Delhi High Court allows the sale of allegedly infringing goods to balance equities and maintain public interest

Alkem Laboratories Ltd (Alkem) has approached the Delhi High Court seeking permission to sell the existing stock of the product ‘ALDIGESIC PAIN RELIEF’ pending the final case decision. Laborate Pharmaceuticals India Ltd (Laborate) alleged that Alkem’s product packaging of ‘ALDIGESIC’ product was similar to the product sold by them under the mark ‘LABDIC RELIEF’. The trial court granted an ex-parte injunction restraining Alkem from manufacturing, selling, or dealing in pharmaceutical preparations in packaging/trade dress, which had similar colour combination, get-up, design, etc., including the similarity in the blister packs in terms of colour combination, etc. 

Alkem, before the High Court, contended:

  1. Laborate obtained ex-parte injunction by suppressing material facts that Alkem is the prior registrant of its trademark ‘ALDIGESIC’ (word) as against Laborate’s registration for ‘LABDIC Relief’
  2. They have been using the trademark ‘ALDIGESIC’ since 2010 continuously and extensively.
  3. The packaging of the rival products is different. 
  4. The word ‘relief’ is generic and descriptive to pain relief tablets and common to trade, and no proprietary rights can vest in Laborate to its exclusive use.

Laborate in their counter stated:

  1. No appeal lies against the order passed by the trial court under its inherent powers under section 151 of the Code of Civil Procedure. 
  2. The ‘LABIDIC Relief’ mark is registered, and they own the copyright in the distinctive packaging. 
  3. Alkem’s impugned product packaged and sold in deceptively similar trade dress/product packaging amounts infringement and passing off. 
  4. Confusion is imminent considering the identical nature of the products, trade channels, and customers. 
  5. Permission to sell the impugned products would amount to selling infringing goods in the market.

High Court’s observations:

  1. The court while dismissing the technical objection that Appeal qua return of goods is not maintainable, held that Alkem’s prayer to sell the existing stock was decided as part of the application to set aside the injunction. Therefore, the objection has no merit and cannot be sustained.  
  2. Admittedly, the application seeking vacation/setting aside the injunction order is pending consideration before the trial court. Thus, the High court is not expected to go into the merits of the case. 
  3. Alkem’s limited prayer is to allow them to sell the existing stock of the ‘ALDIGESIC Pain Relief’ worth Rs. 90 lacs (approx. USD 113,994) without prejudice to contentions between the parties before the trial court. Admittedly, the impugned product is a pain reliever sold under Doctor’s prescription, being a Schedule ‘H’ drug.
  4. Without going into the merits of the rival claims, the High Court took the view that the balance of equities would be maintained if Alkem was permitted to sell the existing stock, which is worth Rs. 90 lakhs (approx. USD 113,994). The court considered the product in question was a Schedule H drug (to be sold on prescription of a medical practitioner). Furthermore, there was no dispute on the quality of the impugned product. 
  5. The court referred to Judicial precedents and remarked that even in matters relating to pharmaceutical products, Courts have been holding that in some instances, a prima facie case or even a strong case of infringement in favour of one party can be off-set by an interim arrangement. The purpose is to balance the equities between the parties and maintain public interest. Therefore, Alkem was granted permission to sell the existing stock, subject to maintaining a sales record for computing a claim of damages, if Laborate was to succeed finally.

In view of the above, High Court modified the trial court’s order and allowed Alkem to sell the existing stock of ‘ALDIGESIC Pain Relief’ product pending disposal of the suit. The High Court also directed Alkem:

  • to file an affidavit detailing the existing stock of the product in question along with the total value of the stock as well as an undertaking that it shall only exhaust the existing stock till any further order by the trial court in its favour; and
  • entire account of sales of the existing stock sold from various locations, with dates of sales, shall be filed on record of the trial court. 

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