A New Test Budding for Judging Likelihood of Confusion: The Hetero Healthcare Ltd Case

Introduction

The Delhi High Court (“HC”), in recent months, has been called upon to pass an interim injunction order against an alleged trademark infringement and passing off one’s product as that of another. Section 11 of the Trademarks Act, 1999 lays down that registration of a proposed trademark is to be refused if it is so identical or similar to an earlier trademark that there exists a likelihood of causing confusion to the public.

In the cases of FDC Limited v Nilrise Pharmaceuticals Pvt. Ltd. and Sun Pharmaceutical Industries Ltd. v DWD Pharmaceuticals, the HC granted an ad-interim injunction on account of the contested mark being deceptively similar to the earlier registered trademark, and thus likely to cause confusion. On the other hand, in Sun Pharmaceutical Laboratories Ltd. v Hetero Healthcare Ltd., the HC declined to grant an interim injunction and interfere with the order of the lower court.

In arriving at its decision, several other factors were considered, however, the same court applied different standards with respect to those factors, thus, developing divergent jurisprudence. In this blog post, the author attempts to briefly discuss the abovementioned judgments while emphasizing and providing a critique of Hetero Healthcare Ltd case (supra), showcasing how the divergent approach promulgates distinct test for judging confusion, and discuss the overarching consideration of public interest.

The Judgment- Sun Pharmaceutical Laboratories Ltd. v Hetero Healthcare Ltd.

The present appeal arises against an order of the commercial court refusing to grant an interim injunction restraining the respondent from using ‘LETERO’. The appellant claims infringement of its trademark ‘LETEROZ’ and passing off by the respondent by using ‘LETERO’ which is deceptively similar to the appellate’ s registered mark. The respondent, on the other hand, contends that since ‘LETROZ’ is derived from the initial six letters of an international non-proprietary name (INN) of a salt, ‘LETEROZOLE’, the appellant cannot claim exclusive monopoly over the word. It may be noted that Section 13 of the Trademarks Act, 1999 prohibits registration of international non-proprietary name.

Upholding the contentions of the respondent, the HC refused to interfere with the order of the lower court. It was noted that the two drugs are same generic drugs used for the treatment of ailments as serious as breast cancer. In arriving at its conclusion that the respondent’s mark is not phonetically or visually similar to the plaintiff’s mark as likely to cause confusion, the HC observed that the drugs in question are highly specialized Schedule H drugs which can be given only upon a prescription by an oncologist who, being specialized in the said area, is unlikely to get confused because of similarity of initial three letters. The HC also pointed out that there exist stark price differences and distinct packaging of the two products. Further, no evidence of actual confusion was advanced by the appellant in support of its contention.

Test for Judging: From Perspective of Whom

While basing its decision (though not solely) on drugs being Schedule H drugs, the HC placed heavy reliance on its decision in the case of Schering Corporation v. Alkem Laboratories Ltd. In the Schering case, while holding that defendant’s mark ‘TEMOKEM’ and ‘TEMOGET’ are not deceptively similar to that of plaintiff’s mark ‘TEMODAL’ and ‘TEMODAR’, the HC considered drugs being highly specialized ones, used for a specific purpose and could be sold only on a prescription of cancer specialist as some of the important factors. It also took note of the immense price difference between the two drugs.

Conversely, in FDC Limited case, the same HC granted an interim injunction against the defendant restraining it from using the mark ‘ZOYPOD’ for its pharmaceutical products which is alleged to be deceptively similar to the plaintiff’s registered trademark ‘ZIPOD’. It rejected the argument of the drugs, being Schedule H drugs, can be sold only on prescription and reiterated that “to say that the medicinal preparations in the present case being ‘Scheduled-H’ drugs requiring a prescription, no confusion would arise, would be limiting the test.”

The standard for judging likelihood of confusion was laid down in the leading case of Amritdhara Pharmacy v Satyadeo Gupta as “from the point of view of a man of average intelligence and imperfect recollection.” However, the HC in the Hetero Healthcare Ltd case held:

“An oncologist, who is an expert and who prescribes the medicines for the treatment of breast cancer, in our opinion, is not likely to get confused because the two drugs are being sold with a mark containing the same first three letters, that are, ‘LET’ when the same are admittedly derived from the INN ‘LETROZOLE’…..”

The HC, through its decision in Hetero case and Schering case, seems to lay down the perspective of an expert, at least in the cases of Schedule H drug, as the judging standard and deviates from the long-settled standard of a man of average intelligence and imperfect recollection. The HC, however, fails to provide an analysis for such deviation from the Apex court’s judgment and its own decisions.

Public Interest: A Consideration to be Contemplate

Consumption of wrong drugs may have disastrous consequences and may be fatal to human life. The court has time again cautioned and adopted a strict approach when it comes to pharmaceutical products. Observing that “drugs are poisons, not sweets”, the Supreme Court in Cadila Healthcare Limited v. Cadila Pharmaceuticals Limited held that “public interest would support lesser degree of proof showing confusing similarity in the case of trade mark in respect of medicinal product as against other non-medicinal products.”

The paramountcy of public interest is evident from the decision of HC in DWD Pharmaceuticals case. In this case, , the plaintiff asked for an injunction restraining the defendant, and alleging the latter’s mark ‘FOLZEST’ to be deceptively similar to its mark ‘FORZEST’. Though the HC imposed penalty of Rs. 10 Lakh on the plaintiff for concealing material facts, it refused to vacate the ad-interim injunction passed by the trial court in favour of the plaintiff owing to the low threshold of confusion in pharmaceutical products and the prevalence of public interest.

In FDC Limited case (supra) as well, the HC adopted the strict approach as any confusion in pharmaceutical products can lead to public injury. Furthermore, even in circumstances where the drug is to be sold only on prescription, a mistake can very well occur while reading the prescription given the handwriting of doctors. The injury is aggravated as generic drugs in India are not necessarily interchangeable and can have varying therapeutic effects.

With reference to DWD Pharmaceuticals case, the author, Praharsh Gour, in his recent blogpost raises an interesting question that even if the plaintiff’s mark ‘FORZEST’ is revoked, given the profits earned, it will not stop using the mark leading to a situation where both marks ‘FORZEST’ and ‘FOLZEST’ are concurrently in the market, therefore, defeating the whole public interest consideration. Though the situation presented is practicable, intellectual property law can only deal with the validity of registration and infringement of marks, not the withdrawal of the product itself. Moreover, a trademark infringement suit would not be the right forum to assert such issues.

Conclusion

The HC, in the Hetero Healthcare Ltd case, seems to be prejudiced by the drive to make medicines available at lower and cheaper prices. However, such a desire does not find a legal basis in trademark law. Had the court applied stringent test and viewed from the angle of public interest, the present case calls for grant of ad-interim injunction. The deviation from the long laid down test for judging the likelihood of confusion and adopting the perspective of “expert” as the standard only leads to confusion unsettling the already settled position. In view of pharmaceutical companies majorly deriving their brand names from “the prime ingredient or the principal component”, more such cases are likely to come to court. It is hoped that the Apex Court will clear the cloud when the said issue comes up before it either in appeal or in a case where it appropriately arises.