THE CORONIL CASE

Author: Khushi Thakkar(Govt. Law College, Mumbai)


DATE OF JUDGMENT: 06.08.2020 CASE NUMBER : CS163/2020 QUORUM : Justice CV Karthikeyan PARTIES TO THE CASE: Arudra Engineers Private Limited represented by its Managing Director, Mr.R.Natraj. ...PLAINTIFF

Vs.

1.M/s. Patanjali Ayurved Limited, Represented by its Directors. 2.Divya Yog Mandir Trust, Represented by its Trustee. ...DEFENDANTS Facts of the case The case calls for a critical analysis of Trademarks Act,1999 [The Act]. This case is a simple case of Trademark infringement. The plaintiff is a two decades old engineering company holding a good reputation in providing a wide variety of cleaning, advanced NDT inspection, RLA inspection and maintenance services for Pipelines, Boilers, Condensers and Heat Exchangers in power generators across the world. The plaintiff manufactures an effective organic liquid inhibitor for citric acid in pickling and industrial cleaning operations which is sold by the name of CORONIL 92b and Coronil-213 SPL. The contentions began when the defendant, a huge ayurvedic medical company named one of its newly launched tablets in the wake of the Novel Coronavirus as CORONIL. As soon as this came to the plaintiff’s notice, the plaintiff filed an application for permanent injunction against infringement of the plaintiff's registered trademark bearing the name “Coronil” by restraining the defendants or anybody from acting under them from using the said trademark or deceptive variation of the said trademark in their products / business and for costs of the suit in the Madras High Court and requested it to be taken up on an urgent basis. Along with this, the plaintiff also asked for an interim injunction restraining the defendants from infringing the registered trademark “Coronil” and from using the trademark or any variation in relation to their product / business which the court granted ex-parte. ARGUMENTS PUT FORTH BY THE PLAINTIFF The plaintiff has argued that by using the word CORONIL, the defendant is infringing the trademark of the plaintiff which is registered and protected by law, also that the defendants were deriving an unjust pecuniary benefit from the plaintiff’s reputation which was violating statutory as well as proprietary rights of the plaintiff. The plaintiff agreed that the trademarks belonged to different classes and different industries, however, plaintiff seeks protection under section 29(4) of the Trademark Act, 1999. A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which— is identical with or similar to the registered trade mark; and is used in relation to goods or services which are not similar to those for which the trade mark is registered; and the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark. The plaintiff for establishing that it had a “reputation” in India submitted various documents along with a list of its customers and its turnover details. It was also contended that the defendants cannot claim protection under section 30 as the defendant is not using the trademark in accordance with honest practices in industrial or commercial matters and rather using it as such to take unfair advantage of or be detrimental to and diluting the distinctive character or repute of the trade mark. Section 30 states that; Nothing in section 29 shall be construed as preventing the use of a registered trade mark by any person for the purposes of identifying goods or services as those of the proprietor provided the use— is in accordance with honest practices in industrial or commercial matters, and is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark. The plaintiff has a trademark for both ‘Coronil – 92 B’ and ‘Coronil – 213 SPL’ which holds valid until 2027 and stated that the unique portion of the trademark in both the instances was the word ‘Coronil’ and that was the distinctive part of the registered trademark also. It further stated that the defendant was negligent in checking with the Registrar of Trademarks, if Coronil was Trademarked or not. ARGUMENTS PUT FORTH BY THE DEFENDANT Defendants claim that registration of their trademark is still in process and that they had received the requisite permission from the Licensing Authority for Ayurveda and Unani Services, Uttrakhand, for conduction of clinical trials,of three tablets namely, (i)Divya Coronil Tablet, (ii)Divya Saswari Vati 540 MG and (iii)Divya Saswari Vati 350 MG They further contended that the plaintiff and the defendants belonged to different industries ,industrial chemical manufacturing and the pharmaceutical industry respectively. Thus, there was no similarity and therefore no bar on registering the trademark under section 11(2). The defendant refuted the claim of the plaintiff under section 29(4) stating that the plaintiff has failed to establish its reputation in India as it has only 31 customers in all and a turnover of 10 crores. It was also contended that it was a justified practice in the pharmaceutical industry to name the drug after the ailment/organ/ medical compound. As CORONIL is an immunity booster (against the Coronavirus) prevalent in the world at the moment, it was named after the virus. The major contention submitted by the defendant was that the plaintiff cannot divide one word from the whole registered Trademark and seek injunction and damages. The plaintiff needs to see the mark as a whole. If the plaintiff were to assert protection, it must have registered the word ‘Coronil’ separately under section 15 and section 16. The plaintiff was also accused of conspiracy stating that a Rs. 10000 crore company want to affect the reputation of a ten crore company, attempting to interfere with honest trade and causing prejudice, hardships and affecting the reputation of the defendant. ISSUES Whether the defendant has infringed the trademark of the plaintiff? Can the defendant claim protection under section 30? Is the plaintiff entitled to protection under section 29(4)? ORDER OF THE MADRAS HIGH COURT The Bench was of the opinion that the plaintiff was able to establish that it had a reputation in India and thus, entitled to protection under section 29(4) of the act. The judge came to this conclusion after a detailed examination of section 11(2) and section 29(4) and drew a distinction between ‘reputation in India’ and ‘well known trademarks’. The Bench agreed with the contention of the plaintiff that the word ‘coronil’ was a distinctive part of the plaintiff’s trademark and stated that although the word has not been registered separately, the word Coronil conveys some meaning directly relating to the business of the plaintiff; the suffixes 92B and 213 SLP independently convey no meaning at all. It was also pointed out that each separate trademark should satisfy all the conditions of an independent trademark for obtaining registration and the numbers simply cannot be awarded a trademark. The plaintiff has registered them as a whole and they are entitled to protection of their primary word in their registered trademark which is ‘Coronil’. The Court came to the conclusion, after observing the shift in the stands by the defendant from a treatment to the virus to an immunity booster, that the defendants have infringed upon the registered trademark of the plaintiff ‘without due cause’ and have caused substantial damage to the reputation of the plaintiff. It was stated that if the defendant has not shown cause to insist on the name Coronil as it implies it to be a cure of the virus which is not true. The Court was of the view that coinage of the term ‘Coronil’ by the defendants( corona+nil) is without due cause and in fact that intention to mislead the general public by the defendant was money driven and sought to exploit the fear among people, by projecting that they could cure Coronavirus. As for the point raised by the defendant relating to the protection under section 30 of The Act, the Court was of the opinion that the actions of the plaintiff are quiet in contrast to its statements made, and are actually for taking unfair advantage of and undermining the distinctive character or repute of the trade mark. The Court came up with an analogy, just like coronil doesn’t cure covid in the same way, people might come to the conclusion that the plaintiff’s product is not the solution for corrosion, the Court granted a permanent injunction on the use of the word ‘coronil’ imposed costs of Rs. 10,00,000 to be paid by both the defendants jointly, to two different organisations providing free Covid services that are helping people. ANALYSIS The case is an interesting one, which examined the intricacies of Trademark Act, 1999. The Court interpreted the sub-section 4 of section 29 of the Act and laid down conditions that need to be fulfilled for availing protection under this section. One of the major arguments that came up before the Court was whether the words ‘reputation in India’ in sub-section 4 of section 29 of the Act and ‘well known trademarks’ hold the same meaning under this section. To support the argument that both were the same, section 11(2) of the act and the judgement of Ford Motor Company & Anr. v. C.R.Borman & Anr CS(OS) 1710/2005 was brought to light and it was stated that it would have been the intention of the parliament for it to mean a well known trademark. The counsel for the defendant also pointed out a parody in law in relation to this section, stating that whereby registration of a subsequent trademark could be refused only if the earlier trademark was a ‘well known trademark’, but, an injunction can be granted by the Courts from usage of a trademark, even if the earlier registered trademark is not necessarily a “well known trademark”, but simply “has a reputation in India”. However, the Court in this case did not agree with the view stated in the Ford Motor Company. The Court was of the opinion that ‘reputation in India’ words were the conscious decision of the Parliament and that the intention of the legislation should be found in the words by legislature itself, if that isn’t done then only its upto the Courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act. The Court felt that there were various clauses of different sections needed to be taken into account for the Trademark to be defined as a Well Known Trademark and the words in section 29(4) were used to widen the scope of the section. FURTHER DEVELOPMENT IN THE CASE: The defendants moved an appeal before the Divisional bench of the Madras High Court against the order of the Single judge. A Bench of Justices R Subbiah and C Saravanan passed the order on an appeal moved by the defendant. The Court stayed the injunction and allowed Patanjali to use "Coronil" for a two-week period. The case was listed to be taken up on September 3. Before the case could be taken further by the Divisional bench, the plaintiff filed a plea in the Supreme court challenging the stay order of the Divisional Bench. The Supreme Court Bench of CJI SA Bobde, Justices AS Bopanna & V. Ramasubramaniun has however, refused to entertain the matter and has asked to withdraw the petition.

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