Delhi District Court
Levi Strauss And Company vs X Virus on 29 August, 2024
THE COURT OF MS NEHA PALIWAL SHARMA
DISTRICT JUDGE-03, CENTRAL DISTRICT,
TIS HAZARI COURTS, NEW DELHI
CNR No. DLCT01-009825-2017
CS (COMM) 565/2020
In the matter of :-
Levi Strauss & Company
1155 Battery Street, San Francisco
State of California,
United States of America
Also at:
Levi Strauss India Pvt. Ltd.
Tower-A, Signature Tower,
5th Floor, Sector-30,
Gurgaon-122002
Through its Authorized Representative
Sh. Narendra Singh
......Plaintiff
Versus
X-Virus
6334, Ground Floor,
Gali No.1, Block No.7,
Padam Singh Road,
Dev Nagar, New Delhi-110005
Through its Owner/ Proprietor
......Defendant
Date of institution : 06.07.2017
Reserved for Judgment : 20.08.2024
Date of decision : 29.08.2024
CS (COMM) No: 565/2020 Page No. 1/ 25
Digitally signed by NEHA
NEHA PALIWAL PALIWAL SHARMA
SHARMA Date: 2024.08.29 17:33:35
+0530
SUIT FOR MANDATORY AND PERMANENT INJUNCTION,
INFRINGEMENT OF TRADEMARK AND COPYRIGHT, PASSING OFF
AND RENDITION OF ACCOUNTS
JUDGMENT
(1) This is a suit for mandatory and permanent injunction, infringement of trademark and copyright, passing off and rendition of accounts, filed by the plaintiff against the defendant.
(2) Succinctly put, the case of the plaintiff, as per the plaint, is that it is a company duly registered under the of law of California, United States of America having its registered office at the aforementioned address. It had duly authorized Sh. Narendra Singh S/o Sh. S.S. Fauzdar through power of attorney to institute, sign, depose, verify and pursue the present suit. It is engaged in the business of manufacturing and marketing of clothing of all kinds, readymade garments, leisure shoes, spectacle glasses, sunglasses, bags and other accessories under the trademark "Levi's" and other trademarks. It carries on its business in Delhi through its exclusive franchises and showrooms in various parts of Delhi and has its warehouse and distributors in Delhi.
(3) It is further the case of the plaintiff that the brand "Levi's" was known in India even before its launch in the country because of its global presence and the plaintiff company ventured into the youth segment in India in 1994 by launching its products under the iconic brand name "Levi's". The Company has ever since built a strong retail and distribution network across India and Levi's in India is being built as the most definitive, the trendiest and the most premium apparel brand targeted at trend-setters and CS (COMM) No: 565/2020 Page No. 2/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:33:43 +0530 early adopters. The Company has grown exponentially over the last few years in India, helped by a huge retail thrust.
(4) It is further the case of the plaintiff company that it is the owner of trademark "Levi's" and "Levi's (Housemark)", "Two Horse logo" and the "Arcuate Stitching Design", which trademarks are registered under the provisions of the Trade Marks Act, 1999 in Trademark Registry of India. The registration of the above trademarks stands renewed from time to time by the Trademark Registry and the said trademarks, on account of renewal, are valid and subsisting in favour of the plaintiff company till date. The plaintiff company has the exclusive right to use the aforesaid trademarks with respect to its goods and no one is entitled to use the said trademarks or any deceptively similar trademark in respect of the goods without a valid license or assignment etc. by the plaintiff company. The apparels of the plaintiff company comprises of the labels bearing the trademark "Levi's"
and "Levi's (Housemark)", "Two Horse logo" and the "Arcuate Stitching Design" logos embossed and / or written on its products which products have become very prominent in the trade. On account of excellent quality and standards of manufacturing and untiring efforts in advertising and marketing by the plaintiff on their goods under the above trademarks, the plaintiff company has acquired unique distinction and enviable reputation and goodwill in India. Its net revenue in the year 2015 was 4.5 billion dollars.
(5) It is further the case of the plaintiff that defendant is a business entity engaged in the wholesale business of storing and selling counterfeit goods bearing the falsified trademarks "Levi's" and "Levi's (Housemark)", CS (COMM) No: 565/2020 Page No. 3/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:33:51 +0530 "Two Horse logo" and the "Arcuate Stitching Design" from its shop situated at X-Virus, 6334, Ground Floor, Gali No.1, Block No.7, Padam Singh Road, Dev Nagar, New Delhi-110005. During a market survey in the last week of January, 2017, it came to the knowledge of the plaintiff company that the defendant is clandestinely storing and selling jeans under the trademark "Levi's" and "Levi's (Housemark)", "Two Horse logo" and "Arcuate Stitching Design" logos deceptively. The products are much inferior in quality than the products of the plaintiff. The labels attached and the trademarks embossed on the impugned products of the defendant are same/ similar in design and appearance, as those used by the plaintiff company. The defendant is thus blatantly counterfeiting the registered trademarks of the plaintiff company in complete contravention of law of the land.
