Delhi District Court
Samsung India Electronics Pvt Ltd And ... vs M/S Fantasy And Others on 20 September, 2023
IN THE COURT OF Sh. ANURAG SAIN,
DISTRICT JUDGE, (COMMERCIAL COURT)-01,
PATIALA HOUSE COURT, NEW DELHI
CS (COMM) 243/2020
1.SAMSUNG INDIA ELECTRONICS PRIVATE LIMITED 6th Floor, DLF Centre, Sansad Marg, New Delhi-110001.
Through its Authorized Representative Mr. Praveen Sangwan.
2. SAMSUNG ELECTRONICS COMPANY LIMITED 129, Samsung-ro, Yeongtong-gu Suwon-si, Gyeonggi-do, Republic of Korea, Through its Authorized Representative, Mr. Praveen Sangwan ...Plaintiffs.
Vs.
1. M/S FANTASY Shop No.04, Palika Bazar, New Delhi-110001.
2. M/s Click Provision and Photo Shoppe Shop No.236, Palika Bazar, New Delhi-110001.
3. M/s THE PYRAMID Shop No.35, Palika Bazar, New Delhi-110001.
4. M/s Om Sai International, Shop No.194 Palika Bazar, New Delhi-110001.
...Defendants.
Date of institution of the case : 31.01.2020 Date on which judgment was reserved : 06.09.2023 Date of pronouncement of the judgment : 20.09.2023 Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.1 of 16 Appearance: Sh. Tarang Aggarwal and Ms. Ashima Aggarwal,Ld. Counsels for plaintiffs.
Defendant No.2 is already exparte.
Judgment
1. This is a commercial suit brought by the plaintiffs for permanent injunction restraining the defendants from infringement of trademarks of the plaintiffs, passing off, delivery up, rendition of accounts and damages.
2. Initially the suit was filed against five defendants. During the course of proceedings, suit stands compromised between the plaintiffs, defendant no.1 M/s Fantasy, defendant no.3 M/s The Pyramid and Defendant no.4 Proprietor of shop no.194. However, the plaintiffs arrayed defendant no.5 Ashok Kumar on John Does principle as applicable in India, thus, plaintiffs dropped their suit against defendant no.5. Thus, the present suit survives against defendant no.2 M/s Click Provision and Photo Shoppe only.
3. Brief facts of the case are that Plaintiff No. 1, Samsung India Electronics Private Limited is a company incorporated in the year 1995 under the provisions of Companies Act, 1956 and has its registered office (i.e., the principal place of business) at 6 th Floor, DLF Centre, Sansad Marg, New Delhi- 110001 and is stated to be 100% wholly owned subsidiary of the Plaintiff No. 2.
4. It is contended that the second plaintiff, Samsung Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.2 of 16 Electronics Company Limited is a Company registered under the laws of the Republic of Korea, having its registered office at 129, Samsung-ro, Yeongtong-gu, Suwon-si, Gyeonggi-do, Republic of Korean and 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". It is averred that plaintiff no.2 adopted the trademark "SAMSUNG" and in the year 1969 in most jurisdictions of the world, including India.
5. The plaintiffs have invested enormous amounts of resources, capital, efforts, etc. on seeking registration of "SAMSUNG" trademark with respect to different goods and services in various classes for expanding its business worldwide. Being the registered proprietors of the said trademark in relation to goods and services, and are conferred with certain exclusive rights regarding use of the said trademark. Plaintiff's logo has become a familiar mark in the eyes of public at large and has acquired great reputation due to quality of its goods and services.
6. In the last week of November 2019, plaintiffs became aware of the fact that counterfeit copies of 'LEVEL U' and 'UFLEX' model headsets under the trademark "SAMSUNG" were being sold by the defendants on a large scale in the Palika Bazar, New Delhi, thus, constituting infringement of plaintiffs registered trademark "SAMSUNG". On investigation through independent agency, it is revealed that the defendants had been Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.3 of 16 widely involved in advertising, offering for sale and selling counterfeit copies of "SAMSUNG" branded "LEVEL U" and 'UFLEX' model headsets, which are identical to the plaintiffs' original LEVEL U" and 'UFLEX' model headsets for which the trademark "SAMSUNG" is registered.
