Blockbuster Damage Awarded to Whatman International Ltd. in a Counterfeit Case

Lucy Rana, Priya Adlakha | March 2019

The indelible impression of a famous dialogue Jis tarah zameen par pair rakhe bagair insaan chal nahi sakta … us hi tarah mujrim kanoon se bhaag sakta hai, lekin bach nahi sakta by Amitabh Bachchan from the 1991 movie ‘Hum’, seems to have reached the ears of the Delhi High Court. Recently, in the case of Whatman International Limited v P Mehta & Ors. Delhi High Court awarded Whatman International Limited a gigantic amount of INR 2,09,55,946 (USD 2,94,514) as damages and costs. The Court pointed out that the Defendants were deliberately and wilfully infringing the Plaintiff’s mark for a period spanning over 25 years and caused enormous loss to the Plaintiff by selling counterfeit WHATMAN filter paper.

The case is an example of how the Courts are reacting to the menace of counterfeiting and repeated violations and disobedience of the Court orders without any remorse.

Brief Facts

Whatman International Limited (hereinafter referred to as ‘the Plaintiff’) is a company incorporated under the laws of U.K. and was founded by James Whatman in 1740 and the owner of the mark WHATMAN.
In February 2008 the Plaintiff was acquired by GE Healthcare, a unit of General Electric Company. The Plaintiff was involved in the manufacture and sale of various products including filter paper. It is the registered owner of trademark ‘WHATMAN’ in classes 1, 9 & 16. ….. (TRADEMARK DETAILS TABLE)
The Plaintiff’s claimed that owing to use of the mark for more than 250 years, it had acquired a secondary meaning in the trade. It further claimed to use a distinctive colour combination and script, get-up and layout for its Whatman filter paper, consisting of a white background with a blue script.
The Defendants in the suit are:

Mr. Paresh Mehta (hereinafter Defendant No.1) who runs a firm by the name of Hiral International.
Mr. Mohit Mehta (hereinafter Defendant No.3) is the son of Mr. Paresh Mehta.
Mr. Bharat Patel (hereinafter Defendant No. 2) is the brother-in-law of Mr. Paresh Mehta.
Mr. Rajesh Patel (hereinafter Defendant No.5) is the brother of Mr. Bharat Patel.
Mr. Jatin Parekh (hereinafter Defendant No. 4) is also a relative of Mr. Paresh Mehta. It had two firms by the name Nimisha Trading Company and Vidhi Traders.
M/s. Shri Maruti Chem Enterprise Pvt. Ltd. (hereinafter Defendant No.7) is promoted by Mr. Paresh Mehta’s wife Mrs. Jagruti P. Mehta and his son Mr. Mohit Mehta. The premises of Defendant No. 7 was owned by Mr. Paresh Mehta.
Sanghvi Scientific Corporation (hereinafter Defendant No.8) is a proprietary concern of Mr. Ketan Ramniklal Sanghvi. It purchased filter papers from M/s. M. K. Corporation, which is a firm run by Defendant No.5.
Wilson (hereinafter referred to as Defendant No.6’) trading as Delcia Printers, does printing jobs.

It alleged that the Defendants were manufacturing and selling Whatman filter paper and were also using an identical colour combination for other filter papers sold by them under various trademarks including ‘HIRAL’, ‘ACHME’, ‘LABSMAN’, ‘UCHEM’ and ‘SUN’
The Plaintiff contended that the Defendants were habitual infringers and had a long history of manufacturing and selling counterfeit Whatman filter paper, beginning from 1992, and thereafter in 2005. It further contended that despite giving undertakings the Defendants continued to sell the infringing goods, leading to the Plaintiff filing the present suit.
It brought to the notice of the Court that an interim injunction was granted on May 23, 2014 and Local Commissioners (hereinafter referred to as ‘LC’) were appointed to visit the premises of the Defendants in Mumbai, where seizures of infringing products were made. As per the LC’s report, the seized products had four different trademarks namely HIRAL, WHATMAN, RELIGLAS and ACHME.
It submitted that despite seizures being affected and the interim injunction operating against them, the Defendants continued to sell infringing products.
The Plaintiff thereafter filed a FIR pursuant to which, again, seizures were conducted by the Mumbai police. The Plaintiff, thus, sought a permanent injunction and damages through the present suit.

