Delhi High Court
Sandisk Llc vs Amit & Anr on 1 March, 2023
Author: Sanjeev Narula
Bench: Sanjeev Narula
2023:DHC:2187
$~27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 01st March, 2023
+ CS(COMM) 478/2019 & I.A. 12032/2019 (under Order XXXIX Rule
1 and 2 r/w Section 151 of the Code of Civil Procedure, 1908 ["CPC"])
and I.A. 3601/2023 (under Section 151 of CPC seeking exemption)
SANDISK LLC ..... Plaintiff
Through: Mr. Prithvi Singh and Ms. Coral Shah,
Advocates.
versus
AMIT & ORS. ..... Defendants
Through: None.
Defendant No. 1 ex parte vide order
dated 18th February, 2020.
Defendants No. 2 and 4 deleted from
array of parties vide order dated 11th
November, 2020.
Defendants No. 3, 5 and 6 ex parte
vide order dated 11th January, 2022.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT
SANJEEV NARULA, J. (Oral):
I.A. 3600/2023 (under Order XIII-A Rule 3 and 6(1)(a) r/w Section 151 of CPC seeking summary judgment)
1. The present suit, inter-alia, seeks permanent injunction restraining infringement of Plaintiff's registered trademarks, copyright, passing off, rendition of accounts, damages, delivery-up, among other ancillary reliefs.Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 1 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05
2023:DHC:2187
2. The facts narrated in the suit: Plaintiff - 'SanDisk LLC' (formerly 'SanDisk Corporation'), a US corporation, registered in the State of Delaware, is engaged in the business of providing data storage solutions. It is one of the world's largest dedicated providers of flash memory storage solutions under the house mark 'SanDisk' since the year-1995. Plaintiff's data storage solutions pride themselves on incorporating essential components such as flash memory, controller, and firmware technologies. Plaintiff possesses trademark registrations in more than 150 jurisdictions apart from India, including USA, European Community, China, Canada, etc. In India, they have variety of word and device marks under registrations under house mark 'SanDisk', details whereof [hereinafter collectively "SanDisk Trademarks"] are set out below:
REGISTRATION NO. TRADEMARKS DATE OF APPLICATIONS CLASSES th 1249761 SANDISK 14 November, 2003 09 2632942 25th November, 2013 09 1805766 13th April, 2009 09 2261469 CRUZER BLADE 04th January, 2012 09 1249763 SANDISK ULTRA 14th November, 2003 09 2898190 SANDISK 10th February, 2015 09, 35, 37, 41, 42, 45
3. Plaintiff has invested considerable time and currency to market and advertise products bearing the SanDisk Trademarks by way of campaigns and product launches specifically catering to the Indian market since the year- 2005. They sell their products in India through their country-wide network of Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 2 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05 2023:DHC:2187 official national distributers who have been authorised to import and distribute in the Indian market original SanDisk products directly from Plaintiff or their subsidiaries. This distribution network is selected to ensure that genuine products bearing SanDisk Trademarks and packaging are sold/ offered for sale at every offline retail outlet or e-commerce portals.
4. Plaintiff's SanDisk Trademarks are extensively advertised and popularised and enjoy immense goodwill and cachet. High Court of Judicature at Bombay in Commercial IP Suit (L) No. 8349 of 2021 vide order dated 31st March, 2021,1 prima facie found the mark 'SanDisk' to have all attributes to qualify as a "well known trade mark", under Section 2(1)(zg) r/w Section 11(6) of the Trade Marks Act, 1999 [hereinafter "Trademarks Act"]. They sell their memory cards and USB flash drives in a distinct and unique packaging, which constitutes as original "artistic work" within the meaning of Section 2(c) of the Copyright Act, 1957 [hereinafter "Copyright Act"], and thus, are entitled to exclusive rights therein under Section 14(c) of the Copyright Act. Key elements of Plaintiffs' packaging include: (a) Red product packaging with white lettering; (b) Red frame logo [' '] describing the capacity of the device; and (c) SanDisk logo [' '].
5. Plaintiff is aggrieved with Defendants indulging in unauthorized third- party distribution of counterfeit microSDHC cards and Cruzer Blade USB 1 Titled - SanDisk LLC v. Mahender and Anr.
Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 3 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:052023:DHC:2187 Flash Drives bearing Plaintiff's SanDisk Trademarks 'SanDisk', ' ', 'Cruzer Blade' and Red Frame Logo [' '] with identical, packaging as that of Plaintiff's products. In August 2019, Plaintiff gained knowledge of use of the said marks in Old Lajpat Rai Market. To ascertain the extent and identity of person(s) involved in manufacturing, selling, marketing and distributing counterfeit products using Plaintiff's SanDisk Trademarks, an investigator was deputed to survey the market which revealed: Mr. Amit/ Defendant No. 1 [operator/ owner of display counter opp. Shop No. 695 at Old Lajpat Rai Market, Delhi - 110006 - hereinafter "Location 1"] and several other temporary/ makeshift establishments were selling impugned products, who remain unidentified and were arrayed as John Doe(s)/ Defendant No. 2.
