CS (OS) No. 111/2006 Page 1 of 40 IN THE HIGH COURT OF DELHI AT NEW DELHI CS (OS) No. 111 of 2006 Reserved on: 22nd January 2010 Decision on: 3rd June 2010 HIMALAYA DRUG CO. ..... Plaintiff Through Mr. Hemant Singh with Ms. Mamta Rani Jha, Mr Sachin Gupta, Mr. Shashi Jha, Mr. Manish K. Mishra, Mr. Animesh Rastogi and Mr. Sumit Rajput, Advocates versus SBL LIMITED ..... Defendant Through Mr. Atishi Dipankar with Mr. S.P. Jha and Mr.B.K. Jha, Advocates CORAM: JUSTICE S. MURALIDHAR 1. Whether reporters of local paper may be allowed to see the judgment? No 2. To be referred to the reporter or not? Yes 3. Whether the judgment should be referred in the digest? Yes JUDGMENT 03.06.2010 Introduction 1. The Plaintiff, which is the manufacturer of an Ayurvedic medicine “Liv.52”, seeks a permanent injunction restraining infringement of its said trademark by the Defendant which is manufacturing a Homeopathic drug “LIV-T”. 2. The case has been entirely presented and argued as a suit for infringement. The incidental reliefs are for delivery up of all the infringing goods and rendition of accounts by the Plaintiff. CS (OS) No. 111/2006 Page 2 of 40 Pleadings 3. The Plaintiff is a registered partnership firm engaged in the business of manufacturing and marketing Ayurvedic medicinal preparations and formulations since 1930. It claims to have gained tremendous reputation in the field of medicine and amongst consumers through large-scale advertising, extensive sales and innovative promotional schemes. Liv.52 is stated to be among several well-known ayurvedic medicines manufactured and marketed by the Plaintiff. 4. Liv.52 is a liver tonic prescribed for liver disorders. It is further advised for promoting appetite and growth, the two biological phenomenon directly related to liver. It is stated that the trademark “Liv.52” is a coined mark. According to the Plaintiff, the prefix “Liv” has no dictionary meaning or any meaning in common parlance. The said trademark is stated to have been coined and adopted by the Plaintiff in 1955 and has been used by it continuously and exclusively all over India since then. 5. It is claimed that at or around the time of the filing of the present suit in 1996, the approximate turnover for sales of „Liv.52‟ for the year 1995-96 was over Rs. 30 crores and the promotional expenditure during the same period was Rs. 3 crores. This, according to the Plaintiff, was reflective of the goodwill that the trademark Liv.52 commands in medical circles and in the public. It is stated that the trademark Liv.52, apart from having inherent distinctiveness on account of its being a coined mark, has also become distinctive on account of its extensive use by the Plaintiff in relation to liver related preparations and medicines since 1955. The CS (OS) No. 111/2006 Page 3 of 40 Plaintiff states that it is the proprietor of the trademark Liv.52 under the common law having exclusive right to the use thereof in relation to the pharmaceutical and medicinal preparations. 6. The Plaintiff states that it holds the following trademark registrations in Class 5: “Trade Mark Regn. No. Class Date Goods LIV.52 180564 5 10.7.57 Medicinal Preparations for the treatment of Disorders of liver LIV.52 290061 5 10.8.73 -do- LIV.52 401959 5 25.2.87 Medicinal, pharma- (Label) ceutical and ayurvedic preparations and substances” It is stated that all the above registrations have been kept renewed till date. 7. The Defendant, M/s. SBL Limited, having its headquarters at Sahibabad, District Ghaziabad, U.P., is engaged in the business of manufacturing and marketing homoeopathic preparations. The Plaintiff alleges that the Defendant has dishonestly and malafide adopted the trademark “LIV-T” in relation to homeopathic preparations meant to cure liver disorders. The Plaintiff states that Liv.52 and LIV-T are deceptively similar. In the plaint, it is stated that “the essential and distinguishable feature of both the trademarks being identical, i.e., “LIV”. The Defendant‟s medicinal preparation is bound to be presumed to be another liver related medicinal preparation originating from the Plaintiff or having an association or nexus with the Plaintiff, which being false is a misrepresentation leading to CS (OS) No. 111/2006 Page 4 of 40 passing off of the Defendant‟s goods/business as those of the plaintiff. It is stated that “the suffix “52” in the Plaintiff‟s trademark or “T” in the Defendant‟s trademark are incapable of distinguishing any medicinal preparations of either of the parties or sufficient to prevent the likelihood of confusion or deception that is bound to occur on account of the essential feature “LIV” being identical.” 