AO/397/2007 1/51 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD APPEAL FROM ORDER No. 397 of 2007 WITH CIVIL APPLICATION No.14306 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ Sd/- ===================================================== 1. Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2. To be referred to the Reporter or not ? YES 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO ===================================================== PARAS PHARMACEUTICALS LTD - Appellant Versus RANBAXY LABORATORIES LTD & 2 - Respondents ===================================================== Appearance : MR MIHIR JOSHI, SENIOR ADVOCATE WITH MR YJ TRIVEDI for Appellant. MR MIHIR J THAKORE WITH MR PRANAV G DESAI for Respondents. ===================================================== AO/397/2007 2/51 JUDGMENT CORAM : HONOURABLE MR.JUSTICE K.A.PUJ Date : 21/02/2008 ORAL JUDGMENT 1. The appellant-Original Plaintiff has filed this Appeal From Order under Order 43 Rule 1(r) of the Civil Procedure Code challenging the order dated 25th October, 2007 passed in the application Exh.6/7 filed in Regular Civil Suit No.2201 of 2007 by the learned (Auxi.) Chamber Judge, City Civil Court, Ahmedabad, thereby dismissing the application for temporary injunction. 2. Mr. Y.J.Trivedi, learned advocate along with Senior Counsel Mr.Mihir Joshi appears on behalf of the appellant and Mr.Pranav G.Desai appears on Caveat along with Senior Counsel Mr.Mihir J.Thakore on behalf of respondent. With the request of the parties, this Appeal is taken up for final hearing. 3. It is the case of the appellant that the appellant is a Company incorporated under the AO/397/2007 3/51 JUDGMENT Companies Act, 1956 and engaged in the business of manufacturing and marketing pharmaceutical products and some prominent products of the appellant company are; 1. MOOV a pain reliever ointment 2. Stopache- ache reliever tablets 3. Itchguard – a itch reliever ointment, amongst others. 4. All the products of the appellant-Company are quite popular and widely accepted in the market and all the products are such popular that even the similar get up or trade dress of any other such kind of product would lead any person to believe close association of the same with the appellant-Company. 5. The dispute in the present appeal is in respect of the product MOOV. The appellant-Company has developed such trade mark with a particular trade dress including colour scheme, get up, AO/397/2007 4/51 JUDGMENT arrangement and trade dress for the article, which is registered trade mark of the appellant and also registered copyright under the Trademarks Act and Copyright Act respectively. The appellant is, therefore, having exclusive right as provided under the Trademarks Act and Copyright Act and any person uses any identical or deceptively similar label, mark, trade dress or making substantial or material reproduction, is liable for infringement of the statutory right granted in favour of the appellant. 6. The appellant has developed the said product since the year 1986-87 and since then it has acquired reputation in the market. As far as sale promotion expenses and sales figures of the product MOOV are concerned, the total sales turn over till date of this product is to the tune of Rs.481,90,12,273/-. The turn over of the financial year 2006-2007 is Rs.55,97,95,386/-. From the renowned sources of the market research, it is proved that the total market share of the product MOOV is of 11% in volume AO/397/2007 5/51 JUDGMENT and 10% in value in total similar category of products. 7. It is also the case of the appellant that the respondents herein are also engaged in the business of medicinal preparation and have started manufacturing of the pain reliever ointment known as VOLINI. The said product is being used by the respondents since long time. However, as they could not get the desirable market share and as they realized that the product of the appellant is day by day increasing the market share and very much popular in the market, the respondents decided to capture the market by way of negative advertisement whereby the product MOOV can be disparaged and denigrated. The respondents have recently started an airing a TV commercial in respect of their product VOLINI, which obviously seeks to disparage and denigrate the product of the appellant MOOV. The copy of the story board of the TV commercial depicting the visual frames with transcripts of the voice recording is AO/397/2007 6/51 JUDGMENT produced before the Trial Court and it is also produced along with this Appeal. 