CADILA HEALTHCARE LTD V/S CADILA PHARMACEUTICALS LTD 2001 PTC 541 (SC)

CADILA HEALTHCARE…. Appellant VS.

CADILA PHARMACEUTICALS LTD…. Respondent

BRIEF FACTS ABOUT THE CASE:

In this case, Cadila Healthcare, a Pharmaceutical Company had filed a suit against Cadila Pharmaceutical Ltd which is another pharmaceutical company belonging to the same business, namely, Cadila Group. The CADILA group was restructured as per Sections 391 & 394 of the Companies Act and all its assets were divided between the two on the condition that both the parties will be given the right to use the name “CADILA” for their respective companies. However, an injunction was filed by the former for the usage of his trademark by the other company.

CADILA HEALTHCARE had manufactured a drug under the name “FALCIGO” which contained Artesunate for treatment of cerebral malaria usually known as Falcipharum. The company had applied for its registration on 20th August 1996 before the Trade Marks Registry, Ahmedabad under Part-A, Class-5 of the Trade and Merchandise Marks Act. The company was thereafter, granted permission to sell this drug in the market on 7th October 1996 by the Drugs Controller General (India). However, the respondent company received permission to sell a drug containing Mefloquine Hydrochloride on 10th April 1997 which is said to be sold under the trade name of “FALCITAB” for the same treatment. As soon as it came to the appellant’s notice in April 1998, he filed a suit for an injunction in District Court of Vadodara. The appellant upheld that the respondent's drug would be passed off as Falcigo because of the similarity in their names, composition, and treatment. This injunction was however dismissed by the Court stating that the two differed in appearance and price and are Schedule L drugs, i.e. they are only sold to hospitals and clinics, and therefore there is no scope for deception or confusion.

Thus, the appellant filed an appeal before the Hon’ble High Court which was dismissed. The High Court stated that as per the precedents it can be said that any confusion is unlikely to occur and the passing off of the products had very little chances, thereby,  making the appellants filed an appeal against its judgement before the Hon’ble Supreme Court of India.

APPELLANT’S CASE:

Cadila Healthcare stated that the respondent company had used a similar name for their drug, used for the same treatment i.e. cerebral malaria, for deceiving its consumers. Although it was a Schedule L drug and was sold only to hospitals and clinics, the degree of confusion may be less but not zero. They submitted that the physicians and pharmacists might be highly knowledgeable in this area, but absolute perfection is not guaranteed. They can make mistakes too. They can be deceived too. In such cases, taking a risk could prove to be fatal.

The appellant company felt that the drug “FALCITAB” was being passed off as their drug in order to gain economic benefits under the name of the appellant’s company. They thereby made the final appeal before the Hon’ble Supreme Court of India for a positive judgement.

RESPONDENT’S CASE:

Cadila Pharmaceuticals Ltd., the respondent company who had developed the drug “FALCITAB” stated in its defence that the prefix “FALCI” had been derived from the name of the disease itself, i.e. Falciparum Malaria, and that it was extremely common to use the name of the disease in the name of its curing drug. They also mentioned that both the drugs were not Schedule H drugs and were not sold by the chemists on any prescriptions, in fact, they were both Schedule L drugs and were only sold to clinics and hospitals. So, the scope of confusion or deception would not arise at all.

HONORABLE SUPREME COURT’S JUDGEMENT:

The Supreme Court decided to avoid any interference in the previous judgments and examined the principles carefully. It stated the reasons behind the non-interference and said that any opinion from the court without any evidence is not advisable, hence the court shall examine all the principles before any judgement is passed.

The court referred to appropriate cases that were relevant to this issue to form its judgement. In National Sewing Thread Co. Ltd., Chidambaram Vs. James Chadwick and Bros Ltd. AIR 1953 SC 357, the court had observed that any registration application for a trademark that is likely to cause confusion has to be refused by the Registrar (Section 8 of Trademarks Act). It also stated that it was the duty of the applicant to convince the Registrar that his trademark did not fall under any prohibition as per Section 8 of the Trademarks Act. Therefore, after analyzing the relevant sections, sub-sections, and acts the court stated that the purchaser of such drugs, be it pharmacists, should be viewed as men of ordinary intelligence who can commit mistakes. The mistakes under such fields can prove to be really fatal, thus even the slightest confusion should be avoided. The fact that both the drugs are sold only to hospitals and clinics does not justify the respondent’s case. With respect to the linguistic divide in our country, accidental negligence has to be kept in mind and strict measures to prevent it need to be taken. Keeping in mind the provisions of Section 8 of Trademarks Act, 1999, and Section 17-B of the Drugs and Cosmetics Act, 1940 the court decided that it was a case of deceptive similarity and any confusion could have dire effects on public health. Some of the essential factors to be considered for determining deceptive similarity was held in this case as follows –

• The nature of marks.

• The extent of similarity between the competing marks – phonetic and visual similarity

• Nature of goods.

• The area where the goods are used.

• The similarity in the goods in relation to effectiveness, performance, nature, etc.

• The target consumers of the goods, their intelligence, and the requisite degree of care that needs to be taken.

BY:-

Ridhika Kapoor