(6) It is further the case of the plaintiff that it had conducted an investigation through its investigator and had purchased counterfeit/ infringed goods bearing the impugned trademarks of the plaintiff company and after studying the essential features of the products of the plaintiff and those of the defendant and the trademarks and logos affixed by the plaintiff on its original products with those of the marks and logos affixed by the defendant, it becomes obvious that the defendant is selling its products under the guise of products of the plaintiff. Further, the finished apparels of the defendant are of much inferior quality than those marketed by the plaintiff company. The products of the plaintiff company have certain characteristic features like all products bear standardized labeling such as security label and size and price label. Each of these labels are informative and peculiar to each individual product of the plaintiff company and on CS (COMM) No: 565/2020 Page No. 4/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:33:59 +0530 close scrutiny of the products of the defendant it was found that these labels are either missing or contain wrong information which does not pertain to the plaintiff company. The defendant with malafide intentions had infringed the registered trademarks and logos of the plaintiff by affixing same/ similar trademarks "Levi's" and "Levi's (Housemark)", "Two Horse logo" and the "Arcuate Stitching Design" logos of the plaintiff, which is evident from the fact that they have adopted all unique and distinctive features of the plaintiff's trademarks and logos. The adoption of plaintiff's trademark and logos by the defendant is not a random or chance occurrence but has been the outcome of devious scheming and meticulous planning with the ultimate objective of deceiving and misleading the public and customers by the defendant. The defendant had chosen to copy the same with the view to pass off its products as those of the plaintiffs and with a view to take advantage of the plaintiff's reputation.
(7) It is further the case of the plaintiff that the products bearing the falsified trademarks and logos/ false trade descriptions are not the genuine merchandise of their manufacture and sale and the said spurious goods are in fact revealing a falsehood as to their origin, character and quality. The defendant by falsifying the trademarks and label, is deceiving the public and making them part with their hard-earned money under wrong belief. The defendant had represented to the members of the trade and public that their products are in some manner associated with that of plaintiff, whereas no such association exists, with an obvious intention to mislead the consumers and persons in the trade and is therefore, attempting to pass off their products as that of the plaintiff. The defendant's adoption and unauthorized use of the impugned trademarks and logos constitute act of infringement of CS (COMM) No: 565/2020 Page No. 5/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:34:07 +0530 trademark. The infringement is unambiguous since the defendant is using the said trademarks and logos with the sole motive to cause deception amongst consumers at large. The defendant's adoption and unauthorized use of the impugned "Two Horse Logo" also constitute an act of infringement of copyright, which was done with sole motive to cause deception amongst consumers at large.
(8) It is further the case of the plaintiff that the defendant had used the trademarks "Levi's" and "Levi's (Housemark)", "Two Horse logo" and the "Arcuate Stitching Design" logos of the plaintiff company without knowledge and prior permission of the plaintiff company and by doing so had caused wrongful gain to himself and huge damage to the plaintiff. The defendant had been trading upon the significant and valuable goodwill in the plaintiff's trade name; the nature of activity of the plaintiff and that of the defendant is the same and goods of the parties with which the trade name is associated are the same or similar and the sphere of activity and the market for consumption of the goods of the parties are same. The defendant had caused or are likely to cause public confusion as to the source or affiliation of their products. They have injured and threaten to further injure the plaintiff's reputation and had diluted and threatened to further diminish the distinctive quality of well known products of the plaintiff and perception of excellence that is associated with the said mark. The defendant is earning illegal profits on account of the unlawful use of deceptively and confusing similar trademarks/ logos as that of the plaintiff company. Thus, it is prayed that the defendant be directed to render all its books of accounts, profits for ascertaining of the damages suffered by the plaintiff, the counterfeit/ infringing goods finished or unfinished, bearing the infringing CS (COMM) No: 565/2020 Page No. 6/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:34:14 +0530 and violative trademark/ label and/ or any other deceptively similar trademark/ label including its labels, display boards, signboard, trade literature and goods etc. be delivered to the plaintiff for destruction and erasure, he be also directed to disclose all other names who are engaged with him and in connivance with him in the said activities, he be also directed to pay compensatory damages to the plaintiff and punitive damages.
