In an era where intellectual property infringement is no longer merely about, copying products but also their designs, packaging, artistic works, and significant marketing materials, the Delhi High Court’s decision in Koninklijke Philips N.V. & Anr. v. Amazestore & Ors. CS(COMM) 737/2016 & CS(COMM) 1170/2016 stands as a notable case in Indian intellectual Property law. This case was decided by Justice Manmohan on 22 April 2019, the case revolved around Philips filing a suit against plethora of manufacturers, online retailers for copying its Advance Beard Trimmer Series 3000. The major contention was that the defendants not only just copied the trimmers design, but they also copied packaging, artistic works, product photographs, and literary work of Philips. The defendants had replaced the product shown in Philips’ images with their own trimmers but copied the Philips’ registered trademark and their product descriptions, thus trying to portray Phillips goods as their own products. In the given case, the Court scrutinised and examined three forms of infringement-i)design piracy ii) copyright infringement, and iii) passing off.
Facts and Issues
Philips had instituted two distinct suits before the Delhi High Court, both aimed at protecting the rights in relation to its trimmers particularly the Advanced Beard Trimmer Series 3000, which essentially covers the model numbers QT4000, QT4001, QT4005, QT4006, and QT4011. The first suit, was filed against Amazestore & Others. In this case, Philips had alleged that the defendants had copied the design shape and configuration of its trimmer, which was protected under Design Registration No. 253140. While, the second suit, was filed against Amitkumar Kantilal Jain & Others, in which the Philips had alleged that the defendants had copied the its product packaging such as its artistic display, colours, photographs, and written content thereby resulting to copyright infringement. Later, on March 18, 2019, the court consolidated them into a single proceeding as both the suit arose on similar grounds.
The remaining defendants, who did not appear before the Court and thus were proceeded ex parte, were part of a coordinated network of business operating across countries. NOVA Manufacturing Industries Limited, Hong Kong, was manufacturing the infringing trimmers. The parent company of Nova Manufacturing Industries Limited, BESTCO LLC, located in Dubai, owned the NOVA brand, while Omni Exim Private Limited imported and distributed the products pan India. The defendants had been selling NOVA trimmers in India since 2013. It is pertinent to note that the defendants continued to sell even after the Delhi High Court passed injunction orders against NOVA in 2015 and 2016, they continued to sell the infringing products by merely changing the model numbers, from NHT 4000 to NHT 1085, and later to NHT 1071 and NHT 1072 in order to escape legal scrutiny.
The defendants had copied almost every pivotal aspect Philips’ product packaging, design, trade dress. They imitated the registered shape of Philips’ trimmer, copied its blue packaging, descriptions, and even used Philips’ photograph of product. One grave instance of blatant imitation is where they digitally replaced the Philips trimmer in their promotional photograph with their trimmer while keeping the rest of the image as it is intact. Their product literature described the NOVA trimmer as a “Philips trimmer,” thereby giving an impression that the two products are associated or linked to one another.
In the present case, the Court had four questions in hand:
- whether copying the shape of the trimmer resulted in design piracy under the Designs Act, 2000,
- whether copying Philips’ packaging, photographs, product descriptions resulted in copyright infringement under the Copyright Act, 1957,
- whether the conduct of the defendant amounted to passing off by harming the goodwill of the Philips products
- what amount of compensatory and aggravated damages shall be awarded to Philips.
Ruling and Analysis
The Court in this case, ruled completely in favour of Philips. The court compared the defendants’ products with Design Registration No. 253140, it held that the NOVA trimmers had copied the registered design in almost all key aspects, thereby resulting in design piracy under Section 22 of the Designs Act, 2000. Besides this the court also recognised, that the Philips’ product description and literature, packaging, and photographs constituted for protection as literary and artistic works under Sections 2(c), 2(o), and 2(s) of the Copyright Act, 1957, and ruled that the defendants’ unauthorised reproduction of these works resulted in copyright infringement under Section 51. The Court concluded that the defendants had a deceptively similar trade dress and had copied Philips’ packaging, colour palate scheme and layout, , which was likely to push consumers into believing that the NOVA products were associated with Philips, thereby making the defendants for passing off.
Additionally, the Court accepted a 20% profit margin based on the documentary evidence. The court awarded ₹69,96,000 as compensatory damages against Omni Exim Pvt. Ltd., and ₹1,45,75,000 jointly against NOVA Manufacturing Industries Ltd. and BESTCO LLC. Besides these, the Court awarded ₹50 lakh each as aggravated damages, holding that the defendants’ represented commercial dishonesty at every level. The infringement was intentional, well thought of, and structured and despite the former injunctions, defendants had continued infringements and violations by changing the model numbers. Resultantly, decree amounted to ₹1,19,96,000 in toto, against Omni Exim and ₹1,95,75,000 jointly against NOVA and BESTCO, along with litigation costs.
Drawing from the English Judgments-Rookes v. Barnard and Cassell & Co. Ltd. v. Broome, as adopted by the Delhi High Court in Hindustan Unilever Limited v. Reckitt Benckiser India Limited, the Court reinforced that damages should be based on gravity of the defendant’s action. The punishment ranges from granting merely an injunction to awarding injunctions, compensatory damages, and aggravated damages where the infringement is intentional , malaise calculated, and accompanied by disrespect of court orders. This principles bring far more consistency and stringency to Intellectual Property Litigation.
The judgment also reiterates that trade dress is equally important as trademark for source identification. Lastly, it is equally important for the court to recognise that every participant in an infringement such as the manufacturer, the parent company, and importer can be held accountable for the profits gained from the unlawful activity.
The court’s ruling in the Koninklijke Philips N.V. & Anr. v. Amazestore & Ors therefore sends a clear message that intellectual property rights infringement, even when carried in a coordinated network by corporates across jurisdictions, will be held liable for substantial monetary damages by the Indian Courts.
