Delhi District Court
Puma Se vs R.J. Enterprises on 9 October, 2020
IN THE COURT OF SHRI MAN MOHAN SHARMA, DISTRICT
JUDGE (COMMERCIAL COURT)06, CENTRAL DISTRICT, TIS
HAZARI COURTS, DELHI
CS (Commercial) No. 2134/2019
PUMA SE
PUMA Way1,
Herzogenaurach, 91074 Germany
Also at:
117, A22, WEA, Ajmal Khan road,
Karol Bagh, New Delhi110005 .....Plaintiff
VERSUS
R.J. Enterprises
IX/630B, 1st Floor,
Krishna Gali No. 1,
Subhash Road,
Gandhi Nagar, Delhi110031 .....Defendant
Suit instituted on : 23.07.2019
Judgment reserved on : 29.09.2020
Judgment pronounced on : 09.10.2020
SUMMARY JUDGMENT
(Under Order XIIIA of the Code of Civil Procedure)
1. The plaintiff has preferred an application for summary judgment under
Order XIIIA of the Code of Civil Procedure, as amended by the
Commercial Courts Act, 2015.
2. I have heard Shri Shashi P. Ozha, Ld counsel for the plaintiff. The
defendant is exparte in this case.
Maintainability of the Application for Summary Judgment
3. As per Order XIIIA Rule 4(3) of the Code of Civil Procedure, in an
application seeking a summary judgment a notice of 30 days ought to
be given to the defendant.
CS (Com) No. 2134/2019 Page No. 1 of 35
4. Since the defendant is exparte in the instant matter since 07.02.2020
and has not joined the proceedings thereafter, a pertinent question
about the maintainability of this application has been put to the Ld.
Counsel for the plaintiff.
5. Ld. Counsel for the plaintiff has cited the law laid down by the
Hon'ble High Court of Delhi in Glaxo Group Limited vs AAR ESS
Remedies Private Limited 2017 (71) PTC 623 (Del) and has relied
upon the para 9 of the judgment which reads as under--
"By I.A. No. 8434/2017 the plaintiff prays for summary judgment in
terms of Order XIIIA Rule2 read with Section 151 CPC. Though as
per Order XIIIA CPC at least 30 days' notice to the defendants is
required to be issued before fixing the suit for hearing on summary
judgment; as noted, the defendants have already been proceeded ex
parte vide order dated 1st February, 2017. Thus, summary judgment
can be passed on the basis of pleadings accompanied by the statutory
affidavits under the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act, 2015 and the
documents filed."
6. In view of the above pronouncement of law, the instant application for
summary judgment is maintainable.
Plaintiff's Application under Order XIIIA CPC
7. In his application seeking a summary judgment under Order XIIIA of
the Code of Civil Procedure, the plaintiff has relied upon the
submissions made in the plaint, the interlocutory applications and
CS (Com) No. 2134/2019 Page No. 2 of 35
documents on record. Legal submission and citations of case law have
also been pressed into service.
Factual Aspects of Plaintiff's case
8. The case of the plaintiff is that the trademark "PUMA" and
logo (hereinafter 'the mark') had been coined by the plaintiff way back
in 1948 in Germany. Due to its continuous and extensive use, the mark
has become synonym with every sport. The Puma logo typeface, has
remained the same since 1948 and it highlights the basic sportsman
spirit that is both uniform and universal. The bold font in Puma logo is
the projection of the company's stability and dominance.
9. The plaintiff is one of the world's leading Sports brands designing,
developing, selling and marketing footwear, apparel and accessories.
The trade mark of the plaintiff is a wellknown trade mark. It is
registered in a number of countries around the world including India.
The plaintiff has been selling its products in India through export and
other modes since the year 1980.
10.The trade and consumers recognizes the plaintiff's trade mark and
logo as the source identifier of the plaintiff Company's products.
Plaintiff company has been extensively advertising its products
including those bearing the distinctive logo and trademark, through
various printed media including newspapers, magazines and trade
journals, leaflets and other promotional literature and the said
materials have been extensively distributed all throughout the country
including Delhi. The plaintiff has spent huge sums of money on the
advertisement and sales promotion of its products.
CS (Com) No. 2134/2019 Page No. 3 of 35
11.The plaintiff's brand and trademark has been endorsed and promoted
by various prominent teams and athletes like Singer Rihanna, world
class cricketers like Yuvraj Singh, Harbhajan Singh etc, Bollywood
celebrity Jacqueline Fernandez.
12.The plaintiff has been vigilant in protecting and safeguarding its rights
in the said mark which has been recognized by various Courts in India
who have passed orders in favour of plaintiff restraining other parties
from using the said mark.
13.The defendant is engaged into the business of manufacturing and
trading of garments bearing the plaintiff's trade mark without
authorization/approval of the plaintiff. This had constrained the
plaintiff to file the instant suit.
14.In this suit an exparte order dated 23.07.2019 and further appointed a
Local Commissioner to search and seize the counterfeit product from
the defendant's premises. The commission was executed and the
Local Commissioner searched and seized a huge quantity of infringing
and counterfeiting products from the premises of the defendant.
15.The defendant despite being aware about the present proceeding did
not appear before this court. Consequently, he had been proceeded ex
parte on 07.02.2020.
Legal Aspects of Plaintiff's case
16.The plaintiff's case has pressed into service various legal aspects to
bring home its case.
CS (Com) No. 2134/2019 Page No. 4 of 35
17. The Plaintiff is the prior adopter, user and registered proprietor of the
mark/trading name PUMA & logo and &
internationally and in India.
18.The said trade marks are distinctive of the plaintiff's goods and have
been in extensive and continuous use since their adoption and these
marks have acquired tremendous and unique reputation and goodwill.
19.The Plaintiff is the registered proprietor of these trade marks in India.
The adoption and use of an identical mark without authorization of the
Plaintiff would amount to infringement of plaintiff's statutory rights in
the above mark/logo as per Section 29(1) and (2) of the Trade Marks
Act.
