Delhi District Court
Koninklijke Philips N.V vs Sohail Kanungo on 26 October, 2024
In the Court of Ms. Anu Grover Baliga,
District Judge (Commercial Court-04),
South-East District, Saket Courts,
New Delhi.
CS (COMM) 402/19
Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo
In the matter of:
1. Koninklijke Philips N. V.
High Tech Campus 5,
Eindhiven, Netharlands.
2. Philips India Ltd.
3rd Floor, Tower A,
DLF IT Park,
08 Block AF, Major Arterial Road,
New Town (Rajarhat),
Kolkata, West Bengal - 700 156. ...Plaintiffs
Versus
Sohail Kanungo
E-256, Basement, Amar Colony,
Lajpat Nagar IV,
New Delhi-110024. ...Defendant
Date of institution : 03.10.2019.
Date of reserving judgment : 09.10.2024.
Date of pronouncement of Judgment : 26.10.2024.
Judgment
1. As per record on 03.10.2019, the present suit was initially filed
before the Court of Ld. ADJ against three Defendants interalia seeking a
permanent injunction for restraining the Defendants from infringing the
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Copyright and Trademark of the Plaintiffs and passing off their goods as
that of the Plaintiffs. The relief damages and compensatory costs from all
the Defendants was also sought in the plaint.
Pleadings:
2. In the plaint filed, the following material averments were made by
the Plaintiffs against the then arrayed Defendants:
a. The Plaintiff No. 1 is a company incorporated under the laws
of the Netherlands and Plaintiff No. 2 is a company incorporated under the
laws of India. The Plaintiff no. 2 is the Indian Subsidiary company of
Plaintiff no. 1. The Plaintiff (the term collectively being referred to both
the Plaintiffs) is a leading electronics company of immense global repute
and is one of the largest diversified companies in the world and is
consistently counted amongst the largest companies in the world. The
Plaintiff ranks no. 43 amongst the best global brands in the world in the
report published in the "Interbrand Ranking 2018" with an estimated brand
value of about USD 12.1 billion. It is widely known by its trademark
'PHILIPS' in addition to its shield device logo, which symbolize
innovation and reliability for billions of consumers across the world and in
India. The Plaintiff enjoys vast and formidable reputation and goodwill
across the globe in India.
b. The Plaintiff has been the recipient of numerous awards and
accolades throughout history, evidencing the immense reputation and
goodwill that it enjoys not only amongst consumers, but also amongst
members of the trade as well. The Plaintiff's Philips trademark has been
declared as well-known in India and as such has attained secondary
significance, in the case of M/s Banga Watch Company Vs. M/s N. V.
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Phillips AIR 1983 P & H 418 wherein the Hon'ble Court held that "Philips
is a household mark mark and has acquired enviable reputation in India
and throughout the world." This declaration has also resulted in the
trademark PHILIPS being included in the list of well-known trademarks of
the trademarks registry of India.
c. One of the most popular and highest-selling product of the
Plaintiff is its Advanced Beard Trimmer Series 3000 consisting of,
QT4001 (launched in March, 2014) amongst other Advanced Beard
Trimmer series. The advanced and innovative technology employed by the
Plaintiff in its Advanced Beard Trimmer series has led them to become
immensely popular amongst members of the general public.
d. The Plaintiff has undertaken several steps in order to ensure
that its Advanced Beard Trimmers are promoted and advertised
extensively in India, physically as well as in the virtual world through
media campaigns. The Plaintiff has spent upwards of INR 160 Crores on
promotional and advertisement for its Advanced Beard Trimmers series
products in India and as a result of such massive promotion and
advertisement by the Plaintiff in relation to these products, members of the
general public associate such products solely and exclusively with the
Plaintiff. The immense promotional measures undertaken by the Plaintiff
have also resulted in massive sales of the beard trimmer series in India,
thereby further evidencing the high reputation enjoyed by them amongst
the general public.
