In Civil Suit No. 1063/2018, Glenmark Pharmaceuticals Ltd. v. Curetech Skintech and Galpha Laboratories Ltd., alongwith Notice of Motion (L) No. 1890/2018 therein jointly by the parties for a consent decree of compromise, Ld. Single Judge (Kathawalla, J.) of the Bombay High Court has, vide judgment dated 2018.8.28 decreeing the suit under consent, also imposed exemplary costs of Rs.1,50,00,000 (Rupees One Crore Fifty Lakhs) on the second Defendant to be paid towards the Kerala Chief Minister Distress Relief Fund. No ordinary costs of suit appear to have been awarded towards legal expenses or lost sales.

The suit alleged infringement and passing-off of trademark CANDID-B in respect of pharmaceutical goods, drugs in class 5, by the impugned trademark CLODID-B seeking injunction, damages and costs. Defendant No.1 submitted through Counsel that it is a mere contract manufacturer for and on behalf of the other Defendant and offered to submit to a consent decree of permanent injunction. Defendant No. 2 submitted before the Court that CLODID-B was adopted by it by mistake, furnished information that it had sold goods under the impugned mark worth Rs. 2.92 Crores in the last 10 years, and also offered to submit to a similar consent decree. The Plaintiff, however, during the hearing before the Court, sought exemplary costs on Defendant No. 2 beyond the scope of the compromise between all the parties jointly placed on record with a joint application for a consent decree in terms thereof.

The scope for penal or otherwise exemplary costs as over and above or within the costs ‘of’ and costs ‘incident to’ a suit, calls into question whether or not the Court has such power under Section 35 of the Code of Civil Procedure, 1908: “Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incident to all suits shall be in the discretion of the Court, and the Court shall have full power to determine by whom or out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid.” Section 151 is a relevant supplementing provision: “Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.”

Analysing whether or not exemplary costs were warranted, the Court concluded: “It is clear that the Defendant No.2 is not only indulging in infringing activities by repeatedly copying brands of other companies but also appears to be in complete violation of the FDA regulations. The conduct of the Defendant No.2 shows that this Defendant has no regard or respect to the rule of law. The consumers and general public are being repeatedly cheated by the Defendant No.2. I am of the opinion that had this Defendant been imposed with exemplary costs at the very beginning of their infringing activities, this Defendant would not have been audacious in repeating its infringing activities.”

The Court did not examine the ambit of Section 35 read with Section 151 of the CPC. The Court also did not specifically elucidate the existence or lack of statutory basis of costs for actions qua non-Plaintiff third parties or for actions reportedly in violation of regulations of a foreign government agency. The Court did not specifically point out that it was only the audacious infringement of this suit that was exclusively the occasion and basis for the exemplary costs and that its remarks about previous actions outside the scope of the suit were merely non-motivating observations. The Court also did not specifically comment on the source of its power to award exemplary costs even when the relief of ordinary costs itself as one of the prayers in the plaint had already been compromised in the negative and the Court was already seized with a joint application under Order XXIII Rule 3 of the CPC by all parties who, having placed the compromise on record, were seeking a consent decree in terms thereof.

It was the public health aspect of public interest that was commented upon as relevant motivation: “Drugs are not sweets. Pharmaceutical companies which provide medicines for health of the consumers have a special duty of care towards them. These companies, in fact, have a greater responsibility towards the general public. However, nowadays, the corporate and financial goals of such companies cloud the decision of its executives whose decisions are incentivized by profits, more often than not, at the cost of public health. This case is a perfect example of just that.”

 

In Snecma V. Union of India & Anr., W.P.(C) 3250/2017 & C.M. No.26210/2017, while allowing the writ on 2018.3.19, a Ld. Single Judge (Shakdher, J.) of the Delhi High Court has dealt with the scope of Rules 137 and 138 of the Patents Rules, 2003 as they stood prior to the amendment in 2016.

India National Phase Application “Blade and Blade Dihedral Angle”, under Chapter III of the Patent Rules, 2003 was entered on 2015.11.6 claiming priority from its French parent dated 2013.3.20. This filing was accompanied with petitions under Rule 137 and 138 of the Patents Rules, 2003 for condonation of the delay in filing. The National Phase was not filed within the statutory period of 31-months from the date of priority as per Rule 20(4)(i) falling in Chapter III of the Patent Rules, 2003. The writ petition itself was against the Request For Examination (RFE) being treated as time-barred.

