Delhi District Court
Samsung India Electronics Pvt. Ltd vs M/S Arvind Enterprises on 17 August, 2024
IN THE COURT OF SH.RAJ KUMAR TRIPATHI:
DISTRICT JUDGE (COMMERCIAL COURT)-08
SOUTH-EAST DISTRICT, SAKET COURTS, NEW DELHI
CS (COMM.) No.70/2020
(Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind
Enterprises & Ors.)
CNR No.DLSE01-000786-2020
1. Samsung India Electronics Private Limited
6th Floor, DLF Centre,
Sansad Marg, New Delhi-110001.
.........Plaintiff No.1
2. Samsung Electronics Company Limited
129, Samsung-ro, Yeongtong-gu,
Suwon-si, Gyeonggi-do,
Republic of Korea.
.........Plaintiff No.2
.........Plaintiffs
Through:- Mr. Tarang Aggarwal
along with Mr. Abhishek Arora, advocates.
VERSUS
1. M/s Arvind Enterprises
G-4, Eros Building, 56,
Nehru Place, New Delhi- 110019
(as amended vide order dated 04.11.2022)
.........Defendant No.1
2. M/s KG Communication
G-4, Manjusha Building,
Nehru Place, New Delhi-110 019.
.........Defendant No.2
3. M/s Amit Mobile Accessories
Nehru Place, New Delhi-110 019
(deleted from the array of parties vide order dated
04.11.2022)
.........Defendant No.3
CS (COMM.) No.70/2020
(Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.)
Page No. 1 of 23
4. Proprietor of Shop No.58
Sahyog Building,
Nehru Place, New Delhi-110 019
(deleted from the array of parties vide order dated
04.11.2022)
.........Defendant No.4
5. M/s Communication Point
G-4B, Manjusha Building,
57, Nehru Place, New Delhi-110 019.
(impleaded vide order dated 17.11.2023)
.........Defendant No.5
Date of filing of suit : 29.01.2020
Arguments heard on : 23.07.2024
Date of Judgment : 17.08.2024
JUDGMENT:
1.1 Plaintiffs have filed the present suit for permanent injunction inter alia praying for restraining the defendants from infringing the registered trade mark, passing off, delivery up, rendition of account of profits and damages with following reliefs:-
a. Pass an order of permanent injunction restraining all the defendants, their associates, partners, proprietors, servants, agents, legal heirs, as the case may be, their assigns in business, franchises, affiliates, subsidiaries, licensees and agents and all others in active concert or participation with them from selling, offering for sale, importing, advertising or from using in any manner whatsoever, directly or indirectly dealing in any products or services under the plaintiffs' registered trade mark/trade name "SAMSUNG" and/or any other mark/ logo or device, which is identical or deceptively CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 2 of 23 similar thereto by itself or in conjunction with any other word in relation to the goods, services or a trade name or part of a trade name in any manner whatsoever, on the counterfeit 'LEVEL U' and 'UFLEX' models headsets;
b. Pass an order of permanent injunction restraining all the defendants, their associates, partners, directors, principal officers, proprietors, servants, agents, legal heirs and all others in active concert or participation with them or any other person, from passing off the plaintiffs' trade mark/trade name 'LEVEL U' and 'UFLEX' or any other mark, identical/deceptively similar thereto, using it by itself or in conjunction with any other word in relation to the goods, services or trade name or part of a trade name or in any other manner whatsoever;
c. Pass an order directing the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India, not to allow import of counterfeit 'LEVEL U' and 'UFLEX' model headsets by the defendants, whether or not the said counterfeit products contain "SAMSUNG" trademark of the plaintiffs or any other mark identical/deceptively similar thereto; d. In the alternate to prayer (c), pass an order directing the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India that as and when any consignment is imported by the defendants, intimation thereof shall be given to the plaintiffs and objections, if any, of the plaintiffs thereto shall be decided under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007;
e. Pass an order for delivery up to the plaintiffs' attorneys or representatives by the defendants or for destruction of all infringing CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 3 of 23 products, labels, stickers, business cards, prints and packages in their possession or under their control, bearing the mark "SAMSUNG" by itself or in conjunction with any other word, or any simulation, reproduction, copy or colorable imitation of the plaintiffs' registered trade mark "SAMSUNG" on the counterfeit 'LEVEL U' and 'UFLEX' models headsets;
f. Pass an order for rendition of account of profits directly or indirectly earned by the defendants from the aforesaid infringing activities and wrongful conduct and a decree for the amount so found due to be passed in favor of the plaintiffs;
g. Pass a decree of damages for a sum of INR 5,00,000/- (Rupees Five Lakhs only) towards loss of sales, reputation and goodwill of the plaintiffs' trademarks, as caused by the illegal and unauthorized activities of the defendants and costs of the suit."
