Delhi High Court Upholds Dr. Reddy’s Exclusive Rights Over “REDDY” Mark, Rejects Acquiescence Plea
Introduction
The Delhi High Court has upheld the rights of Dr. Reddy’s Laboratories Ltd. over the “REDDY” mark and dismissed proceedings filed by Reddy Pharmaceuticals Ltd. in a long-running trademark dispute. A Division Bench comprising Justices C. Hari Shankar and Om Prakash Shukla affirmed both the permanent injunction granted against Reddy Pharmaceuticals and the order directing removal of its trademark from the register. The Court held that mere tolerance of use in a non-competing segment cannot amount to acquiescence when the defendant subsequently enters a directly competing business.
Factual Background
The dispute concerned the use of the mark “REDDY” by Reddy Pharmaceuticals Ltd. and the alleged infringement of rights claimed by Dr. Reddy’s Laboratories Ltd. DRL initiated proceedings in December 2003 alleging passing off and copyright infringement. It contended that Reddy Pharmaceuticals had adopted the “REDDY” mark dishonestly and that its activities were likely to deceive consumers and cause confusion in the pharmaceutical market. DRL also alleged that Reddy Pharmaceuticals copied the trade dress of its “OMEZ” pharmaceutical strips by reproducing similar packaging elements, including colour scheme, lettering style, descriptive text placement, and logo features.
Procedural Background
A Single Judge of the Delhi High Court granted interim injunction in favour of DRL on 26 August 2004 and later decreed the suit on 13 September 2013, permanently restraining Reddy Pharmaceuticals from using the “REDDY” mark. Separately, DRL initiated rectification proceedings before the Intellectual Property Appellate Board (IPAB) in 2006 seeking removal of the registered trademark. On 29 October 2013, the IPAB allowed the rectification petition and directed removal of the “REDDY” mark from the trademark register, holding that the mark had been adopted dishonestly and was likely to cause confusion. Reddy Pharmaceuticals challenged both the decree and the IPAB order before the Delhi High Court through an appeal and a writ petition respectively.
Issues
1. Whether the use of the “REDDY” mark by Reddy Pharmaceuticals amounted to passing off and trademark infringement.
2. Whether the defendant could rely on the defence of acquiescence due to DRL’s earlier tolerance of its corporate name.
3. Whether the IPAB correctly ordered rectification and removal of the trademark.
4. Whether the defendant had copied DRL’s trade dress and packaging.
5. Whether absence of quantified damages barred grant of equitable reliefs.
Contentions of the Parties
Reddy Pharmaceuticals argued that DRL had acquiesced in its use of the corporate name “Reddy Pharmaceuticals Ltd.” over a long period and therefore could not later object to the use of the mark. It also challenged the IPAB’s findings regarding deception, confusion, and dishonest adoption, and disputed allegations of trade dress copying.
DRL contended that the cause of action arose only when Reddy Pharmaceuticals entered the market for finished pharmaceutical formulations in 2003 and began directly competing with DRL.
It argued that the defendant had deliberately adopted the “REDDY” mark to ride upon DRL’s goodwill and reputation in the pharmaceutical sector.
DRL further alleged that the defendant copied the trade dress of its “OMEZ” strips, including packaging layout, colour combinations, text placement, and logo design.
Reasoning and Analysis
The Division Bench upheld the findings of both the Single Judge and the IPAB.
The Court observed that the IPAB had correctly concluded that the defendant’s mark was likely to cause material confusion and deception in the market and that the adoption of the mark was dishonest. The Bench held that even if there were errors in reliance upon certain provisions of the Companies Act, the findings regarding deception, confusion, and lack of bona fide proprietorship independently justified rectification under Sections 9 and 11 of the Trade Marks Act.
Rejecting the defence of acquiescence, the Court held that acquiescence must be examined with reference to the point at which actionable misrepresentation arises. It observed that DRL’s earlier tolerance of the corporate name in a non-competing field could not amount to consent for use in a directly competing pharmaceutical business.
The Court further clarified that goodwill in passing off actions need not be proved solely through chartered accountant-certified financial records. Reputation and public association may be established through a broader body of evidence demonstrating trade, promotion, and market recognition.
On copyright infringement and trade dress imitation, the Court upheld findings that Reddy Pharmaceuticals had substantially copied the packaging appearance of DRL’s “OMEZ” strips, including the silver foil base, magenta lettering, black descriptive text placement, dosage details, and stomach logo device.
Regarding damages, the Court held that failure to prove quantified monetary loss would only affect compensatory damages and would not defeat reliefs such as injunction, rendition of accounts, and delivery up once infringement and passing off stood established.
Decision
The Delhi High Court dismissed both the appeal and the writ petition filed by Reddy Pharmaceuticals Ltd. The Court upheld the permanent injunction restraining use of the “REDDY” mark and affirmed the IPAB order directing removal of the trademark from the register.
All pending applications were also dismissed.
In this case the appellant was represented by Senior Advocate Chander M. Lall with Advocates Arushi Singh, Annanya Mehan, Manviya Arun, Prabhjyot Singh and Amrisha Kumari.
Meanwhile the respondent was represented by Senior Advocate Swathi Sukumar with Advocates Ranjan Narula, Shakti Priyan Nair, Parth Bajaj, Rishika Aggarwal and Ritik Raghuwanshi.