Delhi District Court
M/S Ite India Pvt. Ltd vs M/S Tarsus Group Plc on 27 July, 2023
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDITIONAL DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
CIVIL SUIT No.57441/2016
CNR NO.DLND01-000072-2009
IN THE MATTER OF:
M/S ITE INDIA PVT. LTD.
I-83, LAJPAT NAGAR-II,
NEW DELHI-110024
....PLAINTIFF
VERSUS
M/S TARSUS GROUP PLC
9th FLOOR, METRO BUILDING,
1 BUTTERWICK, LONDON W6 8DL
UNITED KINGDOM
....DEFENDANT
DATE OF INSTITUTION OF SUIT : 13.11.2009
DATE OF ARGUMENTS : 06.07.2023
DATE OF JUDGMENT : 27.07.2023
DECISION : SUIT DECREED
JUDGMENT
1. Plaintiff has instituted the present suit under Section 134 & 135 of Trade Mark Act, 1999 seeking permanent injunction, restraining infringement, passing off, rendition of accounts and damages.
2. The facts, as disclosed in the plaint, are;
(a) Plaintiff ITE India Private Limited is a company incorporated CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 1 of 30 under the Companies Act, 1956 having its registered office at I-83, Lajpat Nagar-II, New Delhi-110024. The suit has been instituted by Sh. Ashish Sharma, Director of plaintiff, who has been authorized to do so by means of a resolution dated 06.06.2009 passed by the Board of Directors of the plaintiff;
(b) Plaintiff is engaged in the business of organizing exhibitions and it is well known name in the exhibition industry. It has a trademark for the abbreviation 'IFDE INDIA' for organizing food, drink and hospitality exhibition and the same has been duly registered under the Trademarks Act, 1999. Plaintiff claims that it coined and adopted the trademark in the year 2003 and had been continuously using the said trademark for organizing various exhibitions. It further claims that its trademark 'IFDE INDIA' has become a renowned name and has acquired goodwill & reputation in the hospitality industry. Plaintiff is the registered owner of the word mark 'IFDE INDIA' in terms of a certificate issued by the Controller of Trademarks, India;
(c) Defendant Tarsus Group PLC is also engaged in the business of organizing exhibitions. Plaintiff learnt from reliable source that somewhere in the first week of December 2009, defendant would be organizing a food & drink exhibition under his trademark 'IFDE INDIA'. On gaining this information, plaintiff wrote a letter to the defendant calling upon it not to hold the exhibition and tender a public apology by issuing advertisements in National and International CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 2 of 30 Newspapers. Defendant sent a reply of the letter through email but failed to tender the apology. On 05.06.2009, plaintiff sent a reminder to the defendant for tendering the apology. Defendant replied on 06.06.2009 admitting having used the trademark but expressed ignorance about the same being a registered trademark of the plaintiff. Defendant assured the plaintiff that it will change the name of the show and will not infringe its trademark.
(d) It is the plaintiff's case that defendant adopted its trademark and used it in the course of trade for the purpose of gain. Plaintiff alleged that defendant had been marketing and selling its exhibitions in India under the trademark 'IFDE INDIA'. Plaintiff mentioned that defendant had been using its trademark to cause confusion to the general public that its exhibition is being organized by the plaintiff. Plaintiff claims that defendant has profited by wrongly using its trademark;
(e) Plaintiff served a legal notice dated 06.07.2009 on the defendant directing to immediately stop using its trademark but it did not yield result. Hence, the present suit.
3. Defendant was served with the summons of the suit. It contested the plaintiff's claim by filing the written statement. It took preliminary objection about the maintainability of the suit. Defendant claimed that the suit is bad on account of non-joinder of parties and it has not been properly valued. Defendant mentioned that plaintiff has leveled allegations against different business CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 3 of 30 entities but they have not been impleaded in the suit. Defendant mentioned that although, the present suit has been filed against Tarsus Group PLC but the exhibition was organized by Tarsus Exhibitions & Publishing Ltd., which is a company registered in England. Defendant stated that this company is a subsidiary of Tarsus Group Ltd., which was formally known as Tarsus Group PLC.
3.1 Defendant claimed that the suit has become infructuous as the exhibition is already over. It claimed that it had never used the trademark of the plaintiff. Defendant mentioned that Tarsus Exhibitions & Publishing Ltd. always used the full name of the exhibition i.e. International Food & Drink Expo India 2009. It mentioned that it never used the abbreviated trade name of the plaintiff. It claimed that a display board was placed at the entrance of the exhibition that it is no way connected with the plaintiff's company. It mentioned that the display notice contained the name of the organizing company and therefore, there was no chance of deception.
