Opposition is a Hopeless Task, Acquiescence would be Worse

Order dt. May 6, 2020 by Delhi High Court 

Time and again, it has been held by various courts that an unreasonable delay in enforcing a legal right by a person amounts to acquiescence, which can be fatal to a case for the grant of an interim injunction. In a recent trademark case, the High Court of Delhi reiterated that the Plaintiff, being aware of the Defendant’s adoption of a similar mark, did not bother to conduct due diligence about the use of the mark; as a result of which the Plaintiff was bound to suffer the consequences of delay in seeking injunction.

Background 

On 6 May 2020, the High Court of Delhi, in the case of Ajanta Pharma Ltd. vs Zuventus Healthcare Ltd. – CS (COMM) 336/2019, refused to grant an interim injunction in a trademark infringement case involving two pharmaceutical companies despite finding a deceptive similarity between the two marks in question (ANADAY vs AMADAY). The Court arrived at this conclusion based on its prima facie finding that the parties were selling the medicines in different jurisdictions, and the Plaintiff had acquiesced to the Defendant’s use of the trademark.

The Plaintiff “Ajanta Pharma Ltd.” is the registered proprietor of the Trademark AMADAY in connection with pharmaceuticals from 1997, and started using the said trademark (and was acknowledged by the Court as the ‘prior user’)  from 2001. In 2008, Zuventus Healthcare Ltd (the “Defendant”) filed an application for the mark ANADAY which was duly opposed by the Plaintiff. The application was declared abandoned as the Defendant chose not to pursue it. Thereafter, the Defendant filed another application for the word mark ANADAY, which is currently pending. The Plaintiff alleged that the Defendant’s use of ANADAY on and in relation to breast cancer medication infringed its own rights in the registered mark AMADAY which was used in respect of medicines for the treatment of high blood pressure and heart disease.

The Defendant contended that the Plaintiff was not selling the medicines under the trademark AMADAY in India, hence the chance of confusion amongst the relevant public was negligible. The Defendant also pointed to the delay in filing the suit, and argued that there was acquiescence on the part of the Plaintiff, which  was aware of the Defendant’s mark since 2008.

Issues

Three issues came under scrutiny in the case, i.e., whether exporting products amounted to use of the trademark; whether there was dishonest use in the present case; and whether delay in filing the suit was sufficient to refuse an injunction. These are discussed in more detail below.

1. Whether export of products under a mark amounts to use of the trademark?

The Court decided that export did amount to the use of a trademark. The Court said a conjoint reading of Section 29(6)(c) along with Section 56 (use of trade mark for export trade and use when form of trade connection changes) of the Indian Trademarks Act 1999 (“Act”) would constitute export as the use of the trademark “for any purpose for which such use is material under the Act or any other law”.

Additionally, the Defendant had raised an argument that the Plaintiff did not have a license to sell its medicine in India and was only allowed to export its drugs. However, the argument was found to be fallacious by the Court as there is no territorial restriction on the use of the registered mark. Nothing would prevent the plaintiff from obtaining necessary licenses and selling its drugs under the mark in India.

2. Whether the adoption of the mark “ANADAY” by the Defendant was dishonest?

The Court held that even though the rival marks were similar, the Defendant had a clear explanation as to why it coined the word ANADAY — i.e.,  by taking the first three letters from the compound name “ANASTROZOLE” and “DAY” as the drug had to be taken once a day. The Court also stated that there was no material on record to show that the Defendant dishonestly adopted the mark ANADAY to ride on the reputation and/or goodwill of the Plaintiff’s mark. This was because the Plaintiff has no sales in India and thus, no corresponding goodwill in India. Moreover, the Plaintiff’s drug was sold for a different ailment i.e. for treating high blood pressure, heart disease etc., whereas the Defendant’s drug was used for treating breast cancer. Thus, any goodwill earned by the Plaintiff’s product could not be claimed by the Defendant.

3. Whether the suit was delayed, and whether the delay was sufficient in disentitling the Plaintiff from an interim injunction?

The Court observed that the Plaintiff was aware of the Defendant’s application for a trademark since 2008, while the present suit was instituted in 2019. The Plaintiff had continued to participate in the opposition proceedings against the Defendant at the Trademarks Registry, which led to the Defendant’s abandonment of its application. The Court stated that the abandonment of the application did not mean abandonment of the sale of the goods under the mark. The Plaintiff, despite having knowledge of the Defendant’s use of the mark, did not show due diligence to enquire about the sale of goods under the Defendant’s mark.

The Court concluded that even though both the marks were deceptively similar, there was no material on record to show the Defendant dishonestly adopted the mark. Therefore, the Court found no grounds to grant an interim injunction in favour of the Plaintiff. The Court also stated that the chances of likelihood of confusion arising amongst the relevant audience was negligible, as the Plaintiff’s product was not available over-the-counter, and the possibility of a chemist mistaking the handwriting on a prescription was negligible.

Conclusion

The present case is instructive as it gives potential Defendants some guidance on what they will need to demonstrate in order to avail the equitable defense of acquiescence. A Defendant can minimise liability when faced with a claim of trademark infringement by establishing the defence of acquiescence and substantiating honest adoption of the mark.