Counterfeit Medical Products Threat To Public Health: Delhi HC Awards ₹3.34 Crore Damages To Johnson & Johnson Over Trademark Infringement

The Delhi High Court has issued a permanent injunction in favour of the American pharmaceutical company Johnson & Johnson, against trademark infringement and selling large quantities of counterfeit products by a party engaged in the sale of surgical devices using Johnson & Johnson's 'Surgicel', 'Ligaclip' and 'Ethicon' trademarks.Remarking that the counterfeit medical products posed a grave threat to public health, Justice Amit Bansal imposed a hefty cost of around Rs. 3.34 crore on the counterfeiters. The Court observed, “In my view, the counterfeit medical products sold by the defendants pose a significant threat to public health. Counterfeiting of medical devices is not merely a case of trade mark infringement, it is a grave offence that endangers the lives of people. The defendants' conduct demonstrates a deliberate effort to mislead the public, jeopardize the consumer safety and exploit consumer trust for financial gain.” Johnson & Johnson (plaintiff) submitted that it has registered trademarks over Surgicel, Ligaclip and Ethicon in relation to surgical devices. It stated that it has been using the Surgicel marks with respect to its products in India since the 1990s. It stated that the products sold under the Surgicel marks are manufactured in its state-of-the-art facilities, which have quality control, specialized equipment and consistent processes which make the products reliable for surgeons.It stated that in 2019, a neurosurgeon at the University of Kentucky Medical Center, USA observed certain irregularities in surgical devices bearing its trade mark Surgicel while performing a brain surgery. Upon examination, Johnson & Johnson discovered that the said device was a counterfeit. Johnson & Johnson's inquiry revealed that the University of Kentucky had procured over 1,000 units of Surgicel-branded surgical devices from a United States of America-based entity XS Supply.Johnson & Johnson filed a suit before the United States District Court against XS Supply and other parties. In the course of the proceedings, XS Supply submitted that it had procured the surgical devices from Lion Heart Surgical Supply LLC, an entity based in Florida. Lion Heart then informed Johnson and Johnson that it had procured the surgical devices from Pure Care Traders F.Z.E., an entity based in UAE.Upon Lion's inquirty with Pure Care, it was informed that the surgical devices were shipped to it by one Mr. Pritamdas Arora (defendant no. 1), the proprietor of M/s Medserve based in New Delhi .Johnson and Johnson thus filed the present suit seeking permanent injunction restraining the defendants from infringing the trade mark, selling counterfeits and passing off along with other ancillary reliefs.The High Court noted that on 11 October 2019, it issued a temporary injunction, restraining defendant no.1 from dealing with any goods/devices/medicines under the mark Johnson & Johnson or Ethicon and from using them as a trade mark. The court had also appointed two Local Commissioners to visit the premises of the defendants to search, seal and seize the infringing products.The Court noted that during the inspection, the Local Commissioner found multiple infringing and counterfeit goods. It noted that a large number of original and photocopied documents were found relating to the sale, purchase, import, export, etc. of various medical devices, including counterfeit goods. It noted that the Local Commissioner seized a consignment containing 10,000 counterfeit products and Rs.16 Lakhs in cash at the residential premises of the defendants. Pursuing the evidence, the Court further noted that the evidence suggests that defendant no.1 has been engaged in Hawala transactions for laundering illicit proceeds. It commented that the defendants' conduct has been malicious and that they repeatedly failed to make full and honest disclosures about their bank accounts despite multiple court orders. It observed “The Court takes serious note of an intercepted conversation where defendant no.1, upon receiving complaints about infected counterfeit surgical products, advised his business associate to resolve the matter through bribery rather than corrective action. Such conduct demonstrates blatant disregard for public health and safety.”It also be noted that the defendants chose to stop appearing before this Court and evade the present proceedings. On the public health risk posed by defendants act of counterfeiting medical products, the Court stated that “The evidence placed before this Court without a doubt establishes that the defendants have engaged in counterfeiting, misrepresentation, and fraudulent activities in blatant violation of the plaintiff's rights. The conduct of the defendants poses a severe risk to public health and safety, as the counterfeit medical products distributed by them lack the necessary sterility and quality standards as required in the surgical use. Further, the guide, found at the defendant's premises, for differentiating genuine ...

Counterfeit Medical Products Threat To Public Health: Delhi HC Awards ₹3.34 Crore Damages To Johnson & Johnson Over Trademark Infringement

Sanjana Dadmi

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