20.The defendant, being a counterfeiter, has no right in the said
trademarks/logo Copying of wellknown trademarks of the Plaintiff, in
respect of their infrior quality of goods, the act of the defendant
amounts to infringment of the plaintiff registered trademark.
21.The plaintiff is entitled to statutory remedy against infringement of his
trade mark. The plaintiff is also entitled to protection of his goodwill
in the trademarks and has common law remedy of passing off.
22.The plaintiff is entitled to damages on all counts including punitive or
extraordinary damages. There is not need of going into rendition of
accounts and the law is well settled that the damages can be awarded
on the face of the facts of the case. There is catena of case law to
support this submission.
CS (Com) No. 2134/2019 Page No. 5 of 35
23.The defendant has no real prospect of successfully defending the
claim. There is no compelling reason why the claim should not be
disposed of by way of a summary judgment.
Appreciation and Reasoning
24.The concept of summary judgment as enshrined in the Order XIIIA of
the Code of Civil Procedure and applicable only in respect of a
commercial suit is a unique provision having no parimateria
provision in any other statute.
25.Though on a cursory examination, it may appear that the summary
judgment is akin to 'judgment on admission' under Orde XII Rule 6 of
the Code of Civil Procedure or a 'default judgment' under Order VIII
Rule 1 of the Code of Civil Procedure or in some way similar to the
'summary procedure' under Order XXXVII of the Code of Civil
Procedure. A careful scrutiny of the provision reveals that it is in fact
quite different from these provisions. It is an independent provision,
selfcontained in itself.
26.The provision of Summary Judgment gives a right of any party to a
commercial dispute instituted under the Commercial Courts Act, 2015
to get a claim decided in its favour without going through the process
of recording the oral evidence.
27. All commercial disputes are covered under the provision of Order
XIIIA with only one exception i.e. the cases originally instituted under
the summary procedure under Order XXXVII of the Code of Civil
Procedure, in which this provision cannot be invoked.
CS (Com) No. 2134/2019 Page No. 6 of 35
28.The right to get a summary judgment can be claimed by any of the
parties to a commercial dispute and this window is open from any
stage of the suit proceeding after the service of summons of the suit
upon the defendant till the stage of the framing of the issues. Once the
issues have been framed, the window gets closed for good.1
29.There are four ways in which the claims can be decided by way of a
summary judgment. Firstly, the entire claim of either of the parties;
secondly, a part of claim of either of the parties; thirdly a counter
claim and lastly any particular question on which the claim, whether
in whole or in part, depends can be decided under this provision.
30.A Court may give a summary judgment against any party to a
commercial dispute on two grounds. These two grounds have been
joined by the word 'and' connoting that both the grounds must exist
together and simultaneously. The first ground is that the Court
considers that the plaintiff has no real prospect of succeeding on the
claim or the defendant has no real prospect of successfully defending
the claim. The second ground is that there is no other compelling
reason why the claim should not be disposed of before recording of
oral evidence. An application for summary judgment has three aspects
viz. the factual submissions; the legal submissions and the
documentary evidence.
31.While dealing with an application for summary judgment the Courts
must consider certain factors. The following factors have been culled
out from various judgments--
1
Bright Enterprises Private Limited & Anr. vs. MJ Bizcraft LLP & Anr 2017 SCC OnLine Del 6394
CS (Com) No. 2134/2019 Page No. 7 of 35
(i). Whether the claimant has a "realistic" as opposed to a "fanciful"
prospect of success?2 A "realistic" claim is one that carries some
degree of conviction. This means a claim that is more than merely
arguable.3
(ii). Court must not take at face value and without analysis everything
that a claimant says in his submissions before the Court.4
(iii). Court must take into account not only the evidence actually
placed before it, but also the evidence that can reasonably be expected
to be available at trial.5
(iv). The Court must be satisfied that there is no genuine issue
requiring a trial with respect to a claim or defence.
(v). It is not enough simply to argue that the case should be allowed to
go to trial because something may turn up which would have a bearing
on the question of construction.6
(vi). Summary judgment ought to be refused if there were compelling
reasons to conduct a trial.
(vii). Court has to strike a balance between a fair trial and expedition.
32.In this context the case of the plaintiff has to be considered for grant
of a summary judgment.
33.The plaintiff has laid claim to the following trade marks:
2
Swain v. Hillman MANU/UKWA/0649/1999: [2001] 1 All ER 91
3
ED & F Man Liquid Products v. Patel [2003] EWCA Civ 472 at [8]
4
ED & F Man Liquid Products v. Patel (supra)
5
Royal Brompton Hospital NHS Trust v. Hammond (No 5) [2001] EWCA Civ 550;
6
ICI Chemicals & Polymers Ltd. v. TTE Training Ltd. [2007] EWCA Civ. 725.
CS (Com) No. 2134/2019 Page No. 8 of 35
450142 25/02/1986 18 25/02/2026
559635 03/10/1991 24 03/10/2018
699153 22/02/1996 09 22/02/2026
699154 22/02/1996 03 22/02/2026
700541 04/03/1996 16 04/03/2026
1264294 03/02/2004 41 03/02/2024
412852 08/11/1983 28 08/11/2024
424934 27/07/1984 14 27/07/2025
450143 25/02/1986 25 27/02/2017
407833 11/07/1983 25 11/07/2024
CS (Com) No. 2134/2019 Page No. 9 of 35
34.The plaintiff has tendered on record copies of the Legal Proceeding
Certificates in respect of its registered trademarks from pages 43 to
56. These documents establish the proprietorship and registration of
various marks of the plaintiff.
35.Various judgments and orders of the Courts in India in which orders
have been passed in favour of the plaintiff have been placed on record
from page no. 2 to 42.
