A.K Sikri, J.—The plaintiff has filed this suit for permanent injunction, infringement of trademark, copyright, passing off, rendition of accounts against the defendants. The plaintiff is a well established manufacturer of various stationery goods including erasers, pencils, refills for propelling pens, clips, pencils, sharpeners, pens, fountain pens, clips and stapples and is carrying on the business since the year 1957. As per the averments made in the plaint, in the year 1958, the plaintiff adopted the trademark APSARA in respect of stationery goods including pencils and is using the same continuously, regularly, extensively and uninterruptedly. The plaintiff is the registered proprietor of the following registered trademarks:
(a) Trademark label APSARA BEAUTY PLACE lead HB under No. 352238 in Class 16.
(b) Trademark APSARA BEAUTY along with logo of two oblique devices HB registered under No. 356759 in Class 16.
2. The plaintiff claims that sale of goods under the aforesaid trademarks with the distinctive colour scheme and getup is substantial and its goods are being sold in every nook and corner in India. The plaintiff is also the registered owner of the copyright of the label of APSARA BEAUTY Pencil registered under No. A-63082/2002. The plaintiff has placed on record APSARA carton/packing material. The essential features of the said APSARA carton/packing material are described in para 7 of the plaint as under:
“That one of the cartons/packing materials in which the plaintiff's pencils are sold has a distinctive background like Annexure X hereto. The front and reverse panel of the said packing carton predominantly comprised black colour background wherein there is a roundish oval device where the trademark of the plaintiff APSARA is written in golden colour. Underneath the said oval shape device the descriptions of beauty pencil are given which are written in white colour lettering. On the right side of the said carton shows the picture of sharpened pencil in white oblique device having two red band strips and rest is black colour portion where the words BONDED LEAD HB are written. The name of the plaintiff company is written in a yellow colour. All the features of the said packing material/carton like Annexure X constitutes the original artistic work within the meaning of Section 2(c) of the Copyright Act, 1957. The plaintiff is the owner of the said copyright therein who has first time adopted and used the said colour scheme, getup, layout and arrangement of the features of the said carton like Annexure X. The said new/revised carton is used by the plaintiff since 1999. The colour scheme, getup, layout and arrangement of features of the said carton are exclusively associated and recognised by the entire trade with the products of the plaintiff and no one else.”
3. According to the plaintiff, the above said APSARA carton is distinctive/artistic and constitute original artistic work under Section 2(c) of the Copyright Act, 1957 which has been designed and drawn by the plaintiff for the first time in India. All the essential features of the said carton are exclusively associated with the plaintiff and no one else. On the basis of the aforesaid averments, it is claimed that the trademark label APSARA BEAUTY black lead HB is a well known trademark within the meaning of Section 11 of the Trade Marks Act, 1999. It is also claimed that no other person in India has ever used the trademark APSARA BEAUTY along with logo of two oblique devices HB prior to the date of user of the plaintiff and, therefore, the plaintiff is the proprietor of the above said trademarks and also the owner of the copyright in its favour. The plaintiff has further stated in para 10 of the plaint that in the month of July, 2003, the plaintiff's attention was drawn to the bonded lead HB pencils brought into market by defendant Nos. 6 and 7 under the trademark HERO CATTY. The defendants are selling their bonded HB pencils in an exactly similar carton, in similar size having the similar background, colour scheme and arrangement of features having similar panels and the directions for use of the pencils which have been copied from the plaintiff's carton. Thus the defendants have slavishly copied the carton of the plaintiff. The cartons used by the defendants are placed on record.
4. Present suit is filed as the plaintiff perceives the aforesaid act of the defendants amounting to infringement of the plaintiff's trademark as well as copyright. The defendants 1 to 5 are the dealers of the defendants 6 and 7. It is also alleged that the defendants 6 and 7 are habitual of infringing the trademarks and copyright of the plaintiff and even earlier proceedings had to be filed against the defendants for copying APSARA DRAWING pencils, APSARA PLANTINUM DARK pencils and label of the plaintiff having red colour background with black lines. Details of these proceedings are mentioned in para 12 of the plaint.
