IPAB can form independent view, says court

In United Biotech Private Limited v Orchid Chemicals and Pharmaceuticals Ltd (WP (C) No 8198/2008 and CM 15758/2008, July 4 2011), the Delhi High Court has dismissed United Biotech Private Limited (UBPL)'s appeal against an order of the Intellectual Property Appellate Board (IPAB) allowing the cancellation of UBPL’s trademark FORZID.

UBPL is engaged in the manufacturing and sale of pharmaceutical preparations, including injections, under the trademark FORZID. It obtained registration of the FORZID mark in Class 5 of the Nice Classification on October 18 2002. FORZID consists of the words 'for' and 'zid', the latter being derived from the word ‘Ceftazidime’. Orchid Chemicals and Pharmaceuticals Ltd manufactures Ceftazidime injections under the mark ORZID. Orchid commenced use of the mark ORZID in May 1999 and registered it in Class 5 on September 6 1999. The products of both parties are prescription drugs.

Upon becoming aware of UBPL's use of the deceptively similar trademark FORZID, Orchid filed a trademark infringement action in the High Court of Madras (CS No 1027 of 2007) in September 2007. Orchid was granted an ex parte injunction. UBPL's registration of the mark FORZID came to Orchid’s knowledge when UBPL filed a counter affidavit. The interim injunction was later set aside by the court, even though it found that Orchid's use of the mark ORZID predated UBPL's use of its mark, and that both marks were phonetically similar. Orchid filed an appeal against the order.

Orchid also initiated proceedings before IPAB for the cancellation of the mark FORZID. IPAB allowed the rectification and directed that the FORZID mark be removed from the register. UBPL filed the present petition, arguing as follows:
  • The fact that both marks shared the generic element 'zid' did not mean that the marks were deceptively similar. The test for deceptive similarity should not take into account generic elements.
  • The marks were visually different and the prices of the products were different. Therefore, there was no scope for confusion.
  • IPAB had erred in ignoring the earlier order of the single judge refusing to grant an interim injunction to Orchid. That order had been affirmed by the Division Bench. Therefore, IPAB's order should be set aside and the case remanded to IPAB for a fresh hearing.
Orchid argued as follows:
  • The single judge of the Madras High Court had held that the marks were phonetically similar and that Orchid was the prior user.
  • The dosages of the injections were different. If wrongly administered, the products could result in serious side effects.
  • The Madras High Court had refused to issue an injunction at the interlocutory stage. Therefore, the court order was not binding on IPAB.
  • UBPL's mark included Orchid's mark in its entirety. UBPL had thus adopted the FORZID mark in bad faith.        
The court held as follows:
  • FORZID and ORZID are deceptively similar. The addition of the soft consonant 'F' to the ORZID mark did not reduce the similarity of the marks.
  • The dosages of the injections were different. The difference in prices was insufficient to find that the average unwary purchaser would not be confused.
  • IPAB was not bound by the order of the High Court at the interim injunction stage.
  • Orchid had not acquiesced to UBPL's use of its mark. There was no evidence to show that Orchid had not taken any steps to seek an injunction against UBPL despite being aware of UBPL's use of FORZID.
Interestingly, the High Court, while asserting that it has supervisory authority over IPAB (which would imply that a High Court judgment is binding on IPAB), held that cancellation actions must be decided by IPAB and that the latter can form an independent view.   
Abhishek Nangia, Advocate Ranjan Narula Associates, Delhi

Get unlimited access to all WTR content