Factual matrix of the case 2.1 Plaintiff no.1 Samsung India Electronics Private Limited is a company incorporated in the year 1995 under the provisions of The Companies Act, 1956 having its registered office (i.e. the principal place of business) at 6th Floor, DLF Centre, Sansad Marg, New Delhi-110 001.
2.2 Plaintiff no.1 is a 100% wholly owned subsidiary of plaintiff no.2 and is a leading provider of high-tech consumer electronics and telecommunications products in India, enjoying leadership in several of the product categories that it is currently selling in the country.
2.3 Plaintiff no.2 Samsung Electronics Company Ltd. registered under the laws of the Republic of Korea, having its CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 4 of 23 registered office at 129, Samsung-ro, Yeongtong-gu, Suwon-si, Gyeonggi-do, Republic of Korean is one of the leading names in the world in respect of a wide variety of goods and services in the realm of electronic sector which are advertised and sold under the brand name "SAMSUNG". Plaintiff No.2 is the registered proprietor of the trade mark "SAMSUNG", which was adopted in the year 1969 and is presently being used in most jurisdictions of the world, including in India.
2.4 By virtue of the Trade Mark License and Registered User Agreement dated 08.07.2003, plaintiff no.2 has licensed the use of the trade mark "SAMSUNG" in India to plaintiff no.1. According to which plaintiff no.1 is declared to be a wholly owned subsidiary in India of plaintiff no.2. 2.5 The trade mark "SAMSUNG" forms an integral part of the plaintiffs' group of companies and has come to be identified solely and exclusively with the plaintiffs. 2.6 Defendants no. 1 to 4 are wholesale/retail importers and suppliers of mobile accessories and other mobile products and operate from their shops/establishments located at Nehru Place Market, New Delhi.
2.7 Plaintiffs aver that defendants are permitting use of, and using, in the course of trade by advertising, putting in the market, offering for sale and selling and importing counterfeit 'LEVEL U' and 'UFLEX' headsets containing "SAMSUNG" trade mark without the consent or permission of the plaintiffs. Defendants are also connected to each other and are carrying the illegal activities in connivance and conspiracy with each other. 2.8 Plaintiffs claim that by virtue of extensive use, sale CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 5 of 23 and promotion of its goods and services under the "SAMSUNG" trade mark, the said trade mark has become a household name in India. From the aforesaid and also as per the provisions of the Trade Marks Act, 1999, the "SAMSUNG" trade mark qualifies to be a well-known trade mark in terms of Section 2 (1)(zg) of the Trade Marks Act, 1999.
2.9 Plaintiff no.2 worldwide owns sixteen registrations for its trademark "SAMSUNG" under various classes being Class No. 7, 9, 11, 14, 35, 36, 37, 38, 39, 40, 42 and 45, details of which are given in para no.10 of the plaint. 2.10 It is submitted that the aforesaid trade marks registrations of the plaintiff no.2 are valid and subsisting till date. Further, by virtue of the said registrations, plaintiff no.2 has the exclusive right to use the above listed trade marks in relation to the goods and services for which the trade marks are registered and to take action for infringement in accordance with applicable law. Plaintiffs claim that through such extensive use, advertisement and the excellent quality of goods sold there under, the trade mark "SAMSUNG" has exclusively been identified with their business activities.
