MANU/DE/3332/2018

IN THE HIGH COURT OF DELHI

CS (COMM) 659/2018

Decided On: 12.09.2018

Appellants: Sandisk LLC and Ors.
Vs.
Respondent: Memory World

Hon'ble Judges/Coram:
Manmohan

JUDGMENT

Manmohan, J.

1. Present suit has been filed for permanent injunction restraining infringement of trade mark, rendition of accounts, damages etc. against the defendant.

2. Vide order dated 27th February, 2018 this Court granted an ex parte ad interim injunction against the defendant and also appointed a Local Commissioner to visit the premises of the defendant to make an inventory and take into custody all infringing products and their packaging and any other materials including advertising material pamphlets, brochures, cartons etc. bearing the plaintiffs' trademarks SANDISK, and the Red Frame logo and return the seized infringing goods to the defendant on Superdari upon its furnishing an undertaking that it will produce the goods as and when called upon to do so by the Court. The Local Commissioner visited the premises of the defendants on 10th March, 2018 and the following quantities of memory cards, loose product packaging, pamphlets and visiting cards were seized:-

(i) Memory card 32 GB - 3 pieces

(ii) Memory card 8 GB - 33 pieces

(iii) Memory card 16 GB - 80 pieces (iv) Memory card 4 GB - 38 pieces

(v) Loose product packaging 16GB - 489 pieces

(vi) Loose product packaging 8GB - 145 pieces

(vii) Loose product packaging 4GB - 389 pieces

(viii) Pamphlets - 930 pieces

(ix) Visiting cards - approx. 700 pieces

The seized products were delivered on Superdari to Mr. Prasanth M.

3. The defendant entered appearance through counsel on 27th April, 2018 and thereafter it failed to appear and was proceeded ex parte on 31st July, 2018 on which date the ex parte ad interim injunction order was confirmed till the disposal of the suit.

4. At this stage, learned counsel for the plaintiffs gives up prayers 23 (c) of the prayer clause to the suit. The statement made by learned counsel for plaintiffs is accepted by this Court and plaintiffs are held bound by the same. Learned counsel for plaintiffs prays that in view of the judgment of this Court in Satya Infrastructure Ltd. &Ors. Vs. Satya Infra & Estates Pvt. Ltd., MANU/DE/0511/2013, the present suit be decreed qua the relief of injunction, delivery up and costs. The portion of the said judgment relied upon by learned counsel for the plaintiffs is reproduced hereinbelow:-

"I am of the opinion that no purpose will be served in such cases by directing the plaintiffs to lead ex parte evidence in the form of affidavit by way of examination-in-chief and which invariably is a repetition of the contents of the plaint. The plaint otherwise, as per the amended CPC, besides being verified, is also supported by affidavits of the plaintiffs. I fail to fathom any reason for according any additional sanctity to the affidavit by way of examination-in-chief than to the affidavit in support of the plaint or to any exhibit marks being put on the documents which have been filed by the plaintiffs and are already on record. I have therefore heard the counsel for the plaintiffs on merits qua the relief of injunction."

5. The relevant facts of the present case are that the plaintiff No. 1, a company founded in 1998, is one of the world's largest dedicated providers of flash memory storage solutions under the house mark SanDisk and has been directly selling its products in the Indian market since 2005. The plaintiff No. 1 is a Fortune 500 and S&P 500 company which designs, develops and manufactures data storage solutions in a range of form factors using the flash memory, controller and firmware technologies. The plaintiff No. 2 is the registered user of the trademarks SanDisk, and the Red Frame Logo belonging to the plaintiff No. 1.

6. It is stated in the plaint that the plaintiff No. 1's pioneering flash memory technologies, which are marketed directly to retail consumers and enterprises as well as to other equipment makers, are integrated into and/or used in a wide range of consumer electronic devices, i.e., mobile phones, tablets, digital cameras etc. It is further stated that approximately 3,00,000 storefronts worldwide stock and sell the plaintiffs' products and the annual revenue of the plaintiff No. 1 in the year 2015 was over USD 5 billion. The plaintiff No. 1 also spends hundreds of millions of dollars in Research and Development of its products and on advertising.

