Mere Use Of Surname No Defence If Adoption Is Dishonest & Causes Confusion In Pharma Trade: Delhi High Court Restrains 'Reddy Pharmaceuticals'

"It is true law recognizes and preserves the right which every man has to use his own name including for carrying on trade or business provided such use is not fraudulent. In the instant case, everything points to the fact that the respondent has deliberately adopted the impugned mark to deceive the public and is in every way a willful misrepresentation to the customer, " Delhi High Court.

The Delhi High Court, in a significant ruling, held that the use of a common surname as a trademark can be restrained if such adoption is found to be dishonest and calculated to exploit the goodwill of an established brand in the pharmaceutical industry.

A bench of Justice C. Hari Shankar and Justice Om Prakash Shukla observed that while individuals have a general right to trade under their own names, this right is not absolute and cannot be used as a shield for passing off goods, especially in the medicinal sector where a higher standard of care is required to prevent consumer confusion.

The dispute arose between the pharmaceutical giant Dr. Reddy’s Laboratories (DRL) and Reddy Pharmaceuticals Ltd (RPL). DRL, established in 1984, alleged that RPL’s use of the mark “REDDY” and a similar corporate name for pharmaceutical preparations amounted to passing off and copyright infringement. The matter reached the Division Bench through an appeal by RPL against a 2013 permanent injunction and a writ petition challenging an IPAB order that had removed RPL's registered trademark from the register.

The primary question before the court was whether the adoption of the mark “REDDY” by a company whose director shares that surname constitutes bona fide use under Section 35 of the Trade Marks Act. The court was also called upon to determine if the plaintiff’s prior knowledge of the defendant’s existence in a non-competing segment (bulk drugs) amounted to acquiescence when the defendant later entered the competing segment of finished formulations.

Primacy Of Trademark Rectification Proceedings

The Court first addressed the challenge to the Intellectual Property Appellate Board (IPAB) order. It noted that the validity of a trademark registration occupies a foundational position in any infringement or passing off suit. Relying on the Supreme Court’s decision in Patel Field Marshal Agencies v. P.M. Diesels Ltd., the bench emphasized that the findings of the statutory forum entrusted with the Register of Trade Marks bind the civil court.

Court Upholds Removal Of "REDDY" Mark From Register

The Division Bench found no reason to interfere with the IPAB’s decision to remove RPL’s mark. Even if certain statutory provisions were incorrectly cited by the Board, the core findings regarding dishonest adoption and the likelihood of material confusion were sufficient to justify the removal under Sections 9 and 11 of the Trade Marks Act. The court noted that RPL’s registration was "wrongly remaining" on the register as it was bound to create an impression of affiliation with DRL.

Stricter Scrutiny Required For Pharmaceutical Products

Turning to the merits of the passing off claim, the court highlighted the "stricter approach" mandated for medicinal products. Citing Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., the bench observed that phonetic similarity between "Dr. Reddy's" and "REDDY" is inevitable since "REDDY" is the dominant feature of both. In the pharmaceutical trade, even a remote possibility of confusion must be avoided to protect public health.

Admissions By Defendant’s Witness Establish Plaintiff’s Goodwill

The Court rejected RPL’s argument that DRL had failed to prove its reputation through chartered accountant certificates. It held that admissions made by the defendant's own witness (DW-1) during cross-examination, acknowledging DRL's reputation in the market, were of "decisive significance." Under the law of evidence, such admissions are the best proof and dispense with the need for further documentation like sales figures or advertisement invoices.

Acquiescence Not Applicable To Non-Competing Segments

A major defense raised by RPL was that DRL had known of its existence since 1997 but only sued in 2003. The Court held that DRL’s tolerance of RPL’s name in the "non-competing segment" of bulk drugs did not constitute acquiescence for the "competing segment" of finished formulations. The threat to DRL’s goodwill only emerged when RPL began marketing products to end consumers under the "REDDY" mark, prompting immediate legal action.

No Protection For Mala Fide Use Of Personal Names

The Bench provided a detailed analysis of Section 35 of the Trade Marks Act, which saves the "bona fide" use of a personal name. It held that RPL’s adoption was not innocent. The court pointed to RPL’s use of a Hyderabad address on its packaging despite having no manufacturing facility there, concluding it was a "deliberate attempt" to create a false association with DRL’s Hyderabad-based laboratories.

"If a roadside dhaba puts up a board of 'Taj Hotel', the owners of Taj Group are not expected to swing into action till the user starts harming their business interests."

Copyright Infringement In OMEZ vs. OMRE Packaging

The Court also upheld the finding of copyright infringement regarding the packaging of RPL’s “OMRE” product. A visual comparison between DRL’s “OMEZ” strip and RPL’s “OMRE” strip revealed substantial similarities in silver foil base, magenta lettering, and the placement of descriptive text and logos. The court held that the overall get-up and layout qualified as an “artistic work” protected under Section 2(c) of the Copyright Act.

Absence Of Quantifiable Loss No Bar To Rendition Of Accounts

Finally, addressing the issue of damages, the court clarified that while the absence of evidence regarding pecuniary harm might defeat a claim for compensatory damages, it does not extinguish the right to a rendition of accounts. Citing Titan Industries Ltd. v. Nitin P. Jain, the bench noted that a successful plaintiff is entitled to know the extent of the infringer’s activities through disclosure before electing their remedy.

The Division Bench concluded that the Single Judge was correct in granting a permanent injunction. The Court found that RPL’s actions were tainted from the outset and aimed at cashing in on the reputation of DRL. Consequently, the appeal against the suit and the writ petition against the IPAB order were both dismissed, affirming the protection of DRL’s proprietary rights in the mark “Dr. Reddy’s.”

Date of Decision: 18 May 2026