2.11 Plaintiffs' brand has been ranked as the 19th Best Brand with a total brand value of more than US $19,491 Million in the year 2010 and ranked sixth in 2017 with brand value of US $56,249 Million as valued by Interbrand, the premier brand consultancy. Further, as per Global 500, plaintiff no.2 has been valued at US $66,218 Million, while in technology sector, the plaintiffs' group of company, i.e., Samsung Electronics has been ranked as 15th largest electronic company in the Fortune 500 list.
CS (COMM.) No.70/2020(Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 6 of 23 2.12 It is averred that the overall revenue, advertising & publicity expenses of plaintiff no.1 for the last 5 years are as under:-
Financial Revenue Advertising & Sales Promotion Year (INR Expenses Million) (INR Million) 2018-19 706,277 30,940 2017-18 593,709 37,491 2016-17 545,313 29,528 2015-16 463,788 21,585 2014-15 388,681 21,220 2.13 Plaintiffs "SAMSUNG" LEVEL U and UFLEX headsets operate on wireless technology connecting via bluetooth to various other devices over short distances. Plaintiff No.1's group net sales figure for the "SAMSUNG" LEVEL U headsets has been 25 lakhs in the last 4 years and for "SAMSUNG" UFLEX headsets has been 2 lakhs till date. 2.14 Plaintiffs aver that somewhere in the last week of November, 2019, he became aware of the fact that certain shop owners were advertising, offering for sale and selling counterfeit copies of "SAMSUNG" LEVEL U and UFLEX models from their shops located in the Nehru Place market, New Delhi. The said advertisement and sales were being done by defendants without any authorization or permission from plaintiffs. The aforesaid illegal activities of defendants have been causing confusion in the minds of the public, owing to the identity of the mark and the goods being sold by the defendants, by using the trade mark identical to "SAMSUNG" trade mark on counterfeit CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 7 of 23 copies of LEVEL U and UFLEX models of the plaintiffs' headsets.
2.15 Immediately upon obtaining knowledge of such illegal activities being carried out in the Nehru Place Market, New Delhi, plaintiffs through an independent investigative agency, conducted a ground investigation/market survey with respect to the counterfeit headsets (models LEVEL U and UFLEX) being illegally sold under the brand name "SAMSUNG". The said ground investigation/market survey revealed that a series of entities/individuals (i.e. the defendants herein) were found to be engaged in identical and illegal activities of advertising, putting in the market, offering for sale and selling counterfeit copies of 'LEVEL U' and 'UFLEX' model headsets containing the trade mark "SAMSUNG". It was further revealed that defendants were selling the above-mentioned counterfeit products at a very low price and without issuance of proper invoices/bills. While the original models of the 'LEVEL U' and 'UFLEX' model headsets sell in the market for around 2,999/- and 3,799/- respectively, the counterfeit copies of the same were being sold between Rs.500/- to Rs.1,000/-.
Defendants offered for sale the said counterfeit products on 'no exchange' and 'no warranty' basis. Furthermore, it was revealed that there were material and significant deviations on the packaging and labeling of the counterfeit products as compared to their respective originals.
