Delhi District Court
Puma Aktiengesellschaft Rudolf ... vs Satpal on 7 January, 2015
IN THE COURT OF SH SUNIL K. AGGARWAL: ADDL. DISTRICT JUDGE
(CENTRAL) 10: DELHI
TM No. 32/13
PUMA Aktiengesellschaft Rudolf Dassler Sport
(A company incorporated in Germany)
Having its registered office at:
91074, Herzogenaurach,
Federal Republic of Germany ....Plaintiff
VERSUS
Satpal,
2333/15, Beadon Pura,
Ajmal Khan Road, Karol Bagh,
New Delhi110005. ...Defendant
Plaint presented on 23.09.2013
E X P A R T E J U D G M E N T:
1.Plaintiff a company registered under the laws of Germany has filed the suit for restraining the defendant from infringing the trademark ''PUMA' and logo 'PUMA' with leaping Cat' on footwear, sportswear, kit, bags, accessories or other goods and/or identical or deceptively similar mark or from passing off the goods of business as that of the plaintiff, from infringing the copyright of the plaintiff in the art work of label, rendition of accounts of profits, delivery up of all finished or semi finished goods bearing impugned trademark/label including display boards, sign boards, trade literature etc. for destruction/erasure, through Attorney Sh. Narendra TM No. 32 of 2013 Page no. 1 of 10 Singh. Plaintiff claims to be the world's largest manufacturer and sellers of Sports, Lifestyle footwear, apparel and other accessories and distributes its products in more than 120 countries. Its trademark 'PUMA' and logo of word mark with leaping cat have created an indelible mark on the sports and fashion industries in India. The plaintiff got its various trademarks, logos and devices registered from 1977 onwards in India. Its products under the registered trademarks have extensively been accepted as quality and standard products. Against the sales of its products for 2460 million Euro in year 2009 the plaintiff had spent about 494 million Euro on their marketing and promotion. The excellent reputation and goodwill has thus been acquired by the plaintiff amongst the user/consumers of its products due to strict quality control.
2. In the second week of October, 2013, the defendant was found to have clandestinely engaged in distribution, supply and retailing of Footwear, Sportswear, Kit, Bags and other accessories under the trademark 'PUMA' and logo 'PUMA' with leaping Cat and deceptively and confusingly similar trademarks which are much inferior in quality. No invoices of the sale of counterfeit goods are being issued by him to the customers to conceal the illegal activities. The label attached and trademarks embossed/embroidered on the impugned products of defendant are similar in design and appearance and is sufficient to confuse the potential purchasers of the products of the plaintiff. Nevertheless, there are subtle yet material distinctions in the usage of rival property marks which can be observed on close scrutiny of their products. The defendant has infringed the registered trademarks and logos of plaintiff with malafide intention. The very adoption thereof by the defendant is dishonest and in bad faith. In order to prevent the erosion of TM No. 32 of 2013 Page no. 2 of 10 plaintiff's valuable rights in the trademarks/label, the present suit has been filed.
3. Vide exparte order dated 24.10.2013, the defendant, his agents, distributors and employees, therefore were restrained from using the trademarks and logos of plaintiff on any Footwear, Sportswear, Kit, Bags and other accessories and from giving any indication in any manner reflecting their association/affiliation or of their products with the plaintiff. Simultaneously, a Local Commissioner was appointed for identifying and separating the infringing goods, material and equipment from the shop and godown of the defendant. The local commission was executed on 29.10.2013 of which report with annexures was filed on 12.11.2013.
4. On appearance after service of summons, the matter was preliminarily discussed with the parties and on perceiving the potential of settlement, the case was referred for mediation. Parties however could not settled their case.
5. In his written statement, the defendant has taken preliminarily objection of the suit having been filed in the name of 'Satnam' instead of 'Satpal' and that the plaintiff has not approached the court with clean hands. It has suppressed the material facts while knowing that the defendant is doing his business honestly without indulging counterfeiting activities. It is claimed that the suit has not been signed, verified and filed in accordance with law by a duly authorized person. While generally denying the contents of plaint, it is asserted that the defendant is not engaged in business of spurious goods at his shop or godown. The claims of plaintiff of their reach and status and that of the products manufactured by them is termed exaggerated. The defendant has not deceive any purchaser or caused loss to the TM No. 32 of 2013 Page no. 3 of 10 plaintiff. The alleged investigator of plaintiff had not purchased any product of the defendant. While contending that the suit has been incorrectly valued and suffers from deficient court fee, its dismissal is urged.
6. An application under Order I Rule 10 CPC was filed on behalf of the plaintiff for rectifying the name of the defendant which was revealed on presentation by him and during the execution of local commission. It was allowed on 11.09.2014.
