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Petitioner: Messrs PLATINUM PHARMACEUTICALS COMPANY (PRIVATE) LIMITED VS Respondent: STAND PHARM PAKISTAN (PRIVATE) LIMITED and 3 others
Court Name: Sindh High Court Judge(s): Anwar Zaheer Jamali, Muhammad Ather Saeed Title:Messrs PLATINUM PHARMACEUTICALS COMPANY (PRIVATE) LIMITED vs STAND
PHARM PAKISTAN (PRIVATE) LIMITED and 3 others Case No.: High Court Appeal No,36 of 2005 Appeal No,36 of 2005 Date of Judgment:2006-02-17 Reported As: 2006 CLD 1109 Result: Appeal allowed Judgment ORDER ' MUHAMMAD ATHER SAEED, J.---This High Court appeal has been filed by a Private Limited Company carrying on business of manufacturing of pharmaceutical drugs, against the order of the learned Single Judge dated 2-1-2005, whereby the learned Single Judge had dismissed its application under Order XXXIX, rules 1 and 2, C.P.C. 2. Brief facts of the case are that the appellant started research for development of a drug (tablets) for muscular pain somewhere in the year 2000 and adopted the name/trade mark Zaniflex for these tablets. The appellant being aware that the manufacture of new drug can only be undertaken after being registered with the Ministry of Health and grant of permission to manufacture and market the same, applied to the Ministry of Health for its registration and permission on 9-11-2000. The appellant also applied to the Registrar for registration of Trade Mark "Zaniflex" in respect of pharmaceutical tablets in clause 5 of international classification of the drugs as adopted by Pakistan in the Schedule IV of Revised Trade Mark Rules, 1963 in the Trade Mark Registry of Pakistan. In response to the application the Trade Mark Registry vide its acknowledgment receipt dated 17-2-2001 allotted No,168485 in clause 5 to said application of the appellant. The Ministry of Health vide its letter dated 15-4-2002 registered the said drug of the appellant vide Registration No,024476 and issued permission to manufacture and market the same. The generic name of the said drug is 'Tizanidine' and the said drug is used for treatment of muscular pains. After getting the registration of the drug "Zaniflex" on 15th April, 2002 from the Ministry of Health, the appellant before starting preparation for manufacture and launch of its drug under the said Trade Mark, out of abandon precaution applied again to the Trade Mark Registry to
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search if any other drug is registered the said Trade Mark or any name confusingly similar to it. And after receiving report dated 19-8-2002 by the Trade Mark Registry that there was no trade mark registered or pending for registration under the above name. Style or any similar name by any other person or persons, started the process of manufacturing and marketing the tablets under the above name. During this period it came to their knowledge that the Ministry of Health had also allowed the respondent No,1 to manufacture the same drug under the Trade Mark Zanaflex on 30- 5-2002 and therefore, they requested the Ministry of Health to direct the respondent to change the name of the drug. 3. This Ministry of Health vide its Letter No,F-6-12/1- Reg-II dated 31st August, 2002 requested the respondent No,1 to change the said name as it is based on resemblance with already registered drug "Zaniflex" tablets. The respondent No,1 vide his letter dated 6th September, 2002 replied to the above and requested the Ministry of Health to direct the appellant company to change the name of its drug as the respondent No, I had already spent a huge amount of money in produc ion of the said drug from the second week of June, 2002 and dispatched huge quantities of the same throughout Pakistan by the end of June, 2002 and had also taken other steps for training technical staff and authorized dealers for marketing the above drug. However, the Ministry of Health not being satisfied wrote another letter dated 24th March, 2003 in which the letter of the respondent dated 6th September, 2002 was acknowledged and advised them to change the aforesaid name. The respondent No,1 again reiterated their comments vide their letter dated 9th April, 2005. 4. Being aggrieved by these letters, they also filed a writ petition in Lahore High Court, Rawalpindi Bench against the Assistant Drug Controller, Ministry of Health, Registrar of Trade Marks and the appellant on 11th August, 2003. The appellant filed its written statement before the Lahore High Court and attended the proceedings before the Rawalpindi Bench, but when the matter could not be proceeded with for more than six months, the appellant filed a suit for infringement, passing off, injunction, damages and accounts before this Court on 20th April, 2004 and filed application under Order XXXIX, rules 1 and 2, C.P.C., which was dismissed by the learned Single Judge vide his order dated 2nd January, 2005. Hence this appeal. 