Pay ₹5 Lakhs To Louis Vuitton Or Face Civil Prison: Delhi High Court To Trader Who Continued To Sell Counterfeit Products

The Delhi High Court has directed a Sadar Bazar trader to pay rupees five lakhs to Louis Vuitton within four weeks or face civil prison for a week, after he was held guilty of contempt for violating a restraining order by continuing to sell counterfeit products of famous French luxury brand. 

Justice C Hari Shankar observed that a counterfeiter abandons any right to equitable consideration by a court functioning within the confines of the rule of law, adding that he is “entitled to no sympathy” as he “practices, knowingly and with complete impunity, falsehood and deception.”

“Counterfeiting is an extremely serious matter, the ramifications of which extend far beyond the confines of the small shop of the petty counterfeiter. It is a commercial evil, which erodes brand value, amounts to duplicity with the trusting consumer, and, in the long run, has serious repercussions on the fabric of the national economy,” the court said.

It added that even while remaining within the confines of Order XXXIX Rule 2A of CPC (consequence of disobedience or breach of injunction), the court is required to be “economically and socially sensitized” and to send a deterrent message to others who indulge or propose to indulge in the practice of counterfeiting.

On September 23 in 2021, the court, while hearing a suit filed by Louis Vuitton Malletier, had restrained several small entities from "importing, manufacturing, selling or offering for sale or otherwise dealing with the registered trademarks "Louis Vuitton Malletier" or the logo "LV", as well as other associated monograms and patterns, as would infringe the registered trademarks of the plaintiff.

An application was later moved by Louis Vuitton alleging violation of the restraining order by the trader, one of the defendants in the suit. It was submitted that the trader continued to sell belts bearing the LV brand at least till September last year.

Justice Shankar said that the trader chose to continue with his business of selling counterfeited LV branded goods, even after having been injuncted from doing so.

Observing that apologies and entreaties to the court can hardly mitigate the misdemeanor, the court ordered:

“I am of the opinion that the interests of justice would best be subserved if, in the present case, the defendant is directed to pay, to the plaintiff, ₹ 5 lakhs within a period of four weeks from today, failing which Mr. Javed Ansari, the proprietor of Defendant 2, shall suffer incarceration in civil prison in Tihar Jail for a period of one week.”

The court also said that if the injunction is only with respect to one brand, it cannot, while proceeding under Order XXXIX Rule 2A of CPC, take into account other brands which may also have been counterfeited.

Noting that in the injunction granted vide its September 2021 order was with respect to manufacture and marketing of goods bearing the LV brand, the court observed:

“There is no injunction regarding manufacture and marketing of any other brand. The manufacture or marketing of any other brand by the defendant cannot, therefore, statutorily constitute a relevant consideration under Order XXXIX Rule 2A, as the provision is clearly restricted to the injunction granted, and nothing more.”

The court said that Order XXXIX Rule 2A court cannot rewrite the order of which breach is alleged as that would lie completely outside the province of its jurisdiction.

“Even if it were to be presumed that the defendant was counterfeiting other brands, to punish the defendant therefor under Order XXXIX Rule 2A, would require the court to rewrite the order dated 29th September 2021 passed under Order XXXIX Rules 1 and 2 as injuncting the defendant not only from manufacturing goods bearing the LV brand, but also from manufacturing goods bearing other brands,” the court added.

Case Title: LOUIS VUITTON MALLETIER vs CAPITAL GENERAL STORE & ORS.

Citation: 2023 LiveLaw (Del) 122

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