Remedies for infringement: ex parte orders, damages and criminal sanctions

1. The statutory basis

Section 135(1) of the Trade Marks Act gives, in a suit for infringement or passing off, an injunction and, at the plaintiff’s option, damages or an account of profits, together with delivery up of infringing labels and marks. Section 135(2) provides that the order of injunction may include an ex parte injunction or interlocutory order for any of the following:

• discovery of documents;
• preserving infringing goods, documents or other evidence related to the subject matter of the suit;
• restraining the defendant from disposing of or dealing with his assets in a manner which may adversely affect the plaintiff’s ability to recover damages, costs or other pecuniary remedies finally awarded.

These correspond to Article 50 of TRIPS, which requires judicial authorities to have power to order prompt and effective provisional measures, including inaudita altera parte where delay is likely to cause irreparable harm or there is a demonstrable risk of evidence being destroyed, subject to review on notice.

The procedure is in the Code of Civil Procedure: Order XXXIX Rules 1 and 2 for temporary injunctions, and Rule 3, which requires the court, before granting an injunction without notice, to record its reasons for believing that the object would be defeated by delay, and requires the plaintiff to send the defendant the papers immediately. Order XXXIX Rule 4 lets the defendant apply to vacate the order.

2. Interim injunctions: the general tests

• Prima facie case, balance of convenience, irreparable injury. The English formulation in American Cyanamid v. Ethicon (House of Lords, 1975) asks only for a serious question to be tried, but Indian courts in trade mark cases look for a prima facie case on merits.
• Wander Ltd. v. Antox India (Supreme Court, 1990): an appellate court should not interfere with the trial court’s discretion at the interim stage unless it was exercised arbitrarily, capriciously or perversely, or ignored settled principles.
• Midas Hygiene Industries v. Sudhir Bhatia (Supreme Court, 2004): in cases of infringement of trade mark or copyright an injunction must normally follow, and mere delay in bringing action is not enough to refuse it where adoption is prima facie dishonest.
• Ramdev Food Products v. Arvindbhai Rambhai Patel, 2006 INSC 563: restated these principles for a family dispute over the “Ramdev” mark.

3. Anton Piller orders (search and seizure)

In Anton Piller KG v. Manufacturing Processes Ltd. (Court of Appeal, 1976), the court made an ex parte order requiring the defendants to permit the plaintiffs’ representatives to enter their premises to inspect and remove documents relating to confidential designs. Ormrod L.J. set three conditions:

1. an extremely strong prima facie case;
2. very serious actual or potential damage to the plaintiff; and
3. clear evidence that the defendant has incriminating documents or things in his possession, and a real possibility that he will destroy them before an application on notice can be made.

In India such orders are made by appointing a local commissioner under Order XXVI Rule 9 and Order XXXIX, who visits the premises with the plaintiff’s representatives, makes an inventory of infringing goods, seizes or seals them and hands them back to the defendant on superdari (custody), and reports to the court. The Delhi High Court has granted such orders routinely in counterfeiting cases since the 1990s.

Safeguards. In Columbia Picture Industries v. Robinson (Chancery, 1987), the English court criticised the oppressive execution of an order and set limits. The UK now regulates search orders under the Civil Procedure Act, 1997 with a supervising solicitor. Indian practice requires full and frank disclosure by the plaintiff, an undertaking in damages, an independent commissioner, and a hearing soon after execution. Suppression of material facts leads to the order being vacated, with costs.

4. Mareva injunctions (asset freezing)

Mareva Compania Naviera v. International Bulkcarriers (Court of Appeal, 1975) allowed a plaintiff to restrain a defendant from removing assets from the jurisdiction pending trial, where there is a good arguable case and a real risk that the assets will be dissipated so that a judgment will go unsatisfied. In India the same result is achieved under section 135(2)(c) of the Trade Marks Act and Order XXXVIII Rule 5 of the CPC (attachment before judgment). It is used sparingly, because it interferes with the defendant’s property before liability is proved.