8. It is the case of the appellant that the respondent's advertisement/ TV commercial is a cleverly conceived box of pain reliever to denounce the product of the appellant as shown in the third, sixth and seventh frames of the TV commercial. The third frame of the TV commercial shows a lady (MOM) explaining about suffering from the ache, she takes out a box of pain reliever product, is clearly identical with the box used by the appellant for marketing its product MOOV as the said box is having distinctive artistic work and colour scheme. The appellant submits that in the fourth, fifth, sixth and seventh frames of the TV commercial a lady comes to the MOM (lady) and suggesting her to use another remedy and gives her respondent's product VOLINI Gel and says “YOU NEED A TRUE PAIN RELIEVER”. The indirect message and suggestion contained in the advertisement is that the product of the appellant, namely, MOOV AO/397/2007 7/51 JUDGMENT is not enough and has not acquired good quality for remedy of backache, lower backache and joint pain and for other aches and the customers shall continue to suffer from the various aches, as mentioned above, if they continue to use the appellant's product, so the respondent's product, namely, VOLINI, is better and a true pain reliever. The TV commercial, in question, contains a subtle message and suggestion that the product shown in the advertisement are ineffective as ache reliever and the viewer shall thus, switch to the product of the respondents. 9. It is, therefore, the case of the appellant that the message and suggestion seeks to disparage and is showing the product in the advertisement, which is easily associated in the minds of the consumers and the general public with the artistic work and colour scheme and the mark of the appellant's product MOOV. The box shown in the advertisement is depicted, being a replica of the artistic work and colour scheme and AO/397/2007 8/51 JUDGMENT trademark used by the appellant for its product MOOV. The effect of TV commercial telecasted by the respondent would inevitably be the disparagement and denigration of the product of the appellant. 10.It is also the case of the appellant that the product of the appellant MOOV is being marketed by the appellant in distinctive artwork and colour scheme for which the appellant holds statutory right. The distinctive artwork and colour scheme in relation to the product MOOV is associated in the minds of consumers and the general public and unwary consumers and the general public watching the respondent's TV commercial which is aired throughout India including city of Ahmedabad are likely to misled into believing that the product which is shown in the TV commercial is poor and having inferior quality, is the product of the appellant, as the impugned TV commercial makes direct reference to the product of the appellant by depicting the box with distinctive colour scheme. AO/397/2007 9/51 JUDGMENT 11.In view of the above referred set of facts, appellant was constrained to file Regular Civil Suit No.2201 of 2007 along with the notice of motion before the learned Chamber Judge, City Civil Court at Ahmedabad and initially ex-parte interim relief was granted and by way of that interim relief the respondents, their agents, servants, dealers, distributors were restrained from demonstrating or advertising their product VOLINI in any manner including telecasting which disparages and denigrates, and directly or indirectly refers to the product of the appellant MOOV. On returnable date i.e. on 25.10.2007, the respondents appeared through their Counsel. However, the respondents did not file any reply or written statement to the suit or Notice of Motion, the respondents have only filed list of documents without application or authentication and submitted their arguments to the effect that though the colour scheme, get up and arrangement may be similar as stated in the advertisement, to the product of the appellant AO/397/2007 10/51 JUDGMENT MOOV, however, the words which are faintly stated on the said card box are different. It is further submitted before the learned City Civil Judge, Ahmedabad on behalf of the respondents that the said advertisement was only a comparison and does not amount to disparage or denigrate the appellant's product MOOV. The case of the appellant before the Court was that from the prints of the advertisement, it is undoubtedly and evidently clear that the product which is disparaged or denigrated in the said advertisement is having identical colour scheme, arrangement, general trade dress with that of the appellant's product MOOV. Despite these facts, the learned City Civil Judge, Ahmedabad has rejected the application of interim relief vide his order dated 25.10.2007. 12.It is this order of the learned City Civil Judge, Ahmedabad which is under challenge in this Appeal From Order. 