Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ...

on 21 February, 2008

Gujarat High Court Gujarat High Court Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008 Equivalent citations: AIR 2008 Guj 94 Author: K Puj Bench: K Puj JUDGMENT K.A. Puj, J. 1. The appellant-Original Plaintiff has filed this Appeal From Order under Order 43 Rule 1(r) of the Civil Procedure Code challenging the order dated 25th October, 2007 passed in the application Exh. 6/7 filed in Regular Civil Suit No. 2201 of 2007 by the learned (Auxi.) Chamber Judge, City Civil Court, Ahmedabad, thereby dismissing the application for temporary injunction. 2. Mr. Y.J. Trivedi, learned advocate along with Senior Counsel Mr. Mihir Joshi appears on behalf of the appellant and Mr. Pranav G. Desai appears on Caveat along with Senior Counsel Mr. Mihir J. Thakore on behalf of respondent. With the request of the parties, this Appeal is taken up for final hearing. 3. It is the case of the appellant that the appellant is a Company incorporated under the Companies Act, 1956 and engaged in the business of manufacturing and marketing pharmaceutical products and some prominent products of the appellant company are; 1. MOOV a pain reliever ointment 2. Stopache-ache reliever tablets 3. Itchguard-a itch reliever ointment, amongst others. 4. All the products of the appellant-Company are quite popular and widely accepted in the market and all the products are such popular that even the similar get up or trade dress of any other such kind of product would lead any person to believe close association of the same with the appellant-Company. 5. The dispute in the present appeal is in respect of the product MOOV. The appellant-Company has developed such trade mark with a particular trade dress including colour scheme, get up, arrangement and trade dress for the article, which is registered trade mark of the appellant and also registered copyright under the Trademarks Act and Copyright Act respectively. The appellant is, therefore, having exclusive right as provided under the Trademarks Act and Copyright Act and any person uses any identical or deceptively similar label, mark, trade dress or making substantial or material reproduction, is liable for infringement of the statutory right granted in favour of the appellant. 6. The appellant has developed the said product since the year 1986-87 and since then it has acquired reputation in the market. As far as sale promotion expenses and sales figures of the product MOOV are concerned, the total sales turn over till date of this product is to the tune of Rs. 481,90,12,273/-. The turn over of the financial year 2006-2007 is Rs. 55,97,95,386/-. From the renowned sources of the market research, it is proved that the total market share of the product MOOV is of 11% in volume and 10% in value in total similar category of products. 7. It is also the case of the appellant that the respondents herein are also engaged in the business of medicinal preparation and have started manufacturing of the pain reliever ointment known as VOLINI. The said product is being used by the respondents since long time. However, as they could not get the desirable market share and as they realized that the product of the appellant is day by day increasing the market share and very much
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

popular in the market, the respondents decided to capture the market by way of negative advertisement whereby the product MOOV can be disparaged and denigrated. The respondents have recently started an airing a TV commercial in respect of their product VOLINI, which obviously seeks to disparage and denigrate the product of the appellant MOOV. The copy of the story board of the TV commercial depicting the visual frames with transcripts of the voice recording is produced before the Trial Court and it is also produced along with this Appeal. 8. It is the case of the appellant that the respondent's advertisement/TV commercial is a cleverly conceived box of pain reliever to denounce the product of the appellant as shown in the third, sixth and seventh frames of the TV commercial. The third frame of the TV commercial shows a lady (MOM) explaining about suffering from the ache, she takes out a box of pain reliever product, is clearly identical with the box used by the appellant for marketing its product MOOV as the said box is having distinctive artistic work and colour scheme. The appellant submits that in the fourth, fifth, sixth and seventh frames of the TV commercial a lady comes to the MOM (lady) and suggesting her to use another remedy and gives her respondent's product VOLINI Gel and says "YOU NEED A TRUE PAIN RELIEVER". The indirect message and suggestion contained in the advertisement is that the product of the appellant, namely, MOOV is not enough and has not acquired good quality for remedy of backache, lower backache and joint pain and for other aches and the customers shall continue to suffer from the various aches, as mentioned above, if they continue to use the appellant's product, so the respondent's product, namely, VOLINI, is better and a true pain reliever. The TV commercial, in question, contains a subtle message and suggestion that the product shown in the advertisement are ineffective as ache reliever and the viewer shall thus, switch to the product of the respondents. 9. It is, therefore, the case of the appellant that the message and suggestion seeks to disparage and is showing the product in the advertisement, which is easily associated in the minds of the consumers and the general public with the artistic work and colour scheme and the mark of the appellant's product MOOV. The box shown in the advertisement is depicted, being a replica of the artistic work and colour scheme and trademark used by the appellant for its product MOOV. The effect of TV commercial telecasted by the respondent would inevitably be the disparagement and denigration of the product of the appellant. 10. It is also the case of the appellant that the product of the appellant MOOV is being marketed by the appellant in distinctive artwork and colour scheme for which the appellant holds statutory right. The distinctive artwork and colour scheme in relation to the product MOOV is associated in the minds of consumers and the general public and unwary consumers and the general public watching the respondent's TV commercial which is aired throughout India including city of Ahmedabad are likely to misled into believing that the product which is shown in the TV commercial is poor and having inferior quality, is the product of the appellant, as the impugned TV commercial makes direct reference to the product of the appellant by depicting the box with distinctive colour scheme. 11. In view of the above referred set of facts, appellant was constrained to file Regular Civil Suit No. 2201 of 2007 along with the notice of motion before the learned Chamber Judge, City Civil Court at Ahmedabad and initially ex-parte interim relief was granted and by way of that interim relief the respondents, their agents, servants, dealers, distributors were restrained from demonstrating or advertising their product VOLINI in any manner including telecasting which disparages and denigrates, and directly or indirectly refers to the product of the appellant MOOV. On returnable date i.e. on 25.10.2007, the respondents appeared through their Counsel. However, the respondents did not file any reply or written statement to the suit or Notice of Motion, the respondents have only filed list of documents without application or authentication and submitted their arguments to the effect that though the colour scheme, get up and arrangement may be similar as stated in the advertisement, to the product of the appellant MOOV, however, the words which are faintly stated on the said card box are different. It is further submitted before the learned City Civil Judge, Ahmedabad on behalf of the respondents that the said advertisement was only a comparison and does not amount to disparage or denigrate the appellant's product MOOV. The case of the appellant before the Court was that from the prints of the
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

advertisement, it is undoubtedly and evidently clear that the product which is disparaged or denigrated in the said advertisement is having identical colour scheme, arrangement, general trade dress with that of the appellant's product MOOV. Despite these facts, the learned City Civil Judge, Ahmedabad has rejected the application of interim relief vide his order dated 25.10.2007. 12. It is this order of the learned City Civil Judge, Ahmedabad which is under challenge in this Appeal From Order. 13. Mr. Mihir Joshi, learned Senior Counsel appearing for the appellant has submitted that the learned City Civil Judge, Ahmedabad has erred in appreciating certain admitted positions which are as under: i. The impugned advertisement does disparage and denigrate one similar product i.e. pain reliever ointment. ii. The trade dress, colour scheme and other arrangement of the get up of the said product/box is identical and/or similar to appellant's product MOOV in all respects. iii. The said advertisement does convey a message that the product of the respondents is only STRUE PAIN RELIEVER as compared to entire other class. iv. The appellant is the registered proprietor of the trade mark as well as of the copy right of the entire trade dress, which does include colour scheme, get up, arrangement, trade dress etc. Thus, from the said advertisement, it is evident that the said advertisement is created by the respondents with mala-fide intention of disparaging and denigrating the appellant's product MOOV and thereby to capture the market developed in respect of the said product by way of negative advertisement on air. 14. He has further stated that the learned City Civil Judge has completely failed to appreciate that the pleading of the appellant is proved as not controverted in any manner by the respondents. Admittedly, the respondents have neither submitted any reply/written statement nor sought time for filing the same nor reserved the liberty to file the same in future in any manner. By short circuiting of the mandatory requirements as provided under the Code of Civil Procedure as well as the Ahmedabad City Civil Court Rules, 1961, the respondents directly submitted the story board of the advertisement. However, in any case, the same otherwise did favour the case of the appellant and on the contrary established the fact that the said advertisement did disparage or denigrate the appellant's product MOOV. 15. He has further submitted that since the pleading of the appellant original plaintiff was not controverted in any manner before the trial Court, the same were said to have been proved by virtue of the provisions of the CPC. Further, the documents which are produced by the appellant did establish a strong prima-facie case beyond any doubt. Hence, the learned City Civil Judge ought not to have passed the impugned order, and therefore, the same deserves to be quashed and set aside. 16. Mr. Mihir Joshi has further submitted that the learned City Civil Judge, Ahmedabad has failed to appreciate that the respondents are not restrained from advertising or manufacturing or using their product or brand. The only grievance of the appellant is not to advertise the product in a manner which disparages or denigrates the appellant's product. He has therefore submitted that ingredients of balance of convenience and irreparable loss does lie and only lies in favour of the appellant as compared to the respondents. He has further submitted that the respondents have no right to use the art work or label of MOOV or print or publish the same in any manner, which amounts to an infringement of copyright, especially when the appellant is the registered proprietor under the Trade Marks Act, 1999. He has further submitted that the respondents have used the mark without any license or permission from the appellant, therefore, as per the provisions of Section 29 of the Act, the respondents are liable for infringement. In view of the provisions contained in Section 29(4), 29(6), 29(7) and 29(8) of the Trade Marks Act, 1999 the respondents are using the appellant's trade mark and hence, respondents are liable for infringement.
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

17. Mr. Mihir Joshi has further submitted that respondents have committed infringement of copy right though the copyright of the appellant is already registered and registration certificate is also produced before the Court. Mr. Joshi, in support of the submission has relied on decision of the Delhi High Court in the case of Karmachand Appliances Pvt. Ltd. v. Shree Adhikari Brothers and Ors. reported in 2005(2) AJ 570 wherein it is observed that what is called disparagement is already described in BLACK'S LAW DICTIONARY. It is referred to in para 20 of the Judgment that Falsehood when tends to denigrate the goods or services of another party, is accountable in common law suit for disparagement...and the statement about the competitor's goods which is untrue or misleading and is made to influence or do not influence the public not to buy. This fact is not appreciated by the learned City Civil Judge, Ahmedabad. 18. Mr. Joshi has further submitted that the phrase in the advertisement, another lady who recommends the respondent's product VOLINI Gel and says "YOU NEED A TRUE PAIN RELIEVER", directly suggesting or giving the message in the said advertisement that the first lady who is having in her hand the product MOOV of the appellant is not enough and is not a true pain reliever. This clearly establishes that the respondents are trying to disparage and show to the customers through the advertisement, that the appellant's product is inferior product or is useless product for pain reliever, which is prohibited in law. 19. Mr. Joshi has further submitted that the respondents have not given any explanation as to why they have adopted the art work or label in their advertisement, and hence, it tantamounts to a fraud on the part of the respondents as laid down in the case of Midas Hygiene reported in 2005(3) SCC 1990. As per the said decision, without giving any explanation, if the respondent start or switch over to similar get up, colour scheme, they are liable for the infringement of the trade mark and copyright and are required to be restrained to protect the statutory right of the appellant. Relying on this Judgment, Mr. Joshi has submitted that in the present case, admittedly the respondents are using the trademark VOLINI and advertising the same since long time. However, recently they have switched over to the advertisement which is impugned, whereby the product which is similar and/or identical to the appellant's product MOOV is shown. 20. The respondents are therefore required to change the two clips in the advertisement and it was suggested that if they change the colour of the cartoon shown, then also the appellant has no objection. This aspect was not considered by the learned City Civil Judge, Ahmedabad while deciding the injunction application. 21. Mr. Joshi has therefore urged that the order passed by the learned City Civil Judge, Ahmedabad deserves to be quashed and set aside and the prayers made by the appellant in the injunction application is required to be granted. 22. Mr. M.J. Thakore, learned Senior Counsel appearing with Mr. Pranav G. Desai for the respondent has submitted that the learned Trial Judge, after considering the facts and circumstances and law as well as judgments cited on behalf of the parties held that there is no merit in the notice of motion filed by the applicant and that it cannot be said that the product of the appellant alleged to have been shown in the advertisement is denigrated and disparaged. He has further submitted that the respondent has not shown the applicant's product MOOV in the advertisement, rather the product shown in the advertisement is completely different product which is not even remotely connected with the appellant's products. He has further submitted that this would be more than evident if the clippings are shown in the size in which they would be displayed on the television. The minimum TV screen size on which the advertisement would appear would be about 20. He has further submitted that despite knowledge, false statements are made in the plaint by the appellant to the effect that the product shown in the clippings is the appellant's product MOOV. He has further submitted that false statements are made in para 13 of the plaint/application for injunction and they are as under: i. Thereafter, in the third frame of the T.V. Commercial shows a MOM explaining her suffering from ache, she takes out MOOV from her bag and speaks SOH, WHAT TO DO, THIS BACK ACHE

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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

ii. The fourth, fifth, sixth and seventh frames of the T.V. Commercial shows a lady comes to MOM and boy and suggesting her for another remedy and speaks STAKE THIS, YOU NEED A TRUE PAIN RELIEVER. At the same time, a lady gives VOLINI Gel to MOM, who is having MOOV in her hand. 23. He has further submitted that in the Item No. 3 of the list in clipping No. 3 & 7 which is produced along with the notice of motion, false statement is made that the advertisement contains applicant's product MOOV. The appellant is seeking to improve upon the pleadings and seeking to explain away the false statements made before the learned Trial Judge. He has submitted that this is not permissible and the appeal as well as civil application deserve to be dismissed solely on the ground of false statements made in the plaint and the application for injunction. 24. Mr. Thakore has further submitted that the advertisement actually makes a comparison and provides an information that the product of Respondent is having qualities in curing the ailment relating to any back ache and muscular pain. There is no remark against the product of the appellant in the advertisement suggesting that its product is inferior. The advertisement of VOLINI product does not tantamount to any act of disparagement or infringement of applicant's rights under the Trade Marks Act, 1999. He has further submitted that there is no similar get up or trade dress which has been adopted by the Respondent while projecting the product SPACE which is not even remotely connected with the Appellant's product MOOV. 25. He has further submitted that no right can be claimed against the basic colours and use of colour is common to the trade. It cannot be monopolized by any of the parties. He has further submitted that the applicant by distraction of facts have tried to make a false attempt to make a case of unfair trade practice. The advertisement is just a symbolic comparison with other non-existent products. The advertisement in no manner refers to the product of the Appellant and therefore, by construing that the Respondent is showing the product which is distinctively seen as PACE is completely wrong and without any substance. 26. Mr. Thakore further submitted that it is settled law that one cannot claim any copy right on the use of basic colour which is always treated as common colour. The customers are not persuaded by the basic colour and no one goes to the retailer or chemist shop asking for a particular colour of the carton by which he will be induced to purchase the product. There can be no monopoly over colours and in this particular case, the PACE which is appearing on the product pack is entirely a different word and has been prominently used which is in no way identical to or similar to the product under the trademark MOOV of the appellant. He has further submitted that applicant cannot claim any copy right on the colour Violet and in the absence of the same, the claim made by the Appellant that TV commercial of VOLINI contains certain message of the product of appellant is devoid of any merits and it cannot be considered to be a case of disparagement and denigration of the product of the Appellant. He has further submitted that violet colour is a common colour and is used commonly in the trade which cannot be monopolized by any of the parties and therefore, the appellant cannot claim exclusive right on the use of the colour. 27. Mr. Thakore has further submitted that there is no balance of convenience which lies in favour of the Appellant and on the contrary, the respondent will suffer irreparable loss and damages in case the order of the Trial Court is set aside and stay is granted in favour of the Appellant which will take away right of the Respondent to carry on the advertisement which otherwise the Respondent is entitled to do so for promotion of its business in relation to its product VOLINI. He has further submitted that there is no strong prima-facie case in favour of the Appellant as alleged and the balance of convenience does not lie in favour of the Appellant as alleged. He has, therefore, submitted that appeal is without any merit and cause of action, improper and is liable to be dismissed. 28. Mr. Thakore, in support of his submission that the advertisement actually makes a comparison and provides an information that the product of respondent is having qualities in curing the ailment relating to any back ache and muscular pain and there is no remark against the product of the appellant in the advertisement suggesting that its product is inferior, has relied on the decision of the Delhi High Court in the case of Dabur
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

India Limited v. Wipro Limited, Bangalore 2006 (32) PTC 677 (Del.) wherein the Court was to consider the interim injunction application restraining the defendant from telecasting TV commercial in respect of Wipro Sanjivani Honey. It was alleged by the plaintiff that the commercial disparaged the product of plaintiff. The defence raised by the defendant was that the TV commercial was only comparing the two products and showing its own product as superior. There was no disparagement of the plaintiff's product. The Court held that no interim injunction against TV commercial can be granted. The Court took the view that the intent of the commercial is to suggest that the product of the defendant, that is, Wipro Sanjivani Honey is far superior to that of the plaintiff, that is, 'Dabur Honey'. While doing so, the commercial does not denigrate or disparage the product of the plaintiff it merely compares the two brands of honey and proclaims that the product of the defendant is superior. The Court further held that it is one thing to say that the defendant's product is better than that of the plaintiff and it is another thing to say that the plaintiff's product is inferior to that of the defendant. The commercial clearly intends to say (and so it does) that as compared to the product of the plaintiff, the product of the defendant is far better. The hidden message in this may be that the product of the plaintiff is inferior to that of the defendant but that will always happen in a case of comparison while comparing two products, the advertised product will but naturally have to be shown as better. The law is that it is permissible for an advertiser to proclaim that its product is the best. This necessarily implies that all other similar products are inferior. The Court further held that in comparative advertising, a consumer may look at a commercial from a particular point of view and come to a conclusion that one product is superior to the other, while another consumer may look at the same commercial from another point of view and come to a conclusion that one product is inferior to the other. Disparagement of a product should be defamatory or should border on defamation. In other words, the degree of disparagement must be such that it would tantamount to, or almost tantamount to defamation. The Court ultimately held that the overall audio-visual impact does not leave an impression that the story line of the commercial and the message that is sought to be conveyed by it is that 'Dabur Honey' is being denigrated, but rather that 'Wipro Sanjivani Honey' is better. 29. Mr. Thakore has submitted that the decision of the Delhi High Court in the case of Karamchand Applicances Private Limited v. Shri Adhikari Brothers and Ors. 2005 (2) R.A.J. 570 (Del.) relied on by Mr. Joshi is distinguishable on facts. In that case, parties to the suit before the Court were fighting for an advertisement campaign meant to promote sale of mosquitoes repellents, which both the parties are maintaining and marketing. The plaintiff has prayed for an order restraining the defendants from telecasting what is described as GOOD KNIGHT TURBO REFILL commercial, which according to the plaintiff denigrates its product and reserves to dilusion of its brands. Though in this case, the Court ultimately took the view that the telecast of the modified commercial is liable to be restrained not only because the commercial disparages the product manufactured and marketed by the plaintiff but also because the claim made by the defendant about any technological advantage justifying the disparagement are not substantiated and hence, the defendants were restrained from telecasting the commercial advertisements in its original form or in the modified form. The Court lays down certain principles for deciding the matter of such type and Mr. Thakore relied on these principles. He has submitted that it is now a settled law that mere puffing of goods is not actionable. Tradesman can say his goods are best or better. But by comparison, the tradesman cannot slander nor defame the goods of the competitor nor can call it bad or inferior. Two positions clearly emerge from the above pronouncements, namely, (1) that a manufacturer or a tradesman is entitled to boast that his goods are the best in the world, even if such a claim is factually incorrect, and (2) that while a claim that the goods of a manufacturer or the tradesman are the best may not provide a cause of action to any other trader or manufacturer of similar goods, the moment the rival manufacturer or trader disparages or defames the goods of another manufacturer or trader, the aggrieved trader would be entitled to seek reliefs including redress by way of a prohibitory injunction. After considering these principles, the Court took the view in the facts of that case that the devices manufactured by parties are based on the same concept. The concept is simple and intelligible even to a layman. There is no real distinction between the two products either from the point of view of the concept underlining their manufacture or technology used for the purpose. And yet the defendant claims that its product chases away mosquitoes at twice the speed. There is no scientific basis or method for verifying that claim as indeed there appears to be no basis even for making it. But in order to puff up the product, the defendant may be entitled to boast no matter unjustifiably about the efficacy of the device and the
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

speed which the mosquitoes would flee from it. Parliament may in the larger interests of the consumer public by law provide a mechanism to regulate and/or prevent the making of such exaggerated claims. But in an action against a wrong caused by a disparaging advertisement, the question as to how and to what extent the claim made in the advertisement is justified may have to be examined only to the extent the same is necessary for determining the limited issue before the Court. By this standard, Mr. Thakore's submission is that TV commercial of the respondent's product is merely a comparison and by no means, it disparages or denigrates the product of the appellant. 30. Mr. Thakore, in support of his submission that there is no violation of the provisions contained in Section 29(8) of the Trade Marks Act, 1999, has submitted that the similar provisions are there in English Act. Section 10(6) of the Trade Marks Act, 1994 provides that nothing in the preceding provisions of this Section shall be construed as preventing the use of registered Trade Mark by any person for the purpose of identifying the goods or services as those of the proprietor or a licensee. But any such use otherwise than in accordance with the honest practices in industrial or commercial matters, shall be treated as infringing the registered mark if the use without due cause takes unfair advantage of, or is detrimental to the distinctive character or repute of the Trade Mark. Section 10(6) has come up for consideration before the English Court in various cases. He relied on the decision of CHANCERY DIVISION in the case of Barclays Bank PLC v. Rbs Advanta (1996) R.P.C. 307 wherein while refusing the injunction, the Court has held as under: 1. The primary objective of Section 10(6) was to allow comparative advertising as long as the use of a competitor's mark was 'honest'. Thus the proviso should not be construed in a way which would effectively prohibit all comparative advertising. 2. The onus was on the plaintiff to show that the factors indicated in the proviso existed. 3. If use of the registered mark was Snot in accordance with honest practices in industrial or commercial matters, there would be infringement. This was an objective test which depended on whether the use would be considered honest by members of a reasonable audience. 4. The words industrial and commercial matters did not mean that the Court should look at statutory or industry agreed codes of conduct and thus the provisions of the Consumer Credit Act 1974 and the Regulations made thereunder were of little relevance. Although most such codes were concerned to ensure probity, they frequently covered other matters as well. The nature of the products or services no doubt would effect the degree of hyperbole acceptable. Honesty had to be gauged against what was reasonably expected by the relevant public of advertisements for the goods or services in issue. 5. The final words of the proviso, that the use of the mark must take unfair advantage of, or be detrimental to, the distinctive character or repute of the trade mark at most meant that the use must either give some advantage to the defendant or inflict some harm on the character or repute of the registered mark so as to be above the level of deminimis. 6. The leaflet and tables could not be treated as separate. They were distributed together and would be read together. Illegitimate use of a registered trade mark would not necessarily be saved by putting the registered trade mark on one document and the dishonest part on another. If they were intended or likely to be read together the advertisement should be read as a whole. 7. It was most unlikely that any reasonable reader would take the view that the advertisement was not honest. Read fairly, the advertisement conveyed the message that the package of 15 features taken as a whole was believed by the defendant to offer the customer a better deal. 8. The plaintiff was therefore unlikely to win the action and this was a major factor to be taken into account when deciding whether or not to grant interlocutory relief. The comparative triviality of the benefit that would
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be obtained by the plaintiff and the small amount of damage the plaintiff would suffer in the light of other competitors' advertising were further factors which led to the view that this was not an appropriate case for interlocutory relief. 31. Mr. Thakore further relied on the decision of the CHANCERY DIVISION in the case of Vodafone Group Plc and Anr. v. Orange Personal Communications Services Limited 1997 F.S.R. 34 wherein the plaintiffs and defendants were rival telecommunications companies offering cellular mobile telephone networks in a highly competitive market. An advertising campaign by the defendant represented that On average, Orange users save 20 Pound every month compared with the Vodafone equivalent tariffs. The plaintiffs had a registered trade mark Vodafone covering the services offered by the defendant. The plaintiffs sued the defendant for malicious falsehood and trade mark infringement. On the malicious falsehood claim, the plaintiffs argued that the advertising slogan would be interpreted by the public either as meaning (i) that users of the Vodafone network would have to pay 20 Pound more per month than their Orange counterparts for identical services and usage, or (ii) that they would save 20 Pound per month if they transferred to the Orange network. On this interpretation they submitted that the slogan was false, malicious and calculated to cause the plaintiff pecuniary damage. The plaintiffs alleged that (a) the whole comparison was so inherently flawed as to be false irrespective of meaning, or alternatively that (b) the comparison was false on the defendant's and the plaintiffs' meanings. The defendant argued that the public would take the statement at face value and on that basis, making reasonable assumptions, it was true. One such assumption was the elasticity of price and consumption, that is to say that fewer calls are generally made on a more expensive tariff. They also suggested that the statement was true even on the plaintiffs' interpretation. They denied malice. The parties agreed that the judge should apply the one meaning rule in libel when considering the claim based on malicious falsehood. On the trade mark infringement claim, the plaintiffs argued that this comparative advertising fell outside the realm of Section 10(6) Trade Marks Act 1994 (honest commercial practices) and took unfair advantage of the distinctive character and repute of the Vodafone mark. The defendants denied dishonesty and unfair advantage. While dismissing the plaintiff's claim, the Court held that: 1. When applying the one meaning rule to determine the falsity of a statement, the Judge as notional jury had to decide upon a single natural and ordinary meaning of the words used. 2. In determining this ordinary meaning, the Judge had to take into account the fact that the public expect a certain amount of hyperbole in advertising. The more precise and specific the claim, the more likely it was that the public would take it seriously. 3. A comparative advertisement used a trademark otherwise than in accordance with honest practices if it was objectively misleading to a substantial portion of the reasonable audience. There was no one meaning rule in the law of registered trade marks. 4. In most cases the second half of the Section 10(6) proviso (without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the mark) added nothing of significance to the first half. The defendant's claim that even if the slogan was misleading it did not take advantage of the distinctive character of the mark was false. The slogan was meaningless if no one had heard of Vodafone. 5. The ordinary man would have interpreted the slogan at face value; he would not have assumed that the 20 Pound saving would apply to every customer, just to an average customer (in the sense of an arithmetic mean). 6. The single meaning for the purposes of malicious falsehood was that if Orange users had been on Vodafone making the same usage as they made on Orange, on arithmetic average they would have paid 20 Pound more per month, including VAT.

