Navigating Trademark Disputes: The Delhi High Court’s Approach in Prakash Pipes Limited v. Jaiswal Traders

This Article deals with a matter before Delhi High Court titled as M/S Prakash Pipes Limited v. M/S Jaiswal Traders Through Its Proprietor Mr. Chandan Jaiswal & Anr.that deals with withdrawal of a suit. It was decided by a Single Bench of Delhi High Court

Introduction

This Article explores the interplay between Order XXIII-A (withdrawal of a suit), Order VIII Rule 10 (consequences of a Defendant’s failure to file a written statement), and Section 151 (inherent powers of the Court) of the CPC in India. We will analyse a case where these provisions intersect, examining the judgments of the lower Court and the High Court, the issues at hand, and the Courts’ observations and conclusions.

Facts of the Case

The case involves a dispute between M/S Prakash Pipes Limited (the Plaintiff) and M/S Jaiswal Traders through its proprietor Mr. Chandan Jaisawal (the Defendant no.2), following allegations of trademark infringement and passing off. The Plaintiff, a well-established company engaged in manufacturing and trading a wide range of pipes and related products, has been using various trademarks and trade dress elements, including “PRAKASH” and “PRAKASH GOLD,” since 1980. These marks are registered and protected under the Trade Marks Act, 1999. The Plaintiff has achieved significant market presence, with substantial sales figures and extensive advertising investments.

The dispute arose when the Plaintiff discovered that Defendant no.1, a former sub-dealer of the Plaintiff, was selling products with infringing marks similar to the Plaintiff’s registered trademarks. Despite issuing a written apology and disclosure from Defendant no.1, who admitted to sourcing these infringing products from Defendant no.2, the sale of such products continued, prompting the Plaintiff to seek legal remedy.

The Plaintiff filed a suit seeking various reliefs, including permanent injunctions, delivery upon, and accounts of profits. The Court had initially issued an interim injunction against both Defendants. While Defendant no.1 eventually settled the matter with the Plaintiff, Defendant no.2, who had been duly served and failed to appear, continued to ignore the proceedings. Consequently, the Court proceeded ex-parte against Defendant no.2.

The Plaintiff sought a summary judgement under Order XIII-A of the Code of Civil Procedure, arguing that given Defendant no.2’s failure to contest and the settlement with Defendant no.1, there was no genuine dispute remaining. The Court, after evaluating the Plaintiff’s claims and evidence, found that the Plaintiff had established its rights and the infringement by Defendant no.2.

The Court granted a permanent injunction against Defendant no.2, restraining it from using the Plaintiff’s trademarks and awarded damages and costs in favour of the Plaintiff.

Issues in the Matter

1.  Trademark Infringement

Issue: Whether the use of trademarks by the Defendant no.2, including the marks “PRAKASH” and “PRAKASH GOLD,” infringes upon the Plaintiff’s registered trademarks.

• Plaintiff’s Argument: The Plaintiff argued that it owns well-established and registered trademarks and trade dress elements, including “PRAKASH” and “PRAKASH GOLD,” used continuously and extensively since 1980. The Plaintiff asserted that Defendant no.2 used these identical or confusingly similar trademarks without authorization, leading to infringement of the Plaintiff’s trademark rights.
• Defendant no.2’s Position: Defendant no.2 did not contest the claims, having failed to enter an appearance or file a written statement. The Court thus proceeded ex-parte, making it necessary for the Plaintiff to prove its claims without opposition from Defendant no.2.

2. Passing Off

Issue: Whether Defendant no.2’s use of trademarks and trade dress similar to those of the Plaintiff constitutes passing off.

• Plaintiff’s Argument: The Plaintiff contended that Defendant no.2’s use of the infringing trademarks and packaging was likely to cause confusion among consumers, misleading them into believing that the goods originated from or were associated with the Plaintiff. The Plaintiff’s case rested on the argument that Defendant no.2’s actions were designed to exploit the Plaintiff’s established goodwill and reputation.
• Defendant no.2: Given the ex-parte nature of the proceedings, Defendant no.2 did not provide any defence or counter-arguments.

 

Observations of the High Court

The High Court of Delhi made several important observations and decisions:

Firstly, the Court recognized the Plaintiff, M/S Prakash Pipes Limited, as a well-established entity engaged in the manufacturing and trading of a wide range of pipes and related products. The Court acknowledged that the Plaintiff’s trademarks, specifically “PRAKASH” and “PRAKASH GOLD,” have been in use since 1980 and are duly registered under the Trade Marks Act, 1999. The Plaintiff provided substantial evidence of a significant market presence, extensive sales, and considerable investment in advertising, which collectively established the trademarks as both well-known and reputable.

On the issue of infringement and passing off, the Court found that Defendant no.2 had used trademarks and trade dress that were identical or confusingly similar to those of the Plaintiff. The comparison of the products revealed that the Defendant’s goods were infringing upon the Plaintiff’s trademarks. Despite the proceedings being ex-parte due to the Defendant’s lack of participation, the Plaintiff’s evidence sufficiently demonstrated that the Defendant’s use of similar marks was likely to cause confusion among consumers, thereby constituting passing off.

Regarding the procedural aspects, the Court observed that Defendant no.2 had been properly served with a legal notice but failed to appear or file a written statement. As a result, the right to contest the case was forfeited, and the proceedings proceeded ex-parte. The absence of a defence from Defendant no.2 implied that the Plaintiff’s claims remained uncontested, thereby reinforcing the grounds for a summary judgement.

Decisions by the High Court

The Court decided to grant a permanent injunction against Defendant no.2, restraining them from using the Plaintiff’s trademarks, trade dress, and other protected elements. This decision aimed to prevent further infringement and safeguard the Plaintiff’s trademarks from unauthorised use. Additionally, the Court found the case suitable for summary judgement under Order XIII-A of the Code of Civil Procedure, 1908. Since Defendant no.2 had not appeared to contest the claims and a settlement had been reached with Defendant no.1, the Court determined that there was no real prospect of Defendant no.2 successfully defending the claim. Consequently, the Court issued a summary judgement to expedite the resolution of the case without the need for further oral evidence. Furthermore, the Court awarded damages of Rs. 5,00,000 (Five Lakhs) to the Plaintiff under Sections 35 and 35A of the CPC. This amount was intended to compensate for the harm caused by the Defendant’s infringement and passing off. Additionally, special costs were granted to cover the expenses incurred by the Plaintiff in pursuing the case.

Conclusion

The High Court’s decision in this case the protection of intellectual property rights, particularly in cases where trademark infringement and passing off are involved. The Court’s observations emphasised the well-established nature of the Plaintiff’s trademarks and the lack of any valid defence from Defendant no.2. The decision to grant summary judgement and the awarded reliefs reinforced the importance of protecting trademarks and ensuring that businesses do not unfairly benefit from another’s established goodwill and reputation.

Significance of the Case

This case highlights the procedural nuances in civil litigation, especially the impact of a suit’s withdrawal on default judgments and the role of the Court’s inherent powers.

 

Shikha Pandey

Associate

The Indian Lawyer & Allied Services