The case of Saga Lifesciences Limited v. Aristo Pharmaceuticals Pvt. Ltd. is a significant ruling in the field of trademark law, particularly concerning the pharmaceutical industry. The dispute centers around the use of the trademark "ULTRAMOL" for paracetamol preparations. The plaintiff, Saga Lifesciences Limited, sought an injunction to restrain the defendant, Aristo Pharmaceuticals Pvt. Ltd., from using the identical mark "ULTRAMOL," arguing that it was the prior user of the trademark since 1992. The Delhi High Court, adjudicated the matter, addressing key issues of prior use, goodwill, and misrepresentation in a passing off action.

• Factual Background:
  • Saga Lifesciences Limited, a pharmaceutical company, claimed that it had been using the mark "ULTRAMOL" for paracetamol products since 1992, following its approval from the Food and Drugs Control Authority (FDCA), Gujarat, in 1991. It marketed the product extensively and had a history of sales and promotions linked to the mark. However, its earlier trademark application (filed in 2007) was abandoned due to miscommunication with its trademark agent.
  • Aristo Pharmaceuticals Pvt. Ltd. applied for trademark registration of "ULTRAMOL" in 2005, on a "proposed to be used" basis. The company also obtained drug licenses for "ARISTO ULTRAMOL." However, the plaintiff alleged that the defendant was misusing the standalone mark "ULTRAMOL" without the "ARISTO" prefix, leading to consumer confusion.
  • The plaintiff, asserting its rights as the prior user, sought an injunction against the defendant to prevent the continued use of the disputed mark. The defendant, in turn, argued that the plaintiff had no sales in India since 2014, and its primary business operations were in foreign markets such as the Philippines, Spain, and Nepal.
     
• Procedural Background:
  • The suit was filed under Sections 134 and 135 of the Trade Marks Act, 1999, before the Delhi High Court. The case was first heard on April 13, 2022, where the court noted that the defendant was aware of the plaintiff's mark and had originally sought approval for "ARISTO ULTRAMOL." The court appointed a Local Commissioner to assess the defendant's product inventory and adjourned the matter to allow the defendant to seek instructions.
  • On April 22, 2022, the court heard detailed arguments from both parties and examined the legal principles governing passing off, prior use, and goodwill.
     
• Issues Involved:
  • Whether the plaintiff had established prior use and goodwill in the trademark "ULTRAMOL."?
  • Whether the plaintiff's use of the mark "ULTRAMOL" for export amounted to used in India?
     
• Plaintiff's Arguments:
  • The plaintiff had been using "ULTRAMOL" for pharmaceutical preparations since 1992 and had substantial goodwill attached to the mark.
  • The defendant dishonestly adopted the identical mark despite knowing about the plaintiff's prior use.
  • The defendant's drug license was for "ARISTO ULTRAMOL," but it was misleadingly using "ULTRAMOL" on its packaging.
  • Even though the plaintiff's sales were primarily for exports post-2014, the law recognized export activity as a valid use of a trademark.
  • Cited Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. (AIR 2001 SC 1952), which emphasized the need to prevent confusion in pharmaceutical trademarks.
     
• Defendant's Arguments:
  • The plaintiff had abandoned its mark in India as it had no domestic sales since 2014.
  • The plaintiff's presence was limited to exports, which did not establish goodwill within India.
  • The defendant had independently adopted the mark after conducting a trademark search in 2005.
  • The prefix "ULTRA" in "ULTRAMOL" was derived from "ultra" (meaning extreme or strong), and its adoption was legitimate.
  • The defendant's sales were substantial, amounting to approximately Rs. 3 crores annually, and any injunction would cause irreparable harm.
  • Relied on Kerly's Law of Trade Marks and Trade Name (16th Ed.) to argue that goodwill must be present in the domestic market.
     
• Discussion on Judgments and Legal Precedents:
  • Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. (AIR 2001 SC 1952): Established that in cases involving medicinal products, even slight confusion could have life-threatening consequences. The court emphasized the need for a strict approach to prevent misrepresentation in pharmaceutical trademarks.
  • Hardie Trading Ltd. v. Addisons Paint and Chemicals (AIR 2003 SC 3377): Defined "use" broadly, holding that even non-physical use (such as advertising and promotion) constituted valid trademark use.
  • Burger King Corporation v. Techchand Shewakramani & Ors (253 (2018) DLT 93): Held that advertisement, manufacturing, and export activities constitute trademark use, rejecting the argument that lack of domestic sales negates goodwill.
  • Laxmikant V. Patel v. Chetanbhat Shah & Anr. (AIR 2002 SC 275): Stated that goodwill must be judged not only based on present conditions but also considering future expansion.
     
• Reasoning and Analysis of the Judge:
  • The court found that the plaintiff was the prior user of "ULTRAMOL" since 1992, and its goodwill had not been abandoned despite the lack of domestic sales.
  • The defendant's explanation for adopting "ULTRAMOL" was not convincing, and the fact that it initially sought registration for "ARISTO ULTRAMOL" indicated awareness of the plaintiff's mark.
  • The defendant's packaging prominently featured "ULTRAMOL" without "ARISTO", creating a likelihood of confusion.
  • Applying the Cadila test, the court held that confusion in pharmaceutical products could have serious public health consequences.
  • The defendant's use of the mark was likely to mislead consumers, constituting passing off.
     
• Final Decision:
  • The court granted an injunction restraining the defendant from manufacturing fresh products under the mark "ULTRAMOL" or any deceptively similar mark.
  • The defendant was allowed to sell its existing stock until September 30, 2022, to prevent undue loss.
  • The court clarified that the defendant could apply for a new drug registration under a non-deceptively similar mark.

Law Settled in the Case:
Prior use prevails over subsequent adoption, even if domestic sales have declined, provided the mark continues to be in use (including exports). Export activity qualifies as "use" under trademark law, ensuring that goodwill is not deemed abandoned merely due to a shift in market focus.Pharmaceutical trademarks demand stricter scrutiny due to potential consumer harm from confusion.Honest adoption defense requires credible justification, and mere prefix changes do not eliminate the possibility of misrepresentation.

Case Title: Saga Lifesciences Limited v. Aristo Pharmaceuticals Pvt. Ltd.
Date of Order: April 22, 2022
Case No.: CS(COMM) 240/2022
Court: High Court of Delhi
Judge: Justice Prathiba M. Singh

Disclaimer:
The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539