2.16 On 10.12.2019, the investigator submitted his report with the plaintiffs, which revealed as under:-
i) The first defendant is selling counterfeit 'LEVEL U' CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 8 of 23 headsets for INR 700 and 'UFLEX' headsets for INR 1250, both under the brand name "SAMSUNG", with an estimated available stock of 12 pieces (approx.);
ii) The second defendant is selling counterfeit 'LEVEL U' headsets for INR 860 and 'UFLEX' headsets for INR 1500, both under the brand name "SAMSUNG", with an estimated available stock of 10 pieces (approx.);
iii) The third defendant is selling counterfeit 'LEVEL U' headsets for INR 1300 and 'UFLEX' headsets for INR 2300, both under the brand name "SAMSUNG", with an estimated available stock of 6 pieces (approx.); AND
iv). The fourth defendant is selling counterfeit 'LEVEL U' headsets for INR 800 and 'UFLEX' headsets for INR 1800, both under the brand name "SAMSUNG", with an estimated available stock of 10 pieces (approx.).
2.17 On the basis of aforesaid investigation report, plaintiffs allege that all the defendants were/are engaged in the sale of counterfeit 'LEVEL U' and 'UFLEX' headsets under the brand name "SAMSUNG", by affixing stickers bearing trademark "SAMSUNG" on them. Plaintiffs laid emphasis on the conclusion of the investigation report as per which the defendants are mainly dealing in bulk and retail selling of all electronic supply and seen circulating the products to other retailers inside and outside New Delhi NCR and North India.
2.18 Plaintiffs aver that all the defendants are/were believed to be either importers, wholesale suppliers or retailers of mobile accessories, who are/were importing and/or selling counterfeit copies of 'LEVEL U' as well as 'UFLEX' headsets CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 9 of 23 bearing plaintiffs' registered and well-known trade mark "SAMSUNG" without their consent or permission. The said import of counterfeit 'LEVEL U' as well as 'UFLEX' headsets being undertaken by defendants is also in violation of The Customs Act, 1962. Neither of defendants are the authorized dealers/licensees of the plaintiffs and as such are not authorized to sell, offer for sale or otherwise deal with the products of the plaintiffs.
2.19 It is stated that use of such stickers by all the defendants on counterfeit 'LEVEL U' and 'UFLEX' headsets bearing the plaintiffs' registered trademark "SAMSUNG", clearly amounts to infringement of its registered trade mark and passing off its goods, being sold under the provisions of The Trade Marks Act, 1999.
2.20 Plaintiffs contend that defendants' act of selling, supplying, distributing and/or offering for sale, counterfeit "SAMSUNG" branded LEVEL U and UFLEX headsets clearly amounts to passing off the said products as the plaintiffs' genuine "SAMSUNG" branded products since:
• Defendants are using the trademark "SAMSUNG" owned by plaintiffs in the exact stylized manner; and • The counterfeit "SAMSUNG" branded LEVEL U and UFLEX headsets are being sold as being those manufactured by the plaintiffs and the acts of defendants apart from causing gross misrepresentation also serve to dilute and tarnish the plaintiffs' well-known trademark CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 10 of 23 "SAMSUNG".
2.21 On the aforesaid averments, plaintiffs instituted the present suit against defendants.
Defendants are ex parte 3.1 Vide order dated 30.01.2020, on the application of plaintiffs under Order XXVI Rule 9 and 10, Order XXXIX Rule 7 r/w section 151 CPC and section 135 of The Trade Marks Act, 1999, to ascertain the alleged acts of infringement/passing off by defendants in respect of products of plaintiffs and actual quantity of the products lying with them, two Local Commissioners were appointed to visit the premises identified by plaintiffs, where offending activities were being carried out by or on behalf of defendants or where the infringing goods/material were expected to be found.
