Punitive Damages denied for Trademark Infringement

infringement-min

In our earlier posts, we have covered the importance of damages in trademark infringement suits and the types of damages as well. The Courts in India have taken a liberal stand while granting nominal and compensatory damages. However, when it comes to punitive damages, the Courts have been stringent. This was yet again observed in a recent case of trademark infringement namely GlaxoSmithKline Pharmaceuticals versus Sarath Kumar Reddy G. The Delhi High Court in the present case restated the principle wherein it was held that the circumstances that justify the grant of punitive damages were not shown to exist in the case and therefore declined the plaintiff’s prayer for the grant of punitive damages.

The plaintiffs in the present case are GlaxoSmithKline Pharmaceuticals and SmithKline Beecham Limited, both being members of the GlaxoSmithKline Group (GSK Group) and engaged in the business of manufacturing and marketing pharmaceutical/ medicinal preparations and healthcare products. GSK is one of the market leaders in India with respect to pharmaceutical products, which manufactures and markets well-known brands such as CALPOL, CROCIN, ENO, HORLICKS, AQUAFRESH, SENSODYNE, amongst many others. The plaintiffs have been using the acronym “GSK” since 2000 with respect to its products and it has accordingly come to be associated with the plaintiff. Further, the plaintiffs are also the registered proprietor of the “GSK” marks in India.  The defendant is the Director of the Company named GSK Life Sciences Private Limited. The plaintiffs claim that in 2009, they noted that the defendant has been using GSK as part of their tradename and with respect to their logo as seen in the business cards of the defendant’s representatives. The plaintiffs further claimed that the logo used is deceptively similar to the plaintiff’s logo.

The plaintiffs in 2013 sent a cease and desist notice to the defendant’s company followed by various letters with a motive of amicably settling the dispute. However, the defendants stated that “GSK” referred to the initials of the defendant namely Gadikota Sarath Kumar Reddy. The plaintiffs claimed that the usage of the mark “GSK” by the defendants with respect to pharmaceutical products amounted to trademark infringement as per Section 29(5) of the Trade Marks Act, 1999.  The plaintiff further claimed that as per Section 2(1) (zg) read with Section 11(6) of the Trade Marks Act, 1999, the plaintiff’s mark was “a well-known mark” and required strong protection.

The court issued a summons and had the same served on the defendant. However, as the defendant failed to appear in the suit, the Court passed an ex parte ad-interim injunction restraining the defendant from using the mark “GSK” or any other mark deceptively similar to the plaintiffs’ registered marks.

The Delhi High Court on bare perusal of the defendant’s products observed that the defendant was manufacturing and dealing with pharmaceutical products under the “GSK” mark. The Court further noted that the plaintiffs are the registered proprietors of the “GSK” marks in India with respect to pharmaceutical and medicinal preparations and therefore incorporation of the acronym “GSK” in the corporate as well as trade name of the defendant lead to infringement of the plaintiffs registered trademarks. The Court further cited the Supreme Court’s decision in Milmet Oftho Industries and Others v. Allergan Inc wherein the Supreme Court held that –

In respect of medicinal products it was held that exacting judicial scrutiny is required if there was a possibility of confusion over marks on medicinal products because the potential harm may be far more dire than that in confusion CS(OS) 1141/2013 Page 7 of 9 over ordinary consumer products. It was held that even though certain products may not be sold across the counter, nevertheless it was not uncommon that because of lack of competence or otherwise that mistakes arise specially where the trade marks are deceptively similar. It was held that confusion and mistakes could arise even for prescription drugs where the similar goods are marketed under marks which looked alike and sound alike. It was held that physicians are not immune from confusion or mistake. It was held that it was common knowledge that many prescriptions are telephoned to the pharmacists and others are handwritten, and frequently the handwriting is not legible. It was held that these facts enhance the chances of confusion or mistake by the pharmacists in filling the prescription if the marks appear too much alike.”

The Delhi High Court therefore held that the defendants were infringing the plaintiff’s rights in the “GSK” marks. A permanent injunction restraining the defendants from using the “GSK” marks or any deceptively similar mark was passed. Further, an order for delivery of all printed matter bearing the GSK mark was passed the Court. However, the plaintiffs were not able to quantify the loss caused to them by the defendant’s use of the “GSK” marks. Further, no evidence indicating the extent of sales of the defendant was made available to the Court and accordingly the plaintiff’s prayer for grant of punitive damages was rejected.

The plaintiffs have suffered significant damages from the infringing acts of the defendants. Looking at the facts of the case and considering the distinguished reputation that the plaintiffs have globally as well as in India, it would only seem fair for the Court to grant punitive damages in this case. However, we note that the Delhi High Court preferred the alternate by affirming that the plaintiffs were not able to quantify the extent of damage caused to them and accordingly declined the latter damages.

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