India: Exemplary Costs For Habitual Trademark Infringers

Last Updated: 19 November 2018
Article by Aditi Verma Thakur and Pooja Nair

1. INTRODUCTION

The imposition of damages in trademark infringement and passing off actions is common. Damages in the nature of punitive or exemplary damages in such cases are also common. However, what is not common is the imposition exemplary damages in such cases of violation in India, exceeding INR 1 crore (approximately USD 135,000).

Back in August, the High Court of Bombay (the "High Court") imposed exemplary damages to the tune of INR 1.5 crore (just over USD 200,000) on Galpha Laboratories Limited ("Galpha") for habitually infringing the trademark rights of Glenmark Laboratories Limited ("Glenmark") in a judgment passed in Glenmark Pharmaceuticals Limited vs. Galpha Laboratories Limited and Another1.

We discuss the case, its findings and implications below.

2. BACKGROUND OF THE CASE

Glenmark is a generic drug manufacturer and one of its products, Candid-B, an anti-fungal cream, was the subject matter of the present dispute. Interestingly, Galpha is also a manufacturer of generic drugs and had launched a similar product under the brand name Clodid-B.

Glenmark learnt of the similarities in the brand name and trade dress between its mark and Galpha's mark. To enforce its trademark rights, Glenmark instituted a suit against Galpha, for infringement and passing off of its registered trademark Candid B as well as for violation of its trade dress.

3. FINDINGS OF THE HIGH COURT

With regard to the adoption of an alleged identical trademark, Galpha submitted in the High Court that the adoption of the Clodid B by them was a mistake and they have never indulged in an unfair adoption of a trademark in the past.

However, Glenmark gave instances of use of infringing trademarks by Galpha in the past. In one instance, Galpha had copied Glenmark's mark ASCORIL and sold the drugs under a deceptively similar trade name ASCODIL. Galpha withdrew their ASCODIL products after receiving a cease and desist notice from Glenmark.

Glenmark also stated that Galpha had blatantly copied brand names of several other major pharmaceutical companies besides Glenmark. In this regard, Glenmark relied upon the orders passed by various courts in trademark infringement cases against Galpha.

Glenmark's submissions coupled with the orders passed by the courts against Galpha in relation to the trademark infringement cases, indicated that the present case was not an isolated case of trademark infringement by mistake but a repetitive practice of Galpha to adopt other companies' trademarks. Thus, the High Court held Galpha to be a habitual infringer.

Glenmark also highlighted that the Central Drugs Standard Control Organisation had published a list of drugs which are "Not of Standard Quality/Spurious/Adulterated/Misbranded". Galpha manufactured several drugs mentioned in the said list.

The High Court noted this and stated that the manufacture of spurious products by Galpha, coupled with the adoption of other companies' trademarks posed a serious threat to consumers; and as such, Galpha should be prohibited from indulging in such malpractices. Further, the High Court observed 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."

On the basis of the above, the High Court imposed exemplary damages amounting to INR 1.5 crores (just over USD 200,000) on Galpha, which Galpha deposited with the Kerala Chief Minister's Flood Relief Fund.

4. CONCLUSION

In the present case, Galpha had unscrupulously adopted the trademarks of various pharmaceutical companies including Glenmark. These continuous infringing activities of Galpha were audacious and indicative of their complete lack of respect for the rights of the rightful trademark owners. The High Court also pointed out that "the conduct of this defendant shows that it has no regard or respect to the rule of law".

Along with the unlawful adoption of various companies' trademarks, Galpha was also found to be selling spurious products under the said brand names. This was held to be damaging to the brand names of the parties and also endangered the lives of consumers. As such, a mere slap of damages would not have sufficed. Hence, the imposition of exemplary damages was the need of the hour.

The imposition of exemplary damages by the High Court is a robust move with regard to the protection of the rights of the intellectual property owners. This judgment sets a precedent and should act as a deterrent to those parties who callously adopt the trademark of other parties in order to ride on their goodwill and to amass unfair revenues. 

This judgment was referred to, in the case of Shalina Laboratories Pvt. Ltd. and Anr. v. Twin Impex and Anr2 ("Shalina v. Twin Impex"), which was also filed before the High Court against a different habitual trademark infringer. In this case, Shalina Laboratories Pvt. Ltd ("Shalina"), a pharmaceutical company, had lodged a complaint against Twin Impex and Another ("Twin Impex") for having copied substantial features of their trademarks and also for infringement of copyright and passing off in respect of their pharmaceutical products.

It was noted that Twin Impex had in fact replicated all the features of Shalina's trademarks and labels. The High Court concluded that the adoption of the word mark, art work, colour scheme, font style, manner of writing and trade dress of Shalina's marks by Twin Impex in relation to their products was fraudulent. The High Court also observed that: "this court cannot feign ignorance of the consequences of the Defendants' infringing activities upon the members of the public that consume their product".

Considering the consequences of the infringement by Twin Impex in Shalina v. Twin Impex, the High Court directed Twin Impex to pay INR 1. 5 crores (just over USD 200,000) as exemplary damages, to Shalina. It is interesting to note that the presiding judge in both the cases was Hon'ble Justice Kathawalla which explains the similarities in ratio decidendi and the quantum of damages.

Generally, these cases demonstate that the courts in India are considering the severe impact of dishonest adoption of trademarks in relation to public health in particular and the safety of consumers by way of imposing high costs, and in particular, exemplary damages, in order to curb such malpractices.

These judgments indeed will serve as a reminder to pharmaceutical companies to refrain from using infringing names and marks and sell spurious products under the same.

Footnotes

1. COMIP (L) No. 1063 Of 2018

2. COMIP (L) NO. 1143 OF 2018

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions