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Bombay HC dismisses Appeal against use of “Covishield” Trademark by Serum Institute- An In-depth Analysis

May 12, 2021

In a recent case namely, Cutis Biotech v. Serum Institute of India Pvt. Ltd.[1], the Division Bench of the Hon’ble High Court of Bombay while dismissing an appeal to restrain use of the trademark “COVISHIELD” by the Serum Institute of India (hereinafter referred to as the Respondent) was of the view that 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.

Timeline and Brief Facts of the case

  • The subject matter of the present Appeal revolves around the trademark “COVISHIELD”.
  • In the case both the Appellant and the Respondent applied for registration of the impugned trademark. Both the applications are pending.
  • The Appellant commenced its business of selling pharmaceutical products in the year 2013 at Nanded, Maharashtra.
  • Serum Institute, a company incorporated under the Companies Act, 1956 at Pune started its business in the year 1966. The Respondent company are manufacturers of Vaccines & immuno-biologicals and has won various awards in this field.
  • The Appellant on April 29, 2020, filed a trademark application vide Application No.4493681 for registration of trademark ‘COVISHIELD’ under Class-5 in respect of veterinary, Ayurvedic, allopathic, medicinal and pharmaceutical.
  • Thereafter on June 06, 2020, the Respondent applied for registration of trademark ‘COVI SHIELD’ under vide Application No.4522244 for vaccine under Class-5.
  • In a subsequent development, the Government of India, on December 10, 2020, published the COVID-19 vaccine procedure, which referred to the Respondent’s trademark ‘Covishield’  Aggrieved by the same, the Appellant on December 11, 2020 filed a Trademark Suit in the District Court, Nanded seeking to restrain Serum Institute from using the mark ‘Covishield’ invoking the law of passing off.
  • On the very next day i.e. December 12, 2020, Cutis Biotech filed another application in the Trademark Registry for registration of trademark ‘Covishield” in Class-5 for vaccine for human use and others.
  • The Respondent in response to the aforesaid suit filed at Nanded, sought rejection of the plaint under Section 134 (2) of the Trademark Act, 1999 and contented that the suit should have been filed under the Commercial Courts Act, 2015. However, no orders were passed by the Court. In a subsequent development, the Appellant withdrew the trademark suit filed at Nanded District Court and filed the present Commercial Suit for temporary injunction against the Respondent in the District Court (Commercial Court), Pune.

Observations and Order of the District Court

The District Court while hearing the suit noted that both Appellant and Respondent to the suit did not have registration for the trademark ‘Covishield’.

While observing that the Appellant had earned no goodwill in a short time and that there was no dishonest deception by the Respondent for passing off or to divert the business of Appellant, the District Court dismissed the suit and refrained from issuing an injunction restraining the use of the impugned mark by the Respondent.

It would be pertinent to mention here that the District Court while arriving at its decision also took into consideration the diabolical situation brought about by the pandemic and the importance of the vaccine for the general public in the present times.

Aggrieved by Lower Court’s order, the Appellant preferred an appeal against the Respondent before the Hon’ble High Court of Bombay.

Appellant’s Contentions

That the trademark ‘Covishield’ has become a distinct product and business of Cutis Biotech. That in a matter of seven months, the turnover of Appelant was Rs.1600152/- and it spent Rs.122500/- towards advertising the products.

That the trade connection between the products of both the parties and the medicinal products of the parties is sufficient for confusion to arise, and even if trade channels are different, so long as the marks are deceptively similar, a case of passing off is made out.

Respondent’s Contentions

That it coined the mark ‘Covishield’ in March, 2020 itself and evidenced the same through an inter-office communication between the Purchase Department to obtain packaging material for the ‘Covishield’ vaccine.

That the Respondent had issued a statement in March, 2020 that they are investing around USD 100 million on the COVID-19 vaccine.

That the Respondent’s use of the mark is genuine as the Union Health Minister also made a statement on April 25, 2020 with respect to trial of Serum Institute. That thereafter the Respondent received virus seed, and cell bank from Oxford University and permission was granted by DCGI and it is only after that i.e. on June 06, 2020, that the Respondent applied for registration of ‘Covishield’ trademark.

Court’s Stance

The Hon’ble Division Bench of the High Court of Bombay while dismissing the Appeal, made the following observations and order in the case:

Passing Off action

The Court noted that as in the present case, impugned trademark was not registered by either of the parties, the present case was based on the action of passing off.

While substantiating on the aspect of passing off, the Court shed light on the Principles of the Classical Trinity[2], which postulates that in order to establish passing off action, the applicant must firstly establish goodwill and reputation attached to his goods and services. Secondly, the applicant must show 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 thirdly that the Applicant is likely to suffer or has suffered damage.

While basing its observations on the Classical Trinity principle, the Court noted that the foundation of passing off action in the case was the existence of goodwill of the Appellant and also as to who conceived and adopted the mark earlier i.e. prior user of the impugned mark.

