Huda Beauty secures permanent injunction against counterfeit imports in India

By Deepika Srivastav and Pallavi Paul

Introduction

In a recent case, the Learned District Commercial Court, New Delhi has granted a permanent injunction to Huda Beauty Limited against M/S Vison Enterprises[1], for importing counterfeit Huda Beauty products in India. By granting a permanent injunction and ordering the destruction of goods, the Court reinforced the principles of intellectual property law and underscored the critical importance of safeguarding brand integrity and consumer trust.

Brands have been facing constant challenges in combating counterfeit goods and this case underscores the importance of robust trademark enforcement mechanisms.

Brief Background of the Case

Huda Beauty Limited (hereinafter referred to as the Plaintiff), a prominent name in the global beauty and cosmetics arena is engaged in the business of manufacturing, distributing and sale of wide range of cosmetics, creams, adhesives and other beauty care preparations. The company was founded in 2010 by the famous beauty blogger and entrepreneur Huda Kattan. Ever since the establishment of the company in 2010, the Plaintiff has been using, trading, manufacturing, marketing, trading, selling its goods under the trademarks/labels Huda Beauty, and other variants thereof.

The Plaintiff is the registered proprietor of trademarks/labels related to Huda Beauty in all major countries of the world including in India. Further, the Plaintiff’s goods have been advertised, promoted, displayed, solicited, sold and traded all over the world via their official website and through their business partners Nykaa and Sephora in India. The brand has witnessed remarkable growth gaining international recognition thereby enhancing its accessibility and reinforcing its market position.

The Plaintiff also enjoys cross-border reputation, and the trademarks/labels of Huda Beauty are well-known within the meaning of Section 2(1)(zg) of the Trademarks Act, 1999.

Issue

M/s Vision Enterprises (hereinafter referred to as Defendant no. 1) were importing numerous fake Huda Beauty cosmetics via the Kolkata Port, West Bengal in India. The goods were intercepted and seized by The Office of the Chief Commissioner of Customs, Kolkata Customs House (hereinafter referred to as Defendant no. 2) under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 framed under the Customs Act, 1962.

Thereafter, the Plaintiff was informed regarding the seized goods containing huge quantities of counterfeit products bearing trademarks/labels of Huda Beauty. Upon inspection, the Plaintiff confirmed that the impugned goods were counterfeits.

Contentions of the Plaintiff

The Plaintiff alleged that the Defendant no. 1, has dishonestly and malafidely adopted and started using the impugned trademark Huda Beauty and its formative trademarks/labels which are visually, structurally identical and/or deceptively and confusingly similar to their registered trademark Huda Beauty and its formative trademarks/labels, thereby causing confusion among consumers.

The alleged misuse is said to have resulted in huge financial loss and damaged the Plaintiff’s goodwill and reputation. The Defendant has unfairly tried to capitalise on the brand’s established goodwill by attempting to passing off counterfeit products as genuine.

The Plaintiff filed the present suit praying that a permanent injunction may be passed against the Defendants and anyone else acting on their behalf from using the impugned The plaintiff also prayed that the Customs be prohibited from releasing the seized counterfeit goods so that they can destroy the seized goods in accordance with the law.

Some of the Plaintiff’s Huda Beauty Trademark Applications/Registrations in India:

Analysis of the Court

A. Jurisdiction
The Learned Court held that it had the territorial jurisdiction to entertain the suit within the meaning of Section 134(2) of the Trade Marks Act, 1999 and Section 62(2) of the Copyright Act, 1957.

The Court was of the view that the Defendant no. 1 was clandestinely supplying and distributing the counterfeit products in New Delhi. The Plaintiff also sells the Huda Beauty products through its exclusive dealers and distributors Sephora and Nykaa (in offline stores of New Delhi as well as on the portals). The Plaintiff has also provided snapshots from its website and the above-mentioned portals inter alia, showcasing that the Huda Beauty products are available for sale in India.

The entire testimony of the Plaintiff remained unchallenged and un-rebutted from the side of the Defendant, and they did file a written statement.. The Court while citing the case of Banyan Holding (P) Ltd v. A Murali Krishna Reddy & Anr.[2], among others opined that the Plaintiff has been able to satisfy the test of purposeful availment of its goods under the registered trademark/label within the jurisdiction of the Court.
B. Permanent Injunction
The Court while relying on the principles laid down in the case of Renaissance Hotel Holdings Inc. v. B. Vijaya Sai & Ors.[3] and Shaw Wallace & Co. Ltd. & Anr. v. Superior Industries Ltd.[4], held that the Court is entitled to grant an injunction without requiring further proof of damage or confusion in an infringement action, once it is established that the Defendant is improperly using the Plaintiff’s trademark. The very act of using an identical mark constitutes infringement and, in such cases, the Court does not need to consider whether consumers are likely to be deceived or confused.

