In FAO (COMM) 94/2022- DEL HC- Prima facie case of infringement in favour of one party can be off-set by interim arrangement which balances equities between parties and maintains public interest: Delhi HC Justices Jyoti Singh & Anoop Kumar Mendiratta [17-06-2022]

Read Order: ALKEM LABORATORIES LTD v. M/S LABORATE PHARMACEUTICALS INDIA LTD & ANR

Tulip Kanth

New Delhi, June 20,2022: Emphasizing on the maintenance of the balance of equities in a trademark infringement case, the Delhi High Court has permitted the Appellant to sell the disputed existing stock, which was worth Rs 90 lakh. 

The Division Bench of Justice Jyoti Singh and Justice Anoop Kumar Mendiratta was considering a case where the first Respondent filed a suit against the Appellant, alleging infringement of trademark with respect to its registered trademark LABDIC RELIEF and packaging thereof as well as unfair competition etc. in respect of products being pain relieving tablets. 

An ex parte ad-interim injunction was granted by the Trial Court restraining the Appellant from manufacturing, selling or dealing in pharmaceutical preparations under the impugned mark ALDIGESIC PAIN RELIEF. Appellant was also restrained from using its trade dress/product packaging and the blister packaging, alleged to be similar to Respondent’s packaging under LABDIC RELIEF.

Upon being served, Appellant filed an application under Order 39 Rule 4 CPC seeking setting aside of or vacating/varying the order and an application was also filed under section 151 CPC for permission to sell its existing stock, amongst other reliefs.The Trial Court declined to vacate the interim injunction, clarifying, however, that Appellant was not restrained from dealing in products bearing the trademark ALDIGESIC and rejecting the prayer for sale of the existing stock. This appeal had been filed under Order 43 Rules 1(r) and 2 CPC read with section 13 of the Commercial Courts Act, 2015, assailing these orders.

According to the Bench,the balance of equities would be maintained between the parties if the Appellant would be permitted to sell the existing stock, which was worth Rs.90 lakh.Referring to set proposition of law, the Bench asserted, “We are fortified, in our view, by judicial precedents in this regard, where even in matters relating to pharmaceutical products, Courts have been holding that in some instances, a prima facie case or even a strong case of infringement in favour of one party can be off-set by an interim arrangement, which balances the equities between the parties and maintains public interest…”

The Bench added that the Defendants had been granted permission to sell the existing stock, subject to maintaining a record of the sales for computing a claim of damages, if the Plaintiffs were to finally succeed.

Observing that the Trial Court was not justified in declining the relief of sale of the existing stock to the Appellant, the Division Bench directed that the Appellant shall file an affidavit detailing the existing stock of the product in question along with the total value of the stock as well as an undertaking that it shall only exhaust the existing stock till any further order by the Trial Court in its favour.