India: Passing Off Pharmaceutical Products

Last Updated: 14 June 2006
Article by Manisha Singh Nair

Passing off, a form of tort, the substantive law of which is based on common law with the object of protecting some form of property is no where defined in the Trade Marks Act, 1999 though is referred to in ss. 27(2), 134(1)(c) and 135. The rules and practice relating to an action for infringement are also applicable to an action for passing off. The concept which initially was restricted to representation of one person’s goods as those of another was later extended to business and services which further broadened to include professions and non-trading activities and today it covers within its ambit many forms of unfair trading and unfair competition where the activities of one person cause damage or injury to the goodwill associated with the activities of another person or group of persons. Passing off is treated as a form of unfair competition in USA and the courts in Canada speak of wrongful appropriation of the plaintiff’s personality instead of passing off, he having a "proprietary right in the exclusive marketing for gain in his personality" (Salmond’s & Hauston’s Law of Torts, 18th Ed., p.379). The gist of the conception of passing off is that the goods are in effect telling a falsehood about themselves, are saying something about themselves which is calculated to mislead. The law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices, the benefit of the reputation already achieved by rival traders (Salmond Law of Torts, 17th Ed., at p. 401).

In Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (JT 2001 (4) SC 243), the Supreme Court laid down certain factors in order to decide an action of passing off on the basis of unregistered trademark. It held that factors like nature of the marks i.e. whether the marks are word marks or label marks, the degree of resembleness between the marks phonetically similar and hence similar in idea, the nature of the goods in respect of which they are used as trade marks, the similarity in the nature, character and performance of the goods of the rival traders, the class of purchasers who are likely to buy the goods bearing the marks they require, the mode of purchasing the goods or placing orders for the goods and any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks are to be considered.

In Satyam Infoway Ltd. case (2004 (6) SCC 145) it held the following three elements to be established for an action of passing off: (a) The first element in an action for passing off, as the phrase "passing off" itself suggests, is to restrain the defendant from passing off its goods or services to the public as that of the plaintiff's. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant's goods or services are the plaintiff’s. (b)The second element that must be established by the plaintiff is misrepresentation by the defendant to the public and what has to be established is the likelihood of confusion in the minds of the public that the goods or services offered by the defendant are the goods or the services of the plaintiff. In assessing the likelihood of such confusion the Courts must allow for the imperfect recollection of a person of ordinary memory. (c) The third element of a passing off action is loss or the likelihood of it. While dealing with cases relating to passing off in the pharmaceutical field, the Supreme Court in Amritdhara Pharmacy Vs. Satya Deo (AIR 1963 SC 449), held that critical comparison of the two names may disclose some points of difference but an unwary purchaser of average intelligence and imperfect recollection would be deceived by the overall similarity of the two names having regard to the nature of the medicine he is looking for with a somewhat vague recollection that he had purchased a similar medicine on a previous occasion with a similar name. Where medicinal products are involved, the test to be applied for adjudging the violation of trademark law might not be at par with cases involving non-medicinal products. A stricter approach should be adopted while applying the test to judge the possibility of confusion of one medicinal product for another by the consumer. While confusion in the case of non-medicinal products may only cause economic loss to the plaintiff, confusion between the two medicinal products may have disastrous effects on health and in some cases life itself. Stringent measures should be adopted specially where medicines are the medicines of last resort as any confusion in such medicines may be fatal or could have disastrous effects (Cadila Healthcare’s case).

Guided by the application of stringent rule in cases related to infringement of trademarks in pharmaceutical products as mentioned in abovementioned case, the Calcutta High Court in Allergen Inc. v. Sun Pharmaceuticals Industries Ltd., (2006 (32) PTC 495 (Cal.) held that so far as the medical product is concerned, there cannot be any doubt that utmost precaution should be taken to prevent any confusion in the mind of the customer regarding the actual product which he is purchasing. In the present case the plaintiff was a leading manufacturing of pharmaceuticals products with the trademark ‘OCUFLOX’ with extensive operations in major countries used for treatment of infections of eye and related ocular diseases. The defendant was manufacturing the products similar to those of the plaintiff but with different composition under identical mark ‘OCUFLOX’ meant for the treatment of eyes and ears. The plaintiff thus filed suit for permanent injunction praying for restraining the defendant from attempting to pass off their pharmaceutical preparation and their mark ‘OCUFLOX’. The plaintiff by oral as well as documentary evidence proved that his products were first to come in the market. He stated on affidavit that he had in his possession complete photocopies of registration certificate signed by the Notary Public which also had seal of the Trade Mark Authority of the Commonwealth of Australia. Another document showed certificate of registration of the product ‘OCUFLOX’ in favour of the plaintiff which was issued by the Registrar of Trade Marks, Government of Republican of South Africa. Original documents were not produced as they were required to be kept in the plaintiff’s office for the purpose of inspection, verification etc. by the concerned authorities of those States. The court understanding the difficulty of filing original documents in such case in India held that then it will create much hardship for the plaintiff for no fault of their own. In an era of globalization this concept cannot be accepted, as it will cause actual hindrance to the business of a big company having its business throughout the world.

Further bringing these certificates within the ambit of public documents as defined under Evidence Act, it held that the Registration Certificates which were issued by the authorities of Australia and South Africa, be taken into evidence as all the formalities had been observed as provided u/s 78(6) of the Act. The certificates proved that the plaintiff product came into the market before that of the defendant. The court followed the direction of the Supreme Court that "if on evidence it is proved that the respondents had adopted the mark prior to the appellants doing so, on the settled law, then the respondents would become entitled to an injunction". To the contention that the plaintiff was not using the mark in India the court was guided by the direction of the Supreme Court to the effect "the mere fact that the respondents have not been using the mark in India would be irrelevant if they were first in the world market". The main thing that was to be considered was whether it was doing its business at the material time in other parts of the world.

Coming to the conclusion that the defendants were passing off the plaintiff’s goods it held that an action for passing off is to restrain the defendant from passing off its goods to the public as that of the plaintiff. It is not only an action to safeguard the interest of the public but also to preserve the reputation of the plaintiff company.

© Lex Orbis 2006

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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