8. It is submitted that the use of the trademark LIV-T by the Defendant in relation to liver related preparations which is phonetically and structurally identical to the trademark Liv.52 of the Plaintiff further amounts to the violation of the Plaintiff‟s statutory right of exclusive use of the mark Liv.52 and infringement of its trademark registrations under Section 29 (1) of the Trade & Merchandise Marks Act, 1958 (`TM Act 1958‟). It is submitted that the adoption and use of the trademark LIV-T by the Defendant in relation to the identical trade and goods “is fraudulent, dishonest and totally illegal.” It is alleged that the use of the said mark LIV-T by the Defendant in relation to identical trade and goods amounts to counterfeiting an offence under Sections 78 and 79 of the TM Act 1958. 9. The Plaintiff sent a legal notice on 14th March 1996 calling upon the Defendant to desist using the trademark LIV-T. However, the Defendant has continued using the said trademark. Accordingly, the present suit was filed seeking the relief of permanent injunction against the infringement and damages. 10. In the written statement filed by the Defendant, apart from raising a CS (OS) No. 111/2006 Page 5 of 40 preliminary objection as to the territorial jurisdiction of this Court to entertain the suit and the authorization under which the plaint has been filed, it is contended that the word “LIV” is generic and common to trade as describing the medicines associated with the treatment of liver. It is stated that “Liv” has become “publici juris” in the field of medicines and pharmaceuticals where it is common practice that the drugs are named either by the name of organ and or by the principle ingredients or the name of the ailment, thereby reducing the chances of error. It is submitted that a word or its abbreviation, having become publici juris, ceases to be the subject matter of proprietorship, and also ceases to be a source of deception or confusion for the persons likely to deal with such goods, who in any event would ignore the publici juris and distinguish the goods by either the prefixes or the suffixes. 11. It is then submitted that the conflict alleged by the Plaintiff is between two different products - one which is an ayurvedic medicine and the other a homeopathic preparation. It is submitted that a homeopathic preparation can be sold only through authorised homeopathic outlets having homeopathic drugs licence. The Plaintiff‟s product, which is an “ayurvedic proprietary medicine”, is not sold through homeopathic outlets. However, the packaging, cartons, labels including the distinguishing features are different as are the colour schemes, placement of letters, and all other features. The composition of the two products are entirely different. The packaging carton of the Defendant‟s product prominently contains the name “SBL” which is written in capital letters, in a bold and prominent fashion and in a very large and prominent size along with the description CS (OS) No. 111/2006 Page 6 of 40 “Collaboration Boiron France” written in a smaller font size. 12. It is stated that the carton of the Defendant which features an artistic impression of the organ liver along with the letters in the word LIV-T written in close conjunction with each other constitutes an original artistic work under the Copyright Act, 1957 of which the answering Defendant is the proprietor. It is further pointed out that the word “LIV” is used as a prefix for the names of drugs for treatment of liver related problems by over fifty pharmaceutical companies. It is pointed out that it is used in several trademarks such as LIV CARD, LIV-UP, LIV-RIL-z, LIVCO, LIVO-10, LIVO-10 al, LIVAPLEX, LIVOFIT, LIVA, LIVOL, LIVDRO, LIVAZOL, LIVERITE, LIVERJET, LIVERNUT, LIVERPOL, LIVUP, LIVEX, LIVIVRON, LIVIBEE, LIVINA, LIVINOL, LIVIPREP, LIVIRILE, LIVIRONVITA, LIVIRUBRA and LIVITA. It is stated that there are at least eight ayurvedic and homeopathic preparations of eight different manufacturers having names beginning with „LIV‟. These include LIVOMAP, LIVION, LIVANO, LIVOTRIT, LIVOSIN, LIVOGUARD, LIVOMYN and LIVOTONE. The Defendant, therefore, denies that they have dishonestly and malafide adopted the mark LIV-T in relation to its medicinal preparation and that the marks LIV.52 and LIV-T are deceptively similar. Since LIV is an abbreviation of liver, and has been used in over 100 registrations as a constituent of the name under which the products relating to treatment associated with liver are being marketed, it is generic and common to trade as describing the medicines associated with the treatment of liver. The Defendant states that upon independent searches conducted by two trademark search agencies, it transpired that there are CS (OS) No. 111/2006 Page 7 of 40 several companies that have sought registration of trademarks such as LIVADEX, LIVOGEN, LIVOTONE, LIVOVIBIN and LIVERON. 