'LIV' written in isolation held to be essential feature of mark for liver disease medicines

In a judgment dated November 9 2012, the Division Bench of the Delhi High Court has allowed an appeal by Himalaya Drug Company, the owner of the trademark LIV-52, and restrained SBL Limited from using its LIV-T mark. 

In 1997, at the interim stage, the Division Bench of the Delhi High Court had allowed an appeal by SBL against the grant of an ad interim injunction in favour of Himalaya and had vacated the ad interim injunction granted by the single judge. The ad interim decision of 1997 is often cited as a judicial precedent in trademark disputes where a defence is raised that a mark is generic or common to the trade.

Himalaya has been the registered proprietor of the mark LIV-52 in Class 5 of the Nice Classification since July 10 1957 in respect of medicinal preparations for the treatment of liver disease. The mark has been in use since 1955. Himalaya alleged that use of the trademark LIV-T by SBL in relation to medicinal preparations for the treatment of liver disease amounted to infringement of the LIV-52 mark, as the essential element 'LIV' was used by SBL in a similar manner as in the LIV-T mark. SBL contended that 'LIV' is generic and common to the trade for medicines used for the treatment of liver disease. It further contended that:

• Himalaya’s product was a homeopathic preparation, while SBL’s product was an ayurvedic preparation; and
• the packaging of the products was dissimilar.

The learned single judge of the Delhi High Court dismissed the suit. The judge held that SBL had showed that 'LIV' was publici juris. It further held that, when comparing the two marks, 'LIV' should be considered as a generic and non-distinctive part of the mark and should be ignored, even if the two marks were being compared as a whole.

Following an appeal by Himalaya, the Division Bench of the Delhi High Court reversed the dismissal of the suit and granted an injunction against SBL preventing it from using the mark LIV-T. However, the court allowed SBL to dispose of existing stock within a period of six months, since it had been using the mark for a considerable amount of time. The following aspects of the judgment are noteworthy:

• The suit was decided as per the provisions of the Trade and Merchandise Marks Act 1958, and not under the Trademarks Act 1999. This is because the suit was filed before the coming into force of the 1999 act, which contains a savings clause providing that suits filed prior to the coming into force of the act must be decided as per the provisions of the 1958 act. The provisions of the 1958 act differ from those of the 1999 act.
• Section 32 of the 1958 act provides that, in all legal proceedings relating to a trademark registered in Part A of the register, after expiry of a period of seven years from the date of registration, the registration will be considered to be valid in all respects, unless it is proven that the original registration was obtained by fraud or that, on the date of commencement of the legal proceedings, the mark was not distinctive. The court held that the registration for the mark LIV-52, which was in Part A of the register, was more than seven years old and, hence, the registration was conclusive in all legal proceedings. Furthermore, SBL had not applied for rectification of the registration or challenged its validity. The court held that, when Section 32 of the 1958 act comes into play, there is a very limited scope for testing the validity of a registration; moreover, the 1958 act does not have provisions akin to Section 37 of the US Lanham Act, which allows the court to review the validity of a registration or even to cancel an invalid registration. The concept of Part A and Part B of the register (which relate to inherently distinctive marks and marks capable of distinguishing, respectively) is not present in the 1999 act. Moreover, the provisions contained in Section 32 of the 1958 act have been omitted from the 1999 act. 
• When reviewing an action for infringement, while the marks must be compared as a whole, the court must take into account the prominent or essential feature of the marks. The element 'LIV' used in isolation (ie, LIV-52, as opposed to being part of a complete word, eg LIVACT) was held to be an essential feature of Himalaya’s mark. The court held that, as the validity of the mark LIV-52 was not in question, Himalaya was entitled to claim exclusive rights in the essential feature 'LIV' used in isolation (ie, LIV-...) and prevent the use of the mark LIV-T by SBL. Under the 1999 act, with the introduction of Section 17, it might have been possible to contend that the 'essential feature' test (which allows the trademark owner to claim exclusivity in the essential feature of a composite mark) may not necessarily be applicable. Section 17 states that the registration of a composite mark shall give exclusive rights to use the mark as a whole, but shall not grant exclusive rights to use a part of the mark which is not the subject of a separate trademark application/ registration or is otherwise non-distinctive. 
• While deciding that an interim application excludes the generic components of a mark for the purposes of comparison, the court believed that there existed a prima facie triable case. The fact that an injunction had been refused at the ad interim stage did not necessarily mean that an injunction could not be granted at the final hearing of the suit.
• The court agreed with the proposition that there may be cases where the trademark contains an element which has a nexus with the ailment that the preparation seeks to cure, or an ingredient of the medicine or an organ of the body, and that such element may be considered to be generic. However, it held that the issue of whether such a mark, or a part thereof, is generic, is necessarily a question of fact. The court further stated that the following issues should also be decided on the facts of each case: (i) the level of distinctiveness acquired by the mark through long-standing use; and (ii) whether the descriptiveness of the mark has been eliminated through acquired distinctiveness. The burden of proving that a mark - or a part thereof - is generic rests on the defendant. The court held that, while Himalaya had provided substantial evidence (eg, in the form of court judgments in its favour, surveys and statements by doctors) to the effect that 'LIV-' used in isolation was distinctive of Himalaya’s LIV-52 products, SBL was unable to submit evidence demonstrating that 'LIV' was publici juris. An important factor which weighed against SBL was that, although it asserted that 'LIV' was generic, it had itself applied for the registration of the mark LIV-T.
• The court held that, in an action for infringement, it was immaterial: (i) that Himalaya’s product was a homeopathic preparation, while SBL’s product was an ayurvedic preparation, as long as the registrations covered medicinal products; (ii) that Himalaya's sales turnover had not reduced; (iii) that the packaging of the products was different; and (iv) whether there was evidence of actual confusion.
• Importantly, the injunction was issued only against use of 'LIV-'. The judgment specifically permits SBL to use a mark containing the element 'LIV' not in isolation and accompanied by suffixes, examples of which are given in the written statement filed by SBL (eg, LIVOL and LIVOFIT - but not LIV-OL or LIV-OFIT). Himalaya made a specific concession in this regard during the course of the arguments.

Mustafa Safiyuddin and Nishad Nadkarni, Legasis Partners, Mumbai