It further opined that in order to establish a prima facie case of passing off and determining that whether the balance of convenience was in the favour of Appellant or not, the relevant factors in the case would have to be considered cumulatively.

Prior use of the mark COVISHIELD

With reference to Appellant’s plea on prior use of the impugned mark, the Court was of the view that the same was not adequately substantiated by the Appellant. The Court was of the view that the Appellant failed to adduce enough evidence showing that it received the products bearing the brand ‘Covishield’.

While throwing light on the aforesaid, the Court pointed out that while proving prior use, the details are necessary to evidence that Appellant was a prior user and had acquired goodwill.

The Court on the other hand noted that the Respondent company had adequate evidence to show prior adoption and user as well as continued use of the mark “Covishield”.

That the Respondent placed on record that it has produced 60 million doses of the ‘Covishield’ vaccine per month and has supplied 48 million doses to the Government of India.

In view of the facts and documents placed by both the parties on record, the Court was of the view that the Appellant lacked enough evidence to substantiate that it was prior user of the mark and that the details produced by Respondent evidenced that it had coined the word ‘Covishield’ and had also took substantial steps towards its development and manufacture.

Acquired Goodwill and Reputation

That the turnover and amount spent by the appellant if spread over seven months would come around less than rupees two 2 lakh a month. The Court while deciding the claim of acquired goodwill and reputation by the Appellant opined that to lay the foundation for the acquisition of goodwill, the turnover need not be enormous. If the applicant is a small businessman, it cannot be said that he has not earned goodwill because there is no substantial turnover.

That the Appellant sold hand sanitisers and disinfectants and such products had high demand during the pandemic, hence the turnover of Rs.16 lakhs for seven months was not a significant amount.

The Court further noted that the evidence placed on record shows by the Appellant did not establish sufficient goodwill regarding trademark ‘Covishield’.

Likelihood of deception

While considering the aspect whether the products of Appellant and Respondent are in the common field or not, the Court was of the view that confusion should arise in the minds of the customers of average intelligence and imperfect recollection.

The Hon’ble Court made an exemplary remark in the case by stating that a common-sense approach was to be adopted in the present case while determining whether the Respondent’s conduct was allegedly calculated to pass off the goods of the Appellant or at least create confusion in the mind of the customers.

The Court noted that in the present case there was no likelihood of confusion between the products of both the parties as the vaccine ‘Covishield’ produced by Respondent was not available across the counter and would be administered through Government agencies. Hence, the buyer of the product ‘Covishield’ of Respondent was the Government of India.

Hence, it was was too farfetched to hold that there would 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 sanitiser products as sold under the Appellant’s brand.

Restraining the use of Respondent’s mark and subsequent disruption in Vaccine Administration Programme

While pronouncing the present order, the Hon’ble Court also shed light on the aspect on implications and ramifications on the general public by restraining use of the trademark “Covishield”.

The Court noted that the Respondent’s vaccine ‘Covishield’ is being administrated from January 16, 2021, for which the Government of India identified almost 300 million people for the vaccine in the first round, and the first order for 11 million doses for the ‘Covishield’ vaccine has been placed. The second dose would be administered after the stipulated weeks. That the Government has also placed a further purchase order for ten crore doses of ‘Covishield’ and that the Respondent has also placed on record that it has spent Rs.28 crore on the development, research and is expected to spend a further Rs.20 crore.

Hence, considering the above facets of the case, the balance of convenience was not in favour of the Appellant and that the grant of injunction against Respondent for use of the mark “Covishield” would have a serious impact on its business.

That a temporary injunction against the Respondent to discontinue the use of mark ‘Covishield’ will also cause confusion and disruption in the Vaccine administration programme of the State and the same would have large scale ramifications traversing beyond the parties to the suit.

Conclusion

The Hon’ble Bombay High Court’s order in the present case is an exemplary one. The Court has endeavoured to maintain a delicate balance between IP rights and interests of the general public. The Court in the case also shed its view on the established principles of trademark law relating to passing off action, acquisition of goodwill and likelihood of deception.

Securing IP rights while serving public interest

The element of intellectual property and public interest can be aptly derived from Article 7 of the TRIPS (Trade Related Aspects of Intellectual Property Rights) which provides that the protection and enforcement of IPR should be conducive to social and economic welfare, and to a balance of rights and obligations. Further Article 8 postulates that Member States shall adopt measures necessary to promote the public interest, including to protect public health. Hence, the present order of the Court is also in harmony and conformity with the existing International Laws and Conventions.

Also read Innovative Relationship of Patents and Business Entities during COVID-19

India has been battling against the global pandemic for more than a year now. The health casualties and disruption being caused in the lives of people in the wake of the pandemic is unprecedented and uncalled for. In such times, the vaccine administration has brought a bleak ray of hope and any order or suit that interferes with its smooth administration shall be crumbled with stiff hands.

[1] APPEAL FROM ORDER NO. 53 OF 2021

[2] Perry v Truefitt 6 Beav. 66

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