Cutis Biotech V Serum Institute of India Pvt. Ltd.: The case of “passing off” in Trademark

The Serum Institute of India, the world’s largest manufacturer of vaccines by volume, has recently launched its antibiotic vaccine ‘Covishield’ to overcome the on-going global pandemic of the novel coronavirus.[1] However, they found themselves stuck in a suit when Cutis Biotech, a pharmaceutical company, brought the case of ‘Passing off’ of the trademark, namely ‘Covishield’, against them. As per Cutis Biotech’s claim, the trademark, Covishield, had already been used for pharmaceutical products by them and they had also applied for the trademark registration under the class-5 category.

Further, it was noted that the Serum Institute also applied for the trademark ‘Covishield’ under the same class 5 category. The plaintiff in the case submitted that due to the similarity of trademark there was a possibility of confusion among the general public, physicians, and medical practitioners. Hence, a case of passing off of the trademark was brought by the plaintiff company to restrict the defendant company from using ‘Covishield’ as a trademark as they had first used the trademark and had earned goodwill in the market.

In this case, the court relied on the doctrine of passing off, which protects the unregistered trademark if the affected party can show that there is a misrepresentation of the trademark which will result in the loss of business or goodwill of the affected party. Further, it relied on the doctrine of the balance of convenience and refused to grant an interim injunction in favor of Cutis Biotech, not restricting the defendant company from using the trademark Covishield.  [2]

In this post, I seek to analyze the doctrine of passing off and its scope and the doctrine of the balance of convenience in granting interim injunction vis a vis the impugned order.

The doctrine of ‘passing off’ in India

Under this doctrine, one company is restricted to sell their products which might deceive the consumer confusing them to be of some other company’s products.[3] In India, Section 27 (2) of the Trademarks Act 1999 deals with the doctrine of ‘passing off’ and provides for the protection of unauthorized use of an unregistered trademark.[4]

In the case of Reckitt & Colman Products Ltd V Borden Inc., the elements of the passing off claims were coined. It was noted that the plaintiff had to show that there is goodwill attached to his products and that the action of the defendant is causing misrepresentation in the eyes of the public, resulting in damages to the plaintiff.[5] Furthermore, in the case of Cadila Healthcare Ltd. V Cadila Pharmaceuticals Ltd, the court, while dealing with the issue of misrepresentation in medical products, noted that a strict judicial review is required as the possible harm is dreadful than any other product. Thus, the court broadened the scope of the concept of passing off and proposed a deceptive similarity test. It stated that Plaintiff Company could bring a suit of passing off if the trademark of the Defendant Company resembled the trademark of the Plaintiff Company likely to confuse the general public and to physicians, as the prescriptions are sometimes difficult to read and are sometimes exchanged over the telephone. [6]

While deciding the case in question, the court focused on the element of misrepresentation to deny the interim injunction to Cutis Biotech. It relied on the case of Nadhini Deluxe V Karnataka Co-operative Milk Producers Federation Limited and held that the plaintiff could not claim the monopoly over the entire class of goods in the Class 5 category. It also took note of the fact that the defendant applied for the trademark Covishield for the vaccination against Covid19 for human use and, on the other hand, the plaintiff’s product is a disinfectant spray, hand and vegetable washing liquid, etc. Thus, the court concluded that the purposes of the products were different and that there was no chance of causing confusion or deception in the eyes of a man with ordinary intelligence. [7]

Further to solidify the refusal of the injunction, the Court also noted that there was no prima facie similarity between the character and the quality of the products. It also noted that since the plaintiff’s products could be purchased without any medical prescription and the defendant’s products require a medical prescription, they could not be said to have caused visual misrepresentation. The court also held that the act of the defendant was unlikely to divert the plaintiff’s business, causing damage to the plaintiff.

Balance of Convenience in granting the temporary injunction

The Doctrine of Balance of Convenience is used while granting a temporary injunction. As per the doctrine, the plaintiff must show that the inconvenience caused by the refusal of an interim injunction to him will be greater than the inconvenience caused to the defendant if the interim injunction is passed.

On the principle of the balance of convenience, the Court noted that the ‘Covishield’ is preventive medicine for Covid-19 disease and is available both in India and abroad. The vaccine is a step towards the control of the global pandemic. Thus, any restraining order in relation to the medicine would cause difficulties to customers all over the world and result in a huge loss to the defendant.

On the other hand, the plaintiff company can still sell its product in the market under the same trademark as the purpose of both products is different. Furthermore, the plaintiff company has not shown any customer denying the product on the grounds of the defendant company’s vaccine, and relied entirely on one dealer who had ceased to purchase the product under the same trademark. The applicant company was therefore not held to be in a position to demonstrate any irreparable loss. Thus, the inconvenience to the Defendant Company would have been greater if a temporary injunction was granted than the inconvenience to the Plaintiff Company if it was not granted. [8]

Conclusion

In the case, the court made it clear that to seek remedy under the Doctrine of passing off, the affected party has to show that the nature of the products of both the companies is similar and that the trademark is likely to confuse the buyer with the product of Defendant Company.

References

[1] As Vaccine Drive Lags, Serum Institute Sits on 55 Million Covishield Doses Awaiting Government’s Call, The Wire, (As Vaccine Drive Lags, Serum Institute Sits on 55 Million Covishield Doses Awaiting Government’s Call (the wire. in))

[2] Cutis Biotech V Serum Institute of India Pvt. Ltd. Commercial Suit No.1/2021 (Cutis Biotech V Serum Institute of India Pvt. Ltd. Commercial Suit No.1/2021 – Google Docs)

[3] Passing off under Trademark, Prerna Chopra (Legal Service India.com) (Passing off under trademark (legalservicesindia.com))

[4] Section 27 (2) of the Trademarks Act, 1999

[5] Reckitt & Colman Ltd v Borden Inc [1990] 1 All E.R. 873

[6] Cadila HealthCare Ltd. V Cadila Pharmaceuticals Ltd (2001) 5 SCC 73

[7] Nandhini Deluxe v. Karnataka Co-Operative Milk Producers Federation Ltd, AIR 2018 SC 3516

[8] Cutis Biotech V Serum Institute of India Pvt. Ltd. Commercial Suit No.1/2021 (Cutis Biotech V Serum Institute of India Pvt. Ltd. Commercial Suit No.1/2021 – Google Docs)

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