High Court grants punitive damages for infringement of trademark
In the case of Christian Louboutin SAS v. Ashish Bansal & Anr., the Plaintiff, Christian Louboutin SAS, a French company well-known for its high-end luxury products and famous women’s shoes with "RED SOLES", filed a suit against the Defendants for permanent injunction, restraining the Defendants from infringement of trademark, passing off, damages as well as rendition of accounts.
The Defendants, situated in, New Delhi, were found to be infringing the Plaintiff’s trademark by selling counterfeit shoes bearing "RED SOLES". The "RED SOLES" are a distinctive feature of the Plaintiff's products which have been recognized by trademark offices in several jurisdictions across the world, including India.
In light of the infringement, the Plaintiff in the present suit prayed for order of permanent injunction, restraining the Defendants from using the registered trademark of the Plaintiff. The Plaintiff claimed that the Defendants by using the trademark of the Plaintiff, misrepresented the quality of the Plaintiff’s goods. They further alleged that the Defendants were taking undue advantage of the reputation/ goodwill of the Plaintiff’s trademark, thus passing off. Moreover, in addition to permanent injunction, the Plaintiff prayed for punitive damages for obvious and wilful infringement of the Plaintiff’s trademark.
After due service of summons and non-appearance of the Defendants, the court proceeded with deciding the matter ex-parte.
The court while deciding this case followed previously settled judgments regarding infringement of trademarks. In the case of Kaviraj Pandit Durga Dutt Sharma v. Navarattana Pharmaceutical Lab it was held that in infringement cases, if the Defendant's mark is visually or phonetically similar to the Plaintiff's mark, then no further proof is necessary.
In the present case, with the evidence provided by the Plaintiff, the court held that they were able to prove infringement of their trademark by the Defendant. Therefore, the suit was decreed against the Defendant and the above-mentioned prayers of the Plaintiff were all allowed by the court.
However, the court decided that the damages to be granted to the Plaintiff were not to be compensatory in nature, but rather punitive. The court took this view based on the 2014 judgment of the Delhi High court in the case of Hindustan Unilever Limited v. Reckitt Benckiser. In this case it was held that:
“…the Court must also grant punitive damages taking into account the mala fide conduct of the defendants, which is clearly not proportional to the quantum of actual damages that the plaintiffs have proven through documentary evidence filed in the suit...”
Another case cited by the Plaintiff in order to support the claim of punitive damages was Jockey International Inc & Anr v. R. Chandra Mohan & Ors.. In this case it was held that:
“A party who chooses not to participate in court proceedings and stays away must, thus, suffer the consequences of damages as stated and set out by the plaintiffs. There is a larger public purpose involved to discourage such parties from indulging in such acts of deception and, thus, even if the same has a punitive element, it must be granted. R.C. Chopra, J. has very succinctly set out in Time Incorporated's case (supra) that punitive damages are founded on the philosophy of corrective justice.”
Relying on the above-mentioned cases, the court in the present case held that since the Defendants had decided to recuse themselves from court proceedings, they could not be allowed to enjoy the benefit of evasion. Thus, the court passed a decree of Rs. 20 Lacs in favor of the Plaintiff. The Defendants were also liable to pay interest at 10% per annum on the damages awarded in favor of the Plaintiff, from the date of filing of the suit till the date of realization.
It is interesting to note that the Delhi High Court on 25th May 2018, in the case of Christian Louboutin v. Abu Baker, held that single colour cannot be granted trademark status under Section 2(m) and 2(zb) of the Trade Marks Act, 1999. This judgment is contradictory to the present judgment and creates legal uncertainty. According to the court in the case of Christian Louboutin v. Abu Baker, section 2(m) of the Trade Marks Act 1999, “prohibits a single color for being given the status of the trademark and thereby, prohibits exclusive ownership of such a trademark [by] a manufacturer or seller”.'
However, in the present case of Christian Louboutin SAS v. Ashish Bansal & Anr., the court accepted the fact that the Plaintiff had acquired distinctiveness for "RED SOLES" on shoes and therefore granted them permanent injunction for infringement of their trademark. Thus, it remains uncertain whether even single colours can be granted trademark status or is it that the disposition of a certain colour in a unique or distinctive manner is the deciding factor? Colours are unconventional trademarks in any case and further, single colours achieving trademark protection is even more unconventional. This legal uncertainty regarding validity of Louboutin’s “RED SOLE” trademark registration in India has to be resolved by the courts.