3.2 Pursuant to the directions of the court, the learned Local Commissioners visited the premises of defendants on 06.02.2020 and executed the commission at the premises i.e. (a) M/s AB Infotech (now changed to Arvind Enterprises), (b) M/s Communication Point (John Doe) and (c) M/s KG Communication. After inspection, the learned Commissioners have submitted their report which form part of record. 3.3 On the application of plaintiffs under Order I Rule 10 CPC , defendants no.3 and 4 were directed to be deleted from the array of parties vide order dated 12.03.2020. 3.4 Pursuant to summons issued to defendants, they did not appear to contest the suit. As defendants did not file their CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 11 of 23 response to the suit within stipulated time, opportunity given to defendants no.1, 2 and 5 to file written statement was closed on 03.10.2023, 16.05.2023 and 15.04.2024 respectively. 3.5 Due to non-appearance of defendants no.1, 2 and 5, they were directed to be proceeded ex parte i.e. defendant no.2 on 16.05.2023 and defendants no.1 and 5 on 15.04.2024. Evidence of plaintiffs 4.1 To prove its case, plaintiffs examined Mr. Praveen Sangwan, AR as PW1, who filed his evidence by way of affidavit, Ex.PW1/A, wherein, he has reiterated and reaffirmed the same facts as mentioned in the plaint.
4.2 Before coming to the testimony of PW1 Mr. Praveen Sangwan, the documents relied upon by him are hereby put in a tabulated form as under:-
S.No. Details of Documents Exhibit Marks
1. Copy of Power of Attorneys dated Ex.PW1/1 and 28.10.2016 and 31.01.2019 issued by Ex.PW1/2 plaintiff no.1 and 2 respectively.
2. Copy of the Trademark License and Mark X Registered User Agreement dated 08.07.2003.
3. Computer copy of the document Ex.PW1/4 containing the plaintiff's history.
4. Computer generated copy of Ex.PW1/5 to documents evidencing registration Ex.PW1/36 status of trademark "SAMSUNG" respectively.
under various Classes alongwith Registration Certificate.
5. Legal Proceedings Certificates Ex.PW1/37
6. Computer generated documents Ex.PW1/38 elucidating the Best Global Brands and 2017 Rankings and Best Global Brands Ex.PW1/39 CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 12 of 23 2019 Rankings.
7. Copy of CA Certificate verifying the Ex.PW1/40 above mentioned figures
8. Computer generated document Ex.PW1/41 elucidating plaintiff business activities which highlight their dealing in 'Level U' and 'Uflex' headsets.
9. Copy of Investigation report dated Ex.PW1/42 10.12.2019
10. Local Commissioner's Reports dated Ex.PW1/43 13.02.2020 (colly)
11. Certificate under Section 65-B of The Ex.PW1/44 Indian Evidence Act, 1872.
Findings and Observations 5.1 I have heard and considered the submissions advanced by learned counsel for plaintiffs and perused the material on record.
5.2 PW1 Mr. Praveen Sangwan in his affidavit of evidence, Ex.PW1/A has deposed and corroborated about the facts as mentioned in the plaint. He has proved the documents as mentioned in para no.4.2 of the judgment.
5.3 PW1 Mr. Sangwan in his affidavit of evidence, Ex.PW1/A has deposed that through extensive use, advertisement and excellent quality of goods sold thereunder, the trade mark 'SAMSUNG' has exclusively been identified with plaintiff's business activities. The overall revenue, advertising and publicity expenses of PW1 for the last five years is as follows:-
Financial Revenue Advertising & Sales
Year (INR Promotion Expenses
Million) (INR Million)
2018-19 706,277 30,940
CS (COMM.) No.70/2020
(Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 13 of 23 2017-18 593,709 37,491 2016-17 545,313 29,528 2015-16 463,788 21,585 2014-15 388,681 21,220 5.4 He deposed that the above figures have been taken from the books of account and record maintained by plaintiff no.1 in the ordinary course of its business and have been verified to be accurate in nature. He proved the CA Certificate verifying the above mentioned figures as Ex.PW1/40. 5.5 Mr. Sangwan further deposed that in the last week of November, 2019, plaintiffs became aware of the fact that certain shop owners were advertising, offering for sale and selling counterfeit copies of "SAMSUNG" LEVEL U and UFLEX models from their shops located in the Nehru Place Market, New Delhi. He also deposed that immediately upon knowing of such illegal activities being carried out by defendants, the plaintiffs, through an independent investigative agency, conducted a ground investigation/market survey with respect to the counterfeit headsets (models LEVEL U and UFLEX) being illegally sold under the brand name "SAMSUNG". He further deposed that original models of the 'LEVEL U' and 'UFLEX' model headsets sell in the market for around 2,999/- and 3,799/- respectively. The counterfeit copies of the same were being sold between Rs.500/- to Rs.1,000/-. Defendants offered for sale the said counterfeit products on 'no exchange' and 'no warranty' basis. The documents elucidating plaintiffs business activities which highlight their dealing in 'LEVEL U' and 'UFLEX' headsets have been proved as Ex.PW1/41. He further proved the CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 14 of 23 investigation report dated 10.12.2019 as Ex.PW1/42. 