Plaintiff’s Contentions

It was strongly contended that all the Defendants were related to each other and members of the same family. It was emphasized that since 1992, they had been deliberately and intentionally violating the Plaintiff’s rights in the trademark WHATMAN.
It argued that the Defendants had not only manufactured and sold counterfeit of WHATMAN filter papers but also adopted an identical colour combination, get up and layout in respect of filter paper sold by them under the different trademarks namely HIRAL, SUN, LABSMAN, U-CHEM and ACHME.
It was submitted that despite the repeated criminal complaints that were filed, and undertakings given by the Defendants in the said complaint cases, they had with impunity, continued to use the trademark WHATMAN.
It was submitted that in the circumstances, it was entitled to not only damages, but punitive damages were also liable be imposed on the Defendants. It was further submitted that a computation of damages according to which the value of the seized goods had been calculated as INR 4,48,53,280/- (USD 68,208) and costs of INR 14,55,964/- (USD 20,462) was also claimed.

Defendant’s Contentions

It submitted that though they are related to each other however, they run their independent businesses and were not connected with each other.
It was admitted that the Defendants used the trademark HIRAL, SUN for filter paper, however, the packaging was claimed to be different than that of Plaintiff’s.
Defendant No.6 stated that it does job work of printing and the labels and the cartons under the mark WHATMAN were printed in response to an orally communicated order from some third party, who claimed to be duly authorized by the owner of the trademark WHATMAN.

Court’s Analysis

The Court granted permanent injunction to the Plaintiff, since the Defendants did not challenge the
Proprietary rights of the Plaintiff in the trademark WHATMAN or the fact that the Plaintiff sold filter paper under the WHATMAN mark in a specific white and blue combination.
The Court observed that the Defendants had a history of repeatedly using the WHATMAN trademark as also an identical getup, color combination and layout for filter paper sold by them under different marks including ‘HIRAL’, ‘ACHME’, ‘LABSMAN’, ‘UCHEM’ and ‘SUN’. It held that the packaging for filter paper, were a substantial reproduction of the Plaintiff’s WHATMAN Filter paper product packaging, in color combination, size, get-up, layout, arrangements etc.
Taking note of the website of ACHME Scientific, achmescientific.com, the Court observed that the intention of the Defendant was clearly to pass off its products as those of the Plaintiff’s or as being comparable to the Plaintiff’s product.
It further noted that the grant of the ad-interim exparte injunction dated May 23, 2014 was well within the knowledge of the Defendants. The reports of the LCs, which were on record clearly established that at the time when the commissions were executed, the Defendants were selling filter paper under the trademark WHATMAN and other trademarks. The seizure by the LCs was of various filter papers, cartons, packaged products, etc. bearing the marks ‘WHATMAN’, ‘HIRAL’, ‘ACHME’, ‘RELIGLAS’, ‘GE HEALTHCARE’ and ‘SCHLEICHER & SCHUELL’. It held that all of these products
Were either counterfeit WHATMAN products or products which were a substantial imitation and a colourable reproduction of the Plaintiff’s WHATMAN filter paper packaging.
On the point of Defendants behavior, the Court was of the view that it had been completely dishonest. It took note of the false statements made by them in their pleadings & in the statements recorded before it. It also threw light on the statement of Defendant No.1 on October 4, 2018, wherein it brazenly and blatantly claimed that he did not remember if there is any FIR in 1993. However, the documents on record showed that there was not just a FIR but also an undertaking given by Defendant No.1 and also INR 15,000/- (USD 210) was paid as damages in the said matter.
Further the Court pointed out that Defendant No.2’s statement that he never did filter paper business and that he never helped Defendant No. 3 in the said business was also false, as it had admitted the fact that it was selling filter paper under the trade mark HIRAL. The Court relied on the report of the LC, which revealed that a large seizure of counterfeit products as also lookalike filter paper was made in LC’s presence.
The Court also noted that Defendant No.4’s statement was also completely misleading, incorrect and false. As it unabashedly denied any connect with the business under the name Vidhi Traders. However, the perusal of the website of Vidhi Traders www.vidhitraders.in claimed that Defendant No. 4 was the mentor of the organization. Further, it denied selling filter paper under the marks SUN, LABSMAN and U-CHEM. However, the website of Vidhi Traders also promoted the filter paper brands LABSMAN and U-CHEM.
The Court held that the irrefutable conclusion was that the Defendants had acted in concert with each other. The Defendants were clearly not coming clean with the Court. They were not only making false statements in their pleadings but are also misleading the Court by trying to create a farcical cloak of independent businesses. The illegality of selling WHATMAN counterfeit paper and lookalike filter paper had continued since the time when the first FIR was registered in 1993.
On the question of the Defendants being habitual offenders, the Court held that the Defendants were continuing to indulge in illegal conduct of infringement and passing off since the year 1992 with scant regard to their own undertakings and to the orders passed by the Court. Even the repeated criminal complaints filed against them and the seizures made pursuant to the said complaints did not appear to have had a deterrent effect. Further it held that the disobedience or breach of an injunction has to have consequences in law. If strict action is not taken, orders of Courts would not be complied with by litigants, as is evident in the present case. Such disobedience not only constitutes violation of the provisions of Order XXXIX Rule 2A but also constitutes contempt under the Contempt of Courts Act, 1971. The conduct of the Defendants in the present case is in the face of the Court and thus Section 14 of the Act is clearly attracted.
The Court held that the Defendants had jointly carried out business of counterfeit Whatman filter paper and lookalike filter paper. They were guilty of infringement and passing off. They were also liable for making false statements before Court, which resulted in impediment of the administration of justice. The violation of the orders of the Court and non-adherence to repeated undertakings given constituted wilful disobedience. The Court further held that there were deliberate and conscious acts of the Defendants to pass off and earn monetary gain. The modus operandi was clearly to hoodwink the authorities and overreach the Court process. Any compassion shown to such persons would clearly send the wrong message.
Applying the judgment in Hindustan Unilever Limited v Reckitt Benckiser India Limited the Court held that the Defendants were liable to compensate the Plaintiff in damages as also punitive damages. The conduct of the Defendants makes them liable for exemplary damages inasmuch as they had been both selling counterfeit

