Dr. Reddy’s Laboratories Ltd. v. Reddy Pharmaceuticals Ltd.

After reading this case analysis, the readers will learn how the High Court of Delhi applied common law principles and jurisprudence to prevent the defendant from copying and infringing the plaintiff's name "Dr Reddy's".
CITATION2004 (29) PTC 435 (Del)
COURTDelhi High Court
JUDGES/CORAMJustice Ramesh Chandra Chopra
DATE OF JUDGEMENT26.08.2004

Introduction

With the technology and web advancing at an unbeatable pace, intellectual property has gained immense importance and light. Be it a small company or a multi-national corporation, intellectual property has become an invaluable asset and is fiercely protected by all. The welcoming of the globalisation has expanded markets of all commodities across borders. International players are constantly being copied by small and upcoming business to get ahead in the race. Such malpractices have become rampant and the present case is one such example.

Facts

The facts of the case are as follows: The plaintiff/appellant/petitioner is Dr Reddy’s Laboratories Ltd. which is an internationally reputed company, engaged in the manufacture and sale of pharmaceutical products, bulk drugs and finished dosages. The 19 year old-company has its base in Hyderabad, but enjoys fame and reputation overseas as well. A logo representing aman with outstretched arms and word mark “Dr Reddy’s” was created and adopted by the company in April, 2001 and the same was assigned exclusively to the plaintiff as its copyright owner in 2002. The plaintiff, at the time of suit, had applied for registration of the trademark in various countries, including India. The company owns various subsidiaries by the name of “Reddy” and/or “Dr Reddy” and commands enormous goodwill. It is reputed for quality pharmaceutical products which are identified through its trade name and logo of the man on the packaging.

On the other hand, the defendant/respondent was Reddy Pharmaceuticals Company which initially had the business of only purchase and supply of bulk drugs, and not their manufacture. The defendant acted as a distributor/agent on contract for the plaintiff and many more pharmaceutical companies.

The dispute between plaintiff and defendant arose when in September 2003 the plaintiff discovered that the defendant was selling their own drugs with a packaging similar to that of the plaintiff’s in many ways: firstly, the defendant had the name “Reddy” on their packaging; secondly, the defendant sold drugs by names similar to those of the plaintiff- for instance, the drug Omeprazole was sold by the defendant under the brand name “OMRE” while the plaintiff sold it under the name “OMEZ”; next the defendant was using a packing and get-up which resembled the plaintiff’s products and were deceptive to the eyes. On discovering the malpractice, plaintiff arranged for various meetings with the defendant to settle the dispute but no outcome were achieved and the defendant continued its acts of copying. The defendant’s use of the name “Reddy” in their domain name and internet websites also built up the dispute.

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The plaintiff approached the Delhi High Court to obtain a permanent injunction to

  1. Restrain the defendant, its Directors, servants, agents and anyone so associated, from using the plaintiff’s mark, “Dr Reddy’s” and the trading style “Reddy Pharmaceuticals Limited”, in any form, whatsoever;
  2. Restrain the defendant from copying the layout, get-up and medicine names of the plaintiff’s pharmaceutical products;
  3. Restrain the defendant from reproducing the plaintiff’s logo of the man, in any manner whatsoever;
  4. Restrain the defendant from passing off.

Additionally, the plaintiff prayed for an ad interim injunction till the suit was finally disposed. The said application for ad interim injunction was opposed by the defendant. The learned single judge presiding over the case, Justice Ramesh Chandra Chopra, having found no merits in the contentions of the defendant, granted the ad interim injunction to the plaintiff.

Issues

The main issue in this case is: Whether or not the plaintiff is entitled to ad interim injunction in his favour.          

