Bombay High Court refuses to set aside injunction order passed in favour of Marico Limited product under its brand Parachute

Bombay High Court: An application was filed by the applicant (defendant in the suit) seeking vacation and setting aside of the impugned order dated 18-08-2023 passed in the interim application in a commercial IP suit. R I Chagla, J., refused to set aside the impugned order because the applicant failed to make out any case for vacating or setting aside the said order by discharging its burden or meeting the essential requirements for vacating an ex-parte order under Order 39 Rule 4 of Civil Procedure Code (CPC) and dismissed the application being devoid merits.

KLF Industries (applicant) was an entity suspected of blatantly copying Marico Limited’s (plaintiff’s) distinctive blue bottle and all its protectable features. The applicant allegedly had a yellow bottle, with a very different appearance, however “very recently” it switched to the impugned similar blue bottle and the plaintiff had discovered the impugned blue bottle only in July, 2023. Thereafter, a commercial IP suit was filed seeking ex-parte ad-interim relief without notice because if the relief is not granted immediately, the plaintiff would “destroy/conceal all evidence”; dump the goods in the market and the “goods may be concealed and thereafter re-appear in the market in other outlets”. The ex-parte ad-interim order granted an injunction in respect of the overall trade dress of Marico’s well-known coconut oil products under the brand Parachute, comprising of the iconic blue bottle and other features. It is this order which stands impugned in the present application.

The present application was filed seeking vacation / setting aside the ex-parte order, primarily alleging that the plaintiff had suppressed prior correspondence with the applicant and prior knowledge of the applicant’s product. The applicant relied on a non-disclosure agreement between the parties and alleged that facts relating to a potential transaction had not been disclosed. The applicant also alleged that both the rival products were being sold at the Canteen Stores Department and the Plaintiff ought to have prior knowledge about the applicant’s product and had chosen not to take action.

Counsel for the applicant submitted that the plaintiff suppressed from the Court that the Applicant is a well-established business entity with an established presence for decades and a bouquet of products. The applicant has a history and tradition going back to 1948, when Mr. K.L. Francis introduced Oil Milling in Kerala (the KLF in the applicant’s name comes from this). The applicant is a well-known and established market entity with substantial sales and having wide range of products with a presence not only in India but in the Gulf. The applicant is the largest manufacturer of cold-pressed virgin coconut oil in India and has won a slew of awards, including from the Government of India.

Counsel for the plaintiff submitted that the material sought to be produced and the grounds raised did not satisfy the requirements of Order 39 Rule 4 of the Civil Procedure Code. The scope of Order 39 Rule 4 is very limited, and Defendant had failed to discharge the high burden of establishing the knowledge of the Plaintiff, the material alleged to be suppressed required consideration at the time of granting the ex-parte order and the plaintiff knowingly, deliberately and willfully made a false statement or a misleading statement to obtain the ex parte order. The plaintiff argued that defendant had not been able to cross the threshold of satisfying the requirements of an application under Order 39 Rule 4, CPC and that no case for vacating the ex-parte order was made out.

The Court noted that the applicant has in the present case failed to establish / discharge the burden of proving that the plaintiff has knowingly made a false or misleading statement in relation to a material particular in either the Plaint or in the Interim Application for temporary injunction. In the present case, the applicant has sought vacation of the ex-parte order on the basis of conjectures or surmises. There is an attempt made by the applicant to draw a link between NDA and the Information Memorandum by relying upon the project named “Project Kepler” mentioned in the alleged Information Memorandum and by further placing reliance upon the E-mail dated 23-04-2021 which refers to “Project Kepler”. However, a perusal of the said E-mail shows that Plaintiff at the very outset expressed its disinterest in participating in the acquisition opportunity shared by one Equirus (financial advisor to the applicant) in respect of KLF Nirmal Industries. The mere reference to ‘Project Kepler’ cannot constitute evidence that the plaintiff company had received the Information Memorandum and/or any other document containing the images of the impugned product.

The Court further noted that the Information Memorandum is not a material and / or relevant document, presuming that the Plaintiff had knowledge of the Information Memorandum and had not disclosed the same, as the Information Memorandum was not capable of being scrutinized in the context of infringement given the fact that the issue is not only about the blue bottle but the entire packaging being the consolidated effect of several distinctive features / marks coupled with the blue color scheme. Moreover, it was clear that giving notice to the Defendants before passing the impugned order would defeat the purpose of granting ad-interim relief. Thus, the Court had upon comparison of the rival products arrived at prima facie finding that the applicant has dishonestly adopted its marks / lables / packaging and that the respective lables / packaging used on the impugned products are a reproduction / substantial reproduction of the Plaintiff’s original artistic works comprised in the Plaintiff’s Parachute packaging / labels and / or including the Flag Device, the Parachute Tree Device, the Broken Coconut Device.

Thus, the Court held that the applicant has failed to make out any case for vacating and / or setting aside the said order by discharging its burden and / or meeting the essential requirements for vacating an ex-parte order under Order 39 Rule 4 of CPC.

[KLF Nirmal Industries Pvt Ltd. v Marico Limited, 2023 SCC OnLine Bom 2734, decided on 20-12-2023]

Advocates who appeared in this case :

Mr. Venkatesh Dhond, Senior Counsel a/w Mr. Shriraj Dhruv, Ms. Aastha Mehta and Mr. Ronak Shah i/b Dhru & Co., Advocates for Applicant/Original Defendant.

Mr. Ravi Kadam, Senior Counsel a/w Mr. Hiren Kamod, Mr. Nishad Nadkarni, Mr. Aasif Navodia, Ms. Khushboo Jhunjhunwala, Ms. Jaanvi Chopra i/b Khaitan & Co., Advocates for Plaintiff.

Mrs. Naina Poojary, S.O., Court Receiver present.