Parachute case against infringement of Copyright laws
By Arpit Kalra and Tanvi Bhatnagar
The plaintiff filed the present suit for permanent injunction alleging infringement, by the defendants, of its registered trademark “PARACHUTE”. The plaintiff is the proprietor of various device marks/labels/trade dress/packaging for the brand “PARACHUTE”. The label in question also constitutes original “artistic works” within the meaning of Section 2(c) of the Copyright Act, 1957 and the plaintiff is the owner of copyright in the said distinguishing features and elements of the said labels thereby having exclusive right to use or reproduce the features thereof in any material form. Since the defendant deliberately did not appear before the court, an ex parte decree was passed by the court in favor of the plaintiff, wherein the court ruled that the use of an identical label amounts to infringement of the plaintiff’s copyright in the original artistic work.
Brief facts of the case
The Plaintiff, Marico Limited a public limited company regisstered under the Companies Act, 1956 filed a suit for permanent injunction against the defendant Mr. Vimal Patel alias Jay Khodiyar, restraining the defendant from using the plaintiff’s registered trade dress “PARACHUTE” which has been extensively and continuously used since the year 1948 by the plaintiff. The plaintiff is one of the leading players in the FMCG market in India with its wide portfolio of trusted brands like PARACHUTE, PARACHUTE ADVANCED, NIHAR, NIHAR SHANTI AMLA, SAFFOLA, LIVON, HAIR & CARE and SET WET among others. The plaintiff claims to have presence in 25 countries across the markets of Asia, United States, Canada, Australia, New Zealand and Africa. The trademark “PARACHUTE” was adopted in the year 1948 by the plaintiff’s predecessors in agreement with Bombay Oil Industries Limited, an Indian Company(hereinafter referred to as ‘BOIL’). The said mark is used for coconut oil and is the one of the oldest flagship brands of the plaintiff. It was claimed that “PARACHUTE” enjoys enormous loyalty in urban, semi-urban and rural markets of the country. The word mark “PARACHUTE” is registered in classes 3 & 29 as of January 3, 1983. Apart from the word mark, the plaintiff is the proprietor of various device marks/labels/trade dress/packaging for the brand “PARACHUTE”.
In and about the year 1974, the plaintiff’s predecessors devised a label having a blue colour background with the device of a coconut tree in green on the two opposite panels, superimposed on the device of a coconut tree with the expression “Parachute Coconut Oil” in bold white letters in English on one panel and in Devnagari (Hindi) on the other panel.. The plaintiff’s predecessor in title applied for the said label mark on June 27, 1980 with a user claim since December, 1948. The said registration is valid and subsisting. The said label also constitutes original “artistic works” within the meaning of Section 2(c) of the Copyright Act, 1957 and the plaintiff is the owner of copyright in the said distinguishing features and elements of the said labels thereby having exclusive right to use or reproduce the features thereof in any material form. The brand PARACHUTE and PARACHUTE with extensions was assigned to the plaintiff in the year 2000 and the plaintiff has been taken on record as the subsequent proprietor of the said trade mark in respect
It is alleged by the plaintiff that around July 2019, the plaintiff discovered that the defendant was engaged in the business of selling products by counterfeiting plaintiff’s “PARACHUTE” trade mark/label. The said label has been replicated in the form of a sticker and is pasted on a blue color bottle, similar to that of the plaintiff’s. On inquiries, it was ascertained that the defendant locally manufactured the counterfeit products and sold them in the market including through e-commerce website such as Flipkart and India Mart, and actively advertised its products under the brand name “PARACHUTE”, which have no connection with the plaintiff whatsoever. Therefore, the plaintiff filed a suit seeking a decree of permanent injunction against the defendant for infringement of Trade Mark, Infringement of Copyright, passing off and damages etc.
Issues of the case:
- Whether the Defendant’s infringing acts fall within the ambit of Section 29(2)(c) of the Trade Marks Act, 1999?
- Whether counterfeiting Plaintiff’s registered Trade Dress amounts to Copyright Infringement?
- Whether the case of the Plaintiff falls for exemplary damages?