6. A comparison of front and backside of Plaintiff's product, with that of Defendants' infringing products, are given below:
ORIGINAL PRODUCT OF PLAINTIFF COUNTERFEIT PRODUCTS OF DEFENDANTS Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 4 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05 2023:DHC:2187
7. On the scrutiny of the images depicted above, the features which distinguish Plaintiff's original/ genuine products from Defendant No. 1's counterfeit products are listed hereinbelow:
7.1. Inferior/ low-quality print of Defendant No. 1's packaging vis-à-vis that of Plaintiff's products. Images on the packaging are blurred and colour quality is heavily compromised when compared with Plaintiff's product packaging. 7.2. Poor quality packaging of Defendant No. 1's products, as it easily flips open and does not tear on opening, as in case of Plaintiff's products. 7.3. Memory card contained in Defendant No. 1's packaging does not contain the serial number or the legend "Made in Taiwan" / "Made in China"; particulars which are embossed on Plaintiff's original products. 7.4. The lettering, font and colour quality featured on Defendant No. 1's counterfeit products are different from that of Plaintiff's. 7.5. Simple/ inexpensive blister packaging of Defendant No. 1 is of a lower quality than that of Plaintiff's and protrudes further out of the packaging. The memory card placed inside is at a significant elevation from the base of the packaging material when compared with Plaintiff's placement.Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 5 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05
2023:DHC:2187 7.6. The print quality of Cruzer Blade USB drives is of a significantly lesser quality than that of Plaintiff. Images depicted therein are blurred/ smudged and colour quality as well is significantly compromised. 7.7. The back of Defendant No. 1's counterfeit Cruzer Blade USB packaging refers to the product as "Cruzer Facet" instead of "Cruzer Blade".
INTERIM ORDER AND REPORTS OF LOCAL COMMISSIONERS
8. On 02nd September, 2019, while issuing summons, an ex-parte ad interim injunction was granted against Defendants and two Local Commissioners [hereinafter "LCs"] were appointed to visit "all makeshift counters in Old Lajpat Rai Markets" for the purpose of seizing and sealing counterfeit goods and to prepare an inventory of the infringing articles. Operative portion of the afore-said order reads as under: -
"8. Noting the submissions made by the counsel for the plaintiff and also perusing the documents it is clear that the plaintiff has made out a prima facie case in its favour and the balance of convenience is in favour of the plaintiff, for it to be entitled to grant of interim relief and accordingly, defendants, their partners, proprietors, servants, agents and all others in active concert or participation with them are restrained from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in products which infringe the plaintiffs copyrights in the artistic work comprised in its products packaging. Defendants, their partners, proprietors, servants, agents and all others acting in active concert with them are restrained from manufacturing, marketing, offering for sale, selling, advertising, directly or indirectly dealing in any product bearing the plaintiffs registered trademarks 'SanDisk', the Sandisk logo, 'Cruzer Blade' and the 'Red Frame Logo' and / or any mark / s conflisingly or deceptively similar thereto, amounting to infringement to the product, registered trademarks / copyright of the plaintiff till the next date of hearing."
