Delhi High Court
Starbucks Corporation vs Lol Cafe & Anr. on 17 November, 2022
Author: Navin Chawla
Bench: Navin Chawla
Neutral Citation Number: 2022/DHC/004921
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 01.11.2022
Date of decision: 17.11.2022
+ CS(COMM) 452/2019 & I.A.11495/2019, 13114/2022
STARBUCKS CORPORATION ..... Plaintiff
Through: Ms.Priya Adlakha, Mrs.Bindra
Rana, Ms.Rima Majumdar,
Ms.Shilpi Sinha, Advs.
versus
LOL CAFE & ANR. ..... Defendants
Through: None
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
1. This suit has been filed by the plaintiff inter-alia praying for a
decree of permanent injunction restraining the defendants from infringing
and/or passing off the plaintiff's registered trade mark
'FRAPPUCCINO' and/or using the 'FRAPPUCCINO' mark, including
the 'BROWNIE Chips FRAPPUCCINO' or any other similar trade
mark in relation to their goods and services. The plaintiff also prays for
damages; rendition of accounts of profits illegally earned by the
defendants; and for an order of delivery and handing over of all the
impugned goods, menu cards, and all other goods of any nature bearing
and/or containing the impugned mark 'FRAPPUCCINO' in any manner
whatsoever, to the plaintiff for their destruction.
2. Vide order dated 23.08.2019 of this Court, summons in the Suit
were issued to the defendants and an ex-parte ad-interim injunction was
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granted in favour of the plaintiff, restraining the defendants from using
'FRAPPUCCINO' mark in any manner on any of the products sold by
them.
3. In spite of service of summons, the defendants chose not to appear
or file their written statements and were thus proceeded ex-parte on
28.11.2019. The plaintiff was given time to file its list of witnesses and
evidence by way of affidavit.
4. On 26.02.2020, a counsel appeared on behalf of the defendants
before the learned Joint Registrar (Judicial), and the learned counsels for
the parties submitted that the suit is likely to be settled between the
parties and prayed for time for the purpose of compromise.
5. The plaintiff thereafter filed an application, being I.A.13114/2022,
under Order XIII-A of the Code of Civil Procedure, 1908 as applicable to
commercial disputes of a specified value (in short, 'CPC'), praying for a
Summary Judgment against the defendants. Notice of this application
was issued by this Court on 22.08.2022, granting a period of three weeks
to the defendants to file their reply. However, the reply to the aforesaid
application was not filed by the defendant nor was the counsel for the
defendant present in Court on 01.11.2022.
6. It is the case of the plaintiff that the plaintiff is a company
organized and existing under the laws of the State of Washington, the
United States of America (in short, 'United States'). It is a lifestyle-
brand company. In the year 1971, its predecessor-in-interest opened its
first retail store under the name 'Starbucks' in Seattle, Washington,
United States, offering a variety of coffee, tea and spices. In 1985, the
plaintiff-company was incorporated as 'STARBUCKS CORPORATION',
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and in the year 1987, the plaintiff opened its first retail store in locations
outside of Seattle, to other locations within the United States as also in
Vancouver, British Columbia, Canada.
7. It is further asserted that the plaintiff, under its registered trade
mark 'FRAPPUCCINO' and the variations thereof, offers its widely
popular hand-crafted blended cold beverages throughout the world. These
are also sold in bottled form in many countries in a variety of flavours.
8. The plaintiff has given details of the registration of its
'FRAPPUCCINO' mark in paragraph 7 of the plaint and filed
documents in support of this claim.
9. It is further asserted that the plaintiff uses its trade mark
'FRAPPUCCINO' in 30,626 'Starbucks' stores in 80 countries and
territories, as well as a bottled-coffee beverage that is distributed to
multiple third-party grocery, retail and wholesale stores globally. The
plaintiff develops specific flavors for various countries in which
beverages under the 'FRAPPUCCINO' mark are available in the
'Starbucks' stores. Some flavors are developed for short-term
promotions, while some are developed for long-term menu use, such as
beverages bearing the mark 'FRAPPUCCINO' and in flavours including
but not limited to 'Banana Java Chip', 'Mango-Azuki', 'Blackberry
Green Tea' in the Philippines, Switzerland, and Australia.
