Itc Limited vs Stc Tobacco Pvt Ltd & Ors on 29 February, 2024

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Delhi High Court - Orders

Itc Limited vs Stc Tobacco Pvt Ltd & Ors on 29 February, 2024

Bench: Sanjeev Narula

                                    $~42
                                    *           IN THE HIGH COURT OF DELHI AT NEW DELHI
                                    +           CS(COMM) 182/2024
                                                ITC LIMITED                                                                           ..... Plaintiff
                                                                                      Through:                Mr. Mukul Rohatgi, Senior Advocate
                                                                                                              with Mr. Hemant Singh, Ms. Mamta
                                                                                                              Rani Jha, Mr. Anuraj Tirthankar,
                                                                                                              Mr. Nikhil Rohatgi, Mr. Akhil Saxena
                                                                                                              and Mr. Keshav Sehgal, Advocates.

                                                                                      versus

                                                STC TOBACCO PVT LTD & ORS.                                                        ..... Defendants
                                                                                      Through:                None.

                                                CORAM:
                                                HON'BLE MR. JUSTICE SANJEEV NARULA
                                                             ORDER

% 29.02.2024 I.A. 4849/2024 (seeking exemption from advance service on the Defendants)

1. The Plaintiff in the instant case, is seeking ex-parte appointment of a Local Commissioner for seizure of the infringing goods. The case set out by the Plaintiff prima facie, indicates that the impugned goods are counterfeit products. Thus, in the peculiar facts and circumstances of the case, the Plaintiff is exempted from advance service on the Defendant.

2. The application is disposed of.

I.A. 4847/2024 (seeking leave to file additional documents)

3. This is an application seeking leave to file additional documents under the Commercial Courts Act, 2015.

4. Applicant, if it wishes to file additional documents at a later stage, CS(COMM) 182/2024 Page 1 of 18 This is a digitally signed order.

5. Accordingly, the application stands disposed of. I.A. 4848/2024 (exemption from pre-institution mediation)

6. As the present suit contemplates urgent interim relief, in light of the judgment of Supreme Court in Yamini Manohar v. T.K.D. Krithi,1 exemption from attempting pre-institution mediation is granted.

7. Disposed of.

I.A. 4851/2024 (seeking extension of time for filing court fees)

8. Mr. Mukul Rohatgi, Senior Counsel for the Plaintiff, states that court fee has been applied for, and undertakes to file the same as and when the court fee certificate/ stamps are issued.

9. In view of the above, the application is disposed of with a direction that the Plaintiff should furnish the deficient court fees within a period of two weeks from today.

CS(COMM) 182/2024

10. Let the plaint be registered as a suit.

11. Issue summons. Upon filing of process fee, issue summons to the Defendants by all permissible modes. Summons shall state that the written statement shall be filed by the Defendant within 30 days from the date of receipt of summons. Along with the written statement, the Defendants shall also file an affidavit of admission/denial of the documents of the Plaintiff, without which the written statement shall not be taken on record.

12. Liberty is given to the Plaintiff to file a replication within 15 days of the receipt of the written statement. Along with the replication, if any, filed by the Plaintiff, an affidavit of admission/denial of documents of the CS(COMM) 182/2024 Page 2 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:39 Defendants, be filed by the Plaintiff, without which the replication shall not be taken on record. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines.

13. List before the Joint Registrar for marking of exhibits on 2nd May, 2024. It is made clear that any party unjustifiably denying documents would be liable to be burdened with costs.

14. List before Court for framing of issues thereafter. I.A. 4845/2024 (for ex-parte ad interim injunction)

15. Mr. Mukul Rohatgi, Senior counsel for the Plaintiff, submits as follows:

15.1. The Plaintiff, ITC Limited, proprietor of trademark "GOLD FLAKE"

& its Roundel Devices and [hereinafter 'Plaintiff's marks and roundel device']their corresponding trade dresses/devices/logos, has ﬁled the present suit seeking permanent injunction restraining Defendants from using the marks "GOLD FALCON ", "GOLD FLICKER ", "GOOD FILTER " and "GOLD POWER " [referred to as 'impugned marks'] in respect of cigarettes, on the ground of infringement and passing off of Plaintiff's trademark and copyright.

