CANDID vs. CANDEX-B judgment: A conundrum!

By Pranit Biswas and Sehar Sethi

Brief Facts

In the present case, Karlin Pharmaceuticals & Exports (first respondent) had filed Application No.749366 dated March 21, 1997 (on a proposed to be used basis), seeking registration of the trademark ‘CANDEX-B’ for pharmaceutical products in class 5. The mark was published in the Trade Marks Journal on August 16, 2007. Subsequently, the appellant, Glenmark Pharmaceuticals Ltd. filed Opposition No. 716540 against the said application on January 22, 2008, inter alia on the basis that the said mark is similar to their prior mark ‘CANDID’. Subsequently, the Counter Statement was filed by the respondent on April 11, 2008. Subsequently, after the prosecution of the application and the hearing in respect of the captioned matter, by the impugned order dated July 26, 2013 passed by the Registrar of Trade Marks (second respondent), the opposition was rejected and the mark was granted registration.

Therefore, the present judgment is in the appeal against the said Registrar’s order dated July 26, 2013.

Contentions of the Appellant

1. Trademark adoption and use: The appellant coined and has been using the trademark “CANDID” for dermatological products since 1978-79, and these products have been marketed continuously since then.
2. Alleged Dishonest Adoption: The first respondent adopted the trademark “CANDEX-B” much later than the appellant, which the appellant’s counsel argued was done to exploit the goodwill of “CANDID.”
3. Well-Known Trademark: “CANDID” was declared a well-known trademark by the Bombay High Court in Suit No. 182 of 2013 and is listed in the Trademarks Registry’s register of well-known marks.[1]
4. Assessment of Impugned Order dated July 26, 2013 passed by Registrar of Trade Marks: The counsel criticized the impugned order, claiming the Registrar wrongly concluded that “CANDEX-B” was distinct from “CANDID” negating the risk of public confusion. They further argued that given both trademarks are for dermatological products, there is a strong likelihood of public confusion.

Contentions of the Respondent

1. Delay in initiating legal action: The counsel emphasized that the mark CANDEX-B was coined during the year 1997 and subsequently, the drug license was obtained in the name of the predecessors of the Respondent (M/s. Karlin Pharmaceuticals) in July 1997. The respondent hence claimed that the said mark had already been using the mark for more than 10 years at the time of the opposition (in 2008), wherein, the products of the respondent were marketed and sold under the name CANDEX-B, there had been no prior legal action initiated against use of the same either by the appellant or by anyone else. The respondent further claimed that the right to the mark CANDEX-B had been acquired by them before commencement of the Act on September 15, 2003 as the mark had already been in use at that time for more than 6 years. Hence, arguing that there has been a considerable delay in initiating legal action against use of the said mark even though the same had been available in the market for more than 10 years.
2. Honest Concurrent Use: The counsel argued that, given these circumstances, the first respondent is entitled to the benefit of Section 12 of the Trade Marks Act, 1999, as an honest and concurrent user of the trademark as the trademark “CANDEX-B” was honestly coined, deriving its name from “candidiasis,” the condition treated by the product.
3. Relevance of Well-Known Status: Regarding the appellant’s claim that “CANDID” is a well-known trademark, the counsel pointed out that the well-known status was granted in 2013, whereas the first respondent’s application was filed in 1997, making the declaration irrelevant in the present matter.

Rebuttal by the Appellant

The appellant argued the following in the rejoinder:

1. Scope of Treatment: In response to the claim that “CANDEX-B” was derived from candidiasis, the appellant argued that the product also treats other conditions like pityriasis versicolor and dermotophytosis, not just candidiasis, which is more specifically referred to as mucocutaneous candidiasis.
2. Failure of conducting prior search: The appellant’s counsel argued that the first respondent failed to conduct a trademark search, neglecting public interest in pharmaceuticals.