5. We have heard Mr. Fazil Bharucha, learned counsel for the applicant and Mr. Farooq Amjad Mir assisted by Mr. M. Masood Khan, the learned counsel for the respondent and have perused the records of the case including the impugned order. Before highlighting the arguments of the learned counsel, it will be appropriate to reproduce the reasons on the basis of which the learned Single Judge dismissed the application for injunction, which read thus:- "The documents of the plaintiff disclosed that in August, 2002 it came to know that the defendant No,1 was using the Trade Mark Zanaflex on their products and therefore, it issued letter dated 20-8- 2002 to the defendant No,3 complaining to that effect. The plaintiff also issued legal notices dated 2-8-2003 to the defendant No, 1. According to the Annexure-F/2 to the plaint the plaintiff first time manufactured the Zaniflex in September, 2002 and marketed it thereafter. The documents pertaining to the promotional expenses and salaries and allowances also pertained to the period after September, 2002. See Annexure-G/ 1 to the plaint. ' As against this the defendant No,1 along with his counter affidavit and the written statement placed copies of the documents including the cash memos., bills of entry, commercial invoice, the letter of credit all of which revealed that they entered into import, manufacture and sale of their Zanaflex w,e,f, May, 2002. See annexure-A to H to the written statement as well as to the counter- affidavit. ' From the above, it is clear that the prior user of the word Zanaflex was the defendant No,1 and not the plaintiff as alleged in the plaint. In the cases of such conflicts, user attains great significance. It is entirely question of who gets there (in the market) first. The party establishing prior user has a better right over the competing party, which commenced using its trade mark subsequently.
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Reliance is placed upon Raja Nib case reported in Anwar v. The Golden Pen Manufacturing Company PLD 1956 Sindh 345. Similar view has been expressed in the case of Ferozuddin v. Muhammad Shafi reported in PLD 1975 Karachi 486. ' In addition to the above, it is pertinent to note that the plaintiff admittedly had the knowledge of the defendant's use of the disputed mark prior to August, 2002 but it did not take any immediate steps to restrain the defendants from using the same. The plaintiff remained content up to April, 2004 only with the correspondence exchanged by it with the defendants Nos.3 and 4 and a legal notice to the defendant No,1. This suit was filed in April, 2004 after a delay of about 18 months of the knowledge of plaintiff of the alleged passing off. The counsel for the plaintiff had not been able to satisfy the Court for the delayed institution of the suit. The said delay provided sufficient time to defendant No,1 to manufacture and, sell their products in the market and establish their business under the name and title of Zanaflex." 6. The learned counsel for the appellant submitted that appellant is the proprietor of Trade Mark Zaniflex derived from the generic name Tizanidine and after applying, to the Registrar Trade Marks for the registration of trade mark/ trade name of Zaniflex on 13-1-2001 and getting registration with the Ministry of Health on 15-4-2002, he established a letter of credit on 4-5-2002 for import of raw material Tizanidine which was cleared on 6-6-2002 and after manufacturing the drug he commenced the sale of Zaniflex tablets in September, 2002. 7. The learned counsel further submitted that the respondent No,1 initially obtained registration of his drug from the Ministry of Health in the name of 'Musculax' on 4-5-2002, which was more than 20 days after the registration of the appellant's drug. However, on 8-5-2002, he applied for changing the name to Myoflex and on 30-5-2002, he wrote another letter to Ministry of Health stating that the name may be changed to Zanaflex and the Ministry of Health granted the registration of the brand name Zanaflex to the respondent No,1 on the same date i,e, 30-5-2002. On the basis of comparison of the above dates, he said that being the proprietor of the earlier rights under section 2(xxxv) of the Trade Marks Ordinance, 2001 due to prior adoption of the brand name "Zaniflex" and by virtue of section 18(2) of the above Ordinance his Trade Mark "Zaniflex" is an earlier trade mark, therefore, it has to be given priority over the trade mark of the respondent No,1, On this point, he relied on the following case-law:-- (i) T.G. Balaji Chettar v. Hindustan Lever Ltd. Bombay AIR 1967 Madras 148; (ii) Abdul Aziz v. Seven-Up Co. Karachi and another PLD 1978 Karachi 10; (iii) Kabushiki Kaisha Toshiba (also Trading as 'oshiba Corporation) PLD 1991 SC 27. 8. Elaborating his arguments further the learned counsel submitted that it was not necessary that the trade mark has to be used in Pakistan prior to the filing of application for Registration thereof with the Registrar of Trade Marks as subsections (1) and (3) to section 22 of the Trade Marks Ordinance, 2001 allows an applicant to file application to the Registrar of Trade Marks on a bona fide intention to use also. In support of this contention, he also asserted that by virtue of section 33(3) of the Ordinance, the trade mark is registered from the date of the filing of the application. In support of the above contention he relied on the case of Mohan Goldwater Breweries (Private) Ltd. v. Khoday Distilleries Private Ltd. And another (Trade Mark Opposition, High Court Madras) IPLR v2 n2 July, 77. 9. He also argued that the order of the learned single Judge is based on misreading of evidence as he has accepted the contention of the respondent that manufacture and sale of "Zanaflex" commenced in May, 2002 but the only evidence which has been filed relate to printer's invoice and import document which are all pre-marketing documents. He said that the name of the drug "Zanaflex" was changed on 30-5-2002 and the bill of entry for raw material was cleared on 6-6- 2002 so even if it is assumed that immediately on clearance of raw material the drug was
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manufactured and distributed in the market there was no question that sale could have commenced before 6-6-2002. 10. Explaining the reasons for filing this suit in April, 2004 he submitted that immediately on receiving information that Ministry of Health had granted permission to manufacture a similar drug "Zanaflex" to the respondent, appellant wrote a letter to the Ministry of Health requesting them to direct the respondent to change the name of the drug and the Ministry after considering the provisions of his letter sent a letter to the respondent directing them to change the name of the drug and when the respondent failed to take any action they also sent them a reminder. He submitted that the respondent then filed a writ petition before the Honourable Lahore High Court in which appellant was also impleaded as respondent, who filed its written statement and also attended the hearings of the case, but when no order was passed by the Honourable Lahore High Court and no action was taken by the Ministry of Health, despite the fact that no interim injunction was granted by the Lahore High Court to the present respondent and appellant's trade mark was being infringed, they filed the suit. He therefore, contended that appellant's suit is not hit by laches and it was filed when it became apparent that due to the obstacles created by the respondent no action was being taken by the Ministry of Health. 11. In support of his various contentions, learned counsel further relied on the following case-laws:-- (i) Glaxo Laboratories Ltd. England v. Assistant Registrar, Trade Marks, Karachi PLD 1977 Karachi 858; (ii) The Sanitas Co. Ltd. v. Condy 4 RPC 530; (iii) Ruston and Honrby Ltd. v. Zamindara Engineering Co. AIR 1970 SC 1649; (iv) Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. AIR 2001 SC 1952; (v) The Welcome Foundation Ltd. v. Karachi Chemical Industries (Pvt.) Ltd. 2000 YLR 1376; (vi) Sandoz Ltd. v. Pakistan Pharmaceutical Products Ltd. 1987 CLC 1571; (vii) Kabushiki Kaisha Toshiba v. Ch. Muhammad Altaf PLD 1991 SC 27; (viii)Dawood Cotton Mills v. Registrar of Trade Marks, Karachi PLD 1960 (W.P.) Kar. 547; (ix) Seven Up Co., Karachi and others PLD 1978 Karachi 10; (x) T.G. B Balaji Chettlar v. Hindustan Lever Ltd. AIR 1007 Madras 148. 12. On the basis of above arguments, appellants counsel prayed that the order of the learned single Judge rejecting his application under Order XXXIX, rules 1 and 2, may be set aside and the said application may be granted. 13. Replying to the arguments of the learned counsel of the appellant, the learned counsel for the respondent supported the order of the learned single Judge and submitted that the conclusion reached by the learned single Judge is unexceptionable and is based on proper appreciation of the law and the facts of the case. He submitted that two remedies were available to the appellant i,e, taking action on the infringement of the registered trade mark or for passing of the goods as those of the appellant. He further submitted that there is no infringement of the Trade Mark as the same is still an unregistered Trade Mark. He also submitted that the respondents have not passed of their goods as the goods of the appellant, but due to their extensive Marketing, the physicians are recommending their product due to its better quality and not due to mistaken belief of their goods being the goods of the appellant. He argued that passing off action can only be claimed if the appellant had enjoyed substantial goodwill due to its long use and other party is trying to pass off his goods as that of the appellant. He argued that in the present case the appellant have entered the market much after the respondent and if anybody enjoys goodwill in respect of this product, it is the respondent and not the appellant. He drew our attention to section 39(1) which provides that the person other than the proprietor of the trade mark may be registered as a registered user thereof in respect of all or any of the goods in respect of which it is registered. He also referred to illustration W' of section 54 of Specific Relief Act, which reads. As under:-