15.2. Plaintiff is one of the largest FMCG companies in the country with its cigarettes business dating back to the year 1910. The trademark "GOLD 1 2023 SCC OnLine SC 1382.

CS(COMM) 182/2024 Page 3 of 18

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:39 FLAKE" was originally adopted by the Plaintiff's predecessor-in-business on or about the year 1905 for use in relation to cigarettes, and subsequently, in 1910, it was assigned to the Plaintiff. On account of the long and uninterrupted use of the mark "GOLD FLAKE" across the country, the same has emerged as one of the most well recognized and popular trademarks of the Plaintiff.

15.3. Over the years, the Plaintiff has applied for and obtained several registrations of device marks of 'GOLD FLAKE', under the trademarks Act, 1999, details of which are mentioned in paragraph No. 11 of the plaint. 15.4. Plaintiff also asserts copyright in the artistic works/ labels affixed on their products details of which are reproduced herein:

15.5. Plaintiff's products have garnered substantial goodwill and revenue in India, with sales turnover of INR 36,855 Crores for the ﬁnancial year 2022- 2023. Details regarding annual turnover of the Plaintiff in relation to trademark "GOLDFLAKE" are mentioned in paragraph No. 13 of the plaint. 15.6. The Plaintiff is aggrieved by the adoption of impugned marks by the Defendants identified and impleaded herein, as well as several unknown parties who are collectively and jointly involved in the manufacture, sale and supply of cigarettes bearing impugned marks. Accordingly, the present CS(COMM) 182/2024 Page 4 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:39 case is of infringement and passing off of the Plaintiff's marks including the trade dress, packaging, label, and colour combination. 15.7 In or around October 2023, Plaintiff received information from the field force about presence of several lookalike "GOLD FLAKE" cigarettes in and around the markets of Delhi. In order to find out the scope and extent of such infringing activities, they engaged an independent investigator to undertake market survey for "GOLD FLAKE" lookalike products. The investigator undertook extensive market survey, both online and on-ground market visits and submitted the Investigation Report dated 15th February, 2024 which reveals that the Defendant Nos. 1 to 7 are involved in manufacturing, selling, offering for sale, advertising and supplying cigarettes under the impugned marks which infringe on the Plaintiff's marks and roundel device, by copying not only the trade mark "GOLD FLAKE"

but also the logo, trade dress including colour combination and the roundel device, outer packaging and even individual cigarette sticks. 15.8. The Defendant No. 1, 5 and 7 are the manufacturers whose names are appearing on the packaging of the impugned products. The Defendant Nos. 2 and 3 are the suppliers of the impugned products in the physical market as well as online through the website namely www.cigarettesdistributor.com. Defendant No. 6 has applied for the registration of the device mark " " bearing no. 3559168 in class 34, the current status of which as per the trademarks registry portal, is 'objected'. Defendant No.4 has dishonestly obtained trademark registration for wordmark "GOLD FALCON" bearing registration no. 5321295 in class 34 and Plaintiff is CS(COMM) 182/2024 Page 5 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:39 taking steps to file cancellation petition against the same. The Plaintiff apprehends that there are many other parties who may be involved along with the aforesaid Defendants in manufacture, sale and supply of cigarettes bearing the impugned marks. The Plaintiff has accordingly made Defendant No. 8 as John Doe so as to implead such unknown parties at the stage when the information is available through ongoing investigation. All the Defendants are individually and collectively liable for acts of infringement and passing off, arising from manufacture and sale of the products under the impugned trademarks and trade dress as enunciated in the plaint. 15.9. Additionally, the investigation report dated 15th February, 2024 also revealed that the Defendant No.2 and 3 are engaged in the supply and sale of contraband and duty evaded cigarettes, cigarettes without appropriate graphical warnings as required under Indian Law and illicit cigarettes not meant for sale in India. A picture of one such cigarette pack is reproduced herein below:

CS(COMM) 182/2024 Page 6 of 18

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40

16. The Court has considered the aforenoted submissions. Comparison chart of the Plaintiff's trademark, products and labels with that of the Defendants' trademark, products and labels is as under:

CS(COMM) 182/2024 Page 7 of 18

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 CS(COMM) 182/2024 Page 8 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 CS(COMM) 182/2024 Page 9 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 CS(COMM) 182/2024 Page 10 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 CS(COMM) 182/2024 Page 11 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40

