Supreme Court Dismisses Appeal in Trademark Dispute Between Wockhardt Limited and Torrent Pharmaceuticals

The case of Wockhardt Limited v. Torrent Pharmaceuticals Ltd. revolves around a trademark dispute between two pharmaceutical giants, Wockhardt Limited and Torrent Pharmaceuticals. The appellant, Wockhardt, filed an appeal challenging the decision of the Division Bench of the High Court, which had granted a temporary injunction to Torrent Pharmaceuticals. The dispute concerns the trademark ‘CHYMORAL’ and the potential confusion it could cause in the pharmaceutical market. Wockhardt challenged the High Court’s findings, claiming that it had erred in applying the legal principles for passing off and injunctions.

Background of the Case

Wockhardt Limited, the appellant, owns the trademark “CHYMORAL” and “CHYMORAL FORTE” for a drug used in post-surgical recovery. The respondent, Torrent Pharmaceuticals Ltd., also sells a product under the name “CHYMTRAL,” which is closely similar to Wockhardt’s trademark. Wockhardt filed a lawsuit in 2015, seeking to stop Torrent Pharmaceuticals from using the “CHYMTRAL” name, alleging that it caused confusion in the market and infringed on their trademark.

The learned Single Judge in the High Court ruled against granting an injunction, finding that Wockhardt failed to prove a prima facie case of trademark infringement or passing off. The Judge noted that the drugs in question had co-existed in the market for several years without causing significant confusion, and thus, the requirement for an injunction was not met. However, the Division Bench reversed the decision, finding that Wockhardt had made out a case for passing off based on the likelihood of confusion in the market due to the similarity of the trademarks.

Legal Issues in the Appeal

• Whether the Division Bench was correct in granting the temporary injunction based on passing off, despite the objections raised by Wockhardt.
• Whether the Single Judge had erred in its assessment of the evidence and legal principles for granting an injunction in passing off cases.
• Whether the balance of convenience favored Wockhardt in this case, given the long-standing use of the “CHYMORAL” trademark and the substantial sales figures.

Arguments by the Appellant (Wockhardt Limited)

The appellant, Wockhardt, argued that:

• The Division Bench’s decision to grant the injunction was erroneous as it ignored the legal precedent set by the Wander Ltd. v. Antox India P. Ltd. case, which provided guidance on the exercise of discretion in granting temporary injunctions in passing off cases.
• The Single Judge had already found that no misrepresentation had been made by Wockhardt and that the claim of passing off was not substantiated by evidence.
• The appellant had a reputation in the market, established over decades, and the use of a similar trademark by Torrent Pharmaceuticals could mislead consumers.
• The Division Bench erred by applying incorrect legal tests and not considering the long-standing coexistence of the trademarks without substantial confusion.

Arguments by the Respondent (Torrent Pharmaceuticals)

The respondent, Torrent Pharmaceuticals, argued that:

• The Division Bench correctly granted the injunction after finding that the appellant had established a prima facie case of passing off.
• The fact that Wockhardt had not objected to the use of a similar trademark for years indicated acquiescence, and thus, they should not be granted the relief they sought at this late stage.
• The similarity between “CHYMORAL” and “CHYMTRAL” was likely to confuse consumers, especially given the nature of the product and the overlapping market.
• The appellant’s reliance on the Wander case was misplaced, as the circumstances in that case were different, and the balance of convenience favored the respondent in this matter.

Supreme Court’s Observations

The Supreme Court reviewed the arguments and legal precedents and made the following observations:

• The Court noted that the Division Bench had erred in applying the legal tests for passing off. It referred to previous rulings where the necessity of showing actual confusion and misrepresentation was emphasized, and it pointed out that confusion could not be assumed merely due to similarity of names.
• It was noted that the appellant’s claims were based on the likelihood of injury, but there was insufficient evidence to show that consumers were actually confused between the two products in the market.
• The Court also remarked that the appellant’s failure to object to the respondent’s use of a similar trademark for several years weakened their case, as the concept of acquiescence could be inferred from their inaction.
• Additionally, the Court observed that the remedy of a temporary injunction was discretionary, and the Division Bench had failed to properly consider the balance of convenience and the fact that the respondent had been using the mark for several years without significant harm.

The Court referred to the landmark judgment in Wander Ltd. v. Antox India P. Ltd., stating:

“The appellate court will not interfere with the exercise of discretion by the single judge unless the discretion has been shown to be exercised arbitrarily or capriciously or perversely or where the court had ignored the settled principles of law regulating the grant or refusal of interlocutory injunctions.”

Final Judgment

The Supreme Court concluded the following:

• The appeal was dismissed, and the Division Bench’s order was upheld.
• The Court held that the appellant had failed to meet the requirements for granting a temporary injunction based on passing off and that the long-standing coexistence of the products without substantial confusion was significant.
• The Court agreed with the Division Bench’s finding that the appellant had acquiesced in the use of the similar trademark by the respondent and could not now claim injury after allowing the situation to continue for several years.
• The injunction was not necessary, as the balance of convenience favored the respondent, whose sales figures demonstrated a well-established presence in the market.

The judgment concluded:

“In view of the circumstances, the balance of convenience is in favor of the respondent, and the appeal is rejected.”

Conclusion

This case underscores the complexities involved in trademark disputes, particularly in the context of passing off. The Supreme Court’s ruling highlights the importance of demonstrating actual confusion in the marketplace and the significance of acquiescence when a party delays asserting its rights. The judgment also emphasizes the need for a careful evaluation of the balance of convenience before granting temporary injunctions, especially in cases involving long-standing market practices. This ruling serves as an important reference for future trademark disputes, particularly in the pharmaceutical industry.

Petitioner Name: Wockhardt Limited.
Respondent Name: Torrent Pharmaceuticals Ltd..
Judgment By: Justice R.F. Nariman, Justice Indu Malhotra.
Place Of Incident: New Delhi.
Judgment Date: 12-09-2018.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: Wockhardt Limited vs Torrent Pharmaceutic Supreme Court of India Judgment Dated 12-09-2018.pdf

Direct Downlaod Judgment: Direct downlaod this Judgment

See all petitions in unfair trade practices
See all petitions in Company Law
See all petitions in Mergers and Acquisitions
See all petitions in Judgment by Rohinton Fali Nariman
See all petitions in Judgment by Indu Malhotra
See all petitions in dismissed
See all petitions in Quashed
See all petitions in supreme court of India judgments September 2018
See all petitions in 2018 judgments

See all posts in Corporate and Commercial Cases Category
See all allowed petitions in Corporate and Commercial Cases Category
See all Dismissed petitions in Corporate and Commercial Cases Category
See all partially allowed petitions in Corporate and Commercial Cases Category