Phonetic and visual similarity in pharmaceutical marks constitutes infringement and warrants compensatory costs in undefended commercial suits.

The Plaintiff, a pharmaceutical company, is the registered proprietor of the trademarks ‘MEFTAL’ and ‘MEFTAL-SPAS’ (since 1981–82) and holds copyright in the artistic work of its packaging.

In October 2015, the Plaintiff discovered the Defendants were marketing analgesic preparations under the mark ‘MEFIAL-SPAS’ with near-identical packaging.

The Plaintiff obtained ad-interim injunctions in 2015, which were later confirmed.

Defendant No. 1 filed a written statement but failed to appear, while Defendant No. 2 failed to file a written statement entirely.

The matter proceeded ex-parte with the Plaintiff leading uncontroverted evidence via affidavits.

1. Whether the Defendants' use of the mark 'MEFIAL-SPAS' and its associated packaging constitutes infringement of the Plaintiff’s registered trademarks and copyright.

2. Whether the Defendants are liable for passing off their goods as those of the Plaintiff.

3. Whether the Plaintiff is entitled to damages and compensatory costs under the Commercial Courts Act.

Section 35 of the Code of Civil Procedure (CPC), as amended by the Commercial Courts Act, 2015, which mandates that costs follows the event and must be realistic rather than nominal.

K.R. Chinna Krishna Chettiar v. Shri Ambal & Co., establishing that marks must be compared as a whole, focusing on phonetic resemblance and likelihood of confusion.

Hiralal Prabhudas v. Ganesh Trading Co. and Parle Products (P) Ltd. v. J. P. and Co., which stipulate that the test for similarity is the "overall impression" on a consumer of average intelligence and imperfect recollection.

The court observed that the Defendants replaced only one letter ('T' with 'I') in the Plaintiff's mark, creating a blatant visual and phonetic imitation.

By comparing the rival products, the court found that the Defendants copied the exact red-and-blue color scheme, geometric designs, and trade dress, indicating dishonest intent to encash on the Plaintiff’s established goodwill.

Since the Plaintiff's registrations for the marks and artwork were valid and subsisting and their sales figures demonstrated long-term continuous use, the court held that the Defendants’ use of 'MEFIAL-SPAS' was likely to mislead unwary consumers.

The court noted the Defendants’ failure to contest the suit as confirmation of their mala fide adoption of the mark.

The claim for damages was rejected due to a lack of specific evidence quantifying the loss.

While the prayer for damages was denied, the court awarded compensatory costs of Rs. 5,00,000/- against each Defendant (Total Rs. 10 Lakhs) citing their negligent conduct and the statutory mandate of Section 35 of the CPC.

Failure to pay costs within eight weeks would attract interest at 8% per annum.