e. The entire get-up, layout, color scheme, placement of
modalities, on the product of the Plaintiff give a distinct and exclusive
look and together comprises of its "trade-dress" and that has already
become the distinctive identity of the Plaintiff's product. The consumers,
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trade and public at large etc., identify and distinguish the said trademarks
and trade dress with the product of the Plaintiff. The sale of Plaintiff's
products and its business is primarily reliant on the said trademark since
the same has acquired secondary significance denoting thereby that the
said mark with respect to the said product is recognized with the Plaintiff
alone. The same has become universally synonymous with the goods and
business of the Plaintiff and in consequence thereof, has become a
distinctive and well-known trademark within the meaning of Section 2(1)
(zg) of the Trade Marks Act, 1999 and is therefore entitled for the highest
degree of protection.
f. The Defendant No.1 is an individual who is selling vast range
of Plaintiff products from his premises at E-256, Amar Colony, Lajpat
Nagar and through e-commerce portals. The Defendant No.1 is also selling
one of the Plaintiff's hari trimmer "Philips Trimmer QT4001" which is
identical, deceptively and phonetically similar to the registered design,
trademark and trade dress of the Plaintiff, thereby infringing the statutory
right in the registered design and trademark "PHILIPS" both in word and
device.
g. The Defendant No.1 has identically copied and sold several
features of the Plaintiff's product, shapes, label, trade dress, design,
packaging and other descriptive features including copyright that validly
subsists in favour of the Plaintiff and is integral to the product of Plaintiff.
The Defendant herein is neither a licensee nor an authorized distributor of
the Plaintiff and is indulging in malafide activities by selling the products
of the Plaintiff without authority or valid approvals, whereby the
Defendant indulging in illegal activities and infringing the product of the
Plaintiff.
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h. The Defendant no. 2 is a multi-national technology company
based out of Seattle, Washington, focusing on e-commerce, cloud
computing, artificial intelligence and digital streaming. Defendant no. 2 is
amongst the largest business entities across the world with its e-commerce
portal and runs its operations in India through its wholly owned subsidiary
Amazon India.
i. The Defendant no. 1 has been using the portal of the
Defendant no. 2 in order to sell the counterfeit goods whereby infringing
upon the rights of the Plaintiff in order to make unlawful gains for himself
and causing the loss of business, reputation and goodwill to the Plaintiff.
j. The Defendant No.3 is a Vendor of e-commerce retail
websites wherein the Defendant No.1 has been selling the impugned
product through e-commerce retail websites.
3. A perusal of the record reflects that on the filing of the suit before
the Ld ADJ, on an application filed by the Plaintiffs, vide order dated
03.10.2019, the ld Court passed an ex-parte ad-interim injunction in their
favour restraining the Defendants from using the trademark PHILIPS or
logo of PHILIPS or any other trademark, which may be deceptively
similar to the Plaintiff's well-known trademark till further orders. Vide the
same order, Local Commissioners were also appointed to visit the
premises of Defendant No.1 and Defendant No.2 to seize the infringing
material.
4. Record further reveals that after execution of the Local
Commission, the Plaintiff prayed that one Electronic King be impleaded in
place of M/s Best Deal, initially arrayed as Defendant No.3, for the Local
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Commissioner had found that it is this entity which was operating its
business from the address mentioned by the Plaintiff as that of M/s Best
Deal. The said prayer of the Plaintiff was allowed vide order dated
22.10.2019.
5. The record further reveals that vide order dated 03.02.2020 of the
Ld. Principal District and Sessions Judge, South-East, Saket Courts, New
Delhi, the present suit was transferred from the Court of Ld. ADJ to a
Commercial Court. When despite various orders thereafter Plaintiff failed
to take any steps for service of the impleaded Defendant No.3, one of the
Ld. Predecessors of this Court vide order dated 27.09.2021 dismissed the
suit against Defendant No.3 for non-prosecution. Further after the transfer
of the suit to this Court, on 29.11.2022, Ld. Counsel for the Plaintiff, Sh.
