Moods XXX condom and the Trademark dispute

If alleged offender was not aware of the existence of a registered trade mark and admits the mistake at the threshold, it could not be compelled to pay damages and rendition of accounts, Delhi High Court said in a suit which was filed by DKT India against HLL Lifecare Limited. It would save the time of the court and the award of damages would be harsh and unjustified, court said.

It is a case, where the plaintiff filed suit against Bajaj Medicose, a distributor of HLL Lifecare Limited (A Government of India Enterprise) which is the largest manufacturer of condoms in the world, seeking permanent injunction restraining the defendants from infringing, passing off their trademark XXX and damages to the tune of Rs.45 Lacs. Plaintiff alleged that, HLL Lifecare’s Moods XXX condom was in violation of Plaintiff’s XXX condoms.

When the suit and the interim applications were listed before Court, an adjournment was sought by the learned counsel for the plaintiff seeking leave to amend the memo of parties by impleading defendant No.2 as defendant No.1 and substitute defendant No.1 as defendant No.2, while also asking for liberty to file certain undertakings that have taken place post filing of the suit. The suit was re-notified from time to time.

It appears from the orders passed by the Courts from time to time that the defendants were keen to settle the matter amicably by giving the undertaking. However, the matter was adjourned from time to time. The plaintiff, on the other hand, despite of exchanging the e-mails between the parties did not place all the material facts before this Court and filed the suit. Had the matter could have been resolved in view of the exchange of correspondence between the parties by e-mails, the question of filing the suit ought not to have arisen.

Defendant No.2 has also filed an affidavit, stating therein that he is simply a retailer running a small medical shop in Delhi and is not selling the said products, i.e. condoms bearing the trademark MOODS XXX. It is further stated in the affidavit that defendant No.2 shall not sell the same in future.

A perusal of Section 135 (b) of the Trade Marks Act, 1999 lays down that if at the time of commencement of the use of trade mark in the suit, a party was unaware and had no reasonable ground for believing that the trademark of the plaintiff was on the register or when he becomes aware of the existence and nature of the plaintiff’s right in the trade mark forthwith ceases to use the said trade mark in relation to such goods, the Court shall not grant relief by way of damages (other than normal damages) or on account of profits.

Similarly proviso to Section 55(1) of the Copyright Act, provides that if the defendant proves that at the date of the infringement he was not aware and had no reasonable ground for believing that copyright subsisted in the work, the plaintiff shall not be entitled to any remedy other than an injunction in respect of the infringement and a decree for the whole or part of the profits made by the defendant by the sale of the infringing copies as the court may in the circumstances deem reasonable.

Section 22 (2) (b) of the Designs Act, 2000 provides that if the proprietor elects to bring a suit for the recovery of damages for any (such) contravention, and for an injunction against the repetition thereof, the person (who acts in contravention of the section) shall be liable to pay such damages as may be awarded and to be restrained by injunction accordingly. Provided that the total sum recoverable in respect of any one design, under clause (a) shall not exceed fifty thousand rupees.

Having considered the overall facts and circumstances, Court considered view that the stand taken by the plaintiff to claim the damages to the tune of Rs.45 Lacs is unreasonable, as it appears to the Court that even before or after filing of the suit, defendant No.1 was ready to resolve the disputes between the parties. Under these circumstances, Court is not inclined to accept the submissions of the learned counsel for the plaintiff to ask the defendant No.1 to pay the damages to the tune of Rs.45 Lacs in view of peculiar facts and circumstances of the present case.

The government firm admitted its mistake and undertook not to use the name. It offered Rs 1 Lacs to DKT. But the latter was not satisfied. The high court stated that the government company was willing to settle the dispute amicably throughout and had stopped the sale of the brand. Therefore, the demand of a huge compensation was unjustifiable. Moreover, the Trade Marks Act and the Copyright Act take a liberal view in such cases.

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