Disney Enterprises Inc. & Anr. vs Balraj Muttneja & Ors.
2014 Latest Caselaw 938 Del

           *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of decision: 20th February, 2014.

+                                CS(OS) 3466/2012

      DISNEY ENTERPRISES INC. & ANR.          ..... Plaintiffs
                  Through: Mr. Aditya Kutty, Adv.

                                     Versus

    BALRAJ MUTTNEJA & ORS.                                       ..... Defendants
                Through: None.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW


1.

The plaintiffs have filed this suit inter alia claiming infringement

and dilution of their registered trade marks and violation of their

copyrights by the defendants, as well as passing off by the defendants of

their goods as those of the plaintiffs, on account of use by the defendants

of certain cartoon characters on their goods over which the plaintiffs

assert exclusive rights.

2. The case of the plaintiffs as reflected in their plaint is thus:

I. that the plaintiff no. 1 M/s Disney Enterprises Inc. is a

corporation organized and existing in the United States of

America and is the creator of a number of world-famous

characters such as Mickey Mouse, Minnie Mouse, Donald

Duck, Daisy Duck, Winnie the Pooh, Hannah Montana,

Tigger, Piglet, Eeyore etc. and has thus the exclusive right to

use and authorize/license the use of such characters and

character names (hereinafter collectively referred to as „DEI

Materials‟);

II. that the plaintiff no.1, to protect its rights in the DEI

Materials has registered several trade marks and copyrights

with respect thereto, across a number of countries including

India, and characters such as Disney and Mickey Mouse have

also been accorded the status of „well-known marks‟ by the

Delhi High Court;

III. that the plaintiff No. 2 M/s The Walt Disney Company

(India) Pvt. Ltd. is the Master Licensee in respect of the DEI

Materials in India and thus infringement of the registered

trade marks and copyrights of the plaintiff no.1 detrimentally

affects the business interests of the plaintiff no. 2;

IV. that the plaintiffs by utilizing the DEI Materials in

conjunction with manufacturing, marketing, supplying,

selling and distributing a wide variety of products/services

for over fifty years all across the world, have earned

immense goodwill and reputation in the DEI Materials and

which has resulted in the consuming public intensely

associating the DEI Materials exclusively with the

goods/services of the plaintiffs;

V. that each of the characters of the plaintiffs is distinctive and

capable of being recognized in isolation without the need for

any context and amongst the most discernible features of

such characters is their anthropomorphic nature i.e. the

ability to feel and express emotions like human beings, and

therefore the presence of any feature/trait which results in the

customer relating to the plaintiffs‟ characters is sufficient to

constitute infringement/unauthorized use, even if all the

features of a character may not have been infringed;

VI. that the plaintiffs, in November, 2012 learnt about the

defendant no. 1 Mr. Balraj Muttneja and defendant no. 2 Mr.

Jaspal Muttneja running and operating affiliate entities

defendant no. 3 M/s J.J. International (being the

manufacturing/factory unit) and defendant no. 4 M/s Balraj

International (being the supply/distribution outlet) for the

purpose of manufacturing and selling confectionary items

such as chocolates etc. under the brand name „Tasty Bear‟

bearing the plaintiff‟s DEI Materials like Winnie The Pooh,

Tigger, Eeyore and Piglet, without the consent/authority of

the plaintiffs;

VII. that such unauthorized use by the defendants of the DEI

Materials of the plaintiffs is with a dishonest and mala fide

intention to ride upon and benefit from the plaintiffs‟ hard-

earned reputation/goodwill, and thus - (a) constitutes

infringement and dilution of the registered trade marks of the

plaintiffs within the meaning of Section 29 of the Trade

Marks Act, 1999, (b) violates plaintiffs‟ copyright subsisting

in the said artistic works under Section 51 of the Copyright

Act, 1957 and, (c) amounts to the defendants passing off

their goods as those of the plaintiff.

Accordingly, the plaintiffs have sought permanent injunction to

restrain the defendants from violating their intellectual property rights

with respect to the DEI Materials, a rendition of accounts of profits

earned by the defendants from their infringing activities, delivery up of

all items bearing the plaintiffs‟ DEI Materials and damages in the sum of

Rs. 20,00,100.

3. Summons of the suit were issued to the defendants No. 1 to 4 on

17.12.2012 and vide order of the same date, an ex-parte ad-interim

injunction was granted against the defendants. This Court also appointed

two Local Commissioners to visit and inspect the premises of the

defendant no. 3 and defendant no. 4 respectively for the purpose of

making an inventory of the infringing goods/merchandise, if any found,

and for seizing and sealing the same. The Local Commissioners so

appointed have in compliance with the order dated 17.12.2012 filed their

reports.

4. Though the defendants entered appearance through their counsel

on 01.02.2013 but remained unrepresented thereafter and failed to file a

written statement as well. The defendants were thus directed to be

proceeded ex-parte vide order dated 04.10.2013 and the plaintiffs

permitted to file affidavits by way of ex-parte evidence.

