Delhi High Court in Counterfeiting Case of Louis Vitton Counterfeiter Abandons Completely Any Right to Equitable Consideration

Delhi High Court in Counterfeiting Case of Louis Vitton Counterfeiter Abandons Completely Any Right to Equitable Consideration

The Delhi High Court by its single judge Justice C Hari Shankar ordered a Sadar Bazar trader/defendants to pay Rs. 5 lakh to Louis Vitton after he was found guilty for contempt-violating a restraining order by continuing to sell counterfeit products of famous French luxury brand.

In the present case, on 23rd September in 2021, the Court while adjudicating a suit filed by the Louis Vuitton Malletie had restrained several small-scale business from importing, manufacturing, selling or offering for sale or otherwise dealing with the registered trademarks Louis Vuitton Malletier or the logo 'LV', as well as other associated monograms and patterns, as other associated monograms and patterns, as would infringe the registered trademarks of the plaintiff.

Firstly, the Court stated that unlike provisions dealing with contempt of court, which are intended to be fundamentally punitive, Order XXXIX Rule 2A of CPC is intended to compel and enforce obedience of the order of interim injunction.

"It cannot, quite obviously, be said that Order XXXIX Rule 2A becomes inapplicable once the disobedience has ceased. In such a case, possibly, the gap between the exercise of power under Order XXXIX Rule 2A and exercise of power of contempt of Court might stand narrowed considerably as, once the disobedience has ceased, there can be no question of 'enforcement' of the interim injunction, and all that remains is punishment for having committed the breach," the Court expressed.

An application was submitted by the plaintiffs under Order XXXIX Rule 2A of the Code of Civil Procedure, 1908 (CPC), complaining that the defendants had violated the interim order of injunction. It was alleged that the trader/defendants continued to sell belts bearing the LV brand even after passing the order of injunction at least till September 2022.

The learned counsel for defendant no. 2 frankly acknowledged the fact that, in fact, his client had been selling LV branded belts even after passing of the order dated 23rd September 2021. He, however, submitted that his client is a paltry businessman, who runs his establishment in a small shop which has been taken on rent. While apologizing for having breached the injunction order dated 23rd September 2021, Mr. Birender Bhatt prayed that a lenient view may be taken in the matter.

The learned counsel appearing for plaintiff strenuously opposed and stated counterfeiting has become a rampant social evil and that, if the court does not come down heavily on such counterfeiters, brand value acquired over years would stand progressively eroded.

The Court noted that the defendant chose to continue with his business of selling counterfeited LV branded goods, even after having been injuncted from doing so, augments his culpability. Apologies and entreaties to the Court, after having so acted, could hardly mitigate the misdemeanor.

The single judge observed, "counterfeiting is an extremely serious matter, the ramifications of which extend far beyond the confines of the small shop of the petty counterfeiter. It is a commercial evil, which erodes brand value, amounts to duplicity with the trusting consumer, and, in the long run, has 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. He is entitled to no sympathy, as he practices, knowingly and with complete impunity, falsehood, and deception. Even while remaining within the confines of the provision with which it is seized."

The Court added that even while remaining within the confines of Order XXXIX Rule 2A of the CPC (consequence of disobedience or breach of injunction), the court is required to be 'economically and socially sensitized' and to send a deterrent message to others who indulge or propose to indulge in the practice of counterfeiting.

The Court was of the view that if the injunction is only with respect to one brand, it cannot, while proceeding under Order XXXIX Rule 2A of CPC, considering other brands which may also have been counterfeited.

Noting that the injunction granted, vide order dated 23rd September 2021, was with respect to manufacture and marketing of goods bearing the LV brand, the Court reckoned, "there is no injunction regarding manufacture and marketing of any other brand. The manufacture or marketing of any other brand by the defendant cannot, therefore, statutorily constitute a relevant consideration under Order XXXIX Rule 2A, as the provision is clearly restricted to the injunction granted, and nothing more."

Since the injunction had been granted consequent on a prima facie determination that the defendant is in fact guilty of having counterfeited the LV brand, the Court cannot, therefore, while exercising jurisdiction under Order XXXIX Rule 2A, return a finding that the defendant is also guilty of counterfeiting other brands, opined the judge.

The Court noted that since the counsel for the plaintiff had not cited a single instance where the defendant was found guilty of counterfeiting any reputed brand, except for the prima facie observations contained in the order dated 23rd September 2021, Section 105 of the Trade Marks Act will not be applied.

The Court held, "Section 105 contained in Chapter XII of the Trade Marks Act, which is titled Offences, Penalties and Procedure. It deals with enhanced penalty on second or subsequent conviction, and envisages extended periods of incarceration for persons who, once having been convicted under Sections 103 or 104, repeats the offence. Section 105 has nothing, whatsoever, to do with Order XXXIX Rule 2A, and it is no part of the function of a Court to propel, or even project, by judicial fiat, one statutory provision into another, or to intermix different statutory provisions, where the legislature has not deemed it appropriate to do so. Leaving Section 105 of the Trade Marks Act to deal with the situations which it envisages, we would do better to examine the present case by staying within the confines of Order XXXIX Rule 2A."

Accordingly, in the interests of justice, the Court directed the defendant to pay Rs. 5 lakh to the plaintiff within a period of four weeks failing which the defendant no. 2 shall suffer incarceration in civil prison in Tihar Jail for a period of one week.