The Indian judicial system has witnessed many positive changes in the last decade, aimed to strengthen the IP regime in the country. The Hon’ble High Courts of Delhi, Mumbai and Madras have pronounced landmark judgments in disputes in the recent years and have helped shape intellectual property law in India by interpreting various facets of the trademark, copyright and patent law.

In the recent years, courts have been successful in creating an ecosystem intended to foster and protect IP by awarding damages for infringements at a much higher rate than those granted before 2014. The principles involved in the grant of damages in IP litigation in India have seen much evolution in the recent decades. A look at some of the recent judicial decisions showcase the same:

In April 2019, in Nippon Steel & Sumitomo Metal Corporation versus Kishore D. Jain and anr.[1], the Bombay High Court awarded a whopping cost of Rs 5 crore for trademark infringement. The suit was filed by the Plaintiff when a complaint was made to them about the quality of some Carbon Seamless Pipes which were to be used in oil plants. It was later discovered that the pipes were manufactured by a third-party manufacturer. In the complaint made, it was alleged that the defendants affixed Nippon Steel’s trademarks on the pipes and provided forged certificates bearing Nippon Steel’s trademarks/logos to the company.

The Hon’ble Court, while awarding the costs, noted that there was a serious need to deter unscrupulous entities from providing spurious pipes. The Hon’ble Court further directed that the costs were to be paid to the Tata Memorial Hospital, a charitable organisation based in Bombay.

It is interesting to note that the Bombay High Court, in September 2018 had also imposed exemplary costs to the tune of Rs. 1.5 crores in the case of Glenmark Pharmaceuticals Limited versus Curetech Skincare and anr.[2] for habitual trademark infringement of pharmaceutical products. The costs were deposited into the CM’s Kerala Flood Relief Fund.

In April 2019, the Delhi High Court in Whatman International Limited versus P. Mehta and ors.[3] awarded punitive damages to the tune of Three Crores and Eighty Five Lakhs (Rs. 3.85 crores) to the Plaintiff, a U.K. based company involved in the manufacturing and selling of various products including filter papers, in lieu of damage caused to its various intellectual property rights by the Defendants for over 25 years.

The Hon’ble Court observed that “punitive damages should invariably follow the award of general damages (by that the Court meant that it could be an element in the determination of damages, or a separate head altogether, but never completely without determination of general damages).

While, the Delhi High Court has always been generous in awarding punitive damages, however, by this judgment, the Court emphasised on the need to exercise a great degree of caution while awarding exemplary punitive damages in cases of libel and tortuous claims, involving financial and intellectual property.

In another important judgment pronounced by the Delhi High Court in April 2019 in Koninlijke Philips NV & Anr v Amazestore & Ors[4], it was held that that the degree of misconduct by Defendants in a civil suit was determinative of the nature of relief to be granted. Hence, applying the aforesaid principles, it was held that the following rule of thumb should be followed while granting damages in cases of intellectual property infringement: -

Degree of Mala fide Conduct

Proportionate Award

First time innocent infringer

Injunction

First time knowing infringer

Injunction + partial costs

Repeated knowing infringer which caused minor impact to the Plaintiff

Injunction + costs + partial damages

Repeated knowing infringer which caused major impact to the Plaintiff

Injunction + costs + compensatory damages

Infringement which was deliberate and

calculated (Gangster/scam/mafia) +

wilful contempt of court.

Injunction + Costs + Aggravated

damages (Compensatory + additional

damages)

In fact, there is sea change in the way the Indian commercial courts adjudicate matters and employ unconventional and innovative methods centred around public good and social causes (as also seen in the aforementioned cases).

Recently, the Delhi High Court has witnessed various judgments awarding damages in the interest of public good. In March 2019, the Hon’ble Court passed an order in Mercke Sharp & Dohme Corp & Anr. versus Abhayakumar Deepak & anr.[1], imposing a cost of Rs. 80 lakhs on the Respondents “to be utilised for the larger public good”. Apart from directing the Respondents to file an affidavit of apology, the Hon’ble Court also directed them to plant 1,40,000 trees on the Central Ridge. The Hon’ble Court gave detailed specifications regarding the type of plants to be planted and the time period for which the respondents would be obligated to nurture the plants. The Respondents were also directed to ensure the presence of water sources and water retention systems and prepare a compliance report. The report was to be submitted to the Deputy Conservator of Forests.

In the case of Hermes International & Anr. versus Riyaaz Nasruddin Amlani & ors.[2], the Delhi High Court fined Rs 20 lakh as punitive damages on the Respondent company i.e. Impressario Hospitality on a contempt plea moved by Hermes International (Petitioner) which alleged that the restaurant chain infringed its trademark, despite the suit being decreed in favour of the Petitioner. The Hon’ble Court directed that the fine be used to provide mid-day meals and sanitary napkins at several orphanages and foster care homes for the next two years. The Hon’ble Court also directed the Respondents to install a commercial grade water purifier at a 150-year old orphanage, Bachhiyon ka Ghar.

The Bombay High Court, in a recent order dated May 20, 2019 in Unilever PLC & anr. versus Masqati Dairy products[3] granted a permanent injunction restraining the Defendant from using the registered mark “FEAST” of the Plaintiff by using a deceptively similar mark “CHOCO FEAST” in respect of ice-creams. This Hon’ble Court ordered the Defendant to donate Rs. 5 lakhs to the Aware Foundation, which cares for wounded and sick animals found on the streets. The Hon’ble Court also ordered the infringing goods seized by the Court Receiver to be distributed among poor children, and the wrappers of the same to be destroyed by the parties.

In some of the earlier cases as well, the Hon’ble Courts had adopted the “public interest” approach. The Hon’ble Court in Dharampal Premchand v Tara Zarda Factory[4] (also known as the Baba Zarda case) ordered the defendant to install 150 spittoons in the Osmania Cancer Hospital in Hyderabad. In The Polo Corporation v Jerry Arora & Ors[5], the Hon’ble Court, in a consent order directed the defendants to perform 50 hours of community service at a senior citizens’ home in New Delhi.

The above cases demonstrate that courts can use the powers at their disposal to bring about real change and implement restorative justice. The jurisprudence relating to penalties and costs in the recent times evidently aim to compensate the aggrieved party, curb the activities of habitual infringers and motivated towards social causes.