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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

7. For the purposes of trade mark infringement, the plaintiffs' contention that their users faced with this advertisement would take it to mean that on average, if there was a transfer to Orange, 20 Pound a month would be saved was not made out. It was not established on the advertisement itself that there was a substantial body of the public who would expect usage to be the same irrespective of price. They would recognise that fewer calls are generally made on a more expensive tariff the 'elasticity' of price and usage. 8. There was no convincing evidence of malice. 9. The calculation of the 20 Pound figure was not so inherently flawed as to be false irrespective of meaning all the assumptions made were reasonable and the only factors left out of the analysis would not have made a significant difference to this figure. 10. The statement was not false on the defendant's meaning when all relevant considerations were taken into account. On the plaintiffs' meaning, which was rejected in any event, the saving worked out at Pound 15.53, insufficient for the sting of the advertisement to be false. 32. Mr. Thakore further relied on the decision of the CHANCERY DIVISION in the case of Cable & Wireless PLC and Anr. v. British Telecommunications Plc (1998) F.S.R. 383 wherein the defendant issued an advertising brochure in which it compared the costs of using its telephone services with those of the plaintiff and which analysed the costs of its best price package with those of the plaintiff's price packages. The plaintiff issued a writ claiming malicious falsehood and trade mark infringement and obtained an ex parte injunction. The defendant filed some evidence in order to prevent the continuation of the injunction but indicated that it was not the totality of the evidence it wished to file. At the suggestion of the Court, the plaintiff restricted its claim to trade mark infringement and the defendant restricted its defence accordingly. Both parties put in further evidence under time pressure, and both indicated that they might wish to file further evidence. The defendant claimed that its conduct fell within the meaning of honest practices in industrial and commercial matters within the meaning of Section 10(6) of the Trade Marks Act, 1994. While refusing injunction but granting liberty to apply and ordering a speedy trial, the Court held as under: 1. A person who knowingly put forward a false claim could not be said to be acting in accordance with honest practices. 2. The test of honesty was an objective one in the sense that the question to be asked was whether a reasonable trader could honestly have made the statements he made based on the information he had. 3. A trader could have a defence if it turned out that the information he had was wrong in some way or other but he would have to stop the acts complained of when further credible information that he was wrong became available. 4. On the evidence the statements made by the defendant were more likely to be true than false and it had not been shown that they were not ones which any honest trader, having the information which the defendant had, would not have been prepared to make. 5. Although the injunction was refused, there would be liberty to apply but any application would have to be on proper notice with a proper opportunity being given to the defendant to answer any further evidence. 33. Lastly, Mr. Thakore relied on the decision of the CHANCERY DIVISION in the case of British Airways Plc v. Ryanair Limited (2001) F.S.R. 541 wherein the defendant ran two advertisements in which it compared its return air fare prices to a number of European destinations with those of the claimant. The first was headed SEXPENSIVE BA....DS and the second Expensive BA and each featured two columns of prices headed Ryanair from and SBA from and then the respective prices. The first advertisement was withdrawn after a short run after the ASA upheld a complaint from a member of the public that it was offensive. SBA was
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