Simranjeet Singh gave a statement that the Plaintiff did not also wish to
pursue its case against Defendant No.2 and prayed that it be also deleted
from the array of parties. As such, the suit has thereafter been proceeded
only against Defendant No.1 i.e. Sohail Kanungo and as per the amended
memo of parties, he is now the sole Defendant.
6. It is also a matter of record that this Defendant did not file his
written statement despite having been served on 24.10.2019 and it is vide
order dated 25.02.2020 that the right of this Defendant to file written
statement was forfeited by the then Ld. Presiding Officer of the Court.
Issues:-
7. On 20.10.2022, this Court after perusing the entire record and taking
into consideration that the Plaintiff had sought Rs.1 Crore damages from the
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Defendant for the infringement of its registered trademark, was of the
opinion that despite the Defendant not having filed its written statement
within the prescribed statutory period, the Plaintiff will have to prove that it
is entitled to this quantum of damages, framed the following issues:
1. Whether the Plaintiff is entitled to the permanent and
mandatory injunctions as sought in the suit against Defendant No.
1? OPP.
2. Whether the Plaintiff is entitled for a decree to recall all
the products and / or any marketing, promotional and advertising
materials that bear or incorporate the Plaintiff's labels / packaging /
trade dress / or any other mark / labels / packaging / trade dress
deceptively and confusingly similar to the Plaintiff's labels /
packaging trade dress which has been manufactured and / or sold,
distributed in the market, including online retail at the cost of the
Defendant No. 1? OPP.
3. Whether the Plaintiff is entitled for delivery by the
Defendant No. 1 of all the offending goods bearing the tradename
"PHILIPS", including the packaging materials, labels, promotional,
advertising materials, publicity materials, stationary, account books
and other incriminating materials under the possession and control
of the Defendant No. 1 for destruction or erasure purposes? OPP.
4. Whether the Plaintiff is entitled for award of damages to
the tune of Rs. 1,00,00,000/- against the Defendant No. 1? OPP.
Evidence:
8. Vide order dated 20.10.2022, this Court had fixed 29.11.2022 and
02.12.2022 for the Plaintiff to lead evidence. However, it is a matter of
record that the Plaintiff did not lead any evidence and this Court vide order
dated 02.12.2022 closed the right of the Plaintiff to lead evidence. Though
initially time was sought on behalf of the Plaintiff from this Court for
challenging the orders of this Court framing issues and of closing the right
of the Plaintiff to lead evidence, but subsequently Ld Counsel for the
Plaintiff submitted that the matter be listed for Final Arguments.
Contentions of Ld. Counsels:
Contentions of Ld. Counsel for the Plaintiffs:
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9. Despite the fact that no evidence has been led by the Plaintiff, Ld.
Counsel Sh. Rohit Gandhi for the Plaintiffs has sought to contend that the
suit of the Plaintiffs is liable to be decreed. It is his contention that the
Report of the Local Commissioners submitted in this Court is evidence in
itself and the Local Commissioners were not required to be examined to
admit their reports as evidence.
10. With respect to the said reports, the submissions of Ld. Counsel Sh.
Gandhi are as follows:-
i. Huge quantities of infringing counterfeit products were
recovered from the premises of the Defendant.
ii. More importantly, besides completely packed products, one
of the Local Commissioner also found loose packaging materials, user
manual, loose items like comb attachments and chargers. The products of
the plaintiffs are manufactured abroad i.e. in Indonesia and imported to
India as a complete packed product. Thus, there was no reason that the
Defendant should have the loose packaging materials of Plaintiff's
products. The same itself shows that the Defendant intended to sell
counterfeit products which he was himself packaging.
iii. Moreover, the counterfeit products were also opened and
compared with the original product before the Hon'ble Court and this
Court itself observed the differences between the product of the Plaintiff
and that of the Defendant. One key difference observed by this Court was
that though the picture of the product of the Plaintiff at Page No.29 of the
plaint reflected that the country of origin (Indonesia) was present on the
original product, it was absent on the counterfeit product recovered by the
Ld. LC. Further, upon comparison, it was evident that there was also
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difference in the shape of comb and charger had different engravings.
