In a Welcome Development, Delhi High Court Rejects Prayer for Grant of Punitive Damages in Trademark Infringement Suit

On this Blog, we have previously covered judgments dealing with claims of passing off and trademark infringement in the domain of pharmaceutical products [see here, here and here].
One common thread that runs through all these judgments is the heightened sensitivity of courts to the negative public health ramifications that are likely to result from a failure to promptly and decisively injunct the sale of deceptively similar medicines of a substantially inferior quality.

Indeed, after the Supreme Court articulated the ‘exacting judicial scrutiny’ standard for assessing the likelihood of confusion in pharmaceutical products in its 2001 judgment in Cadila Healthcare versus Cadila Pharmaceuticals, courts have displayed a tendency to rule in favour of plaintiffs even when there exists a modicum of confusion.

In keeping with this trend, a recent judgment of the Delhi High Court [GlaxoSmithKline Pharmaceuticals versus Sarath Kumar Reddy G] reiterates the importance of restraining the sale of medicines which are deceptively similar to those sold by the plaintiff.

Facts and contentions

The plaintiffs, GlaxoSmithKline Pharmaceuticals and Smithkline Beecham Limited, engage in the marketing and sale of a large array of pharmaceutical preparations under such famous brand names as HORLICKS, AQUAFRESH and SENSODYNE. According to them, the first plaintiff is a market leader in the sale of pharmaceutical products in India, with a turnover of 3021 crores in 2013.

The acronym ‘GSK’, which they have been using since 2000, has come to be recognized as a key marker of their products.

According to the plaintiffs, while browsing the website of the Registrar of Companies in April 2009, they learned of the use of the acronym ‘GSK’ by the defendant, GSK Lifesciences Private Limited, as part of its trade name.

Not only does the acronym ‘GSK’ form part of the defendant’s tradename, argued the plaintiff, but it is also inscribed in their logo.

When they sent a cease and desist letter to the defendant, the latter justified the use of the acronym on the ground that it refers to his initials, Gadikota Sarath Kumar Reddy.

Since the plaintiffs have registered the mark ‘GSK’ in a large number of classes, most significantly class 5, relating to medicinal and pharmaceutical products, they contended that the conduct of the defendant amounted to trademark infringement within the meaning of Section 29(5) of the Trademarks Act, 1999. As the defendant did not enter appearance despite the issuance of a summons by the court, the court decided to proceed ex parte.

Holding of the court

The Court commenced its analysis by noting that a bare perusal of the packaging of the defendant’s product makes it clear that they have been using the ‘GSK’ mark in the manufacturing and marketing of their products. This being the case, in light of the fact that the plaintiff’s mark has been duly registered in the class of products which the defendant is dealing in, the Court arrived at the conclusion that the use of the ‘GSK’ mark by the defendant in its tradename and logo constitutes trademark infringement.

It buttressed its conclusion by citing the Supreme Court’s judgment in Milmet Oftho Industries versus Allergan Inc. which had reaffirmed the need to adopt the ‘exacting judicial scrutiny’ standard in such cases.

While the judgment otherwise appears to be a textbook application of the principles governing the grant of injunction in cases involving trademark infringement of pharmaceutical products, what sets the judgment apart is the Court’s refusal to grant punitive damages as a natural corollary of a determination in the plaintiffs’ favour.

More specifically, after taking note of the plaintiffs’ prayer for the grant of punitive damages on the basis of the now infamous ruling in Time Incorporated versus Lokesh Srivastava and Anr., the Court goes on to squarely reject this prayer. Holding that the plaintiffs have not put forth any concrete material to indicate the extent of the sales of the infringing product or provided any data about the exact quantum of losses suffered by them, the Court notes that the circumstances warranting the grant of punitive damages have not been shown to exist in this case.

As we’ve previously noted on this blog [see here and here], the Delhi High Court’s jurisprudence on punitive damages is mired in considerable confusion and lacks a coherent and legally defensible rationale. In a recent article on this subject, I had reiterated the need for the Court to arrive at a conclusion as to the grant of punitive damages after conducting a distinct factual and legal inquiry in contradistinction to viewing the grant of such damages as a logical extension of a ruling in the plaintiff’s favour.

Not only does the Court conduct such an inquiry in this case, but it also does not allow its determination on the merits of the case to colour its opinion about the prayer for the grant of exemplary damages. If the Court continues to faithfully adhere to the approach outlined by it in this case for assessing the legal tenability of prayers for the grant of punitive damages, it will be able to make significant progress in undoing the damage that its jurisprudence on damages in IP cases has caused.

Rahul Bajaj

Rahul Bajaj is a fourth year law student at the University of Nagpur. His interest in intellectual property law began taking a concrete shape when he pursued Professor William Fisher's online course on copyright law in the second year of law school. Since then, Rahul has worked on a diverse array of IP matters during his internships. He is particularly interested in studying the role of intellectual property law in facilitating access to education.

One comment.

  1. Stacy

    The problem is that decisions like these made by the SC will affect future cases on trademark infringement on pharmaceutical products and it would just worsen.


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