36.A cumulative effect of these documents is that the plaintiff is the
owner and registered user of various trademarks PUMA and
logo and and i.e. the form strip logo. The Court judgments and
orders go to show that the plaintiff has been zealously guarding its
proprietary rights in its trademarks and that its rights have been
recognized by the Courts in India.
37.Page 57 to 62 show the internet downloads showing history of PUMA
& logo. Internet downloads from the plaintiff's website
showing sale of Puma products are on pages 71 to 72. In the same
vein, internet downloads showing various Plaintiff's stores in Delhi
are on pages 77 and 78. Various celebrities who have been promoting
plaintiff's PUMA products are on pages 79 to 82. The plaint, more
particularly the para 21 shows the sales figures of the year 2012 and
2013 as well as the expenditure on advertisement and promotional
activities of plaintiff.
CS (Com) No. 2134/2019 Page No. 10 of 35
38.Report of Local Commissioner as placed on record show that on
31.07.2019, the premises of the defendant has been visited and 76
pieces of Lower and 162 pieces of Tshirts have been confiscated as
infringing products, as bearing the plaintiff's trade mark. As many as
27 photographs showing the proceedings of the Local Commissioner
and the confiscated goods have been placed on record by the Local
Commissioner. The Superdarinama has been signed by Shri Puneesh
Jain on behalf of the defendant.
39.A Local Commissioner is the Officer of the Court. The acts done by
the Local Commissioner are on the directions of the Court. No
objections against the report of the Local Commissioner have been
filed by the defendant. Section 114 illustration (e) of the Indian
Evidence Act, 1872 raises a presumption that all judicial and official
acts have been regularly performed. Thus, in view of these aspects, the
report of the Local Commissioner has to be taken at the face value.
40.It is clearly apparent on the face of the report and the accompanying
photographs that the defendant has slavishly used the trademark and
trade dress of the plaintiff.
41.On the aspect of infringment, the plaintiff has relied upn the law laid
down in Durgadutt Vs. Navratna7 the para 29 of the judgment reads
that "when once the use by the defendant of the mark which is
claimed to infringe the plaintiff's mark is shown to be "in the course of
trade", the question whether there has been an infringement is to be
decided by comparison of the two marks. Where the two marks are
7
AIR 1965 SC 980
CS (Com) No. 2134/2019 Page No. 11 of 35
identical no further questions arise; for then the infringement is made
out...".
42.Ld. Counsel for the plaintiff has relied upon Laxmikant Patel vs
Chetanbhai8 on the aspect of riding upon the goodwill of plaintiff and
passing off. Reliance has been placed upon para 10 of the judgment
which reads that "a person may sell his goods or deliver his services
such as in case of a profession under a trading name or style. With the
lapse of time such business or services associated with a person
acquire a reputation or goodwill which becomes a property which is
protected by courts. A competitor initiating sale of goods or services
in the same name or by imitating that name results in injury to the
business of one who has the property in that name. The law does not
permit any one to carry on his business in such a way as would
persuade the customers or clients in believing that he goods or
services belonging to someone else are his or are associated therewith.
It does not matter whether the latter person does so fraudulently or
otherwise. The reasons are two. Firstly, honesty and fair play are, and
ought to be, the basic policies in the world of business. Secondly,
when a person adopts or intends to adopt a name in connection with
his business or services which already belongs to someone else it
results in confusion and has propensity of diverting the customers and
clients of someone else to himself and thereby resulting in injury."
43.Thus, the plaintiff has been able to establish the infringement and
passing off action on the part of the defendant.
44.Now, the other aspect to be considered the aspect of damages.
8
AIR 2002 SC 275
CS (Com) No. 2134/2019 Page No. 12 of 35
45.It has been submitted by the Ld. Counsel for the plaintiff that the
adoption of a mark and logo identical to plaintiff's trademarks by the
defendant is malafide and cannot be a matter of coincidence. On the
contrary, the same is a deliberate and a calculated move of the
defendant aimed at causing misrepresentation and making illegal
profits. The adoption of identical mark/logos by defendant is dishonest
and motivated by a desire to usurp the vast reputation and goodwill
which is enjoyed by the plaintiff not only in India but throughout the
world.
46.It is also submitted that the plaintiff has suffered and is likely to suffer
irreparable loss and injury to it's goodwill and reputation on account
of aforesaid acts of unfair trade practice committed by the defendant.
Thus, the plaintiff is entitled to punitive as well as compensatory
damages and cost incurred by the plaintiff.
47.Ld. Counsel for the plaintiff submits that the underlying principle
between 'compensatory damages' and 'punitive damages' has been
dealt in various cases by the Hon'ble courts and both punitive and
compensatory damages have been granted.
48.It has been submitted that generally, the court passes 'compensatory
damages' in cases, where the plaintiff has suffered damages on
account of the infringing activities of the defendant and compensatory
damages are granted to compensate the loss suffered by the plaintiff,
whereas the 'punitive damages' is granted to deter a wrong doer from
indulging in unlawful activities.
CS (Com) No. 2134/2019 Page No. 13 of 35
49. As far as the grant of punitive damages is concerned, Ld. Counsel for
the plaintiff traces the jurisprudence in this respect to in the case of
Time Incorporated v. Lokesh Srivastava 9where the High Court of
Delhi for the first time discussed the concept of punitive damages in
IPR case and granted Rs. 5 lacs towards punitive damages. He cited
the judgment which read that "...Coming to the claim of Rs. 5 lacs as
punitive and exemplary damages for the flagrant infringement of the
plaintiff's trade mark, this Court is of the considered view that a
distinction has to be drawn between compensatory damages and
punitive damages. The award of compensatory damages to a plaintiff
is aimed at compensating him for the loss suffered by him whereas
punitive damages are aimed at deterring a wrong doer and the like
minded from indulging in such unlawful activities. Whenever an
action has criminal propensity also the punitive damages are clearly
called for so that the tendency to violate the laws and infringe the
rights of others with a view to make money is curbed. The punitive
damages are founded on the philosophy of corrective justice and as
such, in appropriate cases these must be awarded to give a signal to
the wrong doers that law does not take a breach merely as a matter
between rival parties but feels concerned about those also who are not
party to the list but suffer on account of the breach."
