Ms.Justice Gupta, departing from the decision of the Delhi High Court in TimeIncorporation v. Lokesh Srivatava, refused a punitive damage award in the case Christian Louboutin SAS v. MR. PawanKumar & Ors. In this case, the plaintiff, with a trademark ofdistinctive nature was recognised by the Trade Mark Office all around theworld, which gained immense international recognition and trans- borderreputation in India. The defendants, who are in the business of selling women’sshoes and accessories, which also carry business through social mediaplatforms, used the Trade Mark of the plaintiff in selling their ladies shoes,which was confirmed through further investigation. Plaintiff prayed forpermanent injunction, restraining the defendants from, manufacturing, selling,offering for sale or directly or indirectly dealing with the same goods bearingthe plaintiff’s Trade Mark which is identical or deceptively similar to theplaintiff mark.
Theplaintiff contended that, their Trade Mark, that is, shoe with a red soleclearly identifies the product of the plaintiff and distinguishes it from thegoods of every other person and thus became the signature of the plaintiff.They also pointed out evidences to substantiate its claim that its Trade Markis distinctive and well-known.TheDelhi High Court by taking into consideration the facts and circumstances ofthe case, restrained the defendants from using the plaintiff’s impugned Trade Mark.The Court deciding ex parte, observed that, since the Trade Mark of the plaintiffenjoys substantial Goodwill and Trans- border reputation, it can be consideredas a well- known trade mark.
The Court also made reference to a plethora ofcases in order to arrive at whether to or not to grant punitive damages againstthe defendants. And by relying upon the decision of the same Court in Hindustan Unilever Ltd v. Reckitt BenckiserIndia Ltd, the Court concluded that, it is not reasonable to grant punitivedamages in the matters of Intellectual Property. Rather by taking into consideration3 categories of compensations under Rooks v. Barnard and 5 principles in Cassel& Co. v. Broome, exemplary or punitive damages has to be granted.
Relyingupon the above reasons and the turnover of the defendant, the Court award for acompensation of 2.08 Lakhs against two sets of defendants in general orcompensatory damages plus another 8.63 Lakhs in legal fees, court fees andassociated expenses.Well-knownTrade Marks, as defined under the Trade Mark Act means a mark which has becomeso to the substantial segment of the public which uses such goods or receivessuch services.
Initially, no such provision as to the protection of well-knowntrade mark exists and so reliance was upon the common law remedy of passingoff. The first case, which emerged in this respect, was Daimler Benz v. HyboHindustan, wherein, this Court considered the Plaintiff mark to be well knownon account of Trans- border reputation and Goodwill.
On the same ground wasWhirlpool Co. & Anr. V. N.R.Dongre, decided. Later, following therequirement in General Assembly on Trade & Tariff (GATT), a set of new lawsto handle well-known marks and related issues were enacted.
With regard to thenewly enacted provisions, the Delhi High Court decided the case Indian ShavingProducts Ltd v. Gift Pack & Anr, by taking into consideration the factorsdetermining reputation of mark, that is, duration, extent and geographical areaof any use of the trade mark. On similar grounds, this Court decided the case, ManicoLtd v. Madhu Gupta. Thenext aspect considered was with regard to award of punitive damages.
Affirmingthe decision of this Court in Hindustan Unilever Ltd v. Reckitt Benckiser IndiaLtd, Delhi High Court refused to award punitive damages, against the reasoningof the same Court in Time Incorporation v. Lokesh Srivastava. Damages, beingone of the forms of relief, the general rule in the fixation of the sum to begiven should be as close as possible to that amount which will put the injuredparty in the same position as he would have been, if he had not sustained thewrong for which he is getting compensation. It is granted at the discretion ofthe Court, from the usual practice of compensatory damages and it is awarded inaddition to the compensatory damages. Abreakthrough in the field of awarding punitive damages happened in the case,Time Incorporation v. Lokesh Srivastava, where Court awarded both compensatoryand punitive damages. Upholding this decision, came a plethora of decisions,mainly by this Court, thereby the justification laid in this case became the’vertebrae’ for the grant of punitive damages in IP related issues.
Some ofthose decisions such as Microsoft Corptn v. Deepak Raval and Hero Honda MotorsLtd v. Shres Assuranji, reflected upon the motive behind granting punitivedamages. In all these decisions, the point highlighted was that, thejustification for granting punitive damages is to deter the wrong doers and thelike-minded so that in such cases they would, not only be liable to reimbursethe aggrieved party but would also be liable to pay punitive damages, which mayspell financial disaster to them. Subsequently,came the decision of the same Court in Hindustan Unilever Ltd. V.
ReckittBenckiser India Ltd, departing from the decision of the Time Incorporation v.Lokesh Srivastava. The propositions made by this Court in the aforesaid casewere as follows:· Punitive damages arethat damages which can be awarded in addition to the general compensatorydamages and cannot substitute it.
· It expressly overruledthe decision of Time case, that, punitive damages would more effectively be awardedin civil cases and that, otherwise, would over burden the criminal system. Itacknowledges that, IP statutes includes within it, criminal punishmentincluding fines and if a civil award travels beyond by awarding punitivedamage, it would not happen, in cases where the plaintiffs are unable to provegeneral damages, but the Court, in the absence of a Criminal Conviction,determines that it wants to curb actions that involve a criminal propensity.· The basic objective insuch cases is to avoid ad hoc judge centric award of damages without decidingand compensating for the injury caused by the plaintiff.
Theaforesaid reasoning was affirmed by this Court once again in this case. Such adecision was much needed in order to restore the balance of Delhi High Court in awarding damages. However, such adecision has not entirely shut the entire doors of granting punitive damages.Rather, it emphasised upon the circumstances under which exemplary damages canbe awarded, thereby clarifying that, such damages cannot be granted for theviolation of IP rights as IP laws do not provide for grant of such damages. Thus,it can be concluded that, Court consider trans-border reputation, spill over effect,honest and concurrent use, extensive use and concurrent use, extensive use andadvertisement etc. to determine a particular mark as well-known and theenactment of such provisions led to considerable change in the nature of Indianmarket, as many foreign big brands get attracted to the foreign policiesadopted in this respect.
And that in case of an infringement of a well- knowntrademark or for that matter, of any IP related issues, it would beunreasonable to grant punitive damages without the aggrieved party gettingcompensated.