Cost of INR 1 million (approx. US $ 12,300) imposed on Sun Pharmaceuticals for the concealment of material facts
The Delhi High Court imposed exemplary costs in a suit for trademark infringement filed by Sun Pharmaceutical Industries Ltd https://sunpharma.com/ (the largest pharmaceutical company in India) against DWD Pharmaceuticals Ltd http://www.dwdindia.com/ (DWD). Sun alleged that DWD had copied their brand ‘FORZEST’ by adopting the mark’ FOLZEST.’ An ex parte ad-interim injunction was passed in favour of Sun and is under challenge by DWD on several grounds. DWD also alleged that an ex parte injunction was obtained by not making complete disclosures. The post discusses the parties’ contentions and what led the Court to conclude that Sun was guilty of concealing facts when obtaining an ex parte ad-interim injunction.
Contentions of Sun Pharmaceutical Industries Ltd (Sun)
- Sun claims the mark FORZEST has been used since 2003 and registered under no. 1171650, dated February 4, 2003, in Class 05 (for pharmaceutical and medicinal preparations).
- Sun came across DWD’s application seeking registration of the mark ‘FOLZEST’ in August 2020. The application was filed on a “proposed to be used” basis and is under opposition by Sun.
- Sun’s mark ‘FORZEST’ was cited in the Examination Report against the trademark application for ‘FOLZEST’ of DWD.
- The use of FORZEST and FOLZEST is different. Sun’s FORZEST is targeted towards curing erectile dysfunction in men, while the medicinal preparation of DWD is a multivitamin for pregnant women to lower the risk of pre-term births. Thus, any confusion between the two marks can lead to disastrous consequences.
- DWD cannot claim exclusivity over the word ‘ZEST’ as several third parties co-exist in the market using different trade marks with the word ‘ZEST’ as either a prefix or a suffix. ‘ZEST,’ even otherwise, is a common dictionary word over which no one person can claim exclusivity.
Contentions of DWD Pharmaceuticals Ltd (DWD)
- DWD has been the registered proprietor of the ZEST trade mark since 1983, and has a family of registered trade marks, with ‘ZEST’ forming a part of them (ZESTCAL, ZESTVIT, HEMIZEST, EVERZEST and five other brands).
- Sun was well-aware of not only the registration of the mark ‘ZEST’ in favour of DWD but also of the other marks registered and used by the DWD.
- Sun had earlier applied for the registration of the mark ‘EXEZEST’, which was opposed by DWD way back in 2009. Also, the application for ‘TRIOLMEZEST’ filed by Sun was opposed by DWD in 2014.
- Sun has approached this Court with unclean hands by concealing and suppressing material facts and documents (mentioned above). Therefore, Sun’s claim should not be considered by the Court.
- The mark‘FORZEST’ is descriptive of medicinal preparation used for treating erectile dysfunction in men. The word ‘ZEST’ has a dictionary meaning, ‘feeling of enjoyment, excitement, and enthusiasm. The mark being a combination of the words ‘FOR’ and ‘ZEST’ is descriptive of the pharmaceutical goods, and no exclusivity can be claimed by Sun in the mark.
- DWD’s opposition against ‘EXEZEST’ and ‘TRIOLMEZEST’ was important and material to be disclosed upfront in the plaint. They would undoubtedly have had a bearing while considering the relief of an ad-interim ex-parte injunction.
- Sun or its predecessor in interest has not disclosed the response to the Examination Report for the subject mark ‘FORZEST’; DWD’s mark ‘FERIZEST’ was cited as a conflicting mark. The response was a material document and may or may not act as an estoppel, but certainly relevant to be considered while determining Sun’s prayer for an ad-interim ex-parte relief based on the registration granted.
- Sun has been using the mark ‘FORZEST’ since 2003, while DWD has not even stated the date of launch of its medicinal good under the impugned mark ‘FOLZEST.’ Therefore, the assertion of Sun that it came across the medicine of DWD in the first week of May 2022 remains unrebutted, at least at this stage.
- The competing marks ‘FORZEST’ and ‘FOLZEST’ are deceptively similar, and any confusion can lead to disastrous consequences.
- Sun cannot escape the consequences of having concealed material facts from this Court to obtain an ex-parte order of injunction. Whether with the disclosure of the above-mentioned material facts, the Court would have still granted the ad-interim ex-parte order of injunction or not, is not relevant. Sun cannot be absolved from the consequences of not making such disclosure of material facts. Such a practice not only has to be deprecated but must also be penalised. Sun was therefore directed to deposit costs of Rs.1 million or Rupees Ten Lakh with the Delhi High Court Legal Services Committee within two weeks from the date of the judgment.