5. Summons of the suit were duly served upon the defendants. The defendants appeared and filed written statement raising certain defences. It is, inter alia, stated that the cartons of the plaintiff and that of the defendant No. 7 are entirely different and distinct as far as their colour scheme and essential features are concerned and there is no chance or likelihood of any confusion of deception in the minds of the trader and consumers in distinguishing as to whose products are packed in which cartons. The plaintiff on its carton is using the mark APSARA BEAUTY black lead HB while the defendants' carton has HERO CATTY mark on their cartons.
56. Nobody appeared on behalf of the defendants on 2nd September, 2004 and, therefore, they were proceeded ex parte. Thereafter application for setting aside the ex parte order was filed along with the application for condonation of delay. When these applications came up for hearing on 17th January, 2006, again, nobody appeared on behalf of the defendants and these applications were dismissed in default. Since the plaintiff has filed evidence by way of affidavit, arguments were heard and orders reserved. Learned Counsel for the plaintiff was permitted to file written submissions. No steps are taken by the defendants even thereafter for getting the ex parte proceedings set aside. In the meantime, the plaintiff has filed written submissions. Therefore, I proceed to decide the matter.
6. Evidence by way of affidavit of Mr. P.N Thanawal, constituted attorney and authorized person on behalf of the plaintiff has been filed. He has stated and affirmed, on oath, various averments which are made in the plaint and have already been noted above. He has proved the registration of two trademarks and registration certificates as Ex. P1 and Ex. P2. The copyright certificate is filed as Ex. P3. Statement of sale figures for last five years is given as Ex. P4. Carton of the plaintiff is filed as Ex. P5 and that of the defendants is proved as Ex. P6. Decree dated 10th April, 1991 obtained by the plaintiff against M/s. Kuchhal Pencil Industries in Suit No. 1153/1991 is filed as Ex. P7.
7. The plaintiff is marketing its product under the trade name APSARA BEAUTY pencils whereas the defendants are selling their pencils under the trademark HERO CATTY. Therefore, as far as adoption of the name by the defendants is concerned, that is entirely different and there is no resemblance. However, grievance of the plaintiff is that colour scheme, getup and other features of the plaintiff's cartons are copied by the defendants in the defendants' carton and comparison of two cartons is bound to create confusion in the minds of the consumers. On comparison of the two cartons, this submission of the plaintiff is found to be correct as the following features appearing in the plaintiff's cartons are blindly copied and adopted by the defendants.
(a) The background of the defendants' carton is also of black colour.
(b) The defendants have also used the oval shape white colour device as used by the plaintiff. The trademark of the defendants is also written in golden colouring.
(c) The defendants have also used the expression BEAUTY PENCIL in the same manner as well as in the same white colour lettering. The defendants have also used two oblique red colour devices, which is the part of the registered trademark of the plaintiff. The defendants have also used the white background/device where the pencil is shown in the identical manner as that of the plaintiff. The defendants have also shown the name of defendant No. 7 in yellow colour.
(d) The defendants have also copied the reverse side of the said carton. The colour scheme and design of pencil is also same.
8. It would be relevant to quote following passage from the judgment of the Supreme Court in the case of Laxmi Kant Patel v. Chetanbhat Shah, (2002) 3 SCC 65 : AIR 2002 SC 275:
“A person may sell his goods or deliver his services such as in case of a profession under a trading name as style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by Courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person accepts or intends to adopt a name in connection with his business or services which already belong to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury.
