The case of Cadila Healthcare Ltd. v. Dabur India Ltd., decided by the Delhi High Court, revolves around the claim of exclusive rights over the expression "SUGAR FREE" by Cadila Healthcare Ltd. The dispute primarily concerns whether the term "SUGAR FREE" has acquired distinctiveness as a trademark and whether Dabur’s use of the term in its product "Chyawanprakash" amounts to passing off. The case raises significant questions regarding the intersection of intellectual property rights and generic descriptive terms.

Factual Background:
Cadila Healthcare Ltd., a leading pharmaceutical company in India, introduced a low-calorie tabletop sweetener under the brand name “SUGAR FREE” in 1988. Despite the lack of formal trademark registration, the company argued that over the years, the term had acquired secondary meaning and distinctiveness, making it uniquely associated with their brand. Dabur India Ltd., a well-known manufacturer of Ayurvedic and food products, introduced a sugar-free variant of its product, "Chyawanprakash." The packaging of this product prominently displayed the term “SUGAR FREE,” which Cadila alleged was an attempt to mislead consumers and exploit its goodwill.

Procedural Background:

• Cadila Healthcare filed a suit seeking a permanent injunction against Dabur India, restraining them from using the term "SUGAR FREE."
• The suit also included claims for damages, rendition of accounts, and delivery of infringing goods.
• Along with the plaint, Cadila Healthcare sought an interim injunction under Order 39 Rules 1 and 2 of the Civil Procedure Code, 1908.
• The learned Single Judge of the Delhi High Court dismissed this application on July 9, 2008.
• Aggrieved by this decision, Cadila Healthcare filed an appeal (FAO(OS) No. 387/2008) before the Division Bench of the High Court.

Issues Involved in the Case:

• Whether the term "SUGAR FREE" had acquired secondary meaning and distinctiveness in relation to Cadila Healthcare's product?
• Whether Dabur India's use of the term "SUGAR FREE" constituted passing off?
• Whether the expression "SUGAR FREE" was merely descriptive or had become a well-known trademark?

Submissions of Cadila Healthcare Ltd.:

• Argued that "SUGAR FREE" had acquired distinctiveness through long and extensive use since 1988.
• Cited the case of Cadila Healthcare Ltd. v. Gujarat Cooperative Milk Marketing Federation Ltd., 2008 (36) PTC 168 (Del.).
• Contended that Dabur's use of "SUGAR FREE" was deceptive and likely to mislead consumers.
• Stressed that the Single Judge had overlooked the findings in the Gujarat Cooperative Milk case.

Submissions of Dabur India Ltd.:

• Claimed that "SUGAR FREE" was a generic and descriptive term commonly used to indicate a product's sugar-free nature.
• Argued that their packaging clearly displayed the "DABUR" trademark and "Chyawanprakash" in a prominent manner.
• Submitted that appellate courts should not substitute their discretion for that of the Single Judge unless it was arbitrary or perverse.

Discussion on Judgments Cited:

• Cadila Healthcare Ltd. v. Gujarat Cooperative Milk Marketing Federation Ltd., 2008 (36) PTC 168 (Del.)
  • The court acknowledged some distinctiveness but emphasized that commonly used terms can't be monopolized.
  • Cadila cited it to argue for distinctiveness; Dabur cited it to argue against monopolization.
• Wander Ltd. v. Antox India Pvt. Ltd., 1990 Suppl. (1) SCC 727
  • Supreme Court held that appellate courts should not interfere unless the lower court's order is arbitrary or perverse.
  • Dabur relied on this to argue that the appeal should be dismissed.

Reasoning and Analysis of the Judge:

• Descriptive vs. Distinctive Nature of "SUGAR FREE"
  • The term is fundamentally descriptive of the product’s sugar-free nature.
  • Secondary meaning was not strong enough for exclusive rights.
• Comparison of Packaging
  • Dabur’s packaging prominently featured "DABUR" and "Chyawanprakash."
  • "SUGAR FREE" was in smaller font, indicating a product attribute.
• Application of Precedents
  • The facts differed from the Cadila-Gujarat Milk case.
  • Relying on Wander Ltd., interference by appellate court was unwarranted.
• No Likelihood of Confusion
  • Packaging differences prevented consumer confusion.
  • Use of "SUGAR FREE" was descriptive, not a trademark.

Final Decision:

• The Division Bench dismissed the appeal.
• The court reaffirmed:
  • "SUGAR FREE" cannot be monopolized.
  • Dabur’s packaging was sufficiently distinctive.
  • No prima facie case of passing off.

Law Settled in This Case:

• Generic and Descriptive Terms Cannot be Exclusively Claimed as Trademarks
  • Commonly used terms describing attributes cannot be monopolized.
• Passing Off Requires Likelihood of Confusion
  • Must show consumers are misled into believing the product originates from the plaintiff.
• Limited Scope of Appellate Intervention in Interim Orders
  • Courts should not interfere unless there is arbitrariness or perversity in discretion exercised by the lower court.

Case Title: Cadila Healthcare Ltd. Vs. Dabur India Ltd.
Date of Order: September 12, 2008
Case No.: FAO (OS) 387/2008
Neutral Citation: 2008:DHC:2662-DB
Court: High Court of Delhi
Judges: Hon’ble Mr. Justice Sanjay Kishan Kaul & Hon’ble Mr. Justice Mool Chand Garg

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