Following the Classic Trinity Test in an action for passing off instituted by a Nanded based proprietary firm, Serum Institute of India succeeds in defending the trademark "COVISHIELD" for its Covid-19 vaccine.

The recent judgement passed by the Hon'ble Bombay High Court dismissing Cutis Biotech's plea seeking to restrain Serum Institute of India from using the trademark 'Covishield' for its vaccine has paved a way for curtailment of frivolous litigation. While dismissing Cutis Biotech's plea, the Hon'ble Court has held that 'Covishield' is a vaccine to counter Coronavirus is now widely known. A temporary injunction directing Serum institute to discontinue the use of mark 'Covishield' for its vaccine will cause confusion and disruption in the Vaccine administration programme of the State. In this case, thus, the grant of an injunction would have large scale ramifications traversing beyond the parties to the suit."

Serum Institute of India was advised and represented by Parinam Law Associates in proceedings before the Principal District Judge, Nanded, Commercial Court at Pune as well as the Hon'ble Bombay High Court.

Proceedings before the Hon'ble Principal District Judge, at Nanded:

Sometime around December 2020, a Nanded based proprietary firm through its Sole Proprietor Mrs. Archana Ashish Kabra filed a Suit against Serum Institute of India (SII) and Anr. (one, Mr. Bhandaru Srinivas) seeking an order of injunction restraining SII from passing off the trademark 'Covishield' and/or 'Covid shield' for their COVID-19 vaccine. Cutis Biotech claimed that they had applied for the trademark of "Covishield" before SII and their products such as sanitizers and disinfectant had also started circulating in the market under the same tradename. SII moved an application under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 seeking rejection of the plaint on the ground that the Suit was not maintainable under section 134(2) of the Trademark Act, 1999, and the Suit ought to have been filed under the Commercial Courts Act, 2015. The application was heard, but no orders were passed by the Court. The said Suit is still pending before the Hon'ble Court, at Nanded.

Proceedings before the Hon'ble Commercial Court, at Pune:

Whilst the Suit filed at Nanded was still pending adjudication, Cutis Biotech filed a Commercial Suit before the District Court, at Pune along with an application for a temporary injunction.

  • Cutis Biotech, in support of its case argued the following:
    1. that they had coined the word 'Covishield' in respect of pharmaceutical and other related products;
    2. that they have been using the trademark 'Covishield' on its sanitizers since 29th April 2020 i.e. the day they filed an Application for registration of the mark 'Covishield' in Class 5 in relation to veterinary, ayurvedic, allopathic, medicinal, and pharmaceutical preparations and vitamins and dietary food supplements for humans and animals which is still pending before the Trademarks Registry;
    3. that they received products like antiseptics and disinfectant liquid, sanitizers, surface decontaminant spray, and fruit and vegetable washing liquid from their manufacturer bearing the trademark 'Covishield' and subsequently started selling the said products across various states in India;
    4. that their products bearing the trademark 'Covishield' are being extensively sold and have been popularized through advertisement, publicity, promotion and marketing hence, they have already earned goodwill and reputation by prior use of the trademark;
    5. that SII applied for the trademark 'Covishield' only on 6th June 2020 under Class-5 for the product 'vaccine for human use' which application is pending before the Trademarks Registry;
    6. that they intend to launch a few more products in the market bearing the trademark 'Covishield' including but not limited to vaccines, but because of SII's application for seeking registration of the trademark and various press releases confirming the name of the Covid-19 vaccine as 'Covishield', their trade partners and manufacturers have refused to supply the products and/or work with them due to a 'possibility of confusion' regarding "Covishield", which has led them to suffer losses;
    7. that both parties are trading in a common field of activity and since Cutis has been using the trademark prior to SII, the use of "Covishield" by SII is misrepresenting and deceitful to consumers.
  • SII countered the Cutis's case by arguing that:
    1. Suppression of material facts:
      1. Cutis Biotech has surreptitiously filed the present Suit without withdrawing the Suit filed in Nanded or informing the Court n Nanded of the present Suit which seeks the same reliefs and against the same parties.
      2. Cutis Biotech has concealed a material fact from the Hon'ble Court being that it had applied to the Trademarks Registry on 12th December 2020 for the registration of trademark "Covishield" in respect of "vaccine for human use" and has therefore approached the Court with unclean hands.
    2. Abuse of process of law:
      SII relied on the judgements in K.K. Modi v. K.N. Modi1, M/s. Chetak Construction Ltd. v. Om Prakash & Ors.2 and Union of India & Ors. v. Cipla Ltd. & Ors.3, in submitting that Cutis had filed two Suits along with two Applications for the same reliefs against the same parties SII but in two different Courts which amounts to an abuse of the process of law, forum shopping, and breach of the principles of natural justice.
    3. Cutis Biotech has failed to make out a case for passing off:
      Cutis Biotech had prima facie failed to satisfy the three fundamental elements also referred to as the Classic Trinity test for passing off a trademark: (a) goodwill of Cutis Biotech; (b) misrepresentation by SII; and (c) damages caused to the goodwill of Cutis Biotech. SII argued that none of the parameters were satisfied by Cutis Biotech.
    4. Prior use and goodwill associated to the vaccine:
      1. SII submitted that it was founded in the year 1966 with the aim of manufacturing lifesaving immuno-biologicals which were in shortage in the country and imported at high prices. SII has since its formation manufactured several life-saving biologicals on a large scale and at prices affordable to the common man which has been instrumental in making India self-sufficient for Tetanus, anti-toxin and anti-snake venom drug, followed by DTP (Diphtheria, Tetanus and Pertussis) group of vaccines and MMR (Measles, Mumps and Rubella) group of vaccines.
      2. On account of the innovation and extensive research and development undertaken by SII in partnership with AstraZeneca and Oxford University to manufacture a vaccine for immunity against COVID-19 virus, couple with the applications made for various regulatory permissions and approvals, SII has acquired immense reputation and goodwill among the people at trade and public at large.
      3. SII had filed several documents since the month of March 2020, referring to an investment of USD 100 million and its plan to produce a Covid-19 vaccine in collaboration with Astra Zeneca, which evidences prior adoption of the 'Covishield' mark. Thus, by 6th June 2020, when SII applied for registration of the mark 'Covishield', it was already well-known in the media. SII had also filed requisite documents evidencing a continuous chain of seamless activity to develop the vaccine using the mark 'Covishield'.
      4. SII contended that it was seriously doubtful whether Cutis Biotech was using the trademark 'Covishield' prior to SII.
    5. Visual appearance:
      The nature and visual appearance of the products of both parties are totally different, therefore, there exists no possibility of creating any confusion, misrepresentation, or deceit in the minds of the consumers.
    6. Case law:
      1. SII relied upon the judgements of the Supreme Court of India in Nandhini Deluxe v. Karnataka Co­operative Milk Producers Federation Limited4 and Vishnudas Trading as Vishnudas Kishendas v. Vazir Sultan Tobacco Co. Ltd., Hyderabad & Anr.5 in submitting that even though a party may have a registered trademark for products or goods in a category falling under one class; it does not vest monopoly over the entire class of goods with the proprietor of such registered mark.
      2. SII also relied upon the judgment in Cadila Health Care Ltd.  v.  Cadila Pharmaceuticals Ltd.6 in submitting that there is neither deceptive similarity nor misrepresentation. SII further relied upon the judgment in N. R. Dongre & Ors. v. Whirlpool Corporation & Anr.7 to establish that comparative hardship and balance of convenience must be considered while granting an injunction for the act of passing off of trademark.
    7. SII also claimed that Cutis Biotech can at best, claim to have entered the market in May 2020 and has not been trading for long enough to earn substantial goodwill or reputation which can be taken advantage of by SII. Therefore, the basic ingredients of the action of passing off are missing.
    8. SII also submitted that the balance of convenience lies in its favour since the vaccine is a medicine to prevent a deadly disease i.e.   Covid­19. SII is presently supplying the human vaccine under trademark 'Covishield' to the Government of India and exporting it to many other countries across the world. Therefore, the consumers of the vaccine 'Covishield' are much larger in number than the number of consumers of the product(s) of Cutis Biotech.
  • Reasons for rejecting Cutis Biotech's plea for granting an order of injunction:
    1. The Hon'ble Court held that Cutis Biotech has prima facie failed to establish that any individual customer had been deceived through the acts of SII.
    2. Since there is a difference in the visual appearance of the products of SII and Cutis Biotech as well as in the purpose of the products of both parties, prima facie any likelihood of deception can also not be established.
    3. The court also held that Cutis Biotech had prima facie failed to establish the trinity test for passing off a trademark (more particularly described hereinabove) and had also failed to point out that the balance of convenience lies in its favour or that it is going to suffer irreparable loss in the event the injunction is not granted.
    4. The Court also considered the circumstances surrounding the case and the fact that people around the world were eagerly awaiting a vaccine to prevent the spread of Covid-19. Accordingly, it was observed that barring SII from using the trademark 'Covishield' at this stage and distributing the vaccine under the said trademark, would cause great hardship. The Court therefore held that both comparative hardship and balance of convenience lie in the favour of SII.

Aggrieved by the interim order passed by the Hon'ble Commercial Court, at Pune, Cutis Biotech challenged the interim order before the Hon'ble Bombay High Court in an Appeal under Section 13 of the Commercial Courts Act, 2015.

