The Delhi High Court, in the case involving the sale of counterfeit goods carrying New Balance's marks, acknowledged trademark infringement and passing off.
HC Bench issued a permanent injunction and ordered the surrender of the seized counterfeit items, affirming its commitment to safeguarding brand integrity and combatting counterfeiting.
Brief Facts:
New Balance Athletics Inc. (the plaintiff), a prominent global brand, had been using its "NEW BALANCE" and "NB" marks for several decades in both the United States and India, establishing a strong international presence. The brand's products generated substantial revenues amounting to US $3.4 billion in 2019 and US $2.7 billion in 2020, with significant investments in advertising. New Balance maintained an online presence through its website, ‘www.newbalance.com’, and actively engaged with its audience on popular social media platforms like Facebook, Twitter, Instagram, YouTube, and LinkedIn.
The defendants were accused of selling counterfeit readymade clothing bearing the plaintiff's mark, with some even using the plaintiff's name ‘NEW BALANCE’. The plaintiff sought injunctive relief and the delivery of seized goods.
Contentions of the Parties:
The plaintiff contended that the defendants were selling counterfeit readymade garments using the "NEW BALANCE" mark, some even featuring the plaintiff's name "NEW BALANCE" below the mark. Screenshots from e-commerce websites were presented to demonstrate Defendant 1's involvement in selling counterfeit goods, and a Local Commissioner's report confirmed this practice at Defendant 1's premises, including photographs of such products.
On the other hand, defendant 1 admitted dealing with the plaintiff's marked products but claimed to source them from defendant 3, the manufacturer, denying direct involvement in trademark infringement. They chose not to contest the case by denying infringement and passing off, focusing on its role as a dealer and refraining from seeking damages. Defendants 2 and 3 did not provide formal written responses or affidavits in response to the plaintiff's allegations.
Observations of the Court:
The Delhi High Court established the defendants' involvement in dealing with counterfeit goods bearing the plaintiff's marks, thereby infringing on trademarks and passing off as genuine products. The Court underlined the gravity of counterfeiting, recognizing the erosion of brand value gained over time. Given the unchallenged allegations in the amended plaint and the prevailing circumstances, the Court exercised its authority to decree the suit under Order VIII Rule 10 of the Civil Procedure Code. Consequently, the Court issued a permanent injunction to restrain the defendants from handling goods featuring the plaintiff's marks, further instructing the delivery of seized counterfeit goods to the plaintiff.
The Decision of the Court:
The Delhi High Court decreed the suit in favour of the plaintiff, granting a permanent injunction, the delivery of seized goods, and the award of actual costs. The defendants were restrained from dealing with goods bearing the plaintiff's marks, and the costs were to be borne jointly and severally by the defendants.
Case Title: New Balance Athletics Inc. vs. Salman Khan & Anr.
Coram: Hon’ble Justice C. Hari Shankar
Case no.: CS(COMM) 553/2022
Advocate for the Plaintiff: Dushyant Mahant, Urfee Roomi, Janaki Arun, Ritesh Kumar and Anubhav Chhabra
Advocate for the Defendants: Harsh Vardhan Singh and Animesh Rastogi
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