(9) Thus, the plaintiff had prayed that a decree of permanent and mandatory injunction be passed in its favour and against the defendant, thereby restraining the defendant, its associates and agents, officers, employees, distributors, franchisee, representatives and assigns from using the trademark and deceptively similar marks "Levi's" and "Levi's (Housemark)", "Two Horse logo" and the "Arcuate Stitching Design" and/ or any other trademark and logo deceptively and confusing similar to the registered trademarks and logos of the plaintiff company on any jeans, shirts and other apparels infringing the registered trademarks of the plaintiff company. It is further prayed that a decree of permanent and mandatory injunction be passed in its favour and against the defendant, thereby restraining the defendant, its associates and agents, officers, employees, distributors, franchisee, representatives and assigns from using the copyright in the artistic work vested in the "Two Horse logo" and/ or any other copyright and logos deceptively and confusing similar to the artistic logo of the plaintiff company on any jeans, shirts and other apparels infringing the copyright of the plaintiff company.CS (COMM) No: 565/2020 Page No. 7/ 25 Digitally signed by NEHA
NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:34:22 +0530 (10) The plaintiff had further prayed that a decree of mandatory and permanent injunction be passed in its favour and against the defendant, thereby restraining them from passing off their goods as that of the plaintiff's goods, the defendant be also directed to rendition their account for the profits received by selling the counterfeit goods of the plaintiff company and be further directed to deliver all the infringing finished and unfinished materials bearing the infringing and violative trademark/ label "Levis" and / or any other deceptively similar trademarks/ label including its labels, display boards, signboard, trade literature and goods etc. to the plaintiff for the purposes of destruction and erasure. The defendant be further directed to disclose the name of all other persons who are engaged in storing, supply and selling of counterfeit products in the infringing packaging materials bearing mark/ logo from using the trademark and deceptively and similar marks "Levi's" and "Levi's (Housemark)", "Two Horse logo" and the "Arcuate Stitching" logos. The defendant be further directed to pay punitive damages along with costs to the plaintiff.
(11) Vide order dated 07.07.2017 the Ld. Predecessor of this Court granted ex-parte interim injunction in favour of the plaintiff and restrained the defendant, his associates, agents, employees, distributors from selling, stocking, distributing any apparels, other products in infringement of registered trademark "Levi's" of the plaintiff till the disposal of application under Order XXXIX Rule 1 and 2 CPC. Further, vide the same order the application moved by the plaintiff under Order XXVI Rule 9 CPC for appointment of Local Commissioner was allowed and Sh. Chaman Lal Advocate was appointed as Local Commissioner to conduct the search and inspection of the premises of the defendant, with further directions to seize CS (COMM) No: 565/2020 Page No. 8/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:34:29 +0530 and secure all infringed/ counterfeit products, if any, and also any machinery employed in reproducing the plaintiff's artistic work infringing plaintiff's copyright or trademark. He was further directed to prepare an inventory of the goods and material seized and to release the same to the defendant on superdari and produce sample of the impugned products in the Court. Summons of the suit were also issued to the defendant.
(12) Report was filed by the Ld. Local Commissioner Sh. Chaman Lal before the Court on 11.09.2017, as per which on reaching at the spot, he found one Mr. Rakesh Baweja at the spot, who claimed himself to be the owner of the said shop. He gave notice of the commission to the owner and thereafter inspected and searched the premises along with the representatives of the plaintiff company. During search, 178 pieces of Levis jeans of different colours and sizes were found. The pieces of jeans were packed in different polythenes and each polythene contained 3 or 4 or 5 pieces of jeans and some pieces of jeans were also in loose condition. All the said goods were seized at the instance of Ld. Counsel for the plaintiff as it was stated that they were counterfeit goods/ jeans. The said seized goods/ jeans were signed by the Ld. Local Commissioner with date on polythene of packed pieces of jeans and also on loose pieces of jeans and inventory of the same was prepared. The inventory was also got signed by the owner Sh. Rakesh Baweja. Eight pieces of Levis jeans of different colour and size were taken as samples, which samples were also signed by the Ld. Local Commissioner and were kept separately, whereas the remaining 170 pieces of jeans were kept in two gunny bags and were sealed. Photographs of the proceedings as well as seized goods/ jeans were also taken at the spot and later on the seized goods/ jeans were released to the owner Sh. Rakesh CS (COMM) No: 565/2020 Page No. 9/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:34:37 +0530 Baweja on executing superdarinama, which document was also signed by owner Sh. Rakesh Baweja.