Registrar’s Impugned Order dated July 26, 2013

In the impugned order, the second respondent rejected the appellant’s opposition based on absolute grounds. The appellant argued that “CANDEX-B” was a common trademark derived from disease names and common ingredients, thus lacking distinctiveness. However, the respondent found that trademarks must be considered as a whole, not in parts. It was concluded that “CANDEX-B” was a coined word, capable of distinguishing the applicant’s goods in the marketplace. The addition of “EX-B” made the trademark distinctive. As a result, the opposition under Section 9 of the Trade Marks Act was dismissed.

Judgment

1. The Hon’ble High Court at first discussed that the respondent’s use of the trademark “CANDEX-B” cannot be considered honest and concurrent under Section 12, as their use began about 20 years after the use of “CANDID“. For an honest and concurrent use defence, the use must precede the application date. Thus, the respondent’s use does not meet these requirements.
2. On the issue regarding whether there is a likelihood of deception or confusion, the court discussed that the respondent’s products, like the appellant’s, are used to treat dermatological conditions in humans. Under Section 11, which protects public interest, the Registrar must assess the likelihood of confusion. The appellant argued that the first respondent failed to conduct a trademark registry search, which would have revealed the appellant’s prior use. This failure to conduct due diligence weakens the first respondent’s position.
3. Although the appellant’s trademark was declared well-known in 2013, after the first respondent’s application, this declaration indicates the widespread recognition of the appellant’s mark among the public. The court considered this in assessing the likelihood of confusion. The court placed reliance on Cadila Health Care Ltd. v. Cadila Pharmaceuticals[2], where the Supreme Court emphasized that the risk of public confusion and deception should be given utmost importance, particularly in the context of pharmaceutical products.

The court concluded that there is a likelihood of public deception or confusion based on several factors as listed below:

1. the appellant’s trademark “CANDID” was adopted nearly 20 years before the first respondent’s “CANDEX-B”;
2. both trademarks are used for dermatological products for humans;
3. there is significant phonetic similarity between the two marks; and
4. the appellant’s trademark was declared well-known.

These factors, particularly the phonetic similarity and prior use, led the court to determine that confusion among the public was likely. The court found the conclusions in the impugned order unsustainable, even when comparing the trademarks as a whole. As a result, the impugned order was set aside, and the registration of trademark No. 749366 was cancelled.

Strengthening the Respondent’s Case: Alternative Arguments

The High Court of Madras, while cancelling the registration of trademark No. 749366 citing likelihood of confusion between the two marks and furthering public safety and health, upheld the core tenets regarding pharma trade marks laid down in the Cadila v. Cadila case over two decades ago.

However, in view of the judgment, the following arguments may have been advanced by the Respondent for a stronger defence though, are not reflected in the judgment.

1. Public Search for the word mark CANDEX does not reveal the mark CANDID:
   1. Wordmark Search
      The result for the word mark “contains” and “match with” search of CANDEX in class 05 (pharmaceuticals and other medical and veterinary products) revealed a total of three marks however, neither CANDID or any of the marks of Glenmark Pharmaceuticals were revealed in the said search. Relevant snapshot of the search report is pasted below:
      
   2. Phonetic Search The result for a phonetic search of the mark CANDEX revealed a total of 414 results, however, it is pertinent to mention that none of the results revealed Glenmark’s mark CANDID. Relevant snapshot of the search result has been pasted below:
      

      A conscious perusal of the search reports reveals that neither a word mark search nor a phonetic search revealed the mark CANDID of the appellant, thus contributing to the stance adopted by the Respondent regarding inherent and phonetic dissimilarity between the said marks.

2. Anti-Dissection Rule and honest adoption: The anti-dissection rule asserts that when comparing competing trademarks, the marks should be considered in their entirety, rather than being broken down into separate parts. This principle is based on the idea that the overall commercial impression formed in the mind of the average consumer comes from the entire trademark as a whole, not from its individual elements or components. In Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (2001)[3], the Supreme Court of India held that the marks must be viewed as a whole to determine if they would likely cause confusion among consumers, especially in the pharmaceutical industry where there is a risk of serious harm due to confusion between similar-sounding drugs.

