Trademarks represent a distinct type of intangible property. It is any device or mark which identifies the goods or services of one party and distinguishes them from competitors. It also becomes a symbol of business goodwill after considerable usage and cannot exist apart from the goodwill that it represents. As Such, a trademark cannot be transferred or assigned without the transfer of the goodwill associated with the trademark. Any instance of assigned trademark sans the goodwill is void.

"Goodwill" is an intangible and evasive concept and sometimes it may so happen that the language of the assignment fails to capture the substance of the transaction making obligatory on the courts look to the reality of the transaction to determine if "goodwill" has indeed been transferred. The courts focus on the assignee's use of the trademark and whether the assignee uses the trademark so as to continue the business symbolized by the mark. This facet of trademark assignment also has intrinsic the agreement on adoption and usage of non-similar trademarks on similar products. The instant case Doctor Morepen Limited versus Yash Pharma Laboratories Limited 2007 (35) PTC 357 (Del.) is a case in point.

The plaintiff had sought permanent injunction restraining the defendant from infringement & passing off of trademark and rendition of accounts & delivery of infringing material. The present decision deals with the application for interim injunction.

The reason underlying the dispute is the launching of products by the defendant, under the trademark 'LEMOTAB'. The plaintiff contends that the defendant's trademark is deceptively similar to their brand 'LEMOLATE'. Underlying is also the fact that the plaintiff had purchased 'LEMOLATE' brand from the defendant along with the trademark, technical know-how, manufacturing processes etc and had entered into a comprehensive agreement or memorandum of understanding thus transferring all rights vesting in the defendant in respect of 'LEMOLATE'. After the transfer and execution of the agreement defendants also gave an undertaking that it shall not use or create any trademark/brand name/logo/trade name for their products which will be deceptively similar to the brand 'LEMOLATE' as to be likely to deceive or cause confusion, in the course of the trade, in relation to the goods in respect of which the said trademark is associated.

The Court taking this aspect of this matter into consideration held that the assignment agreement marks the entering of the plaintiff into the shoes of defendant to take full advantage of the trademark and maintenance of secrecy about the change in ownership reflects the intention that the market of the plaintiff may not be affected. The Court categorically remarked that by bringing a tablet almost in the similar name 'LEMOTAB' the defendant is not only infringing the trademark but also announcing indirectly that it has sold 'LEMOLATE' and now it has come up with another tablet which would be competing with 'LEMOLATE'.

The Court, holding that the plaintiff has a good prima facie case and is entitled to an interim injunction, also noted that the action of the defendant is an infringement of the agreement in addition to infringement of the trademark of the plaintiff. Under the memorandum of understanding there was a ban on defendant for three years from manufacturing similar kind of medicine. The defendant had come out approximately after three years with similar kind of medicine and with similar kind of trademark which was not the intention of the parties to assignment agreement. The defendant could come out with similar kind of medicine but with different trademark only.

© Lex Orbis 2008

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