Sale Of Counterfeits Destroys Market For Genuine Goods: Delhi HC Grants ₹11 Lakh Compensation To Woodland In Trademark Dispute

The Delhi High Court has granted compensation of Rs. 11 lakhs to Woodland in a trademark dispute saying that the sale of counterfeits destroys market for genuine goods and reduces brand value.

The suit was related to the trademark ‘WOODLAND’ in which the plaintiff (Aero Club) sought injunction against the defendant entity (M/s. Sahara Belts) to restrain it from manufacturing, offering for sale, selling, advertising, directly or indirectly any products bearing the registered trademark of the plaintiff.

A Single Bench of Justice Prathiba M. Singh observed, “The Defendant’s use of the ‘WOODLAND’ mark and logo on substandard goods not only violates the Plaintiff’s statutory and common law rights but also jeopardizes the Plaintiff’s brand equity and dilutes its marks. If such infringement is not addressed, it would adversely affect consumer interests. Such sale of counterfeits destroys the market for genuine goods and may render the trade mark and brand itself completely useless as large scale piracy of a brand, reduces the value of the brand. The sale of such counterfeit goods also goes against public interest.”

Advocate Prithvi Singh appeared on behalf of the plaintiff while Advocate Bhuvneshwar Tyagi appeared on behalf of the defendant.

Factual Background -

The plaintiff adopted the ‘WOODLAND’ mark in the year 1992 along with a distinctive device. The said mark was used for manufacture, sale and export of various products including footwear, apparel products, lifestyle products like belts, wallets, shoes, shirts, T-shirts, etc. The mark ‘WOODLAND’, ‘WDL’, ‘TREE device’ and ‘WOODLAND’ label were registered by the plaintiff. The plaintiff learnt about the defendant entity sometime in March, 2019, that it was selling counterfeit ‘WOODLAND’ products, and so it appointed an Investigator.

The said Investigator’s report revealed that the shop was owned by a man who was marketing and selling counterfeit products i.e., belts, belt-buckles and wallets bearing the registered ‘WOODLAND’ mark. The Investigator also effected purchase of the products at Rs.32/-, Rs.42/- and Rs.140/- for three belts which he had purchased. The investigator also observed that the defendant shop had a warehouse located on the same premises and in view thereof, the plaintiff filed the case.

The High Court in the above context of the case noted, “… the manner in which the Defendant has filed the written statement and the reply would itself show that the Defendant is completely unapologetic for using the Plaintiff’s ‘WOODLAND’ mark and selling counterfeit products. Since there is no substantive defence raised by the Defendant, the principles of summary judgment would be liable to be invoked in the present case for passing of the decree.”

The Court also noted that the report of the Local Commissioner can be treated as evidence in the suit where it is not challenged by any party.

“… this Court is of the view that in the present case, a summary judgment in favour of the Plaintiff deserves to be passed. Accordingly, the suit is decreed against the Defendant and the Defendant is restrained by way of a permanent injunction from manufacturing, selling, offering for sale, advertising or in any manner selling any products bearing the ‘WOODLAND’ word mark ‘TREE device , ‘WOODLAND’ label or any other mark which is identical or deceptively similar to the Plaintiff’s mark”, said the Court.

The Court directed that the entire seized products shall be handed over by the defendant to the plaintiff’s representative on December 10, 2023, when the plaintiff’s representative may visit the defendant’s premises. The Bench said that the plaintiff is free to destroy or donate the products of the defendant to some charity, if the same are usable.

“Insofar as the prayer for damages/costs is concerned, considering the quantum of seized goods being more than 11,000 products, it is clear that the Defendant has indulged in deliberate piracy and manufactures/sales of counterfeit products”, observed the Court.

Furthermore, the Court said that the infringement conducted by the defendant by imitating plaintiff’s mark ‘WOODLAND’ as also ‘tree device’ has been deliberate and calculated.

“Taking the annual figures of sales by the Defendant and the deliberate act of counterfeiting with complete knowledge of the fact that ‘WOODLAND’ brand and ‘tree device’ cannot be used, imitated the same and earned profits shows lack of any bona fide intent”, concluded the Court.

Accordingly, the High Court directed the defendant to pay damages and costs amounting to Rs. 11 lakhs to the plaintiff within eight weeks.

Cause Title- Aero Club v. M/s. Sahara Belts (Neutral Citation: 2023:DHC:8423)

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