Background

Following the Classic Trinity Test, Serum Institute of India successfully defends the trademark “COVISHIELD” for its own Covid-19 vaccine in a passing-off action brought by a Nanded-based patented firm. 

The Bombay High Court’s recent decision denouncing Cutis Biotech’s petition to prevent SII from ever using trademark ‘Covishield’; for its vaccine has laid the groundwork for the reduction of vexatious lawsuits.

The Hon’ble Court, through discarding Cutis Biotech’s appeal; stated that ‘Covishield’ is a widely known Coronavirus vaccine. The State’s Vaccine Administration Program will be confused and disrupted; if a temporary restraining order directing SII to stop using the mark “Covishield”. In this case, an injunction would have far-reaching consequences that would extend further than the parties to the lawsuit.

Procedural History

Before the District Judge : Nanded

Around December 2020, a Nanded-based patented firm, through its sole proprietor Mrs Archana Ashish Kabra, filed a lawsuit toward Serum Institute of India (herein referred to as SII) and Anr. (one, Mr. Bhandaru Srinivas), desiring an order of injunctive relief prohibiting SII from using the trademarks ‘Covishield’ and/or ‘Covid shield’ for their COVID-19 vaccine.

Cutis Biotech asserted that they had adhered to the trademark “Covishield” before SII, and also that their sanitisers and disinfectants had begun to circulate throughout the market under the same title.

SII filed an application under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908; requesting that the plaint be dismissed on the grounds that the lawsuit was just not maintainable under section 134(2) of the Trademark Act, 1999.

Before the Commercial Court: Pune

Cutis Biotech submitted a Commercial Suit in the District Court of Pune; together with an appliance for a temporary injunction, while the Nanded suit had been pending adjudication.

Contentions: Cutis Biotech

It was contended; that they coined the term “Covishield” for pharmaceutical and other associated accessories, for the first time;

Additionally, they were using the trademark ‘Covishield’ on their hand sanitiser since April 29, 2020. The date as to which they submitted an Application for registration of the mark ‘Covishield’ in Class 5 in regards to; pediatric, ayurvedic, allopathic, medicinal, and pharmaceutical preparations, vitamins and nutritional supplements for animals and humans; that is still pending well before Trademarks Registry;

It was asserted, that their company garnered products bearing the trademark ‘Covishield’ from their producer. It includes antiseptics and disinfectant liquid, sanitizers, surface decontaminant spray, as well as fruit and vegetable washing liquid, and began selling them throughout India;

Further assertions were made that, their merchandise yielding the trademark ‘Covishield’ are sold commercially. Such products have been popularized through; advertising, publicity, endorsement, and marketing, and that as a result of their preceding use of the trademark; they already have earned reputation and goodwill;

The SII applied for the trademark ‘Covishield’ under Class-5 for the product ‘vaccine for human use’ only on June 6, 2020; and also that the implementation is still currently awaiting with the Trademarks Registry;

They plan to launch a several more products for sale yielding the trademark ‘Covishield,’ include but are not limited to vaccines; but then that due to Serum Institute of India’s trademark registration and various press releases affirming the Covid-19 vaccine’s name as ‘Covishield’, their major trading partners and producers have denied to deliver the products and/or collaborate with them owing to a ‘potential of ambiguity’ pertaining ‘Covishield’, that has led them to suffer losses;

that the both candidates are trading in a prevalent area of activity and since Cutis has used the same trademark prior to SII; the use of “Covishield” by Serum Institute of India is mischaracterizing and manipulative to consumers.

Counter Contentions: Serum Institute of India

Suppression of Material Facts

Cutis Biotech has clandestinely filed the current suit without discontinuing or informing the Nanded court of the previous suit, which strives the very same sculptures and is filed against the other parties.

Cutis Biotech has withheld a material fact from the Hon’ble Court, namely that on December 12, 2020, it applied to the Trademarks Registry for the registering of the trademark “Covishield” in respect of “vaccine for human use,” and has thus accosted the Court with soiled hands.

buse of process of Law

Serum Institute of India relied on the judgements in K.K. Modi v. K.N. Modi[1], M/s. Chetak Construction Ltd. v. Om Prakash & Ors[2]and Union of India & Ors. v. Cipla Ltd. & Ors[3], in submitting that Cutis had filed two Suits along with two Applications for the same reliefs against the same parties Serum Institute of India but in two different Courts which amounts to an abuse of the process of law, forum shopping, and breach of the principles of natural justice.

Cutis failed to establish a case for passing off

Cutis Biotech seemed to have prima facie struggled to meet the three main elements of the Original Trinity test for passing off a trademark:

(a) Cutis Biotech’s goodwill;

(b) Serum Institute of India’s misinterpretation; and

(c) losses incurred to Cutis Biotech’s goodwill.

