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Decree of Damages and the Role of the Local Commissioner's Report in Trademark Infringement Cases

This article discusses the significance of the Local Commissioner's report in assessing damages in a trademark infringement case, with reference to a recent judgment by the Hon'ble High Court of Delhi.

The PUMA Trademark Infringement Lawsuit:
The Plaintiff in this case filed a lawsuit against the Defendants, alleging trademark infringement and passing off. The Plaintiff asserted proprietor rights in the well-known PUMA trademark, as well as the iconic leaping cat device. The Defendants were found to be selling counterfeit PUMA products, leading to the infringement suit. The Defendants were initially restrained ex-parte, and as they failed to file a written statement, the suit was decreed in favor of the Plaintiff.

Assessing Damages:
In the aftermath of the decree in favor of the Plaintiff, a key question emerged: how should damages be evaluated based on the evidence available? This is where the role of the Local Commissioner's report becomes crucial.

The Hon'ble High Court of Delhi relied on a recent judgment in "M L Brother LLP v. Mahesh Kumar Bhrualal Tanna [CS(COMM) 126/2022]". The judgment cited Order 26, Rule 10(2) of the Civil Procedure Code (CPC), which stipulates that the report of the Commissioner and the evidence taken by the Commissioner shall be evidence in the suit and shall form part of the record. This provision establishes the evidentiary value of the Local Commissioner's report.

"In light of this legal provision, the Hon'ble High Court of Delhi confirmed that the Local Commissioner's report can be considered as evidence in the case, thereby enabling the court to rely on it for the purpose of assessing damages."

The Local Commissioner's Report:
The court turned to the Local Commissioner's report to evaluate the damages suffered by the Plaintiff due to the Defendants' infringing activities. The report revealed critical information, including the Defendant's average weekly sales and the duration of their involvement in the infringing business.

According to the report, the Defendant's average weekly sale amounted to 200 pairs of shoes, resulting in a weekly revenue of Rs. 40,000 and a monthly revenue of Rs. 1,60,000. The Defendant informed the Local Commissioner that they had been engaged in this infringing business for the last two years. Accordingly, the report estimated that the unauthorized 'PUMA' marked shoes had been sold for a total of 24 months, with a total revenue of Rs. 38,40,000.

The Hon'ble Court observed that considering the costs of raw materials and other expenses were approximately 50% of the revenue, the Defendant was found to have made a profit of approximately Rs. 18 to Rs. 19 lakhs.

Decree of Damages:
Based on the information provided in the Local Commissioner's report, the Hon'ble High Court of Delhi awarded a decree of damages. The court ordered the Defendants to pay Rs. 10 lakhs as damages, in addition to an extra cost of Rs. 2 lakhs.

The Concluding Note:
The recent judgment in this case, emphasizing the evidentiary value of the Local Commissioner's report, demonstrates the importance of reliable evidence in calculating damages in such cases. It underlines the courts' ability to use comprehensive reports to assess the financial harm incurred by the plaintiff and, in doing so, ensures that justice is served in trademark infringement disputes.

The Case Law Discussed:
Case Title: Puma SE Vs Ashok Kumar
Date of Judgement/Order:20/10/2023
Case No. CS(COMM) 703/2017
Neutral Citation No: 2023:DHC:7696
Name of Hon'ble Court: High Court of Delhi
Name of Hon'ble Judge:Prathiba M Singh, H.J.

Information and discussion contained herein is being shared in the public Interest. The same should not be treated as substitute for expert advice as it is subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539

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