Recently, in an order passed by Delhi High Court in the case of Patanjali Ayurved Limited v Masala King Exports Trading Pvt. Ltd. & Ors. held that the doctrine of first sale which cuts off trade mark owner's rights after its products are first sold would be limited to selling the branded item in the same condition when it was first sold. It granted an ex-parte ad-interim injunction against Masala King Exports Trading Private Limited and 11 other companies from exporting products manufactured by Patanjali Ayurved Limited (PAL) in the international market till the next date of hearing. However, it allowed them to sell Plaintiff's product in the domestic market.
- The Plaintiff in this case is ‘Patanjali Ayurved Limited’ which is submitted to be a Company established in 2006.
- It was submitted that it is leading manufacturer and marketer of herbal, nature-based products and herbal medicines under the trade mark “PATANJALI” word and device both in Hindi and English along with part of its logo comprising of lines/strokes in green and orange color.
- It submitted that its products were available globally through its authorized distribution channels. It also brought to notice of the Court that since 2006, it had set up an extensive warehouse and distribution network comprising of over 47,000 retail counters, 3500 distributors in 18 states. It further stated that its sales and advertisement expenses in year 2016-17 was INR 10,000 Crores.
- It got registration of "PATANJALI" word in various classes. It is claimed that its mark enjoys trans border reputation and goodwill.
- Pursuant to a market research, it came to Plaintiff’s knowledge that the Defendants had been procuring its goods which were meant exclusively for sale in the domestic market and were illegally exporting them without any authority, which was resultantly also infringing the exclusive right to use the registered trade mark of the Plaintiff.
- It submitted that to prevent such illegal export, it had also issued letters to Custom Authorities, however the illegal exports continued. It also lodged complaints with Commissioner of customs. However, the Customs authorities stated that the Intellectual Property Rules did not apply to exports and no action was taken on the complaint.
- It contended that presently it does not have any authorized channel for export of its products and the entire export was done solely by itself through its own. It was stated that the packaging of the products that was meant for domestic sale was completely different from those that was meant for export.
- It elaborated that the products which were exported were packaged complying with metrological standards of the country where the products were required to be exported.
- It contended that exports made illegally which do not comply with legal requirements create grave risk to its goodwill and reputation and impacts the sale and exports of its products. It contended that the illegal exports using registered trade mark without any license, permission or authority infringed the trademark ‘PATANJALI’.
- It was submitted that it also came across instances where its goods had been tampered or altered, whereby creating a risk towards the quality of the goods and the reputation attached with them.
It contended that the packaging of the product was materially altered by affixing stickers on the same for the purposes of export. It submitted a picture of an authentic “Atta” packet and one that was illegally exported by the Defendants.
- It argued that based on the product it was apparent that on the original packet it was duly printed that it was to be consumed within four months. However, the products which were allegedly exported illegally had another sticker placed over the details printed on the packet that stated that the “Atta” was good for nine months.
- It further referred to several pictures of the products explaining the differences. The comparison of Plaintiff’s product in domestic market and the one for export is given in a tabular representation below: