No restraint on Serum Institute from using ‘COVISHIELD’, confirms Bombay High Court

A health worker holds a vial of Covishield, AstraZeneca’s Covid-19 coronavirus vaccine made by India’s Serum Institute, at the Cooper hospital in Mumbai on January 16, 2021. (Photo by Punit Paranjpe/The The India Today Group)

Smriti Yadav, Partner, Khaitan & Co

Shwetank Tripathi, Senior Associate, Khaitan & Co

Bhavik Shukla, Associate, Khaitan & Co

In the matter of Cutis Biotech v Serum Institute of India Private Limited, Appeal from Order No 53 of 2021 (Appeal), the Hon’ble Division Bench of the Bombay High Court (High Court) has passed a judgment dated 20 April 2021 (Decision) refusing to grant an interim injunction against the use of the trade mark ‘COVISHIELD’ (Trade Mark) in relation to ‘vaccines for human use’ (Serum’s Goods) by Serum Institute of India Private Limited (Serum).

Factual background

On 29 April 2020, Cutis Biotech (Cutis) filed an application for registration of the Trade Mark in class 5 in relation to wider specification of goods viz. ‘veterinary, ayurvedic, allopathic, medicinal and pharmaceutical preparations and vitamins and dietary food supplements for humans and animals’ (Cutis’ Goods), on a ‘proposed to be used’ basis.

After about a month, on 6 June 2020, Serum applied for registration of the Trade Mark in class 5 limited to Serum’s Goods, on a ‘proposed to be used’ basis.

On 11 December 2020, Cutis filed a suit for passing off before the District Court, Nanded (Nanded Suit) for restraining Serum from using the Trade Mark. Serum appeared in the Nanded Suit and filed an application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) for rejection of plaint on the ground that the suit was barred by law as it ought to have been filed as a ‘commercial suit’ under the Commercial Courts Act, 2015 (Commercial Courts Act). Pursuant thereto, Cutis has filed an application for withdrawal of Nanded Suit and the same is pending.

On 4 January 2021, Cutis filed a similar suit under the Commercial Courts Act, for passing off before the District Court at Pune (Pune District Court). The Pune District Court observed that Cutis failed to establish the primary ingredients of a passing off action i.e. a prima facie case, the balance of convenience and damages / likelihood of damages. Accordingly, Pune District Court vide judgment dated 30 January 2021 (Pune Court Order) dismissed the application for interim relief filed by Cutis. Being aggrieved by the Pune Court Order, Cutis filed the Appeal before the High Court.

Rival contentions

Cutis inter alia contended that (i) the Trade Mark was coined by it on 25 April 2020 and applied for registration on 29 April 2020 in respect of Cutis’ Goods; (ii) the Trade Mark is in use since at least May 2020 and within a span of 7 months, it has generated sales turnover of INR 16 Lakhs, which shows that the Trade Mark has earned goodwill and reputation qua Cutis; (iii) the use of the Trade Mark by Serum amounts to passing off, causing damage to Cutis.  

In response, Serum inter alia contended that (i) Cutis is not the prior adopter of the Trade Mark as Serum coined the Trade Mark in March 2020 and has been using the same continuously and extensively since then. This claim was supported by documentary evidence including approvals taken from Governmental authorities, expenses incurred on producing vaccines bearing the Trade Mark, and supply thereof to Indian Government as well as foreign countries on a large scale; and (ii) the revenue figures produced by Cutis towards the use of the Trade Mark were insignificant to impart any goodwill onto Cutis, as the Trade Mark had been used in respect of hand sanitisers and disinfectants, which remain in high demand due to the Covid-19 pandemic.

Findings and Decision

The High Court, after considering the evidence placed on record by the parties, concurred with the findings of the Pune District Court that the documents filed by Cutis were not adequate to indicate that it had acquired any goodwill in the Trade Mark. Further, the High Court observed that it is Serum who was the prior adopter and user of the Trade Mark since March 2020 as opposed to Cutis which has claimed use since May 2020.

The High Court further concurred with the findings of the Pune District Court that the rival goods and their trade channels were different, and therefore, there was no likelihood of any confusion. On the question of confusion, Cutis raised an interesting contention that due to use of Trade Mark by Serum for Serum’s Goods, the public may be misled into buying Cutis’ Goods assuming their effectiveness against Covid-19. The High Court observed that if such a confusion did arise, it would be because of the goodwill in the Trade Mark generated by Serum. It was further observed that Cutis had to show that Serum was passing off Serum’s Goods as Cutis’ Goods and not vice versa, and to that extent, the contention of Cutis was self-destructive. The High Court also took into the account the over-arching aspect of public interest and observed that restraining Serum from using the Trade Mark in relation to Serum’s Goods would disrupt the administration of the vaccination program and would have a substantial impact on public health.

The High Court also noted that since the matter before it was an appeal, as per settled principles of law, it could not interfere with the exercise of discretion by the Pune District Court unless such discretion was exercised in an arbitrary or perverse manner or was contrary to settled principles of law governing injunctions. The High Court observed that discretion exercised by Pune District Court was not arbitrary or perverse, and as such, the Appeal was dismissed.

Comment

The Decision yet again emphasises the rights of a party who is a prior and extensive user of a mark over a party who may have been the first to apply for registration of the same. Interestingly, it seems that the contention of ‘prior use’ by Serum was raised for the first time before the High Court. Such contention neither appears to have been made in the proceeding before Pune District Court nor is it apparent from the records of Trade Marks Registry given that both Cutis and Serum had filed applications for the Trade Mark on a ‘proposed to be used’ basis. Nonetheless, the High Court did consider Serum as prior user of the Trade Mark. The Decision, in tandem with the settled position, gives primacy to the public interest aspect of a trade mark dispute between two private parties.


The views of the author(s) in this article are personal and do not constitute legal / professional advice of Khaitan & Co. For any further queries or follow up please contact the authors at editors@khaitanco.com.


Photo by Punit Paranjpe/The The India Today Group

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