The High Court of Judicature at Madras delivered a crucial judgment on July 12, 2024, in the case of Glenmark Pharmaceuticals Ltd. vs. Mrs. Karlin Pharmaceuticals & Exports Private Limited and the Deputy Registrar of Trade Marks, Chennai. The case centered around the registration of the trademark 'CANDEX-B' by Mrs. Karlin Pharmaceuticals for pharmaceutical products in Class 5, which Glenmark Pharmaceuticals opposed, citing confusion with its established trademark 'CANDID'. This judgment is significant for understanding the legal principles surrounding trademark disputes, especially the importance of prior search reports from the Trademark Registry in establishing honest adoption.

Background and Factual Matrix:
Glenmark Pharmaceuticals, the appellant, has been using the trademark 'CANDID' since 1978-79 for dermatological products. The company opposed the registration of 'CANDEX-B' by Mrs. Karlin Pharmaceuticals, arguing that the mark was confusingly similar to 'CANDID' and could mislead consumers. The appellant also claimed that the first respondent's adoption of 'CANDEX-B' was dishonest, intending to capitalize on the goodwill associated with 'CANDID'. Importantly, Glenmark emphasized that Mrs. Karlin Pharmaceuticals failed to conduct a trademark search prior to adopting 'CANDEX-B', which would have revealed the existence of 'CANDID' in the register.

On the other hand, Mrs. Karlin Pharmaceuticals argued that they had been using 'CANDEX-B' since 1997 and were entitled to protection under Section 12 of the Trade Marks Act, 1999, as an honest and concurrent user. They contended that both trademarks derived from the medical term for candidiasis, a fungal infection, and there was no likelihood of confusion.

Legal Issues:
The primary issues before the court were:

• Whether the first respondent's use of 'CANDEX-B' constituted honest and concurrent use under Section 12 of the Trade Marks Act.
• Whether the failure to conduct a trademark search before adopting the mark 'CANDEX-B' impacted the validity of the first respondent's claim.
• Whether the registration of 'CANDEX-B' was likely to cause confusion or deception among the public, particularly in the pharmaceutical industry.
• Prior Search Report: A Crucial Element in Establishing Honest Adoption

The appellant's argument hinged on the fact that Mrs. Karlin Pharmaceuticals did not conduct a prior trademark search before adopting 'CANDEX-B'. A prior search report from the Trademark Registry is a critical document in trademark law as it establishes whether a proposed trademark is unique or similar to existing marks. The absence of such a search can indicate a lack of due diligence, which is often considered when assessing whether the adoption of a mark was honest.

In this case, the court emphasized that Section 11 of the Trade Marks Act is designed to protect the public interest by preventing confusion or deception. The court noted that had Mrs. Karlin Pharmaceuticals conducted a proper search, they would have discovered the existing 'CANDID' mark, which would have alerted them to the potential for consumer confusion.

The court observed that failing to undertake this due diligence was a significant omission, casting doubt on the bona fides of Mrs. Karlin Pharmaceuticals' claim of honest adoption. This omission weakened their position, especially given the established reputation and prior use of 'CANDID' by Glenmark Pharmaceuticals.

Likelihood of Confusion and Deception:
Another crucial aspect of the court's analysis was the likelihood of confusion between 'CANDEX-B' and 'CANDID'. Both marks were used for dermatological products, and the court noted that such products directly impact public health. In such cases, even a minor likelihood of confusion can have serious consequences.

The court referred to the precedent set in Indian Immunologicals, where the strength of a trademark was considered weak due to its derivation from a generic name. However, the court distinguished the present case by emphasizing that 'CANDID' had been in use for over two decades before 'CANDEX-B', making it a well-known trademark in the pharmaceutical industry.

Given the similarity in the goods, the court found that 'CANDEX-B' was likely to cause confusion among consumers who might assume it was related to or endorsed by Glenmark Pharmaceuticals. This potential confusion, combined with the failure to conduct a prior search, led the court to conclude that the adoption of 'CANDEX-B' was not bona fide.

Conclusion and Court's Decision:
The court ultimately held that Mrs. Karlin Pharmaceuticals' use of 'CANDEX-B' did not constitute honest and concurrent use under Section 12 of the Trade Marks Act. The court also found that there was a significant likelihood of deception or confusion among the public due to the similarity of the trademarks and the fact that both were used for treating dermatological conditions.

The judgment underscored the importance of conducting a prior search before adopting a trademark, especially in the pharmaceutical industry, where the potential for confusion can have serious public health implications. The court set aside the impugned order and canceled the registration of 'CANDEX-B', directing its removal from the register of trademarks.

This case serves as a vital reminder of the need for thorough due diligence in trademark adoption and the potential consequences of failing to do so. The judgment reinforces the role of prior search reports in proving honest adoption and the courts' responsibility to protect public interest by preventing confusion in the marketplace.

Case Citation: Glenmark Pharmaceuticals Ltd Vs Mrs. Karlin Pharmaceuticals: 12.07.2024 : (T) CMA (TM) No.40 of 2023: Madras High Court: Senthil Kumar Ramamoorthy: H.J

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539