Cutis Biotech failed to meet any of the parameters, according to Serum Institute of India.

Prior Goodwill attached to the Vaccine and their usage

SII claimed that it was founded in 1966 with the goal of producing life-saving immuno-biologicals; and were in short supply in the country and had to be imported at exorbitant prices. SII has been successful in making India self-sufficient in dealing with various diseases and illness. Such complications includes Tetanus, anti-toxin, and other life-saving biologicals on a large scale and at reasonable prices since its inception.

It was further claimed that, ithas built a strong reputation as well as goodwill amongst these trade and the general public as a result of its advancements and comprehensive research and development in collaboration with AstraZeneca and Oxford University to evolve a vaccine for COVID-19 virus immunity, as well as the applications for various regulatory authorizations and authorizations.

Further submissions were made that, several transcripts since March 2020, making reference to a USD 100 million financing and its plan to develop a Covid-19 vaccine in collaborative efforts with Astra Zeneca, demonstrating prior use of the ‘Covishield’ mark.

As a result, when SII implemented for registering of the trademark “Covishield” on June 6, 2020; it was already well-known in the press. SII had also filed the necessary documents; demonstrating a continuous chain of fast and efficient activity in the development of the vaccine under the said name.

SII argued that Cutis Biotech’s use of the trademark ‘Covishield’ earlier to SII was highly improbable.

Visual Appearances

Because the essence as well as visual appearance of both parties’ products are so dissimilar; there is no chance of consumers being confused, misled, or deceived.

Case Laws

SII contended that although a party has a registered trademark for goods or products in a classification descending underneath one class; the Supreme Court’s decisions in Nandhini Deluxe v. Karnataka Cooperative Milk Producers Federation Limited[4] and Vishnudas Trading asVishnudas Kishendas v. Vazir Sultan Tobacco Co. Ltd., Hyderabad & Anr[5] it’s doesn’t vest dominance over the complete category of goods with the owner of these registered mark.

SII also argued that there really is no deceiving similarity or mischaracterization, citing the Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd[6]. decision. SII also cited the decision in N. R. Dongre & Ors. v. Whirlpool Corporation & Anr.[7], which established that comparative hardship and the equilibrium of accessibility must be considered when granting an injunction for a passivized act.

Further Claim

SII also asserted that Cutis Biotech can only assert to have initiated the market in May 2020; and that the company has not been in business long enough to even have built up significant goodwill or reputation that can be exploited by SII. As a direct consequence, the basic components of the passing off action are lacking.

SII also argued that the equilibrium of expedience favors them as the vaccine is a medicine that prevents a fatal disease, namely Covid­ 19.

SII is currently supplying this vaccine to the Indian government and distributing it to a number of other countries across the world. As an outcome, the number of people who have used the vaccine ‘Covishield’; It is much higher than the number of people who have used Cutis Biotech’s product(s).

Rationale behind rejection of Cutis Biotech’s plea:

Cutis Biotech prima facie failed to prove that any independent customer was conned as a result of SII’s actions.

There is a difference in the overall aspect of the products of SII and Cutis Biotech. It has also different objectives; any likelihood of deception also cannot be identified.

Cutis Biotech also failed to prove the trinity test for passing off a trademark (more specifically described hereinabove). It failed to show that the equilibrium of convenience is in its favor or that it will suffer irreversible damage if the injunction is not awarded.

The Court considered that, the people all over the world were waiting for a vaccine to stop Covid-19.. As a result, it was determined that prohibiting SII from using the trademark ‘Covishield’; and disseminating the vaccine under that trademark at this time would cause significant hardship.

As a result, the Court determined that both comparison hardship and the balance of accessibility favor SII.

Affronted by the interim order made by the Hon’ble Commercial Court Cutis Biotech contested the interim order before the Hon’ble Bombay High Court in a Plea under Section 13 of the Commercial Courts Act, 2015.

Before the Hon’ble Bombay High Court

The Hon’ble Court applied Classic Trinity test, which states that the essential elements in a trademark infringement initiative are;

(a) constructing reputation and goodwill affixed to the services and goods; 

(b) demonstrating that the respondent’s actions are likely to result the public into believing that the respondent’s goods and services are the applicant’s goods and services; and

(c) demonstrating that the claimant is likely to suffer or has suffered damages in the event of the respondent’s actions.

A Division Bench of the Bombay High Court in Pune, agreeing with the Hon’ble Commercial Court, described five  significant factors for dismissing Cutis Biotech’s appeal, that are as follows:

Prior Usage

After reviewing the evidence on database, the Court determined that there was sufficient evidence to show prior adoption and use; and that SII has continued to use it without interruption. SII had also obtained various authorizations and licenses to manufacture the vaccine underneath the trademark ‘Covishield,’ it was discovered.

