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15 October, 2018
On September 12, 2018, in the matter of Wockhardt Limited ('Wockhardt') v. Torrent Pharmaceuticals Limited ('Torrent'), the Supreme Court ('SC') dismissed Wockhardt’s Special Leave Petition ('SLP') challenging the order of the Division Bench of the Bombay High Court ('DB') granting an interim injunction restraining Wockhardt’s continued use of the impugned mark ‘Chymtral Forte’, and confirmed the said injunction. We have summarised the key findings of the SC’s judgement below:
Background
Torrent filed a suit, inter alia, for passing-off against Wockhardt based on their registrations for the marks CHYMORAL and CHYMORAL FORTE, alleging that Wockhardt’s use of the mark CHYMTRAL FORTE ('Impugned Mark') violated Torrent’s trademark rights. Wockhardt had, inter alia, raised the defense of delay and acquiescence, as its product under the brand CHYMTRAL FORTE had allegedly coexisted in the market with Torrent’s product CHYMORAL FORTE for a period of 7 years.
The Single Judge of the Bombay High Court ('Single Judge') had dismissed Torrent’s application for an interlocutory injunction against Wockhardt and had held that mere similarity is not enough to succeed in a passing-off action, especially where there is an extended period of co-existence, wherein no actual confusion has been reported.
Aggrieved by the decision of the Single Judge, Torrent filed an appeal before the DB. The Court allowed the appeal, inter alia, on the basis, that Torrent had in fact satisfied the tests for establishing passing-off. The Court held that the Single Judge had not applied the well settled principles for establishing passing-off to the facts and circumstances of the present case and refused to grant the interim injunction.
The Court, inter alia, observed that the strict principles / tests laid down in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. should be adopted while determining passing-off, including the test to judge misrepresentation and the possibility of confusion. Further, the Court also rejected the Single Judge’s view that since the rival goods have remained in the market for a long period of time, there could not be any likelihood of confusion.
Aggrieved by the decision of the DB, Wockhardt filed an SLP before the SC. The SC dismissed Wockhardt’s SLP and confirmed the injunction granted by the Division Bench.
Misrepresentation in passing-off
In its judgement, the SC clarified certain foundational concepts of trademark law and the law of passing-off.
The SC considered the issue of ‘misrepresentation’, which is a key ingredient of passing-off, and held that for ‘misrepresentation’ to be established, overt mala fide conduct need not be demonstrated. The SC also observed that in a plethora of its judgements, the SC has held that though passing-off is, in essence, an action based on deceit, fraud is not a necessary element of a right of action, and that the defendant’s state of mind is wholly irrelevant to the existence of a cause of action for passing off.
Standard of Acquiescence
Most importantly, the SC clarified the standard for determining acquiescence. The SC upheld the view taken by the DB that mere silence or inaction (including failure to object to the use and registration of a trademark) does not amount to acquiescence, and that in order to infer acquiescence, some positive act is required.
Balance of Convenience
The SC also took note of the fact that despite the stay on the operation of the injunction order granted by the DB, Wockhardt had commenced sale of products with identical composition under an alternate brand ‘Chymowok’, which had garnered substantial sales. It was also brought to the attention of the SC that Wockhardt had obtained a trademark registration for this alternate brand ‘Chymowok’ as far back as in the year 2009, but chose not to adopt the same until the injunction order was granted by the DB. In view of these facts, the SC held that the balance of convenience was also in favor of Torrent.
The appeal was accordingly dismissed.
AZB & Partners represented Torrent before the Supreme Court.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
