Saket Court Orders Traders To Pay ₹3.1 Lakh Damages For Selling Counterfeit Nike Products

New Delhi: The Commercial Court-03, South District, Saket Courts, has decreed a permanent injunction in favour of Nike Innovate C.V. and awarded damages of Rs. 3,10,000 against three Delhi-based traders found to be selling counterfeit footwear and apparel bearing marks identical or deceptively similar to Nike's registered trademarks, including the Swoosh device and the Jordan Jumpman logo.

District Judge Balwant Rai Bansal was hearing a suit filed by Nike Innovate C.V. under Sections 134 and 135 of the Trade Marks Act, 1999, and Section 55 of the Copyright Act, 1957, against Fabulous Fashion, Den Sneakers and Sonam Tibet Shop, three stores operating out of Majnu-ka-Tilla, Delhi, seeking permanent injunction, delivery up and damages for trademark infringement, passing off and copyright infringement.

The plaintiff's case was that it had honestly and bona fidely adopted the trademark NIKE and the Swoosh device since 1971, and held valid and subsisting registrations in India for its trademarks and labels, including NIKE, NIKE AIR, JORDAN and the Jumpman device, besides owning copyright in the artistic works embodied in these marks. It was alleged that the defendants, without any authorisation, had adopted and were using identical or deceptively similar marks such as NIKE, DRI-FIT, FLYKNIT, NIKE AIR and JORDAN on counterfeit footwear and apparel, sold through their stores and social media platforms without issuing valid bills, thereby infringing the plaintiff's trademarks and copyright and passing off their goods as those of the plaintiff.

The written statements filed by the defendants were taken off the record for being beyond the statutory period under Order VIII Rule 1 CPC, following which the matter proceeded to plaintiff's evidence. Defendant no. 2 was proceeded ex-parte after its counsel was discharged for want of instructions, while defendants no. 1 and 3 were also proceeded ex-parte after they failed to cross-examine the plaintiff's witness despite opportunities. The plaintiff examined its authorised representative as PW-1, who proved the plaintiff's trademark registrations, Legal Proceedings Certificates, WIPO database extracts, sales and advertisement figures, and a comparison chart depicting the impugned goods alongside the plaintiff's registered marks, none of which was rebutted or challenged by the defendants.

Three Local Commissioners appointed under Order XXVI Rule 9 CPC had, upon inspection of the defendants' premises, seized substantial quantities of counterfeit goods bearing the impugned marks, including 214 pairs of shoes along with T-shirts, jackets and packing material from defendant no. 2's premises, 27 pairs of shoes along with T-shirts, jackets and lowers of the Nike brand from defendant no. 3's premises, and 39 pairs and a single shoe from defendant no. 1's premises, all of which were endorsed as infringing or counterfeit and released to the defendants on superdari.

Applying the settled test of deceptive similarity from the perspective of a person of average intelligence and imperfect recollection, as laid down by the Delhi High Court in Himalaya Drug Company v. S.B.L. Limited and Mankind Pharma Limited v. Novakind Bio Sciences Private Limited, the Court held that the impugned marks used by the defendants were identical to the plaintiff's registered trademarks in all material aspects.

The Court observed that the defendants have imitated/copied all the major and essential features of the registered trademark/label of the plaintiff in their impugned trademark/label which makes both the marks identical or deceptively similar, and that since both parties dealt in goods of a similar nature likely to be sold through the same outlets, the likelihood of confusion among unwary purchasers could not be ruled out.

Holding that the plaintiff had successfully proved its ownership of the registered trademarks and copyright, and that the defendants had intentionally infringed the same and passed off their goods as those of the plaintiff, the Court decreed the suit in the plaintiff's favour. It granted a permanent injunction restraining the defendants from dealing in goods bearing the impugned marks NIKE, FLYKNIT, NIKE AIR, DRI-FIT and JORDAN, or any deceptively similar mark, and directed delivery up of all infringing material seized by the Local Commissioners for destruction after the period for filing an appeal expired. 

The Court also awarded damages of Rs. 3,10,000, to be paid jointly and severally by the defendants, along with the costs of the suit, noting that the sum did not appear excessive given the substantial quantity of counterfeit goods seized from the defendants' premises.

Case Title: Nike Innovate C.V. vs. Fabulous Fashion and Others, CS (COMM.) No. 82/2023