Delhi HC Grants Relief to Zydus in BIOCHEM Trademark Dispute

The court emphasized that Alder's use of "BIOCHEM" as the dominant element in its mark was likely to cause consumer confusion, particularly in the pharmaceutical sector, where brand trust and clarity are paramount.

Justice Mini Pushkarna further remarked that confusion in pharmaceutical products is not just inconvenient but life-threatening.

The case centers around the dispute over the use of the trademark "BIOCHEM." Zydus Healthcare, alleged that Alder Biochem Pvt. Ltd., which adopted the name "ALDER BIOCHEM," is infringing on their trademark. Zydus claimed that it has been using the "BIOCHEM" trademark for several years on over 500 pharmaceutical products, building significant goodwill and recognition in the market. Alder Biochem, which started using the term "BIOCHEM" in its company name, later sought registration for "ALDER BIOCHEM" under Class 5 for pharmaceutical goods, beginning in January 2019. Zydus opposed the trademark application, arguing that the use of "BIOCHEM" by the defendant creates confusion among consumers and infringes on their intellectual property rights.

Zydus argued that it owns the rights to the "BIOCHEM" trademark, which has been registered since the 1960s, and that it has developed a strong association between the mark and its pharmaceutical products. The plaintiffs claimed that Alder Biochem’s use of "BIOCHEM" is an infringement of their rights, as the two marks are visually, phonetically, and structurally similar. Zydus further asserted that it has made substantial sales under the "BIOCHEM" mark, with figures exceeding Rs 240 crores in 2022. The plaintiffs also argued that the defendant’s adoption of the prefix "ALDER" does not diminish the likelihood of confusion, as the dominant part of the mark, "BIOCHEM," remains identical.

Alder Biochem countered by claiming that "BIOCHEM" is a generic term and not exclusive to any one company, particularly in the pharmaceutical industry where it is commonly used as an abbreviation for "biochemistry." They argued that the use of "BIOCHEM" by multiple companies, including Zydus, showed that the term is in the public domain and not distinctive. The defendant further maintained that their mark "ALDER BIOCHEM" as a whole is different from Zydus’s "BIOCHEM" trademark, and they deny that their use of the mark causes any consumer confusion. Alder Biochem also contended that they have been using the name "ALDER BIOCHEM" since 2016, even though the trademark application specifies a use date starting in 2019.

After hearing the submissions, the court acknowledged that while minor differences in the marks might exist, the dominant part of the marks—the term "BIOCHEM"—was substantially identical. The court emphasized that even minor variations or additional elements (like "ALDER") do not absolve infringement if the dominant element ("BIOCHEM") remains identical. It observed;

"It is not necessary that in order to constitute infringement, the impugned trademark should be an absolute replica of the registered trademark of the plaintiff. When the mark of the defendant is not identical to the mark of the plaintiff, it would be necessary for the plaintiff to establish that the mark being used by the defendant resembles his mark to such an extent that it is likely to deceive or cause confusion and that the user of the impugned trademark is in relation to the goods in respect of which the plaintiff has obtained registration in his favour. It will be sufficient if the plaintiff is able to show that the trademark adopted by the defendant resembles its trademark in a substantial degree, on account of extensive use of the main features found in his trademark. In fact, any intelligent person, seeking to encash upon the goodwill and reputation of a well-established trademark, would make some minor changes here and there so as to claim in the event of a suit or other proceeding, being initiated against him that the trademark being used by him, does not constitute infringement of the trademark, ownership of which vests in some other person. But, such rather minor variations or distinguishing features would not deprive the plaintiff of injunction in case resemblance in the two trademarks is found to be substantial, to the extent that the impugned trademark is found to be similar to the registered trademark of the plaintiff. But, such malpractices are not acceptable and such a use cannot be permitted since this is actuated by a dishonest intention to take pecuniary advantage of the goodwill and brand image which the registered mark enjoys, it is also likely to create at least initial confusion in the mind of a consumer with average intelligence and imperfect recollection. It may also result in giving an unfair advantage to the infringer by creating an initial interest in the customer, who on account of such deceptive use of the registered trademark may end up buying the product of the infringer, though after knowing, either on account of difference in packaging etc. or on account of use of prefixes or suffixes that the product which he is buying is not the product of the plaintiff, but is the product of the defendant."

"In a case based on infringement of a registered trademark, the plaintiff need not prove anything more than the use of its registered trademark by the defendant. In such a case, even if the defendant is able to show that on account of use of other words by him in conjunction with the registered word/mark of the plaintiff, there would be no confusion in the mind of the customer when he come across the product of the defendant and/or that on account of the packaging, get up and the manner of writing trademark on the packaging, it is possible for the consumer to distinguish his product from that of the plaintiff, he would still be liable for infringement of the registered trademark."

Given the extensive history and market presence of Zydus’s "BIOCHEM" trademark, the court found that the defendant’s use of "ALDER BIOCHEM" could lead to consumer confusion, particularly in the pharmaceutical sector, where such confusion could have serious consequences. It said;

"There is presumption of validity of the plaintiffs‟ registered trademark. The prominent, essential and dominant feature of the plaintiffs‟ mark is the word BIOCHEM, which is being used by the defendant for identical goods, i.e., Pharmaceuticals products. Further, the balance of convenience also lies in favour of the plaintiffs. The plaintiffs have filed on record documents pertaining to their sales figures of their products under the mark BIOCHEM, which is more than two hundred crores in the year 2022. In contrast, the defendan's sale of products under the impugned mark „ALDER BIOCHEM‟, were to the tune of Rs. 21 lacs, in 2022-2023 and Rs. 38 lacs, in 2023-2024. Further, irreparable injury and loss will be caused to the plaintiffs if the defendant is not injucted. Law is settled that confusion between medical products is life threatening, not merely inconvenient. Further, the damage to a parties‟ reputation and goodwill as a result of acts of infringement and passing off, cannot be compensated in cases relating to pharmaceutical, by damages alone."

The court also noted the absence of evidence supporting Alder Biochem’s claim of widespread use of "BIOCHEM" in the pharmaceutical trade. It highlighted that Zydus, as the first user, enjoyed stronger trademark rights.

Subsequently, the court restrained Alder Biochem and its affiliates from using "ALDER BIOCHEM" or any deceptively similar marks in trade, advertising, or domain names, emphasizing the need to protect Zydus's established goodwill and consumer safety. It held;

"The defendant, its principal officers, assignees, family members, servants and agents, and all other persons claiming under the defendant, are restrained from selling, offering for sale, advertising and/or promoting and/or using the mark/trade name, „ALDER BIOCHEM‟ and any other mark/trade name/label/device that contains the mark „BIOCHEM‟ and any other mark/name/label/device that is deceptively similar to the plaintiffs‟ mark/trade name and „BIOCHEM‟.

"Further, the defendant and all other persons claiming under the defendant, are also restrained from using the domain name www.alderbiochem.com or any other domain name that contains any mark identical or deceptively similar to the plaintiffs‟ mark/label and „BIOCHEM‟."

To view the original order, click on the link below:

https://indiankanoon.org/doc/75893328/