Prior Use of Trademark Overrides Later Registration and Protects Against Passing Off in Pharmaceutical Trade

Dr. Reddy’s Laboratories (DRL), established in 1984, filed a suit in 2003 seeking a permanent injunction against Reddy Pharmaceuticals Ltd. (RPL) for using the mark "REDDY".

RPL had been a distributor of DRL’s bulk drugs since 1997, but in 2003, it launched finished pharmaceutical formulations using "REDDY" as a house mark and registered the domain "www.reddylimited.com".

DRL alleged passing off and copyright infringement of its "OMEZ" packaging.

A Single Judge of the Delhi High Court decreed the suit in favor of DRL on 13.09.2013.

Simultaneously, the Intellectual Property Appellate Board (IPAB) ordered the removal of RPL’s registered trademark "REDDY" from the register on 29.10.2013.

RPL challenged both the decree (via RFA) and the IPAB order (via Writ Petition) before the Division Bench.

1. Whether the registration of the trademark "REDDY" in favor of RPL was liable to be rectified/removed from the Register.

2. Whether the plaintiff (DRL) had acquiesced to the defendant's (RPL) use of the mark "REDDY".

3. Whether RPL’s use of the mark "REDDY" and the domain "www.reddylimited.com" amounted to passing off.

4. Whether RPL’s adoption of the mark was protected as a bona fide use of a personal name under Section 35 of the Trade Marks Act.

5. Whether RPL’s "OMRE" packaging infringed DRL’s copyright in the "OMEZ" strip design.

Section 57 of the Trade Marks Act, 1999, regarding the rectification of the Register for marks "wrongly remaining" or registered without sufficient cause.

The statutory forum's determination on validity binds the civil court as per Patel Field Marshal Agencies v. P.M. Diesels Ltd.

The "Classical Trinity" (goodwill, misrepresentation, and damage) from Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., noting a stricter standard for medicinal products.

Section 35 of the Trade Marks Act, which protects the "bona fide" use of a person's own name, provided such use is not fraudulent.

Domain names are treated as trademarks as per the principle in Satyam Infoway Ltd. v. Sifynet Solutions.

The Court first upheld the IPAB’s rectification order, noting that while "Reddy" is a common surname, RPL’s adoption was dishonest as it sought to create a false association with DRL’s established reputation in the same field.

On the issue of acquiescence, the Court reasoned that DRL’s earlier tolerance of RPL as a bulk drug distributor did not translate to consent when RPL entered the competing retail formulation market in 2003; hence, the cause of action arose only upon direct competition.

Applying the Cadila test, the Court found "REDDY" phonetically and structurally similar to "Dr. Reddy’s," creating a high likelihood of confusion among consumers.

The Section 35 defense was rejected because RPL’s conduct—such as using a deceptive Hyderabad address on its packaging despite being Delhi-based and filing for the mark on a "proposed to be used" basis—negated the requirement of "bona fide" intent.

Lastly, a visual comparison confirmed that RPL’s "OMRE" strip packaging was a substantial reproduction of DRL’s "OMEZ" artistic layout and color scheme.

The Court held that (i) DRL did not acquiesce as the threat emerged only in 2003; (ii) RPL’s use of the mark and domain name constituted passing off; and (iii) RPL committed copyright infringement.

The Court dismissed the RFA, affirming the Single Judge's decree and confirming the permanent injunction against RPL, and DRL is entitled to a rendition of accounts and delivery up of infringing materials.