registered as a trade mark by the claimant for air travel services. The claimant objected to the advertisements and brought proceedings for trade mark infringement and malicious falsehood. In particular, it complained of the offensiveness of the headline of the first advertisement, that the individual price comparisons were unfair and in the case of two destinations (Frankfurt and Dinard) that the destination comparisons were unfair. The price comparisons were said to be unfair because the defendant's midweek return was compared with the claimant's return same week fare and not with its lower return fare which required a Saturday night stay. The Frankfurt comparison was said to be unfair because the defendant's flights went to a secondary airport which was further out from Frankfurt than Frankfurt International to which the claimant's planes flew. The defendant claimed the comparisons were not misleading and relied on Sections 10(6) (use permitted to identify proprietor's own goods) and 11 (2) (b) (descriptive use permitted) of the Trade Marks Act, 1994. The claimant argued that the defendant's use was not in accordance with honest practices in industrial and commercial matters, that Section 11(2)(b) did not protect comparative advertising and that Section 10(6) should be treated as a defence only if there was compliance with the conditions for comparative advertising laid down in Council Directive of October 6, 1997 on Comparative Advertising (97/55). While dismissing the action, the Court held that: 1. The defence of use of a trade mark as a description provided by Section 11(2)(b) of the Trade Marks Act 1994 extended to the use of a description by way of use of a trade mark to describe goods. 2. The Comparative Advertising Directive was not intended to amend the Trade Marks Directive and it would follow that it was not intended to amend or affect the interpretation of any national law passed to implement the Trade Marks Directive. 3. The Comparative Advertising Directive did not require implementation in member states until after the acts complained of. There was no authority to support the proposition that one had to construe a national law in accordance with a subsequent Directive from the moment of its publication even though the Directive itself required implementation later. Accordingly, the interpretation of Section 10(6) of the Trade Marks Act 1994 was not qualified by the Directive. 4. The test as to whether the advertisements were misleading was whether they were misleading to the average consumer. 5. The fact that the first advertisement was offensive did not render it actionable as trade mark infringement. 6. The first advertisement was merely vulgar abuse and was not a malicious falsehood. 7. The price comparisons were not misleading. The average consumer would expect there to be some sort of conditions and the small print made it clear. 8. The omission of the destination information on the Frankfurt fare comparison did not make it a significantly unfair comparison. In substance, the advertisement was comparing with like as far as the fares went. 34. Relying on the above referred judgments and the statutory provisions contained in Section 29(8) of the Trade Marks Act, 1999 which are similar to the provisions contained in Section 10(6) of the Trade Marks Act, 1994, Mr. Thakore has strongly urged that the TV commercial of the respondent's product is nothing but a comparison and there is no infringement of any trade mark of the appellant and hence, no injunction can be granted. The appeal is, therefore, required to be dismissed. 35. After having heard learned counsels appearing for the respective parties and after having gone through the memo of the appeal, affidavit-in-reply filed by the respondent and the impugned judgment and order passed by the learned City Civil Judge, Ahmedabad and after having considered the relevant statutory provisions
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

