Case Citation:

Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited on 26 March, 2001

2001 PTC 541 (SC) Author: Kirpal

Bench: B.N.Kripal, Doraswamy Raju, British Kumar

Court: Supreme Court of India

CASE NO.: Appeal (civil) 2372 of 2001

Special Leave Petition (civil) 15994 of 1998

PETITIONER: CADILA HEALTHCARE LIMITEDVs.

RESPONDENT: CADILA PHARMACEUTICALS LIMITED

DATE OF JUDGMENT: 26/03/2001

BENCH: B.N.Kripal, Doraswamy Raju, British Kumar

Introduction:

This is a case concerning the concept of similarity of a trademark in law. In this case, Cadila
Healthcare Limited (hereinafter referred to as the petitioner) and Cadila Pharmaceuticals
Limited (hereinafter referred to as the respondent) were both pharmaceutical companies
engaged in the business of manufacture and selling of various pharmaceutical products and
drugs. The two companies had taken over the business of the former Cadila Group after its
restructuring under Sections 391 & 394 of the Companies Act. Both the companies got the
right to use the name Cadila as part of their business and corporate existence.

How Is A Medicine Pateneted and Branded:

The branding of a drug raises important trademark principles.Every medicinal preparation has
an active ingredient, that produces the theraputic effect. The active ingredient, the drug, has a
chemical name and a generic name. The chemical name is usually long, sometimes may have
numbers indicating the molecular structure in them and therefore it is difficult to pronounce
and remember. For reference purposes, the drug is known by its generic name in the scientific
community. The main consideration in assigning the generic name is the usefulness to
scientific and medical research, education and medical journals. This international non-
proprietary name is important to doctors, pharmacists and other health care providers. As it is
a non proprietary name, it is in public domain and is not protected by exclusive rights. The
medicinal preparation containing the drug will have a brand name, chosen by the entity
marketing the medicine. The brand name is the trade mark of a medicine and is thus a
proprietary name for which trademark owner has an exclusive right to use.

If the drug is patented, only the patent holder or its licensee will be manufacturing the
medicine containing the drug. Thus usually there will be only be a single brand, that of the
patent holder in the market .The prices are determined by the patent holder or the
manufacturer and therefore will be high. Once out of patent, there will be multiple
manufacturers, manufacturing the medicines under their own brands. Thus there will be a
different brand names for treatment of the same disease. The industry that manufactures the
medicines using drugs in public domain is usually refereed to as a generic drug industry. The
competition offered by the generic drug industry bring down the price of the medicine. Here
the trade mark law provides legal protection to brands.

Principal Of law:

 Sections 391 & 394 of the Companies Act

 Provisions of Section 17-B of the Drugs and Cosmetics Act, 1940
 Class 5 of the Trade and Merchandise Act.
 The Supreme Court of India under Article 136 of the Constitution of India.

Sections 391 & 394 of the Companies Act:

The provisions of Section 391 to section 394 in the Companies Act, 1956, is in reality some
thing different while implementing. The provisions of these sections have wide applicability
in restructuring the business. Though the words merger, de-merger or amalgamation are not
used in these sections, through the interpretation of various terms like – arrangement,
compromise and reconstruction, the same meaning has been derived.

Trade and Merchandise Act:

An Act to provide for the registration and better protection of trade marks and for the
prevention of the use of fraudulent marks on merchandise.
A trade mark shall not be registered in Part B of the register unless the trade mark in relation
to the goods in respect of which it is proposed to be registered is distinctive, or is not
distinctive but is capable of distinguishing goods with which the proprietor of a trade mark is
or may be connected in the course of trade from goods in the case of which no such
connection subsists, either generally or, where the trade mark is proposed to be registered
subject to limitations, in relation to use within the extent of the registration.

Article 136 of the Constitution of India:

Special leave to appeal by the Supreme Court for the following
1. Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant
special leave to appeal from any judgment, decree, determination, sentence or order in any
cause or matter passed or made by any court or tribunal in the territory of India
2.Nothing in clause ( 1 ) shall apply to any judgment, determination, sentence or order passed
or made by any court or tribunal constituted by or under any law relating to the Armed
Forces.