iv. In view of the said evidence, the Defendant is liable to be
permanently injuncted and restrained from using the registered trademarks
of Plaintiffs bearing 'PHILPS', and its logo or any other deceptively similar
marks.
v. Further from the nature of the counterfeit products seized in
huge quantities and also the loose packaging materials, it is apparent that
the Defendant is not a first-time innocent Infringer. He being a deliberate
and calculated Infringer, compensatory and aggravated damages are liable
to be imposed upon him and should be awarded to the Plaintiffs.
vi. Moreover, huge expenses have been incurred by the Plaintiffs
in prosecuting the present proceedings and conducting Local Commissions
and the Plaintiffs are also entitled for award of the costs for the present
proceedings.
vii. Even in a case no evidence has been led towards general,
compensatory and punitive damages, the Court seeing the nature of the
Infringement by the Defendant can take judicial notice of the same.
Furthermore, Hon'ble Delhi High Court Intellectual Property Rights
Division Rules 2022 provide guidance on the manner in which the
damages could be calculated.
11. In support of his aforementioned contentions, Ld. Counsel for the
Plaintiffs has relied upon the following judgments:
a. ML Brother LLP v. Maheshkumar Bhuralal Tanna, 2022 SCC
OnLine Del 1452.
b. Eureka Forbes Limited v Vaibhav Agro Industries [2023 SCC
OnLine 909].
c. Gian Chand Aggarwal v Hitesh and Anr. [2023 SCC OnLine
Del 788], Sandisk LLC v Amit and Ors.
CS (COMM) 402/19
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d. Disney Enterprise Inc. and Anr. v Balraj Muttneja and Ors.
[2014 SCC OnLine Del 781]
e. Cross Fit LLC v. RTB Gym and Fitness Centre,[2022 SCC
OnLine Del 2788]
f. Sandisk LLC & Anr. v Laxmi Mobiles & Ors. [2023 SCC
OnLine Del 432]
g. LT Foods Ltd. v Saraswati Trading Company [2022 SCC
OnLine Del 3694]
h. Kleenoil Filtration India Pvt. Ltd. v Udit Khatri & Ors.
[2023 SCC Online 107]
Contentions of Ld. Counsel for Defendant :
12. The main arguments raised by Sh. Sundeep Sehgal, Ld. Counsel for
Defendant are as follows:-
i. The Plaintiff has not led any evidence whatsoever that the
goods seized from the premises are counterfeit. They have only relied
upon the report of LC only which states that the goods are counterfeit. The
LC is not an expert to check whether the products are counterfeit or not.
The seized products were never sent to any accredited lab like "National
Accreditation Board for Testing and Calibration Laboratories". Further
more, no expert was present when the local commissioner inspected the
premises of Defendant No.1. Thus, the report of LC cannot be relied that
the products are counterfeit.
ii. Amazon (initially arrayed as Defendant No.2) is a business
friendly marketplace that provides technology- led procurement solutions
built specifically for businesses, attractive pricing and a convenient and
transparent shopping experience associated with Amazon.in. It was
designed to meet the business-procurement needs of different institutions
such as hospitals, clinics, manufacturers, universities, schools, NGOs,
government bodies and offices. At the time of registration, Amazon
undertakes a thorough checkup of the clients (like D-1) who intend to sell
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through their platform. They check the copies of the invoices, receipts,
supplier information, buyer information, invoice date, item descriptions,
item quantities etc before allowing the client to sell on their platform. It is
only after a thorough check conducted by Amazon that the present
Defendant was allowed to sell on its online marketplace. Further there is
not even a single complaint by any customer of Defendant that the product
is counterfeit. Not even one customer has returned the product due to its
quality.
iii. Even if it is assumed that the goods being sold by Defendant
were not the genuine products of the Plaintiff, no damages / costs must be
imposed upon the Defendant for he had bonafidely purchased the same
from an authorised dealer of the Plaintiff.
