Protecting the Rooftop: Philip Morris Secures Permanent Injunction

By Aditya Vats Sharma & Anuj Dhar

Introduction

The Hon’ble Delhi High Court’s recent decision, in the case of Philip Morris Brands SARL vs M/s Rahul Pan Shop & Ors, is a significant ruling delivered by Hon’ble Mr. Justice Amit Bansal on November 26, 2024, before the High Court of Delhi. Philip Morris Brands SARL (Hereinafter referred to as ‘Plaintiff’) is a subsidiary of Philip Morris International Inc, an American multinational company and a global leader in the tobacco industry. The Plaintiff filed a suit for trademark infringement against several unscrupulous manufacturers, sellers, stockists and distributors selling counterfeit products of the Plaintiff’s reputed ‘MARLBORO ADVANCE COMPACT’ brand in India. These infringing entities are associated with a proprietorship concern named ‘M/s Rahul Pan Shop’, which is involved in selling cigarettes and other tobacco related products. The said shop is malafidely using the Plaintiff’s ‘MARLBORO’ word mark and ‘ROOFTOP’ device mark  to pass off its products as that of the Plaintiff’s, and thereafter, sell fake/counterfeit cigarettes to unwary and unaware customers, thereby infringing the Plaintiff’s intellectual property.

BRIEF FACTS:

1. The Plaintiff is a subsidiary of Philip Morris International Inc. The Plaintiff carries out its business in India through IPM India Wholesale Trading Pvt. Ltd. The parent company of the Plaintiff adopted the ‘MARLBORO’ mark in 1924 and has been selling cigarettes bearing the said mark extensively across the world ever since.
2. The Plaintiff has been selling cigarettes bearing the ‘MARLBORO’ and ‘’ in India since 2003.
3. The Plaintiff is the registered proprietor of the ‘MARLBORO’ trademark and its formative marks, as well as the ‘ROOFTOP’ device mark , in India. The Plaintiff has adopted several sub-brands and trademarks such as ‘MARLBORO RED’, ‘MARLBORO GOLD’, ‘MARLBORO MENTHOL’, ‘MARLBORO ADVANCE COMPACT’ etc. which are used in products sold all over the world, including India.
4. The Plaintiff has also adopted the labels , , ,etc. and claims copyright protection over the aforementioned labels, which are the original artistic works of the Plaintiff.
5. Over the years, the Petitioner has earned immense goodwill and reputation associated with its MARLBORO brand across the world, including India. In the year 2021-2022, the sales of the Plaintiff’s MARLBORO products were over 1107 crores. The Plaintiff’s MARLBORO brand has also consistently ranked No. 1 in the Brand Finance Report from 2018 to 2020 as world’s most valuable tobacco brand, with a brand value of USD 32.7 million in 2020.
6. M/s Rahul Pan Shop (Hereinafter referred to as Defendant No. 1) is a proprietorship concern involved in selling cigarettes and other tobacco related products. Defendant No. 2 is the person managing and running the Defendant No. 1 and is believed to be the owner / proprietor of Defendant No. 1.
7. Defendant No. 3 is a stockist and the owner of the warehouse located in Chandigarh, where the counterfeit goods bearing the Plaintiff’s trademarks are being stored in large quantities. Defendant No. 4 is the person managing and running the said warehouse, and the Defendant No. 5 is an individual working for Defendant Nos. 3 and 4.
8. The cause of action arose for the first time in March 2023, when the Plaintiff came across the counterfeit ‘MARLBORO ADVANCE COMPACT’ cigarette packs sold by Defendant Nos. 1 and 2. Subsequently, the Plaintiff, through investigators, purchased several packs of the counterfeit products. As a result of this investigation, it emerged that Defendant Nos. 3,4 and 5 were also involved in these infringing activities.
9. It was contended by the Plaintiff that all the counterfeit cigarette packs purchased by the Plaintiff bore the same code “0X0 WUA KH1 546”, which seemed to be incorrect because the genuine products of the Plaintiff bear a unique code on each cigarette pack. This unique code is printed during the manufacturing process and is different on each and every cigarette pack.
10. Thereafter, the Plaintiff filed the present suit on July 10, 2023, seeking to restrain the Defendants from carrying on their fraudulent activities and infringing the Plaintiff’s intellectual property rights.