Facts Of the Case:

Appellant and Respondent were Pharmaceutical companies who had taken over the assets and
business of erstwhile Cadila Group after its restructuring under Section 391 & 394 of the
Companies Act. One of the conditions in the scheme of restructuring of the Cadila Group was
that both the Appellant and the Respondent got the right to use the name “Cadila” as a
corporate name. The Appellant manufactured a drug under the brand name “FALCIGO”
which contained Artesunate for the treatment of cerebral malaria, commonly known as
Falcipharum. On August 20, 1996 the Appellant applied to the Trade Marks Registry,
Ahmedabad for registration of the mark “FALCIGO” in Part-A, Class-5 of the Trade and
Merchandise Marks Act. On October 7, 1996, the Drugs Controller General (India) granted
permission to the Appellant to market the said drug under the trade mark of “FALCIGO” all
over India. On April 10, 1997, Respondent Company was granted permission from the Drugs
Controller General (India) to manufacture and import from abroad a drug containing
Mefloquine Hydrochloride. The Appellant claimed that it was in April 1998 when it came to
their notice that the drug manufactured by the Respondents was also used for the treatment of
Falcipharum Malaria and was sold under the trade mark of “FALCITAB”. The Appellant
then filed a suit in the District Court at Vododra, Gujarat seeking injunction against the
Respondent from using the trade mark “FALCITAB”. The interim injunction application
made by the Appellant was dismissed. Subsequently, an appeal was filed by the Appellant in
the. Hon’bl High Court reached the conclusion that it could not be said that there was a
likelihood of confusion cause to an unwary customer in respect of the disputed marks. The
Appellant then approached the Hon’ble Supreme Court against the order of the Hon’ble High
Court.

Case of the Appellant:

1.It was claimed by the Appellant that the drug manufactured by the Respondent Company
would be passed off as Appellant’s drug “FALCIGO” for the treatment of the same disease in
view of confusing similarity and deception in the names.

2.It was submitted on behalf of the Appellant that although the possibility of confusion in a
drug being sold across the counter may be higher but the fact that a drug is sold under
prescription or only to physicians cannot by itself be considered a sufficient protection
against confusion. The physicians and pharmacists are trained people yet they are not
infallible and in medicines, there can be no provisions for mistake since even a possibility of
mistake may prove to be fatal.

Case of the Respondent:

1.Word “Falci”, which is the prefix of the mark was taken from the name of the disease
Falcipharum Malaria. It is a common practice in pharmaceutical trade to use part of the word
of the disease as a trade mark to indicate to the doctors and chemists that a particular
product/drug is meant for a particular disease.

2.It was also the case of the Respondent that admittedly the two products in question were
Schedule L drugs which can be sold only to the hospitals and clinics with the result that there
could not even be a remote chance of confusion and deception.

Analysis:

Court Observations:

The Hon’ble Supreme Court in its judgement refused to interfere with the order appealed
against and examined the principles that are to be kept in mind while dealing with an action
for infringement or passing off especially in cases of medicinal products.

The well-settled principles of law applicable to such cases are:

 The real question to decide in such cases is to see as to how a purchaser, who must be
looked upon as an average man of ordinary intelligence, would react to a particular
trade mark, what association he would form by looking at the trade mark, and in what
respect he would connect the trade mark with the goods which he would be
purchasing.
 It is apparent that confusion or mistake in filling a prescription for either product
could produce harmful effects. Under such circumstances, it is necessary for obvious
reasons, to avoid confusion or mistake in the dispensing of the pharmaceuticals.
 Physicians are not immune from confusion or mistake. Furthermore it is common
knowledge that many prescriptions are telephoned to the pharmacists and others are
handwritten, and frequently handwriting is not unmistakably legible. These facts
enhance the chances of confusion or mistake by the pharmacists in filling the
prescription if the marks appear too much alike when handwritten or sound too much
alike when pronounced.”
 The drugs have a marked difference in the compositions with completely different
side effect. The test should be applied strictly as the possibility of harm resulting from
any kind of confusion by the consumer can have unpleasant if not disastrous results.
 The courts need to be particularly vigilant where the defendants drug, of which
passing off is alleged, is meant for curing the same ailment as the plaintiffs medicine
but the compositions are different. The confusion is more likely in such cases and the
incorrect intake of medicine may even result in loss of life or other serious health
problems.
 As far as present case is concerned, although both the drugs are sold under
prescription but this fact alone is not sufficient to prevent confusion which is
otherwise likely to occur. In view of the varying infrastructure for supervision of
physicians and pharmacists of medical profession in our country due to linguistic,
urban, semi-urban and rural divide across the country and with high degree of
possibility of even accidental negligence, strict measures to prevent any confusion
arising from similarity of marks among medicines are required to be taken.
 Keeping in view the provisions of Section 17-B of the Drugs and Cosmetics Act,
1940 which inter alia indicates that an imitation or resemblance of another drug in a
manner likely to deceive being regarded as a spurious drug it is but proper that before
granting permission to manufacture a drug under a brand name the authority under
 that Act is satisfied that there will be no confusion or deception in the market. The
authorities should consider requiring such an applicant to submit an official search
report from the Trade Mark office pertaining to the trade mark in question which will
enable the drug authority to arrive at a correct conclusion.

