By Rima Majumdar and Aditi Umapathy
Introduction
According to a report[1] published by a non-profit organization Authentication Solution Providers’ Association (ASPA), in collaboration with Credit Rating Information Services of India Limited (CRISIL) in January of 2023, the consumer expectation of counterfeit products is about 25% to 30% of the goods in the market. The report further states that counterfeiting in the Apparel Industry is one the highest in India, and the consumer survey indicates that approximately 30% to 40% of the products in the apparel industry are counterfeits.
Indian law has a robust legal framework to enable Intellectual Property Rights’ holders to initiate civil as well as criminal action against counterfeiters. However, with only a few major cities in the country having dedicated Intellectual Property (IP) cells in Police Stations in India, and there being a lack of IP awareness amongst the Indian enforcement agencies, swift and effective criminal actions against counterfeiters has been a challenge.
Through the present article, we attempt to present an analysis of a recent decision[2] of a Single Judge of the Hon’ble High Court of Punjab and Haryana whereby an FIR registered under Section 63 and 65 of the Copyright Act, 1957, and the additional charges framed by the Trial Court under Section 104 and 105 of the Trade Marks Act, 1999 were both quashed on account of lapses on the part of the investigating officers.
BRIEF BACKGROUND OF THE DISPUTE
The complainant made a statement to the Police that the Petitioner was manufacturing counterfeit garments using the label of ‘PUMA’ and was selling the said garments at a higher price than the original garments. Accordingly, a First Information Report (FIR) was registered.
Pursuant to the FIR, the police raided the factory of the Petitioner, and seized garments under the fake PUMA label. The seized products were taken into possession by the police, and the Petitioner was arrested. Once the investigation concluded, the police presented a Challan against the Petitioner under Sections 63 and 65 of the Copyright Act, 1957, and charges were accordingly, framed by the Magistrate Court.
During the trial, pursuant to an application filed by the prosecution under Section 216 of the Code of Criminal Procedure, 1963 for alteration and addition of charges, vide order dated September 02, 2023 the Trial Court framed additional charges under Section 103 and 104 of the Trade Marks Act, 1999.
In this background, the Petitioner filed the present petition seeking quashing of the FIR, the final report submitted by the Police, and the aforesaid order dated September 02, 2023.
CONTENTIONS OF THE PETITIONER
- It has been alleged that the Petitioner is manufacturing garments bearing fake PUMA label. This act does not attract the provisions of Section 63 and 65 of the Copyright Act, 1957.
- The search and seizure was conducted by an Inspector. However, as per Section 115(4) of the Trade Marks Act, 1999, any such search and seizure can only be conducted by an officer not below the rank of a Deputy Superintendent of Police or equivalent. Thus, the search and seizure conducted was not in accordance with law.
- The proviso to Section 115(4) of the Trade Marks Act, 1999, requires the concerned police officer to obtain, and abide by the opinion of the Registrar of Trade Marks on the facts involved in the offence before making any search and seizure in relation to an office under Sections 103 or 104 of the Trade Marks Act, 1999. However, no such opinion was obtained from the Registrar of Trade Marks.
DECISION OF THE COURT
- On the charges under Sections 63, and 65 of the Copyright Act, 1957 against the Petitioner, the Hon’ble Court analysed Section 13 of the Copyright Act, 1957, and observed that Copyright only subsists in the class of works mentioned in Section 13 (namely, original literary, dramatic, musical and artistic works; cinematograph films; and sound recordings). Accordingly, it was held that since there can be no copyright in manufacturing and sale of garments, the prosecution failed to prima facie make out a case for copyright infringement punishable under Section 63 and 65 of the Copyright Act, 1957.
- Further, the Hon’ble Court analysed Section 115 of the Trade Marks Act, 1999, and observed that the mandatory provision of Section 115 has not been complied with as the search and seizure was conducted by an Inspector, while Section 115(4) requires such search and seizure to be conducted by an officer not below the rank of Deputy Superintendent of Police or equivalent. Moreover, the opinion of the Registrar of Trade Marks, as per the mandate of proviso to Section 115(4), was not sought prior to conducting the search and seizure.
CONCLUSION
The Hon’ble Court quashed the FIR under Sections 63 and 65 of the Copyright Act, 1957, the final report, as well as the additional charges levelled vide Order dated September 02, 2023.
AUTHOR’S NOTE
This case shows how a winning battle against a counterfeiter was lost on account of lack of IP awareness of the investigating authorities as even though the search and seizure resulted in several counterfeit goods having been discovered, the initial FIR being registered under incorrect provisions of law i.e. Section 63 and 65 of the Copyright Act, 1957 instead of the relevant provisions of the Trade Marks Act, 1999, led to quashing of the FIR.
This case also demonstrates the importance of following the due process of law, and procedure. Despite the Trial Court having framed additional charges under the correct provisions i.e. Section 104, and 105 of the Trade Marks Act, 1999, the non-adherence to the mandatory requirements of Section 115 of the Trade Marks Act, 2024 at the time of conducting the search and seizure of the premises led to vitiating the seizure, and quashing of the additional charges.
Increasing IP awareness amongst enforcement authorities is the need of the hour, and with proper awareness about IP, criminal actions for protecting IP, and other related provisions, the Petitioner in whose premises several garments with the fake PUMA logo was discovered could have been penalised for his action.
[1]CRISIL – ASPA report on the state of counterfeiting in India dated January 23, 2023
[2]Decision dated November 25, 2024 in Arun Kumar vs. State of Punjab & Anr. CRM-M-54104-2023