India: Bombay High Court imposes strict measures on Proprietor for violating temporary injunction orders

July 8, 2019

The Hon’ble Bombay High Court in a recent judgment in the case of Cargil India Private Limited vs. M/s.M.M.Oil Enterprises dated May 16, 2019 has taken a strict view on the violation of temporary injunction orders by M/s.M.M.Oil Enterprises (hereinafter referred to as the ‘Defendants’) in a passing off and copyright infringement case. The Court found prima facie that the Defendant’s trade dress was deceptively similar to that of Cargil India Private Limited (hereinafter referred to as the ‘Plaintiff’) and passed a temporary injunction order against the production of impugned products. The Defendant was sentenced to custody for violating the order.

Brief Facts

The Plaintiff Company Cargil India Private Limited was manufacturing and selling refined oil under the tradename “GEMINI refined oil”. On March 15, 2017, the Plaintiff Company filed a suit for copyright infringement and passing off against the Defendant before the Hon’ble Bombay High Court. The passing off action was initiated against the Defendant for adopting a deceptively similar trademark “GENUINE refined oil” vis-s-vis the Plaintiff’s “GEMINI refined oil”; while copyright infringement action was initiated against the Defendant for the use of deceptively similar trade dress.Production comparisons are as follows:

Pursuant to the filing of the suit, the Plaintiff Company filed Notice of Motion for interim reliefs of temporary injunction and appointment of Court receiver. On hearing the notice of motion, the Hon’ble Bombay High Court issued a temporary injunction against the sale of “GENUINE refined oil”. Further, the Court appointed a receiver who visited the premises of the Defendant where he found large quantities of the impugned products along with its packaging materials. An inventory was prepared for the products and they were seized and sealed. The Defendant signed an undertaking stating that he will not dispose or use the sealed products.

After the visit and during the pendency of suit proceedings, the Plaintiff approached the Hon’ble Bombay High Court under the notice of motion, informing the Court that the Defendant, in breach of the injunction order was still manufacturing and selling the impugned product. Upon enquiry, the Court found that the Defendant’s product was available for sale in the market with products bearing manufacturing dates as recent as December 2018.

Also, the receiver submitted a report before the Court pointing out that the Defendant had disposed-off the sealed products. The Defendant responded to the allegations by stating that he had not indulged in such activities and the sealed products were eaten by rats.

Plaintiff’s Contention:

  • It was claimed that the trade name and trade dress of the Defendant’s product “GENUINE Refined Oil” were deceptively similar to the Plaintiff’s product and that there is a prima facie case made out to stop the sale of the Defendant’s product.
  •  It was alleged that the Defendant violated the orders of the Court by not stopping sale and manufacture of the impugned product despite a temporary injunction.
  • It was further alleged that the products seized and sealed by the receiver, pursuant to the Order of the Court were disposed-off by the Defendant, despite him having given a written undertaking to preserve the said products which were custodia legis.

Defendant’s Contentions:

  • The Defendant made a categorical statement that he had not manufactured or sold any product under the impugned mark since 2017.
  • The Defendant claimed that he had not disposed-off the products and in fact, rats ate all the products.
  • It was further claimed that due to lack of education, the Defendant did not understand the order of the Court and may have violated orders by mistake.

Court’s Decision

  • The Court found that the Defendant on his own showing, made sales of INR 2,29,61,897 [USD 332235 approx.] in the period between the financial years 2017-18 and 2018-19, whilst the Court’s prohibitory orders were in force. Such admissions establish that the Defendant’s activities had continued uninhibited, in spite of the Court’s injunction order.
  • The Court questioned the Defendant’s advocate on the submission that a total of 2,500 liters of oil and huge quantity of unused packing material were eaten by rats to which the Defendant’s advocate himself submitted that he was not able to accept the Defendant’s submission.
  • The Court found the Defendant guilty of disobedience to the court orders on two accounts:
    •  The Defendant admittedly sold goods under the impugned trade dress and mark after the Court’s order of temporary injunction.
    •  The Defendant disposed-off goods that were sealed by the Court receiver, and which were consequently custodia legis.
  • The Court sentenced the proprietor of the Defendant to eight weeks custody with a direction to submit diet charges of INR 2000 [USD 29 approx.]
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