13. In support of his contentions, Ld. Counsel for the Defendant has
relied upon the following judgments:
i. Civil Appeal No. 1973 of 2022, M.P. Rajya Tilhan Utpadak
Sahakari Sangh Maryadit, Pachama, District Sehore And
Others Versus M/s. Modi Transport Service.
ii. Committee of Management Anjuman Intezamia Masajid,
Varanasi Versus Rakhi Singh and Others Respondent, 2023 INSC 702.
Findings:
Issue No.1:-
14. This Court has carefully considered the submissions made by both the Ld.Counsels and has also gone through the judicial dicta relied upon by them. As regards the contention of Ld.Counsel for the Defendant that M/s Amazon undertakes a thorough verification of the sellers who intend to sell through their platform and also verify the copies of the invoices, receipts, supplier/buyer information, item description, etc before allowing CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 11 of 21 the sale of goods on its platform, it will be relevant herein to note the contents of the written statement filed by this entity. In the said written statement, Amazon has categorically asserted that as an intermediary, it does not verify whether or not the products offered for sale by third parties through its platform are genuine or counterfeit. It has categorically asserted that it is a neutral market place which serves as a mere conduit for buyers and sellers to conduct their business and is not liable to adjudicate upon the nature and / or substance of any third party information, specifically not at a time prior to its upload on the intermediary's systems.
In the considered opinion of this Court, in view of such a specific stand taken by Amazon in its written statement, the contention of Ld. Counsel Sh. Sehgal that the goods seized of the Defendant from the premises of Amazon must be taken to be genuine for Amazon would not have allowed the Defendant to sell counterfeit goods, has no merit whatsoever.
15. The next contention of Ld. Counsel Sh. Sehgal that the judicial dicta referred to by him makes it clear that the report of the Local Commissioners should not be considered as evidence by this Court, is also found without any basis. The judicial dicta referred to by Ld. Counsel for the Defendant does not at all lay down that the report of the LC cannot be regarded as evidence. All that has been laid down by the Hon'ble Supreme Court in the two cases referred to by Ld. Counsel for the Defendant is that the evidentiary value of any report of the Commissioner is a matter to be tested in the suit and is open to objections by either of the parties and that it is for the Court to determine whether or not it should rely upon the Commissioner's report. In the case titled and reported as Puma SE Vs. Ashok Kumar (2024) 306 DLT 279, the Hon'ble Delhi High Court has CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 12 of 21 categorically held that the LC's report can be read in evidence in terms of Order XXVI Rule 19(2) CPC. The Hon'ble Court has explained that the rationale behind Order XXVI Rule 10(2) CPC stipulating that the report of the Commissioner is to be taken as evidence in a suit, is that the Commissioner is appointed as representative of the court and the evidence collected by him alongwith his report is therefore evidence in the suit. The Hon'ble Delhi High Court also made it clear that unless any party files an objection to the LC's report, there is no requirement of the Court to examine the LC. It has been categorically observed by the Hon'ble Court that the report of the Commissioner cannot be overlooked or rejected by the court on the spacious plea of non-examination of the Commissioner.