10. The plaintiff has also listed out the details of domain names
registered with the word 'FRAPPUCCINO' as the prominent part across
the various countries, in paragraph 11 of the plaint.
11. The plaintiff asserts that its worldwide sales figures in relation to
the various products sold under 'FRAPPUCCINO' marks runs in
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billions of US Dollars and that it has spent substantial amount on
advertisement and promotion for its products and services, including in
'FRAPPUCCINO' marks. The details of the revenue and the
advertising expenses for the financial years 2012 to 2018 are given in
paragraph 12 of the plaint.
12. The plaintiff also has been featured for the mark
'FRAPPUCCINO' in various popular national and international trade
magazines and newspapers (and their corresponding websites) having
circulation in many countries throughout the world, including India.
12A. It is submitted by the plaintiff that in January, 2011, the plaintiff
signed a pact with 'Tata Coffee Ltd'. to open retail stores in India by way
of equity joint venture. Thereafter, the joint venture company 'Tata
Starbucks Private Limited' was incorporated on September 30, 2011 and
the plaintiff opened its first store in October, 2012 in Mumbai. Since
then, the plaintiff has expanded its presence in India by opening at least
145 'Starbucks' stores in various cities across India. The plaintiff has
also obtained registration of the trade mark 'FRAPPUCCINO' in India
in various classes, the details whereof are given in paragraph 23 of the
plaint.
13. The plaintiff asserts that the 'FRAPPUCCINO' marks constitute
invaluable intellectual property rights of the plaintiff which has been
zealously protected by them across the globe, with successful action
being taken against the infringers of the said mark.
14. The plaintiff asserts that in the third week of November 2018, it
was brought to the notice of the plaintiff that the defendant no. 2 was
operating a cafe/restaurant under the name of the defendant no. 1 in
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Jaipur, Rajasthan, wherein a beverage under the name of 'BROWNIE
Chips FRAPPUCCINO' was being sold without the plaintiff's
permission, authorization or license. The defendants were also making
reference to the beverage name 'Frappucino' on the electric menu cards
of their establishment, which are also being uploaded on third-party
listing portals such as 'Zomato' and 'EazyDiner' for promotion and
advertisement.
15. The plaintiff served the defendants with a cease-and-desist notice
dated 01.12.2018, calling upon the defendants to stop the use of their
registered mark 'FRAPPUCCINO', however, no response thereto was
received. A reminder letter dated 08.01.2019 was thereafter sent, to
which again there was no response.
16. It is asserted that on a telephonic conversation with the director the
of defendant no.2, it was assured to the plaintiff's advocate that they
would cease all use of the mark 'FRAPPUCCINO' and will update their
electronic menu cards which are listed on third-party portals like
'Zomato' and 'EazyDiner'. However, through an internal investigation, it
was found that the defendants continued to sell its products under the
impugned trade mark despite the undertaking of the director of the
defendant no.2. Thereafter, another reminder dated 08.05.2019 was sent
by the plaintiff's advocates to the defendants, requesting them to comply
with the just and fair requisitions within a period of a week, however,
again there was no response to the notice.
17. The plaintiff asserts that the defendants are not only infringing the
registered trade mark of the plaintiff but are also guilty of passing off
their products as those of the plaintiff's. The mark adopted by the
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defendants is identical to the mark of the plaintiff's and there is no
explanation for the defendants to have adopted the said mark.
18. The learned counsel for the plaintiff has also placed reliance on the
judgments of this Court in Starbucks Corporation v. Jail Cafe and Anr.;
2019 SCC OnLine 12301 and in Starbucks Corporation v. Teaquila A
Fashion Cafe & Anr., 2022 SCC OnLine Del 1381 to contend that in
similar circumstances, suits filed by the plaintiff for the protection of its
mark 'FRAPPUCCINO' have been decreed by this Court and damages
have also been awarded to the plaintiff.
