Permanent injunction in undefended case upheld

Cisco Technology filed for a permanent injunction against Yameen and Anr, to restrain them from infringing its trademark. The company also requested delivery of all infringing materials and damages to the tune of ₹2,005,000 (US$44,870).

Cisco, a company incorporated in the US, claimed to have adopted and used the trademark CISCO and its so-called bridge device since 1984. It also said the company’s products were widely advertised in India and the general public, particularly those in information technology, were well informed of their reputation.

Grounds for suit

During a survey in May 2008 Cisco became aware that the defendants were using and thereby infringing its trademark and the device. While filing for infringement of its trademark Cisco argued that:

• The defendants were engaged in the business of purchase and sale, importing, marketing and trading of used, new and refurbished systems hardware bearing the Cisco trademark and device.

• The defendants sold Cisco’s investigator several WIC 1T Cards on multiple occasions, claiming it had been sourced from Cisco. Upon examination the products were found to be unauthentic.

• The defendants were part of Mobylent, a US-based company, whose business in India was carried out through www.mobylentindia.com. Cisco had obtained a cease and desist notice dated 15 September 2006 against Mobylent.

• The unauthorized use of Cisco’s trademark causes confusion in the minds of the public.

• The intentions of the defendants were mala fide. Despite being fully aware of Cisco and its global reputation, the defendants had affixed Cisco’s trademark on their counterfeit products. In doing so the defendants had defrauded the end-users and infringed the plaintiff’s trademarks.

Court’s response

On 24 July 2008 Delhi High Court passed an ad-interim ex-parte injunction against the defendant and appointed a local commissioner to visit the defendant’s premises. The local commissioner reported that during inspection 18 products bearing Cisco’s trademark were found: 13 genuine and 5 counterfeits. On 12 October 2008 the court passed an absolute injunction order that was to be in effect till the final disposal of the case. In addition, as the defendants had failed to appear in the matter or to file a written statement, the court directed that the suit should proceed ex-parte.

Fighting back

Subsequently, the defendants applied under order IX, rule 7 of the Code of Civil Procedure for the ex-parte order to be set aside. Their grounds for doing so were that:

• They had a strong case to defend.

• They dealt in hardware components and procured their products from several companies including Cisco and as such, their products bore no distinguishing features. Further, they procured the hardware components from the local market including those in New Delhi, under valid tax invoices.

• They did not have any equipment to test the authenticity of the Cisco’s product purchased by them from the open market.

• The delay on the part of the defendant of marking their appearance in the matter or filing a written statement was due to the lapse and inadvertence of the postal department.

In its reply Cisco, which relied on the Local Commissioner’s report, contended that the defendants’ intentions were mala fide and that they were intentionally mixing counterfeit and genuine products in the course of their trade. Further, Cisco argued that not having the equipment to check the authenticity of the products, despite carrying out the said business could not be a defence.

No written statements

Dismissing the defendant’s application the court observed that order VII, rule 1 of the Code of Civil Procedure mandates that a written statement be filed within thirty days of service of pleadings to the defendant, which if appropriate may be extended for up to sixty days. The court found the defendant’s explanation for the delay was vague and unsatisfactory.

With regard to the issue of the permanent injunction, the court stated that according to order VIII, rule 10 of the code of civil procedure, it was competent to rule even without a written statement from the defendants. The court held that the lack of testing equipment and that the products were bought from the local market against valid tax invoice did not absolve the defendants from the liability of dealing in counterfeit products, especially when they were engaged in further sale of the said products under the Cisco’s trademark without authorization.

Further, the defendants having traded in the Cisco’s products without authority had indulged in the act of passing-off.

In light of the above the court injuncted the defendants from trading in Cisco’s products without authorization or without the products being purchased from authorized channels.

Manisha Singh Nair is a partner at Lex Orbis IP, a New Delhi-based intellectual property practice.