In an action for passing it is usual, rather essential, to seek an injunction temporary or ad interim. The principles for the grant of such injunction are the same as in the case of any other action against injury complained of. The plaintiff must prove a prima facie case, availability of balance of convenience in his favour and his suffering an irreparable injury in the absence of grant of injunction. According to Kerly (ibid, para 16.16) passing off cases are often cases of deliberate and intentional misrepresentation, but it is well settled that fraud is not a necessary element of the right of action, and the absence of an intention to deceive is not a defence though proof of fraudulent intention may materially assist a plaintiff in establishing probability of deception. Christopher Wadlow in Law of Passing Off (1995 Edition at 0.3.06) states that the plaintiff does not have to prove actual damage in order to succeed in an action for passing off. Likelihood of damage is sufficient. The same learned author states that the defendant's state of mind is wholly irrelevant to the existence of the cause of action for passing off. As to how the injunction granted by the Court would shape depends on the facts and circumstances of each case. Where a defendant has imitated or adopted the plaintiff's distinctive trademark or business name, the order may be an absolute injunction that he would not use or carry on business under that name. (Kerly, ibid para 16.97)”
9. The plaintiff has been able to prove, because of its unrebutted testimony, that on account of superiority of the goods, long, extensive and continuous user and wide advertisement in various modern media including television, national network the said packing material like Ex. P5 has become very popular with the stationery trade and members of the public associate the same with the trademark a well as with the colour scheme, getup, layout and arrangement of the packing carton of the goods of the plaintiff and none else. The said carton like Ex. P5 in which the pencils are sold denotes and connotes the pencils manufactured by the plaintiff alone. The two red strips which are used by the plaintiff on the packing material like Ex. P5 as well as the product is also part of the plaintiff's registered trademark No. 356759 as of 21st December, 1979. The said device is being used by the plaintiff for the last more than three decades. Under Section 31 of the Trade and Merchandise Marks Act the registration granted in favour of the plaintiff is a prima facie evidence and the said registration granted in favour of the plaintiff is conclusive under Section 32 of the said Act. From the previous history of litigation between the parties, it is clear that taking advantage of the popular wellknown product of the plaintiff, the defendants have tried to take undue advantage of the goodwill and reputation of the plaintiff's product and have tried to pass on their product as that of the plaintiff. Due to the adoption of the colour scheme, getup, etc. of the plaintiff's product deliberately and dishonestly the defendants have infringed the plaintiff's registered trademark and copyright and the defendants are guilty of such an infringement under Section 29 of the Act. Under Section 28 of the said Act, exclusive rights are conferred in favour of the plaintiff. Law on this aspect is fairly settled as is clear from the extract of the following judgments:
(i) National Bell Co. v. Metal Goods Mfg. Co., (1970) 3 SCC 665 : AIR 1971 SC 898—
“On registration of a trademark the registered proprietor gets under Section 28 the exclusive right to the use of such trademarks in relation to the goods in respect of which the trademark is registered and to obtain relief in respect of any infringement of such trademark.
(ii) American Home Products v. Mac Laboratories, (1986) 1 SCC 465 : AIR 1986 SC 137—
“When a person gets his trademark registered, he acquires valuable rights by reason of such registration. Registration of his trademark give him the exclusive right to the use of the trademark in connection with the goods in respect of which it is registered and if there is any invasion of this right by any other person using a mark which is the same or deceptively similar to his trademark, he can protect his trademark by an action for infringement in which he can obtain injunction…..”
(iii) Tata Oil Mills v. Wipro Ltd., AIR 1986 Delhi 345—
“The registration of a trademark per se, if valid, whether in part A or B of the Register confers on the proprietor of the mark the right under Section 28(1) of the Act to the exclusive use of the trademark in relation to the goods in respect of which it is registered, that is to say, the right to exclude others from the use of the trademark, to restrain infringement of his mark and to obtain relief in respect of any infringement.”
(iv) Avis International v. Avi Footwear, AIR 1991 Delhi 22—
“In my view violation of the exclusive statutory right is illegal activity, to hold otherwise will negate the statutory provisions of the Trade and Merchandise Marks Act.”