contained in the Trade Marks Act and the authorities cited before the Court, the Court is of the view that the learned City Civil Judge has committed an error of law and facts in rejecting application Exh. 6 & 7 and in holding that the respondents appeared to be in permissible limits and that there is no merit in the submission that in the objected clips there is an attempt to show that the appellant's product is inferior. It is for the simple reason that even if the product shown in the objected clips is that of the appellant, the only objectionable part in such advertisement can be denigrating and disparaging the product of the rival and showing the product to be better than the rival, even if it is not so, is permissible and in further arriving at the conclusion that the appellant has no prima facie case and balance of convenience is not in their favour and that considerable hardships would be caused to the respondents if the injunction is granted. 36. The finding arrived at by the learned City Civil Judge will have to be viewed in light of the fact that the appellant's product MOOV which is a pain reliever ointment is registered under the Trade Mark Act with a particular trade dress, colour scheme, get up, arrangement and dress and the said product has been developed since 1986 87. The respondent's product VOLINI is also a pain reliever ointment. However, the TV commercial was started by the respondent very recently and only objectionable part in that TV commercial is the colour of the product pack which is akin or similar to the product pack of the appellant. It is also to be seen that the respondent has not filed any reply to the suit before the City Civil Court and only the list of documents is filed and it was contended before the learned City Civil Judge that voiced words indicated are totally different and whole TV commercial was based on comparison and there was no intention or an attempt to denigrate or disparage the product of the appellant. The respondent has not raised any plea before the learned City Civil Judge to the effect that in the TV commercial, there was only a symbolic comparison with other non-existent product. It is for the first time before this Court in the affidavit-in-reply the defendant has come out with this defense. All judgments cited by Mr. Thakore in support of his contention regarding comparison are not supporting or strengthening the case of the respondent. No sooner he raised a plea that the TV commercial was only depicting a symbolic comparison with other non-existent product, namely, PACE, all these Judgments become inapplicable. The comparison can always be made between two existing things and in all these judgments, comparisons are made only between two existing things. There is no question of comparing the respondent's product with any non-existent product. Even if the respondent had to choose any non-existent product, the same cannot be in the same colour pack i.e. violet colour pack in which the product of the appellant is put. The Court is, therefore, of the view that there is a substance in the submission of Mr. Mihir Joshi to the extent that the change of colour of pack of the product of the respondent would satisfy the appellant's demand in the suit and with that change, the respondent can carry on telecasting of TV commercial. 37. Mr. Thakore has also addressed the Court on the issue of infringement of the appellant's Trade Mark with special reference to the provisions contained in Section 29(8) of the Trade Marks Act, 1999. This section states that registered Trade Mark is infringed by any advertising of that Trade Mark, if such advertising (a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters, or (b) is detrimental to its distinctive character, or (c) is against the reputation of the Trade Mark. By quoting Section 10(6) of the Trade Mark Act, 1994 and citing judgments of the English Courts, Mr. Thakore has strenuously submitted before the Court that the respondent has not taken any unfair advantage nor it is contrary to the honest practices in industrial or commercial matters. By telecasting such TV commercial, reputation of the Trade Mark of the appellant in no way is affected and hence, there is no question of infringement of the Trade Mark of the appellant by advertising the respondent's product in the T.V. Commercial. The Court is not convinced with the submission of Mr. Thakore as there appears to be no honest practice of comparing one's product with a non-existent product. By adopting a violet colour which is adopted by the appellant to cover up its product and the appellant's product is by and large known in the general public with that colour, and since the appellant's product is much popular amongst the general public as a pain reliever, the respondent has tried to take unfair advantage which may amount to an infringement of the Trade Mark within the meaning of Section 29(8)(a) of the Act. By taking shelter of a non-existent product violet coloured pack,, if the respondent tries to establish that its product is true pain reliever than the other product, it would certainly affect the reputation of the Trade Mark of the appellant and to this extent, Clause (c) of Section 29(8) of the Act can also
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Paras Pharmaceuticals Ltd. vs Ranbaxy Laboratories Ltd. And 2 ... on 21 February, 2008

be invoked for the purpose of satisfying the Court that the respondent has infringed the Trade Mark of the appellant. In all such cases, the basic criteria is test of average consumer or the objective test is that of reasonable audience. The average consumer or the reasonable audience would normally go by the colour which is shown on the TV commercial. In a country like India, lacks of people are illiterate and they are in need of pain reliever at every stage. The figures given by the appellant indicate that the turnover of the appellant's product MOOV is on a very large scale and the TV has reached to the remote villages and areas of this country. Thus, there may not be an objection against the TV commercial of the respondent's product but the way in which the said product was introduced T.V. Commercial and telecasted, is certainly objectionable. The appellant has, therefore, rightly filed the suit before the City Civil Court, Ahmedabad seeking an injunction against such TV commercial. 38. The Court, therefore, directs the respondent to change the colour of the pack of the product which is stated to have been a non-existent product, into any colour other than the colour of the appellant's product pack. Till such colour is changed, the Court hereby restrains the respondent, their servants, Agents, Dealers, Distributors, Stockist, Retailers, Printers and Publishers from printing, publishing, advertising and using the artwork of the appellant's product. 39. This appeal is accordingly allowed and the impugned order of the learned City Civil Judge is modified to the aforesaid extent. 40. In view of the order passed in Appeal From Order, Civil Application does not survive and it is accordingly disposed of. 41. When this judgment is pronounced, Mr. Mihir Thakore, learned Senior Counsel appearing for the respondent prays for stay of the operation of this judgment and order. He has submitted that the stay was not in operation all throughout and this Court has also not granted ad-interim stay earlier. He has, therefore, submitted that since the respondent wants to approach the Apex Court challenging this order, the implementation and operation of the present order may be stayed for a period of 15 days. Mr. Y.J. Trivedi, learned advocate appearing for the appellant has strongly objected to this request. 42. Since the Court has heard the parties at length and arrived at the conclusion that the objectionable clippings in the TV commercial and more particularly use of violet colour to cover up a non-existent product which looks like the product of the appellant, for the purpose of comparision and to show their product as true pain reliever, are disparaging and denigrating the product of the appellant and it is amounting to breach of the infringement of the appellant's Trade Mark, the request for stay of this order cannot be acceded to and it is accordingly rejected.

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