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"A improperly uses the trade mark of B, B may obtain an injunction to restrain the user, provided that B's use of the trade mark is honest." 14. He argued that the appellants use of trade mark is not honest because the appellant started using this trade mark much after the use of such trade mark by respondent and the appellants have been giving different dates while explaining that when they acquired knowledge about the respondent using their trade mark. He pointed out that the appellant had moved an application before the Ministry of Health somewhere in August, 2002 informing them that they had granted permission to the respondent to use the name of "Zanaflex", which is in respect of the same product as that of the appellant and confusingly similar and identical to the name "Zaniflex". In the plaint they alleged that they acquired the knowledge that the respondents were marketing their goods under the above trade mark somewhere in January, 2003. He drew our attention to the legal notice dated August 28, 2003 sent by the appellant's attorney Messrs Ali and Associates to the respondent in which the learned attorney had pointed out that the appellant had just learnt that the respondent has commenced the manufacturing, marketing and selling of identical product under the Trade Mark of "Zanaflex". He said that on the basis of his above submissions it is very clear that the appellants use of the Trade Mark "Zaniflex" is not honest and, therefore, no injunction can be issued in their favour to restrain the user/respondent. He contended that even otherwise respondents use of the trade mark is proper and in accordance with the relevant law. Regarding the creation of the name and Trade Mark "Zanaflex" he said that this name was coined by his staff and whereas Zana has been taken from the generic name "Tizanidine" and since it is a drug for use of muscular relaxation flex has been added and, therefore, the name of "Zanaflex" was created. He said that the appellant has no prima facie, case and the balance of convenience is also in favour of the respondent. In this connection he relied on the following case-laws:-- ' Sivakami Chi v. Narayana Chettiar AIR 1939 Madras 495 15. Exercising his right of reply, the learned counsel for the appellant submitted that there is discrepancy in the version of the learned counsel for the respondent and this discrepancy can be gauged by comparison of the provisions of paragraph 16 and paragraph 24 of the written statement filed before the learned single Judge. He said in paragraph 16 it was contended that the Ministry of Health verbally informed the respondent on 30th March, 2002 that the name of Mark "Myoflex" was not available and they recommended the name "Zanaflex". Which was agreed on by the respondent. However, in paragraph 24 it has been alleged that the term "Zanaflex" was coined by the staff of the respondent from the active inclusion of the drug i,e, "Tizanidine" and word relaxation without copying any other name. He also drew our attention to the parawise comments filed by the Ministry of Health in the pending writ petition before Lahore High Court, Rawalpindi Bench, in which they had denied that the petitioner was asked to change the name of the drug by them and alleged that the petitioner itself had requested for the change of the name to "Zana flex". He submitted that the contention of the respondents that they had acquired the use of the Trade Mark "Zanaflex" without knowledge is misconceived as they were fully aware that the appellant had acquired the permission for manufacturing drug with the name of "Zaniflex" and had also applied for its registration with the trade mark authority. He drew our attention to the permission letters granted to the appellant/ respondents in which conditions were specified for manufacturing the drug. The first condition is that the drug was to be marketed within six months of the receipt of the permission letter. He said that it is an admitted fact that appellant had marketed the drug in September, 2002 i,e, within the specified period of six months. He also drew our attention to condition No,9 of the permission letter where it is specified that the name shall be changed in case it has resemblance with already registered drug. He also took us to the contents of the undertaking filed by the respondent before the Ministry where the respondent had confirmed that the proposed name bears no resemblance and is not a copy of any other registered drug. He mentioned that the
