By, Shaivi Nihal Shah and Palash Moolchandani

What is Deceptive Similarity?

There are a number of ways by which a trademark can be infringed; the most common way being the use of deceptively similar marks[i], with the intention to deceive or confuse the general public. The words deceptively similar have been defined under Section 2(1) (h) of The Trade Marks Act, 1999 as-

“A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion.”

In the Indian legal regime, the concept of deceptive similarity has been constantly used as a ground to refuse the registration of a trademark. The expression “deceptive similarity” has also been used in several other sections such as sec. 11, 16(1), 29, 30, 34, 40, 47, 75, 102 and 134 in different ways such as “identical” or “nearly resembling” but all of them connote the same meaning and effect as per the definition. However, the Act does not explain any set standard or criteria to ascertain whether the mark in question is deceptively similar or not. ([ii])

 

Deceptive Similarity with Regard to the Pharmaceutical Industry.

While there is no provision in the Trademarks Act, 1999 which pertains to drugs and medicines, deceptively similar marks in the pharmaceutical industry are strictly forbidden.[iii] Drugs administered to patients have the capacity to affect the life and health of a patient. In the event of consumption of wrong medication owing to deceptive similarity in trademarks, the patient in question may potentially be exposed to a threat to their life and well-being.

The Act does, however, states in section 23 that trademarking of single-ingredient drugs is not permitted. Only medicines with specially concocted, distinctive and unique formulae can be trademarked as per the law. Since single-ingredient drugs are not distinctive or unique, they cannot be trademarked. This also prevents the confusion that could come along with trademarking the active ingredient used in the drug. Each specific chemical element used in the preparation of a drug has a chemical name and an ordinary name. These names are in the public domain and an exclusive right to them cannot be conferred to an individual or entity. However, the brand name chosen by the company manufacturing and marketing the drug in question can be trademarked with an exclusive right over the said name.[iv]

Patients, as well as health care experts, may be prone to confusion in cases where the marks of drugs are deceptively similar to each other. This could occur in day-to-day consultations with doctors. Especially in high-pressure environments, wherein doctors may verbally misstate the name of a medicine/drug required or an illiterate person is unable to distinguish the minuscule difference in the names of drugs in a prescription.

Drawing the line between an unlawfully deceptive trademark and one which falls within the confines of the law used to be an extremely subjective process. A variety of factors was required to be considered and the process was largely at the discretion of the court. The need to make the process more objective, particularly with reference to the pharmaceutical industry, was extremely pressing. This was due to the seriousness of the consequences that would follow in case of a deceptive trademark in this industry.

 

In the landmark judgement of Cadila Healthcare Limited v. Cadila Pharmaceuticals Limited[v], a number of tests were laid down to determine a deceptively similar trademark and the first step towards making the process of such determination more objective was taken.

Objectivity in the Determination of Deceptively Similar Trademarks: Cadila Judgement a Saviour.

Facts

The parties to the case were two companies which were successors of the same parent company, the Cadila Group. The cause of action arose when the plaintiff filed a suit of injunction against the defendant in order to restrain them from selling their product, Falicitab.

The grounds for the injunction as provided by the plaintiff were that the defendant had registered to trademark the name, Falicitab, for their brand which was deceptively similar to their own brand’s trademark, Falicigo.

Plaintiff’s Contentions

  • Both the trademarks are phonetically similar
  • Both the products cure the same disease and there were high chances that it might create confusion among the consumers.

Defendant’s Contentions

  • The name Falicitab is derived from the root word “falci” which originated from the name of the disease “Falciparum Malaria”.
  • There was no chance that the product in question would deceive consumers as it fell under the category of ‘Schedule L Drugs’ which could only be sold to hospitals and clinics. Thus, experts and practitioners at the hospitals and clinics would easily be able to distinguish between the two products. Consumers would not be able to directly purchase the drug.

 

In deciding this case, various American and European judgements were relied on. The court was of the view that a higher degree of care should be taken while distinguishing medical products as a slight mistake can have serious implications. The fact that physicians and pharmacists have sufficient knowledge in their fields does not mean that they are equally knowledgeable as to the trademarks of various medicines. They thus, would not be immune from mistaking one mark from another.

Supreme Court’s Decision

The court held that proper care and caution should be taken while dealing with pharmaceutical products and though these products were sold on prescription, there were chances that and one might be mistaken for the other. Therefore, the court held that as both the products are phonetically similar, it would amount to deceptively similar.

The court also highlighted that both the drugs have different compositions although they treat the same disease, which means that they cannot be substituted in place of each other. A slight change of composition can have detrimental effects on the health of the consumer as certain consumers may be sensitive or allergic to the different ingredients used.

