Diligence & Proactiveness – Important Factors For Grant Of Injunction

The Delhi High Court recently decided an interim injunction application in a civil suit between Ajanta Pharma Ltd. and Zuventus Healthcare Ltd. The bone of contention being the impugned mark ANADAY of Zuventus. Ajanta filed an injunction suit against Zuventus to restrain them from infringing former’s registered trademark AMADAY for the same category of goods i.e. medicinal preparations.

The Plaintiff’s case:

  • The trademark registration for AMADAY dated to July 1997, but the use commenced in the year 2001. AMADAY is used for the treatment of heart disease related to high blood pressure;
  • Zuventus’s mark ANADAY is confusingly similar to Ajanta’s registered trademark AMADAY which amounted to the claimed infringement.
  • Zuventus’s first trademark application for ANADAY was filed in February 2008, on intent to use basis, which was opposed by Ajanta and the said application was abandoned owing to non-prosecution;
  • The second application for ANADAY was filed in October 2016, with user claim of February 28, 2008, which was also opposed;
  • In June 2019, Ajanta found that Zuventus was using the mark ANADAY for a medicine used to treat breast cancer.
  • Though Ajanta’s products are meant for exports, however, such export amounts to use for the purposes of the Trademarks Act, 1999, and Ajanta is not precluded from marketing its product in India and has a right to re-launch the same.

The Plaintiff also stated that Zuventus’s claim that the two medicinal preparations are used to treat two different ailments cannot be accepted as the prescriptions do not contain the name of the salt or trade dress/ packaging and the confusion in reading the prescription would amount to a serious lapse which may vitally affect the lives of the consumers.

Defendant’s counter:

  • Ajanta had no license for the sale of drug AMADAY in India and with no sale, no case to cause likelihood of confusion in India is made out;
  • The suit is delayed as Ajanta had prior knowledge of Zuventus’s use of the impugned mark since 2008. Owing to such delay, no interim injunction can be granted to Ajanta;
  • Even in its second application, Zuventus had claimed use since February 28, 2008;
  • The goods of both the parties are not available in the same country and by its admission, Ajanta’s AMADAY last use in India was in the year 2002;
  • Zuventus’s drug is sold only on the prescription of Oncologist and not any other Doctor, hence the defendants rebutted the claim of likelihood of any confusion;
  • Adoption of ANADAY is bona fidee. coined by an amalgamation of the molecule name used in the treatment of breast cancer i.e. ANASTROZOLE and that the tablet is taken once a DAY.

The Court made the following observations which were crucial in deciding non-grant of an interim injunction:

Use of a trademark in case of exports

Ajanta placed reliance on Section 56 of the Trade Marks Act i.e. if the goods are exported outside India, then for the purposes of Indian Law, that mark is said to be used in India. Thus, this provision can be relied upon to maintain an action for infringement.

Zuventus placed reliance on Section 28 read with Section 30(2)(b) of the Trade Marks Act i.e. use of a trade mark by a third-party having regard to the conditions or limitations placed on the registered trade mark, does not amount to infringement of the registered trade mark.

On reviewing judicial principles set in previous cases, the Court found the Defendant’s argument flawed on the ground that there is no territorial restriction on the use of the mark by Ajanta by the virtue of registration of the trademark and after obtaining the necessary licenses required under the other enactments, Ajanta can sell its drugs under the mark in India.

Delay and concealment of material facts

Zuventus claimed that Ajanta cannot claim an injunction in the year 2019 since the latter had acquiesced to the use of the trademark ANADAY by Zuventus since 2008. Also, in case of its first application (which was abandoned), Zuventus had filed a Counter Statement stating that on or around February 28, 2008, necessary approvals were obtained by Zuventus from Maharashtra F.D.A. for manufacturing Anastrozole tablet under the trademark ANADAY through their contract manufacturers, Khandelwal Laboratories Pvt. Ltd. and that the marketing and sale of ANADAY branded goods were immediately commenced.

Moreover, Ajanta claimed that a Counter Statement was not received from the Trade Marks Registry, however, Ajanta filed a reliance letter in June 2012 (which is done after the filing of the Counter Statement by the Applicant), stating that they did not wish to file any evidence at this stage and placed reliance on contents of the notice of opposition. No averments in the Counter Statement were refuted in this reliance letter. This indicated that Ajanta had received Zuventus’s Counter Statement filed in support of its first application.

In its rejoinder to its injunction application, Ajanta did not deny receipt of Counter Statement, however, stated that the same was not uploaded on online records of Registry nor it could be found in the records maintained by them.

The above fact was construed against Ajanta as it was evident that the Counter Statement was received and such material fact of knowledge of Zuventus’ sale of goods after obtaining necessary approval around February 28, 2008, was concealed. Despite knowledge and notice, Ajanta did not conduct a due diligence exercise to ascertain since when ANADAY was being sold. Resultantly, it is bound to suffer the consequences of delay in seeking an injunction.

After carefully assessing the meanings of inordinate delay, laches and acquiescence in previously set precedents for grant of interim and/or permanent injunction, the Court went on to observe that the important factor for consideration is that even if there is a delay in bringing the action by the plaintiff, it is to be seen and adjudged on whether the adoption of the mark of the defendant is dishonest. In case the defendant’s adoption is dishonest, the plaintiff would be entitled to grant of an injunction.

In the present case, Zuventus had already explained the coinage of the word ANADAY. Even though ANADAY and AMADAY are confusingly similar, however, there is no material on record to show that Zuventus dishonestly adopted the mark ANADAY to ride on the reputation and/or goodwill of Ajanta’s mark AMADAY since Ajanta had no sales in India and no corresponding goodwill in India. Since both the drugs were sold for the treatment of different ailments, it was understood that goodwill, if any earned by Ajanta’s product cannot be utilized by Zuventus.

Vis-à-vis Plaintiff’s concern of likelihood of confusion i.e. if ANADAY is given instead of AMADAY, the consequences could be worrisome, the Court commented that by its own admission, Ajanta is only exporting its drug AMADAY and not selling the same in India. Since it is not available in India on the counter, there is no likelihood of any confusion caused to the consumer.

Hence, the relief of an interim injunction was not granted to Ajanta pending disposal of the suit.

Article by Manisha Singh and Akanksha Kar.

1st published in Mondaq.