Will Lead To Erosion Of Brand Equity: Delhi HC Grants ₹10 Lakh Compensation To PUMA Against Usage Of Its ‘Leaping Cat’ Trademark
|The Delhi High Court in a Trademark dispute has granted compensation of Rs. 10 lakhs to ‘PUMA SE’ in a case involving usage of its ‘Leaping Cat Device’ mark. The Court said that use of ‘PUMA’ mark and logo by the defendant on inferior quality products will lead to erosion of the brand equity and result in dilution of the marks.
The plaintiff- Puma Se, a German company had filed a suit seeking injunction against the counterfeit products being manufactured and sold under the mark ‘PUMA’ by the defendant i.e., ‘Kumkum Shoes’ trading business based in Agra.
A Single Bench of Justice Prathiba M. Singh held, “The use of ‘PUMA’ mark and logo by the Defendant on inferior quality products would not only result in violation of the Plaintiff’s statutory and common law rights but will also lead to erosion of the brand equity of the Plaintiff and result in dilution of the marks. Such infringement if left unchecked would also be contrary to the consumer’s interests, inasmuch as the consuming public may be purchasing the counterfeit products and paying a higher price presuming the same to be the Plaintiff’s branded products. Thus, the sale of such counterfeit products is even contrary to the public interest.”
The Bench said that the defendant deliberately chose to stay away from the proceedings merely to ensure that it is not required to produce its accounts and that the plaintiff is entitled to be monetarily compensated for the infringement committed by the defendant.
Advocates Ranjan Narula and Shashi P. Ojha appeared on behalf of the plaintiff in this case.
Factual Background -
The ‘PUMA’ brand is the umbrella brand of the plaintiff and endorsed by a large number of internationally well-known celebrities including Usain Bolt, Virat Kohli, K.L. Rahul, etc. and has been supplying/selling its PUMA branded products in India since 1980s. In India, the mark ‘PUMA’ as also the ‘leaping cat device’ were registered since 1977 and 1986. The case of the plaintiff was that its mark ‘PUMA’ and ‘leaping cat device’ were well known marks and were declared such as by the Trademark Registrar in the year 2019. The counsel for the plaintiff asserted that in the second week of September, 2022, the plaintiff learnt that various counterfeit products under the mark ‘PUMA’ were being sold in Agra, Uttar Pradesh.
Thereafter, an investigation was conducted by the plaintiff’s representative to ascertain the availability of the defendants’ counterfeit products and the investigation led to the details of the defendant’s being engaged in the business of manufacturing, sale and supply of counterfeit products bearing the mark ‘PUMA’ as also the ‘leaping cat device’ in Uttar Pradesh, Delhi, and Haryana. It was further submitted that the plaintiff immediately took action, by filing a suit and an interim injunction was granted and a Local Commissioner was appointed. It was, hence, prayed that since the defendant did not file any reply/written statement, the judgment deserved to be pronounced in favour of the plaintiff against the defendant.
The High Court hearing the submissions made by the counsel observed, “Insofar as the quantum of goods manufactured and sold by the Defendants are concerned, even if a reasonable assessment is taken of the Defendant’s manufacture and sale, the inventory which has been prepared by the Local Commissioner on a particular day shows that approximately 156 pieces were lying fully manufactured and certain shoes were semi manufactured. Thus, if the said stock of approximately 200 pairs of shoes is taken as an estimate of products manufactured in a week, it would clearly mean that the Defendant would be manufacturing and selling approximately 800 to 1000 pairs of shoes in a month."
The Court said that most customers would not be able to distinguish between the plaintiff’s and defendant’s products if they are adjacently placed, unless a deeper examination is undertaken.
“The present is a case where the Defendant is clearly engaged in the manufacturing and sale of counterfeit ‘PUMA’ branded products as is evident from the record of the case as also the report of the ld. Local Commissioner. … A perusal of the inventory prepared by the Local Commissioner would show that the quantum is substantial and the Defendant is actually running a full-scale manufacturing operation in respect of counterfeit ‘PUMA’ shoes”, also said the Court.
The Court held that the monetary compensation deserves to be awarded to the plaintiff. Furthermore, it noted that the defendant is obviously aware of the brand equity enjoyed by the ‘PUMA’ mark and has deliberately chosen to manufacture and sell counterfeit products under the said mark and ride piggy-back on the plaintiff’s goodwill and reputation.
“… it is clear that the Plaintiff is liable to be awarded damages. The infringement conducted by the Defendant by imitating Plaintiff’s mark ‘PUMA’ as also ‘leaping cat device’ has been deliberate and calculated. … The Defendant has obviously earned profits from sale of the ‘PUMA’ branded shoes and there has to be some deterrence against sale of such counterfeit products”, said the Court.
The Court took note of the fact that if the costs of raw material etc. are 50% of the same, the defendant made profits of approximately Rs. 18 to Rs. 19 lakhs and in addition, there are no mitigating factors in the case, which would give any benefit of doubt to the Defendant.
“Costs of Rs.2 lakhs are awarded to the Plaintiff as the Defendant has deliberately and with complete knowledge of the fact that ‘PUMA’ brand and ‘leaping cat device’ cannot be used, imitated the same and earned the profits forcing the Plaintiff to file the present suit. … The shoes, which have been seized by the Local Commissioner, shall now be handed over by the Defendant to the Plaintiff’s representative on 1st November, 2023 when the Plaintiff’s representative may visit the Defendant’s premises”, directed the Court.
Accordingly, the High Court granted damages and costs of Rs. 10 lakhs and Rs. 2 lakhs, respectively.
Cause Title- Puma Se v. Ashok Kumar (Neutral Citation: 2023:DHC:7696)