50.The plaintiff further placed reliance upon the case of Hero Honda
Motors Ltd. v. Shree Assuramji Scooters10 in which Delhi High Court
took the view that damages should be awarded against defendants who
chose to stay away from proceedings of the Court and they should not
9
2005 (30) PTC 3 (Del)
10
125 (2005) DLT 504
CS (Com) No. 2134/2019 Page No. 14 of 35
be permitted to enjoy the benefits of evasion of Court proceedings.
The underlying principle 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.
51.Also relied upon is the judgment in the case of Adobe Systems vs P.
Bhoominathan11 in which the Hon'ble Court granted a sum of Rs. 5
lacs as compensatory damages and a sum of Rs. 5 lacs as
punitive/exemplary damages as well as damages on account of loss of
reputation and damage to the goodwill. The para 27 of the judgment
has been cited to read that "India followed the traditional concept of
damages that is to compensate a claimant for loss and damage. Such
damages are also referred to as compensatory damages which are
awarded to compensate the plaintiffs for damages which he has
suffered or is expected to suffer and to replace something that the
plaintiffs has lost or is expected to lose because of the wrongful act of
the defendant. The primary purpose of the damages is to restore those
losses to the plaintiffs. However, as tort litigation has evolved, I find
that the concept of damages is not limited to compensation for loss
and damages alone. Three kinds of damages are being awarded by
courts, which include nominal damages, exemplary damages and
compensatory damages."
52.Para 28 of the Adobe System (supra) judgment has been relied upon to
read that, "punitive damages, also commonly called in English
exemplary damages, are designed to punish, not to compensate. In
general, punitive damages are awarded for socially deplorable
11
2009(39) PTC 658 (Del)
CS (Com) No. 2134/2019 Page No. 15 of 35
conduct, such as fraud or malicious, reckless, or abusive action. Since
the early 1900s, punitive damages have been available only for tort
but not for contract. Punitive damages are discretionary and are never
given as a matter of right."
53.It has been submitted by Ld. Counsel for the plaintiff that thereafter,
the judgment passed in Time Inc. formed foundation for grant of
punitive damages in various cases and court granted punitive damages
following the observation of the court. However, a Division Bench of
Delhi High Court overruled the above judgment in the case
of Hindustan Unilever Limited v. Reckitt Benckiser India Limited12.
54. The judgment of Hindustan Unilever Limited v. Reckitt Benckiser
India Limited (supra) has placed reliance on two landmark
judgments "Rookes v. Barnard13 and Cassell v. Broome14.
55.In the said judgment in para 65 the case of Rookes v. Barnard has
been referred to as the seminal authority of the House of Lords, on the
issue of when punitive or exemplary (or sometimes alluded to as
"aggravated") damages can be granted. The House defined three
categories of case in which such damages might be awarded. These
are:
a. Oppressive, arbitrary or unconstitutional action any the
servants of the government;
b. Wrongful conduct by the defendant which has been calculated
by him for himself which may well exceed the compensation
payable to the claimant; and
12
2014 (57) PTC 495 (Del)
13
[1964] 1 All ER 367
14
1972 AC 1027
CS (Com) No. 2134/2019 Page No. 16 of 35
c. Any case where exemplary damages are authorized by the
statute.
56. Ld. Counsel for the plaintiff stated that it has been noted in the
judgment of Hindustan Unilever (supra) that "the later decision in
Cassell & Co. Ltd. v. Broome, upheld the categories for which
exemplary damages could be awarded, but made important
clarificatory observations that "a judge should first rule whether
evidence exists which entitles a jury to find facts bringing a case
within the relevant categories, and, if it does not, the question of
exemplary damages should be withdrawn from the jury's
consideration. Even if it is not withdrawn from the jury, the judge's
task is not complete. He should remind the jury: (i) that the burden of
proof rests on the plaintiff to establish the facts necessary to bring the
case within the categories. (ii) That the mere fact that the case falls
within the categories does not of itself entitle the jury to award
damages purely exemplary in character. They can and should award
nothing unless (iii) they are satisfied that the punitive or exemplary
element is not sufficiently met within the figure which they have
arrived at for the plaintiff's solatium in the sense I have explained and
(iv) that, in assessing the total sum which the defendant should pay,
the total figure awarded should be in substitution for and not in
addition to the smaller figure which would have been treated as
adequate solatium, that is to say, should be a round sum larger than
the latter and satisfying the jury's idea of what the defendant ought to
pay. (v) I would also deprecate, as did Lord Atkin in Ley v. Hamilton,
153 L.T. 384 the use of the word "fine" in connection with the
CS (Com) No. 2134/2019 Page No. 17 of 35
punitive or exemplary element in damages, where it is appropriate.
Damages remain a civil, not a criminal, remedy, even where an
exemplary award is appropriate, and juries should not be encouraged
to lose sight of the fact that in making such an award they are putting
money into a plaintiff's pocket, and not contributing to the rates, or to
the revenues of central government."
57.Ld. Counsel for the plaintiff placed reliance upon para 66 of the
judgment of Hindustan Unilever Ltd. (supra) to read that. "In India,
the Supreme Court has affirmed the principles in Rookes (supra) and
Cassel (supra). Interestingly, however, the application in those cases
has been in the context of abuse of authority leading to infringement
of Constitutional rights or by public authorities (ref. Ghaziabad
Development Authority v. Balbir Singh15; Lucknow Development
Authority v. M.K. Gupta16). As yet, however, the Supreme Court has
not indicated the standards which are to be applied while awarding
punitive or exemplary damages in libel, tortuous claims with
economic overtones such as slander of goods, or in respect of
intellectual property matters. The peculiarities of such cases would be
the courts' need to evolve proper standards to ensure proportionality in
the award of such exemplary or punitive damages. The caution in
Cassel that "[d]amages remain a civil, not a criminal, remedy, even
where an exemplary award is appropriate, and juries should not be
encouraged to lose sight of the fact that in making such an award they
are putting money into a plaintiffs pocket.... can never be lost sight of.
