India: Bombay High Court Imposes Huge Exemplary Damages on Habitual Offenders

Last Updated: 26 September 2018
Article by Omesh Puri

Bombay High Court in recent cases of habitual offenders has imposed huge exemplary cost on Defendants.  In less than one month, there have been two cases where Bombay High Court has considered the Defendant's malafide actions and punished them monetarily.  The first decision is dated August 28, 2018 in Glenmark Pharmaceuticals Ltd. Vs Curetech Skincare and Galpha Laboratories Limited and second decision came on September 10, 2018 in Shalina Laboratories Pvt. Ltd. Vs . Twin Impex and National Laboratories.

In the first case, the dispute concerned the Plaintiff's product Candid-B, an anti-fungal cream, and a similar drug being sold by Defendant No. 2 named Clodid-B. In addition to adoption of similar word mark, the Defendant No. 2 had also copied the trade dress, color scheme, art work, font style and even manner of writing of the Plaintiff's product. The Defendant No. 2 stated that the impugned mark was adopted by mistake and chose not to contest the suit. The Defendant No. 1, being just the contract manufacturer for Defendant No. 2, also chose to submit to the decree. While decreeing the suit in favour of the Plaintiff, the Court considered the fact that the Defendant No. 2 is a habitual offender. The counsel for the Plaintiff produced a prior judgement of the Delhi High Court [Win-Medicare Pvt. Ltd. Vs. Galpha Laboratories Ltd. &Ors.] wherein it was categorically observed by the Delhi High Court that Defendant No. 2 is a habitual offender. It was also noted by the Court that various pharmaceutical companies have instituted infringement cases against Defendant No. 2 and most of them have obtained injunction orders. Over and above the infringing activities, the Defendant No. 2 was also found to be a violator of FDA regulations. In many instances, the medicinal products of Defendant No. 2 were found to be of "Not of standard quality/Spurious" by Central Drugs Standard Control Organization. In view of the repeated violations, the Court, as a matter of deterrence, slapped an exemplary cost of Rupees One Crore Fifty Lakhs (approx.. USD 206340) on Defendant No. 2. Along with the cost, the Court also ordered the furnishing of personal undertakings to the Court from all the Directors of Defendant No.2 to the effect that they would withdraw and destroy all products bearing the impugned mark and its variants from the market; apply for cancellation of manufacturing permission for products bearing the impugned mark; shall conduct business in accordance with FDA rules and regulations and would not indulge in infringing activities qua products of not only the Plaintiff but other pharmaceutical companies also. It was observed by the court that "Drugs are not sweets. Pharmaceutical companies which provide medicines for health of the consumers have a special duty of care towards them. These companies, in fact, have a greater responsibility towards the general public. However, nowadays, the corporate and financial goals of such companies cloud the decision of its executives whose decisions are incentivized by profits, more often than not, at the cost of public health. This case is a perfect example of just that"

In the second case, he Plaintiffs filed the suit for infringement of trademark, copyright and passing of in respect of its pharmaceutical product under the mark "TANZOL" against the Defendants which were selling pharmaceutical products under an almost identical trade mark/ label "INASOL".  An ex-parte order dated 29th August 2018 was initially passed by the court and subsequent to that, the Court Receiver seized the pharmaceutical products of the Defendants bearing the impugned artwork / trade mark / label "INASOL". Additionally, the court receiver also found pharmaceutical products bearing the mark "TANZOL" i.e. the very same mark / label / artistic work as that of the Plaintiff.  Apart from the impugned products "INASOL" and "TANZOL", the Court Receiver also found other pharmaceutical products bearing the trade mark / label "SUPER PEPTI", "BON APETIT", and "BIG APETITE" in the premises of the Defendant No.1; and pharmaceutical products bearing the trade mark / label "IBUCAB", and "IBUSAP" in the premises of the Defendant.  The court took a note that in the year 2003, the Plaintiffs filed a Criminal Complaint when it became aware of spurious pharmaceutical products bearing the mark / labels "SUPER PEPTI" which was identical / deceptively similar to the Plaintiffs' pharmaceutical products "SUPER APETI. The investigation revealed that the Defendants were manufacturing and exporting / selling the spurious pharmaceutical products under the trade mark/label "SUPER PEPTI". In the year 2009, the Defendants had given personal undertakings to the Plaintiffs wherein they had inter alia acknowledged that they were manufacturing / exporting / infringing / duplicating products under the trademarks "SUPER PEPTI" and had undertaken not to adopt or use any mark / label similar to the Plaintiffs' trade mark / label "SUPER APETI" or other products of the Plaintiffs in future.  In addition to this, there have been multiple suits against the Defendant and based on that, the court went on to declare Defendants as habitual offenders. The Court while relying on earlier judgment of August 28, 2018 ordered the Defendants to pay the total costs of Rupees One Crore Fifty Lakhs (approx.. USD 206340) .

The above two judgments clearly give a strong message to the infamous fraternity of fraudsters and counterfeit drug manufacturers that such acts will be dealt strictly by the Courts.

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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