17. The pictures of the impugned products extracted above reveal that Defendants' products are prime facie deceptively similar to Plaintiff's products. Defendants' intention to imitate Plaintiff's product and trade-dress CS(COMM) 182/2024 Page 12 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 is manifest by adoption of impugned marks alongwith roundel device, the overall look and get up of the front panel and manner of placement of individual elements on their trade-dress, the design element and placement of the roundel device on their cigarette stick, the adoption of red and gold colour combination on their trade-dress and other such similarities as evident from the above-noted comparison chart. Therefore, the impugned marks are structurally, phonetically and visually similar to the Plaintiff's marks.

18. Additionally, the court finds merit in Mr. Rohatgi's argument that cigarettes alleged to be clandestine imports, as revealed by their investigation report, details of which are delineated in paragraph 27 of the plaint, would violate Plaintiff's exclusive rights in their trademark "GOLD FLAKE", pursuant to an assignment from British American Tobacco Co. Ltd, to manufacture and sell "GOLD FLAKE" cigarettes in India. Thus, a prima facie case has been made out that Defendant No.2 and 3's sale of cigarettes in India, under the trademark "GOLD FLAKE", not originating from the Plaintiff are unauthorized products, constitutes infringement of the Plaintiff's rights under Section 29(6)(c) of the Trade Marks Act, 1999.

19. Considering the above, Plaintiff has made out a prima facie case in its favour and in case an ex-parte ad-interim injunction is not granted, Plaintiff will suffer an irreparable loss; balance of convenience also lies in favour of the Plaintiff and against the Defendant.

20. Accordingly, till the next date of hearing, the Defendants and any person acting on their behalf are restrained from manufacturing, offering for sale, selling, displaying, advertising, marketing, using, exporting, printing, whether directly or indirectly, dealing in cigarettes under the marks " GOLD CS(COMM) 182/2024 Page 13 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 FALCON " "GOLD FLICKER " "GOOD FILTER " and "GOLD POWDER "and/or any marks/packaging that are nearly identical/ similar to the Plaintiff's marks that would amount to infringement and passing off of Plaintiff's trademarks and copyright.

21. Additionally, till the next date of hearing, Defendant No. 2 and 3 are restrained from selling or offering for sale or advertising such products which amount to unauthorised import of Plaintiff's products in India.

22. Compliance of Order XXXIX Rule 3 of the Code of Civil Procedure; 1908 be done within three weeks from today.

23. Issue notice. Reply, if any, be ﬁled within four weeks from the date of service. Rejoinder thereto, if any, be ﬁled within two weeks thereafter.

24. List before the Court on 2nd August, 2024.

I.A. 4846/2024 (for the appointment of local commissioners) 25 Mr. Rohatgi seeks appointment of three Local Commissioners contending that the Defendants are likely to remove all physical evidence or deny their involvement in the infringing activities. Plaintiff believes that the infringing products are stored at Defendants' premises situated at the addresses mentioned in paragraph 5 of the instant application.

26. Accordingly, the following are appointed as Local Commissioners to visit the premises of the Defendants situated at the address mentioned against their name:

CS(COMM) 182/2024 Page 14 of 18

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 Name and details of the Local Address of the Defendants Commissioner

1. Ms. Ishika Garg STC Tobacco Pvt. Ltd.

Contact No. (+91 9910304698) Plot No. K-112, UPSIDC Industrial Area, Kosi Kalan -281403, Mathura, Agra, Uttar Pradesh-281403

2. Ms. Rupam Jha Rajan Baluja, trading as Baluja Contact No. (+91 7042471910) Traders, Phase 11, Sector 65, Sahibzada Ajit Singh Nagar, Mohali, Punjab Also at Chandigarh, Sector 19 Sanjay Baluja, trading as Baluja Traders Chandigarh, Sector 19

3. Ms. Sandhya Gupta, Advocate Mr. Suresh Gupta Contact No. (+91 9312280288) Shop at Building number 35, Ekta Market, Katra Baryan, Fatehpuri, Delhi-110 006 The fee of each of the Local Commissioners, to be borne by the Plaintiff, is ﬁxed at Rs. 1,50,000/- each. The Plaintiff shall also bear expenses for travel and lodging of the Local Commissioners and other miscellaneous out-of- pocket expenses for the execution of the commissions. Entire fee of the Local Commissioners shall be paid in advance by Plaintiff.

