Alder Biochem vs. Zydus: Delhi HC Cancels Deceptively Similar Mark

Core Controversy

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The dispute in Alder Biochem Private Limited v. Zydus Healthcare Limited & Ors. [FAO(OS)(COMM)-268/2024] centers on the allegation of trademark infringement and passing off in the pharmaceutical sector. The plaintiffs, Zydus Healthcare Limited and its associates, are the registered proprietors of the trademark “BIOCHEM.” They sought an interim injunction against the defendant, Alder Biochem Private Limited, to prevent the use of the mark “ALDER BIOCHEM” and the corresponding trade name in relation to pharmaceutical goods. The core issue before the Delhi High Court was whether the defendant’s adoption of the mark “ALDER BIOCHEM” was deceptively similar to the plaintiffs’ registered “BIOCHEM” trademark, thereby warranting judicial intervention under the Code of Civil Procedure (CPC), 1908.

The plaintiffs contended that they possess valid and subsisting registrations for the “BIOCHEM” mark. They asserted that the defendant’s use of “ALDER BIOCHEM” on identical pharmaceutical products was a clear violation of their statutory rights under Section 29 of the Trade Marks Act, 1999, which defines infringement by use of identical or deceptively similar marks for similar goods. The defendant, conversely, attempted to rely on third-party use of the term “BIOCHEM” and asserted that its own trade dress and branding were distinct, effectively arguing that no consumer confusion could arise.

Governing Legal Framework

The adjudication of this dispute was primarily guided by the following statutory and procedural provisions:

• Section 29 of the Trade Marks Act, 1999: This provision sets out the conditions under which a registered trademark is infringed, specifically focusing on the use of an identical or deceptively similar mark by a third party for similar goods.
• Section 29(5) of the Trade Marks Act, 1999: This specific subsection clarifies that infringement occurs when a person uses a registered trademark as part of their trade name or business name, especially in relation to the goods for which the trademark is registered.
• Order XXXIX, Rules 1 and 2 of the CPC, 1908: These rules govern the court’s power to grant ad interim and temporary injunctions. Under these rules, a court evaluates three criteria: the existence of a prima facie case, the balance of convenience, and the likelihood of irreparable injury if the injunction is not granted.

The court also considered the principles of passing off, which protect the goodwill and reputation associated with a business, even where a trademark might not be identical, provided there is a misrepresentation that causes or is likely to cause damage to the plaintiff.

Court’s Reasoning

The Division Bench of the Delhi High Court focused on the likelihood of confusion among consumers, particularly given that the products in question were pharmaceutical goods. The court observed that the “BIOCHEM” mark was the essential and distinctive element of the plaintiffs’ registration.

Regarding the allegation of deceptive similarity, the court concluded that the marks “BIOCHEM” and “ALDER BIOCHEM” were structurally, phonetically, and visually confusingly similar. It noted that the inclusion of the prefix “ALDER” did not sufficiently differentiate the mark from the registered “BIOCHEM” name. In the context of pharmaceutical products, where precision is paramount, the potential for confusion between such similar marks poses a risk to public health and the plaintiffs’ commercial interests.

The defendant’s argument regarding third-party use was dismissed by the court. Relying on established legal standards, the court reiterated that third-party use is not a valid defense in a trademark infringement proceeding. The court found that the plaintiffs had demonstrated a prima facie case by showing that their marks were valid, subsisting, and being used in commerce. The court also rejected the defendant’s attempts to rely on a lack of distinctiveness, noting that the plaintiffs had consistently protected their “BIOCHEM” brand by initiating legal action against other infringing marks in the past.

The court further scrutinized the balance of convenience, finding it weighed heavily in favor of the plaintiffs. The plaintiffs presented financial evidence indicating substantial turnover, with sales figures of Rs 21 lacs in 2022-2023 and Rs 38 lacs in 2023-2024. Conversely, the defendant’s first commercial use of its mark was dated to 2022, placing the plaintiffs clearly in the position of prior users. Consequently, the court held that allowing the defendant to continue using the infringing mark would cause the plaintiffs irreparable injury that could not be adequately compensated by damages alone.

Holding and Relief

The Delhi High Court upheld the findings of the Single Judge who had initially granted an ad interim injunction. The court held that the plaintiffs had successfully established all requirements for the grant of an interim injunction: a strong prima facie case of infringement, a balance of convenience favoring them, and the risk of irreparable loss to their goodwill.

The court’s ruling mandates that the defendant, Alder Biochem Private Limited, is restrained from manufacturing, offering for sale, advertising, or promoting any goods under the mark “ALDER BIOCHEM” or any other name deceptively similar to the registered “BIOCHEM” mark of the respondents. This order effectively preserves the status quo and protects the plaintiffs’ intellectual property rights pending the final disposal of the suit.

Also Read: Calcutta HC Returns ITC Plaint for Skipping Section 12A Mediation

Practical Significance

This decision serves as a pertinent reminder for legal practitioners regarding the threshold for infringement in the pharmaceutical sector. The court’s emphasis on the “BIOCHEM” mark being the core identifier underscores that courts will protect the essential features of a trademark, even if a suffix or prefix is added by a competitor.

For IP lawyers, the case reinforces three specific tactical points:

• Inefficacy of Third-Party Defense: The court’s refusal to entertain the defendant’s argument about other third-party users confirms that a defendant cannot escape liability by pointing to other infringers in the market. A trademark proprietor is not required to sue the entire world simultaneously to maintain the validity of their mark.
• Prior Use and Goodwill: The court attached significant weight to the “prior use” evidence provided by the plaintiffs. This highlights the importance of maintaining meticulous records of commercial activity and market entry dates to establish a superior right over later entrants.
• Protection of Essential Features: The judgment clarifies that adding a secondary word to a registered trademark does not act as a shield against infringement claims if the original, registered mark remains the primary identifier of the source of the goods.

By strictly applying the statutory criteria under Section 29, the Delhi High Court has affirmed a robust approach toward curbing unauthorized use of established trademarks. Practitioners should advise clients to perform thorough clearance searches that extend beyond the exact mark, considering the phonetic and structural components that may lead to claims of deceptive similarity.