The case involves the question whether the scope of the Saving expressly stipulated in the unamended Rule 138 of the Patents Rules, 2003 “Save as otherwise provided in the chapter III…the time prescribed…for doing of any act…may be extended…for a period of one month, if he thinks fit…upon such terms…”, read with Rule 137, applies to the time-period permissively prescribed for filing a PCT National Phase in Rule 20(4)(i) falling in Chapter III, or not. Rule 137 provides in relevant part: “…any irregularity in procedure…in the opinion of the Controller may be obviated without detriment to the interest of any person, may be corrected…upon such terms…” The question, therefore, was whether the power to condone the delay beyond the 31-month period is unavailable for being within the Saving-restriction preface of the unamended Rule 138 or is such power, instead, outside the scope of the Saving and hence within the competence of the Controller under the unamended Rule 138 read with Rule 137.

The Court decided that the Controller did have the competence and power to condone the delay. It explained the wider scope of the Rules along with the narrower scope of the Saving:  “…if the Controller reaches a conclusion that an amendment could be ordered in a document qua which there is no special provision in the Act or any irregularity in procedure could be obviated, he may order correction without causing detriment to the interest of any person on terms thought fit by him. It is precisely for this reason that on behalf of the petitioner applications have been filed both under Rule 137 and under the unamended Rule 138.”  

Prior to the amendment in 2016 of Rule 138, an application thereunder for extension of expired time limit for entering national phase, amounting to condonation of delay beyond the time period prescribed under the relevant provision of the Patent Rules, 2003, was thus treated as allowable. It was also treated as inherently being under Rule 137 for curing and obviating a mere irregularity.

This is made clear by the Court: “…the applications for obviating irregularity were maintainable and the limitations contained in unamended Rule 138 had no application qua provisions other than those referred to therein.”

In Federal Express Corporation v. Fedex Securities Ltd. & Ors [2017 (71) PTC 155 (Del)], the Delhi High Court (Gauba, J.) has, vide order dated 2017.04.11, returned the plaint-suit for infringement and passing off of the Plaintiff’s trademark FEDEX, allowing the interlocutory application of the Defendants challenging territorial jurisdiction.

Plaintiff invoked the jurisdiction of the Delhi High Court pleading that it has a subordinate office in Delhi and that the Defendants’ website www.fedsec.in is accessible in Delhi at which they offer and advertise their services, that the documents publicly accessible and issued to public at large on the Defendants’ website show that they are acting as the manager/merchant bankers to various entities/companies in Delhi. Defendants, on the other hand, alleged forum shopping asserting that the averments in the plaint simply do not suffice to establish territorial jurisdiction.  

The Court examined whether the phrases “carries on business” and “cause of action, … in part, arises” in Section 20 of the CPC are attracted by the Defendants merely having an interactive website in that territory or instead that there is an additional requirement that the website intentionally target that territory or also that it do so in a commercially viable manner.

This issue has been analyzed thus in the judgement: “…’carries on business’ at a certain place …means having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control thereover…insignificant or trivial part of the ‘cause of action’…cannot be the decisive factor on the question of jurisdiction…”

Having thus interpreted the scope of the Section, the Court examined the adequacy and sufficiency of the pleadings in the plaint for establishing territorial jurisdiction.

The Court found the pleadings in the plaint as not enough for invoking territorial jurisdiction: “As regards the…averment concerning the advertisement of service on website,…there is no averment that the websites are specifically targeting customers in Delhi or that the website is an interactive one from which it would be or has been possible to conclude commercial transactions. The advertisements published of the offers made by them to the public at large in the capacity of merchant bankers or merchant intermediaries have come with clear declarations of their location in Mumbai, which is the place where they have their registered offices…there is not even a single illustration given of any such commercial transaction having been entered into by the defendants with any user of their website within the territorial jurisdiction of this court…Plaintiff would have to show that the Defendant “purposefully availed” itself of the jurisdiction of the forum court. For this it would have to be prima facie shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.”

In the civil suit Texmo Industries v. Mr. Roshan Kumar, C.S. No. 357/2017, while rendering a summary judgment (dated 2018.7.27) partially decreeing the suit, a Single Judge of the Madras High Court (Karthikeyan, J.), has referred to a larger bench the question of a Court’s competence to declare a trade mark as a ‘well-known trade mark’.

