The Delhi High Court has once again emphasised the importance of long-standing use, statutory presumptions of validity and the likelihood of confusion in pharmaceutical trademark disputes. In an appeal before the Division Bench, the Court declined to interfere with the interim injunction granted by the Single Judge in favour of Zydus Healthcare Limited and its group entities, restraining Alder Biochem Private Limited from using “BIOCHEM” as part of its trademark or trade name.

The Dispute

The plaintiffs, Zydus Healthcare Limited and its group entities, instituted proceedings alleging trademark infringement and passing off against Alder Biochem Private Limited in relation to pharmaceutical, medicinal and allied products.

The plaintiffs claimed longstanding rights in the trademark “BIOCHEM”, tracing its adoption to 1959 by Biochem Pharmaceutical Industries. The business was subsequently incorporated as Biochem Pharmaceutical Industries Ltd. and, in 2017, was amalgamated with the first plaintiff, resulting in the transfer of its intellectual property rights, including the registered BIOCHEM trademark.

The plaintiffs asserted that BIOCHEM had been continuously used for pharmaceutical products for several decades and had acquired substantial goodwill and reputation in the market. Their trademark portfolio included a registered device/label mark incorporating the word BIOCHEM.

The dispute arose when the plaintiffs discovered that Alder Biochem had applied for registration of “ALDER BIOCHEM”, claiming use from January 2019. The plaintiffs issued a cease-and-desist notice, which was resisted by the defendant. A subsequent application for a Class 5 device mark containing ALDER BIOCHEM was also opposed by the plaintiffs before the Trademarks Registry.

The plaintiffs contended that the defendant’s use of ALDER BIOCHEM for pharmaceutical products amounted to infringement and passing off and sought an interim injunction.

The Defendant’s Defence

Alder Biochem contended that it had been incorporated in 2016 and was engaged in contract manufacturing of pharmaceutical and medical products, including soft-gel capsules, inhalers, suppositories, nutraceuticals and food supplements.

The defendant relied upon its domain name, alderbiochem.com, registered in August 2018, and claimed adoption of ALDER BIOCHEM in 2019. It also pointed to applications filed for various Class 5 marks from 2020 onwards.

BIOCHEM was descriptive and non-distinctive. According to the defendant, the expression was a commonly understood abbreviation for “biochemical” or “biochemistry” and was derived from the terms “biology” and “chemistry”.

Numerous businesses used BIOCHEM in their corporate names and that several registered trademarks incorporated the expression. Thus, the plaintiffs could not claim exclusive rights over BIOCHEM as a standalone word.
Registration of a device or label mark conferred protection upon the mark as a whole and did not necessarily confer exclusive rights over individual non-distinctive elements forming part of that mark.

Plaintiffs had deliberately not obtained registration of BIOCHEM as a word mark because the expression was incapable of exclusive appropriation.

The Single Judge’s Decision

The Single Judge found a prima facie case in favour of the plaintiffs and granted an interim injunction restraining Alder Biochem from using BIOCHEM or any deceptively similar mark, including as part of its trade name.

The Court noted that BIOCHEM was the dominant and essential feature of the plaintiffs’ registered mark and that the defendant had adopted the same expression for identical pharmaceutical goods.

The Court also considered the substantial difference in the parties’ commercial activities and sales. The plaintiffs had demonstrated considerably greater sales and longstanding use, whereas the defendant’s evidence of commercial use under ALDER BIOCHEM was substantially more recent.

The Court considered the potential consequences of confusion in relation to pharmaceutical products. The balance of convenience and the possibility of irreparable injury therefore weighed in favour of protecting the plaintiffs’ established trademark rights.

Aggrieved by this order, Alder Biochem preferred an appeal before the Division Bench.

Findings of the Division Bench

Prior Use Favoured the Plaintiffs

Although Alder Biochem had incorporated the expression into its corporate name in 2016 and had registered its domain name in 2018, the Division Bench noted the distinction between use of a corporate name and commercial use of a trademark.

The defendant’s first commercial invoice under ALDER BIOCHEM was only in 2022. In contrast, the plaintiffs had demonstrated use of BIOCHEM dating back to the late 1950s and 1960s.

Consequently, the question of prior use clearly favoured the plaintiffs.

The Court also observed that the defendant operated in the same pharmaceutical sector. Given the plaintiffs’ longstanding use and registrations, it was difficult, at least at the prima facie stage, to accept that the defendant was unaware of the plaintiffs’ rights.

Presumption of Validity

The Division Bench also upheld the reliance placed upon the statutory presumption of validity.

The defendant had not substantively challenged the plaintiffs’ registration or initiated appropriate proceedings seeking cancellation on the ground that BIOCHEM was non-distinctive.

Accordingly, the Court held that the registered mark was entitled to the statutory presumption at the interim stage.
The defendant’s contention that BIOCHEM was descriptive or generic therefore could not, by itself, defeat the plaintiffs’ registered rights at the interlocutory stage. Any claim concerning acquired distinctiveness or the ultimate validity of the mark could be examined on the basis of evidence at trial.

Third-Party Use: Quantity Is Not Enough

The defendant relied upon third-party use of BIOCHEM to contend that the plaintiffs’ rights were weak.

The Division Bench, however, found that the cited third parties were largely operating in unrelated sectors such as chemicals, fertilizers and metals, rather than in the pharmaceutical industry.

Mere existence of businesses or registrations containing BIOCHEM was therefore insufficient to demonstrate that the expression had become common to the trade in pharmaceutical products.

Device Mark Argument

One of the defendant’s principal arguments was that the plaintiffs had registered BIOCHEM only as a device or label mark and therefore could not claim exclusivity over the word itself.

The Division Bench did not accept this argument as a basis for denying interim protection.

The Court recognised that the fact that the plaintiffs’ registration was in device form did not mean that the defendant was free to appropriate the essential and distinctive element of that mark in relation to identical goods.

The Court therefore found that the defendant could not avoid the likelihood of confusion merely by adding the prefix “ALDER” to BIOCHEM.

Anti-Dissection and Dominant Feature Principles

The defendant argued that the competing marks had to be compared as a whole and that BIOCHEM could not be isolated from ALDER BIOCHEM.

The Court accepted that trademarks must ordinarily be considered in their entirety. However, this does not prevent the Court from identifying the dominant or essential feature of a mark when assessing the likelihood of confusion.

In the present case, BIOCHEM was the sole and essential feature of the plaintiffs’ registered mark and had acquired considerable distinctiveness through decades of use. The addition of the word “ALDER” did not sufficiently distinguish the defendant’s mark from the plaintiffs’ established trademark.

Pharmaceutical Products and Likelihood of Confusion

The fact that both parties operated in the pharmaceutical sector further strengthened the plaintiffs’ case.

Trademark confusion in relation to pharmaceutical products can have consequences beyond ordinary commercial confusion. The Court therefore approached the issue keeping in mind the need for greater caution where identical or closely related marks are used for pharmaceutical products.

The defendant’s status as a contract manufacturer did not eliminate the possibility of confusion. The assessment remained one from the perspective of the average consumer possessing imperfect recollection, taking into account the nature of the goods and the overlapping field of trade.

Conclusion

The Division Bench declined to interfere with the Single Judge’s order and dismissed the appeal.

Key takeaway

1. Long and continuous use can transform an expression alleged to be descriptive into a source identifier.
2. A registered mark enjoys the statutory presumption of validity unless successfully challenged. Evidence of third-party use must be relevant to the same or closely connected trade to materially weaken the proprietor’s rights.
3. The anti-dissection principle does not prevent a court from recognising the dominant or essential feature of a mark when assessing deceptive similarity.