13. It is submitted that the Plaintiff‟s legal notice dated 14th March 1986 was replied on 7th May 1986 denying the allegations. Proceedings in the case 14. By an order dated 23rd May 1996, a learned Single Judge of this Court issued an ex parte interim injunction, which was subsequently confirmed by the order dated 12th July 1996 in favour of the Plaintiff. Aggrieved by the said order, the Defendant filed FAO (OS) No. 301 of 1996 which was allowed by the judgment dated 15th July 1997 of the Division Bench of this Court reported as S.B.L. Ltd. v. Himalayan Drugs Co. AIR 1998 Del 126. It was held that “the two rival marks Liv.52 and LIV-T contain a common feature Liv which is not only descriptive but also publici juris; a customer will tend to ignore the common feature and will pay more attention to uncommon features i.e., 52 and T. The two do not have such phonetic similarity as to make it objectionable.” It was held that nobody can claim exclusive right to the use of `Liv‟ as a constituent of any trademark. It was further held that the two cartons were such that there was “no possibility of one being accused of deceptively similar with the other and the likely customer mistaking one with the other, even by recollecting faint impressions.” The interim injunction was accordingly vacated. 15. The matter was then carried to the Supreme Court in SLP (Civil) No. 21173 of 1997 which was dismissed by the Supreme Court on 27th February 1998 stating that the above judgment of the High Court was “in CS (OS) No. 111/2006 Page 8 of 40 the nature of an interim order passed in a pending matter.” The High Court was requested to take up the main case and decide the same expeditiously. It was further observed: “It is needless to say that the learned trial judge will dispose of the matter without being influenced by the observations made in the impugned judgment.” 16. Issues were framed by an order dated 30th November 1998. 17. There was another development which requires to be mentioned. The suit was initially valued for the purpose of court fee jurisdiction at Rs. 5 lakh and was filed in this Court. But with the increase in pecuniary jurisdiction, the case was transferred to the Court of the learned Additional District Judge. Thereafter the Plaintiff filed an application under Order VI Rule 17 CPC to amend the plaint and value the suit at Rs. 20 lakhs. The said amendment was allowed by the order dated 29th March 2005. Thereafter the suit was again transferred to this Court. Evidence 18. The Plaintiff examined six 6 witnesses. PW 1 was Mr. K.N. Jairaman, the Commercial Manager of the Plaintiff. Mr. Jairaman stated in his evidence that he has been in the employment of the Plaintiff since 1973. He has stated that „Liv.52‟ is a coined trademark of the Plaintiff and the word „Liv‟ is not a medically used term. He has also stated that the medicine „Liv.52‟ is sold without medical prescription, as it is an Ayurvedic medicine. Mr. Jairaman has also informed that this product is sold through the Plaintiff‟s 500 stockists throughout the country who in CS (OS) No. 111/2006 Page 9 of 40 turn sell the products to the retailers. The Plaintiff also has 500 field representatives promoting this product throughout the country. Mr. Jairaman states that in March 1996, they came to know about the use of the mark „LIV-T‟ by the Defendant. Mr. Jairaman has stated that the grievance against the Defendant is that in the Defendant‟s trademark „LIV- T‟, they have adopted the Plaintiff‟s essential word „Liv‟, due to which a consumer is likely to identify the product of the Defendant as a product manufactured by the manufacturers of „Liv.52‟, which amounts to a misrepresentation by the Defendant. He has also stated that on account of imperfect recollection on the part of the customer who bought „Liv.52‟ before he bought „LIV-T‟, the customer may presume that it is the same product which he purchased last. According to Mr. Jairaman, this amounts to misappropriation of the goodwill of the Plaintiff by the Defendant. He also said that the entire profits earned by the Defendant on sale of „LIV-T‟ are the loss of the Plaintiff firm for which the Defendant must render accounts to show the profit earned by them on the sale of LIV-T. 19. Mr. Jairaman admitted that the Plaintiff is not selling Homeopathic preparations. However, he has stated that if they want they can sell even Homoeopathy and Allopathy medicines. Mr. Jairaman also stated that he has found the medicine „LIV-T‟ being sold in shops other than Homeo shops. He has also mentioned that in the past also the Plaintiff has taken action against other persons using