(13) Written statement was filed on behalf of the defendant X-Virus through its proprietor Sh. Rakesh Baweja, wherein preliminary objections were taken that the defendant is not dealing with the goods under the trademarks as alleged in the plaint. The plaint is devoid of cause of action and further this Court lacks territorial jurisdiction to entertain the same as neither the plaintiff nor the defendant carries on business or work for gain within the territorial jurisdiction of this Court.
(14) It is further the case of the defendant that the plaintiff has not mentioned the name of copyright owner, it is a foreign company and is neither selling any of their goods under their trademark with the jurisdiction of this Court nor has any subordinate office. No document was filed by the plaintiff in support of its claim that the defendant had sold the alleged goods in the said jurisdiction and on the basis of bald averments, without any documentary evidence, the plaintiff is trying to bring the present suit within the jurisdiction of this Court.
(15) In the reply on merits, besides specifically denying each and every contention of the plaintiff, it was specifically denied by the defendant that he was manufacturing, stocking, distributing, storing and selling/ retailing caps bearing trademarks of the plaintiff.
(16) Replication was filed by the plaintiff to the written statement of the defendant wherein plaintiff had denied the averments made in the preliminary objections and the written statement and reiterated the contents CS (COMM) No: 565/2020 Page No. 10/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:34:44 +0530 of the plaint. It is the case of the plaintiff that pursuant to the orders of this Court dated 07.07.2017, the Ld. Local Commissioner visited the premises of the defendant on 18.07.2017 and the defendant was caught red-handed being in possession of infringing goods bearing the registered trademarks of the plaintiff company. The Ld. Local Commissioner had seized 178 articles bearing the trademark of the plaintiff company from the premises of the defendant which shows that the defendant is engaged in the business of infringing the trademark of the plaintiff company and gained illegal profit.
(17) Vide order dated 31.10.2017, the Ld. Predecessor of this Court disposed off the application under Order XXXIX Rule 1 and 2 CPC and the earlier order dated 07.07.2017 was made absolute.
(18) During the course of trial, in order to explore the possibility of settlement, the present matter was also referred to Mediation, however, the same was received back as 'not-settled'.
(19) After perusal of the pleadings of the parties and on the basis of material available on record, following issues were framed for trial by the Ld. Predecessor of this Court vide order dated 17.09.2019:
1. Whether the suit filed by the plaintiff is not maintainable under Order VII Rule 10/11 CPC as plaint does not disclose any cause of action? OPD
2. Whether the suit filed by the plaintiff is barred by Section 20 of CPC or Section 134 of Trade Marks Act, 1999? OPD CS (COMM) No: 565/2020 Page No. 11/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:00 +0530
3. Whether the Court has no territorial jurisdiction to try the suit?
OPD
4. Whether the plaintiff is entitled to a decree for permanent and mandatory injunction as per clause 'a' to 'f' of the prayer clause? OPP
5. Whether the plaintiff is entitled to a decree for rendition of accounts as prayed? OPP
6. Whether the plaintiff is entitled to a decree for damages, as prayed? OPP
7. Relief.
(20) Thereafter, the matter was fixed for plaintiff's evidence.
(21) The plaintiff company in support of its case had examined its AR namely Narender Singh as PW1. PW1 tendered his evidence by way of affidavit Ex.PW1/A and relied upon the following documents in his evidence by way of affidavit:-
1. Power of attorney dated 12.01.2015, Ex.PW1/1 (OSR).
2. Power of attorney dated 11.11.2019, Ex.PW1/2 (OSR).
3. LPC for trademark no.350738, Ex.PW1/3 (OSR).
4. LPC for trademark no.270875, Ex.PW1/4 (OSR).
5. LPC for trademark no.851933, Ex.PW1/5 (OSR).
6. Renewal certificate for trademark no.301881, Ex.PW1/6 (OSR).
7. LPC for trademark no.851936, Ex.PW1/7 (OSR).CS (COMM) No: 565/2020 Page No. 12/ 25 Digitally signed by NEHA
NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:07 +0530
8. LPC for trademark no.290954, Ex.PW1/8 (OSR).
9. LPC for trademark no.382357, Ex.PW1/9 (OSR).
10. LPC for trademark no.851939, Ex.PW1/10 (OSR).
11. LPC for trademark no.851717, Ex.PW1/11 (OSR).
12. Original photograph of counterfeit goods of the defendant, Ex.PW1/12.
13. Photographs of original goods of the plaintiff, Ex.PW1/13.
14. Affidavit of investigator, Ex.PW1/14.
15. Certificate of incorporation of plaintiff company, Mark A. (22) As none appeared on behalf of the defendant to cross-examine the witness, the right of the defendant to cross-examine PW1 was closed by the Ld. Predecessor of this Court vide order dated 05.04.2022. Further, plaintiff's evidence was also closed by the same order.
