Cadila HealthCare vs. Cadila Pharmaceuticals- A Breakthrough Judgment In Trademark Related Lawsuits

Lawsuits concerning unregistered trademarks are common. Confusion regarding drugs due to the similarity in trademarks can be a severe issue, as it could be life-threatening. The Cadila HealthCare Vs. Cadila Pharmaceuticals is one of the milestone judgments in connection with passing off of an unregistered trademark. The case and the judgment focus on the vulnerability of the unregistered trademark in India. There are various ambiguous questions related to “passing off.” As business entities are increasingly converging on the importance of trademark registration and concerns of passing off, the judgment in Cadila HealthCare Vs. Cadila Pharmaceuticals acts as a point of reference.

A Note On Unregistered Trade-Marks

Passing off is one of the avenues of trademark and their usage. It demarks the rightful and unrightful use of trademarks. It prohibits any person or business entity from characterizing their services and goods as someone else’s. It also prohibits the sale of services or goods by any person as they are of someone else. It is one of the measures for protection for brands or trademarks under the law. However, in the case of an unregistered trademark, the action of passing off is considered maintainable.

The Cadila Healthcare Vs. Cadila Pharmaceuticals -The Case

The case for Cadila Healthcare Vs. Cadila Pharmaceutical was between two pharmaceutical companies. They both took over the business of Cadila Group as per the process of company restructuring. Cadila Healthcare Limited was the applicant, and Cadila Pharmaceuticals Limited was the respondent. Both the applicant and the respondent had the legal rights to use Cadila’s name as their corporate name after the Company Restructuring as per Section 394 and Section 391 of the Company Act.

However, the case between the two major pharmaceutical companies concerned a drug used to treat Falciparum Malaria. The case is critical and is essential to understand the trademark laws in India.

The applicant industrially produced a drug called ‘Falcigo,’ known by “Falcipahrumi.’ It was used for the treatment of cerebral malaria. The trademark ‘Falcigo’ was approved by the Drugs Controller General India on 7.10.1996.

On the other hand, the Drug Controller General Of India also granted Cadila Pharmaceutical Limited permission to manufacture a drug for the treatment of ‘Falciparum Malaria.’ The chemical composition of  the drug had Mefloquine Hydrochloride. The company sold the medicine under the trade name “Falcitab.”

The applicant filed  the court case against the respondent for using the trademark “ Falcitab.” The  bone of contention was the use of the word “false.” The applicant’s concern was  that the same name is also there in its trademark medicine “Falcitab,” used to treat the same disease. It may create confusion, and the respondent’s drug could be sold  as manufactured by Cadila healthcare. Here three points may have been noted as mentioned below.

  • Both companies used the same name, corporate name, Cadila.
  • The drug had different composition but a similarity in name and used the common word “Falci.”
  • Both the drugs were L category drugs and can only be sold to hospitals.

The applicant’s concern was that there could be chances of deception or confusion regarding the sale and use of the medicine.

The Law Involved

In cases of unregistered trademarks, the similarity between the contesting marks is a vital aspect. The probability of deception and the chances of goods manufactured by one manufacturer to be passed off as that of another are thoroughly examined. Some of the crucial sides are as follows.

  • The nature of the trademark.
  • The degree of resemblance.
  • The type of good that the unregistered trademark represents.
  • The mode in which the goods can be purchased.
  • The type of risk involved if passing-off occurs.

In this particular case and all cases of this kind, the court considered the weightage of all factors before delivering the judgment.

The Analysis Of The Case

The key question here was whether the respondent’s trademark might be passed-off as that of the applicant due to the similarity in name and the product they represent.

The court noted the point of differences.

  • Different composition of drugs.
  • Different side effects.
  • The mode of sale of the medicine.

The court will also consider that there is a potential danger to life as the defendant’s medicine is used to treat the same disease but has a different composition.


The Conclusion

After carefully studying all the details, the court came to its conclusion. Because the drugs were an L category drug, the court was convinced that there were potential confusion chances. There was a probability of passing off the respondent’s drug as that of the manufacturers. Later the case was moved to The Supreme Court; it also concluded that there was a case of deceptive similarity. Judgment was delivered in favor of the applicant.

The case and the landmark judgment once again established the importance of the Trademark Act, 1999.

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