16. Taking into consideration the aforementioned judicial dicta and the fact that in the present case the Defendant has not challenged the report of the LC Ms. Vandana, this court is of the considered opinion that the same can be read in evidence . A perusal of her report reflects that 14 No. of Philips Pro Skin Advance Trimmer 3000 series seven numbers of Philips Trimmers Comb (attachment) AT4000/QT4001; 70 Nos. of Philips Pro Skin Advance Trimmer 3000 series; 335 Nos. of Philips Pro Skin Advance Trimmer 3000 series and 654 Nos. of Philips Trimmers Comb (attachment) QT4000/QT4001, one Philips Straightened were seized by her from the premises of M/s Amazon Seller Services Pvt. Ltd. (hereinafter referred to as Amazon) and identified by the Amazon officials to be belonging to the present Defendant. Ld Cousel is not objecting at all to the said fact and he has fairly submitted that the goods seized by the LC Ms Vandana were belonging to the present Defendant only. Now as the report of the said LC , all the products seized were packed in various boxes and were given on superdari to AR of Amazon. It is a matter of CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 13 of 21 record that during the course of Final Arguments, the said boxes, on the directions of this Court, were produced by AR of Amazon before this Court on 22.07.2024. Out of the said sealed boxes produced before this court, 02 of the sealed boxes were opened in the presence of Ld. Counsels for both the parties and it was found that the photographs of the product of the Plaintiffs and that seized from the Defendant, reproduced on page 29 of the plaint correctly depicted the manner in which the Defendant was infringing the trademark of the Plaintiffs. This Court observed that though the product of the Plaintiffs clearly mentioned that it was imported from Indonesia, no such declaration was made on the box seized from the premises of the Defendant. The accessories found alongwith the product seized from the Defendant were also found different from those of the product of the Plaintiffs. The said differences were apparent to the naked eye and therefore in the considered opinion of this Court, no evidence/report of an expert as contended by the Ld. Counsel for the Defendant is required in the present case to hold that the goods that were being sold by the Defendant were infact counterfeit goods. In the considered opinion of this Court the assertions made by the Plaintiff in its plaint namely that the Defendant was selling counterfeit products of the Plaintiff stands proved by the products seized by the Local Commissioner from the Defendant and produced in Court for their inspection. The fact that PHILIPS is a well-known trademark of the Plaintiff and the Plaintiff is statutorily entitled to protect its trademark from infringement, is not disputed at all by Ld. Counsel for the Defendant. The only submission made by Ld. Counsel, Sh. Sehgal in this respect is that the Defendant was not selling counterfeit goods but he was selling the genuine goods of the Plaintiff and that therefore the Plaintiff is not entitled to the permanent CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 14 of 21 injunction sought for. In view of the fact that this Court has hereinabove held that the goods being sold by the Defendant cannot be stated to be the genuine goods of the Plaintiff, the Plaintiffs are held entitled to the permanent and mandatory injunctions as sought by it in the plaint. This issue is therefore decided in favour of the Plaintiff and against the Defendant.
Issues No.2 and 3:
17. In view of the findings given by this Court on Issue No.1 namely that the Defendant has been found to infringing the trademark of the Plaintiff, the Plaintiff is held entitled to recall all the infringing products in possession of Defendant No.1 alongwith the packaging materials, labels, advertisement material, etc. in the possession of Defendant and is entitled to destroy the same. These issues are therefore decided in favour of the Plaintiff and against the Defendant.
Issue No.4:
18. Ld. Counsel for the Plaintiff has vehemently contended that punitive damages must be awarded in favour of the Plaintiffs in view of the fact that the Defendant was found selling counterfeit products of the Plaintiffs and he has submitted that the mere oral contention of Ld. Counsel for the Defendant that the Defendant was a bonafide purchaser of the products from an authorised dealer of the Plaintiffs has no basis whatsoever. Ld. Counsel has pointed out that the Defendant chose not to file any written statement within the statutory period of 120 days and he therefore now cannot be heard to contend that he is a bonafide purchaser. Ld. Counsel for the Plaintiff has relied upon the judgment of the Hon'ble Delhi High Court CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 15 of 21 in the case tiled and reported as Koninlijke Philips and Ors v. Amagestore and Ors, 2019 DHC 2185 to contend that since the Defendant was a knowing infringer and was indulging in sale of the counterfeit goods, the Plaintiff must be awarded punitive damages.
