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  • Writer's pictureVrinda Sehgal

“HELL” Yes!: Delhi High Court Awarded Damages For Trademark Infringement After Settlement Failed


Introduction


Recently in the case of HELL ENERGY MAGYARORSZAG KFT v. SHRI BRAHM SHAKTI PRINCE BEVERAGES PVT. LTD., the Delhi High Court granted Rupees 30 lakh damages in favor of the Plaintiff, a Hungarian energy drinks manufacturer, based on a trademark infringement claim for their trademark “HELL”/”HELL ENERGY DRINK”/”HELL ENERGY”.


Background


The Plaintiff alleged that the Defendants were using the mark “HELLxxx” in respect of energy drinks. In addition, the Plaintiff claimed that the Defendants had filed a trademark application for the mark “HALL ENERGY DRINKS.” In another suit concerning the same matter, the Plaintiff had sought an ex parte interim injunction against the Defendants, and vide an order dated June 1st, 2021, the Court had restrained the Defendants from manufacturing, selling or marketing energy drinks under the marks “HELLxxx” or “HALL ENERGY DRINK”. The Court had also restrained the Defendants from infringing upon the Plaintiff’s trade dress/product packaging and copyright and passing off their goods as that of the Plaintiff’s.


The Court also appointed Local Commissioners in the matter to seize infringing products from the Defendants. Thereafter, the matter was settled under the Delhi High Court Mediation and Conciliation Centre, and the parties entered into a settlement agreement on September 21st, 2021. Vide this agreement, the Defendants had acknowledged the rights of the Plaintiff in the mark “HELL”/”HELL ENERGY” and other variants. They also undertook not to manufacture, sell or advertise products under the impugned mark “HELLxxx” or “HALL ENERGY DRINK” or any other deceptively similar trademark to that of the Plaintiff’s.


In the present suit, the Plaintiffs claimed that despite this settlement agreement, the Defendants had continued to violate the terms of the agreement and that they had launched another product by the name “HILLxxx”. The Plaintiff further claimed that the Defendants were a “habitual infringer” and in contempt of the Court’s earlier decision.


On the other hand, the Defendants argued that the mark was coined and structurally, phonetically, and visually different from the Plaintiff’s mark “HELL” and “HELL ENERGY”.


Considering the disregard for the Court’s previous decisions and the Defendants’ continued infringement of the Plaintiff’s intellectual property rights, the Plaintiff sought penal relief.


Decision


The Court ordered the Defendants to pay Rupees 30 Lakh (approximately USD 37,600) in damages to the Plaintiff. The Court also observed that the mark “HILLxxx” was confusing and deceptively similar to the Plaintiff’s mark, and thus the Defendants were found to be in violation of their settlement agreement.


The Court stated that, “The adoption of the mark 'HILLxxx' and the sale of the products under the said mark by the Defendants is a clear indication that the Defendants show scant regard to the orders passed by this Court." The Court also stated that in case the Defendants were found in violation of the court orders once again, they would be liable to pay damages to the tune of Rupees 1,00,00,000.


Furthermore, the Court also directed the Defendants to ensure that their proposed label and mark should not be in any manner identical or deceptively /confusingly similar to that of the Plaintiff. In addition, the Courts required the Defendants to seek approval from the Plaintiff within 10 days from the date of the decision before adopting a new label and mark.


Conclusion


In this case, the Court has taken a firm stand against the Defendants, who were found to be in continuous infringement and violation of a settlement agreement made before the Court. This case highlights the importance as well as the Court’s intentions to maintain the sanctity of alternative dispute resolution methods employed by the judiciary to ensure a swifter and smoother adjudication process. It has been made clear by the Court that despite using the Court’s mediation process if a Defendant is found to be in contempt and violation of a settlement agreement, they could face hefty penal damages and strict Court order.







For queries, please feel free to write to Ms. Vrinda Sehgal at vrinda@iprattorneys.com



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