Facts of the Case


·         The Parties: The Plaintiffs (Kaira District Cooperative Milk Producers Union Ltd. & Anr.) are the proprietors of the globally recognized and well-known trademark AMUL / KBI AMUL. The Defendants (Amul Brush Enterprises & Anr.) were engaged in manufacturing and selling paint brushes, rollers, putty knives, and allied products under the identical/deceptively similar marks "AMUL" and "KBI AMUL".

·         Trademark Registration: The Plaintiffs claimed absolute priority of registration and user over the trademark. Though Defendant No. 2 also possessed a registration for the mark "KBI AMUL", the Plaintiff’s prior rights over the well-known mark were supreme.

·         Interim Injunction & Seizure: On December 20, 2021, the Court restrained the defendants from using the impugned marks. A Local Commissioner was appointed, who subsequently raided the defendants' premises and seized an extensive cache of approximately 36,000 to 37,000 infringing paint brushes bearing the "KBI AMUL" mark.

·         Surrender by Defendant: Yielding to the legal pressure, the defendants expressed willingness to suffer a decree and claimed they had ceased using the mark "AMUL" with or without prefixes/suffixes.

Issues Involved

1.      Whether the defendants' usage of the well-known mark "AMUL / KBI AMUL" for paint brushes and allied products constitutes trademark infringement.

2.      Whether the defendants were liable to be multed with actual costs despite submitting uncertified GST returns to claim financial inability.

3.      Whether the commercial disposal of the seized goods could be allowed after the complete effacement of the infringing trademark.

Petitioner’s (Plaintiffs') Arguments

·         The Plaintiffs argued that AMUL is a highly reputed, well-known trademark, and its unauthorized use by the defendants on paint brushes constitutes clear infringement and dilution of their brand equity.

·         They underscored the massive scale of infringement, pointing to the Local Commissioner’s seizure of 36,000 to 37,000 offending items from the defendants’ premises.

·         To counter the defendants' claim of financial hardship, the Plaintiffs cited a coordinate bench precedent, Satnam Brush Industry v. Kori Brush Industries [CS(COMM) 492/2021], where Defendant No. 2 was penalized with costs of ₹4,00,000/- in a highly similar trademark dispute involving brush manufacturing.

Respondent’s (Defendants') Arguments

·         The defendants conceded to the litigation by agreeing to suffer a decree and filed an undertaking on affidavit promising never to use the marks, logos, or trade names "AMUL" or "KBI AMUL" for any future goods or services.

·         They argued that all manufacturing materials related to the infringing items had been rendered unusable.

·         The defendants produced uncertified "nil" GST returns to establish that they were financially incapacitated and unable to bear the burden of legal costs.

·         However, their counsel candidly acknowledged that the costs imposed in the cited Satnam Brush Industry case had been complied with and never challenged.

Court Findings / Order

·         Rejection of Financial Hardship: The Hon'ble High Court observed that the defendants' GST returns were neither certified nor audited by a Chartered Accountant, and given their compliance with costs in previous identical litigation, their plea of financial distress was legally unsustainable.

·         Award of Actual Costs: Considering the flagrant manner of infringement and the huge quantum of seized offending materials (36,000+ brushes), the Court ruled that the Plaintiffs were fully entitled to actual costs. The Plaintiffs were directed to present their bill of costs before the Taxation Officer.

·         Decree Passed: The Court passed a permanent injunction decree in favor of the Plaintiffs in terms of Prayers A and B of the suit.

·         Conditional Disposal of Seized Goods: With the Plaintiffs' consent, the Court permitted the defendants to dispose of the seized brushes within 8 weeks, strictly subject to the complete removal or effacement of the offending "KBI AMUL" logo from the body of the products, followed by filing a compliance affidavit.

Important Clarification

This judgment clarifies that even if an infringer surrenders and agrees to a consent decree early in a trial, they cannot escape liability for legal costs if the scale of infringement is substantial. Furthermore, self-declared or uncertified "nil" financial statements/GST returns will not be accepted by commercial courts to wave off costs when past conduct or relevant case laws indicate the financial capacity to comply.

Sections Involved

·         The Trade Marks Act, 1999: Section 29 (Infringement of Registered Trademarks), Section 11(6) (Criteria for Well-Known Trademarks), and Section 135 (Reliefs in Suits for Infringement).

·         The Code of Civil Procedure, 1908 (CPC): Section 35 (Costs) as applicable to commercial disputes under the Commercial Courts Act, 2015.

 


Link to download the order -    https://www.mytaxexpert.co.in/uploads/1782972048_96compressed.pdf 


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