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24 November 2024
The Commercial District Court, Delhi, delivered a significant judgment in M/s Hindustan Unilever Limited v. Pramod Gupta & ors in CS (Comm.) No. 315/2019 under Order VIII Rule 10 of the Code of Civil Procedure (CPC). This provision empowers courts to pronounce judgment when defendants fail to file a written statement, provided the claims are substantiated. The case dealt with significant issues of trademark and copyright infringement, passing off, unfair competition, and the dilution of flagship brands “Fair & Lovely” and “Lakme”, both owned by Hindustan Unilever Limited (HUL). The court’s decision, invoking Order VIII Rule 10 CPC, reflects the judiciary’s focus on protecting intellectual property rights and expediting commercial disputes in India.
Background of the case
Hindustan Unilever Limited, one of India’s largest FMCG companies, filed a suit against Pramod Gupta, Nand Lal, and an unidentified entity (Defendant No. 3) for infringing its trademarks “Fair & Lovely” and “Lakme”. HUL accused the defendants of manufacturing and distributing counterfeit goods that imitated its products’ unique packaging, trade dress, and artistic designs. HUL’s brands, including “Fair & Lovely” and “Lakme”, have built substantial goodwill and reputation over decades. “Fair & Lovely”, introduced in 1975, features distinct pink and white packaging with artistic elements, while “Lakme” has been a pioneer in cosmetics since 1952. Both trademarks are registered under the Trademarks Act, 1999, and the Copyright Act, 1957.
During a market survey in February 2019, HUL discovered the defendants’ activities. Investigations revealed that counterfeit products were being manufactured and packaged in Delhi and distributed in local markets, including Sadar Bazaar. Following this, HUL initiated legal proceedings and sought an injunction, damages, and other reliefs.
Evidence and findings
The court appointed local commissioners conducted raids on multiple premises operated by the defendants. Local commissioners seized significant quantities of counterfeit goods.
Despite being served notices, the defendants failed to appear in court or file a written statement, leading the court to proceed ex parte under Order VIII Rule 10 CPC. The court relied on unchallenged evidence, including the local commissioners’ reports, which confirmed the defendants’ deliberate copying of HUL’s trademarks and packaging, including its artistic work, logo scripts, and trade dress. This evidence demonstrated the defendants’ intent to pass off their counterfeit products as genuine, thereby eroding the distinctiveness of HUL's brands and posing risks to consumer safety.
Judicial analysis under Order VIII Rule 10 CPC
The court emphasized that Order VIII Rule 10 CPC is not a mechanical provision but a tool to ensure justice in cases where defendants fail to file a defence. It relied on precedents such as Balraj Taneja v. Sunil Madan (1999) and Nirog Pharma Pvt. Ltd. v. Umesh Gupta (2016), which emphasize that courts must verify the sufficiency of the evidence before delivering judgments under this rule. In the absence of any rebuttal, the court found HUL’s claims to be credible and supported by evidence.
The court also highlighted the legislative intent of the Commercial Courts Act, 2015, which aims to expedite commercial disputes. The reports of the local commissioners, admissible as evidence under Order XXVI Rule 10(2) CPC, further strengthened HUL’s case, leaving no room for doubt regarding the defendants' infringing activities. The Court also relied on the Delhi High Court Intellectual Property Rights Division Rules, 2022, which provide guidance on calculating damages and assessing evidence in intellectual property cases.
Reliefs granted and damages awarded
The court issued a permanent injunction restraining the defendants from manufacturing or selling products bearing HUL's trademarks, including “Fair & Lovely” and “Lakme” or any deceptively similar marks. The Court also awarded damages of Rs810,450 (around US$9,570), calculated based on the seized counterfeit goods, and Rs445,210 (around US$5,250) towards litigation costs, covering investigation, legal fees, and other expenses.
The judgment set an example by holding the defendants jointly and severally liable for the damages and costs. The court held that the defendants, being “fly-by-night operators”, deliberately evaded legal proceedings. Their actions demonstrated a calculated attempt to exploit HUL’s goodwill for unlawful gains.
Significance and conclusion of the judgment
This judgment is significant for several reasons. First, it reinforces the utility of Order VIII Rule 10 CPC in ensuring swift justice in commercial disputes, particularly when defendants evade legal proceedings. Second, it highlights the judiciary’s commitment to protecting trademarks and copyrights from counterfeiters, provides a strong deterrent against counterfeiters and confirms the importance of protecting trademarks and copyrights in India's commercial landscape. Finally, the case reaffirms that intellectual property protection is integral to India’s legal framework, setting a robust precedent for future disputes.