3.2 Defendant denied having intentionally used the trademark of the plaintiff. It mentioned that it accidentally used the abbreviated name/IFDE INDIA on isolated occasions about 8 months prior to the exhibition. Defendant claimed that it accidentally used the abbreviation after displaying the full name of the exhibition i.e. International Food & Drink Expo India 2009 with abbreviation in brackets as (IFDE INDIA) immediately after the full name. It claimed that the said usage was accidental and it does not infringe CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 4 of 30 the trademark of the plaintiff. Defendant mentioned that it immediately stopped using the abbreviated mark after coming to know that plaintiff is the registered owner of the said mark. 3.3 Defendant denied that plaintiff's trademark has acquired reputation and goodwill. It claimed that plaintiff's trademark has no reputation in the market. It mentioned that there is no similarity and resemblance between 'International Food & Drink Expo India 2009' and 'IFDE INDIA'. It claimed that in past, number of shows have been organized in India under a similar name. It claimed that plaintiff has not placed on record any statement of account to show its financial position. It mentioned that plaintiff has not held any show under the name of IFDE INDIA after the year 2005. It mentioned that it suffered losses in the exhibition organized from 02.12.2009 to 04.12.2009. It prayed that the suit may be dismissed.
4. Plaintiff filed replication and reiterated the contents of the plaint.
5. On the basis of the pleadings of the parties, following issues were framed:
i. Whether the plaint ought to be returned on account of lack of cause of action? OPP ii. Whether the plaintiff, who is a registered holder of the trademark IFDE, is entitled to any rights in its description, which is, International Food and Drink Expo? OPP iii. If answer to issue No.ii is in affirmative, whether the defendant is guilty of infringing and/or passing off the registered mark as described (International Food and Drink Expo)? If so, to what effect? OPP iv. Whether the suit is liable to be dismissed for non-disclosure of CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 5 of 30 material facts, as referred to in paragraph 9, under the heading 'Preliminary Objections', in the written statement? OPD v. Whether the plaintiff is entitled to injunction? OPP vi. Whether the plaintiff is entitled to damages, as claimed? If so, to what extent? OPP vii. What relief, if any?
6. The suit was initially filed before the High Court of Delhi. During trial, defendant filed an application under Section 135 (3)(b) of the Trademarks Act, 1991 mentioning that at the time of the commencement of use of the trademark of plaintiff, he was unaware and had no reasonable ground for believing that the trademark of the plaintiff has been registered with the Registrar of Trademarks. Defendant mentioned in the application that on gaining information that the trademark has been registered, it stopped using the mark forthwith. In terms of this application, defendant submitted that it is willing to suffer a decree in so far as the prayer of injunction is concerned. The High Court of Delhi allowed the application vide order dated 24.09.2015 and partially decreed the suit and restrained defendant from using, displaying, advertising or carrying out the exhibition and business under the trademark of the plaintiff i.e. IFDE INDIA or any other mark, which may be deceptively similar to the plaintiff's trademark. Parties were directed to lead evidence on the issue of rendition of accounts. Thereafter, the matter was transferred to the District Court in view of Notification No.27187/DHC/Orgl dated 24.11.2015.
CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 6 of 307. Trial proceeded. Plaintiff examined only one witness i.e. PW-
1/Ashish Sharma, Director of the plaintiff company. He filed his evidence by way of affidavit (Ex.PW-1/A). He placed reliance on the following documents;
a) Board Resolution dated 06.06.2009 (Ex.PW-1/1);
b) Certificate of Trademark IFDE INDIA issued by the Registrar of Trademarks (Ex.PW-1/2);
c) Correspondences of the plaintiff with Trade Promotion Organization (Ex.PW-1/3 to Ex.PW-1/21);
d) Invitation Letters of the show organized by the plaintiff (Ex.PW-1/22 to Ex.PW-1/25);
e) Copy of letter dated 27.05.2009 issued by the plaintiff to the defendant directing it to restrain from organizing the exhibition (Ex.PW-1/26);
f) Copy of email dated 27.05.2009 sent by the defendant to the plaintiff (Ex.PW-1/27);
The witness was cross-examined by the defendant.
