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Delhi HC Comes Down Heavily on the Practice of ‘Defendant Masking’


In Bata India v Chawla Boot House, a case concerning trademarking infringement and passing off, the Delhi High Court came down heavily on the practice of ‘defendant masking’. Plaintiffs use this strategy to avoid detection of the matter in cause lists and thereby obtain injunctions in initial hearings without the presence of the main defendant’s counsel. The court took notice of this strategy in this case, and directed stricter measures from the Registry to control it in all IPR suits.

Background

This particular case involves a trademark infringement and passing off suit filed by Bata against the mark POWER FLEX and the tag line THE POWER OF REAL LEATHER used for footwear by the ‘main defendant’, Leayan Global Pvt Ltd. The court found trademark infringement for the mark POWER FLEX. Specifically, it rejected Leayan Global’s challenge to the distinctiveness of the mark POWER in relation to footwear, and further, found their use infringing. However, it did not find that the tagline THE POWER OF REAL LEATHER infringed any of Bata’s trademarks.

The court also gave consideration to a compromise suggested by Leayan Global, wherein they would undertake to use the POWER FLEX mark to market and sell only leather footwear, and not extend it to sportswear, the category for which Bata uses the mark POWER. However, the court rejected this compromise, suggesting that a distinction between these two sub-categories would be artificial, and may unfairly restrict Bata’s future plans of brand expansion.

Interestingly, this case also saw the likes of M.S. Dhoni and Virat Kohli being pitted against each other, with both personalities endorsing Bata and Leayan Global respectively. Their advertisements were used as evidence of bona fide use of the mark POWER by both parties. While the court eventually found that Kohli’s endorsement did not relate to the marks in question, and was therefore irrelevant to the matter, the court did have to listen to arguments suggesting that Virat Kohli was not a prominent personality in 2014!

Arraignment of Defendants

It would be noticed that while the main defendant in this case is Leayan Global, the first defendant is Chawla Boot House, a retail outlet in Delhi. This represents an attempt by Bata to ‘mask’ the main defendant in this case. This makes detection in cause lists more difficult by hiding ‘Leayan Global’ under the mask of ‘Chawla Boot House & another’ or ‘others’ and increases the chances of obtaining the first hearing, generally on injunctions, ex parte.

The practice of ‘defendant masking’ is not new (Mr Sandeep Rathod had compiled a list of patent cases in which this strategy had been adopted in 2016). In addition to patent suits and trademark suits such as the present one, this strategy has also been identified in a copyright case. In Micolube, the court disparaged this practice, and likened it to coming to the court with unclean hands:

“It is not only in this case, but in several other cases that this Court has noticed this unhealthy trend on the part of the plaintiffs to array the main defendant as defendant No. 2 or defendant No. 3 while naming some innocuous dealer or retail outlet as defendant No. 1. The object is easily discernible. When the counsel for the main defendants scan the list of cases, they would not be able to know as to whether any case has been filed against them so as to enable them to appear on the very first date on which the case is listed before court. The very fact that the plaintiff has also indulged in this practice is also an indicator that it did not want the counsel for the defendant No. 2 to appear on the first date on which the matter was taken up for consideration of the grant or non-grant of ad interim injunction. This fact also disentitles the plaintiff to any equitable relief. I am of the view that the plaintiff has concealed and suppressed material facts from this Court.”

It is clear, therefore, that this practice has been considered improper for a while now. In order to combat its continued practice, the court directed the Registry to ensure strict compliance of the judgment in Micolube and additionally seek an undertaking from the Plaintiff in all IPR cases where there are multiple defendants that the Defendant No.1 being arraigned is the main contesting defendant in the suit. The same is also reflected in a circular issued by the Delhi High Court. However, it would be apt to exercise caution in this process, since defining the ‘main defendant’ may not be a simple task in all cases across IPRs.

Image from here.

 

One comment.

  1. AvatarAnuj

    In my opinion, I agree that the Plaintiff’s often arraign the lesser known Defendant as the first party, however, the Court has not taken into consideration certain vital aspects.

    1) There are multiple instances where the Defendant’s often are repeat offenders who despite being injuncted against, continue to carry out infringing activities and the Plaintiff is constrained to initiate Execution Proceedings or Contempt of Court proceedings. What is the relief that a Plaintiff can seek? An ex-parte order for injunction in most cases, and how does he prove that? It’s the production of the actual infringing product which is available in the market at the time of filing the suit.

    2) In an effort to teach the Defendant a lesson by production of the actual infringing material and claiming damages, the Plaintiff’s often )in addition to seeking an ad-interim injunction) also file an applitcation seeking appointment of local commissioner’s who will take into evidence that the infringing product was available at the location.

    2) Unscrupulous Defendant’s often keep a watch out on cause lists whether their name appears or not. If so, they are immediately notified that impending action by local commissioner’s and Court’s are being taken against them. Armed with this information, the distributors, the factories ( manufacturing the infringing goods), assigns and any person’s responsible for holding such material are notified immediately and they remove the goods instantly.

    3) The Counsel for the Plaintiff’s are often left red-faced as it is on the basis of their analysis that a Plaintiff would carry out an investigation into ascertaining whether the Defendant has infringing material or not. The costs and expenditures for filing a trademark suit, carrying out investigation, fees for the counsel, Court fees, appointment of local commissioner’s ( who are often paid no less than 1.5 Lakhs) multiple locations ( resulting in 7-10 Local Commissioner’s being appointed thus the equivalent expenditure) are an expensive process for Plaintiff’s who are only seeking to protect their mark.

    4) There is no hidden agenda in unobtrusively seeking to obtain ex-parte ad interim injunctions on the Plaintiff’s behalf. However, the vast expenses incurred by the Plaintiff to protect their mark should also be taken into consideration by the Hon’ble Court.

    5) It is not the case that there is no even playing field for the Defendant, as it noted that the Plaintiff only has to prove a prima-facie case of infringment/passing off. However if none exists, the Defendant already have the remedy of vacating such an injunction when there is no true cause at the next hearing. The Court’s are not blind to vacate such an injunction where the Plaintiff has no proof whatsoever!

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