7. The also claims that by virtue of the Plaintiffs' extensive use, sale and promotion of its goods and services under the"SAMSUNG" trademark, the said trademark has become a household name in India. From the aforesaid and also as per the provisions of the Trade Marks Act, 1999, the "SAMSUNG" trademark qualifies to be a well-known trademarks in terms of Section 2 (1)(zg) of the Trade Marks Act, 1999 respectively.
8. It is further stated that worldwide, the Plaintiff No. 2 owns 16 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 mentioned in para 10 of the plaint.
9. The acts and omissions on the part of defendants have been unauthorized and detrimental to the interest of the plaintiffs; causing confusion in the minds of the public owing to the source and identity of the mark and causing loss due to spurious quality of goods diluting the reputation and goodwill of the plaintiffs in the eyes of consumers and general public. The said products are being sold by the said shopkeepers at a very low price and without issuance of proper invoice/bill, thus causing loss of Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.4 of 16 revenue also to the Government. The original models of 'LEVEL U" and 'UFLEX' headsets are being sold by the authorized dealers of the plaintiffs for around 2,999/- and 3,799/- whereas the counterfeit copies of the same are being sold in the region between Rs.500/- to Rs.1,000/-. These sellers have been offering the sale of said counterfeit products on 'no exchange' and 'no warranty' basis, which reaffirms the fact that the products being sold by them are counterfeit in nature. The statutory and common law rights of the plaintiffs are at stake. Besides, there is loss to the consumers and to the Government.
10. The trademarks registrations of the Plaintiff No. 2 are stated to be valid and subsisting till date and it is submitted that by virtue of the said registrations, the Plaintiff No. 2 has the exclusive right to use the trademarks in relation to the goods and services for which the trademarks are registered and to take action for infringement in accordance with applicable law. It is also submitted that through such extensive use, advertisement and the excellent quality of the goods sold thereunder, the trademark "SAMSUNG" has exclusively been identified with the Plaintiffs' business activities
11. Plaintiffs placed reliance upon the report of its investigator dated 10.12.2019, the contents of which are reproduced as under:
i). The First Defendant is selling counterfeit 'LEVEL U' headsets for INR 1050 and 'UFLEX' headsets for INR 2000, both under the brand name "SAMSUNG", with an estimated available stock of 10 pieces (approx.);
Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.5 of 16
ii). The Second Defendant is selling counterfeit 'LEVEL U' headsets for INR 960 and 'UFLEX' headset for INR 1350, both under the brand name "SAMSUNG", with an estimated available stock of 12 pieces (approx.);
iii). The Third Defendant is selling counterfeit 'LEVEL U' headsets for INR 850 and 'UFLEX' headsets for INR 1050, both under the brand name "SAMSUNG",with an estimated available stock of 6 pieces (approx.);
iv). The Fourth Defendant is selling counterfeit 'LEVEL U' headsets for INR 850 and 'UFLEX' headsets for INR 1100, both under the brand name "SAMSUNG", with an estimated available stock of 5 pieces (approx.).
12. It is further submitted that all the Defendants are believed to be either importers, wholesale suppliers or retailers of mobile accessories,who are importing and/or selling counterfeit copies of 'LEVEL U' as well as 'UFLEX' headsets bearing the Plaintiffs' registered and well-known trademark "SAMSUNG" without the consent or permission of the Plaintiffs and that neither of the 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.
13. It is further submitted that the use of such stickers by all the Defendants on counterfeit 'LEVEL U' and 'UFLEX' headsets bearing the Plaintiffs' registered trademark "SAMSUNG", clearly amounted to infringement of the Plaintiffs' registered trade mark and passing off of the Plaintiffs' goods, being sold under the provisions of the Trade MarksAct, 1999. In addition to this, the 'LEVEL U' and 'UFLEX' head sets being sold by the Defendants under the brand "SAMSUNG" are Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.6 of 16 counterfeit products, which do not originate from that of the Plaintiffs,which is also evident from the fact that all the Defendants selling them,do not provide any 'exchange' or 'warranty', after sale of such products.