8. Defendant also examined only one witness i.e. DW-1/Amit Ranjan. He filed his evidence by way of affidavit (Ex.DW-1/A). He deposed on the basis of a Special Power of Attorney dated 28.06.2012 executed by the defendant in his favour. He mentioned that defendant did not infringe the trademark of the plaintiff. He mentioned that detailed audited accounts of defendant were submitted in the court and same are Ex.DW-1/2. He deposed that defendant placed a notice at the site of exhibition that it is not sponsored by the plaintiff. The copy of the notice is Ex.DW-1/3. He mentioned that plaintiff did not organize any exhibition in the name of IFDE INDIA after January 2005. He mentioned that CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 7 of 30 defendant suffered huge losses in the exhibition. He claimed that there is no similarity between the description International Food & Drink Expo, 2009 and the trademark of the plaintiff. He was cross- examined by the plaintiff.
9. Arguments were heard.
10. I have perused the pleadings, documents as well as the evidence.
The issue-wise finding is as under:
ISSUE-WISE FINDING Issue No.(i):Whether the plaint ought to be returned on account of lack of cause of action? OPP Issue No.(iv):Whether the suit is liable to be dismissed for non- disclosure of material facts, as referred to in paragraph-9, under the heading 'Preliminary Objections', in the written statement? OPD
11. Both the issues are being taken up together as they are interconnected. Plaintiff claimed in the suit that it is engaged in the business of organizing exhibitions. It was the plaintiff's stand that it initially coined and adopted the trademark IFDE INDIA in the year 2003 and it has been using the said mark continuously over a period of time. Plaintiff disclosed that the mark was duly registered with the Registrar of Trademark. In order to support this version, PW-1 tendered in evidence the certificate of registration of trademark IFDE INDIA dated 20.01.2006 issued by the Registrar of Trademark with effective date of 18.07.2003. The CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 8 of 30 trademark was registered under the category of Class-16. It was specified in the certificate that the registered mark was in respect of advertising materials & display materials, brochures & catalogues, printed, publications, photographs and posters. Record shows that plaintiff only filed the true copy of the trademark certificate and did not produce the original certificate.
12. The registered trademark certificate has not been proved as per the requirement of the Indian Evidence Act as the original was never produced in the court. However, this is not fatal as defendant has not disputed the fact that plaintiff is the registered owner of the trademark IFDE INDIA. Moreover, the testimony of PW-1 about the adoption & usage of the trademark has gone uncontroverted. PW-1 has deposed that plaintiff adopted the trademark in the year 2003 and since then, it has been using the same continuously. Defendant has not disputed this aspect during cross-examination. Thus, it is established that plaintiff is the registered owner of the trademark. Plaintiff has alleged that defendant infringed its trademark by adopting and using an identical abbreviation.
13. Section 29 defines the meaning of infringement of a registered trademark. It provides that a registered trademark is infringed by a person, who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with or deceptively similar to, the trademark in relation to goods or services in respect of which the trademark is registered CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 9 of 30 and in such manner as to render the use of the mark likely to be taken as being used as a trademark. Sub-Section (2) of Section 29 of the Act further clarifies that a trademark is infringed by using a mark which is identical or similar with the registered trademark to an extent that it is likely to cause confusion on the part of public that it has an association with the registered trademark. Sub- Section (3) of Section 29 of the Act provides a presumption in respect of a mark that is likely to create confusion on the part of the public on account of its identity with the registered trademark and the identity of goods or services covered by such registered trademark.
14. Plaintiff has alleged infringement of its trademark. Defendant has admitted in its pleading that it used the trademark IFDE INDIA. It was pleaded by the defendant that mark was used under ignorance. Defendant has further pleaded that it inadvertently used the mark IFDE as an abbreviation for International Food & Drink Expo. Be as it may, it cannot be concluded by any stretch of imagination that there was no cause of action to file the plaint. Plaintiff had a legal right to institute a suit for injunction to restrain defendant from using its trademark. Section 28 of the Trademarks Act, 1999 (hereinafter referred to as 'the Act') clarifies that the valid registration of a trademark shall confer on the registered owner of the trademark exclusive right to use the trademark in relation to the goods or services in respect of which the trademark is registered. The Section further empowers the owner of the CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 10 of 30 trademark to obtain relief in respect of infringement of trademark in the manner provided under the Act. Section 134 of the Act provides the remedy of filing a suit for infringement of a trademark while Section 135 of the Act describes the relief which may be granted in a suit for infringement or passing off the trademark. Thus, there was a valid cause of action to file the plaint. Accordingly, Issue No.(i) is decided in favour of plaintiff and against the defendant.