Recent Judgements imbibing the ratio of the Cadila Case.

A recent case that is pertinent to note is the case of Glenmark Pharmaceuticals Ltd. v. Curetech Skincare and GalphaLaboritories Limited (August 2018)[vi]. The plaintiff and defendant manufactured and marketed the products “Candid-B” and “Clodid-B” respectively. These were used as anti-fungal creams or powders. The two were similar in use and design. The colour scheme, artwork, font style and even the manner of writing had been copied by the defendant. It was additionally found that the defendant was a habitual offender in the case of deceptively similar trademarks and had numerous cases pending against him along the same lines.[vii]

Another case is that of Shalina Laboratories Pvt. Ltd. v. Twin Impex and National Laboratories[viii]. In this particular case, the plaintiff, who manufactured and marketed a pharmaceutical product known as “TANZOL”, filed a suit against the defendants for trying to copy the plaintiff’s trademark and product and trying. The defendant’s product was titled “INASOL”. Following an ex-parte order passed by the court on 29.08.2018, the court receiver seized the defendant’s products titled “INASOL” and along with them also found products literally titled “TANZOL”. Thus the fraudulent activity and intentions of the defendant were brought to the notice of the court. The court also found that several other cases had been filed against the defendant with similar allegations.

In both the cases, the defendants were fined a whopping Rs. 1,50,00,000 as damages and the directors of the companies were also made to surrender their personal assets and properties. The companies were ordered to stop manufacturing their products with immediate effect.

An analysis of the two cases reveals the following –

  • Exemplary Damages Awarded to Habitual Offenders

Having regard to the evidence produced, the court awarded exemplary damages of Rs. 1,50,00,000. The most important reason for imposing the exemplary damages was that the defendant in both these cases were habitual offenders. The need of the hour was to deter habitual offenders from engaging in the practice of adopting similar trademarks in order to deceive the general public and feed off the goodwill of another company. Along with the damages awarded, the defendants were also ordered to submit their personal belongings to the court and to apply to cancel their permission for manufacturing their products.

  • Stricter Applicability of the Rule of Deceptive Similarity in Pharmaceutical Cases

The two judgements above clearly show that the ratio of the Cadila judgement is applied more strictly to cases relating to the pharmaceutical industry. The pharmaceutical industry deals with the manufacture and marketing of drugs and medicines which essentially artificial chemicals are introduced into the body of patients with a view to treat or prevent a disease or imbalance. As rightly stated in the Cadila judgement, “Medicines are not like candy.” They have the potential to expose its users to life-threatening situations and thus pharmaceutical companies have a greater responsibility to its patrons. This greater responsibility calls for stricter applicability of the rule of deceptive similarity to them as well as stricter action to be taken against them when they violate the same.

Conclusion

The presence of deceptively similar trademarks in the pharmaceutical industry could be considered from two perspectives. One is that they provide cheaper alternatives to otherwise expensive drugs, while the other is that they pose potential harm to patients as they advertise themselves to be something they are not. In most cases of such fraudulent companies, FDA norms are not met, thus making it extremely dangerous for patients to consume such drugs. Further, the question of theft of intellectual property comes up. So far, the courts have upheld the policy of being extremely strict with matters concerning deceptively similar trademarks in the pharmaceutical industry. The health of the patient lies in the balance, not to mention the illegality of stealing another company’s goodwill and brand name. All in all, the cons by far outweigh the pros when it comes to deceptively similar trademarks in the pharmaceutical industry. In this particular industry, integrity, trust, and goodwill are imperative above all.

 

[i]David Kitchen, Kearly’s Law on Trademarks and Trade Names (Sweet & Maxwell 2001).

[ii]P. Narayanan, Intellectual Property Law 182 (3rded., Eastern Law House 2013).

[iii]Pradeep Kaur Malhotra, The Concept of Deceptive Similarity: Law & Public Policy, Manupatra, (2017), http://docs.manupatra.in/newsline/articles/Upload/D194E4A5-2785-4746-85A1-8EE6B9C53655.2-A__IPR.pdf.

[iv]Zakir Thomas, Legal Issues in Branding MedicinalProducts, 13 JIPR 523 (2008).

[v]Cadila Health Care Ltd. v. CadilaPharamaceuticals Ltd., (2001) 5 SCC 73.

[vi]Glenmark Pharmaceuticals v. Galpha Laboratories, COMIP (L) NO.1063 of 2018.

[vii]Win-Medicare Pvt. Ltd. v. Galpha Laboratories Ltd. &Ors., 2016 (65) PTC 506 (Del).

[viii]Shalina Laboratories Pvt. Ltd. v. Twin Impex and National Laboratories, COMIP (L) NO.1143 of 2018.

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