Facts of the case:
The plaintiff, Larsen & Toubro Ltd. (L&T), a company owning the trademark/logo L&T (in a circle), is a renowned and established multi-national business organization that has been carrying on its business in India for many years. It has an impressive sales figure to flaunt and also spends large sums of money in advertising its mark and products. A sales engineer of L&T has come across a mobile charger made in China being sold with the L&T logo (in a circle) engraved on it. Following this, L&T has brought an action against the defendant company alleging, inter alia, infringement of trademark, likelihood of causing confusion, passing-off and deliberate misrepresentation to the public.
Issues:
(i)Whether use of the mark L&T by the defendant has infringed plaintiff’s registered mark?
(ii)Whether use of the mark L&T by the defendant is likely to cause confusion and give an impression to the public that the defendant is associated with the plaintiff-company?
(iii)Whether the defendant intended to pass off its own products as those of the plaintiff and to represent to the public that it is in some way connected with the plaintiff-company?
Remedies sought by plaintiff:
(i)Injunction restraining the defendant from using plaintiff’s mark or any other deceptively similar mark and from passing off its own products as those of the plaintiff.
(ii)Damages amounting to Rs 20,01,600/-
(iii)Destruction of the infringing goods and packing material, etc.
Decision: An ex-parte decree was passed against the defendant by the Delhi High Court restraining the defendant from manufacturing, selling, exporting, distributing or marketing any mobile charger using the registered mark/logo of the plaintiff company either on the product or on its packaging. Punitive damages amounting to Rs.50,000/- were also awarded to the plaintiff and all the chargers and packaging, which bear the registered mark/logo of the plaintiff company, were ordered to be destroyed within eight weeks. No order as to costs was made.
Reasons and arguments:
Plaintiff argued that it has registered the trademark containing the L&T logo in various classes and the said mark/logo has acquired so much distinctiveness that its use by any person other than the plaintiff is bound to cause confusion among the traders as well as the members of the public. Such a usage might convey an impression that the user was a subsidiary or associate of the plaintiff-company. Also, the names L&T or its abbreviated form, LT have been used exclusively and extensively by the plaintiff for over half a century in India and have come to be exclusively associated with it and/or its group companies and the goods and services under the name L&T have come to be associated with goods and services of highest quality. In this case, the plaintiff had neither authorized nor permitted the defendants to use the mark/logo.
The court found out that the registration of the said trademark/logo had been granted to the plaintiff-company not only in respect of telephones, but also their parts and accessories. Thus mobile phones, as well as chargers as essential accessories also fall within such ambit of the registration by the plaintiff, which is still valid at the time of this case. In the present matter, the mark/logo of the plaintiff-company had been simply re-produced on the carton of the charger, an action to which the defendant had no right. Hence it constituted infringement as per the court’s opinion.
Especially given the plaintiff-company’s continuous use of the mark and its multifarious nature of activities, the court believed that if another company uses said mark, the customer, particularly if he happened to be an unwary customer, was likely to assume that the company manufacturing and/or marketing the product bearing the mark was either a group company/subsidiary company of the plaintiff or had some kind of arrangement/agreement with it for use of the aforesaid mark/logo.
Given lack of presence and/or explanation on defendant’s part, the court inferred that the defendant merely wanted to encash upon the tremendous goodwill and reputation enjoyed by the plaintiff company and hence is guilty of passing off. Moreover, in light of the consumer’s high levels of expectation regarding standard and quality of plaintiff’s products, any inferiority of the defendant’s products (which customers may buy believing them to be the plaintiff’s) will tarnish the credibility and reputation of the plaintiff as a quality manufacturer of goods and also erode its image as a corporate and dilute the brand equity which the mark LT enjoys in the market. Therefore public interest was also cited a reason why the defendant cannot be allowed to use the mark/logo of the plaintiff.
When asked by the court as to the possible modes of execution of the decree, especially given that defendant, a foreign-based company, had no property in the jurisdiction of the Court, the plaintiff’s counsel referred to the provisions of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 framed by the Central Government. Also, as per Sub-section (1) of section 156 of the Customs Act, 1962 the plaintiff company, as the right holder in respect of the registered trademark/logo, was allowed to give a notice to the Commissioner of Customs or any Customs officer authorized in this behalf by him, at the port of import of goods, informing him of infringement of its intellectual property rights and requesting him to suspend the clearance of goods, which are found to be infringing the rights of the plaintiff company in respect of its registered mark/logo. While such notice did not require a decree of the Court but such decree was sought mainly because of its persuasive value for the Commissioner or the Customs Officers duly authorized by him, in preventing import and sale of such goods in India, thereby substantially serving the purpose of the plaintiff.
Although the plaintiff did not prove any actual damage, the court referred to cases such as Times Incorporated v. Lokesh Srivastava & Anr., and Hero Honda Motors Ltd. vs. Raj Scooters, and held that in cases where the defendant had chosen to stay away from the proceedings of the Court, punitive damages ought to be awarded. Otherwise, while a defendant, who appears in the Court and submits its account books would be liable for damages, a party choosing to be absent would escape the liability merely on account of the failure of the availability of account books. The fact was also considered that a lot of energy and resources are spent in litigating against those who infringe the trademark and copyright of others and try to encash upon the goodwill and reputation of other brands by passing of their goods and/or services as those of that well known brand.
