Delhi High Court - Orders
Western Digital Technologies Inc. & Anr vs Consistent Infosystems Private ... on 4 March, 2024
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~44
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 192/2024
WESTERN DIGITAL TECHNOLOGIES INC. & ANR.
..... Plaintiffs
Through: Mr. Pravin Anand, Mr. Saif Khan,
Mr. Shobit Agarwal, Ms. Meghana
Kudligi and Mr. Prajjwal Kushwaha,
Advocates.
versus
CONSISTENT INFOSYSTEMS PRIVATE LIMITED & ORS.
..... Defendants
Through: Mr. Dushyant K. Mahant and Ms.
Vimlesh Kumar, Advocate for D-1.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 04.03.2024 I.A. 5161/2024 (seeking exemption from institution of pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015)
1. 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.
2. Disposed of.
I.A. 5162/2024 (seeking exemption from filing originals, clearer copies, certified copies of original, translated copies and left side margins) 1 2023 SCC OnLine SC 1382.
CS(COMM) 192/2024 Page 1 of 11This 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 06/03/2024 at 21:45:04
3. Exemption is granted, subject to all just exceptions.
4. The Plaintiffs shall file legible and clearer copies of exempted documents, compliant with practice rules, before the next date of hearing.
5. Accordingly, the application stands disposed of.
I.A. 5163/2024 (seeking leave to file additional documents)
6. This is an application seeking leave to file additional documents under the Commercial Courts Act, 2015.
7. If Plaintiffs wish to file additional documents at a later stage, they shall do so strictly as per the provisions of the said Act.
8. Accordingly, the application stands disposed of.
I.A. 5164/2024 (seeking interrogatories under Order XI Rule 2 (as amended by the Commercial Courts Act, 2015) read with Chapter IV of the Delhi High Court (Original Side) Rules and Section 151 of the CPC)
9. Issue notice. Mr. Dushyant K. Mahant, counsel for Defendant No. 1, accepts notice.
10. Issue notice to the remaining Defendants, by all permissible modes, upon filing of process fee, returnable on 15th March, 2024.
I.A. 5165/2024 (seeking exemption form two months' notice of the Government of India)
11. Issue notice to Defendant No. 4, by all permissible modes, upon filing of process fee, returnable on 15th March, 2024.
CS(COMM) 192/2024 Page 2 of 11This 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 06/03/2024 at 21:45:04 CS(COMM) 192/2024
12. Let the plaint be registered as a suit.
13. Issue summons. Mr. Dushyant K. Mahant, counsel for Defendant No. 1, accepts summons. Written statement shall be filed within 30 days from today. Upon filing of process fee, issue summons to the remaining Defendants. Summons shall state that the written statement(s) shall be filed by the Defendants within 30 days from the date of receipt of summons. Along with the written statement(s), the Defendants shall also file affidavit(s) of admission/denial of the documents of the Plaintiffs, without which the written statement(s) shall not be taken on record.
14. Liberty is given to the Plaintiffs to file replication(s) within 15 days of the receipt of the written statement(s). Along with the replication(s), if any, filed by the Plaintiffs, affidavit(s) of admission/denial of documents of the Defendants, be filed by the Plaintiffs, without which the replication(s) 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.
15. List before the Joint Registrar for marking of exhibits on 8th May, 2024. It is made clear that any party unjustifiably denying documents would be liable to be burdened with costs.
16. List before Court for framing of issues thereafter.
I.A. 5160/2024 (u/Order XXXIX Rules 1 & 2 r/w Section 151 of the Code of Civil Procedure, 1908)
17. Issue notice. Mr. Dushyant Mahant, counsel for Defendant No. 1, accepts notice.
18. Mr. Pravin Anand, counsel for the Plaintiffs, places reliance on a CS(COMM) 192/2024 Page 3 of 11 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 06/03/2024 at 21:45:05 previous order dated 26th February, 2024 passed by this Court in CS(COMM) 168/2024, relating to the same Plaintiffs under similar circumstances, and submits as follows:
18.1. Plaintiff No. 1- Western Digital Technologies Inc. is a company organized under the laws of the State of Delaware, U.S.A. They specialize in, inter alia, storage devices, media players, routers/switches/bridges, desktops, solid state drives ["SSDs"], hard disk drives ["HDDs"], software, mobile applications, and other related equipment.
