Samsung Electronics Company Limited and Another v. G. Choudhary and Anr.

Samsung Electronics Company Limited and Another v. G. Choudhary and Another[1]

FACTS:

Samsung initially brought suit in the district court in Delhi seeking an injunction based upon a claim of trademark infringement against the unauthorized distributors from importing and distributing Samsung’s products. The district court denied the injunction. In appeal, the plaintiff prayed for an interlocutory injunction which, in essence, sought to combat and eradicate parallel importation by third parties into India of products manufactured by the plaintiff itself, but in China. The case set up was that although the products were genuine, they were not meant for Indian markets, inter alia because their sale does not strictly conform to Indian laws and regulations.

Relevant Provisions Cited –

Trade Mark Act, 1999: Ss. 29(1) & (6), 30(3) & (4)

TRIPS:

Sec. 3, i.e. Provisional Measures Article 50-

“1. The judicial authorities shall have the authority to order prompt and effective provisional measures-

(a) to prevent an infringement of any intellectual property right from occurring, and in particular to prevent the entry into the channels of commerce in their jurisdiction of goods, including imported goods immediately after customs clearance;”

HELD:

In this case it was held that a prima facie case has been made out for the issuance of ex parte ad interim injunction. The balance of convenience was in favour of the plaintiff who was likely to suffer irreparable loss and injury. The Court observed that the goods and the evidence to substantiate the complaints of the plaintiff would be removed if an injunction is not granted forthwith. Hence, injunction was allowed.

KEY OBSERVATIONS:

Para 11-

“Indian law is quite liberal in permitting parallel imports of genuine goods bearing registered trademarks, provided such goods have not been materially altered after they have been put on the market.

…once genuine goods are released into commerce anywhere by or with the proprietor’s consent, all associated Indian trademark rights are exhausted. Such consent may be express or implied, direct or indirect. The underlying rationale for liberal exhaustion is that trademarks are deemed to connote trade origin and not control. The trademark proprietor may, however, impose contractual restrictions on a third party, such as a foreign licensee, against importing genuine goods into India, provided, that such restrictions pass muster under the Trade Marks Act and the MRTP Act, Indian’s competition statute. Subsequently, if such genuine goods are imported into India, the trade mark proprietor’s remedy against the importer would be through a claim for breach of contract and not for trade mark infringement.”

The issue of exhaustion was not expressly addressed in the 1958 Act, but the New Act statutorily introduces this concept. Section 30 of the New Act provides that where the goods bearing a registered trade mark are lawfully acquired, the further sale or other dealings in such goods by the purchaser or by a person claiming to represent him is not considered an infringement if the goods have been put on the market under such mark by the proprietor or with his consent….A cause of action for trademark infringement may be available to the proprietor against an importer where the genuine goods have been materially altered without the proprietor’s consent after they were put on the market. The burden of proving such consent is on the importer. A cause of action on the grounds of passing off is available if the trademark proprietor can show that the importer is passing off the goods in a misleading or improper way causing confusion in the minds of the public.[2]