When a brand owner seeks an injunction against a counterfeiter, he expects them to comply with the court order. If the counterfeiter continues to sell the counterfeit goods in contravention of the court order, the brand owner wants the Court to come down heavily on such wrongdoers and impose heavy fines.

The post discusses a contempt petition filed by Louis Vuitton Malletier (Louis Vuitton) against a counterfeiter guilty of disobeying the injunction order passed by the Court. Louis Vuitton sought exemplary damages against the counterfeiter under the contempt provisions of Order XXXIX Rule 2 A of the Code of Civil Procedure. The Contempt provisions give sufficient powers to the Civil Judge to punish the person guilty of disobedience of the interim order passed by it, which includes the power to attach property, apart from passing an imprisonment order.

Facts in brief

Louis Vuitton, the well-known French luxury fashion house, had filed suit against the Defendants, Capital General Store & Ors, before the Delhi High Court alleging trademark infringement, passing off, etc. The Defendants, in this case, were manufacturing and marketing articles bearing counterfeit LV marks. At the admission stage of the lawsuit, the Court granted an ex-parte interim injunction restraining the Defendants from manufacturing, selling, advertising, directly or indirectly dealing in, in any manner bearing the marks’ LOUIS VUITTON’, ‘LV’ logo, Toile monogram pattern, Damier pattern and/or LV Flower pattern or any similar trademark amounting to infringement of the registered trademarks, as also passing off their goods as emanating from Louis Vuitton. The High Court later confirmed the interim injunction order and the proceedings are ongoing.

Violation of the injunction order

As the Defendants continued their infringing activities in blatant violation of the injunction order, Louis Vuitton filed the contempt petition for willful disobedience of the Court’s order.

Arguments put forward by Louis Vuitton:

1. Pursuant to the injunction order passed on September 23, 2021, Defendants continued to sell goods bearing fake logos of the ‘LV’ brand and other luxury brands such as Gucci and D&G, which amounts to contempt of Court.
2. Counterfeiting has become a rampant social evil, and if the Court does not come down heavily on such wrong doers, brand value acquired over the years will stand eroded. Any leniency in such cases will encourage similar counterfeiters to make imitation goods, dilute well-known brands’ brand value, and dupe customers in the bargain.
3. The sentence being a punishment for a wrong committed should be proportionate to the wrong. When the contemnor is a counterfeiter, action initiated against a first-time counterfeiter has to be different from that against a habitual one. A counterfeiter who counterfeits various well-known marks and has made counterfeiting his business model calls for a more deterrent sentence.
4. Louis Vuitton also relied on a recommendatory report of the Civil Justice Council, established in the UK, regarding the necessity of a stepped approach to arrive at an appropriate penalty for contempt. They also relied on decisions of the Federal Court of Singapore passed in their favour.

Defendant admitted that they had been selling LV branded belts further to the passing of the injunction order, however, seeks leniency on the ground that they have a small business running from a small rented shop.

The Court, after considering the pleadings, arguments, and case laws, held:

• The Court observed that it is not inclined to accord much significance to the recommendations of the Civil Justice Council in the UK or the decisions by the Federal Court of Singapore, considering that contempt provisions under Order XXXIX Rule 2 A of the Code of Civil Procedure is a self-contained Code.
• The Court noted that the action taken under Order XXXIX Rule 2A has to be limited to the injunction granted by the Court and breached by the Defendant. In case the injunction is only pertaining to one brand, in a proceeding under Order XXXIX Rule 2A, Court cannot consider other brands which may also have been counterfeited by the Defendant.
• In the instant case, the injunction granted in September 2021 was about manufacturing and marketing goods bearing the ‘LV’ brand. There is no injunction regarding any other brand. Thus, manufacturing or marketing of any other brand by Defendant cannot, statutorily, constitute a relevant consideration as the provision is clearly restricted to the injunction granted and nothing more.
• Even assuming that Defendant was counterfeiting other brands, to punish under Order XXXIX Rule 2A, would require the Court to rewrite the order as injuncting the Defendant not only from manufacturing goods bearing the ‘LV’ brand but other brands as well. The Court cannot rewrite the order in which the breach is alleged as it would lie entirely outside the province of its jurisdiction.
• Counterfeiting is an extremely serious issue, the consequences of which extend far beyond the confines of the small shop of the petty counterfeiter. A counterfeiter abandons any right to equitable consideration by a Court and is not entitled to sympathy, as he knowingly and with complete impunity, practices, falsehood, and deception.

Given the above findings, the Court directed the Defendant to pay Rupees 5 lakhs (approx. US$ 6030) to Louis Vuitton within four weeks, failing which the Defendant will have to undergo imprisonment in civil prison for one week.