(23) Matter was fixed for defendant's evidence, however, defendant chose not to appear and lead evidence and therefore, his right to lead evidence was closed vide order dated 19.09.2023.
(24) Final arguments heard as advanced by the Ld. Counsel for the plaintiff. The defendant had not appeared to advance final arguments. The material available on record is also perused.
Issue wise findings are as under:
Issue no.1, 2 and 3:
-Whether the suit filed by the plaintiff is not maintainable under Order VII Rule 10/11 CPC as plaint does not disclose any cause CS (COMM) No: 565/2020 Page No. 13/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:15 +0530 of action? OPD
-Whether the suit filed by the plaintiff is barred by Section 20 of CPC or Section 134 of Trade Marks Act, 1999? OPD
-Whether the Court has no territorial jurisdiction to try the suit? OPD (25) All the above issues are taken up together being interconnected and as onus of proving all the above issues was upon the defendant.
(26) It is the case of the defendant in his written statement that the plaint is directly hit by the provisions of Order VII Rule 10/11 CPC as it does not disclose any cause of action qua the claim as mentioned in the plaint. It is further the case of the defendant that the suit is barred by Section 20 CPC or Section 134 of The Trade Marks Act, 1999 as the plaintiff is a foreign company and is neither selling any of their goods under their trademark within the jurisdiction of this Court nor has any subordinate office. It is further the case of the defendant that neither the plaintiff nor the defendant reside, carry on business or work for gain within the territorial jurisdiction of this Court.
(27) The provisions of Section 134 of the Trade Marks Act states as under:
1) No suit-
(a) for the infringement of a registered trade mark; or
(b) relating to any right in a registered trade mark; or
(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, CS (COMM) No: 565/2020 Page No. 14/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:21 +0530 whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.
(2) For the purpose of clauses (a) and (b) of sub-section (1), a "District Court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain.
Explanation.--For the purposes of sub-section (2), "person" includes the registered proprietor and the registered user.
(28) Perusal of the memo of parties reveals that the shop where the alleged infringed goods were seized by the Ld. Local Commissioner is shop bearing no. 6334, ground floor, gali no. 1, Block no.7, Padam Singh Road, Dev Nagar, New Delhi-110005. The said address falls within the area of Karol Bagh which is within the jurisdiction of Central District. Thus, as per the address of the defendant/ the shop where the allegedly infringed goods were recovered, the matter falls within the territorial jurisdiction of this Court as the defendant worked for gain/ carried on business within the territorial jurisdiction of this Court. As per Section 19 and Section 20 CPC, the matter falls within the territorial jurisdiction of this Court as cause of action arose within the jurisdiction of this Court, as the defendant carried on business and worked for gain within the jurisdiction of this Court. Furthermore, Section 134 of the Trade Marks Act is in the nature of CS (COMM) No: 565/2020 Page No. 15/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:29 +0530 expanding the scope of Section 20 CPC and does not limit the scope thereof. Section 134 (2) of the Trade Marks Act, specifies the word 'include'. Thus, it widens the jurisdiction and not narrows down the same. It states that the suit can also be instituted before the District Court having jurisdiction over the place where the plaintiff actually and voluntarily resides and carries on business or works for gain. It does not exclude the provisions of Section 20 CPC. In view of the same, the matter falls within the territorial jurisdiction of this Court.
(29) Furthermore, keeping in view the report of the Ld. Local Commissioner as well as the various Legal Proceeding Certificates relied upon by PW1 in his evidence by way of affidavit and also keeping in view the non-controverted testimony of PW1, it is held that the plaintiff is the registered owner of trademarks "Levi's" and "Levi's (Housemark)", "Two Horse logo" and the "Arcuate Stitching Design" and therefore, has cause of action to institute the present suit against the defendant.
(30) All the above issues are accordingly decided in favour of the plaintiff and against the defendant.
Issues no.4, 5 and 6:
-Whether the plaintiff is entitled to a decree for permanent and mandatory injunction as per clause 'a' to 'f' of the prayer clause? OPP
-Whether the plaintiff is entitled to a decree for rendition of accounts as prayed? OPP CS (COMM) No: 565/2020 Page No. 16/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:39 +0530
-Whether the plaintiff is entitled to a decree for damages, as prayed? OPP (31) All the above three issues are taken up together being interconnected and as onus of proving all the three issues was upon the plaintiff.