19. In reply, it is the submission of Ld. Counsel for the Defendant that since the Defendant was an innocent infringer, no damages are to be awarded in favour of the Plaintiff. He has submitted that this Court must take into account the conduct of the Plaintiff in the present case in as much as despite various opportunities granted to it, it neither took steps to serve Defendant No.3 nor bothered to lead evidence in support of its case. Ld. Counsel for the Defendant, Sh. Sehgal has further submitted that this Court must also take into consideration that the report of Ld. LC Ms. Geetanjali Borah was in favour of the Defendant in as much as she had seized the ledgers, cash registers, books of Accounts, invoices, etc. from the Defendant and the same if produced in Court, would have proved that the Defendant was bonafide purchaser of goods from an authorised dealer of the Plaintiffs. He has submitted that the said Ld. LC has filed her affidavit affirming on oath that she had given all the said ledgers, invoices, etc. to Ld. Counsel for the Plaintiffs who was present at the commission site and that he had undertaken to file the same before the Court. His submission is that the Ld. Counsels for the Plaintiffs have deliberately not filed the said documents before this Court for the same would have proved that the Defendant was a bonafide purchaser of goods from an authorised dealer of the Plaintiffs. Ld. Counsel for the Defendant has also relied upon the same judgment as relied upon by Ld. Counsel for the Plaintiff namely Koninlijke Philips's case (supra) to contend that since CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 16 of 21 the Defendant is a first time innocent infringer, it is only an injunction that can be granted against him and no costs are to be imposed upon him.
20. In the considered opinion of this Court, the contentions made by Ld. Counsel for the Defendant have much force. It has been rightly contended that once it is the own contention of the Plaintiffs that the report of the LCs has to be read in evidence, the Plaintiffs cannot be allowed to only rely upon the report of the LC Ms. Vandana. It is a matter of record that this Court had summoned Ms. Geetanjali Borah, the second LC appointed by the Court and who had visited the premises of the Defendant at E-256, Basement, Amar Colony, Lajpat Nagar-IV, New Delhi. Her report, which is a part of judicial record, mentions that from the said office premises of the Defendant alongwith infringing products, copies of the account books, including ledgers, cash registers, invoices, etc tendered by the Defendant were taken into possession by her and originals of the same were returned to the Defendant. On 22.08.2023, Ld. Counsel for the Defendant had pointed out that the aforementioned photocopies of documents are however not a part of the judicial record and in view of the said statement of Ld. Counsel for the Defendant, a court notice was issued by this Court to Ms. Geetanjali Borah to appear before this Court and to explain about the said documents. Ms. Borah who appeared before this Court in pursuance of the said notice informed this Court that the documents mentioned in her report were taken from her by Ld. Counsel for the Plaintiff, Sh. Adhar Nautiyal. On directions of this Court, she then filed an affidavit affirming the aforementioned fact on oath. It was then submitted by Ld. Counsel Sh. Gandhi that the Ld. Counsel Sh. Adhar Nautiyal is not now working in the law firm that is representing the Plaintiffs. He CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 17 of 21 thereafter filed a short counter affidavit of the AR of the Plaintiff to rebut the affidavit of Ms Borah.
21. After giving careful consideration to the affidavit filed by Ms. Borah and the counter affidavit filed by the AR of the Plaintiff, this Court is of the considered opinion that there is no reason for this Court to disbelieve Ms. Borah. She has categorically affirmed on oath that since the documents seized were voluminous, Ld.Counsel for the Plaintiff, Sh. Nautiyal had offered to take photocopies of the same and then file it in the Court. On the other hand, the counter affidavit filed by the AR of the Plaintiffs can at best be stated to be hearsay. It has been merely affirmed therein that the AR of the Plaintiffs has crosschecked with Sh. Adhar Nautiyal, who was previously associated with the law firm representing the Plaintiffs and he has confirmed to the AR of the Plaintiffs that no photocopies were retained by him. In the considered opinion of this Court when it is not the case of the Plaintiff that Sh. Adhar Nautiyal is unavailable (for the AR has himself stated that he has cross-checked with the said Counsel), they should have filed the affidavit of the said Counsel to counter the facts affirmed on oath by Ms. Borah. Since they have failed to do so, this Court finds no reason to disbelieve Ms. Borah and therefore it is to be held that the the Plaintiff did have in their possession the documents seized by the LC Ms. Borah.
