Bombay High Court: The Division Bench of Nitin Jamdar and C.V Bhadang, JJ., upheld the order of the District Court refusing to pass injunction against the use of the name “Covishield” by Serum Institute of India for its COVID-19 vaccine.
What is the subject matter of the instant appeal?
Instant appeal is with regard to the trademark ‘Covishield’.
Appellant and Respondent applied for registering the above-stated trademark and their application have been pending.
In the present suit, Cutis Biotech sought an interim injunction to restrain Serum Institute from using the trademark ‘Covishield’ and maintain the accounts regarding the sale.
The above stated interim application was rejected by the District Judge/Commercial Court, therefore, Cutis Biotech filed an appeal before this Court under Section 13 of the Commercial Court Act, 2015.
On 29th April, 2020 Cutis Biotech had filed an application for the registration of trademark ‘COVISHIELD’ under Class-5 and the same is pending and in June, 2020 the Serum Institute applied for the registration of trademark ‘Covishield’.
While rejecting the interim application, District Court held that:
The District Court considered the law on the subject and the tests required for grant of injunction in case of passing off. The District Court held that Cutis Biotech had earned no goodwill in a short time. There was no dishonest deception by Serum Institute for passing off or to divert the business of Cutis Biotech.
Analysis, Law and Decision
Bench noted that neither Cutis Biotech nor Serum Institute have a registration for the trademark ‘Covishield’, but as per Section 27(1) of the Trade Marks Act, 1999 it is mandated that no person shall be entitled to institute any proceeding to prevent or recover damages for the infringement of an unregistered trademark. Though sub-section 2 of the above provision, reserves the right to take action against any person for passing off his goods or services as the goods and services of the applicant and preserves the remedies to prevent passing off actions.
Hence in the instant case, Cutis Biotech has based its case on the action of passing off.
Ingredients to grant an injunction
While granting an injunction in the case of passing off, both ingredients of injunction i.e. prima facie case and balance of convenience should exist in favour of the applicant.
Court must be satisfied that there are serious questions to be tried at the suit, irreparable damage will be caused to the applicant and hardship would be more to the applicant, and therefore an interim injunction is necessary.
Bench remarked that,
“foundation of passing off action is the existence of goodwill. Further as to who conceived and adopted the mark earlier is also relevant.”
High Court found no prima facie case to be established by Cutis Biotech with respect to the prior user.
On evaluating the evidence on record, Court found that Serum Institute had coined the word ‘Covishield’ and took substantial steps towards its development and manufacture. Thus, the evidence demonstrates the prior adoption of the mark by Serum Institute. Hence, no perversity was found with the finding that Cutis Biotech cannot claim to be a prior user of ‘Covishield’.
Likelihood of deception and Whether the products of Cutis Biotech and Serum Institute are in the common field
To establish the above-stated point, actual confusion is not required to be established and a likelihood of confusion is enough to establish the ingredients of passing off.
In the present matter, a common-sense approach will have to be adopted to find out whether Serum Institute’s conduct was calculated to pass off its goods as that of the Cutis Biotech’s or at least create confusion in the mind of the customers leading to the Serum Institute benefiting at the expense of the Cutis Biotech.
Bench expressed that the vaccine ‘Covishield’ produced by Serum Institute is not available across the counter and is being administered through Government agencies. The buyer of the product ‘Covishield’ of Serum Institute is the Government of India. The administration of the vaccine is through an injection. The sale of disinfectant or hand sanitiser, though it may relate to the same field, that, health care products, cannot be said to cause confusion in the mind of average consumers.
Court remarked that, it would be too farfetched to hold that there will be confusion in the average consumers’ minds between the use of a trademark in a Government administered vaccine at designated places and over the counter sanitizer products.
Adding to the decision, Bench held that Cutis’s contention that people may buy its products of thinking they are protected against coronavirus because of the use of mark ‘Covishield’ is self-destructive and against the concept of passing off.
Cutis Biotech through its submissions could not establish a case of passing off action, whereas the High Court observed that Serum Institute claimed the ingredients of passing off action, yet it had not moved any cause for restraining Cutis Biotech for passing off action.
Regarding maintaining accounts, a direction to maintain accounts is not a routine order and cannot be issued when there is no prima facie case made out by Cutis Biotech.
Balance of Convenience
Vaccine ‘Covishield’ of Serum Institute had started being administrated from 16 January 2021. The Government of India rolled out an extensive vaccine administration programme and identified almost 300 million people for the vaccine in the first round, and the first order for 11 million doses for the ‘Covishield’ vaccine was placed. The second dose would be administered after the stipulated weeks. On 1 March 2021, a vaccination drive for those above the age of sixty and the age of forty-five years with comorbidities was launched. ‘Covishield’ vaccine of Serum Institute was supplied through the States and Union Territories.
Serum Institute has also placed on record that it has spent Rs 28 crore on the development, research and is expected to spend a further Rs 20 crore. With these facts, the balance of convenience is not in favour of Cutis Biotech.
A temporary injunction directing Serum Institute to discontinue the use of mark ‘Covishield’ for its vaccine will cause confusion and disruption in the Vaccine administration programme of the State.
Hence, grant of an injunction would have large scale ramification traversing beyond the parties to the suit.
Scope of an Appeal
High Court observed that appellate court doesn’t generally interfere if the conclusion arrived at by the trial court is reasonably possible.
A total deference to the discretion by the trial court is not expected from the appellate court if the order is arbitrary or perverse.
Bench held that, in the present case, discretion used by District Judge in refusing to grant an injunction was not arbitrary or perverse.[Cutis Biotech v. Serum Institute of India (P) Ltd., 2021 SCC OnLine Bom 616, decided on 20-04-2021]
Advocates before the Court:
Mr Abhinav Chandrachud and Mr Aditya Soni with Chetan Alai, Shriniwas Bade and Mr Swaraj Jadhav i/b. White & Brief Advocates & Solicitors for the Appellant.
Dr Birendra Saraf, Senior Advocate with Mr Rohan Savant, Mr Hitesh Jain, Ms Pooja Tidke, Ms Monisha Mane Bhangale and Ms Warisha Parkar i/b. Parinam Law Associates for the Respondent.