15. Now, coming to the finding on Issue No.(iv). The onus of this issue was placed on the defendant. Defendant pleaded in the written statement that plaintiff has suppressed material facts. Defendant claimed that two other similar petitions were filed by an associate company of the plaintiff but this fact was not disclosed in the plaint. Defendant stated that a company named Inter Ads Exhibitions Pvt. Ltd., which was an associate company of the plaintiff, filed petitions bearing OMP 512/2009 and OMP 663/2009 under Section 9 of the Arbitration & Conciliation Act, 1996 to restrain the holding of International Food & Drink Expo, 2009. Defendant mentioned that one of these petitions was dismissed as withdrawn while no injunction was granted in the other petition. Defendant stated that plaintiff filed the present suit to harass it and extort money. Defendant mentioned that plaintiff filed the suit to block it and Montgomery International Ltd. from holding any exhibition in India. Defendant raised these pleas in para-9 of the preliminary objection. However, no evidence was led CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 11 of 30 by the defendant to substantiate these objections. The bald pleas taken in the written statement do not advance the defendant's cause. Accordingly, Issue No.(iv) is decided in favour of plaintiff and against the defendant.
Issue No.(ii):Whether the plaintiff, who is a registered holder of the trademark IFDE, is entitled to any rights in its description,which is, International Food and Drink Expo? OPP Issue No.(iii):If answer to issue No.(ii) is in affirmative, whether the defendant is guilty of infringing and/or passing off the registered mark as described (International Food and Drink Expo)? If so, to what effect? OPP
16. The onus these issues was placed on the plaintiff. Plaintiff filed the present suit along with an application under Order XXXIX Rule 1 & 2 of CPC seeking interim relief that defendant should be restrained from holding the exhibition on 02.12.2009. This application was disposed of by the High Court of Delhi vide order dated 17.11.2009. After hearing the arguments, the High Court did not restrain defendant from holding the exhibition but issued directions that it shall prominently display a disclaimer at the site of the exhibition that it is no way connected with or organized by the plaintiff or that it has no association with the trademark IFDE.
17. It is the defendant's case that plaintiff has no proprietary right for holding exhibition under the name International Food & Drink Expo. Defendant claims to have inadvertently used the trademark CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 12 of 30 of the plaintiff as an abbreviation of International Food & Drink Expo. On the other hand, plaintiff claims that defendant cannot avoid its liability by pleading ignorance. Plaintiff has contended that defendant cannot be allowed to infringe the trademark on the excuse that it is an abbreviation of International Food & Drink Expo.
18. On appreciating the record in the light of respective pleadings and evidence, I have reached a conclusion that plaintiff cannot claim right in the description International Food & Drink Expo on account of being registered owner of the trademark IFDE INDIA. Plaintiff claimed that it had invested huge amount in building the goodwill and reputation of its trademark. It was claimed by the plaintiff that its trademark has acquired a distinctive identity and people in the exhibition industry have started associating it with its trademark. Plaintiff claimed that its trademark is well known and it has acquired reputation and goodwill over a period of time. These averments were made in the plaint. The same were reproduced in the evidence by way of affidavit of PW-1. However, no reliable evidence has come on record to substantiate that plaintiff's trademark is a well known trademark. Section 2 (zg) of the Trademarks Act, 1999 defines the meaning of a 'well known trademark' and it reads as under;
"(zg) 'well-known trade mark', in relation to any goods or services, means a mark which has become so to the substantial segment of the public which uses such goods or receives such services that the use of CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 13 of 30 such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first-mentioned goods or services."
19. The High Court of Delhi defined the meaning and implication of a 'well known trademark' in the matter of "Ihhr Hospitality Pvt. Ltd. Vs. Bestech India Pvt. Ltd." in CS (OS) 207/2011, decided on 31.05.2011. The relevant part of the judgment reads as under;
"4. I had an opportunity to examine the concept of a well-known mark in CS(OS) No.264/2008, decided on 28th March, 2011. This Court, referring to the concept of a well- known trade mark, inter-alia, observed as under:-
"A well known trademark is a mark which is widely known to the relevant general public and enjoys a comparatively high reputation amongst them. On account of advancement of technology, fast access to information, manifold increase in international business, international travel and advertising/publicity on Internet, television, magazines and periodicals, which now are widely available throughout the world, of goods and services during fairs/exhibitions, , more and more persons are coming to know of the trademarks, which are well known in other countries and which on account of the quality of the products being sold under those names and extensive promotional and marketing efforts have come to enjoy trans-border reputation. It is, therefore, being increasingly felt that such trademark needs to be protected not only in the countries in which they are registered but also in the countries where they CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 14 of 30 are otherwise widely known in the relevant circles so that the owners of well known trademarks are encouraged to expand their business activities under those marks to other jurisdictions as well.