the word „Liv‟. He has provided the instances where the Plaintiff has opposed against the use of the marks „Liv.up‟, „Liv-Ril‟ and „Liv-Card‟. CS (OS) No. 111/2006 Page 10 of 40 20. However, during his further examination on 6th April 1999, Mr.Jairaman stated that he was not aware of the names being used by other companies for selling their preparations/medicines for liver disorder and he could not admit or deny the suggestion that other companies/firms are using the prefix „Liv‟ in the names adopted by them for selling the medicines in respect of liver disorders. Mr. Jairaman has also admitted that there is no similarity between the cartons, label and bottle being used by the Plaintiff for „Liv.52‟ and the label, carton and bottle being used by the Defendant for „LIV-T‟. 21. The next witness was Mr. Satish Doval, the retail pharmacist of Guardian Pharmacy. He has stated himself to be in business of selling medicines, allopathic, ayurvedic and homoeopathic for five years. He has mentioned „Liv.52‟ as the drug sold maximum by him for liver disorders. He further deposed that if he comes across any promotion or literature of „LIV-T‟, he will assume that it is another product from the manufacturer of Liv.52. 22. PW 3 was Mr. V. Vashisht, a consumer of „Liv.52‟, who was running a garment fabrication unit in Noida. He stated that he was consuming „Liv.52‟ for last six years for liver related ailments. He further states that he has not heard of any medicine other than „Liv.52‟ for treatment of liver related ailments. After seeing the label „LIV-T‟, he stated that he felt it should be by the manufacturers of „Liv.52‟ as „Liv‟ has been written on it. CS (OS) No. 111/2006 Page 11 of 40 23. PWs 4, 5 and 6 were Mr. Deepak Ohri, Mr. Atul Sarin and Mr. Navin Dutt respectively. They are the medical representatives of the Plaintiff who conducted survey on the significance of the distinctiveness of “Liv”. They produced reports exhibited as Ex. PW 4/1 to PW 4/4, PW 5/1 to PW 5/4 and PW 6/1 to PW 6/2. PW 4 stated that he did not try to find out from doctors, chemists or from journals whether there were other drugs in the market for treatment of liver disorders. 24. The Defendant tendered three witnesses. DW 1 Mr. Sangeet Aggarwal, Manager-Finance & Accounts of SBL Ltd, DW 2 Mr. Rakesh Saxena, the Search Assistant of Indmark and DW 3 Mr. Amarnath Saini, an employee of the Defendant 25. DW 1 stated that the formulation of the Plaintiff‟s product and the Defendant‟s product were entirely different. He pointed out that „Liv.52‟ is sold by the chemist and even by the general merchant and no prescription from a registered medical practitioner was required for purchasing it. „LIV- T‟ is sold through licensed Homoeopathic drug retailer. He further stated that homoeopathic drugs are generally sold on the prescription of the person practising Homoeopathy. He stated that although „LIV-T‟ is not a scheduled drug, it is sold only on prescription. He further deposed that for selling allopathic drugs, a licence is required under Form 20A and 20B of the Schedule to the DCA no licence is required for selling Ayurvedic drugs. He further stated that to his knowledge there were about 100 drugs CS (OS) No. 111/2006 Page 12 of 40 in the market with prefix word „LIV‟. It was not the invented word of the Plaintiff but a prefix traceable to the organ „Liver‟. He denied the statement that the chemists who are selling ayurvedic and allopathic drugs are also selling homoeopathic drugs. 26. DW 2 was the Search Assistant of Indmark, the company that issued search report Ex. DW 2/1 to DW 2/4. DW 3 Mr. Amarnath Saini, an employee of the Defendant since 1988, deposed that in ayurvedic, homoeopathic and allopathic medicines there may be more than one hundred medicines which starts with the name „LIV‟ for liver related diseases. He also stated that homoeopathic medicines are sold exclusively from homoeopathic shops and only a qualified person can dispense homoeopathic medicines. He further stated that both medicines i.e. „Liv.52‟ and „LIV-T‟ cannot be sold to a person from the same counter. Issue wise findings 27. Issue No.1: Whether the plaint is signed, verified and the suit is instituted by a duly competent and authorised person? The onus to prove this issue is on the Plaintiff. The power of attorney („PoA‟) in favour of Mr. B.L. Kakroo to institute the suit is Ex. PW 1/F and PW1 has also spoken about it. There is no cross-examination on this aspect. This issue is decided in favour of the Plaintiff and against the Defendant. 