Bombay High Court grants injunction based on family of marks

In Neon Laboratories Ltd v Themis Medicare Ltd (Notice of Motion (L) No 827 of 2014 in Suit (L) No 336 of 2014), the Bombay High Court has, in an interim order, restrained Themis Medicare Ltd and Ciron Drugs and Pharmaceuticals Ltd from using the marks XYLOX 2%, XYLOX HEAVY, XYLOX GEL, XYLOX ADRENALINE and XYLOX 2% JELLY based on Neon Laboratories Ltd’s marks LOX 2% ADRENALINE, LOX 4%, LOX 5%, LOX HEAVY 5%, LOX VISCOUS, LOXALPRIN, LOXALPRY, LOXIMLA, PLOX and RILOX.

The dispute arose in or about March 2014 when Neon discovered that Themis and Ciron were manufacturing and selling pharmaceutical products bearing the family of XYLOX marks. Neon filed suit, contending that:

• the family of LOX marks is associated exclusively with Neon and any use of the mark LOX is thus perceived as an extension of that family of marks;

• the addition of the prefix 'XY' in the family of XYLOX marks did not sufficiently distinguish that family from the family of LOX marks;

• the family of XYLOX marks was used for a virtually identical range of products with a slightly different formulation; and

• therefore, the family of LOX marks was being infringed by the use of the family of XYLOX marks, and Themis and Ciron were attempting to pass off their goods as those of Neon.

In their defence, Themis and Ciron contended that:

• Neon had failed to reveal that its mark LOXID had been refused registration and that it had abandoned its application for the mark LOX 2% following an opposition by Cadila Healthcare Limited;

• 'LOX' forms an essential and prominent feature of various other third-party marks in the market, such as CIPLOX, NORFLOX and LOXOF. 'LOX' is common to the trade and neither party can claim exclusivity over that term;

• they had adopted the family of XYLOX marks in an honest manner, as the mark XYLOX was derived from the drug xylocaine with the addition of the prefix 'XY', which makes it distinctive;

• the families of marks used by the parties were dissimilar; and

• as the family of XYLOX marks had been used since 2012, the present action was belated and Neon was guilty of acquiescence.

Rejecting the defendants' contentions, the court passed the above order on the following grounds:

• Section 28(3) and Section 12 of the Trademarks Act 1999 contemplate the possible co-existence of multiple proprietors of a single mark simultaneously. However, each proprietor enjoys the entirety of its statutory rights against third parties.

• The object of both families of marks was the same.

• The defendants' explanation for the adoption of XYLOX as deriving from the drug xylocaine was not credible, as the defendants could have used any letter of the alphabet other than 'X' to place at the end of their mark;

• The parties' families of marks were similar, as the first letter 'X' in XYLOX was barely visible and the eye was led ineluctably to the next letter 'Y' and the following letters 'LOX'. The stricter test to be applied in cases involving pharmaceutical trademarks was firmly established by the Supreme Court in Cadila Healthcare Ltd v Cadila Pharmaceuticals Ltd.

• Delay by itself is not a sufficient defence. Further, a mere failure to sue without a positive act of encouragement is not a defence and does not constitute acquiescence.

The decision is important in that a three-letter mark - LOX - has been considered to be distinctive of Neon’s products. Usually, it is difficult to obtain a monopoly over three-letter marks, especially in the pharmaceutical industry where trademarks are coined from the prefixes or suffixes of active ingredients. It remains to be seen whether this decision will stand the test of time.

Adheesh Nargolkar, Shailendra Bhandare and Arunadhri Iyer, Khaitan & Co, Mumbai