Tiz Hazari court restrains any manufacturing and business of FSN International, Veda + Herbs India, and their partners

(Plaintiffs: Sonia Chadha -Sole Proprietor, M/s. Nimson International, A-41, DSIDC Narela, Industrial Park Narela, Delhi-110040 and M/s. Aryanveda Cosmeceuticals Partnership Firm, F-26/12, Main Road, Sector 7 Rohini, Delhi.
Also at 128, Bharatgarh Road Tehsil Nalagarh Distt Solan, Himachal Pradesh-174101)

Vs.

(Defendant: M/s. FSN International, M/s. Veda + Herbs India Parveen Kumar, Partner M/s. FSN International, Navin Singhal, Partner M/s. FSN International, Street No. 1, Dying Complex Bahadur Ke Road, Punjab, Ludhiana- 141008)

ORDER

These are two applications under Order 39 Rule 1 & 2 CPC r/w/Section 135 (2) of Trademark Act and application under Order XXVI Rule (9) r/w Order XXXIX Rule 7 CPC.

Applicant/ plaintiff’s case is that they are partnership firm involved in business of manufacturing and marketing of cosmetic products. Plaintiff No. 1 was earlier carrying the business as proprietorship firm since 2000 and thereafter, was converted into partnership firm. They have invested huge resources and have built up a mature business empire. Due to their quality and research they have managed to establish a name for themselves in the Indian Cosmetic Industry. They have more than 80 registered/ pending applications for their various Trademark. They have large network of stockist and super stockist available throughout the country. They have also been selling their products through Online channels. They have unique designs for their products and were copyright holder of the products mentioned in para 13 of the plaint. Their turnover was more than 42 Crores for last financial year.

Defendant No. 1 to the best of knowledge of plaintiff was a partnership firm of D3 and D4 while D2 was a marketing wing/entity of D1. D3 was plaintiff’s ex­ employee from 2012 to 2017. He resigned from the plaintiff’s employment on 09.11.2017 but during the course of employment, he came to know about all manufacturing aspects as well as technical aspects of plaintiff’s product. D4 was placing orders from plaintiff in regard to their product and was also an ex­super stockist prior to 2017­18.

D4 was owing more than 20 Lakhs to the plaintiff but the same was never paid. He was removed as super stockist by the plaintiff. It is claimed that due to the business dealings of the defendants with the plaintiff, they have acquired technical as well as manufacturing details of the plaintiff’s cosmetic products. Plaintiff further claimed that in the last week of March 2022, they came across the defendant’s product which was being sold on eCommerce portal wherein, defendants have copied the packaging, general getup, placement, design, colour combination etc. to deceive the ordinary customers. They were also taking undue advantage of their knowledge acquired during their dealings with the plaintiff and taking advantage of plaintiff’s goodwill and reputation. They have prayed for ex parte injunction as well as appointment of local commissioner.

Plaintiff has filed suit for injunction, passing off and infringement of copyright against the defendants.

Plaintiff has mentioned that they were copyright holders of plaintiff’s product in question as per Section 17 of the Copyright Act. They were into business since 2000. D3 and D4 were ex­ employee and ex­super stockist of the plaintiff prior to 2017 and therefore had come to know about technical as well as manufacturing details of their products. It is claimed that recently defendant has started manufacturing similar products using the similar get­up, Trade Dress, packaging etc of the plaintiff and therefore, deceiving the ordinary customers. The products were also available on the eCommerce websites and plaintiff has purchased the same.

Plaintiff has placed on record the representation of its products vis­a­vis the defendants product in para No 29 of the plaint. Both the products are not only similar but also largely resemble each other in representation, packaging & get­up. Therefore, there is likelihood of an ordinary person being deceived by the same. Since plaintiff has claimed that D3 and D4 were dealing with them prior to 2017, as such, there is substance in the plaintiff’s argument that defendants were likely/ using their previous know­ how to design the new products. Plaintiff not only claims to be prior user but also claims to be Copyright holder of the design/ get­up in question. As such, at this stage, there is prima facie case in plaintiff’s favour.

In view of the prior usage and the extent of claimed sales, there also appears to be balance of convenience and irreparable loss in favour of plaintiff.

Ld counsel for plaintiff mentioned that the products were deceptive in nature i.e. they suggest about active ingredients in the title but no such ingredients were found in the named product. They were also using certain chemicals which were know to be carcinogenic in nature. Defendant’s products are being manufactured under licence and therefore, there is presumption of defendants product complying with specification but the similarity of their product with the plaintiff’s product together with the absence of specific ayurvedic ingredients in the defendant’s product, which are pitched against the plaintiff’s product available in the market, at this stage, appears to be an additional ground for restraining the defendants from selling the alleged product.

Accordingly, application under Order XXXIX Rules 1 and 2 CPC
ex parte is allowed to the extent that defendants, their partners and / or proprietor, as the case may be, directors, affiliates, principal officers, employees, servants, dealers, agents, representatives, distributors, stockiest, etc. and all other persons acting on behalf of defendant are restrained from manufacturing, marketing, supplying, advertising, exporting, selling and /or offering for sale including on­line sales, either directly or indirectly any cosmetic preparation as mentioned in the plaint and /or other allied and cognate goods under the impugned trade dress/ packaging amounting to infringement of copyright of plaintiff’s trade dress; passing off its products and business as and for those of the plaintiff’s till the next date of hearing.

Plaintiff has also prayed for appointment of ex­parte Local
Commissioner to seize defendant’s product. But the application only mentions that huge stocks of defendant violating their intellectual property rights were lying in their godown/ place. There is no other ground shown as to why ex­parte Local Commissioner was required. There is also no averment regarding defendants likelihood of concealing, destroying or manipulating goods or record relating to the products in question. As such no ground of ex­parte Local Commissioner at this stage is made out and can be considered after notice to the opposite party.
Issue notice of the application under Order XXXIX Rule 1 & 2 CPC r/w/ 135(2) of Trademark Act and application under Order XXVI Rule 9 CPC r/w order XXXIX Rule 7 CPC to the defendant for the next date of hearing.

Plaintiff to carry out necessary compliance under Order XXXIX Rule 3 CPC within two days.