Furthermoreand perhaps most cruciallythe punitive element of the
15
MANU/SC/0282/2004 : (2004) 5 SCC 6
16
MANU/SC/0178/1994 : 1994 SCC (1) 24
CS (Com) No. 2134/2019 Page No. 18 of 35
damages should follow the damages assessed otherwise (or general)
damages; exemplary damages can be awarded only if the Court is
"satisfied that the punitive or exemplary element is not sufficiently
met within the figure which they have arrived at for the plaintiffs
solatium". In other words, punitive damages should invariably follow
the award of general damages (by that the Court meant that it could be
an element in the determination of damages, or a separate head
altogether, but never completely without determination of general
damages)".
58.Reliance has been placed by Ld. Counsel for plaintiff on Ikea Systems
vs. Sham Murari17. It is submitted that in this case Hon'ble court
replying upon the ratio of the division bench in "Hindustan Unilever
Limited v. Reckitt Benckiser India Limited held in para 21 that, thus,
the learned Division Bench has held that the tests laid down in Rookes
and Cassell govern the field of the award of punitive damages. In
Rookes vs. Barnard [1964] 1 All E.R. 367, the House of Lords laid
down that aggravated or punitive damages could be granted in the
following three circumstances..."
59.Para 22 of the judgment in Ikea Systems (supra) has been further
relied upon to read that, "It was further clarified in Cassell & Co. Ltd.
vs. Broome, 1972 AC 1027, that punitive damages can be awarded
only when the amount awarded as general damages does not offer
solatium to the Plaintiffs. Cassell further held that damages remained
a civil remedy and the Court should bear in mind that the money is
being awarded to the Plaintiffs."
17
2018 (76) PTC 121 (Del)
CS (Com) No. 2134/2019 Page No. 19 of 35
60.Further para 23 has been cited to read that, "in the present case, the
Plaintiffs do not claim direct damages on account of any actual losses
suffered by them. The losses claimed by the Plaintiffs are intangible
loss, dilution, loss of confidence and trust of customers and exemplary
damages due to disregard of the principle of fair trading. Under
Section 73 of the Indian Contract Act, 1872, damages can be both
direct and indirect. However, the nature of damages claimed in the
present case, are for violation of trademark rights. While this Court
does not wish to encourage any party, which misleads the trademark
authorities, the question is whether a false affidavit filed before the
trademark office can by itself form the basis of grant of exemplary
damages. The documents placed on record point to the fact that the
Defendants had actually registered the domain name
www.ikeaindustries.com only on 7th May, 2014. The Defendant No. 3
firm was formed on 2nd May, 2014 and the VAT registration was
obtained on 11th September, 2014. Clearly, the user claimed by the
Plaintiffs in its trademark application filed by Defendant No. 4, Shilpa
Metal Industries was completely incorrect. Thus, as on the date when
the exparte injunction was granted, i.e., 22nd December, 2014, the
Defendants may have merely used the mark for a few months. Thus,
on the basis of the inventory prepared by the Local Commissioner,
which according to the Plaintiffs is worth Rs. 67,44,800/ and
according to the Defendants is worth approximately Rs. 25,00,000/,
the Court takes the value of the said products to be in the range of Rs.
25 lakhs to Rs. 30 lakhs, as the said products were not sold. Even
treating the said stock to be the stock of one month, the total turnover
of the Defendants for three months from September to December
CS (Com) No. 2134/2019 Page No. 20 of 35
2014, could not have been more than Rs. 1 crore. This is a rough and
ready estimate on the basis of the seizure made. Since the Defendants
would have had to sell these products with proper dealer/retailer
margins, the profit is estimated at 15% of the total value of the
products, which comes to about Rs. 15 lakhs. In view of the tests laid
down in Rookes and Cassell, the present is not a case for award of
punitive damages."
61.It is submitted that in Glaxo Group Limited Vs AAR ESS Remedies
Private Limited18, Delhi High Court in an application for summary
judgment granted 20 lacs as damages. The relevant paras of the
judgment are as under:
"23.The defendants have been proceeded exparte and thus have
not rendered accounts of profits. No party can be permitted to
benefit by evasion of court proceedings. In view of the
infringement of the plaintiffs trademarks ZINACEF and
FORTAM/FORTAZ, passing off the plaintiffs trademark
FORTAX which enjoys an international reputation and trade
dress and passing of the plaintiffs copyright in the packaging for
the drug AUGMENTIN 625 DUO having been proved, the
plaintiff is entitled to injunction and damages.
24. This Court in the decisions reported as Glaxo Group
Ltd. v. Rajesh Bansal & Ors: 2013 (53) PTC 441 and Ranbaxy
Laboratories Ltd. v. Crystal Pharmaceuticals : 196 (2013) DLT
296 and Macleods Pharmaceuticals Limited v. Procare
18
2017 (71) PTC 623 (Del)
CS (Com) No. 2134/2019 Page No. 21 of 35
Laboratories Pvt. Ltd.: 2013 (54) PTC 357 (Del) awarded
punitive damages for a sum of ` 5 lakhs for infringement of a
single trademark.
25. In the present case in view of the multiple violations, this
Court deems it fit to grant compensatory and punitive damages of
` 20 lakhs in favour of the plaintiff and against the defendants.
26. Consequently, the suit is decreed in favour of the plaintiff and
against the defendants jointly and severally in terms of prayers
(a), (b) and (c) and damages to the tune of ` 20 lakhs are awarded
in favour of the plaintiff and against the defendants jointly and
severally."