The Hon’ble bench took into account;

(i) inter-departmental correspondence pertaining to the mark,

(ii) the fact that SII is evolving a vaccine being reported in the media being not refuted,

(iii) the monthly manufacturing of 60 million doses and deliver of 48 million doses of the vaccine to the Government of India,

(iv) various licenses obtained for fabricating the vaccine, and

(v) various agreements signed globally for the consumption of the vaccine.

“After assessing the evidence on record, we find that Serum Institute coined the term ‘Covishield’ and took significant steps toward its design and deployment,” the Hon’ble Court concluded. As a result, there is sufficient and convincing evidence on file to show Serum Institute’s prior adoption of the mark.

Likelihood of Confusion

The Hon’ble Court disagreed with Cutis Biotech’s claim that there is indeed a risk of confusion between Cutis Biotech’s and SII’s products.

The vaccine ‘Covishield’ manufactured by SII is not available on prescription; and will be administrated through government agencies, according to the Court.

As a result, the Government of India is the buyer of SII’s ‘Covishield’ commodity. Cutis Biotech’s merchandise, on the other hand, are allowed to be sold. While they may be related to the same field, namely health care products, the general public cannot be confused. The Hon’ble Court, ascertained that,

“The presidency of vaccine through injection is very well established. It’s a stretch to believe that average consumers will be confused about the use of a trademark in a government-administered vaccine at designated locations and over-the-counter sanitizer merchandise.

……To substantiate passing off by SII, Cutis Biotech will have to demonstrate that SII is passing off its products as that of Cutis Biotech premised on the benevolence of Cutis Biotech. As a result, Cutis Biotech’s assertion is inherently self-destructive.”

Goodwill

The Court found insufficient evidence to demonstrate goodwill in pursuit of Cutis Biotech’s use of trademark “Covishield” while adjudicating the issue of both parties’ goodwill.

“According to us, there is insufficient substance on record to hold that Cutis Biotech has founded sufficient goodwill pertaining the trademark “Covishield,” the Court concluded. Cutis Biotech’s failure to validate its claim that it was a preceding user of the mark and had procured goodwill is more than clear based on the evidence presented. The District Court’s finding that Cutis Biotech has not founded this test for awarding an injunction is not perverse”.

Future Damage

The Court looked into the combined influence of the Classic Trinity test when deciding on the damage suffered; and the possibility of such damage as a result of the alleged passing off. It stated that; the factors contributing to the potential injury must be viewed in the context of prior usage.

When a party fails to maintain goodwill and prior use, the argument of lost revenue or potential injury cannot stand on its own. As a result, the Bench determined that because the Respondent is the first to use the mark and has built up goodwill as a result; customers are not consciously purchasing Cutis Biotech’s goods.

Balance of Convenience

Ultimately, in assessing the most important aspect of a passing off action; the Court noted that administration of SII’s vaccine, ‘Covishield,’ began on January 16, 2021, after the Case was filed on January 4, 2021. In the first round, nearly 300 million people were recognized as candidates for the vaccine. Afterward, the first order for 11 million doses of ‘Covishield’ was positioned by the Indian government.

The vaccination drive for the age of 60+ and those with the age of 45+ having comorbidities began on March 1. As of March 16, 2021, the States and UTs had distributed 66 million doses of “Covishield.” Furthermore, over 59 million doses had already been distributed to 72 countries.

Having mentioned the aforementioned facts, the Court noted, “That ‘Covishield’ is a vaccine to rebut Coronavirus is now publicly recognized. A preliminary injunction instructing Serum Institute to withdraw the use of mark ‘Covishield’ for its vaccine will lead to confusion and disruption in the Vaccine domestic situations of the State.

In this case, an injunction will have far consequences that would extend beyond the parties to the lawsuit.” As a result, the balance of accessibility was found to be in favor of SII which would be severely harmed if the injunction were granted against each other.

Conclusion

After cautious analysis of the facts, arguments, evidence, and established precedents on the matter; the Hon’ble Commercial Court in Pune came to the conclusion. The Court has demonstrated an exceptional grasp of the nuances of the concept of passing off. While hearing this case; the Appellate Court implemented great caution. It re-established the importance of the Classic Trinity Test in matters of passing off. Both directives are unquestionably valuable additions to the Indian trademark law literature.

[1] AIR 1998 SC 1297

[2] (1998) 4 SCC 577

[3] (2017) 5 SCC 262

[4] (2018) 9 SCC 183

[5] (1997) 4 SCC 201

[6] AIR 2001 SC 1952

[7] (1996) 5 SCC 714

The post Case analysis: Defending the COVISHEILD Trademark appeared first on LexForti Legal News & Journal.

Randy Reid