14. Plaintiffs further contended that the 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:
• The Defendants are using the trademark "SAMSUNG" owned by the 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 herein and the acts of the Defendants apart from causing gross misrepresentation also serve to dilute and tarnish the Plaintiffs' well-known trademark "SAMSUNG".
15. Hence, the Plaintiffs have filed the instant case.
16. On an application moved by the under Order 39 Rule 1 and 2 and under Order 26 Rule 9 r/w Section 151 CPC, after hearing the arguments, vide order dated 31.01.2020, keeping in view the facts and circumstances of the case, finding the case of the plaintiffs prima facie strong on merits and observing that in case injunction was not granted, it would suffer irreparable loss Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.7 of 16 and its goodwill would be frittered, restrained the defendants their associates, partners, proprietors, servants, agents, legal heirs etc. from selling, advertising or otherwise dealing with the plaintiff's products under the trademark/trade name "SAMSUNG" or any other mark/logo or device, which is similar to the plaintiff's registered trademark, 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, till further orders.
17. Two Local Commissioners were also appointed to inspect the premises of the defendants and take into custody all the impugned goods Inspect the premises and take into custody the impugned goods, sign boards, advertisement materials etc. bearing the impugned trademark/trade name or any other trademark/trade name deceptively similar to the Plaintiffs' said trademark/trade name and make inventory thereof.
18. I have perused the report of Local Commissioner, who had visited the shop of defendant no.2. As per report, the shop of defendant no.2 comprises two sub-units. One sub unit sells toys and clothes for children, whereas the other unit sells electronic product. However, it is reported that no Samsung product was found in the said shop.
19. Defendant no.2 was duly served dasti with the summons of suit on 10.02.2020. As neither the defendant no.2 appeared nor filed any written statement, hence, defence of defendant no.2 was struck off vide order dated 05.11.2020 and Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.8 of 16 thereafter he was proceeded exparte vide order dated 23.02.2021 by ld. Predecessor of this Court.
20. In order to prove its case, examined Sh.Praveen Sangwan, AR of the as PW-1. He tendered his affidavit Ex.PW- 1/A in evidence and proved the following documents:
S. Document Exhibit
No
1 Power of Attorney dated 28.10.2016 Ex.PW1/1
2 Power of Attorney dated 31.01.2019 Ex. PW1/2
3 Trademark License and Registered Ex.PW-1/3
User Agreement dated 08.07.2003
4. The document containing plaintiff's Ex.PW-1/4 history
5. Registration status of trademark Ex.PW-1/5
6. Registration certificate bearing Ex.PW-1/6 no.368564
7. Document evidencing registration Ex.PW-1/7 status of trademark "SAMSUNG"
8. Registration certificate bearing Ex.PW-1/8 no.368562
9. Registration status of trademarkof Ex.PW-1/9 trademark "SAMSUNG"
10. Registration certificate bearing Ex.PW-1/10 no.368563
11. Document evidencing registration Ex.PW-1/11 status under class 7 12 Registration certificate bearing Ex.PW-1/12 no.370918
13. Document evidencing registration of Ex.PW-1/13 trademark "SAMSUNG" status under Calss 7
14. Registration certificate bearing Ex.PW-1/14 no.591127 Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.9 of 16
15. Document evidencing registration of Ex.PW-1/15 trademark "SAMSUNG" status under Class 9
16. Registration certificate bearing Ex.PW-1/16 no.591128
17. Document evidencing registration of Ex.PW-1/17 trademark "SAMSUNG" status under Class 11
18. Registration certificate bearing Ex.PW-1/18 no.591126
19. Document evidencing registration of Ex.PW-1/19 trademark "SAMSUNG" status under Class 16
20. Registration bearing no.591306 Ex.PW-1/20 21 Document evidencing registration of Ex.PW-1/21 trademark "SAMSUNG" status under Class 14 22 Registration certificate bearing Ex.PW-1/22 No.757092
23. Document evidencing registration of Ex.PW-1/23 trademark "SAMSUNG" status under Class 7