5.6 PW1 further deposed that post-receipt of the investigation report, plaintiffs also carried out a physical verification of the counterfeit products being sold by the defendants on the sample purchases made by the investigator and provided to the plaintiffs. The plaintiffs undertook their investigation with the support of their technical experts and concluded that all the products were counterfeit since it was evident that, among others, the products were much lighter in weight and with lesser strength as compared to their respective originals. The details of counterfeit products seized by learned Local Commissioners form part of their report dated 13.02.2020 is Ex.PW1/43. PW1 has also proved the Certificate u/s 65B of The Indian Evidence Act, 1872.
5.7 PW1 has further deposed that defendants' act of selling, supplying, distributing and/or offering for sale, counterfeit "SAMSUNG" branded LEVEL U and UFLEX headsets clearly amounts to passing off the said products as the plaintiffs' genuine "SAMSUNG" branded products which have caused immense loss to the reputation and goodwill to the plaintiffs and plaintiffs are entitled to exemplary/punitive damages to the tune of notional value of Rs.5,00,000/-. 5.8 The aforesaid deposition of PW1 as mentioned in his affidavit of evidence, Ex.PW1/A and the averments made in the plaint have gone unrebutted and unchallenged as defendants have not cross-examined plaintiff's witness in respect of the deposition and averments made by him. The case of plaintiff is based on documentary evidence. The documents proved by PW1 Mr. CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 15 of 23 Praveen Sangwan have not been disputed and denied by defendants and thus, they remained unchallenged. 5.9 Section 29 of The Trade Marks Act, 1999 which deals with infringement of registered trade marks is reproduced herein below for ready reference:-
"29. Infringement of registered trade marks.--
(1) A registered trade mark 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 trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.
(2) A registered trade mark 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 because of--
(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or
(b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or
(c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark. (3) In any case falling under clause (c) of sub-
section (2), the court shall presume that it is likely to cause confusion on the part of the public.
(4) A registered trade mark 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-
(a) is identical with or similar to the registered trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and
(c) the registered trade mark has a reputation CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 16 of 23 in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.
(5) A registered trade mark is infringed by a person, if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.(6) For the purposes of this section, a person uses a registered mark, if, in particular, he--
(a) affixes it to goods or the packaging thereof;
(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;
(c) imports or exports goods under the mark; or
(d) uses the registered trade mark on business papers or in advertising.
(7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.
(8) A registered trade mark is infringed by any advertising of that trade mark if such advertising--
(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or
(b) is detrimental to its distinctive character; or
(c) is against the reputation of the trade mark. (9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly."
5.10 As per section 29 (1) of The Trade Marks Act, 1999 any unauthorized use of registered trade mark will itself amount CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 17 of 23 to infringement. Accordingly, the sale of counterfeit 'LEVEL U' and 'UFLEX' headsets by defendant no.1, 2 and 5 being the registered trade mark belonging to plaintiffs, without plaintiffs authorization, amounts to infringement u/s 29 (1) r/w section 29 (6) of The Trade Marks Act, 1999. In the case of Philip Morris Products vs. Sameer & Others (2014) SCC OnLine Del 1077, it was observed as under:-
"34. Counterfeits, which are not the genuine products manufactured by the plaintiffs/affiliates, but are sold by the said defendants under the suit trade marks as plaintiffs' original products, indeed infringe plaintiffs' rights in the suit trade marks under section 29 of the Act."
