DELHI HIGH COURT ORDERS FOR PERMANENT BLOCKING OF DEFENDANTS’ WEBSITES THAT INFRINGED CROMA’S TRADEMARKS AND DEFRAUDED CUSTOMERS

A single Judge Bench of the Delhi High Court comprising of Justice Sanjeev Narula passed a judgement dated 19.01.2024 in Infiniti Retail Limited V. M/S Croma -Share & Ors. CS (COMM) 838/2022 wherein the Delhi High Court ordered for permanent blocking of the websites of the Defendants No. 1-4 which were defrauding people on the pretext of providing part time jobs with Croma.

Facts

A Suit for Trademark Infringement was filed by the Plaintiff before the Delhi High Court, which concerned the Plaintiff’s registered trademarks i.e. “Infinity Retail” and “Croma” that were the wholly owned subsidiaries of Tata Sons Pvt. Ltd. and offered wide range of electronics, appliances, consumer products etc across India. The Defendant No. 1 to 4 were the owners of domain names / websites “www.croma-share.com”, “www.croma-2.com”, “www.croma-1.com”, and “www.croma-3.com”, respectively. In November, 2022, upon receipt of several complaints, the Plaintiff discovered that the Defendants No. 1 to 4 are operating the impugned websites for defrauding people by taking money under the pretext of recruiting them for part-time jobs with Croma / Infiniti Retail Ltd.

The job process required the customers to pay an increasing amount of money for each subsequent level, from Rs. 180 to Rs. 42,000. The Defendants used to approach an unsuspecting consumer with a lucrative job offer, requiring them to purchase goods from the impugned websites with a promise to return the amount with an added component of commission. According to the evidence received on record, a consumer who fell prey to the scam, received a phone call by the Defendant No. 1 with the same job offer. The said consumer had suffered a loss of about Rs. 1,65,000/- due to the scam by Defendant No. 1.

The modus operandi of Defendant No. 1 to 4 was identical. When consumers asked for proof of authenticity, Defendant No. 1 to 4 supplied false and fabricated employee IDs, corporate registration in Belize, communications bearing Plaintiff’s letterheads purportedly signed by Plaintiff’s CEO. The Plaintiff’s Counsel informed that the impugned websites also imitated the terms and conditions of use, privacy policy etc that were displayed on Plaintiff’s Website www.croma.com, which amounted to passing off of Plaintiff’s copyright vested therein.

Issues before the Delhi High Court

A) Whether Defendants No. 1-4 were causing loss to the brand name of ‘Croma’?

B) Whether there was enough infringement of Plaintiff’s Trademarks by the Defendants in order to block their websites?

Decision by the Delhi High Court

On 05.12.2022, while issuing summons, an ex-parte ad-interim Injunction was issued, whereby Defendant No. 1 to 4 were restrained from infringing Plaintiff’s ‘CROMA’ Trademarks.

By seeing the evidence produced, the Delhi High Court could examine that the Defendant No. 1-4 identically designed their websites and were using Plaintiff’s ‘CROMA’ mark to create a misperception of association with the Plaintiff and through the impugned websites, the Defendant No. 1 to 4 were soliciting personal information and money from consumers.

As the impugned domain names wholly incorporated Plaintiff’s ‘CROMA’ mark, the public, under the mistaken belief that they were procuring a job at the Plaintiff’s company, fell prey to the Defendant No. 1 to 4’s ploy. The likelihood of confusion was evident as Defendant No. 1 to 4’s activities amounted to infringement of trademark rights.

After reviewing the Plaintiff’s annual revenue and promotional numbers, as well as the well-known status of Croma marks, the High Court concluded that the alleged conduct caused irreparable harm to their goodwill and reputation. Moreover, the Defendants No. 1-4 did not file any defense to contest the Suit. The High Court concluded that directing the Plaintiff to lead ex-parte evidence would serve no purpose because the pleadings and supporting papers demonstrated that Defendants were exploiting Plaintiff’s CROMA marks, entitling the Plaintiff to protection. As a result, the High Court, exercised its authority under Order VIII Rule 10 of the Civil Procedure Code 1908 (Procedure when party fails to present written statement called for by Court), and issued a decree in favour of the Plaintiff.

Conclusion

The High Court of Delhi provided permanent injunction against the Defendants and their illegal business. The High Court directed Defendants No. 5 to 7 to permanently block access to the impugned websites namely, “www.coma-share.com”, “www.croma-2.com” and “www.croma-1.com”. Thus, the Suit was subsequently disposed of by the Court.

Arjav Jain

Associate

The Indian Lawyer & Allied Services