9. On the day of execution of the commission, one LC visited the premises of Defendant No. 1, and the other LC identified and visited six (06) locations Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 6 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05 2023:DHC:2187 at Old Lajpat Rai Market;2 they both found counterfeit microSDHC card and Cruzer Blade USB pen drives bearing Plaintiff's SanDisk Trademarks. The details of the seizure are as follows:
Location 1: -
SL. NO. DESCRIPTION OF THE PRODUCTS QUANTITY 1. 4 GB Micro SDHC cards 111 2. 8 GB Micro SDHC cards 83 3. 32 GB Micro SDHC cards 93 4. 64 GB Micro SDHC cards 02 5. 16 GB Cruzer Blade USB 10 6. 32 GB Cruzer Blade USB 05 7. 64 GB Cruzer Blade USB 01 TOTAL NUMBER OF PRODUCTS SEIZED 305 units Location 2: - SL. NO. DESCRIPTION OF THE PRODUCTS QUANTITY 1. Product packaging for 16 GB MicroSD Card 223 2. 16 GB Pen Drive 02 3. 32 GB Pen Drive 32 4. 4 GB MicroSD card 45 5. 8 GB MicroSD card 01 6. 16 GB MicroSD card 01 7. 32 GB MicroSD card 07 8. 64 GB MicroSD card 01 TOTAL NUMBER OF PRODUCTS SEIZED 312 units Location 3: - SL NO. DESCRIPTION OF THE PRODUCTS QUANTITY 1. 6 GB Pen Drive 01 2. 16 GB Pen Drive 10 3. 32 GB Pen Drive 03 4. 64 GB Pen Drive 09 2
Defendant No. 2 - Mr. Avinash Yadav [located at counter next to Shop No. 465, Old Lajpat Rai Market, Delhi - 110006]; Defendant No. 3 - Mobile World operated/ owned by Mr. Manoj Kumar [located at Shop No. 479C, Old Lajpat Rai Market, Delhi - 110006 - hereinafter "Location 2"]; Defendant No. 4 - Mr. Gaurav Singh [located at counter opposite Shop No. 557, Old Lajpat Rai Market, Delhi - 110006]; Defendant No. 5 - R.K. operated/ owned by Mr. Shiv Kant Mishra [located at Shop No. 694, Old Lajpat Rai Market, Delhi - 110006 - hereinafter "Location 3"]; and Defendant No. 6 - Mr. Inder Yadav [located at Shop No. 886, Old Lajpat Rai Market, Delhi - 110006 - hereinafter "Location 4"].Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 7 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05
2023:DHC:2187 5. 4 GB MicroSD Card 15 6. 16 GB MicroSD Card 03 7. 32 GB MicroSD Card 01
8. Loose Products without packaging:i. 8 GB Pen Drive 01 ii. 32 GB Pen Drive 02 iii. 62 GB Pen Drive 03 02
iv. 128 GB Pen Drive
9. Product packaging material for:
i. 4 GB MicroSD Card 04
ii. 8 GB MicroSD Cards 05
iii. 16 GB Ultra MicroSD Card 03
TOTAL NUMBER OF PRODUCTS SEIZED 62 units
Location 4: -
SL NO. DESCRIPTION OF THE PRODUCTS QUANTITY
1. 4 GB Pen Drive 123
2. 8 GB Pen Drive 244
3. 32 GB Pen Drive 424
4. 64 GB Pen Drive 220
5. 128 GB Pen Drive 14
6. 4 GB MicroSDHC Card 22
7. 8 GB MicroSDHC Card 105
8. 16 GB MicroSDHC Card 96
9. 32 GB MicroSDHC Card 177
10. Loose packaging material for:
i. 4 GB MicroSDHC Card 1590
ii. 8 GB MicroSDHC Card 180
iii. 16 GB MicroSDHC Card 1248
1335
iv. 32 GB MicroSDHC Card
TOTAL NUMBER OF PRODUCTS SEIZED 5837 units
ANALYSIS
10. The Joint Registrar vide order dated 17th January, 2020, impleaded Defendants No. 2 to 6 as parties to the suit. Later, on Plaintiff's request, vide order dated 11th November, 2020, Defendants No. 2 and 4 were deleted from Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 8 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05 2023:DHC:2187 the array of parties. All Defendants have been served with the summons, in the suit, but have failed to file their written statement(s), within the stipulated timelines. Defendants/ proprietor of Defendants were present at the time of execution of the commission and copy of the order was also served upon them.
The order dated 18th February, 2020 records the appearance of Defendants No. 3, 5 and 6 in-person, however, since then they have never appeared. Thus, Defendants obviously have knowledge of the orders passed by this Court and the present proceedings, yet have stayed away. Based on the aforementioned details, the Court proceeded ex-parte against Defendant No. 1 on 18th February, 2020, and similarly, against Defendants No. 3, 5, and 6 on 11th January, 2022.
11. Plaintiff is the registered proprietor of the SanDisk Trademarks and their registrations are valid and subsisting, a fact proved on the basis of the documents placed on record. No evidence to the contrary has been produced by Defendants. By virtue of provisions encapsuled in Section 28 of the Trademarks Act, Plaintiff has exclusive rights to use the SanDisk Trademarks in relation to the goods for which the marks have been registered.
12. Photographs of the impugned products that have been seized by LCs annexed along with the Reports of the LC also demonstrate that Defendants have been indulging in sale and distribution of products displaying identical packaging and idenitical marks of the Plaintiff's SanDisk Trademarks. These photographs demonstrate that the impugned products are nothing but counterfeit packaging of Plaintiff's 'SanDisk' products. Defendants are clearly indulging in blatant violation of Plaintiff's statutory and common law Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 9 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05 2023:DHC:2187 rights in the SanDisk Trademarks.
13. In view of the pleadings, documents as well as LC Reports that have been placed on record, the Court is of the view that affixation of Plaintiff's registered marks on Defendants' goods is done with the intention to unlawfully profit from and create unauthorised association with the goodwill and cachet enjoyed by Plaintiff's 'SanDisk' products. The use of Plaintiff's SanDisk Trademarks is bound to cause palpable losses, harm and injury to Plaintiff as well as public. Defendants were attempting to deceive the public into buying their counterfeit products. The likelihood of confusion and deception feuled by the mala-fide intention of Defendants is evident. Defendants have made use of identical trade marks, in relation to identical goods (counterfeit microSDHC cards and USB Flash drives), while catering to the same end-use consumers, hence a clear case of trade mark infringement and passing-off is proved.