7. Apparently, the defendant abandoned his defence by continuously abstaining from the proceedings after return of reference from the Mediation Centre. He was therefore proceeded exparte on 05.06.2014.
6. In exparte evidence, plaintiff had examined Sh. Narendra Singh, Attorney as PW 1 who besides narrating its case has proved Copy of Certificate of Incorporation as PW 1/1, Power of Attorney dated 28.01.2011 Ex. PW 1/2, the copy of Legal Proceedings Certificate regarding trademark no. 323376 in respect of device of Leaping Cat as Ex. PW 1/3, Photographs of original products Ex. PW 1/4 (colly.) and copies of trademarks no. 450143 in respect of combination of word mark 'PUMA with Leaping Cat' & 323054 in respect of word mark 'Puma' as Mark 'A' and Mark 'B' respectively. Thereafter plaintiff has closed its evidence on 11.09.2014.
7. I have heard Ms. Abhilasha Jindel, Advocate, Ld. counsel for the plaintiff and carefully perused the judicial record. Although not formally framed in the case yet the following issues may be crystallized from the pleadings:
1. Whether the suit has been signed, verified and TM No. 32 of 2013 Page no. 4 of 10 instituted by a competent person ? OPP.
2. Whether the suit has been correctly valued for the purposes of court fee and jurisdiction and sufficient court fee has been affixed on the plaint ? OPP.
3. Whether the defendant has infringed the registered trademarks of the plaintiff by counterfeiting them on his products ? OPP.
4. Whether the defendant has indulged in passing off his goods and business as that of the plaintiff ? OPP.
5. Whether the plaintiff is entitled to decree of permanent injunction as are claimed in the suit? OPP.
6. Whether the plaintiff is entitled to decree of the amount earned by illegal sale of counterfeit goods by the defendant on rendition of accounts ? OPP.
7. Whether the plaintiff is entitled to order for delivery up of all the impugned goods/material for destruction/erasure ? OPP.
8. Relief.
The issues are now taken up for disposal one by one.
8. Issue No. 1: In the unrebutted testimony PW 1 has proved the true version of translated copy of Certificate of Incorporation of plaintiff as Ex. PW 1/1 and Power of Attorney in his own favour as Ex. PW 1/2. Sh. Narendra Singh, has duly been TM No. 32 of 2013 Page no. 5 of 10 empowered to sign, verify and institute suit or any other proceedings in a court of law on behalf of the plaintiff pertaining to infringement of its intellectual property rights and interalia to do all necessary, incidental and further acts in that behalf. Apparently, in pursuance thereof the witness has been able to lay hands on the documents pertaining to registration of trademarks in favour of the plaintiff. He has incurred expenditure in filing the suit and engaging the counsel. Vital details including background of the plaintiff and their annual turnover of last few years must have emanated from the relevant quarters. It can legitimately be concluded from all these factors that the suit has been filed by a competent person under his signatures. The issue is decided in affirmative.
9. Issue No. 2: For the reliefs of injunction, the suit has distinctly been valued at Rs. 200/ each and fixed court fee of Rs. 20/ each has been paid therein. For the relief of rendition of account, the plaintiff as per its estimation has put value of Rs. 20,000/ for twin purposes and due court fee of Rs. 1,856/ has been paid. The total court fee of Rs. 5,000/ was affixed by the plaintiff on the plaint which is more than that described in its valuation para. The plaintiff has further undertaken to make up deficiency in court fee, if more amount is found due from the defendants on taking accounts of profits. The defendant did not elaborate the objection nor estimated as to how and to what value it should have been assessed. The objection therefore is held to be vague and untenable. The issue is decided in affirmative.
10. Issue No. 3: The defendant has plainly denied that he is engaged in business of TM No. 32 of 2013 Page no. 6 of 10 spurious goods at his shop and godown. He has chosen to avoid any inkling about the brand/trademark and class of goods in which he has been dealing. He did not disclose the company or place from where the goods and products are being sourced. He has not denied that Ld. Local Commissioner had conducted an inspection at his premises on 29.10.2013. No objection against her report were filed. The defendant does not explain the presence of 111 pairs of shoes and footwear prominently bearing the trademark/device 'PUMA' and/or Leaping Cat in his shop and godown. His version of denying dealing in counterfeit goods is diametrically opposite to the report of Ld. Local Commissioner. The fact that defendant has concealed the details of his business gives a fair indication of his having indulged in marketing of counterfeit goods with well known trademark and device of plaintiff. It is therefore found that the defendant has infringed the trademarks of the plaintiff. The issue is decided in affirmative.
