Trademark Violation And Illegal Export: Baba Ramdev’s Patanjali Gets Relief

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The Delhi High Court has stayed the illegal export of products manufactured by Baba Ramdev’s Patanjali Ayurveda Ltd by twelve entities, stating that it was a prima facie violation of Section 29 of the Trade Marks Act, 1999.

“…for the present, till the next date of hearing, the Defendant No. 1 to 12,….are restrained from exporting, (online/offline/directly or indirectly), Plaintiff’s goods in the international market bearing the trademark/artistic design/logo PATANJALI/PATANJALI AYURVED LIMITED or any other trademark, as may be identical with or deceptively/ confusingly similar to Plaintiff’s trademark “PATANJALI/PATANJALI AYURVED LIMITED”., the Court ordered.

Granting an ex-parte ad-interim injunction against Masala King Exports Trading Private Limited and 11 other companies from exporting products manufactured by Patanjali Ayurved Limited (PAL) in the international market, the Delhi High Court has ruled in favour of Patanjali. Justice Sanjeev Narula clarified that the defendant companies may continue to sell the plaintiff Patanjali’s products in the domestic market and the injunction was restricted to export of products in the international market only. Justice Sanjeev Narula clarified that the defendant companies may continue to sell the plaintiff Patanjali’s products in the domestic market and the injunction was restricted to export of products in the international market only.

Senior Counsel Dayan Krishnan appeared on behalf of Patanjali along with Rohan Ahuja and Sonali Dhir of Athena Legal. Krishnan submitted that in order to prevent such illegal export, PAL issued letters to the Customs authorities, however, the illegal exports have continued. PAL has also lodged complaints with the Commissioner of Customs, however, the Customs authorities stated that the intellectual property rules do not apply to exports and no action has been taken on the complaint, Krishnan said. He submitted that PAL presently does not have any authorized channel for export of its products and the entire export is being done solely by PAL itself through its own IEC No. 0506062686. The packaging of the products that are meant for domestic sale is completely different from those that are meant for export, Krishnan submitted. Krishnan informed the court that Patanjali has come across instances where its goods have been tampered with or altered, thereby creating a risk towards the quality of the goods and the reputation of PAL attached with them. Specifically, it was found that a sticker on a packet of Patanjali’s wheat flour that is indicated to be fit for consumption within four months from the date of manufacture was replaced by a second sticker which stated that the product was fit for consumption within nine months. Advocate Amit Bansal appeared on behalf of the Commissioner of Customs (Exports), who is also one of the defendants.

Order

Referring to the averments of altering and tampering of Patanjali products by exporters in the international market, Justice Narula noted that the doctrine of the first sale would be limited to selling the branded item in the same condition that it was sold-

“In view of the categorical stand taken in the suit that the Plaintiff Company does not authorise any dealer to carry out the export of its product, the acquisition of the products for the purpose of export could only be done through the Plaintiff. The goods that are being exported are meant only for domestic sale. Thus, export of such products would conflict the rights of the Plaintiff and prima facie, it would also be an infringement under Section 29 (1) read with Section 29 (6) of the Act. It also prima facie appears that in case the Defendants No. 1 to 13 are permitted to alter the product in question, in the manner which is alleged to have been done, it would attract the provisions of Section 30(4) of the Trade Mark Act 1999.”
It further observed that the defendants’ conduct of altering the products would prima facie attract the provisions of Section 30(4) of the Act.

The doctrine of first sale which cuts off trademark owner’s rights after its products are first sold would be limited to selling the branded item in the same condition when it was first sold. The acts complaint of, like affixing stickers and altering the entire list of ingredients/nutritional facts amounts to “materially” changing the product made by the trademark owner. This would certainly put the image of the company in peril and thus would contravene Section 30 (4) of the Trade Mark Act,1999.”

It thus allowed Patanjali’s prayer seeking an injunction in respect of export of its products in the international market. The Court concluded that the balance of convenience was in favour Patanjali as it would suffer irreparable harm if defendants were not restrained from continuing the illegal export. The Court has, however, clarified that the defendants may continue to sell Patanjali products in the domestic market. The matter will be heard next on May 16 2019.

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