62.Ld. Counsel for the plaintiff has further relied upon Ikea Systems B.V.
and Ors. vs. Sham Murari and Ors.19 and has quoted paras 12 and 23
as under:
"12... Relies upon the seizure made by the Local Commissioner
and claims that the above stock is worth at least Rs. 67,44,800/
even if each piece is valued at Rs. 200/. Thus, the total damages
claimed are Rs. 1,45,44,800/, along with the legal costs.
"23...The losses claimed by the Plaintiffs are intangible loss,
dilution, loss of confidence and trust of customers and exemplary
damages due to disregard of the principle of fair trading. Under
Section 73 of the Indian Contract Act, 1872, damages can be
both direct and indirect. However, the nature of damages claimed
in the present case, are for violation of trademark rights. This, on
19
2018(76)PTC121(Del)
CS (Com) No. 2134/2019 Page No. 22 of 35
the date when exparte injunction was granted, the defendants
may have used the mark for few months. Thus, on the basis of
the inventory prepared by the Local Commissioner, which
according to the Plaintiffs is worth Rs. 67,44,800/ and according
to the Defendants is worth approximately Rs. 25,00,000/, the
Court takes the value of the said products to be in the range of
Rs. 25 lakhs to Rs. 30 lakhs, as the said products were not sold.
Even treating the said stock to be the stock of one month, the
total turnover of the Defendants for three months from
September to December 2014, could not have been more than Rs.
1 crore."
63.The judgment in VINI Cosmetics Pvt. Ltd. vs. Abhay Enterprises and
Ors.20 has been relied upon and para 14 has been cited to read "...
Thus, the only issue which remains is that of damages. Since
Defendant No. 1 has not disclosed his accounts or sale figures,
keeping in mind the value of consignment i.e. approximately Rs. 25
Lakhs, the suit of the Plaintiff is decreed for a sum of Rs. 5 Lakhs
which is 20% of the value of the consignment. Decree in terms of
paragraph 30(a) be drawn up. In addition, a decree of Rs. 5 Lakhs as
damages is also granted in favour of the Plaintiff against the
Defendant no. 1."
64.The judgment of Christian Louboutin vs Ashish Bansal21 has been
relied upon and para 14 has been cited to read, "I am in agreement
with the aforesaid submission of learned counsel for the plaintiffs that
20
2018 (76) PTC 429 (Del)
21
2018 VII AD (Delhi) 125
CS (Com) No. 2134/2019 Page No. 23 of 35
damages in such cases must be awarded and a defendants, who
chooses to stay away from the proceedings of the Court, should not be
permitted to enjoy the benefits of evasion of court proceedings. Any
view to the contrary would result in a situation where a defendants
who appears in Court and submits its account books would be liable
for damages, while another defendants who, chooses to stay away
from court proceedings would escape the liability on account of
failure of the availability of account books. A party who chooses not
to participate in court proceedings and stays away must, thus, suffer
the consequences of damages as stated and set out by the plaintiffs.
There is a larger public purpose involved to discourage such parties
from indulging in such acts of deception and, thus, even if the same
has a punitive element, it must be granted..."
65.The case of Adidas Ag Vs Praveen Kumar22 has been cited to read the
following;
"16. On the basis of pleadings and documents on record and due
to the lack of any defence on behalf of Defendant No. 1, as also
the fact that no valid defence has been raised disputing the
Plaintiffs' rights in the mark by Defendant Nos. 2 and 3, the suit
is liable to be decreed. Accordingly, a decree of permanent
injunction is granted in favour of the Plaintiff and against the
Defendants Nos. 1 to 3 in terms of para 34 (a), (b) and (c) of the
plaint.
17. Insofar as the issue of costs and damages are concerned, it
can be seen from the Local Commissioners' reports, which can be
22
2019 (78) PTC 468 (Del)
CS (Com) No. 2134/2019 Page No. 24 of 35
read in evidence, that Defendants No. 2 and 3 are shopkeepers
who were selling the products manufactured by Defendant No.
1...
18. The main manufacturer of the infringing goods is Defendant
No. 1, who entered appearance in the present suit but has,
thereafter, neither filed the written statement nor raised any
defence. Damages are liable to be awarded in favour of the
Plaintiff against Defendant No. 1. The total inventory found at
the Defendants' premises, altogether, is more than 550 shoes, all
of which are manufactured by Defendant No. 1, as per the record.
The said stock is substantial.
19.Under these circumstances, damages are liable to be awarded
against the Defendant no. 1. The suit is decreed against
Defendant No. 1 for a sum of Rs. 20 lakhs. Insofar as Defendants
No. 2 and 3 are concerned, the said Defendants shall pay
damages of Rs. 50,000/ each to the Plaintiff. Defendant No. 2
and 3 are willing to handover the seized products to the Plaintiffs
representative. Both Defendant Nos. 2 and 3 are directed to hand
over the products seized from them by the Local Commissioners
to the Plaintiffs' representative on 20th May, 2019 and 21st May,
2019. The costs shall be paid on the date when the Plaintiffs'
representative visits the premises of Defendant Nos. 2 and 3.
20. The Plaintiff has suffered heavy costs in the litigation
including court fees, fees of the Local Commissioners, cost of
investigation, etc. The suit is decreed against Defendant No. 1
CS (Com) No. 2134/2019 Page No. 25 of 35
with actual costs incurred. Let bill of costs incurred be placed on
record by Ld. Counsel for the Plaintiff."
66. In the context of the plaintiff's case, Ld Counsel submitted that in
view of the ratios and observations in the cited cases and considering
the nature of the present case where the defendant despite being aware
about the plaintiff's statutory rights in its wellknown
trademarks/logos, have been carrying on their business activities
openly and brazenly offering counterfeit goods to the general public.
The present case squarely falls within the three categories laid down
Rookes v. Barnard, [1964] 1 All ER 367 (relied upon by the Hon'ble
Division Bench in "HUL case"), for grant of exemplary damages
against the defendant since acts of the defendant would be useful to
determine the quantum of damages:
(i). The defendant has copied the plaintiff's wellknown trade
mark/logo for its illegal business;
(ii). The defendant despite aware about the present proceeding
chose not to appear;
(iii). The defendant's conduct is illegal and malafide;
(iv). The defendant is selling/supplying spurious products to the
general public thus causing loss to the goodwill and reputation;
(v). The Local Commissioner seized a total of 198 counterfeit
Puma branded lowers and tshirts;
CS (Com) No. 2134/2019 Page No. 26 of 35
67. In conclusion, Ld. Counsel for the plaintiff submitted that the plaintiff
is entitled for damages and as costs. He furnished the following
accounts of costs:
Expenses Details Amount ₹
Cost of filing of the suit 3500/
including court fee
Fees of the Local 50,000/
Commissioner
Cost incurred in execution of 15,000/
the Local Commissioner
Counsel fee for prosecuting 1,00,000/
and attending hearings in the
present suit
Total 1,68,500
68.The term 'damages' has been defined in the Black's Law Dictionary
as a pecuniary compensation which may be recovered in the courts by
any nonbreaching party which has suffered loss, detriment, or injury,
whether to his person, property, or rights due to the unlawful act or
omission or negligence on behalf of another party.
69.The jurisprudence developed on this subject defines three types of
damages in IPR regime. They are nominal damages; real damages and
extraordinary or punitive damages.
70.Nominal damages are in fact to recognize that the defendant has
infringed the plaintiff's rights. They are only token and have nothing
to do with the actual damages that the plaintiff might have suffered.
To maintain a claim to such damages, the plaintiff has to clear the
litmus test of proving his entitlement for injunction.
CS (Com) No. 2134/2019 Page No. 27 of 35
71.Real damages are the actual damages suffered by the plaintiff on
account of the wrongful acts of the defendant. These are basically
meant to set back the clock i.e. to restore the plaintiff in nearly the
same situation that existed prior to the commission of wrongful act on
the part of the defendant. This is easier said than done. In fact, there is
no 'rule of thumb' or straight jacket formula to ascertain the exact
amount of damages. This requires a scrutiny of balance sheet, book of
accounts or host of other exercise to find out. This may require a peep
into 'accounts of profit or profit of accounts'. Still such damages may
not be ascertainable with a scientific precision or mathematical
exactitude.
72.Punitive damages or exemplary damages, are the damages assessed in
order to punish the defendant for outrageous conduct or to deter the
defendant (and for that matter others too) from engaging in similar
obnoxious conduct. For entitlement to these damages, the record must
show that the conduct of the defendant was dishonest; intention of the
defendant was malafide to take the piggy bank right upon the
plaintiff's intellectual property rights and that there is nothing to show
that defendant had a reasonable or sufficient cause for doing the
wrongful act.
73.Considerable jurisprudence has developed in the recent past to burden
the infringers with punitive damages apart from actual damages. Ld.
Counsel for the plaintiff has rendered his valuable assistance to the
Court on this aspect.
74.Hon'ble High Court of Delhi in Koninklijke Philips N.V. & Anr.
versus Amazestore & Ors and in Koninklijke Philips N.V. & Anr.
CS (Com) No. 2134/2019 Page No. 28 of 35
versus Amitkumar Kantilal Jain and Others23 laid down some of the
principles which a Court ought to look into while granting punitive
damages. The defendant chose not to appear before the Court despite
being duly served with summons. The defendant did not appear in the
matter of contempt of the injunction order. In order to evade the
injunction order, the defendant in a calculated manner kept changing
the model numbers of the infringing produced and routed the
impugned products through another entity with sole intention to
escape detection. In this view of the fact, the Court held that the
plaintiff was entitled to compensatory damages as well as
punitive/aggravated/exemplary damages. While awarding
compensatory damages as claimed by the plaintiff's, the Court
awarded aggravate/exemplary damages of a total of Rs 1 Crore over
and above the compensatory damages on account of the degree of
mala fide conduct. The Court also laid down the rule of thumb that
should be followed while granting damages can be summarised in a
chart as under. The Hon'ble Court clarified that the chart is
illustrative and not to be read as a statutory provision. It was observed
that the Courts are free to deviate from the same for good reason.
No. Degree of malafide conduct Proportionate award
1. Firsttime innocent infringer Injunction
2. Firsttime knowing infringer Injunction + Partial Costs
3. Repeated knowing infringer Injunction + Costs + Partial
which causes minor impact damages
to the Plaintiff
23
CS(COMM) 737/2016 and CS(COMM) 1170/2016 date of decision 22.04.2019 High Court of Delhi
CS (Com) No. 2134/2019 Page No. 29 of 35
4. Repeated knowing infringer Injunction + Costs +
which causes a major impact Compensatory damages
to the Plaintiff
5. Infringement which was Injunction + Costs +
deliberate and calculated Aggravated damages
(Gangster/scam/mafia) + (Compensatory + additional
wilful contempt of court damages)
75.From the uncontroverted material on record, all the claims can be
granted for the reason that leading oral evidence in this suit would be
only a ritual or an art for art's sake exercise. The defendant has stayed
away from the proceedings since inception. Any trial into the matter
would be a wastage of public resources and the precious time of the
Court. Nothing better than what has been set up in pleadings, duly
supported by affidavit, can come out if oral evidence is led, and even
if the defendant joins the proceedings, unless one has staunch faith in
magic and other incredible events.
76.The defendant, by not joining the proceedings and remaining exparte
since inception, has not pressed into service any facts requiring trial.
Thus, in the event of his joining the proceedings in future, he would
not be entitled to put any defence and would only have a right to cross
examine the plaintiff's witnesses only to impugn the case of the
plaintiff.
