In the case of Glenmark Pharmaceuticals v. Curetech Skincare and Galpha Laboratories Ltd.[1], the Bombay High Court awarded damages of an unparalleled amount of INR 1.5 Crore in view of the Defendant No.2; Galpha Laboratories being found guilty of habitual infringement of trademarks and copyrights. In this case, the Plaintiff made an unusual choice and requested to transfer the entire amount of the exemplary damages to a charitable organization. Thus, the Court directed the payment of damages towards the Kerala Chief Minister Distress Relief Fund.

FACTUAL BACKGROUND

The Galpha Laboratories’ mark CLODID-B was alleged to be infringing the Plaintiff’s trademark CANDID-B. It was further alleged that Galpha Laboratories had even copied the word mark, artwork, color scheme, and trade dress of the Plaintiff.

Defendant No. 1 Curetech Skincare is a contract manufacturer, who was manufacturing on behalf of Galpha Laboratories. Therefore, the Defendant No.1 was provided with the art-work, labels and the mark by Defendant No. 2 under a Contract Manufacturing Agreement. 

Interestingly, the Defendants, in this case, accepted the allegations made by the Plaintiff and willingly submitted to the decree by not contesting the suit. It was also submitted that the trademark was not intentionally infringed by them but was by “mistake”. The advocate for the Defendant No. 2, however, accepted that they “ought to have acted diligently before adopting and using the trade mark”.

PLAINTIFF’S CONTENTIONS

The Plaintiff, rebutted the arguments made by the Defendant No.2 with regards to their claim of infringement by “mistake”. They further claimed that Defendant No.2 is a “habitual infringer”. It was submitted by the Plaintiff that they had previously sent a cease and desist notice to Galpha Laboratories for using the trademark ASCODIL and for infringing their registered trademark ASCORIL. In this case, the Defendant No.2 had tendered a written unconditional apology and given an undertaking that they would not infringe the Plaintiff’s trademark in the future.

The Plaintiff further submitted that medical equipment or products of the Defendant No.2 have been found to be "Not of Standard Quality/Spurious" by the Central Drugs Standard Control Organization. The Plaintiff presented various articles and documents available on the public domain to prove that the Defendant No.2 had violated various FDA regulations. The Plaintiff, therefore, prayed to the court that due to the repeated dishonest behavior of the Defendant No.2 it should not only be restricted from using the trademark but be imposed with heavy costs acting as a deterrent for the future.

The Plaintiff cited the case of Win-Medicare Pvt. Ltd. v Galpha Laboratories Pvt. Ltd. & Ors.[2], wherein the Delhi High Court had in January 2016, categorically held Galpha Laboratories to be a ‘habitual infringer’.

DECISION

The Court, in the present case, concluded that the Defendant No. 2 had in fact blatantly copied the Plaintiff's wordmark, artwork, color scheme, font style, the manner of writing and trade dress to the last millimeter. 

Firstly, the Court dealt with the formal written apology and undertaking given by the Defendant No.2 in 2004 to the Plaintiff for agreeing not to use the mark ‘ASCODIL’. The Court held that “After tendering a written apology and undertaking, one is expected to be careful and cautious while conducting its business, but the actions of the Defendant No.2 are far from being careful or cautious and to say, at the least, are shocking and appalling.”

Further, the Court dealt with the record presented by the Plaintiff proving that the Defendant No.2 had been infringing the trademarks of other pharmaceutical companies. The Hon’ble Mr. Justice S.J Kathawalla in this regard held that There is, therefore, no doubt in my mind that the Defendant No.2 is a habitual offender with a set modus operandi of copying brands of other companies to make profits.

Lastly, the Court dealt with the various documents presented before it, to point out the violations of the FDA rules by Galpha Laboratories. The products of the Defendant have been held to be “Not of Standard Quality/ Spurious/ Adulterated/ Misbranded”. The Court in this regard held that It is clear that the Defendant No.2 is not only indulging in infringing activities by repeatedly copying brands of other companies but also appears to be in complete violation of the FDA regulations.” It was furthermore held that The conduct of the Defendant No.2 shows that this Defendant has no regard or respect to the rule of law. The consumers and general public are being repeatedly cheated by the Defendant No.2….”

The Court thus imposed a fine of INR 1.5 Crores on the Defendant No.2, to be donated to the Kerala Chief Minister Relief Fund. It was also held that all the Directors of the company had to give personal undertakings to the court to the extent that they would immediately withdraw CLODID-B products from the market and also apply for cancellation of the manufacturing permission granted for the same. They were further order to conduct business in accordance with the FDA rules and ensure not to indulge in any infringing activities in the future. 

Therefore, by way of deterring the Defendant from indulging in any infringing activities in the future, such an exemplary amount of INR 1.5 Crore damages was awarded. The repeatedly dishonest conduct on the part of the Defendant rendered an award of damages of an unprecedented amount in favor of the Plaintiff.

The Court finally opined that “Drugs are not sweets. Pharmaceutical companies which provide medicines for health of the consumers have a special duty of care towards them. These companies, in fact, have a greater responsibility towards the general public.

This is one such case wherein the court granted extraordinary damages against a pharmaceutical company. This is because pharmaceutical companies have extraordinary responsibilities towards the welfare of the people as well. This judgment comes at a time when recently The Drug Technical Advisory Board (DTAB) approved a proposal to amend the Drugs & Cosmetic Act 1940 in order to make pharmaceutical marketing firms liable for contravention of regulations. This includes punishment for 3-5 years imprisonment for medicine flagged by regulators as "Substandard" quality or even life imprisonment in a case where it is found to be spurious.