14. In the opinion of the Court, the present case is fit for passing a summary judgment under Order XIII-A of CPC as applicable to commercial disputes read with Rule 27 of Delhi High Court Intellectual Property Division Rules, 2022 [hereinafter "IPD Rules"].3 In fact, in absence of defence, the Court is also entitled to invoke Order VIII Rule 10 of CPC to pass a judgment. The LC Reports are also read in evidence in terms of Order XXVI Rule 10(2) of CPC,4 and no ex-parte oral evidence is required to be led.5 Plaintiff is thus entitiled 3 See: Su-Kam Power Systems Ltd. v. Kunwer Sachdev, 2019 SCC OnLine Del 10764, ¶¶ 90 and 92.
4ML Brother LLP v. Maheshkumar Bhuralal Tanna, 2022 SCC OnLine Del 1452.
5Disney Enterprises Inc. and Anr. v. Balraj Muttneja and Ors., 2014 SCC OnLine Del 781 and Cross Fit LLC v. RTB Gym and Fitness Centre, 2022 SCC OnLine Del 2788.
Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 10 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:052023:DHC:2187 to decree of permanent injunction in terms of prayers (a), (b) and (c) of the amended Plaint.
15. On damages, Plaintiff also argues that in light of Defendants' patently dishonest activities considering the unfair trade practice and fast-moving nature of products, Plaintiff is entitled to actual loss of sales. Plaintiff's also argue that since Defendants have sold Plaintiff's counterfeit products and thereby, harmed their reputation and goodwill, heavy and punitive damages should be awarded. Co-ordinate Benches of this Court in M/s General Electric Company v. Mr. Altamas Khan and Ors.,6 and Microsoft Corporation v. Yogesh Papat & Anr.7 have granted compensatory damages based on certain assumptions of sales. Thus, considering the overall facts and circumstances of the case, Defendants' conduct invites the award of damages. However, since Plaintiff has not led any substantial evidence for the said relief, taking a reasonable assessment and considering nature of counterfeiting indulged into by Defendants, in the opinion of the Court, Plaintiff is entitled to nominal damages, which are to be quantified severally commensurate with the volume of seizure of the infringing goods.
RELIEFS
16. The goods seized by LCs, which are lying in superdari with Defendants, details whereof are recorded in the Report of LCs both dated 19th September, 2019, are directed to be handed over to counsel for Plaintiff and/ or authorized representative(s) for Plaintiff, forthwith. The same shall 6 2008 SCC OnLine Del 1794, ¶¶ 13 and 14.
72005 SCC OnLine Del 216, ¶¶ 21.
Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 11 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:052023:DHC:2187 thereafter be destroyed by Plaintiff's representative(s), in compliance with extant rules/ regulations.
17. The present suit is accordingly decreed in favour of the Plaintiff and against Defendants No. 1, 3, 5 and 6 in terms of the relief of permanent injunction as sought in prayers (a), (b), and (c) of the amended Plaint.
18. Accordingly, damages are awarded in favour of Plaintiff, which shall be payable by the Defendants No. 1, 3, 5 and 6 in the following manner/ break- up: Defendants No. 1 and 3 shall pay INR 50,000/- each; Defendant No. 5 is liable to pay INR 25,000/- and likewise, Defendant No. 6 shall pay INR 2,00,000/-.
19. Plaintiff has also incurred costs for executing the commissions and deposited court fees. Thus, in view of the judgment of the Supreme Court in Uflex Ltd. v. Government of Tamil Nadu,8 as well as in terms of the Commercial Courts Act, 2015 and Delhi High Court (Original Side) Rules, 2018 read with IPD Rules, Plaintiff is entitled to actual costs, recoverable jointly and severally from Defendants No. 1, 3, 5 and 6. Plaintiff shall file their bill of costs in terms of Rule 5 of Chapter XXIII of the Delhi High Court (Original Side) Rules, 2018 on or before 30th April, 2023. As-and-when the same is filed, the matter will be listed before the Taxing Officer for computation of costs.
82021 SCC OnLine SC 738.
Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 12 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:052023:DHC:2187
20. Suit is decreed in above terms. Registry is directed to draw up the decree sheet.
21. Suit and all pending applications are disposed of.
SANJEEV NARULA, J MARCH 1, 2023 as (Corrected and released on: 28th March, 2023) Signature Not Verified Digitally Signed CS(COMM) 478/2019 Page 13 of 13 By:SAPNA SETHI Signing Date:28.03.2023 14:27:05