5. John Doe (Ashok Kumar) orders

A John Doe order is an injunction against unnamed or unknown defendants. In Taj Television v. Rajan Mandal (Delhi High Court, 2002), the court restrained unidentified cable operators from broadcasting the football World Cup without licence. Such orders are now granted against unidentified sellers of counterfeit goods, often coupled with commissioners empowered to enter premises of any person found dealing in infringing goods. In online cases, they are combined with orders to registrars to suspend domain names and to intermediaries to take down listings, and the Delhi High Court has extended them to “dynamic” orders that can be extended to new domains on application.

6. Damages and costs

In Time Incorporated v. Lokesh Srivastava (Delhi High Court, 2005), the court awarded punitive damages against an infringer of “Time” magazine’s mark, reasoning that damages should deter. A Division Bench in Hindustan Unilever v. Reckitt Benckiser (Delhi High Court, 2014) questioned that approach, holding that punitive damages are confined to the narrow categories recognised in Rookes v. Barnard (House of Lords, 1964). In Koninklijke Philips v. Amazestore (Delhi High Court, 2019), the court set out a scale linking damages to the degree of the defendant’s culpability, from first-time innocent infringers to repeat counterfeiters. Under the Commercial Courts Act, 2015, actual costs follow the event, which itself deters.

7. Criminal remedies

• Sections 102 to 104: falsifying a mark, falsely applying it, and selling goods or providing services to which a false mark is applied, punishable with imprisonment of six months to three years and fine of fifty thousand to two lakh rupees.
• Section 115: offences under sections 103 to 105 are cognizable. A police officer not below the rank of Deputy Superintendent may search and seize without warrant, but must first obtain the opinion of the Registrar on the facts involving the offence.
• Proceedings under the criminal provisions now follow the Bharatiya Nagarik Suraksha Sanhita, 2023.

8. Border measures

The Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, made under the Customs Act, 1962, let a right holder record its mark with Customs, which may then suspend clearance of suspected counterfeit imports. This implements TRIPS Articles 51 to 60.

9. Groundless threats (section 142) and trade libel

Groundless threats. A letter threatening infringement proceedings can drive a competitor's customers away even when the claim is weak. Section 142 lets any person aggrieved by threats of an action for infringement of a registered mark, made by circulars, advertisements or otherwise, sue for a declaration that the threats are unjustifiable, an injunction against their continuance, and damages. The section does not apply if the person who made the threats, being the registered proprietor or a registered user acting under section 52, commences and prosecutes with due diligence an action for infringement. Mere notification that a mark is registered is not a threat. The Patents Act (s.106) has a parallel provision; the UK consolidated its threats rules in the Intellectual Property (Unjustified Threats) Act, 2017, which allows threats to be made to primary infringers (manufacturers and importers) without liability.

Trade libel (slander of goods, injurious or malicious falsehood) is the common law tort that protects a trader against false statements disparaging his goods or business. Its elements, settled in Ratcliffe v. Evans (Court of Appeal, 1892), are: (i) a false statement about the claimant's goods or business; (ii) published to third persons; (iii) maliciously, that is, knowing it to be false or recklessly indifferent to its truth, or with an improper motive; and (iv) special damage, though statute in the UK (Defamation Act, 1952, s.3) dispenses with proof of special damage where the statement is calculated to cause pecuniary loss. Indian courts apply the tort chiefly in comparative advertising suits, where they treat puffery as permitted and falsely denigrating a rival's product as actionable; see the note on comparative advertising for the Delhi High Court cases. Trade libel differs from defamation in protecting economic interests rather than personal reputation, and from passing off in that the defendant attacks the claimant's goods rather than borrowing their reputation.

How this is examined

For the short note on ex parte orders, cover section 135(2), Order XXXIX Rule 3, Article 50 of TRIPS, the Anton Piller conditions, Mareva and John Doe, and the safeguards. An essay on remedies adds interim injunctions, damages, criminal remedies and border measures.