M/S Arudra Engineers Private Limited v. M/S Patanjali Ayurveda Limited & Anr.; Order disposing Interim Application

M/S Arudra Engineers Private Limited v. M/S Patanjali Ayurveda Limited & Anr.

Date of decison: 06.08.2020

Madras High Court

For brief facts and history of litigation, you can refer our post on ex-parte order here. We are not repeating the same for sake of brevity. The present summary is of the order on the adjudication of application for temporary relif.

Plaintiff’s Contentions:

• Plaintiff came to know of the Defendants’ use of the mark through reports which came about in the press and electronic media about launching of a product to cure the coronavirus. However, the conflicting reports with respect to the nature of the product being sold by the Defendants would indicate that such infringement would cause serious harm to the reputation of the Plaintiff.
• The unique portion of the trademark in both the registered trademarks of the Plaintiff was the word “Coronil”, which is a coined mark by the Plaintiff and intended to imply “Corrosion-nil”, and that was the distinctive portion of the trademark. Therefore, the infringement of this word by the defendants’ mark “Coronil Tablets” would seriously affect the reputation of the Plaintiff.
• Section 29(4) of the Trade Mark Act, 1999 protects the owner of a registered trademark even where there is an attempt to use the very same trademark from dissimilar industries.
• Plaintiff has been in business for over 20 years. They have numerous clients including BHEL, NTPC Ltd., Reliance Industrial Limited, etc. They therefore have a well known reputation in India and abroad.
• Although the name “Coronil” was chosen as an immunity booster, the product is marked as a cure, these claims were without due cause. The product, not being related to coronovirus, should have no reason to retain the name Coronil.
• The defendants were deriving unjust pecuniary benefits at the cost of the Plaintiff’s reputation and exclusive use of the trademark.
• There was a shift from first projecting their product as a cure to it being an immunity booster against cough and fever. In addition to this, there was no approval for marketing of the tablets as a cure from coronovirus, but the Defendants have admitted that they have affected the sales of the tablet. Therefore, the use of the mark by the defendants dilutes the distinctiveness of the trademark and is diminishing the value, goodwill, reputation and proprietary right which is exclusively in favour of the Plaintiff.

Defendants’ Contentions:

• The product being sold by Pathanjali has gone through the scrutiny of the Government of India.
• The products sold by the Plaintiff and the “Coronil Tablet” sold by the defendants belong to different classes. There would be no confusion in the mind of any individual. The market, mode of sales and class of customers are completely different. In addition to this, the visual appearances of the marks are different.
• As Plaintiff has not registered parts of the trademark, it cannot seek for protection of one word which is a part of their trademark.
• Plaintiff’s trademark is not a well-known trademark. Plaintiff is known to a very small number of people in the industrial fraternity and has a very small market of only 31 customers in contrast with the Defendants’ millions of customers.
• Trademark of the Plaintiff is only a registered mark, not a recognised or reputed mark.
• The word “Coronil” is used as an abbreviation of “coronovirus-nil”. This mark is justified since it is common practice for the drugs to be named after the ailment which they are intended to treat and is not without due cause.
• Defendant is a well-known, Rs .10,000 crore company and they have no reason to ride on the reputation of the Rs. 10 crore company of the Plaintiff.
• The product has been created as an immunity booster for the benefit of the general public, which will not be able to avail the advantage of the immunity boosting tablets in case of an order of injunction against the defendants.

Court’s Observations:

On the intention of the statute to protect well-known trademarks

• The first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself. In this case, the specific words used in Section 29(4) are “reputation in India” which shall be the parameter in the current case and not whether or not it is a well-known mark.

On Plaintiff’s reputation in India

• The Plaintiff is engaged in a unique business and India does not have many heavy industries. Therefore, a reasonable conclusion can be drawn that the Plaintiff has established a reputation in India among the industrial fraternity in which they operate.
• The Plaintiff has clientele in India and abroad and in heavy industry business 31 clients is a substantial amount.
• The trade mark is also known throughout the globe in the field of chemical cleaning.
• Therefore, the Plaintiff has made out a prima facie case of their trademark being a reputed mark in India in its particular field.

On infringement of one word from the registered trademark

• The only word in the Plaintiff’s trademark which conveys some meaning directly relating to the business of the Plaintiff is the coined word “Coronil”.
• The primary word, which is relied upon by both the parties is “Coronil”.
• Plaintiff, having a prior registration of the trade mark bearing the primary word, is entitled protection from infringement.

On due cause in the Defendants’ use of the mark

• The change in projection of the “Coronil Tablets” from a treatment for coronavirus to it being an immunity booster against cough and cold shows that the Defendants have infringed upon the registered trademark of the Plaintiff “without due cause”.
• The mark is being used by the Defendants without any due cause and is taking advantage of the term “Coronil” which is a registered trademark of the Plaintiff.
• Defendants have directly infringed upon the registered trademark of the Plaintiff by use of the word “Coronil”

On whether the use of the mark by the Defendants is detrimental to the registered trademark

• Although the detriment caused would be negligent by virtue that the two trademarks being in different classes, the fact that the Defendants’ mark itself is misleading in nature would provide otherwise.
• A similar imputation would be caused on their trademark as those which have been raised against the Defendant’s mark and doubts can be raised as to whether the Plaintiff’s product is actually effective against corrosion.
• In addition to this, permission has neither been granted to the Defendants to market the product, nor to hold it out to be a cure for coronavirus.
• Defendants seek to exploit public fear by projecting as a cure against the virus, the use of the mark is therefore without due cause and has caused substantial damage to the reputation of the mark of the Plaintiff with respect to its quality.
• Therefore, the harm caused to the Plaintiff outweighs any consideration put forth on behalf of the Defendants.

Closure by the Hon’ble Court

The certainty of confusion directly exists since both the marks are exactly the same. The possibility of dilution also exists as the Defendants have failed to show due cause in naming their product.

Cost of Rs. 5,00,000/- is to be paid jointly by the defendants to the Dean, Adyar Cancer institute (WIA), Chennai and further Rs. 5,00,000/- is to be paid jointly by the defendants to Dean, Government Yoga and Naturopathy Medical College and Hospital, Chennai.

Authors’ Comments

The decision is primarily on Section 29 (4) of the Trade Marks Act, 1999.[1] While it can be a prima facie point in favour of the Plaintiff that its mark has reputation. However, mere reputation in India is not the test for applicability of Section 29 (4). The Plaintiff also has to establish that the Defendant’s mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

Further, it is a fact that the Defendants’ company is better known in comparison. The Defendant would not need to depend on the reputation of the Plaintiff. It is thus quite apparent that Defendant being a huge Company cannot be said to be taking unfair advantage of Plaintiff’s mark. Thus, the only question remains as to whether use of “Coronil” by Defendants would be detrimental to ‘distinctive character’ or ‘repute’ of the registered trade mark. In our view, as the mark of the Plaintiff is invented and unique, if it has a reputation no one should be allowed to dilute the distinctive character of the same. This can be termed as a case of dilution by blurring. Hence, with regard to Section 29 (4), the order appears to be correct on the second part of Section 29 (4) (c) but not on the point ‘unfair advantage’.

However, we do not agree that just because the mark was used on a product which was first intended as a cure and later as immunity booster is a ground to decide infringement under Trade Marks Act, 1999. We also do not agree with the fact that the mark is misleading.

Currently, the present order is stayed by the Division Bench of the Madras High Court.

[1] Section 29 (4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which—

(a) is identical with or similar to the registered trade mark; and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

Co-Author: Ms. Nidhe Sushrutha, M.S. Ramaiah College of Law