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Neon Laboratories Ltd. v. Medical Technologies Ltd. & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 1018 of 2006)Decided 5 Oct 2015
Civil Appeal No. 1018 of 2006
Justice Vikramajit Sen · Justice Shiva Kirti Singh

Background

Both companies sell the generic anaesthetic drug propofol under names that look and sound alike: ROFOL (Neon) and PROFOL (the respondents). Neon applied to register ROFOL in 1992 but did not start selling it until 2004, whereas the respondents had been using PROFOL since 1998. The trial court granted an interim injunction against Neon in the respondents' favour, and the first appellate court upheld it.

Decision Breakdown

The Supreme Court dismissed Neon's appeal and kept the interim injunction in place, with no order as to costs. The Court held that the respondents had made out a prima facie case under the "first in the market" test, because they had been using their mark before Neon started using its own. Section 34 of the Trade Marks Act, 1999 protects a prior user against a later registrant, and a registration that is backdated to its application date does not automatically override goodwill built up in the meantime. The Court stressed that its findings were only prima facie for the interim stage, and that the full merits must be decided in the suit, which is still pending.

Lesson Learnt

Registering a trademark does not always win a dispute, because a business that was using a name first can often keep using it. A company that files for a mark but then sits on it for years may lose its advantage to someone who actually brought the product to market.

Official source (sci.gov.in)View Judgment (PDF)

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