The relevant general public in the case of a well known trademark would mean consumers, manufacturing and business circles and persons involved in the sale of the goods or service carrying such a trademark.
The doctrine of dilution, which has recently gained momentum, particularly in respect of well known trademarks emphasizes that use of a well known mark even in respect of goods or services, which are not similar to those provided by the trademark owner, though it may not cause confusion amongst the consumer as to the source of goods or services, may cause damage to the reputation which the well known trademark enjoys by reducing or diluting the trademarks power to indicate the source of goods or services.
Another reason for growing acceptance of trans-border reputation is that a person using a well known trademark even in respect of goods or services which are not similar tries to take unfair advantage of the trans-border reputation which that brand enjoys in the market and thereby tries to exploit and capitalize on the attraction and reputation which it enjoys amongst the consumers. When a person uses another person s well known trademark, he tries to take advantage of the goodwill that well known trademark enjoys and such an act constitutes an unfair competition.CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 15 of 30
The concept of confusion in the mind of consumer is critical in actions for trademark infringement and passing off, as well as in determining the registrability of the trademark but, not all use of identical/similar mark result in consumer confusion and, therefore, the traditionally principles of likelihood of confusion has been found to be inadequate to protect famous and well known marks. The world is steadily moving towards stronger recognition and protection of well known marks. By doing away with the requirement of showing likelihood of confusion to the consumer, by implementing anti-dilution laws and recognizing trans-border or spill over reputation wherever the use of a mark likely to be detrimental to the distinctive character or reputation of an earlier well known mark. Dilution of a well known trademark occurs when a well known trademark loses its ability to be uniquely and distinctively identify and distinguish as one source and consequent change in perception which reduces the market value or selling power of the product bearing the well known mark. Dilution may also occur when the well known trademark is used in respect of goods or services of inferior quality. If a brand which is well known for the quality of the products sold or services rendered under that name or a mark similar to that mark is used in respect of the products which are not of the quality which the consumer expects in respect of the products sold and/or services provided using that mark, that may evoke uncharitable thoughts in the mind of the consumer about the trademark owners product and he can no more be confident that the CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 16 of 30 product being sold or the service being rendered under that well known brand will prove to be of expected standard or quality."
After noticing the provisions of Trademarks Act, 1999 with respect to well-known trademarks, this Court observed as under:-
"Trademarks Act, 1999 does not specify the factors which the Court needs to consider while determining whether a mark is a well known mark or not, though it does contain factors which the Registrar has to consider whether a trademark is a well known mark or not. In determining whether a trademark is a well known mark or not, the Court needs to consider a number of factors including
(i) the extent of knowledge of the mark to, and its recognition by the relevant public;
(ii) the duration of the use of the mark;
(iii) the extent of the products and services in relation to which the mark is being used; (iv) the method, frequency, extent and duration of advertising and promotion of the mark; (v) the geographical extent of the trading area in which the mark is used; (vi) the state of registration of the mark; (vii) the volume of business of the goods or services sold under that mark; (viii) the nature and extent of the use of same or similar mark by other parties;
(ix) the extent to which the rights claimed in the mark have been successfully enforced, particularly before the Courts of law and trademark registry and (x) actual or potential number of persons consuming goods or availing services being sold under that brand.CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 17 of 30
A trademark being well known in one country is not necessarily determinative of its being well known and famous in other countries, the controlling requirement being the reputation in the local jurisdiction."
20. Coming to the present matter, there is no evidence to substantiate the averments in the plaint that the plaintiff's trademark is a well known trademark. Although, plaintiff has placed on record certain documents to demonstrate that it kept holding its exhibition under the banner of International Food & Beverages Exhibition at Pragati Maidan, New Delhi but there is no evidence to demonstrate that these exhibitions were held in any other state or country. Plaintiff has placed on record photocopies of certain Newspaper articles wherein the exhibition was portrayed in a positive light but these articles have not been proved as the original Newspaper was not placed on record. There is no evidence to indicate the amount of expenditure incurred by the plaintiff in the sales promotion of its exhibition. Plaintiff has not led any evidence to demonstrate the amount of revenue generated from its exhibitions. There is no evidence to indicate the geographical extent of the area where the exhibitions were held. There is no evidence to show the volume of business generated from the exhibitions of the plaintiff. Plaintiff has not placed on record any evidence to show that its trademark had acquired a unique identity. There is no evidence to indicate that people started identifying the trademark IFDE INDIA with the word International Food & Drink CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 18 of 30 Exhibition. I find no evidence that may indicate that plaintiff, being the registered holder of trademark IFDE, is entitled to any right in its description International Food & Drink Expo. From the evidence placed on record, it cannot be concluded that the persons attending and visiting the exhibition would likely to believe that the exhibition under the banner International Food & Drink Export was organized by the plaintiff. Indeed, the word mark 'IFDE' could be taken to be an abbreviation of the word 'International Food & Drink Expo' but there appears to be no possibility of confusion or deception merely on account of this fact. More so, when there is no evidence to demonstrate that the mark has become so renowned that people started associating the word mark IFDE with the exhibition organized by the plaintiff. In view of these findings, issue No.(ii) & (iii) are decided against the plaintiff and in favour of defendant.
