COUNTERFEITING – NO MORE A CAKE WALK-Bombay High Court imposes INR 5 crore fine

The Bombay High Court has imposed a fine of INR 5 crores on Kishore Jain and others for copying the trademark and goods of Nippon Steel & Sumitomo Metal  Corporation.

In an unprecedented order Justice S.J Kathawallaon  directed Kishore Jain and jeetendra Busad to pay Rs 5 crore to the Mumbai based Tata Memorial Cancer Hospital .

In a suit filed by law firm Khaitan & Co for the plaintiffs Nippon Steel & Sumitomo Metal Corporation against Kishor D Jain & Anr the court imposed the costs of INR 5 Crore on the defendants saying that such people have absolutely no regard for ethics and principles and in the bargain they make an inrrepairable dent to the reputation of of our country which is very unfortunate.

Background

By an ex-parte order dated 26 March 2019, the Bombay High Court had restrained Kishor D Jain & Anr (Defendants) from infringing the registered trade-marks ‘Nippon Steel’ and its variants owned by Nippon Steel & Sumitomo Metal Corporation (Plaintiff). The Bombay High Court had also appointed the Court Receiver to seize the impugned goods (carbon seamless pipes) and make copies of the electronic records of the Defendants. Thereafter, the Court Receiver seized various pipes, inspection certificates and had taken a mirror copy of the entire electronic records of the Defendants’ computers/servers which were found at the Defendants premises.

During the course of the hearing, the Defendants admitted that they procured unbranded pipes from the local markets and affixed the Plaintiff’s registered trade-marks upon the same. These counterfeit goods were then exported by the Defendants to Saudi Arabia to be used for laying pipes in oil plants.  Interestingly, the Defendants admitted that they also fabricated the inspection certificates issued in relation to the counterfeit goods to show that the same emanate from the Plaintiff.

The Plaintiff submitted that the pipes in question are specialized seamless pipes which are used in the oil industry and can have disastrous consequences if the same are spurious and do not meet the required standards of safety. The Plaintiff submitted that apart from causing serious damage to its goodwill and reputation coupled with possibility of accidents, the acts of the Defendants have in fact brought disrepute to the reputation of the Country and therefore heavy and unprecedented costs should be imposed on the Defendants.

Decision

Considering the blatant copy of the Plaintiff’s registered trade-marks, the Defendants submitted to a decree within 30 days of the initiation of the suit. However, with a view to deter various other counterfeiters from conducting such fraudulent activities, the Bombay High Court imposed costs of INR 5 Crore upon the Defendants. These costs will go to charity in favour of “Tata Memorial Hospital”.

Comment

This is the first time that the Bombay High Court has imposed such heavy costs upon a defendant in a trade mark counterfeiting case. It’s a welcome decision for the brand owners who spend heavily, first to popularize their mark and then to curb such blatant misuse of their popular mark. This decision should certainly serve as a deterrent to future counterfeiters/defendants. It breaks the traditional thought process of the defendants that stopping the use of the infringing mark is the only consequence of misuse of a trade mark.

-By-Smriti Yadav (Partner) and Dhiren Karania (Senior Associate)

 Rabindra Jhunjhunwala