19. I have considered the averments made in the plaint, the documents
filed therewith, as also the submissions made by the learned counsel for
the plaintiff.
20. As noted hereinabove, the defendants, in spite of service, have
neither filed their written statement nor has anyone appeared in the suit,
apart from on two occasions, that is on 26.02.2020 and 22.08.2022.
21. The plaintiff is the registered proprietor of the mark
'FRAPPUCCINO', as is evident from not only the contents of the plaint
but also the documents filed therewith. It has a worldwide reputation in
the said mark. The defendants have adopted an identical mark, with the
prefix 'BROWNIE Chip' used by the defendants with the registered
mark of the plaintiff 'FRAPPUCCINO' apparently intending to deceive
an unwary consumer and to ride upon the reputation of the mark. The
plaintiff itself used its mark 'FRAPPUCCINO' with a suffix depicting
the flavours of its beverages, like 'Java Chip Frappuccino' and others as
stated in the plaint. The adoption of the mark 'FRAPPUCCINO' by the
defendants is, therefore, dishonest, and is intended to deceive an unwary
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consumer. It amounts to infringement of the plaintiff's trade mark and
would also result in passing off the goods of the defendants as that of the
plaintiff's.
22. As the defendants have been proceeded ex-parte, in my opinion,
the present is a fit case for passing of Summary Judgment invoking the
provisions under Order XIII-A of the CPC, as applicable to the
commercial disputes of a specified value, read with Rule 27 of the Delhi
High Court Intellectual Property Rights Division Rules, 2022. The
plaintiff, in absence of any defence and in view of the uncontroverted
assertions in the plaint and the documents filed therewith, has not only
been able to prove its right in the mark 'FRAPPUCCINO', but also the
infringement and passing off of the said mark by the defendants.
23. No useful purpose shall be served in calling upon the plaintiff to
further undertake the exercise of proving the facts and documents that are
otherwise not disputed. To do otherwise would defeat the object and
intent of the Commercial Courts Act, 2015. For this purpose, reliance
can be placed on the judgement passed by this Court in Su-Kam Power
Systems Ltd. v. Kunwer Sachdev and Another, 2019 SCC OnLine Del
10764, wherein it was held as under:
"90. To reiterate, the intent behind incorporating
the summary judgment procedure in the
Commercial Court Act, 2015 is to ensure disposal
of commercial disputes in a time-bound manner.
In fact, the applicability of Order XIIIA, CPC to
commercial disputes, demonstrates that the trial is
no longer the default procedure/norm.
91. Rule 3 of Order XIIIA, CPC, as applicable to
commercial disputes, empowers the Court to grant
a summary judgement against the defendant
where the Court considers that the defendant has
no real prospects of successfully defending the
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claim and there is no other compelling reason why
the claim should not be disposed of before
recording of oral evidence. The expression "real"
directs the Court to examine whether there is a
"realistic" as opposed to "fanciful" prospects of
success. This Court is of the view that the
expression "no genuine issue requiring a trial" in
Ontario Rules of Civil Procedure and "no other
compelling reason..... for trial" in Commercial
Courts Act can be read mutatis mutandis.
Consequently, Order XIIIA, CPC would be
attracted if the Court, while hearing such an
application, can make the necessary finding of
fact, apply the law to the facts and the same is a
proportionate, more expeditious and less
expensive means of achieving a fair and just
result.
92. Accordingly, unlike ordinary suits, Courts
need not hold trial in commercial suits, even if
there are disputed questions of fact as held by the
Canadian Supreme Court in Robert Hryniak v.
Fred Mauldin, 2014 SCC OnLine Can SC 53, in
the event, the Court comes to the conclusion that
the defendant lacks a real prospect of successfully
defending the claim."
23A. In reaching the above conclusion, reliance is also placed on the
judgments of this Court in Jail Cafe and Anr. (supra) and Teaquila A
Fashion Cafe & Anr. (supra).
