharmaplan Pvt. Ltd v Regional Director, Ministry of Corporate Affairs, the Delhi High Court concurred with the decision of the Regional Director, Ministry of Corporate Affairs (Respondent No.1) which directed CGMP Pharmaplan Pvt. Ltd, to change its name by removing the word "PHARMAPLAN", within a period of three months.

NNE Pharmaplan India Private Limited (Respondent No.2), was a company incorporated on 30th December, 1997 under the name Pharmaplan (India) Limited, the main business of which was to provide services as technical and industrial consultants and engineers especially to planning, consulting, engineering, plant and equipment supply, pharmaceutical, bio-technology, medical device/products and the health care industries. Additionally, they also acted as advisers and consultants on all matters and problems connected with or related to pharmaceutical, bio-technology, medical device/product and the health care industries. On 27th June 2008, the name of the company was changed to NNE Pharmaplan India Limited.

Mr. Ravi Saxena, the Director of the Petitioner Company i.e. CGMP Pharmaplan Pvt. Ltd was initially an employee of the Respondent No.2 company until the employment was terminated with effect from 11th May 2009. After two months of the said termination, the Petitioner was incorporated as a private limited company under the name CGMP Pharmaplan Private Limited.

On 17th July 2009, the Respondent company filed a Civil suit before the Delhi High Court seeking, inter alia, an injunction to restrain the Petitioner from passing off the name of the Respondent Company as their own. A single judge of the Court while disposing the application under Order XXXIX Rules 1 & 2 of the Code of Civil Procedure 1909 (CPC), concluded that the Respondent company did not have a prima facie case as the two disputing names were in no manner similar. The Respondent Company had subsequently filed an appeal which is pending before the Division Bench of the Court.

The Respondent Company had simultaneously, filed a representation before the Regional Director on 27th July, 2009 under Section 22 of the Act seeking a direction that the Petitioner should change its name. The Regional Director during the hearing of the said application observed that the holding company as well as group companies of NNE Pharmaplan India Private Limited had registered the trade marks "PHARMAPLAN" and "NNE PHARMAPLAN" and had also applied for their registration the world over. He thus felt that in such circumstances allowing the Petitioner to use the mark "PHARMAPLAN" would have a misleading effect in the minds of the general public. As such, he directed the Petitioner to delete the word "PHARMAPLAN" from its name and accordingly change it name to something else within three months from the date of the order.

Aggrieved by the aforementioned order, the Petitioner appealed before the present Court and argued that the basic approach adopted by the Regional Director in this case was erroneous. It was pointed out that instead of determining whether the name of the Petitioner was either identical with or "too nearly resembled" the name of the Respondent No.2, the Regional Director had proceeded to examine if the Petitioner's name caused "misleading effect" in the minds of general public and as such had treated the matter as an action for infringement under Trade Mark law. It was also submitted that the prefix "CGMP" was sufficient to distinguish from the name of the existing company.

The Respondent No. 2 relied on an earlier decision, Montari Overseas Limited v. Montari Industries Limited to highlight that if the procedure adopted by the Respondent is just and fair, then the Court should not sit in appeal over the decision of the Regional Director.

The High Court considered the above mentioned contentions and found no error in the decision of the Regional Director. The Court stated that the prominent part of both the names was the coined word "PHARMAPLAN". Both the names were to be compared as a whole and when so compared the Court said that the Petitioner's name too nearly resembled the name of the Respondent company structurally and phonetically too. The Court further agreed with the contention of the Respondent Company that the powers of the central government under Section 22 of the Act are wider inasmuch as there is no need to examine whether there is a likelihood of deception or confusion. It is enough to examine if the name of the registered too nearly resembles another registered name. In this particular case, the Court said that the Respondent Company had successfully shown that both names too nearly resembled each other.

In light of the above grounds, the Court found no reason to interfere with the impugned order of the Regional Director. However, the time period for the Petitioner to comply with the order was extended further by two months.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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