Recently, the Madras High Court, in the case of Sun Pharmaceuticals (Applicant/Defendant) v. Cipla Ltd (Respondent/Plaintiff) refused to vacate the interim injunction against the Applicant, Sun Pharmaceutical Industries. The Respondent, Cipla Ltd, was seeking directions against Sun Pharma, claiming that the latter was selling medicines under the mark “Respule” which was alleged to be deceptively similar to their marks “Budecort Respules”,“Duolin Respules” and “Respules”. Accordingly, Cipla Ltd brought in an action for Trademark infringement, copyright infringement and passing off.

Background

In the instant case, Cipla Ltd filed a suit seeking a permanent injunction against Sun Pharma for infringing the trademark “Respule”. The mark “Respule” owned by Cipla Ltd has been in use since 2013 and Cipla had been selling medicines that treat respiratory ailments under the names Budecort Respules and Duolin Respules. It had accordingly, contended that Sun Pharma had been illegally using the mark “Respule” and has attempted to pass off by imitating the artistic trade dress, packaging and label. The Court, upon hearing the case, passed an interim injunction on 30.4.21 against Sun Pharma from using the mark till 2.06.21. Against the order of injunction, Sun Pharma filed three counterstatements seeking to vacate the interim order, stating that the products under the alleged infringing mark had already been stocked due to the unprecedented medical emergency.

Issue

Whether the ad-interim order should be allowed in favour of Cipla Ltd on the grounds of passing off, trademark and copyright infringement when there is an ongoing pandemic?

Cipla’s Contentions 

Cipla contended that Sun Pharma:

  • Indulged in colourable imitation and substantial reproduction of the mark “Respule” by replicating the artistic trade dress, packaging and label which amounts to copyright infringement in the Artistic Works.
  • Adopted a mark deceptively similar its own, which amounts to infringement of its earlier “Respule” mark.
  • Attempted to imitate the trade dress thereby causing confusion in the market and resulting in an act of passing off.
  • By virtue of using the mark “Respule”, had taken unfair advantage of the pandemic and has caused detriment to the distinctive character and reputation of Cipla’s well-known mark.

Sun Pharma’s Contentions

The Applicant/ Defendant, Sun Pharma stated that they would adopt a new package/label totally different from the one which has been currently used by them as the medicine has been stocked up which has an expiry period of one year.

Observations of the Court

The Court held that “The respective label and the trade dress adopted by the plaintiff has been copied by the defendant is prima facie slavish imitation of the plaintiff’s label wrapper to take advantage of the unprecedented demand in the market for these medicines. It is clearly intended to ride on the goodwill and reputation of the plaintiff”.

It also asserted that, “The balance of convenience to continue the interim order granted by the court on 30.4.2021 still continues in favour of the plaintiff notwithstanding the fact that an attempt has been made by the dependent to nix the public interest due to the medical emergency in the country and world over with the rights of the plaintiff”.

It added “If the defendant is allowed to release the products in the market, it will result in incalculable damage to the proprietary rights of the plaintiff and by permitting the defendant to sell the good it will be allowing dilution of the proprietary rights of the plaintiff.”

Decision

The Court dismissed the applications filed by Sun Pharma for vacation of the interim order and held that the interim injunction shall continue subject to the final decision. The HC ruled that, “The court cannot allow a party to violate another person’s intellectual property rights viz copyright and trademark and remain a mute spectator where there also is an attempt to pass-off the goods notwithstanding fact that the country is facing unprecedented medical emergency and possibly the patients suffering from covid symptoms require the drugs manufactured both by the plaintiff and the defendant for treating patients with respiratory ailments during these tough times”.

Analysis

The significance of the case lies in the fact that Sun Pharma did not dispute the allegation of infringement of the mark but instead resorted to the ground of medical urgency in order to sell the already stocked up supplies of the medicine using the infringing mark/packaging. Medical supplies being the need of the hour during the pandemic, the infringement of intellectual property rights poses a difficult conundrum to regulators and the judiciary, who have to balance public requirements against private property rights.

It is pertinent to note that Sun Pharma had stocked up medicines with the intention to disregard the goodwill and reputation of Cipla. This is clear from the fact that they have used the same packaging and label. The Court therefore noted that no concession can be granted to recall the products and repack the same without further loss to itself and release the same with the revised label/package on the ground of an ongoing pandemic.

An important aspect which the Hon’ble High Court of Madras observed is that there would be no harm if the interim order is allowed to continue but it would result in an incalculable damage to the proprietary rights of Cipla if the injunction was vacated. The Court directed Sun Pharma to suitably alter not only the trade dress, layout, colour combination, design and artistic work on the label but also the words which are deceptively similar to Cipla’s earlier mark Respule.

The judgement serves as an important notice to all the pharmaceutical companies to refrain from willful trademark infringement even during the prevailing pandemic situation. It is evident that third parties cannot take shelter under the umbrella of public interest that the mark is used for treating COVID-19. A balanced approach mindful of the intellectual property of rights holders must be weighed against the public interest, particularly in the present circumstances so as to prevent profiteering. The courts have time and again held that force majeure cannot be a ground to infringe IP rights. Therefore, third parties cannot attempt to use the pandemic as a convenient excuse to trade on the reputation and goodwill of genuine rights holders.

This article has been authored by Madhuharanjani Prabakaran.