(32) In order to prove its case, the plaintiff had examined its AR namely Sh. Narender Singh as PW1 who had tendered his evidence by way of affidavit Ex.PW1/A. PW1 in his evidence by way of affidavit had reiterated and affirmed the contents of the plaint and had deposed in consonance with the plaint. He had further deposed that 178 infringing goods were seized from the premises of the defendant bearing the trademark of the plaintiff company by the Ld. Local Commissioner. The plaintiff had also paid fees of Local Commissioner. The cost of 178 jeans along with the fees of the Local Commissioner amount to Rs.9,45,000/- and the plaintiff also claims punitive damages for Rs.10,00,000/-. As the defendant failed to cross-examine PW1 and further failed to lead evidence in support of his contentions, the testimony of PW1 had remained non-controverted, non-
rebutted and non-challenged.
(33) The plaintiff besides the testimony of PW1, had also placed reliance upon the report of the Ld. Local Commissioner namely, Sh. Chaman Lal Advocate. The Ld. Local Commissioner was not examined as a witness before the Court nor was the report of the Ld. Local Commissioner exhibited before the Court. However, it is held by the Hon'ble High Court of Delhi in case titled as Levi Strauss & Co. v. Rajesh CS (COMM) No: 565/2020 Page No. 17/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:47 +0530 Agarwal, 246 (2018) DLT 577 that as the Ld. Local Commissioner is a representative of the Court, his report shall be treated as evidence in the suit and shall form part of the record. It was held by the Hon'ble Supreme Court of India in the case of Misrilal Ramratan & Ors. Mansukhlal & Ors v. A. S. Shaik Fathimal & Ors., 1995 Supp (4) SCC 600 that the report of the Commissioner is part of the record and therefore, cannot be overlooked or rejected on spacious plea of non-examination of the Commissioner as a witness since it is part of the record of the case.
(34) It was further held by the Hon'ble High Court of Delhi in the case of Levi Strauss & Co. Vs. Rajesh Agarwal (Supra) that if any party has any objection to the Commissioner's report or to the evidence, such party has an option to examine the Commissioner personally in open Court. Such examination is, however, neither compulsory nor required especially in cases were the party does not challenge the report. The report of the Local Commissioner can be treated as evidence in the suit where it is not challenged by any party.
(35) In the present case in hand, the report of the Ld. Local Commissioner as well as the written statement were filed on the same date. Thereafter issues were also framed, however, no objections to the report of the Ld. Local Commissioner were filed by the defendant. The defendant had further chosen not to lead evidence or to cross-examine the plaintiff's witness and therefore, as the report of the Local Commissioner has not been challenged by either the defendant or the plaintiff and the Local Commissioner was appointed by the Court as its representative, therefore, the evidence collected by the Local Commissioner along with its report are CS (COMM) No: 565/2020 Page No. 18/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:35:55 +0530 evidence before this Court.
(36) The Ld. Local Commissioner in his report had observed that 178 jeans were seized which were bearing the trademark "Levi's". The photographs of the inspection conducted and of seizure of goods has been placed on record. It was reported that 178 pieces of Levis jeans of different colour and different size were found, the said pieces of jeans were packed in different polythenes and each polythene contained 3 or 4 or 5 pieces of jeans and some pieces of jeans were also in loose condition. The photographs Ex.PW1/12 and Ex.PW1/13 reveal that the jeans were containing the plaintiff's trademark "Arcuate Stitching Design", "Two House Logo", "Levi's" and "Levi's Housemark".
(37) Thus, it is evident from the report of Ld. Local Commissioner as well as evidence of PW1 that counterfeited goods were seized from the premises of the defendant and therefore, defendant was dealing in counterfeited goods which contained the registered trademarks of the plaintiff and thereby was infringing the trademark of the plaintiff.
(38) For the purposes of damages, the plaintiff had relied upon the inventory prepared by the Ld. Local Commissioner. The AR of the plaintiff company namely Sh. Narendra Singh, in his evidence by way of affidavit Ex.PW1/A had stated that for the purpose of rendition of accounts, they rely upon 178 infringed products seized from the premises of defendant bearing the trademark of the plaintiff company at the time of commission and fees of Ld. Local Commissioner, totalling to Rs.9,45,000/-. He had also claimed punitive damages to the tune of Rs.10,00,000/-.