10. I find that it is a clear case of infringement of the plaintiff's copyright as well. [See Anglo-Dutch Paint, Colour and Varnish Works Pvt. Ltd. v. India Trading House, AIR 1977 Delhi 41 and M/S. Vicco Laboratories Bombay…Plaintiffs; v. M/S. Hindustan Rimmer, Delhi…Defendants., AIR 1979 Delhi 114.
11. The plaintiff, therefore, is entitled to decree of injunction as prayed for. Insofar as claim of damages is concerned, as the defendants have remained ex parte, in the absence of exact figures of sales, etc. of the defendants under the infringing trademark exact damages are not proved. However, punitive damages can be awarded in view of the principles laid down in the following judgments:
(i) Time Incorporated…Plaintiff; v. Lokesh Srivastava & Anr.…Defendants Ex Parte., 2005 (30) PTC 3.
(ii) Hero Honda Motors Ltd…Plaintiff; v. Shree Assuramji Scooters…Defendant., 2006 (32) PTC 117 (Delhi).
12. Time Incorporated (supra), was also a case where the defendants chose to remain ex parte. While refusing to grant damages on the ground that nothing was proved on record as to how these damages were calculated, the Court still granted punitive and exemplary damages of Rs. 5 lacs. It would be apposite to reproduce discussion on this aspect contained in paras 6 to 8 of the judgment:
“6. The plaintiff has claimed a decree of Rs. 12.5 lacs on account of damages suffered by the plaintiff or an order of rendition of accounts of the profits illegally earned by the defendants by use of the impugned trademark. In view of the fact that the defendants have not chosen to turn up and face these proceedings, this Court is of the considered view that an order of rendition of accounts is fully warranted and called for. Damages in the sum of Rs. 12.5 lacs as claimed cannot be awarded on account of the fact that the plaintiff has not succeeded in proving on record as to how and on what basis these damages have been calculated. Damages of Rs. 5 lacs are claimed on account of loss of reputation of the plaintiff. These can be awarded inasmuch as the readers who might have read the defendants' TIME ASIA SANSKARAN, must have formed a very poor opinion about the plaintiff's Magazine and, as such, the reputation and goodwill of the plaintiff has suffered.
(7) Coming to the claim of Rs. 5 lacs as punitive and exemplary damages for the flagrant infringement of the plaintiff's trademark, this Court is of the considered view that a distinction has to be drawn between compensatory damages and punitive damages. The award of compensatory damages to a plaintiff is aimed at compensating him for the loss suffered by him whereas punitive damages are aimed at deterring a wrong-doer and the like-minded from indulging in such unlawful activities. Whenever an action has criminal propensity also the punitive damages are clearly called for so that the tendency to violate the laws and infringe the rights of others with a view to make money is curbed. The punitive damages are founded on the philosophy of corrective justice and, as such, in appropriate cases these must be awarded to give a signal to the wrongdoers that law does not take a breach merely as a matter between rival parties but feels concerned about those also who are not party to the lis but suffer on account of the breach. In the case in hand itself, it is not only the plaintiff, who has suffered on account of the infringement of its trademark and Magazine design but a large number of readers of the defendants' Magazine ‘TIME ASIA SANSKARAN’ also have suffered by purchasing the defendants' Magazines under an impression that the same are from the reputed publishing house of the plaintiff company.
(8) This Court has no hesitation in saying that the time has come when the Courts dealing actions for infringement of trademarks, copy rights, patents, etc. should not only grant compensatory damages but award punitive damages also with a view to discourage and dishearten lawbreakers who indulge in violations with impunity out of lust for money so that they realize that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them. In Mathias v. Accor Economy Lodging, Inc., 347 F. 3d 672 (7th Cir. 2003), the factors underlying the grant of punitive damages were discussed and it was observed that one function of punitive damages is to relieve the pressure on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution of minor crimes. It was further observed that the award of punitive damages serves the additional purpose of limiting the defendant's ability to profit from its fraud by escaping detection and prosecution. If a tort-feasor is caught only half the time he commits torts, then when he is caught he should be punished twice as heavily in order to make up for the times he gets away. This Court feels that this approach is necessitated further for the reason that it is very difficult for a plaintiff to give proof of actual damages suffered by him as the defendants who indulge in such activities never maintain proper accounts of their transactions since they know that the same are objectionable and unlawful. In the present case, the claim of punitive damages if of Rs. 5 lacs only which can be safely awarded. Had it been higher even, this Court would not have hesitated in awarding the same. This Court is of the view that the punitive damages should be really punitive and not flea-bite and quantum thereof should depend upon the flagrancy of infringement.”
