Case Brief: Cadila Health Care Ltd. vs. Cadila Pharmaceuticals Ltd.

Procedural History

Cadila Health Care Ltd. (appellant) filed a suit for injunction against Cadila Pharmaceuticals Ltd. (respondent) in the District Court at Vadodara regarding the use of the brand name “Falcitab” for a medicine manufactured and sold by the respondent. The appellant claimed that the brand name was similar to its drug “Falcigo” and could lead to confusion and deception among consumers.

The appellant’s drug, “Falcigo,” contains Artemether as the active ingredient and is used for the treatment of cerebral malaria, commonly known as ‘Falcipharum.’ The appellant applied for the registration of the trade mark “Falcigo” in Part-A, Class-5 of the Trade and Merchandise Marks Act in 1996 and received permission to market the drug under that trade mark from the Drugs Controller General (India) in October 1996.

On the other hand, the respondent received permission from the Drugs Controller General (India) to manufacture a drug containing Mefloquine Hydrochloride in April 1997 and to import the drug from abroad. The drug was also used for the treatment of ‘Falcipharum Malaria’ and was sold under the brand name “Falcitab.”

In defense, the respondent argued that the prefix “Falci” in its brand name was taken from the name of the disease ‘Falcipharum Malaria’ and it was a common practice in the pharmaceutical trade to use part of the word of the disease as a trade mark. Additionally, both drugs were Schedule “L” drugs, which could only be sold to hospitals and clinics, reducing the chance of confusion and deception among consumers.

The Extra Assistant Judge, Vadodara dismissed the interim injunction application in May 1998, finding that the two drugs “Falcigo” and “Falcitab” differed in appearance, formulation, and price and there was no chance of deception or confusion among consumers. The appeal filed by the appellant before the High Court also met with no success, as the court concluded that there was little chance of one product being passed off as the other due to the differences in the disputed marks and the fact that the drugs were only sold to hospitals and clinics.

Supreme Court

The principles on which these cases are required to be decided are based on the Trade and Merchandise Marks Act of 1938. Under Section 28 of the Act, a registered proprietor of a trade mark in Part A or B of the register has an exclusive right to use the trade mark in relation to the goods in question and to obtain relief in case of infringement.

For unregistered trade marks, a passing off action is maintainable under Section 27(2) of the Act. The passing off action is based on the principle that no one has the right to represent their goods as those of another person, and the modern tort of passing off has five elements:

(1) a misrepresentation,

(2) made by a trader in the course of trade,

(3) to prospective customers or ultimate consumers of goods or services,

(4) which is calculated to injure the business or goodwill of another trader, and

(5) which causes actual damage or is likely to cause damage to the business or goodwill of the trader.

The defendant had argued that in the last four decades had clearly established that what had to be seen in a passing off action was the similarity between the competing marks. However, the court disagreed with this argument and noted that the conclusion reached in Dyechem’s case was contrary to the binding precedent set in the cases of National Sewing Thread Co. Ltd.’s case , Corn Products Refining Company’s case , Amritdhara Pharmacy’s case , Durga Dutt Sharma’s case, and Hoffmann-La Roche & Co. Ltd.’s case.

The court noted that in Dyechem’s case , the court had incorrectly concluded that the difference in essential features was relevant. The court had applied three tests to determine the similarity between the two marks “Piknik” and “Picnic”.

The three tests were:

(1) whether there was any special aspect of the common feature that had been copied,

(2) the mode in which the parts were put together differently, and

(3) whether one should pay more regard to the parts that are not common when there are common elements.

However, the court in Dyechem’s case concluded that the dissimilarities in the script and manner of writing the two words were more important than the phonetic similarity or the similarity in the use of the word “PICNIC” for “PIKNIK”.

The court noted that it was unable to agree with the conclusion reached in Dyechem’s case and noted that the principle of phonetic similarity should not be disregarded when the manner in which the competing words are written is different. The court noted that this conclusion was contrary to the binding precedent set in the cases of Amritdhara’s case and Durga Dutt Sharma’s case, where the phonetic similarity was applied to judge the two competing marks.

The court further noted that the fact that both drugs were sold under prescription was not sufficient to prevent confusion, as there was a high degree of possibility of accidental negligence due to the varying infrastructure for supervision of physicians and pharmacists across the country. The court noted that strict measures were required to prevent any confusion arising from similarity of marks among medicines, as confusion between medicinal products could be life-threatening, not merely inconvenient.

The court also noted that public interest would support a lesser degree of proof showing confusing similarity in the case of trade marks in respect of medicinal products, as compared to non-medicinal products. The court noted that in hospitals, drugs could be requested verbally and/or under critical/pressure situations, and many patients may not be in a position to differentiate between the medicine prescribed and bought.

The court noted that while the decisions of English courts were relevant in understanding the essential features of trade mark law, when dealing with the sale of consumer items in India, the differences between England and India had to be taken into account. The court concluded that English principles could not be applied in their entirety in India with no regard to Indian conditions.