77.The contumacious acts of the defendant per se constitute the
infringement of the plaintiff's registered trade mark; passing off the
goods of the defendants as if they originate from the plaintiff; dilution
CS (Com) No. 2134/2019 Page No. 30 of 35
of the goodwill of the plaintiff and unjust profiteering of the
defendants at the cost and expense of the plaintiff.
78.The pleadings and documents on record, coupled with the report of the
Local Commissioner, as discussed above, go to show that the plaintiff
claimant has a realistic and not a fanciful prospect of success. It is
much more than a mere prima facie case. There is absolutely no
defence to the claim of the plaintiff. Even going to the extent of the
worstcasescenario of the defendant joining the proceedings and
crossexamining the witnesses of the plaintiff to impugn the case of
the plaintiff, no magic wand is expected to come out of the blue and
change the entire setting on the scene.
79.From the material on record and in the light of the factual and legal
submissions, I am satisfied that there is no genuine issue requiring a
trial with respect to the claim of the plaintiff. The weighing of the
material on record leads to an irresistible conclusion that the defendant
has no defence to the suit and there are no real prospects of the
defendant succeeding even by joining the proceedings. Further, there
is also no compelling reason why the claims of the plaintiff should not
be disposed of by way of a summary judgment.
80.In the overall analysis, the material on record coupled with the above
discussion establishes that plaintiff is entitled to a summary judgment
on all the claims.
81.From the averments of the plaint and the submissions made apparently
the mark of the plaintiff is a wellknown trade mark, within the intent
and meaning of the Trade Marks Act, 1999.
CS (Com) No. 2134/2019 Page No. 31 of 35
82.From the material on record there is nothing to indicate that the
defendant has any justifiable claim to the use of the trademarks
PUMA and logo. Apparently, there is substantial force in
the averments of the plaintiff that the same is motivated and with a
view to take undue advantage of the trademark, goodwill and
popularity of the plaintiff and to unjustly enrich itself at the plaintiff's
cost, expense and to his detriment.
83.In the process, the defendant is also causing loss and damage to the
gullible customers and in turn putting the reputation and goodwill of
the plaintiff at stake. There is every likelihood that having suffered
with inferior and spurious goods, the customer would underrate the
plaintiff and this would result in the dilution of the goodwill of the
plaintiff. Such acts and omissions of defendant, would cause serious
injury to the valuable rights of the plaintiff and would cause
incalculable loss to him, without any fault on its part.
84.Ostensibly, such acts of the defendant might also be against the
interest of the Revenue and the exchequer as these might have been
done in a clandestine manner without issuing the tax paid bills and
without the transactions being carried out in a recorded mode.
85.The acts and omissions of the defendant not only constitute
infringement but also passing off the goods of the defendant as if they
had originated from the plaintiff.
86.There is no reason to disbelieve the pleadings supported with affidavit
and documentary evidence led by the plaintiff and on preponderance
of probabilities it appears to be trustworthy and inspires confidence in
CS (Com) No. 2134/2019 Page No. 32 of 35
the mind of the court. Therefore, the suit of the plaintiff is entitled to
be decreed by way of a summary judgment.
87.The statement of cost as propounded by the plaintiff appears to be
correct and proper keeping in view the various items and the relevant
factors.
ORDER
88.In view of the above discussion, the suit of the plaintiff is decreed as under:
(i). A decree of permanent injunction is passed thereby restraining the defendant, its persons in control and incharge of its affairs, servants, agents, stockiest etc. from manufacturing, trading, selling, marketing, offering for sale through online shopping portals or dealing in any other way, any goods including garments (track pants), and other accessories, and / or any other goods under the Plaintiff's PUMA and/or logo or any other mark/ logo which is deceptively similar to it or which may amount to infringement of the plaintiff's registered trademarks or which may amount to passing off the defendant's goods as the goods of the plaintiff;
(ii). The defendant shall deliver up all finished and unfinished goods, dies, blocks, labels and any other printed matter bearing the plaintiff's said same/similar logo/mark to the authorised representative of the plaintiff for the purpose of destruction/erasure;CS (Com) No. 2134/2019 Page No. 33 of 35
(iii). The defendant shall remove plaintiff's logo or any other deceptively similar logo or trademark of the plaintiff company from any ecommerce websites /online shopping portals being used by the defendant in the course of trade of sale of shoes or any other similar products.
(iv). Compensatory damages in the sum of ₹ 1,00,000/ (Rupees One Lakhs only) are also awarded in favour of the plaintiff and against the defendant which be paid within two months from the date of the order, failing which the defendant would be liable to pay interest @ 12% per annum till the date of payment.
(v). Extraordinary/Punitive damages in the sum of ₹ 1,00,000/ (Rupees One Lakhs only) are also awarded in favour of the plaintiff and against the defendant which be paid within two months from the date of the order, failing which the defendant would be liable to pay interest @ 12% per annum till the date of payment.
(vi). The plaintiff shall be entitled to the costs of the suits as well against the defendant and the same is awarded in the sum of ₹ 1,68,500/ (Rupees One Lakh Sixty Eight Thousand and Five Hundred Only) which shall be payable within two months of the passing of the decree failing which it would entail payment of interest @ 12% per annum till the date of actual payment.
89.Decree shall be drawn accordingly.
CS (Com) No. 2134/2019 Page No. 34 of 35Copy of the Judgment
90.In compliance of the provisions of the Order XX Rule 1 of the Code of Civil Procedure (as amended uptodate by the Commercial Courts Act, 2015) a copy of this judgment be issued to all the parties to the dispute through electronic mail, if the particulars of the same have been furnished, or otherwise.
91.File be consigned to the Record Room.
Digitally signed
Announced through Video Conferencing by MANMOHAN
MANMOHAN SHARMA
on 09.10.2020 SHARMA Date:
2020.10.12
16:55:18 +0530
(Man Mohan Sharma)
District Judge (Commercial Court)06 Central District, Tis Hazari Courts, Delhi.
CS (Com) No. 2134/2019 Page No. 35 of 35