It is well settled that in an action for alleged infringement of a registered trademark, if the impugned marked used by the defendant is identical with the registered trademark of the Plaintiffs, no further questions have been to be addressed, and it must be held that there is indeed an infringement.

The Court observed that the Plaintiff has adhered to the procedural requirements and have filed copies of trademark registration certificates which shows that they are the registered proprietor of Huda Beauty marks (which are renewed, valid and subsisting). Additionally, the documents of correspondence with the Defendant no. 2 were also submitted by the Plaintiff as evidence to establish that the counterfeit goods were imported by Defendant no. 1.

Reliefs Granted to the Plaintiff

The Court opined that the Plaintiff has been held to be the owner of the Huda Beauty trademarks/labels and thus they squarely fall within the definition of ‘Right Holder’ as mentioned in Rule 2(d)[5] of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.

Based on the submissions made by the Plaintiff, the Court decreed the suit in favour of the Plaintiff and against the Defendant(s) and granted the following reliefs:

1. Permanent Injunction: The Court restrained the Defendant all other acting for and on its behalf from using, selling, soliciting, importing (in any manner or from any other port), exporting, displaying, advertising or by any other mode or in any manner using impugned trademarks/ labels Huda Beauty, any other trademarks/ labels which may be identical with and/ or deceptively similar to the Plaintiff’s registered trademarks/labels which infringes the plaintiff’s registered trademarks, copyright and passing off their products as that of the Plaintiff.
2. Seizure and destruction of goods: Customs authorities were directed to seize the counterfeit goods and consider the destruction of the infringed seized goods as per the procedure laid down in this regard in the light of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
3. Cost: The cost of the suit to be awarded in favor of the Plaintiff.

Combating Counterfeit by Custom Authorities

In India, Custom authorities take proactive measures to prevent counterfeit goods from entering the domestic market. A few of the key actions include:

1. Legal Framework: Under the Customs Act, 1962 and the Intellectual Property Rights (IPR) Enforcement Rules, 2007, custom officers are empowered to seize goods suspected of infringing intellectual property rights.
2. Recordation of IP: Right Holders can register their trademarks or copyrights with the ICEGATE portal which helps custom officers identify and stop fake goods at ports and airports.
3. Collaboration with Right Holders: Custom offices work closely IP holders to share product identification manuals, trainings and intelligence which helps customs staff verify the authenticity of goods and take appropriate action against infringing products.
4. Public Awareness and Coordination: Custom authorities works with organizations like FICCI and CII, and international bodies like WCO, to promote awareness regarding the prevalence of counterfeit goods. Further, they collaborate with agencies like BIS (Bureau of Indian Standards) to ensure products meet quality standards.

Concluding Thoughts

Counterfeit products not only tarnish a brand’s reputation but also deceive consumers and compromise overall product quality. A specific order for destruction of counterfeit goods rather than just seizure or return ensure the counterfeits do not find alternative routes into the market.

Brands in the cosmetics industry have been facing constant challenges in combating counterfeiting, as fake beauty products continue to flood both offline and online marketplaces. These counterfeit products mimic the packaging and branding of legitimate products making it difficult for consumers to distinguish real from fake. Beyond damaging brand reputation and revenue, counterfeit cosmetics can pose serious health risks including skin irritation, allergic reaction and exposure to harmful chemicals. The growing popularity of e-commerce platforms has only made it easier for counterfeiters to reach unsuspecting buyers. In response, cosmetic companies are turning to advanced technological solutions for eg: QR code verification, tamper-proof packaging, however, the fight against fake cosmetics remains ongoing, demanding a united front from brands, regulators and consumers alike.

In parallel, enforcement by customs and regulatory authorities complement judicial efforts by intercepting fake goods at entry points, thus creating a multi-layered defense against counterfeits. Despite these measures, challenges persist, however continuous efforts are being made to enhance coordination among enforcement agencies to combat counterfeiting.

[1]CNR NO.: DLND01-006282-2021; TM/18/2021

[2]2009 SCC OnLine Del 3780

[3] MANU/SC/0066/2022

[4] 2003 (27) PTC 63 (Del)

[5]Rule 2(d) defines the ‘Right Holder’ as a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights.