Executive and legal regime fight against counterfeiting

By Dheeraj Kapoor, LexOrbis

Counterfeiting imperils a nation’s economic growth and tarnishes its brand image. India’s recent efforts to develop a robust and well-coordinated executive and legal regime to tackle this menace include the first National Intellectual Property Rights (IPR) Policy, unveiled in May 2016; the creation of IPR cells in state police forces; the launch of the IPR Enforcement Toolkit in January 2017; and training programmes on IPR enforcement for police officials in various states.

Dheeraj Kapoor Associate LexOrbis
Dheeraj Kapoor

This special executive attention on anti-counterfeiting may be appreciated in conjunction with legal provisions as follows:

Indian Penal Code, 1860

Defines counterfeiting (section 28) and makes it an act of cheating, punishable by a fine, imprisonment for up to one year or both (section 417).

Trade Marks Act, 1999

Sections 102-104 deal with the offences of falsifying and falsely applying trademarks, including unregistered trademarks, providing for punishment of up to three years’ imprisonment and a of fine up to ₹200,000 (US$3,000). A civil action can be initiated for infringement of a registered trademark (section 29 read with sections 134 and 135). A civil passing off action can be employed to protect unregistered trademarks (section 27(2) read with sections 134 and 135).

Copyright Act, 1957

Section 63 prescribes penalties of up to three years’ imprisonment and a fine of up to ₹200,000 for infringing or abetting infringement of any copyright. Section 64 empowers police officers to seize all copies of infringing works and plates used in their creation. Section 53 empowers the Commissioner of Customs to treat infringing copies as prohibited goods and detain them. Section 55 provides various remedies for infringement of copyright including injunctions, damages and account of profits.

Customs Act, 1962

The Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, enable IP owners to enforce their rights at Indian borders. When the trademark is registered, a notice can be given to the customs authorities for initiating action against importers of counterfeit goods.

Geographical Indications Act, 1999

For falsifying and falsely applying GIs, the law prescribes penalties of imprisonment for up to three years and a fine of up to ₹200,000.

Drugs and Cosmetics Act, 1940

The import of spurious drugs or cosmetics is punishable by imprisonment for up to three years and a fine of up to ₹5,000 (section 13). Under section 27(a), the penalty for manufacture, sale, distribution, stocking or exhibition of any spurious drug which is likely to cause a person’s death or grievous hurt on consumption is imprisonment for not less than 10 years and up to a term of life and a fine of up to ₹1 million or three times the value of the drugs confiscated, whichever is more.

Food Safety and Standards Act, 2006

Section 52 stipulates a penalty of up to ₹300,000 for the manufacture, sale, distribution, import, etc., of “misbranded food”.

Consumer Protection Act, 1986

Section 2(1)(r) illustrates and sets out the scope of “unfair trade practice”, which impliedly includes an act of counterfeiting, for which the district forum is empowered to grant punitive damages and give appropriate directions to stop the wrongdoing.

Information Technology Act, 2000

The Information Technology (Intermediaries Guidelines) Rules, 2011, specify the scope of the responsibilities or duties of intermediaries with respect to prevention of and/or taking action against online counterfeiting and infringement of trademarks.

A few recent cases highlight the Indian judiciary’s proactive approach and seriousness in tackling counterfeiting.

In Cartier International AG and Ors v Gaurav Bhatia and Ors, the defendants were held to have supplied massive quantities of counterfeits under the plaintiff’s brands and punitive damages of ₹10 million were awarded.

In Louis Vuitton Malletier v Plastic Cottage Trading Co, counterfeit Louis Vuitton bags imported into India were destroyed and a penalty of ₹140,000 was imposed on the importer.

Flamagas SA v Irfan Ahmed and Ors was a case of counterfeiting of the shape trademark in relation to lighters, in which punitive damages of ₹300,000 were awarded in favour of the plaintiff along with a permanent injunction against the defendant.

In Havells India Limited v Havells Nepal (Pvt) Ltd, the court restrained the defendants from using the mark Havells and prohibited imports as well as exports of the counterfeit goods.

It is hoped that the proactive approach and serious measures undertaken by the executive and the judiciary to tackle counterfeiting will soon melt this iceberg from tip to base.

Dheeraj Kapoor is an associate at LexOrbis.

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