Trademark

Punitive damages in IP cases are here to stay: Proctor and Gamble v. Joy Creators



The case stands out owing to the importance given by the plaintiffs to levying punitive damages on the defendants. This is a marked departure from the importance given to injunctions especially temporary injunctions in recent times in intellectual property litigation. Intellectual property litigation in India is mostly confined to proceedings for temporary litigation. Once a temporary injunction is obtained, plaintiffs often abandon the litigation. We had previously posted on a talk by Justice Arjan Sikri on the same.

We had also previously posted on the elimination of temporary injunctions to hasten the litigation process. On a more specific note, a fairly recent post talks about elimination of interim injunctions in relation to trademarks.

Facts:

The present suit is a suit for permanent injunction, rendition of accounts, damages and delivery up of the infringing material. The plaintiff is the manufacturer of Olay Total Effects anti ageing products. The plaintiff owns a registered trademark “OLAY TOTAL EFFECTS” in Class 3 of Schedule 4 of the Trademarks Act. The plaintiff launched its products under the above trademark in 2007.

Around the year 2008, the plaintiff saw an advertisement of an application for registration of the label containing the mark “JOY ULTRA LOOK TOTAL EFFECTS”, in respect of cosmetics by the defendants. The defendants claimed that they were using the label since April 2001. The plaintiffs filed initiated opposition proceedings against the registration and the opposition proceedings are still pending.

Plaintiffs have further alleged that the defendant is using the words “TOTAL EFFECTS” only in relation to anti aging/age defying products. The plaintiffs have thus initiated infringement and passing off actions.

The defendants claim that in their label, “JOY ULTRA LOOK TOTAL EFFECTS”, the words ULTRA LOOK had been given prominence and that the words TOTAL EFFECTS were written below the words ULTRA LOOK in much smaller font size.

The Delhi High Court through an interim order had restrained the defendants from using the trademark “TOTAL EFFECTS” or any other deceptive variation. The interim order was made absolute on 24th January 2011.

Judgment:

The Court quoted from various judgments and noted that for the action to succeed, the plaintiff only needs to show that the trademark of the defendant “resembles its trademark in a substantial degree, on account of extensive use of the main features” of the trademark. The Court noted that a “consumer with average intelligence and imperfect recollection” has to be kept in mind. It is important to note that the consumer does not have both the marks lying side by side for comparison. This increases the chances of deception.

The Court reasoned that TOTAL EFFECTS was an essential and integral part of the plaintiff’s trademark. Therefore its use with changes like prefixes, suffixes and packaging will not be of significance once the essential part is used. Thus, the court ruled in favour of the plaintiff.

Most interestingly, in the instant case, neither the relief of injunction nor the relief of delivery up of infringing material was pressed for. The plaintiff insisted on the award of punitive and compensatory damages. The plaintiff among other cases relied on Time Incorporated v. Lokesh Srivastava (2005) and Hero Honda Motors Ltd. V. Shree Assuramji Scooters (2006) and claimed for punitive damages. The Court observed that punitive damages are founded on the philosophy of corrective justice. The Court also stressed the need to award punitive damages to defendants who are absent before court. Defendants should not be allowed to escape liability just because the actual profit generated from the infringing mark cannot be computed from the account books. The Court awarded punitive damages amounting to Rs. 1,00,000 each against the defendants.

Click here for the judgment on indiakanoon.

Pictures from here and here.

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3 comments.

  1. AvatarAnonymous

    well it is interesting to note that the judiciary is warming up to the idea of punitive damages in the realm of trademark infringement. this will go a long way in protecting the interests of especially the well known marks.

    Reply
  2. Avatarprakruthip

    Hi anonymous

    Thanks for your comment. You are absolutely right.
    Previously the litigation would end with a temporary injunction. All that the infringers had to do was stop using the infringing mark. Plaintiffs never pursued them for damages as in this case. The courts would often shy away from compensatory damages as most infringers were fly by the night companies.

    The court and the plaintiffs have set an example in this case, by insisting on punitive damages and not compensatory damages. Thus blurring the line between defendants who appear before the court and defendants who do not.

    Reply
  3. AvatarAnonymous

    hi,
    please clarify. it seems like before the trend of awarding punitive damages started,those defendants/infringers who remained absent from court proceedings were in a better position than those who appeared before the court?

    Reply

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