24. Registration cerificate bearing Ex.PW-1/24. no.105554
25. Document evidencing registration of Ex.PW-1/25 trademark "SAMSUNG" status under Class 9
26. Registration certificate bearing Ex.PW-1/26 no.1055555
27. Document evidencing registration of Ex.PW-1/27 trademark "SAMSUNG" status under Class 11
28. Registration certificate bearing no. Ex.PW-1/28 1055556
29. Document evidencing registration of Ex.PW-1/29 trademark "SAMSUNG" status under Class 14
30. Registration certificate bearing Ex.PW-1/30 no.1055557 Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.10 of 16
31. Document evidencing registration of Ex.PW-1/31 trademark "SAMSUNG" status under Class 7,9,11,38 and 42 32 Registration certificate bearing Ex.PW-1/32 no.1240403 33 Document evidencing registration of Ex.PW-1/33 trademark "SAMSUNG" status under Class 99
34. Registration certificate bearing Ex.PW-1/34 no.1240401
35. Document evidencing registration of Ex.PW-1/35 trademark "SAMSUNG" status under Class 99
36. Registration certificate bearing no. Ex.PW-1/36 1240402
37. The documents eluciadating the Ex.PW-1/37 Best Global Brands 2017 rankings and Ex.PW-
and Best Global Brands 2019 Rankings, 1/38
38. The CA certificate verifying the Ex.PW-1/39 above mentioned figures
39. The document elucidating plaintiffs' Ex.PW-1/40. business activities which highlight their dealing in LEVEL U and UFLEX headsets
40. The investigation report dated Ex.PW-1/41 10.12.2019 41 Certificate u/s 65 B of Indian Ex.PW-1/42.
Evidence Act
42. The Legal Proceedings Certificates Ex.PW-1/43 (Colly)
21. I have heard Ld. Counsel Ms. Ashima Aggarwal for the plaintiff and perused the record.
22. The testimony of the Plaintiff's witness remained Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.11 of 16 unrebutted since the Defendant no.2 choses not to appear and contest the matter. There is thus no doubt to disbelieve the unrebutted testimony of PW-1.
23. A perusal of the unrebutted testimony of PW-1 and the documents placed and exhibited on record, it is apparent that the act of Defendants No.2 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 Plaintiff's genuine "SAMSUNG" branded products owned by the Plaintiffs in the exact style and manner and counterfeit "SAMSUNG" branded LEVEL U and UFLEX headsets as being those manufactured by the Plaintiffs and the acts of the Defendants apart from causing gross misrepresentation also serve to dilute and tarnish the Plaintiff's well known trademark "SAMSUNG" beside undermining the reputation and goodwill of the Plaintiffs in the market. The sale of counterfeit 'LEVEL U' and'UFLEX' headsets by the Defendants No.2 bearing the suit trademark belonging to the Plaintiffs, without the authorization from the Plaintiffs amounts to infringement under Section 29(1) read with Section29(6) of the Trade Marks Act. Similar observation was made by the Hon'ble High Court in the case titled as 'Philip Morris Products vs Sameer & Ors.' (2014) SCC Online Del 1077, wherein it has been observed in para-34 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 Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.12 of 16 trademarks as plaintiffs' original products, indeed infringe plaintiffs' rights in the suit trademarks under section 29 of the Act....."
24. By using Plaintiff's well-known trademark 'SAMSUNG' , without obtaining the Plaintiff No.1's consent (the registered proprietor of the suit trade mark), the Defendant no.2 is thus wrongfully benefiting from the goodwill maintained by the Plaintiffs in the suit trademark besides passing off the business and counterfeit goods as those of the Plaintiffs and thereby deceiving the consumers by selling counterfeit and poor- quality 'LEVEL U' and 'UFLEX' headsets under the garb of the Plaintiff's well known trade mark. However, in the present case, as per the report of Ld. Local Commissioner, no counterfeit product was found at the time of execution of commission in the shop of defendant no.2, but due to non-appearance of the defendant no.2, plaintiffs have proved their case. In the light of the above discussion, the Plaintiffs, in my opinion, are entitled to decree of permanent injunction, as prayed.