24. On the question of claim of damages, in Intel Corporation v.
Dinakaran Nair & Ors., 2006 SCC OnLine Del 459, this Court has held
as under:-
"13. The only other question to be
examined is the claim of damages of Rs. 20
lakh made in para 48(iii) (repeated) of the
plaint. In this behalf, learned Counsel has
relied upon the judgments of this Court
in Relaxo Rubber Limited v. Selection
Footwear, 1999 PTC (19) 578; Hindustan
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Machines v. Royal Electrical Appliances,
1999 PTC (19) 685; and CS (OS)
2711/1999, L.T. Overseas Ltd. v. Guruji
Trading Co., 123 (2005) DLT 503 decided
on 7.9.2003. In all these cases, damages of
Rs. 3 lakh were awarded in favour of the
plaintiff. In Time Incorporated v. Lokesh
Srivastava, 2005 (30) PTC 3 (Del) apart
from compensatory damages even punitive
damages were awarded to discourage and
dishearten law breakers who indulge in
violation with impunity. In a recent
judgment in Hero Honda Motors
Ltd. v. Shree Assuramji Scooters, 125
(2005) DLT 504 this Court has taken the
view that damages in such a case should be
awarded against defendants who chose to
stay away from proceedings of the Court
and they should not be permitted to enjoy
the benefits of evasion of Court
proceedings. The rationale for the same is
that while defendants who appear in Court
may be burdened with damages while
defendants who chose to stay away from the
Court would escape such damages. The
actions of the defendants result in affecting
the reputation of the plaintiff and every
endeavour should be made for a larger
public purpose to discourage such parties
from indulging in acts of deception.
14. A further aspect which has been
emphasised in Time Incorporated
case (supra) is also material that the object
is also to relieve pressure on the overloaded
system of criminal justice by providing civil
alternative to criminal prosecution of minor
crimes. The result of the actions of
defendants is that plaintiffs, instead of
putting its energy for expansion of its
business and sale of products, has to use its
resources to be spread over a number of
litigations to bring to book the offending
traders in the market. Both these aspects
have also been discussed in CS(OS) No.
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1182/2005 titled Asian Paints (India)
Ltd. v. Balaji Paints and Chemicals decided
on 10.3.2006. In view of the aforesaid, I am
of the considered view that the plaintiff
would also be entitled to damages which
are quantified at Rs. 3 lakh."
(Emphasis supplied)
25. In Hindustan Lever Ltd. and Anr v. Satish Kumar, 2012 SCC
OnLine Del 1378, it has been held as under that:
"23. One of the reasons for granting relief of
punitive damages is that despite of service of
summons/notice, the defendant had chosen not to
appear before the court. It shows that the
defendant is aware of the illegal activities
otherwise, he ought to have attended the
proceedings and give justification for the said
illegal acts. Since, the defendant has maintained
silence, therefore, the guilt of the defendant
speaks for itself and the court, under these
circumstances, feels that in order to avoid future
infringement, relief of punitive damages is to be
granted in favour of the plaintiff."
26. In Teaquila A Fashion Cafe & Anr. (supra), this Court awarded
damages of Rs.2,00,000/- (Rupees Two Lakh only) in favour of the
plaintiff and against the defendants. In my opinion, similar damages
deserve to be awarded in favour of the plaintiff and against the
defendants in the present suit as well.
27. In view of the above, a decree is passed in terms of prayer made in
paragraph 43 (a), (b) and (e) of the plaint.
28. The plaintiff is also held entitled to the cost of the Suit. Apart from
the Court fee, the plaintiff has filed an 'Advocate Fee Certificate'
showing an amount of Rs.13,38,917.85 charged by the counsel as legal
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fee. The same is found to be reasonable and is thus awarded in favour of
the plaintiff and against the defendants.
29. The Suit is decreed in the above terms. Let a Decree Sheet be
drawn accordingly.
NAVIN CHAWLA, J.
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