Supreme Court upholds Gujarat High Court’s decision in Neon Laboratories Ltd vs. Medical Technologies Ltd. & Ors.

March 2012The recent judgment rendered by Supreme Court (hereinafter SC) in Neon Laboratories Ltd vs. Medical Technologies Ltd. & Ors.,(Civil Appeal No. 1018 of 2006, October 5, 2015) has upheld Gujarat High Court’s decision, reaffirming the injunction granted by the Trial Court against the Appellant.

The parties i.e. Neon Laboratories (hereinafter Appellant) and Medical Technologies (hereinafter Respondent), at the centre of this litigation are in the business of manufacturing and marketing pharmaceuticals. The facts of the case date back to 1992, when the Appellant filed an application for registering the mark ‘ROFOL’, the same being granted in 2001. However, after filing the application for registration of its trademark, steps were not taken to introduce the product in the market until 2004.

In 1998, the predecessor-in-title of the Respondents introduced the generic drug ‘PROPOFOL’ in India, which they began marketing under the name ‘PROFOL’. This was followed by an amalgamation of the predecessor-in-title with the Respondent; through which the latter became the owner of the trademark ‘PROFOL’ and began using it, also filing for registration of this mark. Upon becoming aware that the Appellant had introduced the same generic drug under the trademark ‘ROFOL’, the Respondent along with its Licensee (Respondent No. 2), filed a suit against the Appellant, claiming that the mark ‘ROFOL’ was identical and deceptively similar to their mark ‘PROFOL’. The Trial Court granted a temporary injunction against the Appellant, which was affirmed by the High Court on an appeal.

At the onset of the judgment, SC stated that an appeal against an interlocutory order was usually not heard by them; however, keeping in the mind the slow rate of disposal and the far reaching consequences of temporary ad interim injunctions, the leave to hear the same may have been granted in the present case.

The three factors that are taken into consideration before granting an ad interim injunction are as follows:

  • Whether prima facie case in favour of the applicant has been established;
  • Does the balance of convenience lie in favour of the applicant; and
  • Whether irreparable loss or damage will be suffered by the applicant, in case the injunction is not granted.

 

SC held that all three factors were in favour of the Respondents, as they had succeeded in establishing a prima facie case by providing ample proof “that they had already been using their trademark well before the attempted user of an identical or closely similar trademark by the Defendant-Appellant”.[i] Thus, in light of first in the market test, the Respondents were entitled to the temporary injunction. Furthermore, keeping in mind the likely loss of goodwill as well as business, the other two factors i.e. irreparable harm and balance of convenience, too were held to be in favour of the Respondents. SC held that since the injunction was granted by the Trial Court, merely a year after the Appellant launched its product, the balance of convenience weighed in favour of the Respondents.

SC took the view that had “Defendant-Appellant commenced user of its trademark ROFOL prior to or even simultaneous with or even shortly after the Plaintiff-Respondents’ marketing of their products under the trademark PROFOL, on the Defendant-Appellant being accorded registration in respect of ROFOL which registration would retrospectively”[ii] have effectiveness from the date of application, the result would have been favourable to the Appellant. However, the Appellant failed to take any action to introduce its product in the market. Moreover, during the pendency of the application, Appellant was “legally lethargic” as it failed to take any steps to restrain the Respondents from using the mark ‘PROFOL’. Furthermore, SC also took into account that the litigation was initiated by the Respondents as opposed to the Appellant, who at any time could have raised the issue of Respondents using a mark similar to the one they were seeking registration for.

SC took a conscious step not to go into minute details, restricting itself to the issue at hand i.e. the legal propriety of granting the temporary injunction, and held that the Trial Court had correctly granted the injunction in favour of the Respondents.

 

[i] Neon Laboratories Ltd vs. Medical Technologies Ltd. & Ors.,(Civil Appeal No. 1018 of 2006, October 5, 2015)

[ii] Ibid

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