CS (COMM) No: 565/2020 Page No. 19/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:36:03 +0530 (39) Thus, the plaintiff had demanded punitive damages to the tune of
Rs.10,00,000/- for loss of its goodwill, reputation and business opportunity from the defendant.
(40) The Hon'ble High Court of Delhi in the case of Louis Vuitton Malletier v. Capital General Store & Ors., AIR 2023 Delhi 39 has held that counterfeiting is a commercial evil, which erodes brand value, amounts to duplicity with the trusting consumer, and, in the long run, has serious repercussions on the fabric of the national economy. A counterfeiter abandons, completely, any right to equitable consideration by a Court functioning within the confines of the rule of law. He is entitled to no sympathy, as he practices, knowingly and with complete impunity, falsehood and deception.
(41) In the case of Christian Louboutin Sas v. Ashish Bansal & Ors., 2018 VII AD (Delhi) 125, the Hon'ble High Court of Delhi had observed that where the defendants have reclused themselves from the proceedings, they cannot be permitted to enjoy the benefits of evasion or covert priorities.
(42) In the case titled as Microsoft Corporation v. Deepak Raval, MANU/DE/3700/2006: MIPR 2007 (1) 72, it was held by the Hon'ble High Court of Delhi that punitive damages can be granted even in cases where due to absence of defendant, the exact figures of sale made by them under the infringing copyright and/or trademark and exact damages are not available. The same should be granted for loss suffered by the plaintiff and to deter a wrong doer and like-minded from indulging in such unlawful activities.
CS (COMM) No: 565/2020 Page No. 20/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA
SHARMA Date: 2024.08.29 17:36:10
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(43) It has also been held by the Hon'ble, High Court of Delhi in the
case of Time Incorporated v. Lokesh Srivastava, 116 (2005) DLT 599 and in the case of Microsoft Corporation v. Deepak Raval (Supra) that:
"17. Coming to the question of damages, it may be stated at the outset that in the absence of the defendants, it may not be of any use to pass a decree of rendition of accounts. However, still damages can be awarded on the basis of estimation. Courts in this country have started adopting appropriate yardsticks for awarding of the damages even in the absence of the defendants.
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19. Reading of the judgments in the aforesaid cases would manifest that the courts have frowned upon the conduct of the defendants "willfully calculated to exploit the advantage of an established mark" and held that in such circumstances, the plaintiff would be entitled to compensation. It was also found that the defendants were enough business savvy to engage in a successful, albeit illegal business venture. Even assuming, arguendo, that they had no knowledge of Microsoft licensing products, knowledge is not an element of copyright infringement. The Courts came heavily upon the defendants where it was found that irrefutable evidence give rise to an influence of the defendants international, knowing and willful infringement.
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24. Coming to the legal position in India, a positive trend has started. Here also as Courts are becoming sensitive to the growing menace of piracy and have started granting punitive damages even in cases where due to absence of the defendant's exact figures of sales by the defendants under the infringing copyright and/or trade mark, exact damages are not available."
(44) It was further held in the case of Times Incorporated Vs. Lokesh Srivastava and Ors. (Supra) that thwart of compensatory damages to a CS (COMM) No: 565/2020 Page No. 21/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:36:18 +0530 plaintiff is aimed at compensating him for the loss suffered by him whereas punitive damages are aimed at deterring a wrong doer and the like minded from indulging in such unlawful activities. Whenever an action has criminal propensity also the punitive damages are clearly called for so that the tendency to violate the laws and infringe the rights of others with a view to make money is curbed. The punitive damages are founded on the philosophy of corrective justice ad as such, in appropriate cases these must be awarded to give a signal to the wrong doers that law does not take a breach merely as a matter between rival parties but feels concerned about those also who are not party to the list but suffer on account of the breach. In the case in hand itself, it is not only the plaintiff, who has suffered on account of the infringement of its trade mark and Magazine design but a large number of readers of the defendants' Magazine "TIME ASIA SANSKARAN" also have suffered by purchasing the defendants' Magazines under an impression that the same are from the reputed publishing house of the plaintiff company. This Court has no hesitation in saying that the time has come when the Courts dealing actions for infringement of trade marks, copy rights, patents etc. should not only grant compensatory damages but award punitive damages also with a view to discouraged 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. Punitive damages should be really punitive and not flee bite and quantum thereof should depend upon the flagrancy of infringement.
