THE RIGHTS OF PRIOR USER IN INDIA

~Sai Pavan Dyagala

Section 34 of The Trade Marks Act, 1999 states that “A person or a Predecessor continuously using a trade mark from a Prior date has his vested rights to that trade mark when compared to a proprietor or a registered user of a registered trade mark which is identical or in resemblance with the goods or services of the former.”

MILMET OFTHO INDUSTRIES & OTHERS vs. ALLERGAN INC. is a case law between two Pharma companies Allergan Inc. and Milmet Oftho Industries & others. The Milmet Oftho Industries and others who filed the appeal are the Indian Pharma Companies, whereas the Allergan Inc. is the Pharma Company manufacturing Pharma products in several countries. This is an appeal against the Judgement of Calcutta High Court dated 6th November, 1997. Allergan filed a suit for an Injunction based on an action for passing off in respect of mark OCUFLOX belonging to the respondents. The Allergan Inc. (Respondents) claims that they are the prior users of the mark OCUFLOX since 9th September, 1992 in respect of eye care product containing Ofloxacin and other compounds. They marketed the product in so many countries and also got registration in few countries. The application for registration of Trade Mark in few countries including India was pending at the date of filing of this case. The Appellants were selling OCUFLOX on a medicine containing CIPROFLOXACIN HCL used for both the eye and ear treatment. The claim of the appellants was that they coined the word OCUFLOX by taking the prefix OCU from OCULAR and FLOX from CIPROFLOXACIN which is the basic constituent of their product. They were granted registration by the Food and Drug Control Administration on 25th August, 1995. They have applied for registration of the mark OCUFLOX in September 1993 which is now in pending. The Supreme court headed by a two Judge bench consisting of S.N. Variava and H.K. Sema referred to two important judgements N.R. DONGRE vs. WHIRLPOOL CORP. and CADILLA HEALTH CARE LTD. vs. CADILLA PHARMACEUTICALS LTD. before disposing off this appeal filed by the Milmet Oftho Industries and others.

In N.R. DONGRE vs. WHIRLPOOL CORPORATION, the appellants got the registration mark WHIRLPOOL in respect of washing machines. The Whirlpool Corporation filed a suit for passing off action brought by the Respondents to restrain the appellants from manufacturing, selling, advertising or in any way using the trade mark WHIRLPOOL of their product. It was held that the refusal of an Injunction could cause irreparable injury to the reputation of the whirlpool corporation, whereas grant of an injunction would cause no significant injury to the appellants who could sell their washing machines merely by removing a small label bearing the name WHIRLPOOL.

In CADILLA HEALTH CARE LTD. vs. CADILLA PHARMACEUTICALS LTD., when the question of whether the mark FALCIGO and FALCITAB were deceptively similar was raised, the highest court did not interfere on the ground that the matter required evidence on merits but laid down principles on which such cases were required to be decided. Supreme Court held that in a passing off action for deciding the question of deceptive similarity the following facts had to be taken into consideration:

1. The nature of the marks i.e. whether the marks are word marks or label marks or composite     marks, i.e. both words and label works.
2. The degree of resemble ness between the marks, phonetically similar and hence similar in idea.
3. The nature of the goods in respect of which they are used as trade marks.
4. The similarity in the nature, character and performance of the goods of the rival traders.
5. The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods.
6. The mode of purchasing the goods or placing orders for the goods, and
7. Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.

In NEON LABORATORIES LTD. vs. MEDICAL TECHNOLOGIES LTD. & ORS., a two judge bench of the Supreme Court opined that “to claim exclusivity of user, the trademark should normally partake of a new creation, or if an existing word, it should not bear descriptive characteristics so far as the product is concerned, nor should it be of an extolment or laudation.” Court also referred to Wander Ltd. vs. Antox India P. Ltd. in which Supreme Court adumbrated that the Appellate Court ought not to “reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court’s exercise of discretion”. Before granting an ad interim injunction, the Court in seisin of the litigation has to address its attention to the existence or otherwise of three aspects-

1. whether a prima facie case in favour of the applicant has been established; 
2. whether the balance of convenience lies in favour of the applicant; and 
3. whether irreparable loss or damage will visit the applicant in the event injunctory relief is declined.

S. SYED MOHIDEEN vs. P. SULOCHANA BAI is an appeal in the Supreme Court before a two Judge bench where the appeal was dismissed and the appellants are asked to pay the costs of Rs. 50,000/- to the respondents. Earlier, the factual position of this case is summed up by the High Court in the following manner:

“when the Plaintiff has earned the reputation and goodwill in the business in the name and style of ‘Iruttukadai Halwa’, the defendant cannot simply add the word ‘Tirunelveli Iruttukadai Halwa’, as the same has been used prior in point of time by the Plaintiff. Therefore, the Court is of the considered opinion that allowing the defendant to use the trade mark ‘Tirunelveli Iruttukadai Halwa’ will amount to deceiving the public, hence, no one can be permitted to encroach upon the goodwill and reputation of the other party, particularly when a specific mark, though may be a descriptive word, has acquired a subsidiary meaning and is fully admitted by the particular company and when a party who cannot be termed as a honest current user of the mark on the reputation and goodwill of the company, it will constitute an invasion of the proprietary right, hence, the same cannot be permitted any longer. In a situation like this, it is the bounden duty and obligation of the Court not only to protect the goodwill and reputation of the prior user, but also to protect the interest of the consumers.”

Thus, keeping in view the above mentioned case laws and the provision of the Trade Marks Act, it is clear that the prior user has primary rights on his goods or services which came earlier into the market when compared to the other users who started the same or similar products in the market even if they have a registered trade mark of such product. This does not deprive a person who has not applied for a trade mark due to lack of knowledge or due to any economical or other reasons. The law makers are very careful while framing this law and taken due care to not cause any loss to the prior users of any goods or services.

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