7. It is stated in the plaint that the plaintiff No. 1 possesses both common law trade mark rights as well as trade mark registrations for the mark SanDisk in more than 150 countries worldwide. The said trademark has been in extensive, continuous and uninterrupted use globally since 1995 and in India since 2005 and in addition to the worldwide trademark registrations, the plaintiff No. 1 is also the registered proprietor of both a variety of word marks and device marks in India including the logo and the Red Frame logo, since 2003 under Class 9 of the Trade Marks Act, 1999 and all these trademarks are valid and subsisting.

8. It is averred in the plaint that the plaintiff No. 1 sells memory cards with a unique packaging. The key elements of the product packaging are described hereinbelow:-

a. Red product packaging with white lettering.

b. A "Red Frame Logo" which described the capacity of the memory card on the top right corner.

c. The logo in a unique font in white lettering prominently at the bottom.

9. Learned counsel for the plaintiffs states that in February 2018, it came to the knowledge of the plaintiffs that certain unauthorised third parties in Kerala, were selling counterfeit micro SD HC cards bearing the SanDisk marks in counterfeit (locally printed) packaging, which was found to be emanating from Tirur. Subsequently, the plaintiffs deputed an investigator to conduct a survey in Tirur, wherein he found the defendant to be dealing in wholesale quantities of memory cards and mobile accessories, including retail packaged micro SD HC cards where the packaging bore the mark SanDisk but was counterfeit as also loose packaging. She states that the said micro SD HC cards in retail packaging were sold to the plaintiffs' investigator who also obtained a visiting card of the defendant. The investigator's affidavit is filed in the proceedings. A photographic representation of the loose packaging of the defendant is reproduced hereinbelow:

10. Learned counsel for the plaintiffs states that the defendant has infringed upon the statutory rights of the plaintiffs by copying each and every element of the plaintiffs' product and/or product packaging, with the sole intent of duping unwary customers by selling counterfeit products and to ride on the plaintiffs' reputation and goodwill.

11. She states that since the plaintiffs' product comes pre-packaged, there is no occasion for genuine loose packaging to be available in the market, which therefore establishes the counterfeit nature of the defendant's product packaging.

12. Order XIII-A of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 empowers this Court to pass a summary judgment, without recording evidence, if it appears that the defendants have no real prospect of defending the claim and there is no other compelling reason why claim should not be disposed of.

13. In the opinion of this Court, the defendant has no real prospect of defending the claim and no other compelling reason appears to this Court why claim of the plaintiffs should not be disposed of. This is so because the defendant has not filed its written statement despite entering appearance on 27th April, 2018, as stated above, nor denied the documents of the plaintiffs. Moreover, as the defendant is selling counterfeit products bearing the plaintiffs' SanDisk trademark and product packaging, it is a clear case of infringement of the plaintiffs' registered trademark.

14. This Court is also of the view that the defendant is using the registered trade mark SANDISK of the plaintiffs and its product packaging to sell counterfeit products with a view to trade upon and benefit from the immense reputation and goodwill of the plaintiffs' mark and pass off its products as those of the plaintiffs.

15. In view of the aforesaid, the suit is decreed in favour of the plaintiffs and against the defendant in accordance with prayer clause 23 (a) of the plaint along with the actual costs. Prayer (b) is allowed to the extent that the infringing goods seized by the Local Commissioner shall be delivered by the defendant to a representative of the plaintiffs for destruction within fourteen days of passing the order. The costs shall amongst others include the lawyers' fees. The plaintiffs are given liberty to place on record the exact cost incurred by it in adjudication of the present suit, if not already filed.

16. Registry is directed to prepare a decree sheet accordingly. Registry is also directed to issue to an authorised representative of the plaintiffs a certificate authorizing him/her to receive back from the Collector full amount of the Court fee paid by them in the present suit.

17. Consequently, the present suit stands disposed of.

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