Judgement of the Hon'ble Bombay High Court:

  • The Hon'ble Bombay High Court systematically perused the Classic Trinity test8 which postulates the fundamental elements in an action for passing off the trademark which are (a) establishing goodwill and reputation attached to the goods and services (b) showing that the respondent's acts are likely to lead the public to believe that the goods and services offered by the respondent are goods and services of the applicant, and (c) showing that the applicant is likely to suffer or has suffered damages.
  • Concurring with the Hon'ble Commercial Court, at Pune, a Division Bench of the Bombay High Court identified five (5) significant factors for dismissal of Cutis Biotech's appeal, which are as follows:
    1. Prior Usage:
      After evaluation of the evidence on record, the Court held that there was adequate evidence to show prior adoption and user and that moreover, SII has also continued its user without a break. It was also observed that SII had obtained various permissions and licenses to manufacture the vaccine under the trademark 'Covishield'. The Hon'ble Bench took into account (i) the inter-departmental communications pertaining to the mark, (ii) the factum of SII developing a vaccine being covered by the media not being denied, (iii) the monthly production of 60 million doses and supply of 48 million doses of the vaccine to the Government of India, (iv) various licenses garnered for manufacturing the vaccine, and (v) various Agreements executed globally for the supply of vaccines. The Hon'ble Court accordingly held, "After evaluating the evidence on record, we find that Serum Institute had coined the word 'Covishield' and took substantial steps towards its development and manufacture. Thus, there is adequate and convincing material on record to demonstrate the prior adoption of the mark by Serum Institute. There is no perversity in the finding that Cutis Biotech cannot claim to be a prior user of 'Covishield'."
    2. Likelihood of confusion:
      The Hon'ble Court disagreed with the contention of Cutis Biotech that there is a likelihood of confusion between the products of Cutis Biotech and SII. The Court observed that the vaccine 'Covishield' produced by SII is not available across the counter and will be administered through Government agencies. Thus, the buyer of SII's product, 'Covishield' is the Government of India. On the other hand, Cutis Biotech's products are sold over the counter and though they may relate to the same field i.e. health care products, there cannot be any confusion in the mind of the average consumer. The Hon'ble Court, observed that, "The administration of vaccine through injection is well known. It will be too farfetched to hold that there will be confusion in the average consumers' minds between the use of a trademark in a Government administered vaccine at designated places and over-the-counter sanitizer products.
      ......To substantiate passing off by SII, Cutis Biotech has to show that SII is passing off its goods as that of Cutis Biotech based on the goodwill of Cutis Biotech. Thus, the argument advanced by Cutis Biotech is therefore self-destructive."
    3. Goodwill:
      While adjudicating over the issue of goodwill of both the parties, the Court did not find sufficient material to establish goodwill in favour of Cutis Biotech's use of the trademark "Covishield". Thus, the Court held that, "According to us, there is no sufficient material on record to hold that Cutis Biotech has established sufficient goodwill regarding trademark "Covishield". From this evidence produced on record, the failure of Cutis Biotech to substantiate its assertion that it was a prior user of the mark and had acquired goodwill is more than clear. There is no perversity in the finding of the District Court that Cutis Biotech has not established this test for granting an injunction."
    4. Future Damage:
      While adjudicating over the damage suffered or the likelihood of such damage due to the alleged passing off, the Court emphasized the combined impact of the Classic Trinity test, and accordingly stated that the factors contributing to the potential injury must be observed in the context of prior usage and goodwill. Where a party fails to establish goodwill and prior user, the argument of loss of revenue or potential injury cannot sustain by itself, even if it is an argument available in law. Therefore, the Bench held that since the Respondent is the prior user of the mark and has acquired goodwill because of which, consumers are not consciously purchasing Cutis Biotech's goods, such usage cannot be considered as a case of passing off by SII.
    5. Balance of convenience:
      Lastly, while determining the most important facet for an action of passing off, the Court observed that after the Suit was filed on 4th January 2021, administration of SII's vaccine, 'Covishield' had commenced from 16th January 2021. The Government of India had rolled out an extensive vaccine administration programme wherein almost 300 million people were identified for the vaccine in the first round and the first order for 11 million doses of 'Covishield' had been placed. As on 1st March 2021, a vaccination drive for those above the age of sixty and the age of forty-five years with comorbidities was also launched. As of 16th March 2021, 66 million doses of "Covishield" were supplied through the States and Union Territories. Further, around 59 million doses had already been supplied to over 72 different countries. Having noted the aforesaid facts, the Court observed, "That 'Covishield' is a vaccine to counter Coronavirus is now widely known. A temporary injunction directing Serum Institute to discontinue the use of mark 'Covishield' for its vaccine will cause confusion and disruption in the Vaccine administration programme of the State. In this case, thus, the grant of an injunction would have large scale ramifications traversing beyond the parties to the suit." Thus, the balance of convenience was held to rest in favour of SII who would stand to face a serious impact if the injunction was to be granted against them.

The Hon'ble Commercial Court, at Pune has remarkably put forth its views after careful consideration of the facts, arguments, evidence, and established precedents on the subject. The Court has presented an impeccable understanding of the nuances in the concept of passing off. The Appellate Court also exercised great prudence in dealing with the case, thereby re-establishing the significance of the Classic Trinity Test in matters of passing off. Certainly, both orders are a worthy addition to the literature of Indian trademark law.

Footnotes

1. AIR 1998 SC 1297

2. (1998) 4 SCC 577

3. (2017) 5 SCC 262

4. (2018) 9 SCC 183

5. (1997) 4 SCC 201

6. AIR 2001 SC 1952

7. (1996) 5 SCC 714

8. Reckitt & Colman Products Ltd v Borden Inc [(1990) RPC 341]

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