On the issue of calculation of damages, the Court took note of the quantities of the seized by the LC, which were:

1	Whatman packed products and packaging material	8182 units of different sizes, 2646 units of different sizes
2	Hiral packed products and packaging material	2646 units of different sizes
3	ACHME packed products and packaging material	1293 units of different sizes
4	ReliGlas packaging material	79 nits

WHATMAN paper as also lookalike filter paper under various marks with identical packaging, colour combination and get up.

It held that even if an average profit of Rs.500/- per unit is taken, the profit ranges to more than INR 40 lakhs (USD 56,216). It also noted that the quantity of look-a-like filter paper, which was recovered from the Defendants, reveals a business worth crore of Rupees. Further, it highlighted that the Defendants had committed infringement of the Plaintiff’s mark and impinged on their rights deliberately, consciously and wilfully for a period spanning over 25 years. The Defendants have caused enormous loss to the Plaintiff in the form of not only selling lookalike filter paper under various brands namely ACHME, HIRAL etc. but have also sold counterfeit WHATMAN filter paper. They have not just caused damage to the Plaintiff but even to the customers who have purchased these products presuming the same to be genuine WHATMAN filter paper.

The Plaintiff was accordingly awarded a decree of damages of:

INR 1 crore (USD 1,40,540) against Defendant Nos. 1, 3 & 7.
INR 25 lakhs (USD 35,135) each was passed against Defendant Nos. 2, 4 & 5.
INR 10 lakhs (USD 14,054) against Defendant No.8

Also, the Plaintiff was awarded costs of INR14,55,946.00 (USD 20,462).

Therefore, in the present suit the Plaintiff was awarded a whopping amount of INR 2,09,55,946 (USD 2,94,514) as damages and cost.

About Author

Lucy Rana

Lucy Rana is a Partner at S.S. Rana & Co. Her practice is focused on Intellectual Property and Corporate Law with emphasis on luxury goods, F&B, FMCG, hospitality, E-commerce, Information technology, automobile, sports and fitness, media and entertainment and the gaming industry industries. Lucy assists both multinational corporations and grassroot startups on all aspects of brand development from inception through international and national expansion and beyond.

Priya Adlakha

Priya Adlakha is as Associate Partner of S.S. Rana & Co. She was enrolled with Bar Council of Delhi in 2010 and started her career as a general litigator and handled several civil and commercial disputes, matrimonial and criminal matters.