IPR Newsletter: Cutis Biotech v. Serum Institute of India-July 2021

Introduction:

“Cutis Biotech”, a Maharashtra based pharmaceutical company had filed for the registration of the trademark “Covishield” under Class 5 of the Trade Mark Rules of 2002 in April 2020. Whilst this application was pending before the Trademark office, in June 2020, Serum Institute of India (SII) filed for a trademark of the same mark “COVISHIELD” under Class 5 as well.

Before the lower courts:

Before proceeding further, it is important to note that the trademark was not registered yet in favour of either of the parties. In late July 2020, SII had applied to the DCGI to conduct trials of Covid-19 vaccine and asked permission for the manufacture of this vaccine called “Covishield”. DGGI granted the license to SII which included the mark “Covishield”. In December 2020, Cutis Biotech filed a trademark suit before the Nanded District court seeking to restrain SII from using the trademark ‘Covishield’ for its vaccine. In response to this, SII filed its reply to the suit and gave an application seeking the rejection of the suit filed by Cutis Biotech, on the following grounds:

• The products which were offered by the 2 parties were different in terms of visual appearance, and also purpose.

• The trade channels used for both the products were different.

• Any evidence of confusion in the minds of the consumer was not found regarding the products. The court also analysed the current situation of the pandemic and made a note of how important vaccines are and what negative effects would the injunction cause to the public, and as a result held that there was no dishonest deception or the act of passing off was not committed by SII. Through the above points, the injunction application was rejected by the commercial district court of Pune and in response an appeal was filed by Cutis Biotech before the Bombay High Court.

Before the Bombay High court:

The Bombay High Court in its judgement analysed the basis to be checked for granting an injunction and decided that for an injunction to be granted the prima facie case as well as the balance of convenience must be completely in the favour of the Cutis Biotech and that there must be a strong reason such as the business of Cutis Biotech would be gravely impacted if the injunction is not passed. The Court found, the prima facie case was in favour of the defendants i.e. SII. The Court discussed the concept of goodwill and agreed with the findings of the district court stating that Cutis Biotech had not accrued enough goodwill during 7 months in which they were selling their sanitizer products.

The court stated that the time at which Cutis Biotech were selling their sanitizer products, the products were in high demand and the turnover of Rs. 16 lakhs over 7 months were not that much. The Court further noted that in terms of investment and the amount of money spent on the product and the mark, SII had spent unfathomably more than Cutis Biotech. On confusion between the products of Cutis Biotech and SII, the Court taking a common sense approach held that even though both the products belong in a similar category, they can in no way be confused to be similar as Cutis Biotech’s product is sold over the counter as a sanitizer to limited consumers, but SII’s vaccine of the same name is being distributed through the central government and other official channels. The Court also held that the passing of an injunction would not be in the interest of the public due to the confusion that might be caused, and it would slow down the government’s efforts in curbing this virus. Thus, the Bombay High Court dismissed the appeal.

The Tribunals Reforms (Rationalisation and Conditions of Service) Bill and Ordinance of 2021

Introduction:

2021 has been an interesting year for the IPR sector. During the first 6 month of 2021, various changes have been announced on IPR front. While the Copyright (Amendment) Rules, 2021, has bought some changes to the notification of copyrights, increasing transparency through an annual transparency report, one another important piece of legislation is the introduction of The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021 in February 2021 and The Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance that was promulgated in April 2021.

Changes proposed in the Bill:

The 2 major changes that are proposed in the Bill are:

1. The Chairperson and Members of the Tribunals will be appointed by the central government on the recommendation of a Search-cum-Selection Committee. The Committee will consist of: (i) the Chief Justice of India, or a Supreme Court Judge nominated by him, as the Chairperson (with casting vote), (ii) two Secretaries nominated by the central government, (iii) the sitting or outgoing Chairperson, or a retired Supreme Court Judge, or a retired Chief Justice of a High Court, and (iv) the Secretary of the Ministry under which the Tribunal is constituted (with no voting right). The Bill specifies that the term of office for the Chairperson of the tribunals will be of four years or till the attainment of the age of seventy years, whichever is earlier. For other members of the tribunals, the term will be of four years or till the age of sixty-seven years, whichever is earlier.

2. The appellate boards and tribunals under 9 Acts be done away with and their responsibilities be transferred to the high courts and the commercial courts.

IPAB (Intellectual Property Appellate Board) which was established under section 83 of the Trademarks Act, originally handled the appeals related to the: • The Trademark Act, 1999 • The Copyright Act, 1957 • The Patents Act, 1970 • The Geographical Indication of Goods (Registration and Protection) Act, 1999 New bill proposes that the appellate jurisdiction would lie with the high courts. Consequent to passing of an ordinance, IPAB stands abolished. The effects of abolishing the IPAB can already be seen. The Delhi high court in the first week of July 2021 has created a new Intellectual property division in the court to solely deal with matters pertaining to IPR. Reports suggest that around 3,000 cases of the IPAB have now been transferred to the IP division of the Delhi high court.