27. The Local Commissioners, along with representatives of the Plaintiff and their counsel, shall be permitted to enter upon the above noted premises CS(COMM) 182/2024 Page 15 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40 of Defendants or any other location/premises that may be identiﬁed during the course of commissions, in order to conduct the search and seizure. The Local Commissioners shall conduct search of the premises and seize products (including unﬁnished semi-ﬁnished goods) bearing the afore-noted impugned marks and roundel devices identical or similar to the Plaintiff's afore-noted marks and labels and other materials/ documents pertaining thereto. If the Defendants are using different marks on outer packaging of the impugned products and identical roundel devices on the individual cigarette sticks, the Local Commissioner shall be permitted to open cigarette packs to inspect the logos/devices on the individual cigarette sticks.

28. Since, Plaintiff also seeks execution of commission against unknown person represented as 'John Does', in addition to the abovementioned directions, this Court considers it appropriate to pass the following directions:

i) The Local Commissioners shall visit such premises, on information being made available to them from time to time by the Plaintiff and seize impugned products, if any, found in those premises. The said direction shall operate until 2 months from today.

ii) The Local Commissioners will seek identity documents of defendants/John Doe defendants and, if provided, self-attested photocopies of the same, shall be retained to enable the plaintiffs to array them as parties to the present suit.

iii) The moment the infringing goods are seized by the Local Commissioners, the injunction order adverted to in paragraph 20 above shall apply eo-instanti to such persons who would then be impleaded by name as 'Defendants' to the present proceedings.

CS(COMM) 182/2024 Page 16 of 18

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40

iv) If the Local Commissioner seizes any goods, products, cartons bearing the impugned trademark/labels/logos etc., the said Defendants, or each of them in respect to whom the seizure has been effected, be served with a complete set of court documents forthwith and with a copy of summons. The said Defendants shall have the right to defend himself/themselves on the date indicated on the said summons. If such Defendant(s) appears on the date indicated on the summons, he/they shall be at liberty to take all such defenses as are open to him/them.

v) In order to effectuate the above, the Registry is directed to issue additional summons in the name of John Doe/s defendants, which can be used by the Local Commissioners from time to time, to serve those parties and to seize the counterfeit goods therefrom, on receipt of intimation by the Plaintiff.

vi) The fees of Local Commissioner(s) would be INR 50,000/- for each subsequent visit. In addition, thereto, the Local Commissioner(s) will also be reimbursed for their out-of-pocket expenses, if any, incurred by them in the course of execution of the commission. The burden of the fee and expenses will be borne by the Plaintiff.

29. After seizing infringing material, the same shall be inventoried, sealed and signed by the Local Commissioners, in the presence of the parties, and handed over on superdari to the plaintiff or its representatives.

30. The Local Commissioners shall also be permitted to make copies of the books of accounts including lodgers, cash registers, stock registers, invoices, books; etc. insofar as they pertain to the infringing products. Further, the Local Commissioners are permitted to undertake/arrange for photography/ videography of the execution of the commissions. All the CS(COMM) 182/2024 Page 17 of 18 This is a digitally signed order.

31. In case any of the premises are found locked, the Local Commissioner shall be permitted to break open the- lock(s). To ensure an unhindered and effective execution of this order, the Senior Superintendent of Police, SAS Nagar, Senior Superintendent of Police, Chandigarh, Senior Superintendent of Police, Mathura and Deputy Commissioner of Police, Dwarka and their designated/jurisdictional SHO is directed to render all assistance and protection to the Local Commissioner(s), if and when sought.

32. The commissions shall be executed within a period of three weeks from today. Reports of the commissions shall be ﬁled by Local Commissioner within a period of four weeks from the date of execution.

33. The application stands disposed of in the above terms.

34. Copy of this order shall not be uploaded for a period of three weeks from today.

35. Dasti under the signatures of court master.

SANJEEV NARULA, J FEBRUARY 29, 2024 nk CS(COMM) 182/2024 Page 18 of 18 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/03/2024 at 20:37:40

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