Counterfeiting affects fabric of national economy: Delhi High Court orders shop to pay Louis Vuitton ₹5 lakh for selling fake belts

The Delhi High Court observed on Monday that counterfeiting is an extremely serious matter whose ramifications extend far beyond the confines of the small shop of the petty counterfeiter, and has serious repercussions on the fabric of national economy in the long run [Louis Vuitton Malletier v. Capital General Store & Ors]..Justice C Hari Shankar said that it is a commercial evil eroding brand value and amounts to duplicity with the trusting consumer.“A counterfeiter abandons, completely, any right to equitable consideration by a Court functioning within the confines of the rule of law. He is entitled to no sympathy, as he practices, knowingly and with complete impunity, falsehood and deception...the Court is, therefore, 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," the Court said.It, therefore, directed the owner of a Delhi-based store to pay ₹5 lakh as damages to French luxury fashion house Louis Vuitton (LV) for selling its counterfeit products in violation of an injunction earlier passed by the Court..The Court was dealing with an application filed by Louis Vuitton (LV) under Order XXXIX Rule 2A of the Civil Procedure Code (CPC) in its already pending suit related to trademark infringement. The application alleged that despite the Court’s injunction order of September 2021, defendant Javed Ansari was selling counterfeit LV products at least till September 2022.Ansari’s counsel acknowledged that he had been selling LV branded belts even after passing of the Court’s injunction order. However, he stated that his client is a paltry businessman who runs his establishment in a small shop which has been taken on rent. The defendant also apologised for the breach and asked the Court to take a lenient view in the matter.Opposing the request, LV submitted that counterfeiting has become a rampant social evil, and that if the Court does not come down heavily on such counterfeiters, the company's brand value acquired over years would stand progressively eroded.It was also argued by LV that in evaluating the degree of culpability of the defendant, the Court must also take into account the fact that he imitates other reputed brands as well..After considering the arguments, the Court decided that the action taken under Order XXXIX Rule 2A has to be limited to the injunction granted by the Court which has been breached. If the injunction is only with respect to one brand, the Court cannot, in proceeding under Order XXXIX Rule 2A, take into account other brands which may also have been counterfeited by the defendant, Justice Hari Shankar underlined.The Bench noted that in the present case, the injunction granted was based on a prima facie determination that the defendant is in fact guilty of having counterfeited the LV brand, but there is not even a consideration regarding counterfeiting of any other brand.“The court cannot, therefore, while exercising jurisdiction under Order XXXIX Rule 2A, return a finding that the defendant is also guilty of counterfeiting other brands. No such presumption can, in law, be drawn. For all one knows, the other brands in which the defendant is dealing may be genuine.”.The Court further said that in the present case, breach stands committed but is no longer continuing since the defendants have stopped selling those products. Therefore, the power to attach the property is no longer with it.It thus directed Ansari to pay ₹5 lakh to LV within four weeks, failing which he will suffer incarceration in civil prison in Tihar Jail for a period of one week. .Advocates Pravin Anand, Dhruv Anand and Nimrat Singh appeared for Louis Vuitton.Advocates Kailash Sharma and Nishi Jain appeared for defendant No 1.Advocates Birender Bhatt and Rakesh Kumar appeared for other defendants. .[Read Order]