11. Issue No. 4: The defendant having not disclosed about sale of footwear or other articles of brands other than that of the plaintiff at his shop/godown while the goods bearing the impugned marks were found in abundance as per the report dated 11.11.2013 of Ld. Local Commissioner, it is apparent that he had been marketing not only the goods as if the same have been procured from plaintiff but also gave sufficient indications of his association with plaintiff so as to pass off his business to be connected with them. The issue as such is decided in affirmative.
12. Issue No. 5: The obvious corollary of the outcome of issues no. 3 & 4 is that in order to protect the financial and intellectual property interests of plaintiff from being TM No. 32 of 2013 Page no. 7 of 10 dented and that of the public as there is great potential of them purchasing the counterfeit goods of defendant under a fair impression that they have actually purchased world renowned PUMA products. The plaintiff thus is entitled to the claimed reliefs of permanent injunction against the defendant.
13. Issue No. 6 & 7 : Having found the plaintiff to be at receiving end at the hands of defendant, a clear message needs to be conveyed to such operators by straightaway awarding suitable compensation in the facts and circumstances of the case without the formalility of directing rendition of accounts by the defendant which in any case will be difficult to retrieve for umpteen reasons in view of the abstention of the defendant. There is plethora of precedent for award of compensation in like circumsntances. It has been held in 'Microsoft Corporation Vs. Kiran, 2007 (35) PTC 748 (Delhi)' that compensatory damages can be awarded by adopting "Licence Fee Approach" as the copyright owner has been deprived of the license fee by the infringing acts of defendants. It has further been observed that the defendant cannot escape damages as a consequence of its disappearing from legal proceedings. A number of precedents have been cited therein viz. Relaxo Rubber Ltd. Vs. Selection Footwear, 1999 PTC (19) 578; Hindustan Machine Vs. Royal Electrical Appliances, 1999 PTC (19) 685; Time Incorporated Vs. Lokesh Srivastava, 2005 (30) PTC 3; Hero Honda Motors Ltd. Vs. Shree Assuramjee Scooters, 125 (2005) DLT 504; L. T. Overseas Ltd. Vs. Gurujee Trading Company, CS(OS) No. 2711/1999 decided by Hon'ble High Court of Delhi on 07.09.2003 and Microsoft Corporation Vs. Akram Khan, CS (OS) No. 117/03 decided by Hon'ble Delhi High Court on 31.08.2006. It was concluded that damages in cases should be awarded TM No. 32 of 2013 Page no. 8 of 10 against defendants who chose to stay away from the court proceedings and should not be permitted to enjoy the benefits of evasion. The rationale for the same is that while the defendants who appear in court may be burdened with damages, the defendants who chose to stay away from the Court would escape such damages. The actions of the defendants result in affecting the reputation of plaintiff and every endeavour should be made for a larger public purpose to discourage such parties from indulging in acts of deception.
In Microsoft Corporation Vs. Deepak Raval, 2006 (33) PTC 11 (Delhi) and Microsoft Corporation Vs. Shameer Ahmed, CS(OS) No. 300/08 decided on 10.12.2008 by Hon'ble High of Delhi it was expounded that apart from compensatory and nominal damages, punitive damages ought to be awarded to discourage and dishearten law breakers who indulge in violation with impunity and that such damages ought to be awarded against the defendants who chose to stay away from the proceedings of the Court. More so when an action has criminal propensity it was elsewhere observed that one of the functions of the punitive damages is to relieve the pressure on an over loaded criminal justice system by providing a civil alternative to criminal prosecution of minor crimes.
Reliance in this behalf may be placed upon Castrol Ltd. Vs. Rajender Kumar Gupta, CS(OS) No. 488/05 decided by Hon'ble Delhi High Court on 21.03.2011. A reference to ITC Ltd. Vs. Sunil, MIPR 2007 (2) 152 will be useful in the same context.
Since it may not be feisible to retrieve even the counterfeit products seized and sealed by the Ld. Local Commissioner from the defendant to whom the same were entrusted, it is deemed just and expedient award compensation to the tune of Rs. 2,50,000/ to the plaintiff against the defendant under all applicable heads.
TM No. 32 of 2013 Page no. 9 of 10 Issue is decided accordingly. 14. Issue No. 8:
In the light of above findings, the suit is decreed in terms of prayer clauses a & b of the plaint dated 23.10.2013. A decree of damages/compensation for a sum of Rs. 2,50,000/ (Rs. Two Lacs Fifty Thoushand Only) is also passed in favour of the plaintiff and against the defendant. The plaintiff shall also be entitled to cost of the suit.
15. Decree sheet be prepared accordingly. It is necessary to mentioned that monetary part of decree shall be executable on the plaintiff making up deficiency in court fee, if any. File be consigned to Record Room.
Announced in the open court
on 7th January, 2015 (Sunil K. Aggarwal)
Addl. District Judge (Central)10
Delhi.
TM No. 32 of 2013 Page no. 10 of 10