28. Issue No.2: Whether this Court has no territorial jurisdiction to CS (OS) No. 111/2006 Page 13 of 40 entertain the present suit? (OPD). The onus to prove this issue was on the Defendant. The Plaintiff has proved by production of an invoice Ex.P-2 that the product LIV-T of the Defendant is being sold at Delhi. In fact, there is no contest on this issue at all. This issue is decided against the Defendant and in favour of the Plaintiff. 29. Issue No.3: Whether the suit is maintainable in its present form? Under Order XXX Rule 1, the partnership firm can sue or be sued in the name of the firm. The record of change of the constitution of the Petitioner firm is Ex. PW1/I. There was no cross-examination of PW-1 on this aspect. Ex.PW1/J is the application filed before the Trade Marks Registry in Form TM-24 for recording the additional partners as subsequent proprietors of the registered trade mark Liv.52. The order passed by the Registrar on 29th August 1996 is Ex. PW 1/K. It has been established that the Plaintiff has been able to discharge the onus of showing that the suit is maintainable in its present form. The issue is decided in favour of the Plaintiff and against the Defendant. 30. Issue No.4: Whether there is no cause of action for institution of the present suit? (OPD) There is a specific averment in para 14 of the plaint that the use of the trademark LIV-T by the Defendant constitutes infringement and gives rise to the cause of action for the suit. The defendant has not been able to show that there is no cause of action for instituting the suit. This issue is decided CS (OS) No. 111/2006 Page 14 of 40 against the Defendant and in favour of the Plaintiff. 31. Issue No.5: Whether the suit is barred by limitation? (OPD) It is averred in para 14 of the plaint that the Plaintiff came to know of the adoption by the Defendant of LIV-T in March 1996 and a legal notice was issued by the Plaintiff to the Defendant on 14th March 1996. The suit was filed on 16th May 1996. The Defendant has not been able to prove that the suit is barred by limitation. The issue is decided in favour of the Plaintiff and against the Defendant. 32. Issue No.6: Whether the suit is bad for non-joinder of necessary parties? (OPD) The Defendant has failed to discharge the onus of showing that the suit is bad for non-joinder of necessary parties. This issue is decided in favour of the Plaintiff and against the Defendant. 33. Issue No.7: Whether the suit is barred by principles of estoppel and waiver? (OPD) The Defendant has not led any evidence to show that the suit is barred by the principle of estoppel and waiver. This issue is decided in favour of the Plaintiff and against the Defendant. 34. Issue No.8: Whether the products of the defendant company can be sold only through homeopathic outlets? (OPD) Elaborate arguments were advanced by the learned counsel for the Defendant with reference to the Drugs and Cosmetics Act, 1940 („DCA‟) CS (OS) No. 111/2006 Page 15 of 40 to demonstrate that there was a statutory requirement that homeopathic drugs should be sold only through authorised homeopathic outlets. While this may be correct, it is also true that a chemist shop can be authorised to sell both allopathic and homeopathic medicines and sometimes even the ayurvedic medicines. PW-2 has produced invoices of such sales which have been exhibited as PW 2/1 and PW 2/2. Consequently, it is seen that ayurvedic and homeopathic drugs can indeed be sold in the same shop side-by-side as long as the pharmacy holds licence for both. Therefore, this issue is answered by holding that the Defendant‟s drugs need not be sold only through homeopathic outlets but also through chemist shops which sell all forms of medicines as long as they conform to the requirements of the DCA and are duly licenced for that purpose. 35. Issue No.9: Whether the Plaintiff is the proprietor of the trade mark “Liv.52” in respect of drugs and Pharmaceuticals? (OPP) The registration certificate Registration No. 180564 dated 10th July 1957 for the trade mark Liv.52 has been produced by the Plaintiff and marked as PW 1/B. The registration is valid and in terms of Section 28 of the TM Act 1958 it makes the Plaintiff the registered proprietor of the said registered trademark. Although the Defendant has averred in the written statement that the grant of such registration is not valid since the mark lacks distinctiveness, the fact remains that till date the Defendant has not raised any challenge to the validity of the grant of registration of the trademark Liv.52 in favour of the Plaintiff. Apart from the above, the Plaintiff has also sought to establish its proprietary right over the trade mark Liv.52 on account of long usage. Invoices of sales since 1972 have CS (OS) No. 111/2006 Page 16 of 40 been exhibited as Ex. PW 1/1 to PW 1/38. Ex. PW X-1 to X-14 is the literature pertaining to Liv.52. The evidence of PW-1 shows that Liv.52