   Applying the said principle to the present case, while comparing the rival marks CANDEX-B and CANDID, dissecting the word “CAND” would essentially be in violation of the anti-dissection rule. When comparing the two marks as a whole there are distinct dissimilarities between the pronunciation of the two marks resulting in phonetic dissimilarity.

   Further, the name CANDEX-B as adopted by the Respondent had been derived from the disease “Candidiasis”, fungal infection caused by Candida, a type of yeast that naturally lives in small amounts in the human body. The said drug was exclusively meant for treatment of Fungal Infections associated with CANDIDIASIS, thus indicating the honest and bonafide adoption. In this regards it is pertinent to note that the prefix CANDI/CAND is common to trade as part of a common salt and also discussed by the Respondent in the Counter Statement filed by them which highlights that marks such as CANDICIDE (application filed by Ambalal Sarabhai Entp.Ltd., Baroda in 1983), CANDIOMYCIN (application filed by Shaikh Aslam Mohamed in 1952) CANDUR (application filed by  Behringwerke Aktiengesellschaft IN 1962) and CANDEX (application filed by May & Baker Ltd. England in 1978) commonly use the said prefixes. However, when the mark CANDEX-B is viewed as a whole and not dissected to separate the words CAND and EX-B, the same composes a distinctive mark.

   That said, it is pertinent to mention that Courts in India pay due attention to both principles i.e., the “Anti-Dissection Rule” and “Rule of Dominant Feature” in cases of trademark misuse and infringement. As mentioned in the case of Bennet, Coleman And Company Limited v. Fashion one television LLC AND Anr. [C.O. (COMM.IPD-TM) 255/2021) and C.O. (COMM.IPD-TM) 144/2022], “Thus, the principle of ‘anti-dissection’ and identification of ‘dominant mark’ are not antithetical to one another and if viewed in a holistic perspective, the said principles rather compliment each other.”

3. Schedule H of Drugs and Cosmetics Rules 2006: Schedule H of Drugs and Cosmetics Rules 2006 outlines the classification of drugs that require a prescription for sale in India. It is part of the Drugs and Cosmetics Rules, 1945, which regulate the manufacture, sale, and distribution of drugs and cosmetics in India. Schedule H is specifically concerned with prescription-only drugs. Drugs listed under Schedule H are classified as prescription drugs and can only be dispensed by a pharmacist when accompanied by a valid prescription from a registered medical practitioner.

   The salt composition of CANDEX-B comprises of Beclometasone (0.025% w/w) + Clotrimazole (1% w/w), wherein Clotrimazole has been included in Schedule-H of the Drugs and Cosmetics Rules 2006 which implies that the same is a prescribed drug and cannot be sold over the counter without a valid prescription from a registered medical practitioner.

   As discussed in the present judgment, the court iterated that while adjudicating regarding likelihood of confusion of pharmaceutical drugs the threshold is to be viewed from a lenient lens keeping in mind the harms of confusion in two drugs on the public health, however, a plausible argument that the respondent could have adopted for the same laying emphasis on the fact that CANDEX-B is a Schedule H drug is that since the same is a prescribed drug which can only be sold by means of a valid prescription, it eliminates the possibility of public confusion and further places the responsibility of prescribing the correct drug on the medical practitioner. This further invokes the doctrine of “Reasonable Person” Standard wherein, this doctrine is applied to determine whether a healthcare provider’s actions meet the standard of care expected in the medical community and places the burden of exercising higher standard of care. Thus, it would be reasonable to presume that the medical practitioner has practiced due care while prescribing drugs such as CANDEX-B.

Nevertheless, it is to be kept in mind that recognized well-known trade marks have the privilege of broader protection and as such, while it can be argued that CANDID vs. CANDEX-B is a very debatable proposition, the fact that CANDID has been recorded as a well-known trade mark likely pipped the scale in Glenmark’s favour.

[1] (T) CMA (TM) No.40 of 2023

[2] (2001) 5 SCC 73

[3] (2001) 5 SCC 73