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SHARMA Date: 2024.08.29 17:36:27
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(45) In view of the above cited case laws, it is held that the defendant
herein had also chosen to stay away from the proceedings of the Court. No ledger of sale or record of accounts/cash registers, stock register, invoices etc. of defendant has been placed on record. It is deposed by PW1 that defendant used to give kachcha bills to the customers. Accordingly, decree of rendition of accounts of profits made by defendant cannot be granted in favour of the plaintiff. Though in his absence a decree of rendition of accounts is useless, however, damages can be awarded on the basis of estimation. The defendant by infringing the registered trademark and copyright of the plaintiff company had harmed the goodwill, reputation of the plaintiff company and had caused damage to its business. It had also harmed the customers of the plaintiff who were made to believe that the goods sold by the defendant belong to the plaintiff company.
(46) Considering the totality of facts and circumstances, quantum of recovery of infringed goods and also considering that PW1 had not provided the calculation on the basis of which such damages are being sought, the calculation of punitive damages by the plaintiff appears to be on a higher side. As 178 counterfeit jeans infringing the registered trademark and copyright of the plaintiff company were recovered from the shop of the defendant and as per Ex.PW1/13 one of such good put up for sale by the defendant contained MRP of Rs.2,799/-, the plaintiff is awarded punitive damages to the tune of Rs.6,00,000/- to be paid by the defendant. Besides the same, the plaintiff is also entitled to decree of permanent and mandatory injunction against the defendant. Accordingly, the defendant, his associates and agents, officers, employees, distributors, franchisee, representatives and assigns are hereby restrained from using the trademark and copyright CS (COMM) No: 565/2020 Page No. 23/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:36:35 +0530 "Levi's", "Levi's (Housemark)", "Two Horse Logo" and/or the "Arcuate Stitching Design" and/ or any other trademark and logos deceptively and confusingly similar to the registered trademarks and artistic logos of the plaintiff company on any jeans, shirts and other apparels infringing the plaintiff's registered trademark and copyright.
(47) Further defendant, his associates and agents, officers, employees, distributors, franchisee, representatives and assigns are restrained from passing off its goods as that of the goods of the plaintiff.
(48) The defendant had chosen not to appear, however, the goods were handed over on superdari. The defendant is directed to handover to the plaintiff the infringed goods violative of the plaintiff's trademark and copyright or deceptively similar to the same for the purpose of destruction.
(49) All the issues no. 4, 5 and 6 are accordingly disposed off in favour of the plaintiff and against the defendant.
Relief:
(50) In view of above discussions and findings, the present suit is hereby decreed.
(51) It is held that the plaintiff is entitled to decree of permanent and mandatory injunction against the defendant. Accordingly, the defendant, his associates and agents, officers, employees, distributors, franchisee, representatives and assigns are hereby restrained from using the trademark and copyright "Levi's", "Levi's (Housemark)", "Two Horse Logo" and/or the "Arcuate Stitching Design" and/ or any other trademark and logos CS (COMM) No: 565/2020 Page No. 24/ 25 Digitally signed by NEHA NEHA PALIWAL PALIWAL SHARMA SHARMA Date: 2024.08.29 17:36:43 +0530 deceptively and confusingly similar to the registered trademarks and artistic logos of the plaintiff company on any jeans, shirts and other apparels infringing the plaintiff's registered trademark and copyright. (52) Further defendant, his associates and agents, officers, employees, distributors, franchisee, representatives and assigns are restrained from passing off its goods as that of the goods of the plaintiff. (53) The defendant is also directed to handover to the plaintiff the infringed goods violative of the plaintiff's trademark and copyright or deceptively similar to the same for the purpose of destruction. (54) The defendant is further directed to pay damages to the tune of Rs.6,00,000/- to the plaintiff along with cost of the suit. The cost will also include the fees of the Ld. Local Commissioner. The defendant is directed to pay damages to the plaintiff within 30 days of the judgment, failing which the plaintiff will be entitled to interest there upon @ 6% per annum till realization. Decree sheet be prepared accordingly.
(55) File be consigned to record room, after due compliance.Digitally signed by NEHA
NEHA PALIWAL PALIWAL SHARMA
SHARMA Date: 2024.08.29 17:36:52
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Pronounced in the Open Court (Neha Paliwal Sharma)
on 29.08.2024 District Judge-03, Central District,
Tis Hazari Courts, Delhi
It is certified that this Judgment contains 25 pages and each page bears my signatures.Digitally signed by NEHA
NEHA PALIWAL PALIWAL SHARMA
SHARMA Date: 2024.08.29 17:37:00
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(Neha Paliwal Sharma)
District Judge-03, Central District,
Tis Hazari Courts, Delhi
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