5. The plaintiffs, despite having been granted sufficient time and

several opportunities, have failed to get their affidavits for leading ex-

parte evidence on record. However, it is not deemed expedient to further

await the same and allow this matter to languish, for the reason that I

have in Indian Performing Rights Society Ltd. Vs. Gauhati Town Club

MANU/DE/0582/2013 held that where the defendant is ex parte and the

material before the Court is sufficient to allow the claim of the plaintiff,

the time of the Court should not be wasted in directing ex parte evidence

to be recorded and which mostly is nothing but a repetition of the

contents of the plaint.

6. I have thus, apart from examining the averments made by the

plaintiffs in the plaint, as culled out above, also combed through the

documents filed by the plaintiff to support its case, in order to ascertain

whether the plaintiffs are entitled to a decree forthwith.

7. The plaintiffs in order to validate their claims are found to have

taken assistance of the following documents:

I. Copies of the Copyright Registration Certificates in respect

of the DEI Materials in favor of the plaintiffs.

II. Copies of Trade Mark Registration Certificates with respect

to the DEI Materials and Renewal Certificates thereof.

III. Photographs of Authorized Merchandise of the plaintiffs.

IV. An affidavit of Mr. Mohit Bajaj, Investigator to the effect

that he visited the premises of defendant no. 4 and purchased

confectionary items such as chocolates which he found to

bear the characters and character names like Winnie The

Pooh, Tigger, Eeyore, Piglet etc., and who has attached the

photographs of the infringing goods/merchandise alongwith

the said affidavit.

8. I am also benefitted by the reports filed by the two Local

Commissioners appointed by this Court. Ms. Arati Mahajan Shedha who

visited the premises of defendant no. 3 has recorded that she found "kept

in the hall on the first floor of the said premises, a lot of packaging and

wrapping material bearing Disney Characters" and has further identified

them to be Pooh, Tigger, Eeyore and Piglet. She has also annexed to her

Report, samples of the said packaging and wrapping material found in the

premises of defendant no. 3. Similarly, Mr. Jayesh Bakshi who inspected

the premises of defendant no. 4 has reported that "the characters were

displayed both on the box and the individual chocolate wrapping paper".

The „On the Spot Proceedings‟ annexed to the said Reports, which also

contain the aforesaid findings of the Local Commissioners, are found to

bear the signatures of defendant no. 1 and defendant no. 2 respectively,

thus indicating their acceptance of the contents thereof.

9. The examination of the all the aforesaid unrebutted material leads

to the inescapable conclusion that the defendants are using identical

and/or deceptively similar characters on their goods/merchandise and

thereby infringing and diluting the registered trade marks as well as

violating the copyrights of the plaintiffs with respect to the said

characters

10. As far as the other reliefs claimed by the plaintiffs, for rendition of

accounts and damages is concerned, the counsel for the plaintiff has

handed over judgments of this Court in Time Incorporated Vs. Lokesh

Srivastava 116 (2005) DLT 599, Adobe Systems Vs. P. Bhoominathan

2009 (39) PTC 658 (Del.) and Disney Enterprises, Inc. Vs. Rajesh

Bharti 2013 (54) PTC 372 (Del.), wherein compensatory as well as

punitive damages have been awarded to the plaintiff for flagrant violation

of its intellectual property rights.

11. I am however of the opinion that the present case does not call for

award of compensatory or punitive damages in as much as the

infringement is not of the blatant and brazen variety as was the case in the

judgments cited by the counsel supra. In the present case, evidently, the

characters of the plaintiffs have been affixed by the defendants on their

goods without the permission or consent of the plaintiffs. However, what

cannot also be lost sight of is that the defendants have refrained from

using the character names of the plaintiffs and have also not mentioned

anything on the packaging of their goods to even remotely suggest that

they may be emanating from the plaintiff. Rather, the defendants have

admittedly manufactured and sold the infringing goods under their own

brand name. In such a scenario, there is a distinct possibility of the use of

the characters of the plaintiffs on the goods of the defendants being an

innocent adoption and a result of the defendants being unaware of the

proprietary rights of the plaintiffs in such characters. It indeed seems

improbable that the defendants calculatedly, with sinister and mala fide

intentions, sought to cash in on the reputation of the plaintiffs‟ goods or

services.

12. In this view of the matter, I am of the opinion that the rights of the

plaintiff would be adequately protected by grant of permanent injunction

restraining the defendants from manufacturing or selling confectionary

items such as chocolates etc. bearing upon its packaging or wrappers any

trade mark which is identical or deceptively similar to that of the

plaintiffs, or any artistic work in which the plaintiffs have a copyright. I

also deem it fit to pass an order for delivery up by the defendants to the

plaintiffs of the infringing goods/merchandise as seized and sealed by the

Local Commissioners in the premises of defendant no. 3 and defendant

no. 4.

13. The suit is thus decreed in the aforesaid terms. The plaintiffs shall

be entitled to costs of the suit. Counsel‟s fee assessed at Rs.25,000/-.

Decree Sheet be drawn up.

RAJIV SAHAI ENDLAW, J FEBRUARY 20, 2014 'Ag'