Issue No.(v):Whether the plaintiff is entitled to injunction? OPP
21. Issue No.(v) has already been decided in favour of plaintiff. The suit qua the relief of injunction stands partially decreed in terms of order dated 24.09.2015 passed by the High Court of Delhi. In view of this, there remains no scope for giving any further finding.
Issue No.(vi):Whether the plaintiff is entitled to damages, as claimed? If so, to what extent? OPP
22. Coming to the plea of the plaintiff that he is entitled to receive damages. It is the plaintiff's case that defendant used its trademark CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 19 of 30 for holding its exhibition so as to create confusion in the mind of general public and give an expression that its exhibition has been organized by the plaintiff. Plaintiff has submitted that defendant used its trademark dishonestly in order to earn profit from its goodwill. Plaintiff has claimed that it is entitled to compensatory and punitive damages.
23. The High Court of Delhi Intellectual Property Right Division Rule 2022 lists various factors for determining the quantum of damages. Rule No.20 of the Rules provides as under;
"20. Damages/Account of profits A party seeking damages/account of profits, shall give a reasonable estimate of the amounts claimed and the foundational facts/account statements in respect thereof along with any evidence, documentary and/or oral led by the parties to support such a claim. In addition, the Court shall consider the following factors while determining the quantum of damages:
(i) Lost profits suffered by the injured party;
(ii) Profits earned by the infringing party;
(iii) Quantum of income which the injured party may have earned through royalties/license fees, had the use of the subject IPR been duly authorized;
(iv) The duration of the infringement;
(v) Degree of intention/neglect underlying the infringement;
(vi) Conduct of the infringing party to mitigate the CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 20 of 30 damages being incurred by the injured party;
In the computation of damages, the Court may take the assistance of an expert as provided for under Rule 31 of these Rules."
24. In granting damages, the court needs to analyze not just the rights of the parties but also assess broader surrounding factors such as the impact of infringement and the need for higher cost to deter a habitual offender to curb a malafide attempt to ride on another's goodwill and reputation. In the present matter, plaintiff has prayed for general as well as punitive damages. The test for calculating and imposing damages in a case of intellectual property right violation came up for consideration before the High Court of Delhi in the case of "Inter Ikea System B.V & Ors. Vs Sham Murari & Ors." CS (COMM) 104/2018, I.As. 26029/2014 & 26030/2014 wherein it was observed as under;
"20. In Hindustan Unilever Limited v Reckitt Benckiser India Limited, ILR (2014) II Delhi 1288, a Division Bench of this Court has laid down the tests for award of damages, though in the context of disparaging advertisements. The Court has specifically upheld the procedure of using "rough and ready calculations" for award of damages. The relevant observation of the court is as under:
"63. In the present case, the plaintiff (Reckitt) has been able to prove, successfully, that HUL telecast the impugned 30 second advertisement on a large number of occasions (2763 times, to be precise, according to Ex. PW-1/19). The innuendo was cleverly designed to suggest that Reckitt's Dettol Original caused damage to the skin. The advertiser, CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 21 of 30 i.e. HUL, was conscious that it was crossing the boundary between permissible "puffing" and what was prohibited in law. The evidence on record, in the form of HUL's witnesses' testimony, is that Rs. 2.5 crores was spent in July 2007 alone for advertising its product. HUL also admitted during the trial that the Dettol Original brand was worth Rs. 200 crores. Such being the case, this Court holds that the Single Judge's reluctance to award general damages was not justified. It would be necessary to mention in this context that it may not be possible for an otherwise successful plaintiff, in a disparagement or slander of goods action to always quantify the extent of loss; there would necessarily be an element of dynamism in this, because of the nature of the product, the season it is sold in, the possible future or long term impact that may arise on account of the advertisement, etc. Therefore, courts the world over have resorted to some rough and ready calculations."