25. Accordingly, a decree of permanent injunction as per prayer clause (a) and (b), is hereby passed in favour of the Plaintiffs and against the Defendants No.2 restraining him, his associates, partners, proprietors, servants, agents, legal heirs, affiliates, subsidiaries, licensees and agents and all other 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 Plaintiff's registered trademark/trade name "SAMSUNG" and/or any other mark/logo or device, which is identical or Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.13 of 16 deceptively 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 and from passing off the Plaintiff's trademark/trade name 'LEVEL U' and 'UFLEX', in any manner, whatsoever.
26. Further, the relief sought in paras (c) and (d) of the prayer clause of the Plaint cannot be granted for want of any evidence showing import of counterfeit 'LEVEL U' and 'UFLEX' model headsets by the Defendants, therefore the same is declined.
27. As no counterfeit product was found in the possession of defendant no.2, the relief sought as per prayer clause (e), with regard to destruction of infringing products etc. is denied. The order of the superdari in respect of the products seized by the Local Commissioner is accordingly cancelled.
28. Insofar as the relief for rendition of accounts is concerned, as per prayer clause (f) is concerned, since nothing was found in the possession of defendant no.2 and the Defendants No.2 chose to stay away from the proceedings, the said relief cannot be granted, as prayed.
29. However, the Plaintiffs have also prayed for a decree of damages as per clause (g) for a sum of Rs.5 lacs towards loss of sales, reputation and goodwill of the Plaintiff's trademarks. Reliance has also been placed upon the following judgments in Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.14 of 16 support of his submissions by learned counsel for the Plaintiffs:-
a) Philip Morris Products vs. Sameer & Ors. (2014) SCC Online Del 1077;
b) Hero Honda Motors Ltd. vs. Shree Assuramji Scooters, 125 (2005) DLT 504
c) Disney Enterprises Inc. vs. Mr.Rajesh Bharti & Ors., 2013(54) PTC 372 (Del.)
d) Frankfinn Aviation Services Pvt. Ltd. Vs. Frankfinn Creations and Ors., MANU/DE/2437/2022
30. Though the plaintiff has not filed any document to substantiate its claim for damages but there is no denial of the fact that because of the impugned activities of the defendant no.2, the plaintiff has suffered loss in its business and reputation since in such like business, the customers and trade channels are the same. In the instant case, as per report of the investigator Ex.PW-1/41, the defendant no.2 had tried to encash the goodwill and reputation of the plaintiff by passing off their goods as that coming from the source and origin of the plaintiff. In the case of Hero Honda Motors Ltd v/s Shree Assuramji Scooters, 2006 (86) DRJ 113, it was observed that the time has come when the courts dealing actions for infringement of trademarks,copyrights etc. should not only grant compensatory damages but award punitive damages also with a view to discourage and dishearten law breakers who 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. It was held that in such cases, Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.15 of 16 damages must be awarded and the 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. In the instant case also, the defendant stayed away from the proceedings and from the testimony of the plaintiff, it is clear that the defendant no.2 is indulged in selling or offering for sale of counterfeit goods. Thus, in view of the aforesaid, I am of the view that the plaintiff is entitled to compensatory and punitive damages to the extent of Rs.50,000/- as a consequence of infringement of the trademark of the plaintiff by the defendant no.2.
31. Decree sheet be prepared accordingly.
32. File be consigned to record room after due compliance.
Pronounced in the open Court (Anurag Sain) on this 20th day of September, 2023 District Judge (Commercial Courts)-01 New Delhi District, Patiala House Courts New Delhi Samsung India Electronics Pvt. Ltd. Vs. Fantasy and Ors. Page no.16 of 16