Case Update M/s Pathanjali Ayurved Ltd. & Anr. vs Arudra Engineers Pvt. Ltd.

Decided on 02 February 2021 | Madras High Court

A Division Bench of the Hon’ble Madras High Court (“HC“) comprising Justice R. Subbiah and Justice C. Saravanan D, in M/s Pathanjali Ayurved Ltd. & Anr. vs Arudra Engineers Private Ltd. (2021) 2 MLJ 180, dealt with the trademark ability of dissimilar marks under Section 29(4) of the Trademarks Act, 1999 (“TM Act”). In the present case, the HC dealt with an appeal against the order and decree passed in O.A. No.258 of 2020, dated 06.08.2020, by way of which the earlier interim order that was granted in favour of the Respondent, was made absolute. Consequently, the Appellants herein were restrained from further using / infringing the Respondent’s trademark “Coronil,” in any variation, pending disposal of the suit.

Brief facts

The Respondent is a private limited company engaged in the business of chemical cleaning agents and materials for industrial use. The product in respect of the Respondent’s marks ‘Coronil-213 SPL’ and ‘Coronil-92B’ is a “chemical agent for sanitising and cleaning heavy industrial machinery and containment units at factories with minimal corrosion.” The Respondent has been using the said alpha-numeric label mark for a period of 20 years globally as well as in India and has gained reputed clients like BHEL, Reliance Industries, Indian Oil Corporation etc. The first Appellant is an Indian multinational consumer packaged goods company founded in 2006, engaged in manufacturing, distribution and selling of FMCG products whereas the second Appellant is a health, wellness and fitness company.

With the onset of the Covid-19 pandemic in December 2019, the Appellant’s “Coronil Tablet” was advertised it in print and electronic media as an effective cure for Coronavirus, with the Appellant not having undertaken clinical trials.  This came to the attention of the Respondent in June 2020 when top executives of the Appellant company publicly made claims that “Coronil Tablet” was 100% effective in curing coronavirus, and the Government had only allowed the Appellants to market and sell the product as an immunity boosterand not as a medical cure.

The Respondents’ adoption and use of the trademark “Coronil” is stated to be identical to that of the plaintiff’s registered trademark. The Respondent’s claimed that they had amassed goodwill and reputation in the field of industrial cleaning agents, in India and that the Appellants’ mark was diluting the distinctiveness of their trademark and damaging the goodwill and reputation of the Respondent. 

The present update deals with the appeal before the Division Bench, although some necessary contextual references have been made to the Single Judge’s Order.

In the present case, the Hon’ble Madras HC held that: (i) None of the ingredients required under Sec. 29(4) of the Act were satisfied; (ii)an injunction could not be in force during the pendency of the trial and a decision concerning any “unfair advantage” and possible detriment to the reputation of the Respondent would have to be deliberated during trial (iii) the Cost that was earlier imposed on the Appellant was also done away with.

Judgment of the Court

The HC while dealing with a question of infringement in respect of dissimilar marks held that the requisite conditions under Sec. 29(4) of the TM Act fall under two categories, viz., qualitative and quantitative. The quantitative component relates to: (i) reputation and (ii) use that is detrimental to such reputation; the qualitative component relates to: (i) due cause and (ii) unfair advantage of the distinctive character of the registered Trademark.

The Appellants argued that “reputation in India” was to be assessed on the basis of factors such as publicity, marketing, turnover and impact of the mark in the minds of the people. Whereas, the Respondent submitted that it should be decided on the basis of the Respondent’s customer base and not a pan-India basis. The Respondent argued that “Coronil Tablet” was not an effective covid cure and was not allowed to be marketed as such by the Government. When such is the case, the Respondent felt that people would associate their product to be ineffective as a cleaning agent thereby leading to dilution of their mark. The Appellants argued that the use of “Coronil” was not without “due cause” as the name was coined by shortening the term Coronavirus and combining the word nil to it. They also gave numerous examples of other manufacturers choosing names related to the Corona Virus / Covid, such as “Covaxin,” “Covishield,” “Coviblock,” “Coroflu,” “Corovax” and “Zycov-d.”

The HC stated that the burden of proving existence of “unfair advantage of the distinctive character” lies on the Respondent, which in the present case, failed to establish the same. Further, the Appellants’ mark had no resemblance to the mark of the Respondent when seen as a whole, as stipulated under trademark law. The HC held that “due cause” and “unfair advantage” could not be decided without trial.

The HC also held that the Respondent had failed to establish a prima facie case for grant of injunction and that the balance of convenience was in favour of the Appellants as placing a restriction on their use of “Coronil tablets” would result in the product being discontinued in toto. In view of the same there was no irreparable loss caused to the Respondent.

The HC observed that the Respondent enjoyed protection over “Coronil-213 SPL” and “Coronil-92B” and not on the term “Coronil” by itself  and reiterated that a registered trademark affords the proprietor exclusive right to use the mark as a whole and not parts of it.

Therefore, the HC held that the Appellant ’s mark did not meet either the Qualitative or Quantitative requisites laid down in Sec. 29 (4), necessary to constitute infringement and finally held that the Respondent not being able to meet the statutory requirements, are not entitled to an absolute injunction pending trial.