On August 16, the Delhi High Court passed an order in Sun Pharma Laboratories Ltd. v. Finecure Pharmaceuticals which is sure to have caught the attention of trademark lawyers. The court refused to grant an interim injunction to the plaintiff despite finding that the defendant had infringed the plaintiff’s mark. The court reasoned this by holding that prima facie trademark registration seems invalid, questioning the veracity of the registration order by the Trademark Registry and also finding that since the defendants were not a party to the above order, it cannot impact the plea of invalidity raised by them. The court also considered the defendant’s allegations that the plaintiff has concealed material facts. The conflicting marks here are ‘Pantocid’ (Plaintiff’s) and ‘Pantopacid’ (Defendants) are both used as anti-acidity drugs.
Rejecting or modifying injunction orders on grounds of unclean hands is not unheard of (for instance see here and here). What’s unique this time is the court’s interpretation of the interplay between the provisions on the presumption of validity of trademark registration, infringement of trademark, and the rights accorded by the registration. The court held that though the validity of a trademark does not play a role in the infringement analysis, u/s 29, once the infringement is established, the right to seek remedy becomes contingent on the validity of the trademark. The court reasoned this because of the emphasis on the validity of a mark to exercise rights conferred by registration under Section 28(1). Therefore the court has harmoniously tried to segue validity as a factor under Section 29 by reading the provision on “infringement of registered mark” and “infringement of (validly) registered mark.” In doing so, the court has also clarified that the presumption on the validity of trademark registration is only prima facie and if the defendant is able to set a strong case to displace the prima facie presumption, the court will be open look past this presumption (something similar has been seen in the DB order in Marico Limited v. Agro Tech Foods Ltd.)
However, I think the most contentious part of the order was the court’s observation on the order granting trademark registration. There are two facets to this-
First, the court’s opinion that the registration was granted disregarding the relative ground of refusal u/s 11(1)(a), which prohibits registration of identical trademarks for similar goods and how the exception of “other special circumstances” cannot be determined on the whims of the Registrar.
Second, the defendants not being bound by the order granting registration to the plaintiff on “Pantocid” mark. For the latter part, the court relied on State of Punjab v. Amar Singh, but interestingly the Amar Singh order talks about appeals against the impugned order, whereas in the present case there was no “appeal” against the order of the Registrar per se. It is also worth noting that the defendant had not opposed “Pantocid” mark when it was applied for registration, but rather relied on opposition by a proprietor of a previously registered, identical mark to argue invalidity. Regardless of what was argued and what could have been done instead, the court’s observation restricting the effect of the order granting the registration serves as another instance of diluting and undermining the prosecution stage.