LexNEON LABORATORIES LTD. versus MEDICAL TECHNOLOGIES LTD. & ORS.
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A [2015] 10 S.C.R. 684 NEON LABORATORIES LTD. v. MEDICAL TECHNOLOGIES LTD. & ORS. (Civil Appeal No.1018 of 2006) B OCTOBER 5, 2015 [VIKRAMAJIT SEN AND SHIVA KRITI SINGH, JJ.) Trade Marks Act, 1999 - Passing off- First in the market test - Suit for injunction damages and account for profit by C respondent no 1 against appellant on the basis of a/legation of passing off - Respondent's case that in 1998 its predecessor-in-title introduced generic drug ROFOL and began marketing under the name PROFOL and after amalgamation of respondent no. 1 with predecessor-in-title D in 2000, respondent no. 1 became the owner of the trademark PROFOL and has been using it since then, when it also applied for its registration and that the appellant had been using the mark ROFOL which is similar to its mark PROFOL - Appellant's case that it filed application for registration for E its trademark ROFOL in 1992 and the same was granted in 2001, however, it commenced its user from 2004 onwards - Trial court granted temporary injunction against appellant which was upheld by the High Court- On appeal, held: Three factors relevant to an interim order-prima facie case, balance F of convenience and an irreparable loss in favour of respondents. Since the respondents have supported with proof that they had already been using their trademark well before the attempted user of an identical or closely similar trademark by the appellant, they are entitled to temporary G injunction, in light of 'first in the market' test- Thus, the order passed by the High Court upheld. Dismissing the appeal, the Court HELD: 1.1 Section 34 of the Trade Marks Act, 1999 H palpably holds that a proprietor of a trade mark does not 684 NEON LABORATORIES LTD. v. MEDICAL 685 TECHNOLOGIES LTD. have the right to prevent the use by another party of an A identical or similar mark where that user commenced prior to the user or date of registration of the proprietor. This "first user" rule is a seminal part of the Act. While the case of the respondents is furthered by the fact that their user commenced prior to that of the appellant, the · B entirety of the Section needs to be taken into consideration, in that it gives rights to a subsequent user when its user is prior to the user of the proprietor and prior to the date of registration of the proprietor, whichever is earlier. The appellant filed for registration C in 1992, six years prior to the commencement of user by the respondents. The appellant was, thus, not prevented from restraining the respondents' use of the similar mark PROFOL, but the intention of the Section, which is to D protect the prior user from the proprietor who is not exercising the user of its mark prima facie appears to be in favour respondents. [Para 7] [692-F-H; 693-A-B] 1.2 Had the appellant commenced user of its trademark ROFOL prior to or even sin:rnltaneous with or E even shortly after the respondents' marketing of their products under the trademark PROFOL, on the appellant being accorded registration in respect of ROFOL which registration would retrospectively have F efficacy from 19.10.1992, the situation would have been unassailably favourable to it. After applying for registration of its trademark ROFOL in 1992, the appellant took no steps whatsoever in placing its product in the market till 2004. It also was legally G lethargic in not seeking a curial restraint against the respondents. This reluctance to protect its mark could well be interpreted as an indication that the appellant had abandoned its mark at some point during the twelve y1!!ar interregnum between its application and the H 686 SUPREME COURT REPORTS [2015) 10 S.C.R. A commencement of its user, and that in 2004 it sought to exercise its rights afresh. It would not be unfair or fanciful to favour the view that the appellant's delayed user was to exploit the niche already created and built-up by the Respondents for themselves in the B market. The 'first in the market' test has always enjoyed pre-eminence. [Para 9) [693-F-H; 694-A-C] 1.3 Since the respondents have alleged, and have prima facie supported with proof, that they had already C been using their tra.demark well before the attempted user of an identical or closely similar trademark by the appellant, the former would be entitled to a temporary injunction, in light of the 'first in the market' test. Respondents have made out a prima facie case. Th
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