Delhi High Court Upholds Dr. Reddy's Rights Over “REDDY” Mark, Rejects Acquiescence Defence

The The Delhi High Court on 18 May dismissed proceedings filed by Reddy Pharmaceuticals Ltd. and upheld reliefs granted in favour of Dr. Reddy's Laboratories (DRL) Ltd. in a long-running dispute over the mark “REDDY”, affirming both the permanent injunction and the order directing removal of the trademark.

A Division Bench Justices C. Hari Shankar and Om Prakash Shukla dismissed Reddy Pharmaceuticals' appeal against the Single Judge's decree and rejected its writ petition challenging the Intellectual Property Appellate Board (IPAB) order directing removal of its registered mark. It observed:

“The plaintiff's tolerance of the defendant's use of the corporate name 'Reddy Pharmaceuticals Ltd.' in a non-competing segment cannot, in our view, be construed as acquiescence to its subsequent use in a directly competing line of business.”

DRL initiated proceedings in December 2003 before the Delhi High Court seeking a permanent injunction against Reddy Pharmaceuticals for passing off and copyright infringement. A Single Judge granted an interim injunction on 26 August 2004 and later decreed the suit on 13 September 2013 in favour of DRL, restraining Reddy Pharmaceuticals from using the “REDDY” mark.

Parallelly, DRL moved rectification proceedings in 2006 before the IPAB, seeking removal of Reddy Pharmaceuticals' registered “REDDY” mark. The IPAB allowed the rectification on 29 October 2013 and directed removal of the mark from the Register, holding that it was adopted dishonestly and was likely to cause confusion.

Reddy Pharmaceuticals pursued both challenges before the High Court by filing an appeal against the Single Judge's decree and a writ petition against the IPAB order. The Division Bench heard them together, noting also that an earlier Division Bench in 2007 had upheld the interim injunction as “legally unexceptionable”.

On the IPAB findings, the Court recorded that the tribunal had held that the defendant's mark “was bound to cause material confusion and deception in the market” and that “everything points to the fact that the respondent has deliberately adopted the impugned mark to deceive the public and is in every way a willful misrepresentation to the customer.”

On merits, the judges held that the IPAB had correctly found that the mark was likely to cause confusion and had been adopted with intent to deceive. They also observed that even if there was an error in invoking provisions of the Companies Act, the findings on deception, confusion and lack of bona fide proprietorship independently sustained the rectification under Sections 9 and 11 of the Trade Marks Act.

Rejecting the defence of acquiescence, the Bench held that “the doctrine of acquiescence must therefore be applied with reference to the point of actionable misrepresentation and not merely the initial inception of use,” and that the cause of action arose only when Reddy Pharmaceuticals entered the market for finished pharmaceutical formulations in 2003.

On goodwill, the Court held:

“the law on passing off does not require goodwill to be proved solely through CA certified records” and that what is required is “proof that the mark has generated reputation and public association in the market, which may be established through a mosaic of evidence showing actual trade, promotion, and public recognition.”

On copyright, the judges upheld the finding that Reddy Pharmaceuticals copied the trade dress of DRL's “OMEZ” strips, noting that it reproduced “the same silver foil base, the same pink/magenta lettering, the same black descriptive text placement, the same left-right distribution of dosage/warning and trading particulars, and even a similar stomach logo device.”

On damages, the Division Bench held that absence of proof of quantified loss would only affect compensatory damages, but would not defeat reliefs such as rendition of accounts and delivery up once infringement and passing off were established.

Accordingly, the High Court dismissed both the appeal and the writ petition along with all pending applications.