The plaint averred the Plaintiff as being the owner and registered proprietor of the trade mark TEXMO and formative marks for motor pump sets in various classes including classes 2, 7, 11, 22, 23, 24, 25 and 26. The suit was for, inter alia, trademark infringement and passing off, against Defendant’s use of the mark TEXMEN for identical goods. After granting an initial interim injunction, the Court has allowed Plaintiff’s motion for summary judgment for various reliefs. In relation, however, to the relief of declaration of TEXMO as a well-known trade mark, the suit has been kept pending until a larger bench first decides a reference of the question – “whether the Court would be the appropriate authority for declaration of a mark as a well-known mark or is it only the Registrar who is empowered to declare so”.

The case involves the question whether the mention of the “Registrar” in Section 11(6) of the Trade Marks Act, 1999 – “The Registrar shall, while determining whether a trade mark is a well-known trade mark, take into account…including: …the extent to which the trade mark has been recognised as a well-known trade mark by any court or Registrar…”, indicates that the Registrar is exclusively vested with the competence to declare a mark as well known, and that the Court is not so vested. Other notable related statutory provisions featuring further mentions of the “Registrar” include Section 11(7) – “The Registrar shall, while determining as to whether a trade mark is known or recognised…”, and Section 11(8) – “Where a trade mark has been determined to be well-known…by any court or Registrar, the Registrar shall consider that trade mark as a well-known trade mark for registration under this Act”.

As regards the factors enumerated in Section 2(1)(zg) and 11(6) to ascertain whether a trade mark is well known or not, the Court has observed, subject to the decision of the larger bench, that – “They are factors which can be determined only by the Registrar of Trade Marks…the Court is not an expert on those lines and the court cannot substitute itself for the Registrar of Trade Marks who is the competent authority to examine the relevant statistics to declare that a mark is a well known mark….and thereafter it is the prerogative of the Registrar of Trademark to actually declare a Trademark as a well-known Trademark.”

The Plaintiff relied upon an earlier judgment dated December 11, 2017 of a coordinate bench (a Single Judge) of same Court (Madras High Court) in which the same mark TEXMO was declared as a well-known trade mark. Unpersuaded by this reliance, the Court while making the reference, has examined various statutory provisions appearing to it to indicate that the only authority conferred with such statutory competence is the Registrar of Trade Marks.

The Court has accordingly sought for the question to be decided by a Division Bench (larger bench of two Judges) and observed that – “since there had been earlier judgment of this court on this one issue namely whether the court can declare a mark as a well known mark or the court can only determine the factors relating to the mark as a well known mark and the onus is on the Registrar of trade marks to declare such mark as a well known mark, I hold is a matter to be referred to a Larger Bench.”

 

In Apollo Tyres Ltd. v. Pioneer Trading Corporation & Anr [2017 (72) PTC 253 (Del)], the Delhi High Court on 2017.08.17 has, in a suit for passing off of the Plaintiff’s tread pattern  in respect of its truck tyre under mark ENDURANCE LD 10.00 R20, confirmed an ad-interim injunction restraining from using a similar tread pattern, pending trial.

The Defendant’s interlocutory application for vacation of ad-interim injunction was dismissed and the earlier ad-interim order in favour of the Plaintiff was confirmed. The Defendant had contended that tread patterns in tyres are functional and no proprietary rights as trademark can be claimed. Further, that uniqueness in tread patterns may be registrable designs and therefore no action of passing off as a trademark lies.

The case deals with shape of goods as trademarks under Section 2(1)(zb) “…trade mark… may include shape of goods…” and Section 9 “…A mark shall not be registered as a trade mark… the shape of goods which results from the nature of the goods themselves… which results from the nature of the goods themselves…”. The judgement holds:

“…. No party can claim proprietary over the technique/ practice of providing treads in a tyre, since treads are functional, i.e. they afford the necessary grip between the tyre and the ground … However, that does not mean that the unique pattern of the tread adopted by a particular manufacturer,…would not be entitled to protection as a design – if it is registered, and as a trademark- if the tread pattern has been exploited as a trademark i.e. a source identifier. What is functional in a tyre are …”treads” and not “tread pattern”…”

The court while determining that the tread patterns could be protected as trademarks notwithstanding protection under the Designs Act, also held that shape and features of goods not registered as a design does not disentitle suing for trademark passing off.

“Copying of the unique shape of the goods could lead to confusion with regard to the source.. the submission…that the tread pattern…constitutes a design-registrable…and failure of the plaintiff to get its design…registered deprives the plaintiff of protection against passing off has no merit, and is rejected.”