22. In view of the above finding, when the documents seized by the LC Ms. Borah have not been produced by the Plaintiffs, an adverse inference has to be drawn against them. Though no doubt, the Defendant has failed to file its written statement as discussed hereinabove, when the Plaintiff is CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 18 of 21 being allowed to rely upon the report of the LC to contend that the same proves that the products being sold by the Defendant were counterfeit, the Defendant is also to be allowed to rely upon the LC's report to contend that the documents seized by the LC would have shown that he had bonafidely purchased the goods from an authorised dealer of the Plaintiffs. As such, this Court is not inclined to hold that the Defendant is not a bonafide purchaser of products from an authorised dealer of the Plaintiffs. Having said that this Court makes it clear that by accepting this contention of Ld. Counsel for the Defendant, this Court is not agreeing that since the goods may have been purchased by the Defendant from an authorised dealer of the Plaintiff, the same were genuine. The fact that the goods seized from the Defendant were not genuine, is clear from the inspection of the seized goods by this Court. The only concession that can be allowed in favour of the Defendant is that in view of the conduct of the Plaintiff in not placing the documents seized by the LC before this Court, it can be held that the Defendant unintentionally purchased counterfeit goods from a supplier.
23. In view of the discussion hereinabove and in view of the judicial dicta referred to by both the Ld. Counsels, this Court is of the considered opinion that interest of justice would be met if the Defendant is directed to pay costs of Rs.50,000/- to the Plaintiffs, for the said amount was paid by the Plaintiffs to LC Ms. Borah, whose report is being relied upon by Ld. Counsel for the Defendant to contend that the Defendant was an innocent infringer. The Issue No.4 therefore stands decided accordingly.
Conclusion:
CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 19 of 21
24. The suit of the Plaintiff therefore stands decreed against the Defendant Sohail Kanungo and this Defendant, his associates, agents, employees, representatives and assignees are hereby restrained from using the trademark PHILIPS or logo of PHILIPS or any other trademark, which may be deceptively similar to the Plaintiff's well-known trademark, in any manner whatsoever which results in passing off the said trademark of the Plaintiffs. The Defendant, his associates, agents, employees, representatives and assignees are also restrained from using the term "PHILIPS" displayed on its products' packaging/label/or any other descriptive features or any other product identical to and deceptively similar and phonetically similar to that of the Plaintiff's trademark "PHILIPS', which results in infringement of said trademark of Plaintiff. The Defendant, his associates, agents, employees, representatives and assignees are also restrained from infringing the original artistic work existing in the texts, font, images, tables, label, layout and shape of the packaging and the product that forms an integral part trade dress of the Plaintiff's product "PHILIPS".
25. The Plaintiff is also held entitled to destruct all the infringing goods that were seized by the LC Ms. Vandana and handed over to the Plaintiffs on superdari by this Court. As regards the infringing goods seized by Ms. Borah which were given on superdari to the Defendant, he will destruct the same in the presence of the AR of the Plaintiff by 15th November, 2024. Today both the Ld. Counsels state that they will fix a date for the said purpose.
26. As regards the damages, this Defendant will also pay damages to CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 20 of 21 the extent of Rs.50,000/- to the Plaintiffs. No other orders as to costs of the suit. Decree-sheet be prepared accordingly. This file be consigned to Record Room.
ANU Digitally signed
by ANU GROVER
GROVER BALIGA
Date: 2024.10.29
BALIGA 14:07:57 +0530
Announced in the Open Court (Anu Grover Baliga)
on 26th October, 2024. District Judge (Commercial Court-04) South-East District/Saket Courts New Delhi CS (COMM) 402/19 Koninklijke Philips N. V. & Ors. Vs. Sohail Kanungo Page 21 of 21