Delhi High Court: A Single Judge Bench of C. Hari Shankar, J. observed that counterfeiting was an extremely serious matter, the ramifications of which extend far beyond the confines of the small shop of the petty counterfeiter and therefore, directed the proprietor of a small shop to pay Rs. 5 lakhs, failing which he would suffer incarceration in civil prison for a week as he violated the order of interim injunction passed earlier by the Court and continued to sell counterfeited products of Louis Vuitton.
The plaintiff, Louis Vuitton Malletier was a corporation headquartered in France and the articles bearing the Louis Vuitton (LV) brand or mark were niche articles catering only to the most affluent of society, who could partake of such luxury, therefore, they command a high price, often prohibitively out of the reach even of the upper-middle class of the society.
The plaintiff instituted a suit against several small entities who were alleged to be manufacturing and marketing articles bearing counterfeit LV marks. This Court in its earlier order dated 23-9-2021, found prima facie merit in the allegations of the plaintiff and accordingly passed the interlocutory order of restraint, thereby, restraining the defendants from “importing, manufacturing, warehousing, selling and/or offering for sale, advertising, directly or indirectly dealing in, in any manner bearing the registered trademarks “LOUIS VUITTON”, “LV” logo, Toile monogram pattern, Damier pattern and/or LV Flower pattern or any similar trade mark amounting to an infringement of plaintiff’s registered trademarks, as also passing off of their goods as emanating from the plaintiff”.
The present application had been filed by the plaintiff alleging violation by the defendants of the interim order dated 23-9-2021, passed by this Court and confirmed in order dated 28-3-2022. It was alleged by the plaintiff that even after passing the order of injunction, goods bearing fake logos of the LV brand as well as other luxury brands were being sold by the defendants. Accordingly, the application prayed that the defendants be punished for having committed contempt of this Court within the meaning of Order 39 Rule 2-A of the Civil Procedure Code, 1908 (Code).
Submissions on behalf of the Plaintiff
Counsel for the plaintiff submitted that Defendant 2 had continued to sell belts bearing the LV brand at least till September 2022. Further, it was submitted that counterfeiting had become a rampant social evil and that, if the court did not come down heavily on such counterfeiters, brand value acquired over years would stand progressively eroded, therefore, any leniency shown in the present matter, would encourage similar such counterfeiters to make imitation goods and, thereby, not only dilute the brand value of well-known brands, but also dupe customers in the bargain.
Submissions on behalf on the Defendant 2
Counsel for the defendant acknowledged that Defendant 2 had been selling LV branded belts. However, it was submitted that the defendant was a paltry businessman, who runs his establishment in a small shop which had been taken on rent. While apologizing for having breached the injunction order, counsel for the defendant prayed that a lenient view may be taken in the present matter.
Analysis, Law, and Decision
The Court noted that the injunction that had been granted was consequent on a prima facie determination that Defendant 2 was guilty of having counterfeited the LV brand and there was not even a consideration regarding counterfeiting by Defendant 2 of any other brand. Therefore, the Court opined that this Court, while exercising jurisdiction under Order 39 Rule 2-A, could not return a finding that Defendant 2 was also guilty of counterfeiting other brands as no such presumption could, in law, be drawn.
The Court opined that even if it were to be presumed that Defendant 2 was counterfeiting other brands and to punish Defendant 2 therefor under Order 39 Rule 2-A, it would require the Court to rewrite the order dated 29-9-2021 passed under Order 39 Rules 1 and 2 as injuncting Defendant 2 not only from manufacturing goods bearing the LV brand, but also from manufacturing goods bearing other brands. The Court further noted that under Order 39 Rule 2-A, the Court could not rewrite the order of which breach was alleged as that would lie completely outside the province of its jurisdiction.
The Court relied on Amazon.com NV Investment Holdings LLC v. Future Retail Ltd., (2022) 1 SCC 209 (Amazon) and opined that proceedings under Order 39 Rule 2-A were intended to enforce the order of interlocutory injunction and to ensure its compliance, therefore, there could not be compliance with the order beyond the terms of the order itself. The Court therefore noted that its earlier order dated 23-9-2021 injuncted the Defendant 2 from manufacturing or marketing the goods bearing the LV brand and the Order 39 Rule 2-A, which was concerned with ensuring the compliance of the order, could not take into consideration alleged counterfeiting of other brands as that would go against the very ethos of Order 39 Rule 2-A, as identified and understood by the Supreme Court in Amazon (supra).
The Court further relied on U.C. Surendranath v. Mambally’s Bakery, (2019) 20 SCC 666 (U.C. Surendranath) and Food Corporation of India v. Sukh Deo Prasad, (2009) 5 SCC 665 (Food Corporation of India) and opined that this Court had necessarily considered the nature and seriousness of breach or disobedience while dealing with an application under Order 39 Rule 2-A.
The Court observed that “counterfeiting was an extremely serious matter, the ramifications of which extend far beyond the confines of the small shop of the petty counterfeiter. It was a commercial evil, which erodes brand value, amounts to duplicity with the trusting consumer, and, eventually, would have 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, therefore, Defendant 2 was entitled to no sympathy, as he practiced, knowingly and with complete impunity, falsehood, and deception”.
The Court opined that “under Order 39 Rule 2-A, the only option with this Court, in a case such as the present, would be to detain the defendant in civil prison, for a term not exceeding three months and at the same time, the court could not be unmindful of the fact that detention in prison was an extreme step, which irreparably prejudices the liberty of the individual. Keeping this factor in mind, the Supreme Court in U.C. Surendranath, and Food Corporation of India, held that the power under Order 39 Rule 2-A had to be sparingly exercised, with great care and caution”.
The Court disposed of the application and opined that the interests of justice would best be subserved if, in the present case, the defendant was directed to pay, to the plaintiff, Rs. 5 lakhs within four weeks, failing which the proprietor of Defendant 2 shall suffer incarceration in civil prison in Tihar Jail for a week.
[Louis Vuitton Malletier v. Capital General Store, 2023 SCC OnLine Del 613, decided on 6-2-2023]
Advocates who appeared in this case:
For the Plaintiff: Advocate Pravin Anand;
Advocate Dhruv Anand;
Advocate Nimrat Singh;
For the Defendant: Advocate Kailash Sharma;
Advocate Nishi Jain;
Advocate Birender Bhatt;
Advocate Rakesh Kumar.
*Judgment authored by: Justice C. Hari Shankar.
*Simranjeet Kaur, Editorial Assistant has reported this brief.