13.Mr. Mihir Joshi, learned Senior Counsel appearing for the appellant has submitted that AO/397/2007 11/51 JUDGMENT the learned City Civil Judge, Ahmedabad has erred in appreciating certain admitted positions which are as under: (i)The impugned advertisement does disparage and denigrate one similar product i.e. pain reliever ointment. (ii)The trade dress, colour scheme and other arrangement of the get up of the said product / box is identical and/or similar to appellant's product MOOV in all respects. (iii)The said advertisement does convey a message that the product of the respondents is only “TRUE PAIN RELIEVER” as compared to entire other class. (iv)The appellant is the registered proprietor of the trade mark as well as of the copy right of the entire trade dress, which does include colour scheme, get up, arrangement, trade dress AO/397/2007 12/51 JUDGMENT etc. Thus, from the said advertisement, it is evident that the said advertisement is created by the respondents with mala-fide intention of disparaging and denigrating the appellant's product MOOV and thereby to capture the market developed in respect of the said product by way of negative advertisement on air. 14.He has further stated that the learned City Civil Judge has completely failed to appreciate that the pleading of the appellant is proved as not controverted in any manner by the respondents. Admittedly, the respondents have neither submitted any reply / written statement nor sought time for filing the same nor reserved the liberty to file the same in future in any manner. By short circuiting of the mandatory requirements as provided under the Code of Civil Procedure as well as the Ahmedabad City Civil Court Rules, 1961, the respondents directly submitted the story board of the advertisement. However, in any case, the same otherwise did favour the case of the appellant and on the AO/397/2007 13/51 JUDGMENT contrary established the fact that the said advertisement did disparage or denigrate the appellant's product MOOV. 15.He has further submitted that since the pleading of the appellant – original plaintiff was not controverted in any manner before the trial Court, the same were said to have been proved by virtue of the provisions of the CPC. Further, the documents which are produced by the appellant did establish a strong prima-facie case beyond any doubt. Hence, the learned City Civil Judge ought not to have passed the impugned order, and therefore, the same deserves to be quashed and set aside. 16.Mr. Mihir Joshi has further submitted that the learned City Civil Judge, Ahmedabad has failed to appreciate that the respondents are not restrained from advertising or manufacturing or using their product or brand. The only grievance of the appellant is not to advertise AO/397/2007 14/51 JUDGMENT the product in a manner which disparages or denigrates the appellant's product. He has therefore submitted that ingredients of balance of convenience and irreparable loss does lie and only lies in favour of the appellant as compared to the respondents. He has further submitted that the respondents have no right to use the art work or label of MOOV or print or publish the same in any manner, which amounts to an infringement of copyright, especially when the appellant is the registered proprietor under the Trade Marks Act, 1999. He has further submitted that the respondents have used the mark without any license or permission from the appellant, therefore, as per the provisions of Section 29 of the Act, the respondents are liable for infringement. In view of the provisions contained in Section 29(4), 29(6), 29(7) and 29(8) of the Trade Marks Act, 1999 the respondents are using the appellant's trade mark and hence, respondents are liable for infringement. AO/397/2007 15/51 JUDGMENT 17.Mr. Mihir Joshi has further submitted that respondents have committed infringement of copy right though the copyright of the appellant is already registered and registration certificate is also produced before the Court. Mr.Joshi, in support of the submission has relied on decision of the Delhi High Court in the case of Karmachand Appliances Pvt. Ltd. V/s. Shree Adhikari Brothers and others reported in 2005(2) RAJ 570 wherein it is observed that what is called disparagement is already described in BLACK'S LAW DICTIONARY. It is referred to in para 20 of the Judgment that “Falsehood when tends to denigrate the goods or services of another party, is accountable in common law suit for disparagement”...... and the statement about the competitor's goods which is untrue or misleading and is made to influence or do not influence the public not to buy”. This fact is not appreciated by the learned City Civil Judge, Ahmedabad. AO/397/2007 16/51 JUDGMENT 18.Mr. Joshi has further submitted that the phrase in the advertisement, another lady who recommends the respondent's product VOLINI Gel and says “YOU NEED A TRUE PAIN RELIEVER”, directly suggesting or giving the message in the said advertisement that the first