5.11 From the material available on record, it is apparent that the acts of defendants no.1, 2 and 5 of selling, supplying, distributing and/or offering for sale, counterfeit SAMSUNG branded 'LEVEL U' and 'UFLEX' headsets clearly amounts to passing off the said products as plaintiff's genuine 'SAMSUNG' branded products owned by plaintiffs in the exact style and manner and counterfeit 'SAMSUNG' branded 'LEVEL U' and 'UFLEX' headsets as being those manufactured by plaintiffs and the acts of defendants apart from causing gross mis- representation also serve to dilute and tarnish the plaintiffs well known trade mark 'SAMSUNG' besides undermining the reputation and goodwill of the plaintiffs in the market. 5.12 By using plaintiff's well known trade mark 'SAMSUNG', without obtaining its consent (the registered proprietor of the suit trade mark), the above named defendants i.e. defendants no.1, 2 and 5 are wrongfully benefiting from the CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 18 of 23 goodwill maintained by the plaintiffs in the suit trade mark besides passing off the business and counterfeit goods as those of plaintiffs and thereby deceiving the consumers by selling counterfeit and poor quality 'LEVEL U' and 'UFLEX' headsets under the garb of plaintiff's well known trade mark. 5.13 In view of foregoing reasons and discussions, I am of the considered view that plaintiffs have succeeded to prove their case and have made out a case for grant of permanent injunction in their favour and against the defendants. 5.14 Besides praying for the relief of permanent injunction, plaintiffs have also prayed for an order for delivery up to plaintiffs attorneys or representatives by defendants no.1, 2 and 5 or for destruction of all infringing products labels, stickers, business cards, prints and packages in their possession or under their control bearing the mark 'SAMSUNG' on the counterfeit 'LEVEL U' and 'UFLEX' model headsets.
5.16 Subsequent to order dated 30.01.2020, when a Local Commissioner visited the premises of defendants no.1 and 5, the following infringing products were recovered:-
Defendant Infringing Products Recovered Defendant no.1 • 6 items of LEVEL U M/s Arvind Enterprises (earlier • 2 items of UFLEX known as AB Infotech) (Exhibit PW-1/43 @ Pg 11 of the LC Report) Defendant no.5 • 4 units of LEVEL U M/s Communication Point • 2 units of UFLEX (Exhibit PW1/43 @ Pg 15 of the LC Report) 5.17 The following infringing products were recovered CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 19 of 23 from the premises of defendant no.2 at the time of visit of the Local Commissioner:-
Defendant Infringing Products Recovered Defendant no.2 • 3 units of LEVEL U M/s KG Communication • 2 units of UFLEX (Exhibit PW-1/43 @ Pg 13 and 15 of the LC Report) 5.18 The aforementioned infringing products which were recovered from the possession of defendants were given on Superdari to Mr. Vicky, representative of plaintiffs. The said order of superdari in respect of products seized by Local Commissioners is directed to be cancelled. 5.19 Plaintiffs in para no.(c) and (d) of the prayer clause have prayed for directions against Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, Government of India. The said relief cannot be granted to plaintiffs as they have failed to prove the import of counterfeit 'LEVEL U' and UFLEX model headsets by defendants. 5.20 Plaintiffs have further prayed for an order of rendition of accounts in para (f) of the prayer clause. This relief also cannot be granted to plaintiffs since defendants are ex parte and they have chosen not to participate in the proceedings of the present case.