Plaintiff’s submissions
- The plaintiff’s counsel submitted that the plaintiff ordered a consignment of PARACHUTE products from the defendant and upon inspection of the product so obtained, it was found to be counterfeit and not originating from the plaintiff on various parameters. One such difference was that the impugned product bears a plastic sticker which is a replica/counterfeit of plaintiff’s well known PARACHUTE trademark/label/trade dress pasted on a blue bottle having a design identical to that of plaintiff’s Parachute blue bottle.
- It was also alleged that the defendant’s impugned packaging was deceptively identical and similar to the plaintiff’s trademarks/labels in each and every respect including phonetically, visually, structurally, in its basic idea and in its essential features and that the defendant had been using the same in course of trade without the leave and license of the plaintiff.
- The plaintiff’s counsel argued that defendant has also infringed plaintiff’s copyright involved in the said trademarks and was also using the same trade label.
- It was also argued that the defendant had been using all kinds of false descriptions on its impugned goods to wrongly link the impugned goods with those of the plaintiff and mislead the customers.
- It was further alleged that the defendant had adopted and started using the impugned trademark dishonestly, fraudulently and out of greed with a view to take advantage and to trade upon the established goodwill, reputation and proprietary rights of the plaintiff in the plaintiff’s said trademark/label.
Ex Parte Decree
The defendant was served on 20.11.2020 through WhatsApp. The defendant was also duly served with the copy of plaint and documents by Ld. Local Commissioner. Despite being served, the defendant neither cared to appear before the court nor filed the written statement. Since the defendant deliberately and contumaciously did not appear before the court, the defendant was proceeded ex parte vide order dated 26.02.2021.
Court’s observations
- The Delhi High Court observed that a perusal of the defendant’s product clearly shows that the Defendant is counterfeiting Plaintiffs’ trade dress in its entirety including its registered trade mark “PARACHUTE”, product description and registered as well as manufacturing unit of the Plaintiff in toto. The creation of identical/counterfeit labels by the Defendant is creating a direct association with the Plaintiff and is cheating innocent consumers.
- The defendant’s infringing acts fall squarely within the parameters of Section 29(2) (c) of the Trade Marks Act, 1999 and therefore, as per Section 29(3) it can be presumed that it is likely to cause confusion in the mind of the public.
- The court further observed that the use of an identical label also amounts to infringement of the Plaintiff’s copyright in the original artistic work.
- The court stated that is evident that the defendant is guilty of infringement of trade mark and passing off its business and services as that of the plaintiff. The defendant has no justification to adopt and use the trademark/trade name/ domain name or to use the same in any manner on the websites. It amounts to infringement of legal rights of the plaintiff. The defendant has deliberately and intentionally chosen not to appear before the Court and raise its defense as the defendant is aware that it has no case on merits.
- The court relied on the decision of Hindustan Unilever Ltd. Vs. Reckitt Benckiser India Ltd.[1] wherein the court declined punitive damages, however granted exemplary damages as the contesting defendant persisted with the disparaging advertisement of the plaintiff’s product and kept on contesting the issue. In the instant case the defendant did not show up and participate in the proceedings in order to deprive the plaintiff of the benefit of rendition of accounts. The court therefore, in the totality of the facts and circumstances, was of the opinion that the plaintiff company was entitled to exemplary damages amounting to Rs.3,00,000/-.
Conclusion
The Delhi High Court in the instant case reiterated that counterfeiting plaintiff’s registered trade dress amounts to Copyright Infringement of the plaintiff’s artistic work. The Court held that the plaintiff is entitled to a grant of damages not only in terms of compensatory damages but also in the form of exemplary damages for the immense loss to the goodwill and reputation of the plaintiff. The Court further took a stand that where the defendant reclused from the proceedings, he cannot be permitted to enjoy the benefits of evasion as infringing the Plaintiffs’ registered trademark certainly makes the defendant liable to pay the damages to the plaintiff. This judgement has instilled faith in the original proprietors of reputed trademarks, who invest tremendous amounts of resources in promoting and using their marks, and has also delivered a note of caution to dishonest counterfeiters in order to prohibit them from passing off the hard earned goodwill and reputation of the trade mark holders.
[1] ILR (2014) II Delhi 1288.
Richa Pushpam, Intern at S.S. Rana & Co. has assisted in the research of this article.
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