Contentions of the Defendant

As per the defendant,

  1. The plaintiff was claiming monopolist and proprietary right in a common surname, “Reddy”.
  2. The plaintiff did not have the mark “Dr Reddy’s” registered as a trademark and so could not claim any rights.
  3. The plaintiff only had proprietary rights over the mark “Dr Reddy’s”, and not “Reddy”.
  4. They had no similarity of packaging with the plaintiff’s, which meant there was no confusion being created in the minds of customers.
  5. The suit was instituted by plaintiff to recover their due debt and was only an arm- twisting tactic.
  6. They had been doing the business of marketing pharmaceutical products by the name “Reddy” since 1996 and that the plaintiff was well aware of this fact and never objected to its use, thus implying acquiescence.

Summary of court decision and judgment

The plaintiff had prayed for an ad interim injunction to restrain the defendants from infringing their intellectual property and allied rights, until a permanent injunction for the same was granted. The defendants vehemently opposed the application for ad interim injunction but failed to make their case. Thus, the judge granted the ad interim injunction because the defendants had passed off the plaintiff’s products which enjoyed superior goodwill and reputation and caused irreparable loss to the plaintiff.

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Analysis

Here, as the mark “Dr Reddy’s” was not a registered trademark, the plaintiff could not bring an infringement action against the defendant. But as the mark had become well known in India, as well as overseas, the plaintiff’s action for passing off was totally backed by tort law.

Assuming that the defendant’s use of the trade name, “Reddy”, to market and package its products is bona fide. This would imply that the defendant must have had a good reason to use the name for its business and competition. As per the case, the reasoning given by the defendant for use of “Reddy” was that it was the last name of their Managing Director, and hence the name and usage. But the reasoning is liable to be set aside because it prima facie seems absurd and also because the defendant entered into business way after the plaintiff had been in business since 1984, whereas the defendant started his commerce only in 1996, and having operated for so long the plaintiff earned a good name which the defendant would also be aware of, but still it chose to use a very similar name as that of the plaintiff’s. Hence, the assumption is false and defendant’s use of the trade name and mark cannot be justified.

Even the above-mentioned point that the defendant had been in manufacturing, distributing and selling business of drugs by the name of “Reddy Pharmaceuticals Limited” since 1996, was flawed as there was no record or document to show their manufacturing business prior to 2003. The defendant only purchased and sold drugs from companies like the plaintiff’s and thus, was their agent. It was only in 2003 that the defendant launched 33 pharmaceutical drugs under various brand names, used the name “Reddy” and stepped in the manufacturing business with the name. But even still there appeared to be no manufacturing unit owned by the defendant at the time of the suit and the defendant was only putting the name “Reddy” on pharmaceutical preparations of other manufacturers. To add up, the defendant also started using a Hyderabad office so as to mislead the customers as the plaintiff is a Hyderabad-based company. Thus, the defendant acted dishonestly.

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The logo created by the plaintiff of a man with outstretched arms and words “Dr Reddy’s” is an original artistic work and falls within the meaning of Section 2(c) of the Copyright Act. Though the mark had not been registered during the case, it was well known, distinctively identified with the defendant as discussed above and the Court also stated that non-registration could not be a ground for refusal of the injunction. The plaintiff, having been in business for very long, had gained international reputation and their logo of a man with outstretched arms had acquired substantial recognition worldwide. An important precedent was set by Kirloskar Diesel Recon Pvt. Ltd. & Anr. v. Kirloskar Proprietary Ltd.[1],  in which it was held that ‘Kirloskar’ had become a household word and thus a trademark. In the present case as well, “Dr Reddy’s” had acquired a brand image of its own. So using the name and logo, with minor variations was nothing but a step to deceive and confuse consumers and cause losses to the defendant by way of passing off.

Hence, considering all the above points, the ad interim injunction was correctly granted to the plaintiff as the defendant was only trying to encash upon the reputation and goodwill of the plaintiff.     

Conclusion

In my opinion, in the present judgement, there has not been much reference to the related statutory provisions. Rather, the judge has relied upon common law and general principles to reach the judgement which makes it a good precedent. Intellectual property has a long way to go and the domain of law is only going to widen its reach and never shrink.


[1] Kirloskar Diesel Recon Pvt. Ltd. & Anr. v. Kirloskar Proprietary Ltd, AIR 149, (Bom: 1996).