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Ministry of Health vide its letter dated 31st August i,e, within three months of the issuance of permission letter vide its Letter No,F-6/Reg-2 dated 31st August, 2002 informed the respondent that their product bears resemblance with an already registered drug "Zaniflex" and requested them to change the name, but the respondent instead of changing the name continued the manufacturing and marketing activities and filed a writ petition in the Lahore High Court, Rawalpindi against the Ministry of Health for requiring them to change the name of their drug. He submitted that trade mark is a property as per section 54 of the Specific Relief Act, 1954, therefore, whereever there is infringement of unregistered trade mark, injunction can be granted. In this connection he relied on the case of Messrs. Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCM R 1090. The learned counsel went on to submit that the balance of convenience is in favour of the appellant and illegal use of a trade mark specially in respect of medicine no matter for how long and how expensive thereto does not give any immunity to the illegal user. In this connection he placed reliance on the case of CIBA Ltd. Basle Switzerland v. M. Ramalingam and S. Subramaniam Trading in the name of South Indian Manufacturing Co. Madura and another AIR 1958 Bombay 56 and relied upon the following extract from this case:-- "But on the other hand, when the respondents complained of substantial injury by being allowed to sell their goods under this name, of having built up large sales and spent large amounts on advertisement, it should be pointed out that the respondents did this at their own peril, because they had been warned by the appellants as far back as October, 1945. It hardly lies in the mouth of a party to come to the Court and say, "I have been trading upon the reputation of the other side, by trading upon that reputation I have been making money. I have been warned that I should not so trade and yet I took the risk, and now protect me from my folly or my own dishonesty because the other side has delayed in coming to the Court and I have a large stake in the sales which I am effecting by reason of using a trade mark which resembles the trade mark of another." Therefore, the argument put forward by Mr. Shah of balance of convenience, of hardship of equity, has no application on the facts of this case. It is not the case of an innocent party owing to a long user it has built up a business which should not be destroyed by rectification of the register. As we have already pointed out, the word "Cibol" seems to have been deliberately selected by the respondents for no other purposes than for its resemblance with the word of the appellants." 16. We have examined the case in the light of the arguments of the learned counsel, carefully gone through the impugned order, perused the records of the case and the relevant case law. Since various sections of Trade Mark Ordinance, 2001 have been referred, it will be useful to reproduce them as under:-- "Section 2(xxiv) " proprietor of earlier right", in relation to a trade mark, means a person entitled to prevent the use of a trade mark;" "Section 17. Relative grounds for refusal of registration:- (1) A trade mark shall not be registered if it is identical with an earlier trade mark and the goods or services, for which the trade mark is applied for, are identical with the goods or services for which the earlier mark is registered." "Section 18........... (a) (b) .. (c) . (2) Reference in this Ordinance to an earlier trade mark include a trade mark in respect of which an application for registration has been made and which, if registered, would be an earlier trade mark by virtue of clause (a) or (b) of subsection (1), subject to its being so registered." ' Section 22. Application for registration.---(1) An application for registration of a trade mark shall be made in writing to the Registrar in the prescribed manner.
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(2) Without limiting the particulars that may be included in an application, the application shall contain:-- (a) A request for registration of a trade mark; (b) Full name and address of the applicant; (c) A statement of goods or services in relation to which it is sought to register the trade mark; (d) International classification of goods or services; (e) A representation of the trade mark; and (f) Full name, address and contact details of agent. Is case the application, on behalf of the applicant, if by his agent. (3) The application shall state that the trade mark is being used by the applicant, or with his consent, in relation to goods or services, or that he has a bona fide intention that it should be used. (4) The Registrar may refuse to admit an application if it does not contain all the particulars required under subsections (2) and (3). (5) The application shall be subject to the payment of the application fee as may be prescribed. ' Section 33.--........... (a) (b) (2) ................... (3) A trade mark when registered shall be registered as of the date of filing of the application for registration and that date shall be deemed for the purposes of this Ordinance to be the date of registration. ' Section 39. Rights conferred by registration.-- (1) A registered trade mark shall be personal property. (2) The proprietor of a registered trade mark shall have exclusive rights in the trade mark which…
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