Moreover in deciding whether a particular trade mark is likely to deceive or cause confusion
that duty is not discharged by arriving at the result by merely comparing it with the trade
mark which is already registered and whose proprietor is offering opposition to the
registration of the mark.

Factors For Deciding The Question By Honble Supreme Court:

The Hon’ble Supreme Court also laid down some factors for deciding the question of
deceptive similarity. However, it suggested that weight age to be given to each of these
factors should depend upon the facts and circumstances of each case.

The factors are enumerated below:

 The nature of the marks i.e. whether the marks are word marks or label marks or
composite marks, i.e. both words and label works.
 The degree of resembleness between the marks, phonetically similar and hence
similar in idea.
 The nature of the goods in respect of which they are used as trade marks.
 The similarity in the nature, character and performance of the goods of the rival
traders.
 The class of purchasers who are likely to buy the goods bearing the marks they
require, on their education and intelligence and a degree of care they are likely to
exercise in purchasing and/or using the goods.
 The mode of purchasing the goods or placing orders for the goods; and
 Any other surrounding circumstances which may be relevant in the extent of
dissimilarity between the competing marks.

The matter was remitted to the trial court to try the suit keeping the above factors in mind.
Judgement:

The Extra Assistant Judge of the District Court at Vadodara came to the conclusion that both
the drugs in question differed in their appearance, chemical formulation and price. And since
they could only be sold to hospitals and clinics and not to the general public, there was no
chance of any deception or confusion. Hence, he dismissed the injunction application of the
petitioner. Thereafter, the petitioner went for an appeal to the High Court of Gujarat. The
High Court upheld the decision granted by the district court.

Then, the petitioner went for an appeal before the Supreme Court of India under Article 136
of the Constitution of India. The case was decided by a Division Bench of the court
comprising of Justice B.N.Kripal, Justice D Raju and Justice B Kumar. The bench invoked
the contents of Section 17-B of the Drugs and Cosmetics Act, 1940. It provides that in order
to avoid confusion or deception in the market, the concerned authorities responsible for grant
of trademarks under the Act should verify that trademark in question. And ensure that it is not
an imitation or resemblance of a previously held trademark. Further that the applicant to the
trademark should submit an official search report from the Trade Mark office pertaining to
the trade mark in question.

Conclusion:

And after taking into consideration the contentions of both the parties the division bench of
the apex court held that the petitioner was right in claiming for infringement of their
trademark. It ruled that since the products in question were medicinal products there was a
greater risk of confusion compared to non-medicinal products. And it could have fatal and
disastrous effects on the buyers. And accordingly the appeal was disposed of by the bench.

Other Relevant Cases:

 Durga Dutt Sharma V Navaratna Pharmacuetical Laboratories AIR 1965 SC 980

 Corn Products Refining Co V Shnagrila Food Products Ltd AIR 1960 SC 142(1960).
 Amritdhara Pharmacy v Satya Deo Gupta AIR 1963 SC 449.
 Hoffmann-La Roche & Co Ltd v Geoffrey Manner & Co (p) Ltd (1969) 2 SCC 716.
 Tokalon Ltd v Davodson & Co (1906) 23 RPC 774 at p 777.
 M/s Panacea Biotic Ltd v Recon Ltd,1996 PTC (16) 561.
  Griffen Laoratories Ltdv Indian Natiopnal Drug Co Ltd (vol 14,no.1 )9.
 Astra-IDL Ltd v TTK Pharma Limited AIR 1995
 SBL Ltd v Himalaya Drug Co, AIR 1998 Del 126.
 Pfizer Products Inc v B L & Company & Ors 2002 (25) PTC 262 (Del).
 Cadila Health care Ltd v Swiss Pharma Pvt Ltd v 2002 (24) PTC 708 (Guj).
References:
 http://www.lawinfowire.com/articleinfo/cadila-healthcare-limited-vs-
pharmaceuticals-supreme-court-india-2001-5-scc-73
 https://indiancaselaws.wordpress.com/2015/08/18/cadila-health-care-ltd-v-cadila-
pharmaceuticals-ltd/
 https://indiankanoon.org/doc/1114158/
 http://www.manupatra.co.in/newsline/articles/Upload/84977C7F-EFB8-409F-A773-
840DCA02ACB9.pdf