Thus the Court holds that general damages can be granted on the basis of rough and ready calculations. Insofar as punitive damages are concerned, the Court observed as under: -
"67. 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 Singh, (2004) 5 SCC 6; Lucknow Development Authority v. M.K. Gupta, 1994 SCC (1) 243). 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 CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 22 of 30 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. Furthermore-and perhaps most crucially-the punitive element of the 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).
68. This court is of the opinion that the impugned judgment fell into error in relyingon the decision in Times Incorporated v. Lokesh Srivastava 116 (2005) DLT 569. A Single Judge articulated, in his ex parte judgment in a trademark infringement action, as follows:
"This Court has no hesitation in saying that the time has come when the Courts dealing actions for infringement of trade-marks, copy rights, patents etc. should not only grant compensatory damages but award punitive damages also with a view to discourage and dishearten law breakers who CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 23 of 30 indulge in violations with impunity out of lust for money so that they realize that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them. In Mathias v. Accor Economy Lodging, Inc. reported in 347 F.3d 672 (7th Cir. 2003) the factors underlying the grant of punitive damages were discussed and it was observed that one function of punitive damages is to relieve the pressure on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution of minor crimes. It was further observed that the award of punitive damages serves the additional purpose of limiting the defendant's ability to profit from its fraud by escaping detection and prosecution. If a to tortfeasor is caught only half the time he commits torts, then when he is caught he should be punished twice as heavily in order to make up for the times he gets away. This Court feels that this approach is necessitated further for the reason that it is very difficult for a plaintiff to give proof of actual damages suffered by him as the defendants who indulge in such activities never maintain proper accounts of their transactions since they know that the same are objectionable and unlawful. In the present case, the claim of punitive damages is of Rs. 5 lacs only which can be safely awarded. Had it been higher even, this court would not have hesitated in awarding the same.
This Court is of the view that the punitive damages should be really punitive and not flee bite and quantum thereof should depend upon the flagrancy of infringement."
With due respect, this Court is unable to subscribe to that reasoning, which flies on the face of the CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 24 of 30 circumstances spelt out in Rookes and later affirmed in Cassel. Both those judgments have received approval by the Supreme Court and are the law of the land. The reasoning of the House of Lords in those decisions is categorical about the circumstances under which punitive damages can be awarded. An added difficulty in holding that every violation of statute can result in punitive damages and proceeding to apply it in cases involving economic or commercial causes, such as intellectual property and not in other such matters, would be that even though statutes might provide penalties, prison sentences and fines (like under the Trademarks Act, the Copyrights Act, Designs Act, etc) and such provisions invariably cap the amount of fine, sentence or statutory compensation, civil courts can nevertheless proceed unhindered, on the assumption that such causes involve criminal propensity, and award "punitive" damages despite the plaintiffs inability to prove any general damage. Further, the reasoning that "one function of punitive damages is to relieve the pressure on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution of minor crimes" is plainly wrong, because where the law provides that a crime is committed, it indicates the punishment. No statute authorizes the punishment of anyone for a libel-or infringement of trademark with a huge monetary fine which goes not to the public exchequer, but to private coffers. Moreover, penalties and offences wherever prescribed require the prosecution to prove them without reasonable doubt. Therefore, to say that civil alternative to an overloaded criminal justice system is in public interest would be in fact to sanction violation of the law. This can also lead to undesirable results such as casual and unprincipled and eventually CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 25 of 30 disproportionate awards. Consequently, this court declares that the reasoning and formulation of law enabling courts to determine punitive damages, based on the ruling in Lokesh Srivastava and Microsoft Corporation v. Yogesh Papat and Another, 2005 (30) PTC 245 (Del) is without authority. Those decisions are accordingly overruled. To award punitive damages, the courts should follow the categorization indicated in Rookes (supra) and further grant such damages only after being satisfied that the damages awarded for the wrongdoing is inadequate in the circumstances, having regard to the three categories in Rookes and also following the five principles in Cassel. The danger of not following this step by step reasoning would be ad hoc judge centric award of damages, without discussion of the extent of harm or injury suffered by the plaintiff, on a mere whim that the defendant's action is so wrong that it has a "criminal"
propensity or the case merely falls in one of the three categories mentioned in Rookes (to quote Cassel again-such event "does not of itself entitle the jury to award damages purely exemplary in character")."