lady who is having in her hand the product MOOV of the appellant is not enough and is not a true pain reliever. This clearly establishes that the respondents are trying to disparage and show to the customers through the advertisement, that the appellant's product is inferior product or is useless product for pain reliever, which is prohibited in law. 19.Mr. Joshi has further submitted that the respondents have not given any explanation as to why they have adopted the art work or label in their advertisement, and hence, it tantamounts to a fraud on the part of the respondents as laid down in the case of Midas Hygiene reported in 2005(3) SCC 1990. As per the said decision, without giving any explanation, if the AO/397/2007 17/51 JUDGMENT respondent start or switch over to similar get up, colour scheme, they are liable for the infringement of the trade mark and copyright and are required to be restrained to protect the statutory right of the appellant. Relying on this Judgment, Mr.Joshi has submitted that in the present case, admittedly the respondents are using the trademark VOLINI and advertising the same since long time. However, recently they have switched over to the advertisement which is impugned, whereby the product which is similar and/or identical to the appellant's product MOOV is shown. 20.The respondents are therefore required to change the two clips in the advertisement and it was suggested that if they change the colour of the cartoon shown, then also the appellant has no objection. This aspect was not considered by the learned City Civil Judge, Ahmedabad while deciding the injunction application. AO/397/2007 18/51 JUDGMENT 21.Mr. Joshi has therefore urged that the order passed by the learned City Civil Judge, Ahmedabad deserves to be quashed and set aside and the prayers made by the appellant in the injunction application is required to be granted. 22. Mr.M.J.Thakore, learned Senior Counsel appearing with Mr.Pranav G.Desai for the respondent has submitted that the learned Trial Judge, after considering the facts and circumstances and law as well as judgments cited on behalf of the parties held that there is no merit in the notice of motion filed by the applicant and that it cannot be said that the product of the appellant alleged to have been shown in the advertisement is denigrated and disparaged. He has further submitted that the respondent has not shown the applicant's product MOOV in the advertisement, rather the product shown in the advertisement is completely different product which is not even remotely connected with the appellant's products. He has AO/397/2007 19/51 JUDGMENT further submitted that this would be more than evident if the clippings are shown in the size in which they would be displayed on the television. The minimum TV screen size on which the advertisement would appear would be about 20”. He has further submitted that despite knowledge, false statements are made in the plaint by the appellant to the effect that the product shown in the clippings is the appellant's product MOOV. He has further submitted that false statements are made in para 13 of the plaint / application for injunction and they are as under: (i)Thereafter, in the third frame of the T.V. Commercial shows a MOM explaining her suffering from ache, she takes out MOOV from her bag and speaks “OH, WHAT TO DO, THIS BACK ACHE” ! (ii) The fourth, fifth, sixth and seventh frames of the T.V. Commercial shows a lady comes to MOM and boy and suggesting her for another remedy and speaks “TAKE THIS, YOU NEED A TRUE PAIN RELIEVER”. At the same time, a lady gives VOLINI Gel to MOM, who is having MOOV in her hand. AO/397/2007 20/51 JUDGMENT 23.He has further submitted that in the Item No.3 of the list in clipping No.3 & 7 which is produced along with the notice of motion, false statement is made that the advertisement contains applicant's product MOOV. The appellant is seeking to improve upon the pleadings and seeking to explain away the false statements made before the learned Trial Judge. He has submitted that this is not permissible and the appeal as well as civil application deserve to be dismissed solely on the ground of false statements made in the plaint and the application for injunction. 