COURT PROCEEDINGS:

1. On July 13, 2023, the Hon’ble Court granted an ex-parte ad-interim injunction in favor of the Plaintiff, restraining the Defendants from dealing in any products bearing the impugned packaging or using the labels/artistic works labels , , , , as well as the five sided ‘ROOFTOP device’. The Hon’ble Court also appointed a Local Commissioner to visit the premises of Defendant Nos. 1 and 2.
2. On July 22, 2024, the Local Commissioner conducted the commission and inventoried all cigarette packs bearing the Plaintiff’s MARLBORO trademarks which were found at the premises.
3. Vide Order dated February 27, 2024, the Hon’ble Court decreed the present suit qua Defendant Nos. 3 and 4 on the basis of settlement.
4. Vide Order dated January 31, 2024, the Joint Registrar noted that the Defendant Nos. 1 and 2 were duly served on December 15, 2023. However, despite the service, neither did the Defendant Nos. 1 and 2 appear before the Hon’ble Court nor did they file any written statement on their behalf.
5. On July 03, 2024, the Defendant Nos. 1 and 2’s right to file written statement was closed, as the maximum permissible period of 120 days had lapsed.
6. Vide Order dated August 20, 2024, the Defendant Nos. 1 and 2 were proceeded against ex parte. Further, the said Order also records that the Plaintiff doesn’t wish to proceed against Defendant No. 5.
7. Thereafter, the counsel for the Plaintiff pressed for a decree of permanent injunction against the Defendant Nos. 1 and 2, under Order VIII Rule 10 of the Code of Civil Procedure, 1908.

COURT’S ANALYSIS:

The Hon’ble Delhi High Court took into consideration the below mentioned factors while ruling in favor of Philip Morris Brands SARL:

1. No written statement was filed on behalf of the Defendant Nos. 1 and 2. Further, no affidavit of the admission and denial was filed on behalf of Defendant Nos. 1 and 2 in respect of the Plaintiff’s documents. Therefore, the averments made by the Plaintiff in the plaint, along with the Plaintiff’s documents, are deemed to be admitted.
2. The Plaintiff has proved that it is the registered proprietor of the trademark ‘MARLBORO’ and the ‘ROOFTOP’ device mark. Further, due to Plaintiff’s long and continuous use of its trademarks and labels, the Plaintiff has acquired a copyright over the said labels which are used in its cigarettes/cigarette packs.
3. A side-by-side comparison of the Plaintiff’s genuine products and the Defendant’s counterfeit products showcases that the Defendants are indulging in infringement and passing off of the Plaintiff’s registered ‘MARLBORO’ trademarks. The side-by-side comparison is provided herein below for ready reference:
   

   Such comparison highlights that the cigarette packs of both parties are identical in terms of color combination, arrangement of letter, marks and figures. Thus, it is evident that the Defendants have blatantly replicated the Plaintiff’s product and packaging to dupe unwary consumers, resulting in the dilution of Plaintiff’s goodwill and reputation in the market.

4. Despite having suffered an ad-interim injunction order, the Defendant Nos. 1 and 2 failed to take any requisite steps to contest the present suit. Thus, it is evident that they have no defense to put forth on merits.

JUDGEMENT:

Hon’ble Mr. Justice Amit Bansal, after careful and thorough analysis of the facts of the case, held that a clear case of infringement of Plaintiff’s trademark and copyright is made out. It was held that the Defendant Nos. 1 and 2 have taken unfair advantage of the reputation and goodwill of the Plaintiff’s intellectual property and have also duped and deceived unwary consumers by dishonestly and malafidely adopting the Plaintiff’s registered marks without any plausible explanation. It was also taken into consideration that the Defendants did not appear before the Hon’ble Court, despite service of summons. Further, no Written Statement on behalf of the Defendants Nos. 1 and 2 has been placed on record in the present suit.  In view of the aforementioned factors, the Hon’ble Court passed a decree of permanent injunction in favor of the Plaintiff against Defendant Nos. 1 and 2.

AUTHOR’S NOTE:

The judgment in Philip Morris Brands SARL vs M/s Rahul Pan Shop & Ors is a crucial reaffirmation of the importance of safeguarding intellectual property rights, especially in cases involving counterfeit products. The Delhi High Court’s meticulous approach highlights the significance of a proprietor’s long-standing goodwill and reputation in establishing trademark and copyright infringement. The court’s reliance on the defendants’ inaction, including their failure to file a written statement or contest the injunction, underscores the procedural and evidentiary advantages available to vigilant IP owners.

The decision not only strengthens the legal position of trademark proprietors but also sends a strong deterrent message to infringers attempting to exploit established brands for profit. By granting a permanent injunction, the court has protected both the plaintiff’s intellectual property and the interests of consumers who might otherwise be deceived by counterfeit products. This case serves as a reminder to brand owners to actively monitor and enforce their rights and underscores the importance of comprehensive litigation strategies when combating infringement.

Shashwat Bhardwaj, Former Intern at S.S. Rana & Co. has assisted in the research of this article.