21. 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: -
"(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 CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 26 of 30 exceed the compensation payable to the claimant; and
(c) Any case where exemplary damages are authorised by the statute."
22. 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."
25. In the present case, plaintiff has claimed that defendant used its trademark for exhibition and profited from its goodwill but there is no evidence to demonstrate that defendant earned profit by using the trademark of plaintiff. Plaintiff has relied on printouts of certain emails purportedly sent by the defendant but these printouts were not supported with the requisite certificate under Section 65B of the Indian Evidence Act and accordingly, the same cannot be read in evidence. Plaintiff claimed in an email dated 17.07.2009 sent to the defendant that one of its client exhibitors spoke to the executive of defendant on his mobile phone, who confirmed that defendant is organizing the exhibition IFDE INDIA. Plaintiff has mentioned in this email that the executive of the defendant disclosed during telephonic conversation with the client exhibitor that his company has taken over the exhibition from the previous organizer. Neither the client exhibitor nor any other person has been examined to substantiate these allegations. However, I do find substance in the submissions of the plaintiff CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 27 of 30 that defendant made an admission in its pleading that it has used the plaintiff's trademark as an abbreviated form of International Food & Drink Expo India 2009. The question that remains to be answered is whether plaintiff is entitled to punitive damages merely on account of the said admission? The answer is negative.
26. Defendant mentioned in its written statement that on isolated occasions, it has used the plaintiff's trademark as an abbreviation of its exhibition but clarified this aspect by mentioning that the usage was accidental and unintentional. Defendant claims to have stopped the said usage immediately after gaining knowledge that plaintiff is the registered owner of the trademark IFDE INDIA. Although, plaintiff has claimed that defendant continued to use its trademark but there is no evidence to substantiate this aspect. As observed earlier, Section 135 of the Trademarks Act, 1999 provides the relief which may be granted in a suit for infringement or passing-off of trademark. Section 135(1) provides that in such a suit, the court may apart from granting injunction also grants either damages or on account of profits, together with or without any order for delivery-up of the infringing label & marks for destruction or eraser. Section 135 (3) (b) & (c) of the Trademarks Act, 1999 are in a way exception to sub-clause (1) of Section 135 of the Act. Section 135 (3) (b) (i) provides that in a suit for infringement and passing-off, the court shall not grant relief by way of damages (other than nominal damages) or on account of profits, in those cases where the defendant satisfies the court that CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 28 of 30 at the time he commenced to use the trademark complained of, he was unaware and has no reasonable ground for believing that the trademark of the plaintiff was on the register or that the plaintiff was a registered user. Section 135 (b) (ii) of the Act carves out a similar exception in those cases where the defendant forthwith seized to use the trademark of the plaintiff after becoming aware of its existence.
27. In the present matter, defendant claims to have immediately discontinued the usage of the abbreviation IFDE after becoming aware of the fact that plaintiff is the registered owner of the trademark. Although, plaintiff has alleged that defendant was using its trademark intentionally to gain advantage from its goodwill but there is no evidence to substantiate this version. Plaintiff's version that defendant kept using its trademark for a considerable period of time has also not been substantiated. In the exhibition held in the year 2009, on the directions of the court, defendant displayed a disclaimer in its exhibition that it is in no way connected with or sponsored or organized by the plaintiff and it has no association with the plaintiff's trademark. Defendant has mentioned that it discontinued the usage of the trademark immediately after gaining information that plaintiff is the registered owner of the said trademark. Plaintiff has not produced any evidence to prove otherwise. In these circumstances, no case is made out for imposing punitive damages. At best, plaintiff is entitled to nominal damages. The judgments on which reliance has been placed by the CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 29 of 30 plaintiff are distinguishable as the same were passed in different sent of circumstances. In those case, there was blatant infringement of the trademark by the defendants coupled with the malafide. Both the said components are missing in the present case. Accordingly, I deem it expedient to grant only nominal damages to the tune of Rs.3,00,000/- (Rupees Three Lac only). Issue No.(vi) is decided in favour of plaintiff. In view of this, the suit stands decreed with the following relief:
i. Decree of damages to the tune of Rs.3,00,000/- (Rupees Three Lac only).
ii. Cost of the suit.
28. Decree-sheet be prepared accordingly.
29. File be consigned to Record Room after necessary compliance.
Announced in open Court on 27.07.2023 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal, New Delhi District, Patiala House Courts, New Delhi/27.07.2023 CS 57441/2016 M/s ITE India Pvt. Ltd. Vs M/s Tarsus Group Page 30 of 30