18.2. Plaintiff No. 1 uses 'WESTERN DIGITAL' as its house mark, either as a standalone or in conjunction with marks of its other brands.
Further, Plaintiff No. 1 is also the registered proprietor of the device/ logo 'WD'/ ' '. The registration details of Plaintiff No. 1's trademarks, as set out in Paragraph No. 20 of the plaint, are reproduced as under:
CS(COMM) 192/2024 Page 4 of 11This 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 06/03/2024 at 21:45:05 18.3. Plaintiff No. 2 is a wholly owned subsidiary of Plaintiff No. 1, and is the registered owner of trademarks 'ULTRASTAR' and 'DESKSTAR'. Details of Plaintiff No. 2's trademark registrations, set out at Paragraph No. 25 of the plaint, are as follows:CS(COMM) 192/2024 Page 5 of 11
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 06/03/2024 at 21:45:05 18.4. Plaintiffs have registrations in respect of their aforenoted marks in several countries, and have been using the same continuously and uninterruptedly. Further, Plaintiffs have incurred substantial expenses in marketing/ advertising their trademarks, as delineated in the plaint.
Consequently, the said marks have acquired widespread goodwill and recognition in respect of the goods produced by the Plaintiffs. 18.5. Defendant No. 1- Consistent Infosystems Private Limited is engaged in the import, supply and sale of, inter alia, HDDs and SSDs, promoting and advertising their business through their website www.consistent.in, as well as through third party interactive websites and social media platforms.
18.6. In November 2023, Plaintiffs, through their representatives, received information that old/ used HDDs of the Plaintiffs were being refurbished and sold in the market as brand-new HDDs under Defendant No. 1's branding 'Consistent' ["Impugned Products"]. In order to investigate the same, Plaintiffs purchased several 1 TB, 4TB and 8TB HDDs bearing the mark 'Consistent' from one, M/s. Sai Network Solutions located at Nehru Place, New Delhi. Thereafter, the said samples were examined by the Plaintiffs' internal team of engineers as well as by a third-party technical expert.
18.7. The investigation confirmed that Defendant No. 1's Impugned Products are in fact refurbished and rebranded HDDs which were originally manufactured by Plaintiffs under their marks 'WESTERN DIGITAL', 'DESKSTAR' and 'ULTRASTAR'. Defendant No. 1 has physically altered Plaintiffs' brandings/ trademarks, markings at serial number, model and CS(COMM) 192/2024 Page 6 of 11 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 06/03/2024 at 21:45:05 other identifiers from the said HDDs. Further, they have effaced the erstwhile model and serial number on the printed circuit board ["PCB"] of the said HDDs by reformatting the PCB with their own markings. The internal verification conducted by the Plaintiffs has revealed that despite the reformatting, refurbishing and rebranding of HDDs by Defendant No. 1, Plaintiffs can still be identified as original manufacturers of the Impugned Products once a report is generated upon running the HDDs on a device. The findings of the internal verification conducted by the Plaintiffs have been set out in Paragraph No. 43 of the plaint.