13. In Hero Honda Motors (supra), the Court granted punitive damages of Rs. 5 lacs after taking note of its earlier judgment in Time Incorporated (supra) as is clear from the following passages:
“18. I am in agreement with the aforesaid submission of learned Counsel for the plaintiff that damages in such cases must be awarded and a defendant, who chooses to stay away from the proceedings of the Court, should not be permitted to enjoy the benefits of evasion of Court proceedings. Any view to the contrary would result in a situation where the defendant who appears in Court and submits its account books would be liable for damages, while a party which chooses to stay away from Court proceedings would escape the liability on account of failure of the availability of account books. A party who chooses not to participate in Court proceedings and stay away must, thus, suffer the consequences of damages as stated and set out by the plaintiff. Of course, this would not imply that the plaintiff would be entitled to any figure quoted by it which may be astronomical. The figure of Rs. 5 lacs as damages can hardly be said to be astronomical keeping in mind the nature of deception alleged by the plaintiff which not only causes direct loss to the plaintiff, but also affects the reputation of the plaintiff by selling substandard goods in the market where the public may be deceived in buying the goods thinking the same to be that of the plaintiff. There is a larger public purpose involved to discourage such parties from indulging in such acts of deception and, thus, even if the same has a punitive element, it must be granted. R.C Chopra, J. has very succinctly set out in Time Incorporated's case (supra), that punitive damages are founded on the philosophy of corrective justice. That was the case where the publishers of Time Magazine had come to Court and one of the factors which weighed while awarding punitive damages was that the readers had been sufferers of the infringement of the mark of the plaintiff. The only difference is that in the present case it is the consumer of the products of the plaintiff, who have suffered as a consequence of the infringement of the mark and logo of the plaintiff by the defendant.
19. The second aspect emphasized in Times Incorporated's case (supra), has also material bearing as the object is to relive the pressure on overloaded system of criminal justice by providing civil alternative to criminal prosecution of minor crimes. The defendant could have been prosecuted for such counterfeiting, but the plaintiff has considered appropriate to confine the relief to civil proceedings.
20. Learned Counsel for the plaintiff also rightly points out that instead of plaintiff utilising its energy for expansion of its business and sale of its products, the resources have to be spread over a number of such litigations to bring to book the offending traders in the market. In such a case, both compensatory and punitive damages ought to be granted apart from the costs incurred by the plaintiff in such litigation.”
14. Going by the ratio of the aforesaid two cases it is a tit case where punitive damages of Rs. 1 lacs should be granted. Accordingly, punitive damages of Rs. 1 lacs are granted in this case as well.
15. Following decree is passed:
(a) for permanent injunction restraining the defendants, their servants, agents, dealers, stockists, distributors, retailers, shopkeepers, etc. from manufacturing, marketing, exporting, offering to sell and distributing pencils in the carton like Annexure Y (Ex. P6) which is similar in colour scheme, getup, layout and arrangement of features as that of the plaintiff's carton/packing material like Annexure X (Ex. P5).
(b) the defendants are also directed to deliver up the infringing material like offending labels, cartons, wrappers, blocks, dyes, advertisement material, etc. to the plaintiff for the purpose of destruction and/or obliteration thereof.
16. Plaintiff is also entitled to costs. Decree be drawn accordingly.
Suit decreed.