5.21 Lastly, plaintiffs have prayed for a decree of damages for a sum of Rs.5,00,000/- towards loss of sales, reputation and goodwill of their trade marks as caused by the illegal and unauthorized activities of defendants. In the case of Hero Honda Motors Ltd. vs. Shree Assuramji Scooters 125 (2005) DLT 505, wherein, defendants chose to stay away from CS (COMM.) No.70/2020 (Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 20 of 23 the proceedings and relief for grant of rendition of accounts was not possible, it was held by Hon'ble High Court that in such cases, plaintiff ought to be granted damages (compensatory and punitive) as sought for in the suit. It was held as follows:-
"14. It is trite to say that the defendant has deliberately stayed away from the proceedings with the result that an enquiry into the accounts of the defendant for determination of damages cannot take place. However, the infringement of the trademark of the plaintiff as also its logo is not in dispute. The plaintiff has claimed token damages and compensation of Rs. 5 lakhs as it was not possible to determine the exact nature of damages at the stage of filing of the suit. The attention of this Court has been drawn to a number of judgments in this behalf where dealing with similar situations, damages have been awarded.
18. I am in agreement with the aforesaid submission of learned counsel for the plaintiff that damages in such cases must be awarded and a defendant, who chooses to stay away from the proceedings of the Court, should not be permitted to enjoy the benefits of evasion of court proceedings. Any view to the contrary would result in a situation where the defendant who appears in Court and submits its account books would be liable for damages, while a party which chooses to stay away from court proceedings would escape the liability on account failure of the availability of account books. A party who chooses to not participate in court proceedings and stay away must, thus, suffer the consequences of damages as stated and set out by the plaintiff. Of course, this would not imply that the plaintiff would be entitled to any figure quoted by it which may be astronomical. The figure of Rs.5 lakhs as damages can hardly be said to be astronomical keeping in mind the nature of deception alleged by the plaintiff which not only causes direct loss to the plaintiff, but also affects the reputation of the plaintiff by selling sub-standard goods in the market where the public may be deceived in buying the goods thinking the same to be that of the plaintiff. There is a larger public purpose involved to discourage such parties from indulging in such acts of deception and, thus, even if the same has a punitive element, it must be granted."CS (COMM.) No.70/2020
(Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 21 of 23 5.22 In the case of Hindustan Uniliver Limited vs. Reckitt Benckiser India Ltd. 2014 SCC OnLine Del 490, it was observed that courts usually grant notional or compensatory damages unless there are extenuating circumstances and overwhelming evidence of wrong doing, when punitive damages can be awarded. In such cases, procedure of using rough and ready calculation for award of damages can be adopted. 5.23 In the present case, defendants would be identified as first time knowing infringer since there is no evidence on record that there is repeated infringement. As a result, the proportionate award in favour of plaintiff will be injunction and partial costs. Reliance is placed upon Koninlijke Philips and Others vs. Amazestore and Others 2019 DHC 2185. 5.24 In the case in hand, plaintiffs have paid court fees of Rs.7,500/-. They have also spent Rs.1,00,000/- (Rs.50,000/-per Local Commissioner) towards expenses for inspection of premises for seizure of infringing products. Plaintiffs have also paid fees to their advocate for fighting the litigation against defendants. In view of above, this court considers it fit that interest of justice would be subserved, if plaintiffs are awarded cost of Rs.1,75,000/- as litigation cost. 5.25 For the aforesaid reasons and discussions, the suit of plaintiff is partly decreed. A decree of permanent injunction, in terms of prayer clause 35 (a) and (b) of the plaint as well as cost of Rs.1,75,000/- is granted in favour of plaintiffs and against the defendants no.1, 2 and 5.
CS (COMM.) No.70/2020(Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 22 of 23 6.1 Decree sheet be prepared accordingly. 7.1 File be consigned to Record Room.
Announced in the open court (RAJ KUMAR TRIPATHI) Dated: 17.08.2024 District Judge (Commercial Court)-08, South-East District, Saket Courts, New Delhi.
CS (COMM.) No.70/2020(Samsung India Electronics Pvt. Ltd. & Anr. vs. M/s Arvind Enterprises & Ors.) Page No. 23 of 23