On November 16, 2023, in the matter of Dr Reddys Laboratories Limited vs Smart Laboratories Pvt Ltd. CS(COMM) 744/2023, the Delhi High Court granted an interim injunction order in favour of Dr. Reddy’s Laboratories, restraining the use of Smart Laboratories’ mark AZIWAKE, in light of it being infringing of the former’s prior registered mark AZIWOK.
As far as the factual matrix goes, the plaintiff claimed that the trademark AZIWOK was initially registered in favour of Wockhardt Ltd. with effect from December 30, 1994, after which this registration was assigned to the plaintiff vide Assignment Deed dated June 9, 2020. Under the name AZIWOK, the plaintiff has been selling azithromycin in various strengths, and the plaintiff further asserted the mark has been in use by Wockhardt since 1994, i.e., continuously since the time of its registration, and thereafter also placed evidence of such use at least since 2003 on record. In the third week of August 2023, the plaintiff learned about the defendant’s use of the mark AZIWAKE, also for azithromycin formulations and that the defendant had applied for its registration on a ‘proposed to be used’ basis on April 14, 2022.
Thereafter, the plaintiff instituted the present suit before this Court, alleging that the brand name AZIWAKE was deceptively similar to its registered trademark AZIWOK, both marks being used for azithromycin, due to which there was every chance of likelihood of confusion as well as the likelihood of association between the two marks in the mind of a consumer of average intelligence and imperfect recollection, and sought a decree of permanent injunction, restraining the defendant from using, in any manner, the infringing mark AZIWAKE.
The defendant first raised a preliminary objection as to the maintainability of the present suit without exhausting the channel of pre-institution mediation envisaged under Section 12A(1) of the Commercial Courts Act, 2015. The defendant contended that it had applied for registration of the mark AZIWAKE on April 14, 2022; however, the plaintiff, without even issuing any cease and desist notice to the defendant, had instituted the present suit belatedly and thus, relying on the judgment of Patil Automation (P) Ltd vs Rakheja Engineers (P) Ltd., it contended that the plaintiff should not be granted exemption from the requirement of the pre-institution mediation.
It submitted that it is common to the pharmaceutical trade to name pharmaceutical products by abbreviating the name of the active ingredient/the targeted organ /the disease which the preparation intends to cure. Thus, the AZI prefix herein, both in the plaintiff’s AZIWOK as well as the defendant’s AZIWAKE, stands for azithromycin. In totality, the marks cannot be regarded as either visually or phonetically similar. The defendant also highlighted that the principle under Cadila Health Care would not apply herein since the product sold under each rival mark was azithromycin only. It further argued that the plaintiff had not submitted evidence for using its mark AZIWOK before 2020, compared to the defendant’s use of the impugned mark AZIWAKE since 2022.
The question raised by the defendant as to the plaintiff not having use of its mark AZIWOKE before 2020 was countered by the plaintiff by drawing attention to the documents in support of the prior use of the said mark, i.e., AZIWOK already placed on record, which showed use of its mark since 1994, in contrast to the defendant’s mark applied on a ‘proposed to be used’ basis in 2022. The plaintiff pointed out that the structural and phonetic similarity between AZIWOK and AZIWAKE is so pronounced that there is a clear likelihood of confusion and association.
When the marks are compared as a whole, the likelihood of confusion would not be mitigated merely because of the class of consumers. In a case such as this, when a consumer of average intelligence and imperfect recollection, who has once come across the plaintiff’s AZIWOK and, at a later point of time, chances upon the defendant’s AZIWAKE, would be bound to be placed in a state of wonderment as to whether he had seen the mark earlier, considering the fact that today, even Schedule H drugs are sold over the counter. It relied upon the note of caution sounded by the Supreme Court in Cadila Health Care while dealing with passing off in the case of pharmaceutical products.
The Court firstly started by considering the wording of Section 12A of the Commercial Courts Act, stating that it ordains, mandatorily, that every suit, which does not contemplate any urgent interim relief, shall not be instituted without the plaintiff, in the first instance, exhausting the remedy of pre-institution mediation and that the word “contemplate” therein, even by itself, accords pre-eminent place to the intention of the plaintiff which is determined from the averments made in the plaint. Regarding the Patil Automation judgment relied upon by the defendant, the Court clarified that it endorses the principle that the requirement of the institution mediation would apply only where the plaintiff did not contemplate any urgent interim relief and that the position applicable to plaints which do contemplate such urgent interim relief does not, therefore, stand in anyway diluted by this case.
The Court further highlighted that commercial courts cannot blindly/mechanically allow requests for dispensing the requirement of pre-institution mediation and are required to examine the merits of the request individually in order to prevent misuse of Section 12A by plaintiffs, creating artificial grounds of urgency. Therefore, the Court concluded that since the assertions regarding urgency and necessity of immediate interim relief, as contained in the present application, were genuine, detailed and comprehensive, the dispensation with the requirement of pre-institution mediation was justified herein and dismissed the defendant’s submission that the suit was not maintainable under Section 12A.
As regards the question of similarity between the rival marks, the Court held that to the ear of the consumer of average intelligence and imperfect recollection, it is clear that the words “AZIWOK” and “AZIWAKE” would be considered phonetically deceptively similar. The Court opined that the defendant’s argument as to the prefix ‘AZI’ being “common to trade” when used for pharmaceutical preparations containing azithromycin was misconceived since the rival marks would not be considered similar merely because of the common “AZI” prefix but because the two marks, seen as a whole, were phonetically similar, due to the degree of similarity between the suffixes “WAKE” and “WOK”, having the same initial and terminal consonant sounds. Applying the initial interest test, a consumer who had once come across the plaintiff’s AZIWOK product and later came across the defendant’s AZIWAKE product would have every chance of being placed in a state of wonderment or confusion as to whether he had seen the mark earlier.
Furthermore, with regard to the defendant’s argument that the note of caution as enshrined under Cadila Health Care would not apply here since, in the present case, AZIWOK and AZIWAKE are both used for azithromycin, and, therefore, administration of one or the other would not be injurious to a patient, was refused by the Court, which stated that the need to avoid confusion between pharmaceutical preparations, caused by similar trademarks or brand names, is not, limited to cases in which the rival marks derived from different APIs, but also extends – though, arguably, to a slightly lesser extent – to cases in which the two marks are used for preparations containing the same API. In plain terms, if a physician desires his patient to be treated with AZIWOK, the patient must not take AZIWAKE because of the confusion caused by similar names/marks.
Further, the Court relied upon the case Midas Hygiene Industries (P) Ltd vs Sudhir Bhatia, wherein it was held that “mere delay in bringing the action is not sufficient to defeat grant of injunction in such cases”, stated that given the fact that the defendant had been using the impugned AZIWAKE mark only since 2022, it cannot even be said that the plaintiff was guilty of any inordinate delay in approaching the Court. Additionally, since the injunction, once granted, would require the defendant to only change its mark to something other than AZIWAKE, which would not infringe the plaintiff’s AZIWOK mark, the balance of convenience was also in favour of the grant of injunction and thus, no loss could be said to ensue to the defendant.
Therefore, the Hon’ble Court concluded that since a clear prima facie case of infringement, by the defendant’s AZIWAKE mark, of the plaintiff’s AZIWOK was made out, mainly as both marks were being used for azithromycin, the Court issued an interim injunction, restraining the defendant from using the impugned mark “with or without any prefixes or suffixes, in respect of pharmaceutical preparations, or for any other allied of cognate goods or services”. However, regarding the existing stock, the Court allowed the defendant to proceed with its sale subject to it submitting affidavits with requisite details.