24.Mr. Thakore has further submitted that the advertisement actually makes a comparison and provides an information that the product of Respondent is having qualities in curing the ailment relating to any back ache and muscular pain. There is no remark against the product of the appellant in the advertisement suggesting that its product is inferior. The advertisement AO/397/2007 21/51 JUDGMENT of VOLINI product does not tantamount to any act of disparagement or infringement of applicant's rights under the Trade Marks Act, 1999. He has further submitted that there is no similar get up or trade dress which has been adopted by the Respondent while projecting the product “PACE” which is not even remotely connected with the Appellant's product MOOV. 25. He has further submitted that no right can be claimed against the basic colours and use of colour is common to the trade. It cannot be monopolized by any of the parties. He has further submitted that the applicant by distraction of facts have tried to make a false attempt to make a case of unfair trade practice. The advertisement is just a symbolic comparison with other non-existent products. The advertisement in no manner refers to the product of the Appellant and therefore, by construing that the Respondent is showing the product which is distinctively seen as PACE is completely wrong and without any substance. AO/397/2007 22/51 JUDGMENT 26. Mr.Thakore further submitted that it is settled law that one cannot claim any copy right on the use of basic colour which is always treated as common colour. The customers are not persuaded by the basic colour and no one goes to the retailer or chemist shop asking for a particular colour of the carton by which he will be induced to purchase the product. There can be no monopoly over colours and in this particular case, the PACE which is appearing on the product pack is entirely a different word and has been prominently used which is in no way identical to or similar to the product under the trademark MOOV of the appellant. He has further submitted that applicant cannot claim any copy right on the colour Violet and in the absence of the same, the claim made by the Appellant that TV commercial of VOLINI contains certain message of the product of appellant is devoid of any merits and it cannot be considered to be a case of disparagement and denigration of the product of the Appellant. He has further submitted that AO/397/2007 23/51 JUDGMENT violet colour is a common colour and is used commonly in the trade which cannot be monopolized by any of the parties and therefore, the appellant cannot claim exclusive right on the use of the colour. 27. Mr.Thakore has further submitted that there is no balance of convenience which lies in favour of the Appellant and on the contrary, the respondent will suffer irreparable loss and damages in case the order of the Trial Court is set aside and stay is granted in favour of the Appellant which will take away right of the Respondent to carry on the advertisement which otherwise the Respondent is entitled to do so for promotion of its business in relation to its product VOLINI. He has further submitted that there is no strong prima-facie case in favour of the Appellant as alleged and the balance of convenience does not lie in favour of the Appellant as alleged. He has, therefore, submitted that appeal is without any merit and cause of action, improper and is liable to be AO/397/2007 24/51 JUDGMENT dismissed. 28.Mr. Thakore, in support of his submission that the advertisement actually makes a comparison and provides an information that the product of respondent is having qualities in curing the ailment relating to any back ache and muscular pain and there is no remark against the product of the appellant in the advertisement suggesting that its product is inferior, has relied on the decision of the Delhi High Court in the case of DABUR INDIA LIMITED V/S. WIPRO LIMITED, BANGALORE, 2006 (32) PTC 677 (Del.) wherein the Court was to consider the interim injunction application restraining the defendant from telecasting TV commercial in respect of “Wipro Sanjivani Honey”. It was alleged by the plaintiff that the commercial disparaged the product of plaintiff. The defence raised by the defendant was that the TV commercial was only comparing the two products and showing its own product as superior. There was no disparagement of the plaintiff's product. The Court held that AO/397/2007 25/51 JUDGMENT no interim injunction against TV commercial can be granted. The Court took the view that the intent of the commercial is to suggest that the product of the defendant, that is, “Wipro Sanjivani Honey” is far superior to that of the plaintiff, that is, 'Dabur Honey'. While doing so, the commercial does not denigrate or disparage the product of the plaintiff – it merely compares the two brands of honey and proclaims that the product of the defendant is superior. The Court further held that it is one thing to say that the defendant's product is better than that of the plaintiff and it is another thing to say that the plaintiff's product is inferior to that of the defendant. The commercial clearly intends to say (and so it does) that as compared to the product of the plaintiff, the product of the defendant is far better. The hidden message in this may be that the product of the plaintiff is inferior to that of