18.8. Thus, the old discarded HDDs of Plaintiffs are being rebranded and repackaged by Defendant No. 1 under the mark 'Consistent', and sold to customers by misrepresenting them to be new and unused HDDs. This constitutes a violation of the Plaintiffs' statutory rights and the principle concerning protection of consumer interest from deceptive marketing practices. To demonstrate the manner in which the Impugned Products are being altered, reliance is also placed on the technical reports of the third- party expert, an illustrative excerpt whereof is extracted hereinbelow:
CS(COMM) 192/2024 Page 7 of 11This 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 06/03/2024 at 21:45:05 CS(COMM) 192/2024 Page 8 of 11 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 06/03/2024 at 21:45:05 18.9. In view of the above, it is argued that Defendant No. 1's impairment of the Impugned Products results in infringement of Plaintiffs' trademarks. Further, since Defendant No. 1 has removed the original trademarks on the Impugned Products without permission of the registered proprietor and thereafter sought to sell the same as brand new products, Defendant No. 1's conduct also amounts to reverse passing off. Reliance is also placed on Section 30(4) of the Trade Marks Act, 1999 ["Act"] to contend that the Plaintiffs have legitimate reason to seek injunction, as the condition of goods has been materially altered and impaired. Accordingly, the present suit is filed seeking protection of the Plaintiffs' trademarks.
19. Mr. Mahant, on behalf of Defendant No. 1, strongly contests the aforenoted contentions. His submissions have been summarized as follows:
19.1. The Impugned Products are being sold under Defendant No. 1's own brand name 'Consistent'. Thus, the Impugned Products can only be identified to Defendant No. 1, and the Plaintiffs' contention in respect of misleading customers is untenable as there is no case of trademark infringement.
19.2. Defendant No. 1 has acquired the Impugned Products lawfully. Therefore, in light of Section 30(3) of the Act, Defendant No. 1's sale of the Impugned Products cannot amount to infringement of the Plaintiffs' trademarks.
19.3. Consumers are not being defrauded in any manner, as the source identifier on the said products is the trademark of Defendant No. 1 which is entirely distinct from that of the Plaintiffs. He further states that the Defendant No. 1 is giving its own warranty of the products, which establishes a direct connection between the Impugned Products and CS(COMM) 192/2024 Page 9 of 11 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 06/03/2024 at 21:45:05 Defendant No. 1 in the mind of customers.
20. During the course of submissions, Mr. Anand had strongly objected to Defendant No. 1's sale of the Impugned Products without any disclaimer to the effect that the said goods are in fact used and refurbished products. On this issue, Mr. Mahant on instructions states that Defendant No. 1 is agreeable to prominently displaying a disclaimer on their packaging identifying the Impugned Products to be refurbished goods.
21. The Court will take a firm view on the matter after pleadings in the application are complete. However, at present, in light of the aforenoted statement of Mr. Mahant, it is directed that till the next date of hearing, any sale by Defendant No. 1 of their Impugned Products shall be accompanied by a disclaimer on the product packaging, in a font which is legible and discernible by purchasing customers, to the effect that the goods in question are used and refurbished goods.
22. Further, Defendant No. 1 shall file an affidavit prior to the next date of hearing disclosing the stock statements of the sale and purchase of the HDDs originally manufactured by the Plaintiffs under Defendant No. 1's brand name 'Consistent', along with the proof of such purchase and sale.
23. Issue notice to the unrepresented Defendants, by all permissible modes, upon filing of process fee, returnable on the next date of hearing. Reply, if any, be filed within a period of two weeks from date of service. Rejoinder thereto, if any, be filed within one week thereafter.
24. Considering that there are now several matters on the same issue, of which the Bench of Hon'ble Mr. Justice Anish Dayal is hearing CS (COMM) 67/2024, it would be appropriate that all these matters are clubbed together before any one of the Benches.
CS(COMM) 192/2024 Page 10 of 11This 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 06/03/2024 at 21:45:05
25. Therefore, subject to the orders of Hon'ble the Judge in-charge (Original Side), list the matter along with CS (COMM) 67/2024 before the appropriate Bench on 15th March, 2024.
SANJEEV NARULA, J MARCH 4, 2024 as CS(COMM) 192/2024 Page 11 of 11 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 06/03/2024 at 21:45:05